EMPLOYMENT AGREEMENT
This Agreement is effective as of the 14th of August 2000 ("Agreement")
and is by and between XXXXXXXXXXX.XXX, INC., a Nevada corporation ("Company"),
and M. XXXXX XXXXX, a resident of the State of Florida ("Executive").
WITNESSETH:
WHEREAS, the Company desires to employ Executive in accordance with the
terms and conditions contained in this Agreement and to ensure the availability
of the Executive's services to the Company; and
WHEREAS, the Executive desires to accept such employment and render his
services in accordance with the terms and conditions contained in this
Agreement; and
WHEREAS, the Executive and the Company desire to enter into this
Agreement which will fully recognize the contributions of the Executive and
assure harmonious management of the Company's affairs.
NOW, THEREFORE, in consideration of the promises and the mutual
covenants set forth in this Agreement, and intending to be legally bound, the
Company and the Executive agree as follows:
1. Term of Employment
(a) Offer/Acceptance/Effective Date. The Company hereby offers
employment to the Executive and the Executive hereby accepts employment subject
to the terms and conditions set forth in this Agreement.
(b) Term. The term of this Agreement shall commence on the
date first indicated above. The term of employment shall commence on September
11, 2000 and shall remain in effect for three (3) years thereafter ("Term").
2. Duties.
(a) General Duties. The Executive shall serve as the Chief
Financial Officer of the Company with duties and responsibilities that are
customary for such executives plus such other responsibilities that are
specifically assigned by the Board of Directors of the Company.
(b) Best Efforts. The Executive covenants to use his best
efforts to perform his duties and discharge his responsibilities pursuant to
this Agreement in a competent, diligent and faithful manner.
(c) Devotion of Time. The Executive shall devote substantially
all of his time, attention and energies during normal business hours to the
Company's affairs (exclusive of periods of sickness and disability and of such
normal holiday and vacation periods as have been established by the Company).
3. Compensation and Expenses.
(a) Base Salary. For the services of the Executive to be
rendered by him under this Agreement, the Company will pay the Executive for
each of the periods indicated below an annual base salary ("Base Salary") as
follows:
(i) From September 11, 2000 to September 10, 2001, the amount of
$125,000;
(ii)From September 11, 2001 to September 10, 2002, the amount of
$135,000;
(iii)From September 11, 2002 to September 10, 2003, the amount of
$145,000.
The Company shall pay the Executive his Base Salary in equal
installments no less frequently than on a monthly basis.
(b) Base Salary Adjustment. The Base Salary may not be
decreased hereunder during the term of this Agreement, but may be increased upon
review by, and at the sole discretion of, the Company's Board of Directors.
(c) Bonus. Executive may receive bonus compensation in an
amount as approved by the Company's Board of Directors in its sole discretion
based upon the performance criteria as may be established by the Board of
Directors from time to time. Such bonuses may be paid in cash or issued in
shares of the Company's common stock on such terms as approved by the Board of
Directors.
(d) Expenses. In addition to any compensation received
pursuant to Section 3, the Company will reimburse the Executive for all
reasonable, ordinary or necessary travel, educational, seminar, trade shows,
entertainment and miscellaneous expenses incurred in connection with the
performance of his duties under this Agreement, provided that the Executive
properly accounts for such expenses to the Company in accordance with the
Company's practices.
(e) Subsidiary and Affiliate Payments. In recognition of the
fact that in the course of the performance of his duties hereunder, the
Executive may provide substantial benefits to the Company's subsidiaries or
affiliated companies, the Executive and the Company may at any time and from
time to time agree that all or any portion of the compensation due the Executive
hereunder may be paid directly to the Executive by one or more of the Company's
subsidiaries or affiliated companies.
(f) Stock Options. Upon execution of this Agreement, Executive
shall receive nonqualified stock options to purchase 102,000 shares of the
common stock of the Company at an exercise price of $2.6875 per share, which is
the fair market value of the closing price of the Company shares as of the
effective date of this Agreement. The options granted hereunder will be
considered "non-qualified" and will vest as follows:
one-third (1/3) at the end of the first full year of employment
hereunder;
one-third (1/3) at the end of the second full year of employment
hereunder; and
one-third (1/3) at the end of the third full year of employment
hereunder.
The options shall have a maximum exercise period of ten (10) years
following the effective date
of this Agreement.
4. Benefits.
(a) Vacation. Paid vacation each year with salary, consistent
with Company's policy for all Executive management employees.
The Executive shall take his vacation at such times as the
Executive may select and the affairs of the Company or any of its subsidiaries
or affiliates may permit upon prior written notice to the President of the
Company.
(b) Employee Benefit Programs. In addition to the compensation
to which the Executive is entitled pursuant to the provisions of Section 3
hereof, during the Term the Executive will be entitled to participate in any
stock option plan, stock purchase plan, pension or retirement plan, and
insurance or other employee benefit plan that is maintained at that time by the
Company for its employees, including any programs of life, disability, basic
medical and dental, and supplemental medical and dental insurance. All
applicable insurance coverage for spouse and family including all health and
dental coverage shall also be covered as a benefit to Executive. The Company
shall pay directly all COBRA payments for the Executive's spouse and family,
until such time that Executive's spouse and family qualify under Company plan.
(c) Automobile Allowance. During the term of this Agreement,
the Company shall pay the Executive an additional $400 per month as an
automobile allowance to be applied to any automobile expense incurred by the
Executive.
5. Termination.
(a) Termination for Cause. The Company may terminate the
Executive's employment pursuant to this Agreement before expiration of the Term
at any time for cause upon written notice. Such termination will become
effective upon the giving of such notice. Upon any such termination for cause,
the Executive shall have no right to compensation, bonus or reimbursement under
Section 3 or to participate in any employee benefit programs or other benefits
to which he may be entitled under Section 4 for any period subsequent to the
effective date of termination; provided, however, that any vested but
unexercised options shall remain in effect following any such termination. For
purposes of this Agreement, the term "cause" shall mean only:
(i) the Executive's conviction of a felony;
(ii) the Executive's conviction of misappropriating
assets or otherwise defrauding the Company or
any of its subsidiaries or affiliates; or
(iii)a continuing material, willful and habitual breach by
the Executive of any provision of this Agreement or a
continuing failure to perform the Executive's assigned
job responsibilities following receipt of written
notice of such breach or failure.
If the Employment Term is terminated by the Company, including
a termination resulting from the Company's election not to renew this Agreement,
the Employee shall be entitled to receive Severance Pay (as hereinafter defined)
for a period of three (3) months from the effective date of termination, payable
in regular installments in accordance with the Company's general payroll
practices for salaried employees. Receipt of Severance Pay is contingent upon
Executive executing and adhering to a release of all employment claims in a form
acceptable to the Company. The Company shall have not further obligations
hereunder or otherwise with respect to Executive's employment from and after the
termination date.
(b) Death or Disability. This Agreement and the Company's
obligations hereunder will terminate upon the death or disability of the
Executive. For purposes of this Section 5(b), "disability" shall mean that for a
period of six (6) months in any twelve-month period, the Executive is incapable
of substantially fulfilling the duties set forth in this Agreement because of
physical, mental or emotional incapacity resulting from injury, sickness or
disease as determined by an independent physician mutually acceptable to the
Company and the Executive. Upon any termination of this Agreement due to death
or disability, the Company will pay the Executive or his legal representative,
as the case may be, any accrued but unpaid Base Salary (which may include any
accrued but unused vacation time) through the date of such termination of
employment plus any other compensation that may be due and unpaid. Any vested
but unexercised options shall remain in effect following any termination by
death or disability.
(c) Voluntary Termination. Prior to any other termination of
this Agreement, the Executive may, on ninety (90) days' prior written notice to
the Company given at any time during the Term, terminate his employment with the
Company. Upon any such termination with proper notice, the Company shall pay the
Executive any accrued but unpaid Base Salary through the date of such effective
termination of employment (not including any accrued but unused vacation time)
and the Executive shall have no further right to compensation, bonus or
reimbursement under Section 3 or to participate in any employee benefit programs
or other benefits to which he may be entitled under Section 4 for any period
subsequent to the effective date of such termination; provided, however, that
any vested but unexercised options shall remain in effect following any such
termination.
6. Restrictive Covenants.
(a) Competition with the Company. The Executive covenants and
agrees that during the Term of this Agreement and for a period of two (2)
years after termination of this Agreement, the Executive shall not, without
the prior written consent of the Company, directly or indirectly (whether as a
sole proprietor, partner, member, stockholder, director, officer, employee or
in any other capacity as principal or agent) compete with the Company.
Notwithstanding this restriction, Executive shall be entitled to invest in
stock of other competing public companies so long as his ownership is less
than 5% of such company's outstanding shares.
(b) Disclosure of Confidential Information. The Executive
acknowledges that during his employment he will gain and have access to
confidential information regarding the Company and its subsidiaries and
affiliates. The Executive acknowledges that such confidential information as
acquired and used by the Company or any of its subsidiaries or affiliates
constitutes a special, valuable and unique asset in which the Company or its
subsidiaries or affiliates, as the case may be, holds a legitimate business
interest. All records, files, materials and confidential information (the
"Confidential Information") obtained by the Executive in the course of his
employment with the Company shall be deemed confidential and proprietary and
shall remain the exclusive property of the Company or its subsidiaries or
affiliates, as the case may be. The Executive shall not, except in connection
with and as required by his performance of his duties under this Agreement,
(i) use any Confidential Information for his own benefit or the benefit of any
person or entity with which he may be associated other than the Company; or
(ii) disclose any Confidential Information to any person, firm, corporation,
association or other entity for any reason or purpose whatsoever without the
prior written consent of the Board of Directors of the Company, unless such
information previously shall have become public knowledge through no action by
or omission of the Executive.
(c) Subversion, Disruption or Interference. At no time during
the term of this Agreement shall the Executive, directly or indirectly,
interfere, induce, influence, combine or conspire with, or attempt to induce,
influence, combine or conspire with, any of the employees of, or consultants
to, the Company to terminate their relationship with the Company or compete
with or ally against the Company or any of its subsidiaries or affiliates in
the business in which the Company or any of its subsidiaries or affiliates is
then engaged in.
(d) Enforcement of Restrictions. The parties hereby agree that
any violation by Executive of the covenants contained in this Section 6 will
likely cause irreparable damage to the Company or its subsidiaries and
affiliates and may be restrained by process issued out of a court of competent
jurisdiction, in addition to any other remedies provided by law.
7. Assignability. The rights and obligations of the Company under this
Agreement shall inure to the benefit of and be binding upon the successors and
assigns of the Company, provided that such successor or assign shall acquire all
or substantially all of the assets and business of the Company. The Executive's
rights and obligations hereunder may not be assigned or alienated (except as
provided in this agreement) and any attempt to do so by the Executive will be
void.
8. Severability. If any provision of this Agreement is deemed to be
invalid or unenforceable or is prohibited by the laws of the state or
jurisdiction where it is to be performed, this Agreement shall be considered
divisible as to such provision and such provision shall be inoperative in such
state or jurisdiction and shall not be part of the consideration moving from
either of the parties to the other; provided, however, that the provisions of
Section 6 may be modified and enforced by a court in any legal or equitable
action as necessary to comply with applicable law as determined by the court.
The remaining provisions of this Agreement shall be valid and binding.
9. Miscellaneous.
(a) Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the internal, substantive laws of the
State of Florida without giving effect to the conflict of laws rules thereof.
(b) Waiver/Amendment. The waiver by any party to this
Agreement of a breach of any provision hereof by any other party shall not be
construed as a waiver of any subsequent breach by any party. No provision of
this Agreement may be terminated, amended, supplemented, waived or modified
other than by an instrument in writing signed by the party against whom the
enforcement of the termination, amendment, supplement, waiver or modification is
sought.
(c) Attorney's Fees. In the event any legal or equitable
action is commenced to enforce the terms and conditions hereof, the prevailing
party shall be entitled to reasonable attorneys' fees, costs and expenses.
(d) Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof and
replaces and supersedes any prior agreements or understandings.
(e) Counterparts. This Agreement may be executed in
counterparts, all of which shall constitute one and the same instrument.
(f) Facsimile. A facsimile copy of this agreement and any
signatures hereon shall be considered for all purposes as an original.
IN WITNESS WHEREOF, the Company and the Executive have executed this
Agreement as of the day and year first above written.
COMPANY:
XXXXXXXXXXX.XXX, INC.
By:
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Its:
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EXECUTIVE:
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M. XXXXX XXXXX
