Exhibit 10.3
EMPLOYMENT AGREEMENT
THIS Employment Agreement (the "Agreement"), made this 1st day of January, 2005
by and between O2 Secure Wireless, Inc. with principal business operations at
0000 Xxxxxxx Xxxxxx Xxxx, Xxx. 000, Xxxxxxxx, XX 00000 ("O2") and Xxxxx X.
Xxxxxxx (the "Employee") provides:
For good consideration, O2 employs the Employee on the following terms and
conditions.
1. Term of Employment. Subject to the provisions for termination set
forth below this agreement will begin on January 1, 2005 and continue
to December 31, 2007, unless terminated earlier pursuant to Paragraph
9 below.
2. Compensation. Employee shall be compensated for services provided to
O2 on the basis set forth herein:
a. Employee shall be issued as of the date of this Agreement 500,000
warrants to purchase common stock of O2. The warrants will have
an exercise price of $1.00 per share, and shall be exercisable
for cash at any time within three years after the date of
issuance.
b. Until O2 achieves monthly gross revenues of $57,000 per month for
three consecutive months, Employees sole monetary compensation
shall be payment of $5,000 for each property successfully
deployed and operating, excluding the properties commonly known
to O2 and Employee as Post Park and Xxxxxxxx, Post Uptown and
Post Gateway, all located in North Carolina.
c. After O2 achieves monthly gross revenues of $57,000 per month for
three consecutive months, Employee will receive a salary of
$100,000 per year, and will not be entitled to any payments
pursuant to Paragraph 2(c) herein that were not payable on the
date of commencement of the salary.
3. Duties and Position. O2 hires the Employee in the capacity of Chief
Information Officer. The Employee's duties include but are not
necessarily limited to directing the management of O2's information
systems, structure and devices, as well as researching and
implementing decisions regarding appropriate systems and platforms to
maintain the organization's information systems. These duties may be
reasonably modified by O2's board of directors from time to time.
4. Duties and Extent of Service. During the term of this Agreement, the
Employee agrees to devote Employee's full business time energy and
skill to the business of O2 and to the promotion of O2's interests as
may be required for the fulfillment of Employee's obligations under
this Agreement. Employee may provide services for third parties and
engage in other employment so long as such other services and
employment do not interfere with Employee's ability to provide the
services set forth herein for O2 on a full-time basis, and the
services do not violate any other covenant or obligation of the
Employee herein. During the term of this Agreement, the Employee has a
duty of loyalty to O2 and shall not engage in, or otherwise have an
interest in, directly or indirectly, any other business activity that
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would adversely affect the Employee's ability to perform Employee's
duties as set forth in this Agreement; provided, however, this
constraint is not to be construed as preventing the Employee from
investing Employee's assets in any form or manner that does not
require any services on the part of the Employee and does not require
Employee's operation of the affairs of the companies in which
investments are made. Employee agrees that termination of Employee's
employment, regardless of the method, reason or circumstances of such
termination shall not relieve Employee of Employee's obligations under
the restrictive covenants set forth herein.
5. Reimbursement of Expenses. The Employee may incur reasonable expenses
for furthering O2's business, including expenses for entertainment,
travel, and similar items pursuant to the travel and expense policy in
place at the time said expenses are incurred. O2 shall reimburse
Employee for all business expenses after the Employee presents an
itemized account of expenditures, pursuant to O2 policy.
6. Vacation and Leave. The Employee shall be entitled to a yearly
vacation pursuant to O2's leave policy for the Employee's employment
level.
7. Disability. In the event that the Employee cannot perform his duties
because of illness or incapacity for a period of more than one week,
the annual compensation otherwise due during said illness or
incapacity will be reduced by 80% during the period of such illness or
disability, and Employee's full annual compensation will be reinstated
upon return to work.
8. Termination of Agreement. Notwithstanding anything herein to the
contrary, Employee's employment under this Agreement may be terminated
by O2 immediately upon the occurrence of one of the following events,
and if so terminated, the Company shall have no further liability to
Employee whatsoever for compensation, benefits or damages, other than
those that have accrued prior to termination:
(a) the commission of any act by Employee which, if
prosecuted, would constitute a felony;
(b) any act or omission by Employee that may have a
materially adverse effect on O2;
(c) failure or refusal by Employee to comply with the
policies of O2 contained in any company handbook or with the
provisions of this Agreement if not cured within ten (10) days
after the receipt of written notice from the board of directors;
(d) Employee's prolonged absence without the consent of O2;
(e) Employee's gross neglect of his duties or willful
insubordination to the Board of Directors or his superior
officers;
(f) the death of Employee; or
(g) delivery of written notice of termination by O2 after
Employee has become unable to perform Employee's services by
reason of illness or incapacity, which illness or incapacity
results in Employee's failure to discharge Employee's duties
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under this Agreement for an aggregate total of sixty (60) days
(whether consecutive or nonconsecutive) during any one hundred
and eighty (180) day period.
9. Death Benefit. Should Employee die during the term of employment, O2
shall pay to Employee's estate any compensation due through the end of
the month in which death occurred.
10. Covenants of Employee. Employee understands and acknowledges that O2's
ability to develop and retain trade secrets, customer lists,
proprietary techniques, information regarding customer needs and other
confidential information relating to its business is of the utmost
importance to O2's success, and Employee further acknowledges that
Employee will develop and learn information in the course of
performance of Employee's services hereunder that would be useful in
competing unfairly with O2. In light of these facts and in
consideration of O2's agreement to compensate Employee on the terms
set forth herein, Employee covenants and agrees with O2 as follows:
a. Confidential Information. Employee shall use his best efforts to
protect Confidential Information. During and after association
with O2, Employee will not use (other than for O2) or disclose
any of O2's Confidential Information. "Confidential Information"
means information, without regard to form, relating to O2's
customers, operation, finances, and business that derives
economic value, actual or potential, from not being generally
known to other Persons, including, but not limited to, technical
or nontechnical data, formulas, patterns, compilations (including
compilations of customer information), programs, models,
concepts, designs, devices, methods, techniques, processes,
financial data or lists of actual or potential customers
(including identifying information about customers), whether or
not in writing. Confidential Information includes information
disclosed to O2 by third parties that O2 is obligated to maintain
as confidential. Confidential Information subject to this
Agreement may include information that is not a trade secret
under applicable law, but information not constituting a trade
secret only shall be treated as Confidential Information under
this Agreement for a two (2) year period after the date on which
this Agreement is terminated for any reason (the "Termination
Date"). "Person" means any individual, corporation, limited
liability company, bank, partnership, joint venture, association,
joint-stock company, trust, unincorporated organization or other
entity.
b. Return of Materials. On the Termination Date or for any reason or
at any time at O2's request, Employee will deliver promptly to O2
all materials, documents, plans, records, notes, or other papers
and any copies in Employee's possession or control relating in
any way to O2's Business, which at all times shall be the
property of O2.
c. Solicitation of Employees. During the Term of this Agreement, and
for one (1) years after the Termination Date, Employee will not
induce or solicit to leave employment with O2 any Person employed
or engaged by O2 in any capacity (including without limitation as
an employee or independent contractor), whether or not such
Person is employed or engaged pursuant to a contract with O2 and
whether or not such Person is employed or otherwise engaged at
will.
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d. Solicitation of Customers. Employee will not, except on behalf of
O2, at any time during the period commencing on the date of this
Agreement and continuing for a period of one (1) year after the
Termination Date, directly or indirectly, whether alone or with
any other Person as a partner, officer, director, employee,
agent, shareholder, consultant, sales representative or otherwise
solicit, or assist in the solicitation of, any Person who is, or
was during the term of this Agreement, a customer of O2, for the
purpose of obtaining the patronage of such Person for the sale or
purchase of goods or services comparable to O2's services;
provided, however, that this Subparagraph will apply only with
respect to any Person with whom Employee has had contact in
furtherance of O2's Business during the two-year period prior to
the Termination Date or about whom Employee has received O2's
Confidential Information during such period.
e. Non-Competition. During the term of this Agreement and for a
period of one (1) year after the Termination Date, Employee shall
not within the States of Virginia, North Carolina, South
Carolina, Georgia, Florida (the "Area"), directly or indirectly,
either individually or as an owner, manager, supervisor,
administrator, consultant, instructor or executive employee, take
a position with another business entity which is in the same or
essentially the same business as O2 Business in which his/her
duties and responsibilities are similar to those performed by the
Employee for O2 hereunder. Notwithstanding the above, nothing
contained herein shall be construed to prohibit Employee from
owning, as an investment, not more than one (1%) percent of a
class of equity securities issued by any company that provides
products or services competitive with the products or services of
O2 and is publicly traded and registered under Section 12 of the
Securities Exchange Act of 1934.
f. Disparagement. Employee shall not at any time make false,
misleading or disparaging statements about O2, including its
products, services, management, employees, and customers. O2
shall not at any time make false, misleading or disparaging
statements about Employee.
g. Work For Hire Acknowledgment; Assignment. Employee acknowledges
that work on and contributions to documents, programs, and other
expressions in any tangible medium (collectively, "Works") which
are developed within the Employee's capacity as an Employee of O2
or are within the scope of Employee's obligations under this
Agreement and part of Employee's duties, responsibilities, or
assignment. Employee's work on and contributions to the Works
will be rendered and made by Employee for, at the instigation of,
and under the overall direction of, O2, and all such work and
contributions, together with the Works, are and at all times
shall be regarded, as "work made for hire" as that term is used
in the United States Copyright Laws. Employee specifically
acknowledges that the Works includes the computer software,
including source code and documentation, written in part by
Employee and used and known internally by O2 as the "router
operating system software." Without limiting this acknowledgment,
Employee assigns, grants, and delivers exclusively to O2 all
rights, titles, and interests in and to any such Works, and all
copies and versions, including all copyrights and renewals.
Employee will execute and deliver to O2, or its successors and
assigns, any assignments and documents O2 requests for the
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purpose of complete, exclusive, perpetual, and worldwide
ownership of all rights, titles, and interests of every kind and
nature, including all copyrights in and to the Works, and
Employee constitutes and appoints O2 as its agent to execute and
deliver any assignments or documents Employee fails or refuses to
execute and deliver, this power and agency being coupled with an
interest and being irrevocable.
h. Inventions, Ideas and Patents. Employee shall disclose promptly
to O2, and only to O2, any invention or idea of Employee
(developed alone or with others) conceived or made during
Employee's employment by O2 or within six months of the
Termination Date. Employee assigns to O2 any such invention or
idea in any way connected with Employee's employment or related
to O2's Business, its research or development, or demonstrably
anticipated research or development and will cooperate with O2
and sign all papers deemed necessary by O2 to enable it to
obtain, maintain, protect, and defend patents covering such
inventions and ideas and to confirm O2's exclusive ownership of
all rights in such inventions, ideas and patents, and irrevocably
appoints O2 as its agent to execute and deliver any assignments
or documents Employee fails or refuses to execute and deliver
promptly, this power and agency being coupled with an interest
and being irrevocable. This constitutes written notification that
this assignment does not apply to an invention for which no
equipment, supplies, facility or trade secret information of O2
was used, and which was developed entirely on Employee's own
time, unless (a) the invention relates (i) directly to O2's
Business, or (ii) to O2's actual or demonstrably anticipated
research or development, or (b) the invention results from any
work performed by Employee for O2.
11. Tax Consequences. Set forth below is a brief summary as of the date of
this Agreement of certain of the federal tax consequences of the
shares and warrants issued under this Agreement. THIS SUMMARY IS
NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT
TO CHANGE. EMPLOYEE SHOULD CONSULT A TAX ADVISOR BEFORE ACCEPTING ANY
SHARES OR WARRANTS HEREUNDER, OR EXERCISING ANY WARRANTS ISSUED
HEREUNDER.
a. With respect to the receipt of shares of common stock hereunder,
there will be federal tax liability equal to the fair market
value of the shares as of the date of issuance or the date of
vesting, if later than the date of issuance, unless the Employee
makes an election under Section 83(b) of the Internal Revenue
Code. If the Employee makes an election under Section 83(b) of
the Internal Revenue Code, then the fair market value of the
shares will be taxable income upon issuance, regardless of
whether Employee satisfies any vesting requirements.
b. There may be federal tax liability upon the exercise of the
warrants. Employee will be treated as having received
compensation income equal to the excess, if any, of the fair
market value of the shares acquired on the exercise of the
warrant over the exercise price of the warrant.
c. If Employee is an employee at the time the shares become taxable
income to the Employee, or the warrant is exercised, O2 will be
required to withhold from employee's compensation or collect from
Employee and pay the applicable taxing authorities an amount
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equal to a percentage of the compensation income of employee at
the time of issuance, vesting or exercise, as applicable. Any
gain realized on disposition of the shares will be treated as
short-term or long-term capital gain for federal income tax
purposes, depending on whether the shares have been held for at
least one year.
12. Assistance in Litigation. Employee shall, upon reasonable notice,
furnish such information and proper assistance to O2 as it may
reasonably require in connection with any litigation in which it is,
or may become, a party either during or after employment.
13. Effect of Prior Agreements. This Agreement supersedes any prior
agreement between O2 or any predecessor of O2 and the Employee, except
that this agreement shall not affect or operate to reduce any benefit
or compensation inuring to the Employee of a kind elsewhere provided
and not expressly provided in this agreement.
14. No Conflicting Obligations. Employee represents and warrants that
Employee is not subject to any non-competition agreement,
nondisclosure agreement, employment agreement, or any other contract
of any nature whatsoever, oral or written, with any Person other than
O2, or any other obligation of any nature, which will or could cause a
breach of or default in, or which is in any way inconsistent with, the
terms and provisions of this Agreement.
15. Settlement by Arbitration. This Agreement shall be governed by and
construed in accordance with the laws of the State of Georgia
applicable to contracts made in Georgia by persons domiciled in
Atlanta, Georgia and without regard to its principles of conflicts of
laws. Any dispute under this Agreement shall be submitted to
arbitration with the American Arbitration Association (the "AAA") in
Atlanta, Georgia, and shall be finally and conclusively determined by
the decision of a board of arbitration selected as according to the
rules governing the AAA. In connection with rendering its decisions,
the Board of Arbitration shall adopt and follow the laws of the State
of Georgia. Any decision made by the Board of Arbitration shall be
final, binding and conclusive on the parties to the dispute, and
entitled to be enforced to the fullest extent permitted by law and
entered in any court of competent jurisdiction. The non-prevailing
party to any arbitration (as determined by the Board of Arbitration)
shall pay the expenses of the prevailing party, including reasonable
attorneys' fees, in connection with such arbitration.
16. Limited Effect of Waiver by O2. Should O2 waive breach of any
provision of this agreement by the Employee, that waiver will not
operate or be construed as a waiver of further breach by the Employee.
17. Severability. If for any reason any provision of this agreement is
held invalid by a court of competent jurisdiction, said provision
shall be modified in accordance with the laws of the State of Georgia.
All other provisions of this agreement shall remain in full effect. If
this agreement is held invalid or cannot be enforced pursuant to the
laws of the State of Georgia, then to the full extent permitted by law
any prior agreement between O2 (or any predecessor thereof) and the
Employee shall be deemed reinstated as if this agreement had not been
executed.
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18. Assignment. This Agreement may not be assigned by either party without
the written consent of the other party; provided, however, O2 may
assign this Agreement to party acquiring substantially all of its
assets.
19. Oral Modifications Not Binding. This instrument is the entire
agreement of O2 and the Employee. Oral changes have no effect. It may
be altered only by a written agreement signed by both parties.
20. Policies. O2 shall have the right to institute or modify, at its
discretion any policy referenced herein or otherwise, which impacts
the whole of the organizations employee pool (such as travel and
expense or vacation) without cause. Such policies shall be provided to
Employee upon the date no later than the first date they become
effective.
21. Execution. This Agreement shall be executed in duplicate copies and
each executed copy shall constitute an original. The copies shall be
deemed one and the same instrument and this Agreement shall not be
modified or waived, except in writing, signed and acknowledged by the
parties hereto.
EXECUTION PAGE
By signing below the parties hereto cause this Agreement to be effective
pursuant to the terms and conditions defined herein on the date first indicated
above.
O2 Secure Wireless, Inc. Employee
By: /s/ T. Xxxxx Xxxxxx By: /s/ Xxxxx Xxxxxxx
------------------------------------- ------------------------------------
Name: T. Xxxxx Xxxxxx Name: Xxxxx Xxxxxxx
Title: CEO
Date: 01/01/05 Date: April 19, 2005
--------------- ---------------------
Address: 0000 Xxxxxx Xxxxx Xxxx
Xxxxxxx, XX 00000
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