EMPLOYMENT AGREEMENT
This
Employment Agreement ("AGREEMENT") is made as of the __day of November, 2009 by
and among EGPI Firecreek, Inc., a Nevada corporation located at 0000 Xxxxx Xxxxx
Xxxx Xxxx, Xxxxxxxxxx Xxxxxxx 00000 ("EGPI"), South Atlantic Traffic
Corporation., a Florida subchapter-S corporation located at 0000 Xxxxx Xxxx
Xxxx., Xxxxx 000 XXX 305, Xxxxxxxxx, Xxxxxxx, 00000 (the "COMPANY"), and Xxx
Xxxxxx (hereinafter, the "EXECUTIVE").
RECITALS
A. EGPI
acquired all of the issued and outstanding stock of the Company on November _,
2009.
B. The
Board of Directors of EGPI (the " EGPI BOARD") recognizes the Executive's
potential contribution to the growth and success of EGPI by providing executive
management services to the Company and desires to assure the Company of the
Executive's employment in an executive capacity.
C. The
Board of Directors of the Company (the "BOARD") recognizes the Executive's
potential contribution to the growth and success of the Company, and desires to
assure the Company of the Executive's employment in an executive capacity and to
compensate him therefore, has approved the provisions of this Agreement and has
authorized the officers of the Company to execute the Agreement on behalf of the
Company.
D. The
Executive is willing to make his services available to the Company on the terms
and conditions hereinafter set forth.
AGREEMENT
NOW,
THEREFORE, in consideration of the premises and mutual covenants set forth
herein, the parties agree as follows:
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1.
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Employment.
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1.1.
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Employment
and Terms. The Company hereby agrees to employ the Executive and the
Executive hereby agrees to serve the Company on the terms and conditions
set forth herein.
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1.2.
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Duties
of Executive. During the Term of Employment under this Agreement (as
hereinafter defined), the Executive shall serve as the Company's TBD
Officer. The Executive shall be accountable only to the Board, and,
subject to the authority of the Board, shall have supervision and control
over, and responsibility for the overall operations of the Company. He
also shall have such other powers and duties as may from time to time be
prescribed by the Board, provided that such duties are consistent with the
Executive's position as Chief Executive Officer of a company the size and
type of the Company. The Executive shall devote the necessary time and
attention to the business and affairs of the Company, render such services
to the best of his ability, and use his reasonable best efforts to promote
the interests of the Company. Notwithstanding the foregoing or any other
provision of this Agreement, it shall not be a breach or violation of this
Agreement for the Executive to (i) be employeed in the construction
industry, (ii) serve on corporate (subject to approval of the Board, which
shall not be unreasonably withheld), civic or charitable boards or
committees, (iii) deliver lectures, fulfill speaking engagements or teach
at educational institutions, or (iv) manage personal investments, so long
as such activities do not significantly interfere with or significantly
detract from the performance of the Executive's responsibilities to the
Company in accordance with this Agreement. The Executive may continue to
serve out the remaining term as a board member on any corporate board on
which he serves as of the Commencement
Date.
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2.
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Term.
The term of employment under this Agreement (the "TERM OF EMPLOYMENT")
shall commence as of the __day of November, 2009 (the "COMMENCEMENT DATE")
and shall continue for a period ending two (2) years from any date as of
which the Term of Employment is being determined, subject to earlier
termination pursuant to Section 5 hereof. This agreement shall
automatically renew for an additional 2-year term at the conclusion of the
initial or successive 2-year terms. The date on which the Term of
Employment shall expire is sometimes referred to in this Agreement as the
"EXPIRATION DATE."
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3.
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Compensation.
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3.1.
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Base
Salary. The Executive shall receive a base salary at the annual rate
consistent with existing salary (the "BASE SALARY") during the Term of
Employment, with such Base Salary payable in installments consistent with
the Company's normal payroll schedule, subject to applicable withholding
and other taxes. The Base Salary shall be reviewed, at least annually, for
merit increases and may, by action and in the discretion of the Board, be
increased at any time or from time to
time.
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3.2.
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Bonuses.
In addition to Base Salary, the Executive shall be eligible to receive a
bonus (the "ANNUAL BONUS") payable in such amount and at such times as may
be recommended by the Compensation Committee of the Board of Directors in
its sole discretion.
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4.
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Expense
Reimbursement and Other Benefits.
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4.1.
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Reimbursement
of Expenses. Upon the submission of proper substantiation by the
Executive, and subject to such rules and guidelines as the Company may
from time to time adopt with respect to the reimbursement of expenses of
executive personnel, the Company shall reimburse the Executive for all
reasonable expenses actually paid or incurred by the Executive during the
Term of Employment in the course of and pursuant to the business of the
Company. The Executive shall account to the Company in writing for all
expenses for which reimbursement is sought and shall supply to the Company
copies of all relevant invoices, receipts or other evidence reasonably
requested by the Company.
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4.2.
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Compensation/Benefit
Programs. During the Term of Employment, the Executive shall be entitled
to participate in all medical, dental, hospitalization, accidental death
and dismemberment, disability, travel and life insurance plans and all
other plans as are presently and hereinafter offered by the Company to its
executive personnel, including savings, pension, profit-sharing and
deferred compensation plans.
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4.3.
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Working
Facilities. During the Term of Employment, the Company shall furnish the
Executive with an office, secretarial help and such other facilities and
services suitable to his position and adequate for the performance of his
duties hereunder.
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4.4.
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Automobile.
During the Term of Employment, the Company shall, at the Executive's
election, either (i) pay to the Executive a non-accountable automobile
allowance of $1,200 per month, or the current economic terms of the
Executive’s automobile allowance, or (ii) provide the Executive with a
mid-size automobile (which initially shall be new and shall be replaced
not less frequently than every three (3) years), and reimburse the
Executive for the costs of gasoline, oil, repairs, maintenance, insurance
and other expenses incurred by Executive by reason of the use of the
automobile.
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4.5.
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Stock
Options.
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4.5.1.
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Initial
Grant. As of the Commencement Date, EGPI shall grant to the
Executive an option to purchase 500,000 shares of common stock
of EGPI (the "COMMON STOCK") (hereinafter, the "INITIAL
OPTIONS") at the closing price on the Commencement Date. Fifty Percent
(50%) of this option shall be exercisable on the one year anniversary of
the Commencement Date and the balance on the second year anniversary of
the Commencement Date and shall remain exercisable for a period of three
(3) years, whether or not the Executive continues to be employed by the
Company during that period. The parties intend that the Initial Options be
granted pursuant to the EGPI stock option plan (the " EGPI
STOCK OPTION PLAN") and shall be incentive stock options to the extent
allowable under the EGPI Stock Option Plan and applicable laws;
provided, however, in the event that the Initial Options may not be
granted under the EGPI Stock Option Plan due to the failure
of EGPI to obtain shareholder approval of an increase in the
number of shares available for grant thereunder, the Initial Options shall
be granted to the Executive outside of the EGPI Stock Option
Plan.
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4.5.2.
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Future
Grants. In addition, during the Term of Employment, the Executive shall be
eligible to be granted options (the "STOCK OPTIONS") to purchase common
stock of EGPI under (and therefore subject to all terms and
conditions of) the EGPI Stock Option Plan, and any successor
plan thereto; provided, however, that the Stock Options shall become
immediately exercisable in full upon termination of the Executive's
employment with the Company for any reason other than termination by the
Company for Cause under Section 5.1 hereof or termination by the Executive
without Good Reason under Section 5.5(b) hereof. The number of Stock
Options and terms and conditions of the Stock Options shall be determined
by the committee of the Board appointed pursuant to the EGPI
Stock Option Plan, or by the EGPI Board, in its discretion and
pursuant to the EGPI Stock Option
Plan
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4.6.
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Target
Companies. Within thirty (30) days after Commencement Date, a special
committee (the "COMMITTEE") of the EGPI Board shall be
established to meet with the Executive and _________________
(collectively, the "MANAGERS") to establish guidelines (the "GUIDELINES")
for acquisitions of companies similar to the Company. After the Guidelines
have been established and approved by the EGPI Board, the
Managers may from time to time bring acquisition candidates (a "TARGET
COMPANY" or the "TARGET COMPANIES") to the Committee for review. If the
acquisition terms of a Target Company comply with the
Guidelines, EGPI will make available a pool of Common Stock and
apportion cash which may be available from EGPI for the
acquisition of the Target Company as a wholly-owned subsidiary of the
Company, pursuant to any acquisition structure recommended by the
Company's attorneys, accountants or other professional
advisors.
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As soon
as practicable after the acquisition of the Company, the Committee and the
Managers shall establish reasonable financial goals for the results of
operations of any Target Company acquired, to include target sales, target
growth in sales, and target earnings before interest, depreciation, taxes and
amortization, as determined in accordance with United States generally accepted
accounting principles ("EBITDA"), hereinafter collectively the "TARGET
GOALS."
At the
end of each full fiscal year of operation for any Target
Company, EGPI shall cause an audit of the Target Company to be
performed by EGPI' accountants (the "TARGET REVIEW").
The board
of directors of EGPI (the “Board”) shall compare the financials of the Companies
to the projected financials of the Company and determine a Bonus Pool. The
cumulative Bonus Pool shall be 50% of the earnings in excess of 110% of the
Earnout Target. In the event the results of operation of each Target Company, as
determined by the Target Review, is equal to greater than the Target Goals, then
an amount not less than Twenty-Five Percent (25%) of the net income of any
Target Company, as established by the Target Review, would be paid to the
Managers, in accordance with each Manager's Employment Agreement, in cash or in
common stock of EGPI, at the Company's option, in accordance with the
example set forth in EXHIBIT A hereto. The incentive compensation payable under
this Section shall be cumulative over a three (3) year period.
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4.7.
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Other
Benefits. The Executive shall be entitled to four (4) weeks of paid
vacation each calendar year during the Term of Employment, to be taken at
such times as the Executive and the Company shall mutually determine and
provided that no vacation time shall significantly interfere with the
duties required to be rendered by the Executive hereunder. Any vacation
time not taken by Executive during any calendar year may be carried
forward into any succeeding calendar year. The Executive shall receive
such additional benefits, if any, as the Board of the Company shall from
time to time determine.
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5.
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Termination.
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5.1.
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Termination
for Cause. The Company shall at all times have the right, upon written
notice to the Executive, to terminate the Term of Employment, for Cause as
defined below. For purposes of this Agreement, the term "CAUSE" shall mean
(i) an action or omission of the Executive which constitutes a willful and
material breach of, or a willful and material failure or refusal (other
than by reason of his disability or incapacity) to perform his duties
under, this Agreement which is not cured within fifteen (15) days (or if
the Executive is acting diligently to effect a cure, such longer time as
shall be reasonably necessary to effect the cure) after receipt by the
Executive of written notice of same, (ii) fraud, embezzlement,
misappropriation of funds or material breach of trust in connection with
his services during his tenure as an officer of the Company, or (iii) a
conviction of any crime which involves dishonesty or a breach of trust.
Any termination for Cause shall be made in writing by notice to the
Executive, which notice shall set forth in reasonable detail all acts or
omissions upon which the Company is relying for such termination. The
Executive (and his legal representative) shall have the right to address
the Board regarding the acts set forth in the notice of termination. Upon
any termination pursuant to this Section 5.1, the Company shall (i) pay to
the Executive any unpaid Base Salary through the date of termination and
(ii) pay to the Executive accrued but unpaid Incentive Compensation, if
any, for any Bonus Period ending on or before the date of the termination
of Executive's employment with the Company. Upon any termination effected
and compensated pursuant to this Section 5.1, the Company shall have no
further liability hereunder (other than for (x) reimbursement for
reasonable business expenses incurred prior to the date of termination,
subject, however, to the provisions of Section 4.1, and (y) payment of
compensation for unused vacation days that have accumulated during the
calendar year in which such termination
occurs).
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5.2.
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Disability.
The Company shall at all times have the right, upon written notice to the
Executive, to terminate the Term of Employment, if the Executive shall as
the result of mental or physical incapacity, illness or disability, become
unable to perform his obligations hereunder for a period of 180 days in
any 12-month period. The determination of whether the Executive is or
continues to be disabled shall be made in writing by a physician selected
by the Board and reasonably acceptable to the Executive. Upon any
termination pursuant to this Section 5.2, the Company shall (i) pay to the
Executive the Executive's Base Salary for the remainder of the
then-current Term of Employment, (ii) pay to the Executive accrued but
unpaid Incentive Compensation, if any, for any Bonus Period ending on or
before the date of termination of the Executive's employment with the
Company, (iii) pay to the Executive his Termination Year Bonus, if any, at
the time provided in Section 3.2f hereof, and (iv) pay to the Executive
any then unpaid Additional Bonuses at the time provided in Section 3.2(c).
Upon any termination effected and compensated pursuant to this Section
5.2, the Company shall have no further liability hereunder (other than for
(x) reimbursement for reasonable business expenses incurred prior to the
date of termination, subject, however to the provisions of Section 4.1,
and (y) payment of compensation for unused vacation days that have
accumulated during the calendar year in which such termination
occurs).
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5.3.
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Death.
Upon the death of the Executive during the Term of Employment, the Company
shall (i) pay to the estate of the deceased the Executive's Base Salary
for the remainder of the then-current Term of Employment, (ii) pay to the
estate of the deceased Executive accrued but unpaid Incentive
Compensation, if any, for any Bonus Period ending on or before the
Executive's date of death, (iii) pay to the estate of the deceased
Executive, the Executive's Termination Year Bonus, if any, at the time
provided in Section 3.2f hereof, and (iv) pay to the Executive's estate
any then unpaid Additional Bonuses at the time provided in Section 3.2(c).
Upon any termination effected and compensated pursuant to this Section
5.3, the Company shall have no further liability hereunder (other than for
(x) reimbursement for reasonable business expenses incurred prior to the
date of the Executive's death, subject, however to the provisions of
Section 4.1, and (y) payment of compensation for unused vacation days that
have accumulated during the calendar year in which such termination
occurs).
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5.4.
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Termination
Without Cause. The Company shall have the right to terminate the Term of
Employment by written notice to the Executive not less than thirty (30)
days prior to the termination date. Upon any termination pursuant to this
Section 5.4 (that is not a termination under any of Sections 5.1, 5.2, 5.3
or 5.5), the Company shall (i) pay to the Executive on the termination
date unpaid Base Salary, if any, through the date of termination specified
in such notice, (ii) pay to the Executive the accrued but unpaid Incentive
Compensation, if any, for any Bonus Period ending on or before the date of
the termination of the Executive's employment with the Company, at the
time provided in Section 3.2a, (iii) pay to the Executive on the
termination date a lump sum payment equal to three (3) times the sum of
(x) his Base Salary and (y) the accrued but unpaid Bonus for the year in
which such termination occurs, (iv) continue to provide the Executive with
the benefits under Sections 4.2 and 4.4 hereof (the "BENEFITS") for a
period of three (3) years immediately following the date of his
termination in the manner and at such times as the Benefits otherwise
would have been provided to the Executive; (v) pay to the Executive as a
single lump sum payment, within 30 days of the date of termination, a lump
sum benefit equal to the value of the portion of his benefits under any
savings, pension, profit sharing or deferred compensation plans that are
forfeited under such plans but that would not have been forfeited if the
Executive's employment had contained for an additional three (3) years. In
the event that the Company is unable to provide the Executive with any
Benefits required hereunder by reason of the termination of the
Executive's employment pursuant to this Section 5.4, then the Company
shall promptly reimburse the Executive for amounts paid by the Executive
to acquire comparable coverage. Upon any termination effected and
compensated pursuant to this Section 5.4, the Company shall have no
further liability hereunder (other than for (x) reimbursement for
reasonable business expenses incurred prior to the date of termination,
subject, however, to the provisions of Section 4.1, and (y) payment of
compensation for unused vacation days that have accumulated during the
calendar year in which such termination
occurs).
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5.5.
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Termination
by Executive.
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5.5.1.
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The
Executive shall at all times have the right, by written notice not less
than thirty (30) days prior to the termination date, to terminate the Term
of Employment.
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5.5.2.
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Upon
termination of the Term of Employment pursuant to this Section 5.5 by the
Executive without Good Reason (as defined below), the Company shall (i)
pay to the Executive upon the termination date any unpaid Base Salary
through the effective date of termination specified in such notice or
otherwise mutually agreed and (ii) pay to the Executive any accrued but
unpaid Incentive Compensation, if any, for any Bonus Period ending on or
before the termination of Executive's employment with the Company, at the
time provided in Section 3.2. Upon any termination effected and
compensated pursuant to this Section 5.5(b), the Company shall have no
further liability hereunder (other than for (x) reimbursement for
reasonable business expenses incurred prior to the date of termination,
subject, however, to the provisions of Section 4.1, and (y) payment of
compensation for unused vacation days that have accumulated during the
calendar year in which such termination
occurs).
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5.5.3.
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Upon
termination of the Term of Employment pursuant to this Section 5.5 by the
Executive for Good Reason, the Company shall pay to the Executive the same
amounts, and shall continue or compensate for Benefits in the same
amounts, that would have been payable or provided by the Company to the
Executive under Section 5.4 of this Agreement if the Term of Employment
had been terminated by the Company without Cause. In addition, if the
termination of the Term of Employment occurs after a Change in Control (as
hereinafter defined), and as a result of the Change in Control, the
Executive would be entitled to a reduction in the option price for any
options granted to the Executive, or any cash payments from the Company,
(other than those provided under this Agreement) in addition to those
specified in Section 5.4, under any plan or program maintained by the
Company (the "ADDITIONAL BENEFITS"), then the Company shall provide the
Executive with those Additional Benefits, if and only to the extent that
such Additional Benefits, when added to the amounts payable and the
Benefits provided by the Company to the Executive hereunder, will not
constitute excess parachute payments with the meaning of Section 280G of
Internal Revenue Code of 1986, as amended, and the regulations thereunder
(the "CODE"). Upon any termination effected and compensated pursuant to
this Section 5.5(c), the Company shall have no further liability hereunder
(other than for (x) reimbursement for reasonable business expenses
incurred prior to the date of termination, subject, however, to the
provisions of Section 4.1, and (y) payment of compensation for unused
vacation days that have accumulated during the calendar year in which such
termination occurs.)
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5.5.4.
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For
purposes of this Agreement, "GOOD REASON" shall mean (i) the assignment to
the Executive of any duties inconsistent in any respect with the
Executive's position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities as contemplated by
Section 1.2 of this Agreement, or any other action by the Company which
results in a diminution in such position, authority, duties or
responsibilities, excluding for this purpose an isolated, insubstantial
and inadvertent action not taken in bad faith and which is remedied by the
Company promptly after receipt of notice thereof given by the Executive;
(ii) any failure by the Company to comply with any of the provisions of
Article 3 of this Agreement, other than an isolated, insubstantial and
inadvertent failure not occurring in bad faith and which is remedied by
the Company promptly after receipt of notice thereof given by the
Executive; (iii) the Company's requiring the Executive to be based at any
office or location, that is not within 150 miles of the executive's home
city except for travel reasonably required in the performance of the
Executive's responsibilities; (iv) any purported termination by the
Company of the Executive's employment other than for Cause pursuant to
Section 5.1, or because of the Executive's disability pursuant to Section
5.2 of this Agreement; (v) the termination by the Company of
________________; or (vi) the occurrence of a Change in Control. For
purposes of this Section 5.5(d), the Executive acknowledges that the
Company's holding company functions are headquartered and centralized in
Atlanta, Georgia. For purposes of this Section 5.5(d), any good faith
determination of Good Reason made by the Executive shall be conclusive;
provided that the Executive shall not exercise his right to terminate his
employment for Good Reason without first giving sixty (60) days written
notice to the Company of the factual basis constituting Good Reason. The
Company shall have the right to cure the problem(s) noted by the
Executive, before the Executive may terminate his employment for Good
Reason.
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5.5.5.
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For
purposes of this Agreement, the term "CHANGE IN CONTROL" shall
mean:
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5.5.5.1.
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Approval
by the shareholders of the Company of (x) a reorganization, merger,
consolidation or other form of corporate transaction or series of
transactions, in each case, with respect to which persons who were the
shareholders of the Company immediately prior to such reorganization,
merger or consolidation or other transaction do not, immediately
thereafter, own more than Fifty Percent (50%) of the combined voting power
entitled to vote generally in the election of directors of the
reorganized, merged or consolidated company's then outstanding voting
securities, in substantially the same proportions as their ownership
immediately prior to such reorganization, merger, consolidation or other
transaction, or (y) a liquidation or dissolution of the Company or (z) the
sale of all or substantially all of the assets of the Company (unless such
reorganization, merger, consolidation or other corporate transaction,
liquidation, dissolution or sale is subsequently
abandoned);
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5.5.5.2.
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A
new Board member is elected without the approval of at least four (4) of
the persons who, as of the Commencement Date of this Agreement, constitute
the Board (the "INCUMBENT BOARD");
or
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5.5.5.3.
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the
acquisition (other than from the Company) by any person, entity or
"group", within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act, of beneficial ownership within the meaning of
Rule 13-d promulgated under the Securities Exchange Act of more than Fifty
Percent (50%) of either the then outstanding shares of the Company's
Common Stock or the combined voting power of the Company's then
outstanding voting securities entitled to vote generally in the election
of directors (hereinafter referred to as the ownership of a "CONTROLLING
INTEREST") excluding, for this purpose, any acquisitions by (1) the
Company or its Subsidiaries, (2) any person, entity or "group" that as of
the Commencement Date of this Agreement owns beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Securities Exchange Act)
of a Controlling Interest or (3) any employee benefit plan of the Company
or its Subsidiaries;
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5.5.5.4.
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provided
that, with respect to this Section 5.5(e), a Change in Control shall not
be deemed to have occurred should any of the contingencies referred to in
this Section involve any of those companies, persons or other legal
entities with whom the Company is negotiating on or before the
Commencement Date and which are communicated, in writing, by the Company
to the Executive upon execution of this
Agreement.
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5.6.
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Certain
Additional Payments by the Company. Anything in the Agreement to the
contrary notwithstanding, in the event it shall be determined that any
payment, distribution or other action by the Company to or for the benefit
of the Executive (whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise, including any
additional payments required under this Section 5.6) (a "PAYMENT") would
be subject to an excise tax imposed by Section 4999 of the Code, or any
interest or penalties are incurred by the Executive with respect to any
such excise tax (such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the "EXCISE TAX"),
the Company shall make a payment to the Executive (a "GROSS-UP PAYMENT")
in an amount such that after payment by the Executive of all taxes
(including any Excise Tax) imposed upon the Gross-Up Payment, the
Executive retains (or has had paid to the Internal Revenue Service on his
behalf) an amount of the Gross-Up Payment equal to the sum of (x) the
Excise Tax imposed upon the Payments and (y) the product of any deductions
disallowed because of the inclusion of the Gross-Up Payment in the
Executive's adjusted gross income and the highest applicable marginal rate
of federal income taxation for the calendar year in which the Gross-Up
Payment is to be made. For purposes of determining the amount of the
Gross-Up Payment, the Executive shall be deemed to (i) pay federal income
taxes at the highest marginal rates of federal income taxation for the
calendar year in which the Gross-Up Payment is to be made, and (ii) pay
applicable state and local income taxes at the highest marginal rate of
taxation for the calendar year in which the Gross-Up Payment is to be
made, net of the maximum reduction in federal income taxes which could be
obtained from deduction of such state and local
taxes.
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5.7.
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Resignation. Upon
any termination of employment pursuant to this Article 5, the Executive
shall be deemed to have resigned as an officer, and if he or she was then
serving as a director of the Company, as a director, and if required by
the Board, the Executive hereby agrees to immediately execute a
resignation letter to the Board.
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5.8.
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Survival.
The provisions of this Article 5 shall survive the termination of this
Agreement, as applicable.
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6.
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Restrictive
Covenants.
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6.1.
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Non-competition.
In order to fully protect the Company's Proprietary Information, at all
times during the Restricted Period, the Executive shall not, directly or
indirectly, perform or provide managerial or executive services on behalf
of any person, entity or enterprise which is engaged in, or plans to
engage in the United States that directly or indirectly competes with the
Company's Business (for this purpose, the "COMPANY'S BUSINESS" is the
business of manufacturing or distribution of products related the
Department of Transportation/Intelligent Traffic Systems); excluding any
activities in the construction industry. During the Executive's employment
with the Company, the Executive shall not, directly or indirectly, have
any interest in any business that provides work related to the Department
of Transportation/Intelligent Traffic Systems in the United States (other
than the Company) that competes with the Company's Business, provided that
this provision shall not apply to the Executive's ownership or
acquisition, solely as an investment, of securities of any issuer that is
registered under Section 12(b) or 12(g) of the Securities Exchange Act of
1934, as amended, and that are listed or admitted for trading on any
United States national securities exchange or that are quoted on the
National Association of Securities Dealers Automated Quotations System, or
any similar system or automated dissemination of quotations of securities
prices in common use, so long as the Executive does not control, acquire a
controlling interest in or become a member of a group which exercises
direct or indirect control of, more than five percent (5%) of any class of
capital stock of such corporation. For purposes of this Agreement the
"RESTRICTED PERIOD" shall be the period during which the Executive is
employed by the Company and, if the Executive's employment with the
Company is either terminated by the Company without Cause pursuant to
Section 5.4, or by the Executive for Good Reason pursuant to Section 5.5c,
and the Company has paid to the Executive all of amounts then payable to
the Executive pursuant to Sections 5.4 or 5.5c, as applicable, the one (1)
year period immediately following the termination of the Executive's
employment with the Company. EGPI acknowledges that the Factoring
Transaction associated with Creative Capital Associates is a temporary
bridge financing and EGPI is bound by the Stock Purchase Agreement to use
its best efforts to obtain a traditional Line of Credit as soon as
possible, as stipulated in the original Letter of Intent. EGPI agrees to
use its best efforts to replace the temporary bridge financing within
forty-five (45) days of closing with an option by EGPI to extend this
deadline to January 31, 2010. In the event that EGPI does not obtain a
traditional Line of Credit within the timeline, the Executive may
terminate the Agreement, and the Non-Compete shall be null and void. If
this clause is exercised by the Executive, it will not trigger any
Clawback against the Promissory Note portion of the Cash Consideration or
the Stock Consideration, or a claim against the Executive for any of the
Cash Consideration paid at Closing. Exercise of this option will also void
any payments due to the Executive by EGPI under this Agreement. This
option is only exercisable at the election of the Executive after January
31, 2010. In addition, EGPI is required to obtain a commitment for funding
of $500,000 within twenty-one (21) days of closing. If the commitment has
not been obtained in the 21 day period, by November 24, 2009, then by
written demand by the majority of the Sellers the Employment Agreements
including the Non-Compete will be null and void, and EGPI will have no
claims against the Cash Consideration paid except for any balances on the
Promissory Notes and the Stock
Consideration.
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6.2.
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Confidential
Information. The Executive recognizes and acknowledges that the Trade
Secrets (as defined below) and Confidential Information (as defined
below), of the Company and all physical embodiments thereof, as they may
exist from time-to-time, collectively, the "PROPRIETARY INFORMATION" are
valuable, special and unique assets of the Company's business. In order to
obtain and/or maintain access to such Proprietary Information, which
employee acknowledges is essential to the performance of his duties under
this Agreement, the Executive agrees that, except with respect to those
duties assigned to him by the Company, the Executive shall hold in
confidence all Proprietary Information and the Executive will not
reproduce, use, distribute, disclose, or otherwise misappropriate any
Proprietary Information, in whole or in part, and will take no action
causing, or fail to take any action necessary to prevent causing, any
Proprietary Information to lose its character as Proprietary Information,
nor will the Executive make use of any such Information for the
Executive's own purposes or for the benefit of any person, business or
legal entity (except the Company) under any circumstances, except that the
Executive may disclose such Proprietary Information to the extent required
by law, provided that, prior to any such disclosure, the Company be
provided an opportunity to contest such
disclosure.
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For
purposes of this Agreement, the term "TRADE SECRETS" means information belonging
to or licensed to the Company, regardless of form, including, but not limited
to, any technical or non-technical data, formula, pattern, compilation, program,
device, method, technique, drawing, financial, marketing or other business plan,
lists of actual or potential customers or suppliers, or any other information
similar to any of the foregoing, which derives economic value, actual or
potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can derive economic value
from its disclosure or use. The term "CONFIDENTIAL INFORMATION" means any
information belonging to or licensed to the Company, regardless of form, other
than Trade Secrets, which is valuable to the Company and not generally known to
competitors of the Company.
The
provisions of this Section 6.2 will apply to Trade Secrets for as long as such
information remains a Trade Secret and to Confidential Information during the
Executive's employment with the Company and for a period of two (2) years
following the termination of the Executive's employment with the Company for
whatever reason.
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6.3.
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Non-solicitation
of Employees and Customers. At all times during the Restricted Period, as
defined in Section 6.1 hereof, the Executive shall not, directly or
indirectly, for himself or for any other person, firm, corporation,
partnership, association or other entity (a) solicit, recruit or attempt
to solicit or recruit any employee of the Company to leave the Company's
employment, or (b) solicit or attempt to solicit any of the actual or
targeted prospective customers or clients of the Company with whom the
Executive had material contact or about whom the Executive learned
Confidential Information on behalf of any person or entity in connection
with any business that competes with the Company's
Business.
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6.4.
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Ownership
of Developments. All copyrights, patents, trade secrets, or other
intellectual property rights associated with any ideas, concepts,
techniques, inventions, processes, or works of authorship developed or
created by Executive during the course of performing work for the Company
or its clients (collectively, the "WORK PRODUCT") shall belong exclusively
to the Company and shall, to the extent possible, be considered a work
made by the Executive for hire for the Company within the meaning of Title
17 of the United States Code. To the extent the Work Product may not be
considered work made by the Executive for hire for the Company, the
Executive agrees to assign, and automatically assign at the time of
creation of the Work Product, without any requirement of further
consideration, any right, title, or interest the Executive may have in
such Work Product. Upon the request of the Company, the Executive shall
take such further actions, including execution and delivery of instruments
of conveyance, as may be appropriate to give full and proper effect to
such assignment.
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6.5.
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Books
and Records. All books, records, and accounts relating in any manner to
the customers or clients of the Company, whether prepared by the Executive
or otherwise coming into the Executive's possession, shall be the
exclusive property of the Company and shall be returned immediately to the
Company on termination of the Executive's employment hereunder or on the
Company's request at any time.
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6.6.
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Definition
of Company. Solely for purposes of this Article 6, the term "COMPANY" also
shall include any existing or future subsidiaries of the Company that are
operating during the time periods described herein and any other entities
that directly or indirectly, through one or more intermediaries, control,
are controlled by or are under common control with the Company during the
periods described herein.
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6.7.
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Acknowledgment
by Executive. The Executive acknowledges and confirms that (a) the
restrictive covenants contained in this Article 6 are reasonably necessary
to protect the legitimate business interests of the Company, and (b) the
restrictions contained in this Article 6 (including without limitation the
length of the term of the provisions of this Article 6)are not overbroad,
overlong, or unfair and are not the result of overreaching, duress or
coercion of any kind. The Executive further acknowledges and confirms that
his full, uninhibited and faithful observance of each of the covenants
contained in this Article 6 will not cause him any undue hardship,
financial or otherwise, and that enforcement of each of the covenants
contained herein will not impair his ability to obtain employment
commensurate with his abilities and on terms fully acceptable to him or
otherwise to obtain income required for the comfortable support of him and
his family and the satisfaction of the needs of his creditors. The
Executive acknowledges and confirms that his special knowledge of the
business of the Company is such as would cause the Company serious injury
or loss if he were to use such ability and knowledge to the benefit of a
competitor or were to compete with the Company in violation of the terms
of this Article 6. The Executive further acknowledges that the
restrictions contained in this Article 6 are intended to be, and shall be,
for the benefit of and shall be enforceable by, the Company's successors
and assigns.
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6.8.
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Reformation
by Court. In the event that a court of competent jurisdiction shall
determine that any provision of this Article 6 is invalid or more
restrictive than permitted under the governing law of such jurisdiction,
then only as to enforcement of this Article 6 within the jurisdiction of
such court, such provision shall be interpreted and enforced as if it
provided for the maximum restriction permitted under such governing
law.
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6.9.
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Extension
of Time. If the Executive shall be in violation of any provision of this
Article 6, then each time limitation set forth in this Article 6 shall be
extended for a period of time equal to the period of time during which
such violation or violations occur. If the Company seeks injunctive relief
from such violation in any court, then the covenants set forth in this
Article 6 shall be extended for a period of time equal to the pendency of
such proceeding including all appeals by the
Executive.
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6.10.
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Survival.
The provisions of this Article 6 shall survive the termination of this
Agreement, as applicable.
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7.
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Injunction.
It is recognized and hereby acknowledged by the parties hereto that a
breach by the Executive of any of the covenants contained in Article 6 of
this Agreement will cause irreparable harm and damage to the Company, the
monetary amount of which may be virtually impossible to ascertain. As a
result, the Executive recognizes and hereby acknowledges that the Company
may be entitled to an injunction from any court of competent jurisdiction
enjoining and restraining any violation of any or all of the covenants
contained in Article 6 of this Agreement by the Executive or any of his
affiliates, associates, partners or agents, either directly or indirectly,
and that such right to injunction shall be cumulative and in addition to
whatever other remedies the Company may
possess.
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8.
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Attorney's
Fees. Nothing contained herein shall be construed to prevent the Company
or the Executive from seeking and recovering from the other damages
sustained by either or both of them as a result of its or his breach of
any term or provision of this Agreement. In the event that
either party hereto brings suit for the collection of any damages
resulting from, or the injunction of any action constituting, a breach of
any of the terms or provisions of this Agreement, then the party found to
be at fault shall pay all reasonable court costs and attorneys' fees of
the other.
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9.
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Assignment.
Neither party shall have the right to assign or delegate his rights or
obligations hereunder, or any portion thereof, to any other
person.
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10.
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11.
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Entire
Agreement. This Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof and, upon its
effectiveness, shall supersede all prior agreements, understandings and
arrangements, both oral and written, between the Executive and the Company
(or any of its affiliates) with respect to such subject matter. This
Agreement may not be modified in any way unless by a written instrument
signed by both the Company and the
Executive.
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12.
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Notices:
All notices required or permitted to be given hereunder shall be in
writing and shall be personally delivered by courier, sent by registered
or certified mail, return receipt requested or sent by confirmed facsimile
transmission addressed as set forth herein. Notices personally delivered,
sent by facsimile or sent by overnight courier shall be deemed given on
the date of delivery and notices mailed in accordance with the foregoing
shall be deemed given upon the earlier of receipt by the addressee, as
evidenced by the return receipt thereof, or three (3) days after deposit
in the U.S. mail. Notice shall be sent (i) if to the Company, addressed to
the address of the Company in the preamble to this Agreement, Attention:
Chairman of the Board, and (ii) if to the Executive, to his address as
reflected on the payroll records of the Company, or to such other in
accordance with this provision.
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13.
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Benefits;
Binding Effect. This Agreement shall be for the benefit of and binding
upon the parties hereto and their respective heirs, personal
representatives, legal representatives, successors and, where permitted
and applicable, assigns, including, without limitation, any successor to
the Company, whether by merger, consolidation, sale of stock, sale of
assets or otherwise.
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14.
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Severability.
The invalidity of any one or more of the words, phrases, sentences,
clauses, provisions, sections or articles contained in this Agreement
shall not affect the enforceability of the remaining portions of this
Agreement or any part thereof, all of which are inserted conditionally on
their being valid in law, and, in the event that any one or more of the
words, phrases, sentences, clauses, provisions, sections or articles
contained in this Agreement shall be declared invalid, this Agreement
shall be construed as if such invalid word or words, phrase or phrases,
sentence or sentences, clause or clauses, provisions or provisions,
section or sections or article or articles had not been inserted. If such
invalidity is caused by length of time or size of area, or both, the
otherwise invalid provision will be considered to be reduced to a period
or area which would cure such
invalidity.
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15.
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Waivers.
The waiver by either party hereto of a breach or violation of any term or
provision of this Agreement shall not operate nor be construed as a waiver
of any subsequent breach or
violation.
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16.
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Damages.
Nothing contained herein shall be construed to prevent the Company or the
Executive from seeking and recovering from the other damages sustained by
either or both of them as a result of its or his breach of any term or
provision of this Agreement. In the event that either party hereto brings
suit for the collection of any damages resulting from, or the injunction
of any action constituting, a breach of any of the terms or provisions of
this Agreement, then the party found to be at fault shall pay all
reasonable court costs and attorneys' fees of the
other.
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17.
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Section
Headings. The article, section and paragraph headings contained in this
Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this
Agreement.
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18.
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No
Third Party Beneficiary. Nothing expressed or implied in this Agreement is
intended, or shall be construed, to confer upon or give any person other
than the Company, the parties hereto and their respective heirs, personal
representatives, legal representatives, successors and permitted assigns,
any rights or remedies under or by reason of this
Agreement.
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19.
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Counterparts.
This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original but all of which together shall
constitute one and the same instrument and
agreement.
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20.
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Indemnification
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20.1.
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Subject
to limitations imposed by law, the Company shall indemnify and hold
harmless the Executive to the fullest extent permitted by law from and
against any and all claims, damages, expenses (including attorneys' fees),
judgments, penalties, fines, settlements, and all other liabilities
incurred or paid by him in connection with the investigation, defense,
prosecution, settlement or appeal of any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative and to which the Executive was or is a party or is
threatened to be made a party by reason of the fact that the Executive is
or was an officer, employee or agent of the Company, or by reason of
anything done or not done by the Executive in any such capacity or
capacities, provided that the Executive acted in good faith, in a manner
that was not grossly negligent or constituted willful misconduct and in a
manner he reasonably believed to be in or not opposed to the best
interests of the Company, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
The Company also shall pay any and all expenses (including attorney's
fees) incurred by the Executive as a result of the Executive being called
as a witness in connection with any matter involving the Company and/or
any of its officers or directors.
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20.2.
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The
Company shall pay any expenses (including attorneys' fees), judgments,
penalties, fines, settlements, and other liabilities incurred by the
Executive in investigating, defending, settling or appealing any action,
suit or proceeding described in this Section 20 in advance of the final
disposition of such action, suit or proceeding. The Company shall promptly
pay the amount of such expenses to the Executive, but in no event later
than 10 days following the Executive's delivery to the Company of a
written request for an advance pursuant to this Section 20, together with
a reasonable accounting of such
expenses.
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20.3.
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The
Executive hereby undertakes and agrees to repay to the Company any
advances made pursuant to this Section 20 if and to the extent that it
shall ultimately be found that the Executive is not entitled to be
indemnified by the Company for such
amounts.
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20.4.
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The
Company shall make the advances contemplated by this Section 20 regardless
of the Executive's financial ability to make repayment, and regardless
whether indemnification of the Indemnitee by the Company will ultimately
be required. Any advances and undertakings to repay pursuant to this
Section 20 shall be unsecured and
interest-free.
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20.5.
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The
provisions of this Section 20 shall survive the termination of this
Agreement.
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[The
remainder of this page has been intentionally left blank]
IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first above written.
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COMPANY:
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By:
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Name:
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Title:
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COMPANY:
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By:
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Name:
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Title:
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EXECUTIVE:
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Name:
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