EMPLOYMENT AGREEMENT
This Agreement is effective as of the 25th of April 2003 ("Agreement")
and is by and between XXXXXXXXXXX.XXX, INC., a Nevada corporation ("Company"),
and, Xxxxx 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; which supercedes the employment agreement dated August 14, 2000, and
the Change of Control and Termination Agreement dated April 9, 2001; 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 May 1, 2003, and shall
remain in effect for two (2) years thereafter ("Term").
2. Duties.
(a) General Duties. The Executive shall serve as the Chief Financial
Officer/Secretary of the Company with duties and responsibilities that are
customary for such executives plus such other responsibilities that are
specifically assigned by the Chief Executive Officer 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.
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(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 May 1, 2003 to April 30, 2004, the amount of $135,000.00;
(ii)From May 1, 2004 to April 30, 2005, the amount of $144,445.00;
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 or the Chief Executive
Officer
(c) Bonus. Executive may receive bonus compensation in an amount as
approved by the Company's Board of Directors or the Chief Executive in its sole
discretion based upon the performance criteria as may be established by the
Board of Directors or the Chief Executive Officer 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 or the Chief Executive Officer.
The Executive will also be entitled to participate in the "Executive Bonus Plan"
as set forth by the Company and may elect to take such cash compensation in
Restricted Stock at a value equal to 90% of the Fair Market price.
(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 and the
expense is approved by the CEO.
(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.
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(f) Change of Control. For purposes of this Agreement, "Change of Control"
means:
(1) The closing of any merger, combination, consolidation or similar
business transaction involving the Company in which the holders of Common
Stock immediately prior to such closing are not the holders of a majority
of the ordinary voting securities of the surviving person in such
transaction (a "Business Combination"); or
(2) The closing of any sale by the Company of all or substantially all of
its assets to an acquiring person in which the holders of Common Stock
immediately prior to such closing are not the holders of a majority of the
ordinary voting securities of the acquiring person (an "Asset Sale"); or
(3) The closing of any sale by the holders of Common Stock of an amount
of Common Stock that equals or exceeds a majority of the shares of Common
Stock immediately prior to such closing to a person in which the holders of
the Common Stock immediately prior to such closing are not the holders of a
majority of the ordinary voting securities (a "Stock Sales"); or
In the event of a Change in Control as defined in this section all the
Executive's unvested employee stock options will automatically vest and the
Executive will have one year from his termination date to exercise all
stock options issued to employee prior to his termination. Notwithstanding
the previous sentence in no event can the options be exercised past the
expiration date of the option.
(g) Stock Options - As of the date of this agreement, Executive shall
receive stock options to purchase 50,000 shares of the common stock of the
Company at an exercise price equal to the market price at the end of that same
date. The options will vest one-third each year over a three-year period and
will be subject to the acceleration of the vesting provisions as described in
Sections 3(f) and 5(b).
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.
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(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
(iii) otherwise defrauding the Company or any of its subsidiaries or
affiliates; or
(iv) 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.
(b) Non-Renewal of Contract If the Company elects not to renew this
Agreement, the Employee shall be entitled to receive Severance Pay (as
hereinafter defined) for a period of nine (9) months from the effective date of
termination, payable in regular installments in accordance with the Company's
general payroll practices for salaried employees. Additionally, all unvested
employee stock options will automatically vest and the Executive will have one
year from termination date to exercise the employee stock options.
Notwithstanding the previous sentence in no event can the options be exercised
past the original expiration date of the options. 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 no further
obligations hereunder or otherwise with respect to Executive's employment from
and after the termination date.
(c) 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.
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(d) 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. This non-compete covenant is supported by the
stock options issued to Executive and the Executive acknowledges that the
Company would not issue such stock options but for Executive's agreement to be
bound by the restrictive covenants set forth herein.
(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 and for two (2) years after termination 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.
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(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.
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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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