EXHIBIT 10.1
Solomon Alliance Group, Inc. Employment Agreement
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EMPLOYMENT AGREEMENT
This Employment Agreement is made and entered into as of this 21st day
of December 2000, by and between Solomon Alliance Group, Inc. (the "Company"),
and Xxxxx Xxxxx, an individual and resident of Virginia (the "Executive").
RECITALS
A. The Company desires to be assured of the association and services of
Executive for the Company.
B. Executive is willing and desires to be employed by the Company, and
the Company is willing to employ Executive, upon the terms, covenants and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual terms, covenants and
conditions hereinafter set forth, the parties hereto do hereby agree as follows:
1. EMPLOYMENT. The Company hereby employs Executive as Vice President
of Sales, subject to the supervision and direction of the Company's Chief
Executive Officer and Board of Directors.
2. TERM. The term of this Agreement shall be a period of one (1) year
commencing on the date hereof, and shall automatically renew for five successive
one year terms, unless renegotiated or otherwise terminated earlier pursuant to
Section 7 below; provided, however, that obligations required of either party
hereto following any termination shall continue in effect after such
termination.
3. COMPENSATION; REIMBURSEMENT.
3.1 BASE SALARY. For all services rendered by Executive under this
Agreement, the Company shall pay Executive a base salary of Seventy-eight
Thousand Dollars ($78,000.00) per annum, payable monthly in equal
installments (the "Base Salary"). The amount of the Base Salary may be
increased at any time and from time to time by the Board of Directors of the
Company. No such change shall in any way abrogate, alter, terminate or
otherwise affect the other terms of this Agreement.
3.2 EQUITY COMPENSATION. In addition to the Base Salary, Executive
shall participate in Incentive Stock Option plans, Non Statutory Stock Option
plans or similar plans which shall be adopted by the Company's Board of
Directors following consultation with its accountants and employee benefits
advisors. The Executive will have the opportunity to earn additional options and
cash performance bonuses if the Executive achieves financial and business
performance objectives that will be negotiated annually between the Board of
Directors and the Executive.
3.3 ADDITIONAL BENEFITS. In addition to the Base Salary and the Equity
Compensation, the
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Executive shall be entitled to health, disability and life insurance and such
other benefits as may be provided by the Board of Directors to all executive
employees of the Company. The Executive shall be entitled to two weeks of
vacation annually.
3.4 REIMBURSEMENT. Executive shall be reimbursed for all reasonable
"out-of-pocket" business expenses for business travel and business entertainment
incurred in connection with the performance of his duties under this Agreement
(i) so long as such expenses constitute business deductions from taxable income
for the Company and are excludable from taxable income to the Executive under
the governing laws and regulations of the Internal Revenue Code (provided,
however, that Executive shall be entitled to full reimbursement in any case
where the Internal Revenue Service may disallow to the Company a percentage of
meals and entertainment expenses, under Section 274(n) of the Internal Revenue
Code, as such section may be amended); and (ii) to the extent such expenses do
not exceed the amounts allocable for such expenses in budgets that are approved
from time to time by the Company. The reimbursement of Executive's business
expenses shall be upon monthly presentation to and approval by the Company of
valid receipts and other appropriate documentation for such expenses.
4. SCOPE OF DUTIES.
4.1 ASSIGNMENT OF DUTIES. Executive shall have such duties as may be
assigned to him from time to time by the Company's Chief Executive Officer. Such
duties shall be exercised subject to the control and supervision of the Chief
Executive Officer of the Company.
4.2 GENERAL DUTIES. Executive shall act as the Vice President of Sales
of the Company and perform all duties, functions and responsibilities as
determined by the Chief Executive Officer and as generally associated with such
a position in a similarly situated company.
4.3 ANNUAL PLAN.
(1) Executive shall submit to the Chief Executive Officer for the
Board's approval, not later than 60 days before the beginning of each calendar
year, an annual business plan for the Company's sales activities (the "Annual
Plan"). The Annual Plan shall be revised by the Executive and submitted for
review (and approval in the case of material changes from the approved Annual
Plan) from time to time during each year to reflect changes in the Annual Plan
because of operations or otherwise. Each Annual Plan shall provide such
information, proposals and market projections sufficient to assist the Chief
Executive Officer and the Board of Directors to determine the corporate policy
with respect to the Company's sales activities. Each Plan shall include the
following information:
(a) an annual forecast of income and expenses for the
Executive's area of responsibility;
(b) a cash flow budget, estimate of profit, and source and
use of cash statements:
(c) a payroll and staffing plan and budget for the
operation of the Company; and
(2) During each year Executive, in the performance of his duties under
this Agreement, shall comply or cause compliance with the applicable Annual Plan
and shall not (except for emergency expenditures or special circumstances
requiring an unanticipated expenditure) deviate by ten percent or more from any
budget category set forth in the Annual Plan, incur any material additional
expense or change materially the manner of operation without the approval of the
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Company.
4.4 EXECUTIVE'S DEVOTION OF TIME. Executive hereby agrees to devote
such time, abilities and energy as may be required to faithfully perform the
duties assigned to him and to the promotion and forwarding of the business
affairs of the Company, and not to divert any business opportunities from the
Company to himself or to any other person or business entity without the prior
approval of the Board of Directors of the Company.
4.5 CONFLICTING ACTIVITIES.
(1) Executive shall not, during the term of this Agreement, be engaged
in any other business activity without the prior consent of the Board of
Directors of the Company; provided, however, that this restriction shall not be
construed as preventing Executive from investing his personal assets in passive
investments in business entities which are not in competition with the Company
or its affiliates, or from pursuing business opportunities as permitted by
paragraph 4.5(b).
(2) Executive hereby agrees to promote and develop for the Company all
business opportunities that come to his attention relating to current or
anticipated future business of the Company, in a manner consistent with the best
interests of the Company and with his duties under this Agreement. As used
herein, the term "business opportunity" shall not include business opportunities
involving investment in publicly traded stocks, bonds or other securities, or
other investments of a personal nature.
5. SEVERANCE. So long as this Agreement is in effect and no termination
"with cause" has occurred, Executive shall at all times be entitled to severance
benefits which shall include, without limitation, payment to Executive, and/or
his legal representative or heirs as applicable, of the Executive's cumulative
base salary for the remainder of the term of employment hereunder, payable in
equal installments over the remainder of the term (the "Severance Payment.")
6. TRADE SECRETS AND NON-COMPETITION.
6.1 TRADE SECRETS. Executive agrees to sign the Company's Employee
Secrecy Agreement and to cause all employees to sign such agreement for the
benefit of the Company. Executive agrees that he will not disclose, either
during the term of his employment by the Company or at any time thereafter, to
any person, firm or corporation any information concerning the business affairs,
the trade secrets or the customer lists or similar information of the Company.
Any technique, method, process or technology used by the Company shall be
considered a "trade secret" for the purposes of this Agreement.
6.2 OWNERSHIP OF TRADE SECRETS; ASSIGNMENT OF RIGHTS. Executive hereby
agrees that all know-how, documents, reports, plans, proposals, marketing and
sales plans, client lists, client files and materials made by him during the
term of his employment or by the Company are the property of the Company and
shall not be used by him in any way adverse to the Company's interests.
Executive shall not deliver, reproduce or in any way allow such documents or
things to be delivered or used by any third party without specific direction or
consent of the Board of Directors of the Company. Executive hereby assigns to
the Company any rights that he may have in any such trade secret or proprietary
information.
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6.3 COVENANT NOT TO SOLICIT AND COMPETE. For so long as the Executive
is an employee of the Company and for two years thereafter (the "Non-Compete
Period"), the accounts and customers of the Company will not be solicited,
directly or indirectly, by the Executive, or by any individual or company with
whom the Executive is affiliated as partner, director, founder, officer,
employee, consultant, contractor or other business relationship by which the
Executive would benefit as a result of any such solicitation. In addition:
(1) As a material inducement for the Company to enter into this
Agreement, Executive shall not, during the Non-Compete Period:
(a) Directly or indirectly, on its own behalf, or on behalf of
any other party, engage in, or assist in any way, financially or otherwise, any
competitor or any party that is engaged, or which proposes to engage, in the
business of Company.
(b) Own, either directly or indirectly, 5% or more of a
competitor of Company.
(c) Directly or indirectly solicit, attempt to solicit, or
otherwise divert, or attempt to divert, any supplier or customer of any business
of Company for a purpose or with a result that is competitive with Company.
(2) If any court of competent jurisdiction shall finally hold that the
time, territory or any other provision set forth in this Section 6.3 constitutes
an unreasonable restriction, such provision of this Section 6.3 shall not be
rendered void, but shall apply as to such time, territory or to such other
extent as such court may determine constitutes a reasonable restriction under
the circumstances involved. Executive acknowledges that the restrictions
contained in this Section 6.3 are reasonable and necessary to protect the
legitimate interests of Company and that any breach by the Executive of any
provision hereof will result in irreparable injury to Company. Executive
acknowledges that Company shall be entitled to preliminary and permanent
injunctive relief in any action seeking to enforce the provisions of this
Section 6.3. The Executive acknowledges that the Company shall be entitled to an
equitable accounting of all earnings, profits or other benefits arising from
such breach and shall be entitled to receive such other damages, direct or
consequential, as may be appropriate.
7. TERMINATION.
7.1 BASES FOR TERMINATION.
(1) Executive's employment hereunder may be terminated at any time by
mutual agreement of the parties.
(2) This Agreement shall automatically terminate on the last day of the
month in which Executive dies or becomes permanently incapacitated. "Permanent
incapacity" as used herein shall mean mental or physical incapacity, or both,
reasonably determined by the Company's Board of Directors based upon a
certification of such incapacity by, in the discretion of the Company's Board of
Directors, either Executive's regularly attending physician or a duly licensed
physician agreed to by the Executive and the Company's Board of Directors,
rendering Executive unable to perform substantially all of his duties hereunder
and which appears reasonably certain to continue for at least six consecutive
months without substantial improvement. Executive shall be deemed to have
"become permanently incapacitated" on the date the Company's Board of Directors
has determined that Executive is permanently incapacitated and so notifies
Executive.
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(3) Executive's employment may be terminated by the Company "with
cause," effective, unless otherwise indicated, upon delivery of written notice
to Executive given at any time (without any necessity for prior notice) if any
of the following shall occur:
(a) any material and intentional breach of duty of the
Executive that continues for 15 days after written notice of termination under
this subsection has been delivered to the Executive;
(b) any material breach of Executive's obligations
hereunder; or
(c) any material acts or events which inhibit Executive from
fully performing his or her responsibilities to the Company in good faith, such
as (i) a felony criminal conviction; (ii) any other criminal conviction
involving fraud; (iii) drug or alcohol abuse.
(4) Executive's employment may be terminated by the Company "without
cause" (for any reason or no reason at all) at any time by giving Executive 60
days prior written notice of termination, which termination shall be effective
on the 60th day following such notice. The severance provisions of Section 5
shall become effective upon such notice.
(5) Executive may terminate his or her employment hereunder by giving
the Company 60 days prior written notice, which termination shall be effective
on the 60th day following such notice.
7.2 PAYMENT UPON TERMINATION. Upon termination under subsections
7.1(1), (2), (4), or (5), the Company shall provide the severance benefits
described in Section 5 above. After any such termination and provision of the
severance benefits set forth in Section 5, the Company shall not be obligated to
compensate Executive, his estate or representatives nor provide benefits to
Executive, except as provided by law.
7.3 DISMISSAL FROM PREMISES. At the Company's option, Executive shall
immediately leave the Company's premises on the date notice of termination is
given by either Executive or the Company.
8. INJUNCTIVE RELIEF. The Company and Executive hereby acknowledge and
agree that any default under Section 6 above will cause damage to the Company in
an amount difficult to ascertain. Accordingly, in addition to any other relief
to which the Company may be entitled, the Company shall be entitled to such
injunctive relief as may be ordered by any court of competent jurisdiction
including, but not limited to, an injunction restraining any violation of
Section 6 above and without the proof of actual damages.
9. MISCELLANEOUS.
9.1 MERGERS AND ACQUISITIONS. In case of any consolidation or merger of
the Company with or into another corporation (other than a consolidation or
merger in which the Company is the continuing corporation), or in case of any
sale or conveyance to another corporation of the property of the Company as, or
substantially as, an entirety (other than a sale/leaseback, mortgage or other
financing transaction), or any change of name or other transfer of securities of
the Company resulting in a change of control (voting, management, board or
otherwise) of the Company, the terms and provisions of this Agreement shall
remain effective on the Company, or its legal successors, subsidiaries and
affiliates.
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9.2 TRANSFERS AND ASSIGNMENT. This Agreement is personal as to
Executive and shall not be assigned or transferred by Executive without the
prior written consent of the Company. This Agreement shall be binding upon and
inure to the benefit of all of the parties hereto and their respective permitted
heirs, personal representatives, legal successors and assigns.
9.3 SEVERABILITY. Nothing contained herein shall be construed to
require the commission of any act contrary to law. Should there be any conflict
between any provisions hereof and any present or future statute, law, ordinance,
regulation, or other pronouncement having the force of law, the latter shall
prevail, but the provision of this Agreement affected thereby shall be curtailed
and limited only to the extent necessary to bring it within the requirements of
the law, and the remaining provisions of this Agreement shall remain in full
force and effect.
9.4 GOVERNING LAW. This Agreement is made under and shall be construed
pursuant to the laws of the State of the Company's domicile without giving
effect to any conflict of laws principles.
9.5 COUNTERPARTS. This Agreement may be executed in several counter
parts and all documents so executed shall constitute one agreement, binding on
all of the parties hereto, notwithstanding that all of the parties did not sign
the original or the same counterparts.
9.6 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
and understanding of the parties with respect to the subject matter hereof and
supersedes all prior oral or written agreements, arrangements, and
understandings with respect thereto. No representation, promise, inducement,
statement or intention has been made by any party hereto that is not embodied
herein, and no party shall be bound by or liable for any alleged representation,
promise, inducement, or statement not so set forth herein.
9.7 MODIFICATION. This Agreement may be modified, amended, superseded,
or cancelled, and any of the terms, covenants, representations, warranties or
conditions hereof may be waived, only by a written instrument executed by the
Company and the Executive.
9.8 ATTORNEYS' FEES AND COSTS. In the event of any dispute arising out
of the subject matter of this Agreement, the Company shall determine venue and
the prevailing party shall recover, in addition to any other damages assessed,
its attorneys' fees and court costs incurred in litigating or otherwise settling
or resolving such dispute whether or not an action is brought or prosecuted to
judgment. In construing this Agreement, none of the parties hereto shall have
any term or provision construed against such party solely by reason of such
party having drafted the same.
9.9 WAIVER. The waiver by either of the parties, express or implied, of
any right under this Agreement or any failure to perform this Agreement by the
other party, shall not constitute or be deemed as a waiver of any other right
under this Agreement or of any other failure to perform under this Agreement by
the other party, whether of a similar or dissimilar nature.
9.10 CUMULATIVE REMEDIES. Each and all of the several rights and
remedies provided in this Agreement, or by law or in equity, shall be
cumulative, and no one of them shall be
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exclusive of any other right or remedy, and the exercise of any one of such
rights or remedies shall not be deemed a waiver of, or an election to
exercise, any other such right or remedy.
9.11 HEADINGS. The section and other headings contained in this
Agreement are for reference purposes only and shall not in any way affect the
meaning and interpretation of this Agreement.
9.12 NOTICES. Any notice under this Agreement must be in writing, may
be telecopied, sent by express 24-hour guaranteed courier, or hand delivered, or
may be served by depositing the same in the United States mail, addressed to the
party to be notified, postage prepaid and certified with a return receipt
requested. The addresses of the parties for the receipt of notice shall be the
then-current address of the parties on the books and records of the Company.
Each notice given by certified mail shall be deemed delivered and effective on
the date of delivery as shown on the return receipt, and each notice delivered
in any other manner shall be deemed to be effective as of the time of actual
delivery thereof. Each party may change its address for notice by giving notice
thereof in the manner provided above.
9.12 SURVIVAL. Any provision of this Agreement which imposes an
obligation after termination or expiration of this Agreement shall survive the
termination or expiration of this Agreement and be binding on Executive and the
Company.
9.13 RIGHT OF SET-OFF. Upon termination or expiration of this
Agreement, the Company shall have the right to set-off against the amounts due
Executive hereunder the amount of any outstanding loan or advance from the
Company to Executive.
9.14 EFFECTIVE DATE. This Agreement shall become effective as of the
date set forth on page 1 when signed by Executive and the Company.
IN WITNESS WHEREOF, the parties hereto have caused this Employment
Agreement to be executed as of the date first set forth above.
SOLOMON ALLIANCE GROUP, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
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Xxxxxx X. Xxxxxx, Xx., President and CEO
XXXXX XXXXX
/s/ Xxxxx Xxxxx 12-21-00
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Xxxxx Xxxxx
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