EMPLOYMENT AGREEMENT
AGREEMENT,
made and entered into in Danbury, CT, by and between Xxxxxx Capital Corp. (the
“Company”), a Nevada corporation with its principal place of business at 00 Xxx
Xxxxxxxxx Xxxx, Xxxxx 00, Xxxxxxx, XX, and Xxxxxxx X. Xxxxxxx (the “Executive”),
effective as of the 2nd
day of
February, 2006.
WHEREAS,
the operations of the Company are a complex matter requiring direction and
leadership in a variety of arenas, including financial, strategic planning,
regulatory, community relations and others;
WHEREAS,
the Executive is possessed of certain experience and expertise that qualify
him
to provide the direction and leadership required by the Company; and
WHEREAS,
subject to the terms and conditions set forth in this Agreement, the Company
therefore wishes to employ the Executive as its President
and Chief Executive Officer and the Executive wishes to accept such
employment;
NOW,
THEREFORE, in consideration of the mutual covenants and promises hereinafter
set
forth and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Company and the Executive hereby agree
as
follows:
1. Employment.
Subject
to the terms and conditions set forth in this Agreement, the Company hereby
offers and the Executive hereby accepts employment.
2. Term.
Subject
to earlier termination as hereafter provided, this Agreement shall have an
original term of three (3) years commencing on the effective date hereof and
shall be automatically renewed for additional three (3) year terms unless either
party provides notice to the other at least thirty (30) days prior to the
expiration of the original or any renewal term that the Agreement is not to
be
renewed. The term of this Agreement, as from time to time extended or renewed,
is hereafter referred to as “the term of this Agreement” or “the term hereof.”
3. Title
and Duties.
Executive agrees during the term of this Agreement to devote substantially
all
of his working time, attention, skill and efforts during normal working hours
to
the performance of his duties, faithfully and to the best of his abilities
and
in accordance with the supervision and direction of the Board of Directors
of
the Company (the “Board”). The Executive shall serve as President and Chief
Executive Officer and
shall
have such other duties as the Board, in its discretion, may assign to the
Executive from time to time. Provided, however, that the Executive may devote
reasonable amounts of time required for purposes of:
(a) serving
as a director or member of a committee of an organization or corporation,
provided such activities do not involve a conflict of interest with the
Executive’s duties and responsibilities at the Company and do not interfere with
the regular and diligent performance of those duties and
responsibilities.
(b) managing
his personal investments or engaging in any other noncompeting business
activities, provided that such activites do not involve a conflict of interest
with the Executive’s duties and responsibilites at the Company and do not
interfere with the regular and diligent performance of those duties and
responsibilities.
4. Compensation
and Benefits.
As
compensation for all services performed by the Executive under and during the
term hereof and subject to performance of the Executive’s duties and of the
obligations of the Executive to the Company, pursuant to this Agreement or
otherwise:
(a)Base
Salary.
During
the term hereof, the Company shall pay the Executive
a salary at the rate of Two Hundred Seventy-Five Thousand Dollars ($275,000)
per
annum (“Base Salary”), payable in accordance with the payroll practices of the
Company for its executives. Executive’s Base Salary may be subject to increase
by the Board in its sole discretion.
(b) Bonus
Compensation.
Executive shall be eligible to be considered for a bonus annually during the
term hereof. The amount of such bonus, if any, shall be determined by the Board
in its sole discretion.
(c) Vacations.
During
the term hereof, the Executive shall be entitled to twenty-five
(25) days of vacation per year, to be taken at such times and intervals as
shall
be determined by the Executive, subject to the reasonable business needs of
the
Company. Vacation shall otherwise be governed by the policies of the Company,
as
in effect from time to time.
(d) Other Benefits.
During
the term hereof and subject to any contribution generally required of Executives
of the Company, the Executive shall be entitled to participate in any and all
employee benefit plans from time to time in effect for Executives of the Company
generally, except to the extent such plans are in a category of benefit
otherwise provided to the Executive (e.g.,
severance pay). Such participation shall be subject to the terms of the
applicable plan documents and generally applicable Company policies. The Company
may alter, modify, add to or delete its employee benefit plans at any time
as
it, in its sole judgment, determines to be appropriate, without recourse by
the
Executive. The Company also agrees to provide the Executive with short term
and
long term disability benefits. In the event that the Company terminates its
group health insurance plan, the Company agrees to reimburse the Executive
for
the costs of obtaining comparable health insurance coverage during the term
of
this Agreement. The Company agrees to reimburse the Executive for the cost
of
his continued group health insurance coverage (under a prior employer’s plan)
until he receives family coverage under the Company’s group health insurance
plan.
(e)
Business
Expenses.
The
Company shall pay or reimburse the Executive for all reasonable business
expenses incurred or paid by the Executive in the performance of his duties
and
responsibilities hereunder, subject to such reasonable substantiation and
documentation as may be specified by the Company from time to time.
(f) Company
Automobile.
The
Company will provide the Executive with a Company automobile during the term
hereof, and will reimburse the Executive for all reasonable automobile expenses.
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(g)
Stock
Options.
(i)
The
Executive shall be granted an option to purchase, at a price of One Dollar
($1.00) per share, 2.2 Million shares of common stock, $0.001 par value per
share, of the Company (the “Option”). Five Hundred Fifty Thousand (550,000)
shares shall vest on the date of grant. The remaining One Million Six Hundred
Hundred and Fifty Thousand (1,650,000) shares shall vest in equal monthly
installments over the two-year period from the date of grant. Such vesting
shall
cease if the Executive’s employment under this Agreement is terminated, unless
termination is by the Company other than for Cause, by the Executive for Good
Reason, or caused by the Executive’s death.
(ii)
In
the
event the Company undergoes a Change in Control, as defined below, one hundred
percent (100%) of the then unvested portion of the Option shall become vested
and exercisable upon the occurance of such Change in Control. A Change in
Control means the occurence of any of the following events: (a) the Company
is a
party to, or the stockholders approve, a merger, consolidation or reorganization
with another corporation (other than a merger, consolidation or reorganization
that (i) would result in the voting power immediately before to continue to
represent either by remaining outstanding or by being converted into securities
of the surviving entity, more than 50% of the voting power thereafter, or (ii)
in which no person or group would acquire more than 20% of the voting power);
(b) a sale of all, or substantially all, of the assets of the Company; (c)
any
individual, partnership, firm, corporation, association, trust, unincorporated
organization or other entity, or any syndicate or group deemed to be a person
under Section 14(d)(2) of the Exchange Act, is or becomes the “beneficial owner”
(as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of
shares of common stock of the Company representing 35% or more of the voting
power of the Company’s then outstanding securities entitled to vote in the
election of directors of the Company; or (d) the Company is disolved or
liquidated; provided
however,
that a
change in control under clause (a), (b), (c), or (d) shall not be deemed to
be a
Change in Control as a result of an acquisition of securities of the Company
by
an employee benefit plan maintained by the Company for its employees.
5. Termination
of Employment.
Notwithstanding the provisions of Section 2 hereof, the Executive’s employment
hereunder shall terminate prior to the expiration of the term under the
following circumstances:
(a) Death.
In the
event of the Executive’s death during the term hereof, the Executive’s
employment hereunder shall immediately and automatically terminate. In such
event, the Company shall pay to the Executive’s designated beneficiary or, if no
beneficiary has been designated by the Executive, to his estate, (i) the Base
Salary earned but not paid through the date of temination, (ii) pay for any
vacation time earned but not used through the date of termination, (iii) any
business expenses incurred by the Executive but unreimbursed on the date of
termination, provided that such expenses and required substantiation and
documentation are submitted within sixty (60) days of termination and that
such
expenses are reimbursable under Company policy; (iv) continued payment of Base
Salary for the period of time that the Executive would have been entitled to
receive such payments under Section 5(d) below if his employment had been
terminated by the Company other than for Cause on the date of his death; and
(v)
any bonus owed to the Executive. The Company shall have no further obligation
to
the Executive hereunder.
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(b) Disability.
(i) The
Company may terminate the Executive’s employment hereunder,
upon notice to the Executive, in the event that the Executive becomes disabled
during his employment hereunder through any illness, injury, accident or
condition of either a physical or psychological nature and, as a result, is
unable to perform substantially all of his duties and responsibilities
hereunder, for one hundred twenty (120) consectuive days during any calendar
year. In the event of such termination, the Company shall pay to the Executive
(i) the Base Salary earned but not paid through the date of temination, (ii)
pay
for any vacation time earned but not used through the date of termination,
(iii)
any business expenses incurred by the Executive but unreimbursed on the date
of
termination, provided that such expenses and required substantiation and
documentation are submitted within sixty (60) days of termination and that
such
expenses are reimbursable under Company policy.
(c) By
the
Company for Cause.
The
Company may terminate the Executive’s employment hereunder for Cause at any time
upon notice to the Executive setting forth in reasonable detail the nature
of
such Cause. The following, as determined by the Board in its reasonable
judgment, shall constitute Cause for termination:
(i)
The
Executive’s conviction of a felony or conviction of any other crime involving
dishonesty or moral turpitude (which specifically excludes all traffic
violations);
(ii)
The
Executive’s theft, embezzlement, misappropriation of or intentional and
malicious infliction of damage to the Company’s business or
property;
(iii)
The
Executive’s gross dereliction of duties or gross negligence; and
(iv)
The
Executive’s breach of any material term of this Agreement not cured by the
Executive within twenty (20) days following notice from the Company specifying
in detail the nature of such breach.
Upon
the
giving of notice of termination of the Executive’s employment hereunder for
Cause, the Company shall have no further obligation to the Executive, other
than
payment to the Executive of (i) the Base Salary earned but not paid through
the
date of temination, (ii) pay for any vacation time earned but not used through
the date of termination, (iii) any business expenses incurred by the Executive
but unreimbursed on the date of termination, provided that such expenses and
required substantiation and documentation are submitted within sixty (60) days
of termination and that such expenses are reimbursable under Company
policy.
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(d)
By
the
Company Other than for Cause.
The
Company may terminate the Executive’s
employment hereunder other than for Cause at any time upon notice to the
Executive. In the event of such termination, and provided that no benefits
are
payable to the Executive under a separate severance agreement or an executive
severance plan as a result of such termination, then for a period of twenty-four
(24) months less one month for each month after the effective date hereof (but
in no case for less than twelve (12) months), the Company shall continue to
pay
the Executive Base Salary at the rate in effect on the date of termination,
and
any bonus to which he would have been entitled during such period. Any
obligation of the Company to the Executive hereunder is conditioned, however,
upon the Executive’s signing a mutually acceptable release of claims. Base
Salary to which the Executive is entitled hereunder shall be payable in
accordance with the normal payroll practices of the Company.
(e)
By
the
Executive for Good Reason.
The
Executive may terminate his employment hereunder for Good Reason, upon notice
to
the Company setting forth in reasonable detail the nature of such Good Reason.
The following shall constitute Good Reason for termination by the
Executive:
(i)
Failure
of the Company to continue the Executive in the position of President and Chief
Executive Officer;
(ii) Material
diminution in the nature or scope of the Executive’s responsibilities, duties or
authority, a Change of Control, or a request by the Company, wheather written,
verbal or implied, to engage in unlawful behavior, including but not limited
to
violating SEC or NASDAQ rules or regulations; or
(iii) Material
failure of the Company to provide the Executive the compensation and benefits
in
accordance with the terms of Section 4, excluding an inadvertant failure which
is cured within ten (10) business days following notice from the Executive
specifying in detail the nature of such failure.
In
the
event of termination in accordance with this Section 5(e), and provided that
no
benefits are payable to the Executive under a separate severance agreement
or an
executive severance plan as a result of such termination, then the Executive
will be entitled to the same pay he would have been entitled to receive had
the
Executive been terminated by the Company other than for Cause in accordance
with
Section 5(d) above; provided that the Executive satisfies all conditions to
such
entitlement, including without limitation the signing of an mutually agreeable
release.
(f) By
the
Executive Other than for Good Reason.
The
Executive may terminate his employment hereunder at any time upon thirty (30)
days’ notice to the Company. In the event of termination of the Executive
pursuant to this section 5(f), the Company shall have no further obligation
to
the Executive, other than (i) the Base Salary earned but not paid through the
date of temination, (ii) pay for any vacation time earned but not used through
the date of termination, (iii) any business expenses incurred by the Executive
but unreimbursed on the date of termination, provided that such expenses and
required substantiation and documentation are submitted within sixty (60) days
of termination and that such expenses are reimbursable under Company policy.
The
Company may elect to waive the period of notice, or any portion thereof.
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(g)
Non-Renewal
of Agreement.
In the
event this Agreement is not automatically
renewed or extended beyond the initial term hereof pursuant to paragraph 2,
and
provided that no benefits are payable to the Executive under a separate
severance agreement or an executive severance plan as a result of such
termination, then the Executive will be entitled to the same pay he would have
been entitled to receive had the Executive been terminated by the Company other
than for Cause in accordance with Section 5(d) above; provided that the
Executive satisfies all conditions to such entitlement, including without
limitation the signing of an mutually agreeable release.
6. Effect
of Termination.
The
provisions of this Section 6 shall apply to termination due to the expiration
of
the term hereof, pursuant to Section 5 or otherwise.
(a) Payment
by the Company of any Base Salary, any Base Salary continuation and any bonus
that may be due the Executive in each case under the applicable termination
provision of Section 5 shall constitute the entire obligation of the Company
to
the Executive. The Executive shall promptly give the Company notice of all
facts
necessary for the Company to determine the amount and duration of its
obligations in connection with any termination pursuant to Section 5(d) or
5(e)
hereof.
(b)
Provisions
of this Agreement shall survive any termination if so provided herein or if
necessary or desirable to accomplish the purposes of other surviving provisions,
including without limitation the obligations of the Executive under Sections
7,
8 and 9 hereof. The obligation of the Company to make payments to or on behalf
of the Executive under Section 5(d) or 5(e) hereof is expressly conditioned
upon
the Executive’s continued full performance of obligations under Sections 7, 8
and 9 hereof. The Executive recognizes that, except as expressly provided in
Section 5(d) or 5(e), no compensation is earned after termination of employment.
7. Restrictive
Covenants.
During
the term of this Agreement and for a period of twelve (12) months from the
date
on which the Executive's employment with the Company terminates, the Executive
covenants and agrees that he shall not do any of the following:
(a)
recruit,
solicit or induce any employee, consultant, agent, director or officer of the
Company to terminate his/her employment with, or otherwise cease any
relationship with, the Company;
or
(b)
divert,
or take away any clients, customers or accounts, or prospective clients,
customers or accounts, of the Company, or any of the Company’s business with
such clients, customers or accounts which were contacted, solicited or served
by
Executive, or were directly or indirectly under Executive’s responsibility,
while Executive was employed by the Company, or the identity of which Executive
became aware during the term of employment except as agreed upon in writing
signed by a duly authorized officer of the Company.
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If
any
part of this Section 7 shall be determined by a court of competent jurisdiction
to be unreasonable in duration, geographic area, or scope, then the provisions
of this Section are intended to and shall extend only for such period of time,
in such area and with respect to such activities as shall be determined by
such
court to be reasonable and all provisions hereof shall be applied to the fullest
extent permitted by law.
8. Non-Disclosure
of Confidential Information.
(a) The
Executive shall not during the term of this Agreement and for a twenty-four
(24)
month period following termination of his employment hereunder intentionally
or
negligently use or disclose to any person, firm or corporation any confidential
or proprietary information acquired by him during the course of his employment
relating to the Company (or relating to any client of the Company) except in
the
course of performing his duties for the Company. Such confidential and
proprietary information shall include, but shall not be limited to, proprietary
technology, trade secrets, patented processes, research and development data,
know-how, formulae, contractual information, pricing policies, the substance
of
agreements and arrangements with customers, suppliers and others, names of
accounts, customer and supplier lists and any other documents embodying such
confidential and proprietary information, that is not already known to the
public.
(b)
All
information and documents relating to the Company shall be the exclusive
property of the Company, and the Executive shall use his best efforts to prevent
any publication or disclosure of such information and documents. Upon
termination of the employment of the Executive with the Company, the Executive
shall not take from and will promptly return to the Company all documents,
records, customer lists, computer programs, equipment designs, technical
information, reports, writings and other similar documents containing
confidential or proprietary information of the Company, including copies
thereof, then in the Executive's possession or control.
9. Proprietary
Rights.
Any and
all inventions, processes, procedures, systems, discoveries, designs,
configurations, technology, works of authorship, trade secrets and improvements
(whether or not patentable and whether or not they are made, conceived or
reduced to practice during working hours or using the Company's data or
facilities) (collectively, the "Inventions") which the Executive makes,
conceives, reduces to practice, or otherwise acquires during his employment
by
the Company (either solely or jointly with others), and which are related to
the
Company's present or planned business, services or products, shall be the sole
property of the Company and shall at all times and for all purposes be regarded
as acquired and held by the Executive in a fiduciary capacity for the sole
benefit of the Company. All Inventions that consist of works of authorship
capable of protection under copyright laws shall be prepared by the Executive
as
"works made for hire", with the understanding that the Company shall own all
of
the exclusive rights to such works of authorship under the United States
copyright law and all international copyright conventions and foreign laws.
The
Executive hereby assigns to the Company, without further compensation, all
such
Inventions and any and all patents, copyrights, trademarks, trade names or
applications therefor, in the United States and elsewhere, relating thereto.
The
Executive shall promptly disclose to the Company and to no other party all
such
Inventions and shall assist the Company for its own benefit in obtaining and
enforcing patents and copyright registrations on such Inventions in all
countries. Upon request, the Executive shall execute all applications,
assignments, instruments and papers and perform all acts (such as the giving
of
testimony in interference proceedings and infringement suits or other
litigation) necessary or desired by the Company to enable the Company and its
successors, assigns and nominees to secure and enjoy the full benefits and
advantages of such Inventions.
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10. Right
to Injunction.
The
Company and the Executive each acknowledge that the services to be performed
by
the Executive hereunder are unique and that the Company required the Executive
to enter into this Agreement as a condition to his employment by the Company.
The Executive specifically acknowledges and agrees that the restrictions imposed
by Sections 7 and 8 are reasonable as to duration, geographic area and scope
and
are necessary for the protection of the interests of the Company. Any breach
or
threatened breach of any provision of this Agreement by the Executive shall
entitle the Company, in addition to any other remedies available to it at law
or
in equity, to bring an action in any court of competent jurisdiction to enjoin
any such breach or threatened breach and to obtain an order temporarily or
permanently enjoining any such breach or threatened breach, without posting
bond, and the Company shall be entitled to recover from the Executive the
Company’s reasonable attorneys’ fees and costs in obtaining such
relief.
11. Withholding.
All
payments made by the Company under this Agreement shall be reduced by any tax
or
other amounts required to be withheld by the Company under applicable law.
12. Assignment.
This
Agreement shall not be assignable by the Executive or the Company without the
written consent of the other party, provided, however, that the Company may
assign the Agreement to any person, partnership or corporation which acquires
all or substantially all of the assets of the Company.
13. Waiver,
Amendment and Alteration.
The
waiver by either party of a breach of any provision of this Agreement shall
not
operate as or be construed as a waiver of any prior or subsequent breach
thereof. This Agreement may be amended or modified only by a written instrument
signed by the Executive and by an expressly authorized representative of the
Company.
14. Conflicting
Agreements.
The
Executive hereby represents and warrants that the execution of this Agreement
and the performance of his obligations hereunder will not breach or be in
conflict with any other agreement to which the Executive is a party or is bound
and that Executive is not now subject to any covenants against competition
or
similar covenants or any court order or other legal obligation that would affect
the performance of his obligations hereunder. The Executive will not disclose
to
or use on behalf of the Company any proprietary information of a third party
without such party’s consent.
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15. Notices.
Any and
all notices, requests, demands and other communications provided for by this
Agreement shall be in writing and shall be effective when delivered in person
or
deposited in the United States mail, postage prepaid, registered or certified,
and addressed to the Executive at his last known address on the books of the
Company or, in the case of the Company, at its principal place of business,
attention of the Secretary, or to such other address as either party may specify
by notice to the other actually received.
16. Entire
Agreement and Binding Effect.
This
Agreement contains the entire agreement of the parties with respect to the
subject matter hereof and supercedes all prior communications, agreements and
understandings, written or oral, and shall be binding upon and inure to the
benefit of the parties hereto and their respective successors, permitted assigns
and legal representatives.
17. Counterparts.
This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
instrument, and in pleading or proving any provision of this Agreement it shall
not be necessary to produce more than one of such counterparts.
18. Headings.
The
headings and captions in this Agreement are for convenience only and in no
way
define or describe the scope of content of any provision of this Agreement.
19.
Severability/Governing
Law.
The provisions of this Agreement are severable. If any term or provision
hereof (or the application thereof) is held invalid or unenforceable for any
reason, the remaining provisions shall not be affected but rather shall remain
in full force and effect and shall be enforced to the fullest extent permitted
by law.
IN
WITNESS WHEREOF, this Agreement has been executed as a sealed instrument by
the
Company, by its duly authorized representative, and by the Executive, as of
the
date first above written.
| THE EXECUTIVE: | XXXXXX CAPITAL CORP.: | |
| |
|
|
| /s/ Xxxxxxx X. Xxxxxxx | By: | /s/ Xxxxx Xxxxx |
| Xxxxxxx X. Xxxxxxx | Title: Executive Vice President | |
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