EMPLOYMENT AGREEMENT BETWEEN BLUEGATE CORPORATION AND STEPHEN J. SPERCO
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Exhibit
1.
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BETWEEN
BLUEGATE CORPORATION AND XXXXXXX X. XXXXXX
This
Employment agreement (the “Agreement”) is made effective as of the
31st
day of
December 2006, by and between
Bluegate
Corporation, a Nevada corporation (“Bluegate”), and
Xxxxxxx X. Xxxxxx
(the
“Executive”).
WHEREAS,
The Executive is willing to be employed by Bluegate from and after the effective
date on the basis and the terms and conditions set forth in this
Agreement.
THEREFORE,
upon the mutual promises and covenants of the parties, and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and intending to be legally bound, the parties agree as
follows:
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1.
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Employment.
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Bluegate
hereby employs the Executive, and the Executive hereby accepts such employment,
for the period stated in section 3. of this Agreement and upon the other terms
and conditions herein provided.
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2.
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Position
and Duties.
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During
the Employment Period the Executive agrees to serve as Chief Operating Officer
(“COO”) of Bluegate. In his capacity of COO, the Executive will perform such
duties and responsibilities for Bluegate as may from time to time be assigned
to
him by the Board of Directors of Bluegate. The Executive shall have no
responsibility for payroll or for the filing of any payroll tax return, or
for
the payment of any tax of any kind that may be due or payable by Bluegate or
any
of its divisions.
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3.
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Term.
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By
this
Agreement, Bluegate employs the Executive, and the Executive accepts employment
with Bluegate, for a period consisting of two (2) years, commencing on the
date
of this Agreement.
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4.
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Compensation.
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a.
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Salary.
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In
consideration of such service, Bluegate agrees to pay the Executive as
compensation an annual salary in accordance with Bluegate's regular payroll
practices in effect from time to time. For the term of the Agreement, the amount
of the annual salary paid to the COO shall be equal to salary paid to the
President of Bluegate at the commencement date of this Agreement
($150,000.00/year) and be modified from time to time in conjunction with any
positive adjustments made to the salary of the Bluegate President.
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b.
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Stock
Options.
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In
addition to the compensation set forth above, the Executive shall be entitled
to
receive options to purchase the following number of Bluegate shares of common
stock, par value $.001 per share, (“Option Shares”) pursuant to a Stock Option
Agreement on the date and at the option price set out below:
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DATE
OF GRANT
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OPTION
SHARES
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OPTION
PRICE
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December
31, 2006
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1,200,000
shares
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$0.95
per share
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The
Option Shares to be issued pursuant to this Agreement shall be restricted
securities with piggy back registration rights, and shall terminate becoming
invalid after the expiration of five (5) years from the date of grant.
Additionally, 600,000 of the Option Shares shall vest immediately as of the
Date
of Grant, and the remaining 600,000 Option Shares shall vest 25,000 each month,
beginning January 1, 2007 through and including December 1, 2008.
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c.
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Bonus.
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In
addition to the compensation set forth above, Executive and Bluegate agree
to
enter into good faith negotiations with a view to reaching an agreement on
the
payment of one or more bonuses (the "Bonuses") in such amounts as are mutually
agreed upon by Executive and Bluegate, if major transactions or milestones
(such
as acquisitions and financings) agreed mutually upon by them shall be achieved.
The Bonuses shall be payable at such time as is mutually agreed upon by
Executive and Bluegate.
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5.
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(Intentionally
Left Blank)
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6.
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Confidentiality.
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In
the
course of the performance of Executive's duties hereunder, Executive recognizes
and acknowledges that Executive may have access to certain confidential and
proprietary information of Company or any of its affiliates. Without the prior
written consent of Company, Executive shall not disclose any such confidential
or proprietary information to any person or firm, corporation, association,
or
other entity for any reason or purpose whatsoever, and shall not use such
information, directly or indirectly, for Executive's own behalf or on behalf
of
any other party. Executive agrees and affirms that all such information is
the
sole property of Company and that at the termination and/or expiration of this
Agreement, at Company's written request, Executive shall promptly return to
Company any and all such information so requested by Company.
The
provisions of this Section shall not, however, prohibit Executive from
disclosing to Others or using in any manner information that:
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(1)
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has
been published, or has become part of the public domain other than
by
acts, omissions, or fault of
Executive;
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(2)
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has
been furnished or made known to Executive by third parties (other
than
those acting directly or indirectly for or on behalf of Executive)
as a
matter of legal right without restriction on its use or
disclosure;
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(3)
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was
in the possession of Executive prior to obtaining such information
from
Company in connection with the performance of this Agreement;
or
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(4)
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is
required to be disclosed by law.
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7.
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Indemnification.
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The
Company shall to the full extent permitted by law or as set forth in the
Articles of Incorporation and the Bylaws of the Company, indemnify, defend
and
hold harmless Executive from and against any and all claims, demands,
liabilities, damages, losses and expenses (including reasonable attorney's
fees,
court costs and disbursements) arising out of the performance by him of his
duties hereunder except in the case of his willful misconduct.
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8.
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Termination.
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This
Agreement and the employment relationship created hereby will terminate (1)
with
cause under Section 8.a.; or (2) upon the voluntary termination of employment
by
Executive under Section 8.b.
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a.
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With
Cause.
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The
Company may terminate this Agreement at any time because of (i) the
determination by the Board of Directors in the exercise of its reasonable
judgment that Executive has committed an act or acts constituting a felony
or
other crime involving moral turpitude, dishonesty or theft or fraud; or (ii)
Executive's willful misconduct in the performance of his duties hereunder,
provided, in each case, however, that the Company shall not terminate this
Agreement pursuant to this Section unless the Company shall first have delivered
to the Executive, a notice which specifically identifies such breach or
misconduct and the executive shall not have cured the same within fifteen (15)
days after receipt of such notice.
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b.
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Voluntary
Termination.
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The
Executive may terminate his employment voluntarily.
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c.
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Obligations
of Company Upon Termination.
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In
the
event of the termination of Executive's employment pursuant to Section 8.a.
or
b., Executive will be entitled only to the compensation earned by him hereunder
as of the date of such termination (plus any life insurance benefits). In the
event of the termination of Executive's employment for any reason other than
Section 8.a. or b. as described immediately above, all compensation of every
nature described in this Agreement shall immediately vest and become due and
owing to Executive.
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d.
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Survivorship.
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In
the
event of the Death of the Executive prior to the end of the Term of this
Agreement, Executive's spouse shall be entitled to receive Compensation pursuant
to this Agreement through the end of its Term as it accrues.
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9.
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Waiver
of Breach.
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The
waiver by any party hereto of a breach of any provision of this Agreement will
not operate or be construed as a waiver of any subsequent breach by any
party.
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10.
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Arbitration.
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If
a
dispute should arise regarding this Agreement the parties agree that all claims,
disputes, controversies, differences or other matters in question arising out
of
this relationship shall be settled finally, completely and conclusively by
arbitration in Houston, Texas in accordance with the Commercial Arbitration
Rules of the American Arbitration Association (the "Rules"). The governing
law
of this Agreement shall be the substantive law of the State of Texas, without
giving effect to conflict of laws. A decision of the arbitrator shall be final,
conclusive, and binding on the Company and Executive.
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11.
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Covenant
Not to Compete.
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a.
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So
long as the Executive is employed by the Company and for a period
of
eighteen (18) months after either: (1) the voluntary termination
of
employment by Executive, or (2) the termination of the Executive
by the
Company for cause, as set forth in Section 8.a. hereof, the Executive
specifically agrees that he will not, for himself, on behalf of,
or in
conjunction with any person, firm, corporation or entity, other than
the
Company or a Sperco Company in existence at the time and date of
the
beginning of the agreement (either as principal, employee, shareholder,
member, director, partner, consultant, owner or part-owner of any
corporation, partnership or any type of business entity) anywhere
in any
county in which the Company is doing business at the time of termination,
directly or indirectly, own, manage, operate, control, be employed
by,
participate in, or be connected in any manner with the ownership,
management, operation, or control of any business similar to the
type of
business conducted by the Company at the time of termination of the
Executive's employment. For the purpose of this Agreement, a "Sperco
Company" shall be any company owned or operated by the Executive,
including any successor or assigns of those
companies.
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b.
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Executive's
Acknowledgments and Agreements.
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The
Executive acknowledges and agrees that:
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i.
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Due
to the nature of the Company's business, the foregoing covenants
place no
greater restraint upon the Executive than is reasonably necessary
to
protect the business and goodwill of the
Company;
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ii.
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These
covenants protect a legitimate interest of the Company and do not
serve
solely to limit the Company's future
competition;
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iii.
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This
Agreement is not an invalid or unreasonable restraint of
trade;
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iv.
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A
breach of these covenants by the Executive would cause irreparable
damage
to the Company;
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v.
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These
covenants will not preclude the Executive from becoming gainfully
employed
following termination of employment with the
Company;
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vi.
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These
covenants are reasonable in scope and are reasonably necessary to
protect
the Company's business and goodwill and valuable and extensive trade
which
the Company has established through its own expense and
effort;
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vii.
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The
signing of this Agreement is necessary for the Executive's employment;
and
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viii.
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He
has carefully read and considered all provisions of this Agreement
and
that all of the restrictions set forth are fair and reasonable and
are
reasonably required for the protection of the interests of the
Company.
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c.
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Remedies,
Injunction.
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In
the
event of the Executive's actual or threatened breach of any provisions of this
Agreement, the Executive agrees that the Company shall be entitled to a
temporary restraining order, preliminary injunction, and/or permanent injunction
restraining and enjoining the Executive from violating the provisions herein.
Nothing in this Agreement shall be construed to prohibit the Company from
pursuing any other available remedies for such breach or threatened breach,
including the recovery of damages from the Executive. The Executive further
agrees that for the purpose of any such injunction proceeding, it shall be
presumed that the Company's legal remedies would be inadequate and that the
Company would suffer irreparable harm as a result of the Executive's violation
of the provisions of this Agreement. In any proceeding brought by the Company
to
enforce the provisions of this Agreement, no other matter relating to the terms
of any claim or cause of action of the Executive against the Company will be
defense thereto. The foregoing remedy provisions are subject to the provisions
of §15.51 of the Texas Business and Commerce Code, as amended (the "Code"),
which Code provisions shall control in the event of any conflict between the
provisions hereof and the Code or any other law in effect relevant and
applicable hereto.
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12.
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Benefits
Insurance.
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a.
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Medical,
Dental and Vision Benefits.
During this Agreement, Executive and his dependents will be entitled
to
receive such group medical, dental and vision benefits as Company
may
provide to its other executives, provided such coverage is reasonably
available, or be reimbursed if Executive is carrying his own similar
insurance.
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b.
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Benefit
Plans.
The Executive will be entitled to participate in any benefit plan
or
program of the Company, which may currently be in place or implemented
in
the future.
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c.
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Other
Benefits.
During the Term, Executive will be entitled to receive, in addition
to and
not in lieu of base salary, bonus or other compensation, such other
benefits and normal perquisites as Company currently provides or
such
additional benefits as the Company may provide for its executive
officers
in the future.
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13.
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Vacation
and Sick Leave.
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a.
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Vacation
Pay.
The Executive shall be entitled to an annual vacation leave of four
(4)
weeks at full pay. Executive is specifically permitted to work from
home
or other remote location in his discretion, which time shall not
be
considered as vacation leave.
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b.
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Sick
Pay.
The Executive shall be entitled to sick leave as
needed.
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14.
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Reimbursement
of Expenses.
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Upon
submission of a detailed statement and reasonable documentation, Company will
reimburse Executive in the same manner as other executive officers for all
reasonable and necessary or appropriate out-of-pocket travel and other expenses
incurred by Executive in rendering services required under this Agreement.
Executive shall be entitled to: (1) $750 per month transportation allowance,
and
(2) up to a $1,000 per month discretionary expense account.
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15.
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Withholding
of Taxes.
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Bluegate
may withhold from any payments under this Agreement all applicable taxes, as
shall be required pursuant to any law or governmental regulation or
ruling.
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16.
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Entire
Understanding.
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This
Agreement sets forth the entire understanding between the parties with respect
to the subject matter hereof and cancels and supersedes all prior oral and
written agreements between the parties with respect to the subject matter
hereof.
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17.
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Severability.
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If
for
any reason any provision of this Agreement shall be held invalid, such
invalidity shall not affect any other provision of this Agreement not held
so
invalid.
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18.
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Governing
Law.
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This
Agreement has been executed and delivered in the State of Texas and its
validity, interpretation, performance and enforcement shall be governed by
and
construed in accordance with the laws thereof applicable to contracts executed
and to be wholly performed in Texas.
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19.
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Notices.
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All
notices shall be in writing and shall have been duly given if delivered by
hand
or mailed, certified or registered mail, return receipt requested to the
following address or to such other address as either party may designate by
like
notice:
If
to Executive:
Xxxxxxx
X. Xxxxxx
Two
Prudential Plaza, Suite 700
000
Xxxxx
Xxxxxxx Xxxxxx
Xxxxxxx,
Xxxxxxxx 00000
If
to Bluegate:
Bluegate
Corp.
Attn:
Chairman of the Board of Directors
000
X.
Xxxx Xxx Xxxx, Xxxxx 000
Xxxxxxx,
Xxxxx 00000
Bluegate
has caused this Agreement to be executed by its officer and the Executive has
signed this Agreement.
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20.
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Successors,
Binding Agreement.
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This
Agreement is binding upon Bluegate's successors. Bluegate will require any
successor (whether direct or indirect, by purchase, merger, consolidation,
or
otherwise) to all or substantially all of the business and/or assets of Bluegate
to expressly assume and agree to perform this Agreement in the same manner
and
to the same extent that Bluegate would be required to perform it as if no such
succession had taken place. Failure of Bluegate to obtain such assumption and
agreement prior to the effectiveness of any such succession shall constitute
a
breach of this Agreement.
This
Agreement shall inure to the benefit of both Bluegate and its successors and
assigns and the Executive and his personal or legal representatives, executors,
administrators, heirs, distributes, successors and assigns.
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BLUEGATE
CORPORATION:
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EXECUTIVE:
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/s/
Xxxxxxx Xxxxxxxxx
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/s/
Xxxxxxx X. Xxxxxx
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Xxxxxxx
Xxxxxxxxx
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Xxxxxxx
X. Xxxxxx
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CEO
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