EXHIBIT 10.12
EMPLOYMENT AGREEMENT
SMARTGATE, INC.
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of
this 9th day of February, 2000, by and between SmartGate, Inc., a Nevada
corporation, (the "Company") and Xxxxxx X. Xxxx ("Employee").
RECITALS:
WHEREAS, the Company is in the business of developing, manufacturing and
marketing safety systems for closure devices based upon a proprietary technology
licensed to SmartGate, L.C., a Florida limited liability company, from Radio
Metrix, Inc. ("Business"); and
WHEREAS, Employee is employed by SmartGate, L.C.; and
WHEREAS, the Company is acquiring all of the outstanding stock of
SmartGate, L.C. with the intent to operate SmartGate, L.C. as a subsidiary; and
WHEREAS, the Company wishes to enter into this Employment Agreement
superseding the Employment Agreement previously entered into between SmartGate,
L.C. and Employee, thereby making Employee a direct employee of the Company
commencing at the acquisition of SmartGate, L.C. by the Company; and
WHEREAS, the Company and the Employee are desirous of setting forth in
this definitive Employment Agreement their respective rights and obligations
with respect to Employee's employment with the Company.
NOW, THEREFORE, in consideration of Employee's employment or continued
employment by the Company, in consideration of the mutual promises in this
Agreement, in consideration of Employee's prior employment with and services to
SmartGate, L.C., and for additional good and valuable consideration, the receipt
and sufficiency of which is acknowledged by the parties hereto, the Company and
the Employee agree as follows:
1. EMPLOYMENT AND TERM. On the terms and subject to the conditions
of this Agreement, the Company agrees to employ the Employee and the Employee
accepts such employment. Employee's employment under this Agreement shall
commence simultaneously with the acquisition of SmartGate, L.C. by the Company
and shall continue in effect for a period of three years from the date thereof.
This Agreement shall terminate at the end of said three-year period
("Termination Date"), unless earlier terminated or continued by the parties
pursuant to Paragraph 6 hereinbelow.
2. DUTIES. The Employee is employed by the Company to perform the
duties, as specified from time to time by the Board of Directors and set forth
on Exhibit "A") which is attached hereto, incorporated herein and made a part
hereof ("Duties").
3. COMPENSATION. As compensation for Employee performing the
Duties, the Company shall pay Employee the compensation, as set forth on Exhibit
"B" which is attached hereto, incorporated herein and made a part hereof
("Compensation").
4. VACATIONS. Employee is part-time and shall have no specified
vacation.
5. FRINGE BENEFITS AND REIMBURSEMENT OF EXPENSES. The Company will
reimburse Employee for Employee's out-of-pocket expenses for entertainment,
travel, and similar expenses reasonably incurred by Employee in the performance
of Employee's Duties hereunder ("Expenses") provided such Expenses are
consistent with policy and budgets established by the Board of Directors from
time to time. The Employee shall provide an itemized account of such Expenses,
itemizing such Expenses in reasonable detail, and reimbursement for Expenses
approved by the Board of Directors or its designated officer shall be made in a
reasonable time following the Employee's delivery of the itemized account.
6. TERMINATION OF EMPLOYMENT.
6.1 Prior to the Termination Date, the Company may, upon 30
days written notice to the Employee, immediately thereafter terminate the
Employee's employment for any reason and without regard to cause. In the event
of such termination, the Company shall pay to Employee the Compensation prorated
through the date of termination. No additional Severance Compensation shall be
due or payable to Employee.
6.2 Prior to the Termination Date, the Employee may, upon 30
days written notice to the Company, terminate Employee's employment with the
Company, and in such event, Employee shall not be entitled to any Compensation
or Severance Package Compensation following the date of such termination.
7. NON-COMPETITION. Simultaneously with his execution of this
Agreement, Employee shall execute a Covenant Not to Compete Agreement with the
Company, as set forth on Exhibit "C" which is attached hereto, incorporated
herein and made a part hereof.
8. CONFIDENTIALITY/WAIVER OF INTEREST. Simultaneously with the
execution of this Agreement, Employee shall execute a Confidentiality/Waiver of
Interest Agreement with the Company, as set forth on Exhibit "D" which is
attached hereto, incorporated herein and made a part hereof.
9. NOTICES. Any notice provided for in this Agreement must be in
writing and must be either personally delivered or mailed by certified mail,
return receipt required, to the recipient at the address indicated below:
To the Company: To the Employee:
SmartGate, Inc. Xxxxxx X. Xxxx
000 X. Xxxxxxxx Xxxxxx, Xxxxx 000 4400 Xxxxxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000 Xxxxxxxx, XX 00000
or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party.
10. SEVERABILITY. In the event that any provision of this Agreement
shall be held to be unreasonable, invalid, or unenforceable for any reason
whatsoever, the parties agree that: (i) such invalidity or unenforceability
shall not affect any other provision of this Agreement and the remaining
covenants, restrictions, and provisions hereof shall remain in full force and
effect; and (ii) any court of competent jurisdiction may so modify the
objectionable provision as to make it valid, reasonable, and enforceable, and
such provision, as so modified, shall be valid and binding as though the
invalid, unreasonable, or unenforceable portion thereof had not been included
therein.
2
11. COMPLETE AGREEMENT. This Agreement contains the entire agreement
of the parties and supersedes and preempts any prior understandings, agreements
or representations between Employee and the Company regarding the employment of
Employee.
12. COUNTERPARTS. This Agreement may be simultaneously executed in
two counterparts, each of which shall be an original, and all of which shall
constitute but one and the same instrument.
13. CHOICE OF LAW. This Agreement shall be governed by and construed
in accordance with the laws of the state of Florida, with venue in Sarasota
County, Florida.
14. ATTORNEY'S FEES. In the event that either party to this
Agreement shall be forced to retain the services of any attorney to enforce any
of the provisions hereof, than the prevailing party in any ensuing litigation
shall be entitled to recover from the non-prevailing party the prevailing
party's reasonable attorney's fees, court costs or other expenses of litigation,
whether incurred at trial or upon appeal.
15. AMENDMENTS/WAIVERS. This Agreement may only be modified,
amended, or waived by a writing duly authorized and executed by all parties.
16. PERMITTED ACTIVITIES. It is acknowledged that Employee is
engaged in other business activities and has other employment relationships. The
Company expressly permits Employee to engage in current and future business and
employment activities at the discretion of Employee, which are in addition to
the employment of Employee by the Company without any further approval or
consent by the Company and Employee is entitled to earn and retain compensation
as a result of such additional employment relationships or business activities.
It is expressly acknowledged by the Company that Employee is acting on a
part-time basis, making himself reasonably available to fulfill his duties and
obligations to the Company. It is further acknowledged that Employee's state of
residence will be either Utah or California and that Employee will not relocate
to the Company's headquarters in Sarasota, Florida. In furtherance of the
foregoing and not in limitation thereof, it is expressly acknowledged and agreed
by the Company that Employee may subsequently become an employee, officer,
director and stockholder of Radio Metrix, Inc., New Freedom, Inc., entities
which have or may in the future have license agreements or sublicense agreements
with Radio Metrix, Inc. and other entities, some of which have or may have
business or financial relationships with the Company, SmartGate, L.C., Radio
Metrix, Inc. or other entities. Potential conflicts of interest resulting from
Employee's relationship with such entities are hereby waived by the Company and
the continued relationship and involvement of Employee in such entities is
expressly permitted.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first above written.
THE COMPANY: EMPLOYEE:
SmartGate, Inc.
By: /s/ [SIG] /s/ XXXXXX X. XXXX
--------------------- ------------------------
Xxxxxx Xxxxxx Xxxxxx X. Xxxx
President
3
EXHIBIT "A"
EMPLOYMENT AGREEMENT
BETWEEN
SMARTGATE, INC.
AND
XXXXXX X. XXXX
In accordance with Paragraph 2, Employee shall perform the following
duties:
All duties associated with serving as Chief Financial Officer and
Treasurer.
EXHIBIT "B"
EMPLOYMENT AGREEMENT
BETWEEN
SMARTGATE, INC.
AND
XXXXXX X. XXXX
In accordance with Paragraph 3, Employee shall be paid the following
Compensation payable as set forth below:
1. $30,000 annual base salary, payable monthly;
2. A bonus as determined from time to time by the Company's Board of
Directors. The Company's Board of Directors shall quarterly review and declare a
bonus to Employee based upon the performance of the Company. It is anticipated
by the parties that, based upon the performance of the Company, bonus
compensation will constitute a significant part of Employee's overall
compensation from the Company.
CONFIDENTIALITY AGREEMENT
SMARTGATE, INC.
THIS AGREEMENT is made and entered into by and between SmartGate, Inc. a
Nevada corporation (hereinafter referred to and defined as the "Company") and
Xxxxxx X. Xxxx, (hereinafter referred to and defined as the "Second Party").
WHEREAS, the Company is in the business of creating, developing,
manufacturing and marketing safety systems for closure devices based upon
proprietary technology licensed by Radio Metrix, Inc. to SmartGate, L.C., a
Florida limited liability company.
WHEREAS, the Company, through its subsidiary SmartGate, L.C., is a
Sublicensee of the technology from Radio Metrix, Inc. and pursuant to its
Sublicense Agreement, all future inventions, improvements. modifications or
alterations to the technology belong to Radio Metrix, Inc.; and
WHEREAS, Second Party is an officer in the Company who stands to benefit
from an increase in the value of the Company's stock if the Company is
successful and profitable through meeting its business goals and objectives; and
WHEREAS, Second Party is fully aware and knowledgeable of the Products
in existence as of the date hereof; and
WHEREAS, Second Party recognizes that by virtue of Second Party's
relationship with the Company, Second Party has or will acquire a special
knowledge of: the processes, technologies, drawings, designs, and methods of
manufacture of the Products and future Products; and the clients, accounts,
business lists, prospects, records, corporate policies, operational methods and
techniques and other useful information and trade secrets of the Company
(hereinafter all collectively and referred to and defined as "Confidential
Information"); and
WHEREAS, Second Party acknowledges that the Company's Confidential
Information represents valuable, special and unique assets of the Company; and
WHEREAS, Second Party acknowledges that the Company's legitimate
business interests include the Confidential Information and the Company's
customer goodwill (hereinafter referred to and defined as "the Company's
Legitimate Business Interests") and that the Company's Legitimate Business
Interests would be harmed if Second Party would divulge or disclose the
Confidential Information to any third-party while the Second Party is a
stockholder of the Company, or at anytime thereafter; and
NOW, THEREFORE, in consideration of the premises and the respective
covenants and agreements of the parties herein contained, and for additional
good and valuable consideration the receipt and sufficiency of which is
acknowledged by the parties, the parties mutually agree as follows:
1. CONFIRMATION OF RECITALS. The foregoing recitals are true and
correct and are hereby ratified and confirmed by the parties and are made an
integral part of this Agreement; as such, the recitals shall be used in any
construction of this Agreement, especially as it relates to the intent of the
parties.
2. CONFIDENTIAL INFORMATION. As used in this Agreement,
"Confidential Information" shall mean any information and data, oral, written,
electronic or other media relating to the business of the Company including, but
not by way of limitation, the following: product information, sources of supply,
contractual relationships, technological matters, prototypes, other advantageous
relationships, sales, marketing and distribution strategies, customers list and
information, financial information and other data which are the property of the
Company and which the Company has not marked "non-confidential".
3. PROTECTION OF CONFIDENTIAL INFORMATION. Second Party shall
maintain, on a confidential basis, all material and information designated as
"confidential" by the Company and not disclose nor divulge same to any third
party, during the term of Second Party's Employment Agreement with the Company
and for a period of two years thereafter, except as otherwise provided below:
a. With advance approval of the Company;
b. Information already in the possession of the third
party;
c. Information which is part of the public domain;
d. Information which is disclosed pursuant to a lawful
requirement or good faith obligation to a governmental
agency;
e. Information which was developed independently by the
Second Party; and
f. Information described by requirement of law.
4. INJUNCTION AND DAMAGES. Second Party agrees that this Agreement
is important, material and gravely affects the effective and successful conduct
of the business of the Company, and it also affects the Company's reputation and
goodwill, and is necessary to protect the Company's Legitimate Business
Interests. The Second Party further recognizes and agrees that the Company will
suffer irreparable injury in the event of Second Party's breach of any covenant
or agreement contained in this Agreement and cannot be compensated by monetary
damages alone. Accordingly, the Second Party agrees that, in addition to and
without limiting any other remedies or rights that the Company may have, the
Company shall have the right to obtain injunctive relief, both temporary and
permanent, against the Second Party from any court of competent jurisdiction. In
addition to said injunctive relief, the Company shall also be entitled to seek
damages, including, but not limited to, compensatory, incidental, consequential,
exemplary, and lost profits damages. Second Party agrees to pay the Company's
reasonable attorney's fees and costs for enforcement of this Agreement, if the
Second Party breaches this Agreement.
2
5. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Florida. The parties agree that
venue for enforcement of any type under this Agreement shall be in Sarasota
County, Florida.
6. SURVIVORS. This Agreement survives after Second Party is no
longer a stockholder in the Company.
7. MISCELLANEOUS. No change, addition, deletion, or amendment of
this Agreement shall be valid or binding upon Second Party or the Company unless
in writing and signed by Second Party and the Company. The rights of the Company
under this Agreement may be assigned; however, the covenants and agreements of
the Second Party pursuant to this Agreement cannot be assigned. The title of
this Agreement and the paragraph headings of this Agreement are not substantive
parts of this Agreement and shall not limit or restrict the Agreement in any
way. In construing this Agreement, neither of the parties hereto shall have any
term or provision of this Agreement construed against such party solely by
reason of such party having drafted same as each provision of this Agreement is
deemed by the parties to have been jointly drafted by the Company and Second
Party.
8. EXCLUDED ACTIVITIES. The Employment Agreement between Second
Party and the Company expressly authorizes and permits Second Party to serve
in employment and ownership relationships with other entities including, but not
limited to Radio Metrix, Inc., New Freedom, Inc. or other entities which may
presently or subsequently hold sublicenses or licenses from Radio Metrix, Inc.
("Other Entities"). Neither this Agreement nor the assignment or relinquishment
set forth in this Agreement affect, in any fashion, the rights of Second Party
to serve in an employment, officer or ownership relationship with Other Entities
including, but not limited to those listed, nor does it affect or alter the
ownership rights of Other Entities. This Agreement does not, in any fashion,
expand the ownership rights of the Company, beyond that which it has by virtue
of license, sublicense, or other contractual arrangements outside of this
Agreement. This Agreement is not binding on or enforceable against the Other
Entities with which Second Party may be engaged in employment or other business
relationships.
9. SECOND PARTY ACKNOWLEDGMENT. The Second Party acknowledges that
Second Party has voluntarily and knowingly entered into this Agreement and that
this Agreement encompasses the full and complete agreement between the parties
with respect to the matters set forth herein.
Executed on this 9 day of February, 2000
---
SMARTGATE, INC. SECOND PARTY
By: /s/ [SIG] By: /s/ XXXXXX X. XXXX
------------------------ -------------------------
Xxxxxx Xxxxxx, President Xxxxxx X. Xxxx
3
COVENANT NOT TO COMPETE
SMARTGATE, INC.
This Covenant Not to Compete is made and entered into by and between
SmartGate, Inc., a Nevada corporation (hereinafter referred to as the
"Company"), and Xxxxxx X. Xxxx (hereinafter referred to as the "Second Party").
RECITALS:
WHEREAS, the Company is in the business of developing, manufacturing and
marketing safety systems for closure devices based upon proprietary technology
licensed to SmartGate, L.C. by Radio Metrix, Inc.
WHEREAS, Second Party is an owner, consultant or employee of the
Company; and
WHEREAS, Second Party acknowledges that the Company's business
activities extend throughout the world; and
WHEREAS, Second Party acknowledges that through such consulting or
employment he has and/or will acquire a special knowledge of the processes,
technologies, drawings, designs and methods of manufacture of the Company's
products; and the clients, accounts, business lists, prospects, records,
corporate policies, operational methods and techniques and other useful
information and trade secrets of the Company (hereinafter all collectively
referred to and defined as "Confidential Information"); and
WHEREAS, Second Party acknowledges that the Company's legitimate
business interests include the Confidential Information and the Company's
customer goodwill (hereinafter referred to and defined as the "Company's
Legitimate Business Interests") and that the Company's Legitimate Business
Interests would be harmed if Second Party engaged in competitive activities with
the Company anywhere in the United States of America; and
WHEREAS, the Company and Second Party, pursuant to the provisions of
Florida Statute 542.335 and the provisions of this Agreement, wish to enter into
an agreement as embodied herein whereby Second Party will refrain from owning,
managing, or in any manner or capacity working for a business conducting
business activities which are similar to or competitive with those of the
Company as defined herein and from soliciting customers of the Company and
employees of the Company for competitive purposes as defined herein during
Second Party's employment with the Company and during the period of five years
after Second Party's cessation of employment with the Company in the
geographical location of anywhere within the United States of America.
NOW, THEREFORE, in consideration of the premises and the respective
covenants and agreements of the parties herein contained, and for additional
good and valuable consideration the receipt and sufficiency of which is
acknowledged by the parties, including, but not limited to, the Second Party's
employment with the Company and the continuation of the Second Party's
employment with the Company, the parties mutually agree as follows:
1. CONFIRMATION OF RECITALS - The foregoing recitals are true and
correct and are hereby ratified and confirmed by the parties and made an
integral part of this Agreement; as such, the recitals shall be used in any
construction of this Agreement, especially as it relates to the intent of the
parties.
2. DEFINITION OF COMPETITION - For purposes of this Agreement
"competition" shall mean the manufacture or sale of safety systems or devices to
prevent strikes, damage, injury or entrapment from the movement of a closure
device. Closure devices include, but not by way of limitation, powered gates,
powered doors, parking gates, swinging gates, sliding gates, automatic doors,
residential and commercial garage doors and elevator doors. Notwithstanding the
foregoing, competition does not include any device, sensor or system that is not
primarily intended to prevent a strike, damage, injury or entrapment from a
moving closure device. Specifically, but not by way of limitation, the term
"competition" does not include proximity sensing, anti-theft sensing, barrier
sensing, perimeter sensing, security sensing, contact avoidance, presence
recognition or other sensing applications whose primary intended purpose is
other than to prevent a strike, damage, injury or entrapment from a moving
closure device, notwithstanding that an incidental or secondary benefit may be
to prevent a strike, damage, injury or entrapment. The term "competition" does
not include any employment or other relationships or activities of Second Party
which are permitted by the Employment Agreement between the Company and Second
Party.
3. NON-COMPETE - The Second Party will not do, or intend to do, any
of the following, either directly or indirectly, during Second Party's
employment with the Company and during the period of five (5) years after Second
Party's cessation of employment with the Company, anywhere within in the United
States of America:
a. Own, manage, operate, control, consult for, be an
officer or director of, work for, or be employed in any capacity by any company
or any other business, entity, agency or organization which conducts operations
or activities that are in competition, as defined herein, with those of the
Company; or
b. Solicit prior or current customers of the Company for
any purpose in competition (as defined herein) with the Company; or
c. Solicit any then current employees employed by the
Company without the Company's consent.
The Second Party and Company agree that the phrase
"Second Party's cessation of employment with the Company" as used in this
Agreement, refers to any separation of Second Party from his employment at the
Company either voluntarily or involuntarily, either with cause or without cause,
or whether the separation is at the behest of the Company or the Second Party
(hereinafter referred to and defined as "Second Party's Cessation of
Employment"). For purposes of this Agreement and for purposes of determining
activity which is covered by the non-compete provisions of this Agreement,
Second Party's Cessation of Employment shall not include non-voluntary
termination of employment by the Company unless all severance obligations of the
Company are being fully and completely honored and satisfied by the Company. In
the event that the Company involuntarily terminates Second Party's employment
and fails to fully and completely honor and satisfy the severance provisions,
this Covenant Not to Compete shall be non-enforceable even though Second Party
may fully pursue and enforce his rights and entitlement to the severance package
as provided in the Employment Agreement.
The Employment Agreement between Second Party and the
Company expressly authorizes and permits Second Party to continue in or enter
into employment and ownership relationships. Such other entities may include
Radio Metrix, Inc., New Freedom, Inc., and other entities which may have or
subsequently have licenses or sublicenses from Radio Metrix,
2
Inc. for applications other than the primary application of preventing a strike,
damage, injury or entrapment from a moving closure device. Entering into and
carrying out such employment and ownership relationships permitted by the
Employment Agreement between the Company and Second Party shall not be deemed to
be a violation of this Covenant Not to Compete. Furthermore, such companies, by
virtue of an employment or ownership relationship with Second Party, shall not
be deemed to have participated in any violation or breach of this Agreement.
4. INJUNCTION AND DAMAGES - Second Party agrees that this
Agreement is important, material, confidential, and gravely effects the
effective and successful conduct of the business of the Company, and it effects
its reputation and good will and is necessary to protect the Company's
Legitimate Business Interests. Second Party recognizes and agrees that the
Company will suffer irreparable injury in the event of Second Party's breach of
any covenant or agreement contained herein and cannot be compensated by monetary
damages alone, and Second Party therefore agrees that the Company, in addition
to and without limiting any other remedies or rights that it may have, either
under this Agreement or otherwise, shall have the right to obtain injunctive
relief, both temporary and permanent, against the Second Party from any court of
competent jurisdiction. Second Party further agrees that in the event of Second
Party's breach of any covenant or agreement contained herein, the Company, in
addition to its right to obtain injunctive relief, shall further be entitled to
seek damages, including, but not limited to, compensatory, incidental,
consequential, exemplary, and lost profits damages. Second Party agrees to pay
the Company's reasonable attorney's fees and costs for enforcement of this
Agreement, if the Second Party breaches this Agreement.
5. MISCELLANEOUS - Wherever used in this Agreement,
the phrase "directly or indirectly" includes, but is not limited to Second Party
acting through Second Party's wife, children, parents, brothers, sisters, or any
other relatives, friends, trustees, agents, associates or entities with which
Second Party is affiliated with in any capacity. The Company may waive a
provision of this Agreement only in a writing signed by a representative of the
Board of Directors of the Company and specifically stating what is waived. The
rights of the Company under this Agreement may be assigned; however, the
covenants, warranties, and obligations of the Second Party cannot be assigned
without the prior written approval of the Company. The title of this Agreement
and the paragraph headings of this Agreement are not substantive parts of this
Agreement and shall not limit or restrict this Agreement in any way. This
Agreement survives after the Second Party's Cessation of Employment. No change,
addition, deletion, or amendment of this Agreement shall be valid or binding
upon Second Party or the Company unless in writing and signed by Second Party
and the Company. This Agreement is intended to be a valid contract under Section
542.33, Florida Statutes. In the event a court of competent jurisdiction
determines any covenant set forth herein to be too broad to be enforceable or
determines this Agreement to be unreasonable, then said court may reduce the
geographical area and/or the length of time provisions herein, in order to make
this Agreement enforceable and reasonable. This Agreement shall be governed by
Florida law. The parties agree that venue for any action brought under this
Agreement shall be in Sarasota County, Florida. In construing this Agreement,
neither of the parties hereto shall have any term or provision construed against
such party solely by reason of such party having drafted same as each provision
of this Agreement is deemed by the parties to have been jointly drafted by the
Company and Second Party.
3
6. SUPERSEDES PRIOR AGREEMENT - This Covenant Not to
Compete shall commence upon the acquisition by SmartGate, Inc. of SmartGate,
L.C., a Florida limited liability company. Until such acquisition, this
Agreement, whether signed or unsigned, shall be unenforceable. This Agreement
shall, upon its commencement, supersede the prior Covenant Not to Compete
between Second Party and SmartGate, L.C., a Florida limited liability company,
which shall terminate simultaneously with the commencement of this Covenant Not
to Compete.
7. SECOND PARTY ACKNOWLEDGMENT - The Second Party,
acknowledges that he has voluntarily and knowingly entered into this Agreement
and that this Agreement encompasses the full and complete agreement between the
parties with respect to the matters set forth herein.
Executed on this 9 day of February 2000.
---
SMARTGATE, INC. SECOND PARTY
By: /s/ [SIG] /s/ XXXXXX X. XXXX,
-------------------------- -------------------------
Xxxxxx Xxxxxx, President Xxxxxx X. Xxxx,
4
