EMPLOYMENT AGREEMENT
AGREEMENT dated October 06, 1999, by and between Enterprises Solutions
Inc., a Florida corporation ("Company"), and Xxxxx X. Xxxxx ("Employee").
WHEREAS, the Company is engaged in the business of developing and
operating internet and computer security solutions, government and corporate
systems integration and contract selling and development work;
WHEREAS, the Company and the Employee wish to enter into an Employment
Agreement in order to retain Employee's ongoing services as the Executive Vice
President of the Company or in such capacities as the Company's Board from time
to time determines;
WHEREAS, Employee is employed by the Company in a confidential
relationship wherein Employee, in the course of his employment with the Company,
will become familiar with and aware of information as to the specific manner of
doing business and the customers of the Company and its affiliates and future
plans with respect thereto, all of which will be established and maintained at
great expense to the Company; this information is a trade secret and constitutes
the valuable goodwill of the Company.
WHEREAS, employee recognizes that the Company's business is dependent
upon a number of trade secrets, including locations, trade contacts, supplies,
techniques, methods and data. The protection of the trade secrets is of critical
importance to the successful operation of the Company;
WHEREAS, the Company will sustain great loss and damage if during the
terms of this Agreement or Employee's employment with the Company, or for a
period of one (1) year immediately following the termination of the Agreement or
Employee's employment, for whatever reason, Employee should violate the
provisions of Articles III or IV of this Agreement. Further, monetary damages
for such losses would be extremely difficult to measure.
NOW, THEREFORE, in consideration of the mutual promises, terms,
covenants and conditions set forth herein and the performance of each, it is
hereby agreed as follows:
ARTICLE I
Employment and Duties
A. The Company hereby employs Employee as its Executive Vice President,
Operations. Additional or different duties, titles or positions, however,
may be assigned to Employee or may be taken from Employee from time to time
by the President & CEO and/or the Board of Directors ("Board") of the
Company. The Employee reports directly to the President and CEO of the
Company. Employee hereby accepts this employment upon the terms and
conditions herein contained and agrees to devote his time, attention and
efforts to promote and further the business and services of the Company.
Employee shall faithfully adhere to, execute and fulfill all policies
established by the Company.
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B. Employee shall perform such duties, assume such responsibilities and devote
such time, attention and energy to the business of the Company as the Board
shall from time to time require and shall not, during the term of his
employment hereunder, be engaged in any other business activity pursued for
gain, profit or other pecuniary advantage if such activity interferes with
Employee's duties and responsibilities hereunder. However, the foregoing
limitations shall not be construed as prohibiting Employee from making
personal investments in such form or manner as will neither require his
services in the operation or affairs of the companies or enterprises in
which such investments are made nor violate the terms of Paragraphs 3 or 4
hereof.
ARTICLE II
Compensation
2.01 Salary. From and after the effective date of this Agreement, the Employee
shall receive a salary ("Salary") from the Company in an amount equal to
$120,000.00 per year.
The Employee's Salary shall be payable pursuant to a monthly schedule
consisting of semi-monthly payments ("Salary"), each such payment being in an
amount equal to 1/72 of $360,000 or $5,000. The Employee's present salary shall
remain in effect until the company begins to receive its funding. Immediately
after receipt of the initial outside funding capital pursuant to the above the
Employee shall receive the salary as defined in this agreement on the next
scheduled pay period and for each and every pay period thereafter in accordance
with this agreement.
2.02 Expense Reimbursement. The Company shall reimburse Employee for all
reasonable travel, entertainment and other expenses related to his employment by
or promotion of the Company. Employee shall provide a written accounting and
receipt of all expenses for which reimbursement is sought on a monthly basis and
the Company shall reimburse all such expenses within ten (10) days following
receipt of each written accounting.
2.03 Bonuses. The Employee shall be entitled to receive such bonuses as the
President & CEO and/or Board shall determine from time to time in accordance
with Company policy and at the sole discretion of the President and/or Board.
2.04 Plan Participation. The Employee shall be entitled to participate in any
and all stock option, stock bonus, pension, profit sharing, retirement or other
similar plans adopted by the Company.
2.05 Other. The Employee shall be entitled to such fringe benefits as the
Company shall establish for its employees generally which shall include with
respect to the Employee at least four weeks paid vacation annually, (family)
medical, life and disability insurance, disability pay, automobile and such
other benefits as the Company shall adopt, subject to the discretion of the
Company to add or delete such standard benefits as the Board deems appropriate,
from time to time.
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2.06 Stock Compensation. The Employee shall be entitled to receive in the form
of Common Stock of the Company shares in the amount of 120,000 shares in the
performance of this agreement. Forty Thousand 40,000 shares will be tendered to
the Employee immediately upon execution of this agreement. The Company shall
hold the remaining shares pursuant to this agreement in escrow. The right to the
remaining 2/3rds of Common Stock shall vest upon execution of this contract and
the remaining 80,000 shares shall be issued to Employee at the end of each of
the next two calendar years of service.
In the event the Employee's employment by the Company is terminated on or before
October 6, 2002 or following a "change in control of the Company", as defined in
section 5.02E below, any stock bonus provided for above shall be deemed to be
earned in full and shall be paid by the Company simultaneously with such change
in control.
ARTICLE III
Non-Competition Agreement
A. Employee will not, during the period of this Agreement or of his employment
by or with the Company, and for a period of two (2) years immediately
following the termination of this Agreement or his employment, whichever is
longer, for any reason whatsoever, directly or indirectly, for himself or on
behalf of or in conjunction with any other person, persons, company,
partnership, corporation or business of whatever nature (i) call upon any
customer of the Company (including, but not limited to, any customer
obtained for the Company by Employee) for the purpose of soliciting or
selling any products or services in competition with those of the Company or
its affiliates; (ii) call upon any employee of the Company or any of its
affiliates for the purpose or with the intent of enticing them away from or
out of the employ of the Company or any reason whatever; (iii) establish,
enter it, be employed by or, advise, consult with or become a part of, any
company, partnership, corporation or other business entity or venture, or in
any way engage in business for himself or for others, in competition with
the Company or its affiliates within one hundred (100) miles of the home
office of the Company and/or any affiliated company location, such location
having a permanent and known facility wherein the Employee has served in any
capacity and wherever Employee has performed duties or had management
responsibility on behalf of the Company or its affiliates; or (iv) during or
after the term of his employment with the Company, disclose the Company's
customers or any other trade secrets of the Company whether in existence or
proposed, to any person, firm partnership, corporation or business for any
reason or purpose whatsoever.
B. Because of the difficulty of measuring economic losses to the Company and
its affiliates as a result of his breach of the foregoing covenant and
because of the immediate and irreparable damage that would be caused to the
Company and its affiliates for which it would have no other adequate remedy,
Employee agrees that the foregoing covenant may be enforced by the Company
and its affiliates in the event of breach by him by injunctions and
restraining orders.
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C. It is agreed by the parties that the foregoing covenants in this Paragraph 3
are necessary to protect the goodwill and business interests of the Company
and its affiliates and impose a reasonable restraint on Employee in light of
the activities and business of the Company and its affiliates on the date of
the execution of this Agreement and the future plans of the Company; but it
is also the intent of the Company and Employee that such covenants be
construed and enforced in accordance with the activities and business of the
Company and its affiliates on the date of the termination of the employment
of the Employee.
D. The covenants in this Paragraph 3 are severable and separate and the
unenforceability of any specific covenant shall not affect the provisions of
any other covenant. Moreover, in the event any court of competent
jurisdiction shall determine that the scope, time or territorial restriction
set forth are unreasonable, then it is the intention of the parties that
such restrictions be enforced to the fullest extent which the court deems
reasonable and the Agreement shall thereby be reformed.
E. All of the covenants in this Paragraph 3 shall be construed as an agreement
independent of any other provision in this Agreement and the existence of
any claim or cause of action of Employee against the Company or its
affiliates, whether predicated in this Agreement or otherwise, shall not
constitute a defense to the enforcement by the Company of such covenants. It
is specifically agreed that the period of one (1) year stated at the
beginning of this Paragraph 3, during which the agreements and covenants of
Employee made in this Paragraph 3 shall be effective, shall be computed by
excluding from such computation any time during which Employee is in
violation of any provision of this Paragraph 3 and any time during which
there is pending in any court of competent jurisdiction any action
(including any appeal from any final judgment) brought by any person,
whether or not a party to this Agreement, in which action the Company or its
affiliates seeks to enforce the agreements and covenants of Employee or in
which any person contests the validity of such agreements and covenants or
their unenforceability or seeks to avoid their performance or enforcement
ARTICLE IV
Non-Disclosure Agreement and Proprietary Information.
A. The Employee recognizes and acknowledges that the information, techniques,
processes, formulas, developments, experimental work, work in progress,
business, list of the Company's customers and any other trade secret or
other secret or confidential information relating to Company's business as
they may exist from time to time are valuable, special and unique assets of
Company's business. In addition, Employee recognizes that Company is
continually engaged in research and development of new inventions and
improvements to the information, techniques, processes, formulas,
developments, trade secrets, and other secrets and confidential matters
relating to Company's business. Therefore, Employee agrees as follows:
1. That Employee will hold in strictest confidence and not disclose, reproduce,
publish or use in any manner, whether during or subsequent to his
employment, without the express authorization of the Board of Directors of
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the Company, any information, manufacturing technique, process, business
customer lists, trade secrets or any other secrets or confidential matter
relating to any aspect of the Company's business as designated from time to
time by the Board of Directors of Company, except as such disclosure or use
may be required in connection with Employee's work for the Company.
2. That upon request or at the time of leaving the employ of the Company, the
Employee will deliver to the Company, and not keep or deliver to anyone
else, any and all notes, memoranda, documents and, in general, any and all
material relating to the Company's business.
3. That the Board of Directors of the Company may from time to time designate
other subject matters requiring confidentiality and secrecy which shall be
deemed to be covered by the terms of this Agreement.
B. In the event of a breach or threatened breach by the Employee of the
provisions of this Paragraph 4, the Company shall be entitled to an
injunction:
1. Restraining the Employee from disclosing, in whole or in part, any
information as described above or from rendering any services to any person,
firm, corporation association or other entity to whom such information, in
whole or in part, has been disclosed or is threatened to be disclosed;
and/or
2. Requiring that Employee deliver to Company all information, documents,
notes, memoranda and any and all discoveries or other material as described
above upon Employee's leave of the employ of the Company. Nothing herein
shall be construed as prohibiting the Company from pursuing other remedies
available to the Company for such breach or threatened breach, including the
recovery of damages from the Employer.
ARTICLE V
Term: Terminations
5.01 Term. The term of this agreement shall begin on October 6, 1999 and
continue until October 6, 2002, unless further extended or sooner terminated as
herein provided. On October 6, 2002, and on the 6th day of October each year
thereafter, the term of the Employee's employment shall be automatically
extended one (1) additional year unless, on or before sixty (60) days in advance
of such 6th day of October 2002, the Company shall have delivered to the
Employee or the Employee shall have delivered to the Company written notice that
the term of the Employee's employment hereunder will not be extended.
5.02 Termination. This Agreement and Employee's employment may be terminated in
any one of the following ways:
B. The death of Employee.
C. The Company may terminate the Agreement after thirty (30) days written
notice ("Notice of Termination") to Employee if, because of illness or
physical or mental disability or other incapacity which continues for a
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period in excess of three (3) months, Employee is unable to perform his
duties under this agreement.
D. Employee shall not be discharged during the Employment Period except
for justifiable cause. For purposes of this Agreement, justifiable
cause is limited to the following: willful, material dishonesty,
including theft, misappropriation or material intentional falsehood;
invidious discrimination or significant harassment, battery or assault
of an officer, employee, customer, client or vendor of the Company,
whether associated with race, color, religion, national origin, age,
sex, non-job related disability or any other factor or status protected
by law; willful or wanton breach of fiduciary duties; material and
persistent refusal to carry out lawfully assigned duties; intentional
or grossly reckless defamation, conviction of a felony or other illegal
public action that materially damages the Company's reputation. The
termination of the Employee for reasons other than those specified in
the preceding paragraph shall be deemed to be without justifiable
cause. No action or inaction by the Employee shall be deemed to have
occurred under this Agreement unless written notice of such action or
inaction shall have been given to the Employee by the Company and the
Employee shall have failed to cure or remedy such defect to the
Company's reasonable satisfaction within sixty (60) days after the
Employee receives written notice of the offending action or inaction.
Any termination of the Employee without justifiable cause shall entitle
the Employee to a minimum severance package of two (2) years current
salary payable over six (6) monthly installments, or the balance of
$360,000 less any payments made to Employee pursuant to this agreement,
whichever is less. Employee will also be entitled to immediate issuance
of shares in the Company equal to 120,000 less shares already issued
Employee.
E. Thirty (30) days notice by Employee of his intent to resign his
position.
F. For purposes of this Agreement, a "change in control of the Company"
shall mean a change in control that would be required to be reported in
response to Item 1(a) of Form 8-K under the Securities Exchange Act of
0000 (xxx "Xxxxxxxx Xxx"); provided that, without limitation, such a
change in control shall be deemed to have occurred if (i) any "person"
(as that term is used in Sections 13(d) and 14(d) of the Exchange Act),
other than the Company, as constituted, is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 25% or more of
the combined voting power of the Company's then outstanding securities,
(ii) during any period of three consecutive years during the term of
this Agreement, individuals who at the beginning of such period
constitute the Board cease for any reason to constitute at least a
majority thereof, unless the election of each director who was not a
director at the beginning of such period has been approved in advance
by directors representing at least two-thirds of the directors then in
office who were directors at the beginning of the period.
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F. In the event the Company terminates, or attempts to terminate, the
employment of the Employee other than as provided above, or the Company
otherwise is in breach of the terms of this Agreement, the Company
agrees to pay or reimburse the Employee for, all legal fees, costs and
other damages, including back-pay and benefits if applicable, incurred
as a result of such breach or wrongful termination.
5.3 Compensation Upon Termination or During Disability
A. During any period that the Employee fails to perform his duties
hereunder as a result of incapacity due to physical or mental illness
("disability period"), the Employee shall continue to receive his full
salary at the rate then in effect for such period until his employment
is terminated pursuant to section 5.02B hereof.
B. If the Employee's employment shall be terminated pursuant to Section
5.02B, the Company shall pay the Employee his full salary through the
date of termination, at the rate in effect at the time Notice of
Termination is given, plus all outstanding expenses payable pursuant to
section 2.02 hereof and the Company shall have no further obligations
to the Employee under this Agreement.
C. If the Employee shall terminate his employment under Section 5.02D
hereof, the Company shall pay the Employee his full salary through the
date of termination at the rate in effect at the date of termination,
plus all outstanding expenses payable pursuant to section 2.02 hereof.
D. If the Company shall terminate the Employee's employment in breach
hereof or within one year of a "change in control of the Company", for
any reason other than death or disability under section 5.02A or B,
then:
1. The Company shall pay the Employee for any termination without
justified cause a minimum severance package of (2) years current
salary payable over six (6) months installments, or the balance of
$360,000 less any payments made to Employee pursuant to this
agreement, whichever is less. Employee will also be entitled to
immediate issuance of shares in the Company equal to 120,000 less
shares already issued Employee.
2. The Company shall maintain in full force and effect, for the
continued benefit of the Employee for three (3) months from the
date of termination, all employee benefit plans and programs in
which the Employee was entitled to participate immediately prior to
the date of termination provided that the Employee's continued
participation is possible under the general terms and provisions of
such plans and programs. All such benefit plans and programs shall
be maintained at the level and value provided immediately prior to
the date of termination. In the event that the Employee's
participation in any such plan or program is barred, the Company
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shall arrange to provide the Employee with benefits substantially
similar to those which the Employee would otherwise have been
entitled to receive under such plans and programs from which his
continued participation is barred.
Employer shall be permitted to take key man life insurance out on
employee, with the company as beneficiary in the amount up to
$1,000,000.
Except as required above, the Company shall not be required to maintain
in force for the benefit of the Employee any employee benefit plans or programs
following the date of termination.
E. The Employee shall not be required to mitigate the amount of any
payment provided for in this Section by seeking other employment or
otherwise.
ARTICLE VI
Representations of Employee
Employee has represented and hereby represents and warrants to the
Company that he is not subject to any restriction or non-competition covenant in
favor of a former employer or any other persons or entity and that the execution
of this Agreement by Employee and his employment by the Company or its
affiliates and the performance of his duties hereunder will not violate or be a
breach of any agreement with a former employer or any other person or entity.
Further, Employee agrees to indemnify the Company and its affiliates for any
claim, including, but not limited to, attorney's fees and expenses of
investigation, by any such third party that such third party may now have or may
hereafter come to have against the Company or its affiliates based upon or
arising out of any non-competition agreement or invention and secrecy agreement
between Employee and such third party.
ARTICLE VII
Miscellaneous
7.01 Complete Agreement. This Agreement is not a promise of future employment.
There are no oral representations, understandings or agreements with the Company
or any of its officers, directors or representatives covering the same subject
matter as this Agreement. This written Agreement is the final, complete and
exclusive statement and expression of the agreement between the Company and
Employee and of all the terms of this Agreement and it cannot be varied,
contradicted or supplemented by evidence of any prior or contemporaneous oral or
written agreements. This written agreement may not be later modified except by a
further writing signed by the Company and Employee, and no term of this
Agreement may be waived except by writing signed by the party waiving the
benefit of such terms.
7.02 No Waiver. No waiver by the parties hereto of any default or breach of any
terms, condition or covenant of this Agreement shall be deemed to be a waiver of
any subsequent default or breach of the same or any other term, condition or
covenant contained herein.
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7.03 Non Delegation of Duties. Employee understands that he has been selected
for employment by the Company on the basis of his personal qualifications,
experience and skills. Employee agrees, therefore, that he cannot delegate any
part of his duties under this Agreement.
7.04 Notice. Whenever any notice is required hereunder, it shall be given in
writing addressed as follows:
To the Company: Enterprises Solutions Inc.
0000 X. Xxxxx Xxxxxxx
Xxxx Xxxxx, XX 00000
To Employee: Xxxxx X. Xxxxx
00000 Xxxxxxxxx Xxxxx Xxxx
Xxxx Xxxxx, XX 00000
Notice shall be deemed given and effective three (3) days after the deposit in
the Unites States mail of a writing addressed as above and sent first class
mail, certified, return receipt requested, or when actually received. Either
party may change the address for notice by notifying the other party of such
change in accordance with this Section 7.04.
7.05 Severability: Headings. If any portion of this Agreement is held invalid
or inoperative, the other portions of this Agreement shall be deemed valid and
operative and, so far as is reasonable and possible, effect shall be given to
the intent manifested by the portion held invalid or inoperative. The paragraph
headings herein are for reference purposes only and are not intended in any way
to describe, interpret, define or limit the extent or intent of this Agreement
or of any part hereof.
7.06 Arbitration. Any controversy or claim arising out of or relating to this
Agreement or the breach thereof shall be settled by arbitration in the City of
Boca Raton, Florida in accordance with the rules then existing of the American
Arbitration Association and judgement upon the award may be entered in any Court
having jurisdiction thereof.
7.07 Governing Law. This Agreement shall in all respects be construed according
to the laws of the State of Florida.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
date herein first set forth.
ENTERPRISES SOLUTIONS INC.
WITNESSED BY:
__________________________ __________________________
Xxxx X. Xxxxxxx
Dated: _________________ Corporate President & CEO
EMPLOYEE:
WITNESSED BY:
__________________________ __________________________
Xxxxx X. Xxxxx
Dated:_________________
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