EXHIBIT 10.20(c)
EMPLOYMENT AGREEMENT
(Xxxxx Xxxxxx)
This Employment Agreement (this "Agreement") is entered into effective as
of the 1st day of January, 2005, by and between Cyber Defense Systems, Inc. a
Florida corporation ("Company"), and Xxxxx Xxxxxx ("Employee").
WHEREAS, Company is engaged in the business of designing, developing,
manufacturing, and marketing UAV's and other aerospace products;
WHEREAS, Employee's services had previously been retained by Company's
affiliated company, On Alert Systems, Inc, under an Independent Contractor
Agreement dated April 1, 2003; and
WHEREAS, Company desires to retain the services of Employee in the capacity
of Vice President, Government Sales.
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the parties agree as follows:
1. Employment. Company agrees to employ Employee and Employee agrees to accept
employment with Company subject to the conditions herein.
2. Term. Subject to the provisions of Section 5, the term of this Agreement
shall commence on the date hereof and shall continue for a period of one (1)
year from such date. At the expiration of the original one-year period, the term
of this Agreement shall be automatically renewed for successive one year
periods. The term of this Agreement is referred to herein as the "Employment
Term." Notwithstanding anything to the contrary, this is an agreement for
employment-at-will and may be terminated immediately by either party with or
without cause, however, Employee shall be entitle to the compensation outlined
in paragraphs 4 (a), 4 (b) and 4 (f) of this Agreement for a period of one (1)
year from the effective date of the termination subject to Employee meeting his
obligations under this Agreement. .
3. Duties and Responsibilities.
(a) Subject to the direction of the president of Company to hire and remove
officers, Employee shall serve Company as Vice President, Government Sales (or
in such other office as the Company may determine) and shall perform, faithfully
and diligently, the supervisory and management services and functions relating
to such office or otherwise reasonably incident to such office as may be
designated from time to time by the president; provided, however, that all such
services and functions shall be reasonable and within Employee's area of
expertise.
(b) Employee shall, during the Employment Term, devote such of his entire
time, attention, energies and business efforts to his duties as an employee of
Company as are reasonably necessary to carry out such duties. Employee shall
not, during the Employment Term, engage in any other business activity
(regardless of whether such business activity is pursued for gain, profit or
other pecuniary advantage) if such business activity would materially impair
Employee's ability to carry out his duties hereunder.
(c) Employee shall be eligible to participate in Company's 401(k) program
after completing one year of service to Company.
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4. Compensation and Other Benefits. As compensation for his services under the
terms of this Agreement:
(a) Base Salary. Commencing on the effective date of this Agreement,
Employee shall be paid an annual salary of not less than $120,000, payable in
accordance with the standard payroll policies of Company. Such annual salary is
herein referred to as the "Base Salary." The Base Salary shall be reviewed
annually by the Company and shall be subject to adjustment based upon Employee's
performance.
(b) Benefits. Company shall maintain health insurance for Employee. Company
shall maintain health insurance coverage for a spouse and any dependents.
(c) Vacations. Employee shall be entitled to two weeks of vacation after
one year of service to Company. Employee shall accrue one additional day of
vacation for each year of service thereafter.
(d) Bonus. Company shall create a bonus pool ("Bonus Pool"). The Bonus Pool
shall be equal to seven and one half percent (7.5%) of the Company's net profit.
Employee shall be entitle to his pro-rata share of the Bonus Pool based upon his
Base Salary in relationship to the sum total of the Base Salaries of all of the
other Company employees entitle to claim part of the Bonus Pool. Dispersments
from the Bonus Pool shall be made thirty (30) days after the closing of the
Company's accounting year.
(e) Modifications. Company reserves the right to amend the Benefits and
Bonus as it deems necessary.
(f) Commissions. Company shall pay Employee a commission on all sales which
Employee closes for Company's benefit. The amount of the commission shall be
four percent (4%) of the gross proceeds to Company. In the event, Company must
pay another party a commission on these sales, Employee's commission shall be
reduced by a prorate amount. For example, if Employee helps close a sale and
Company must pay a commission on that sale to two (2) people in addition to
Employee, Employee's commission shall be one third (1/3) of four percent (4%).
In the event the company must reduce its commission of the sale of airships the
employees commission will be reduced by an equal percentage amount.
(g) Stock. Company shall issue to Employee an additional forty thousand
(40,000) Shares on the first anniversary of the effective date of this Agreement
and every anniversary thereafter. Rights to the Shares issued on the anniversary
of the effective date of this Agreement shall not vest unless the Employee
remains continuously in the service of the Company until such anniversary dates.
The ownership of the Shares is subject to the conditions outlined in section 14
of this Agreement.
(h) Previous Commissions. Employee and his company, Sales Resources
Consultants, Inc. ("SRC") entered into a Consulting, Lobbying and Sales
Agreement (the "CLS Agreement") dated January 3, 2003 with Techsphere Systems
International, LLC ("TSI"). TSI owes additional commissions to SRC under the CLS
Agreement. Company is currently in negotiations with TSI. It is anticipated SRC
and TSI will terminate the CLS Agreement in conjunction with the Company and TSI
negotiations. It is also anticipated that as a result of the negotiations TSI
will remit a commission to Company which was originally due to SRC under the CLS
Agreement. Company shall forward the payment of that commission to SRC upon
receipt of the designated funds from TSI.
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5. Termination of Employment.
(a) For Due Cause. Nothing herein shall prevent Company from terminating
Employee, without prior notice, for Due Cause, in which event Employee shall be
entitled to receive the compensation outlined in paragraphs 4 (a), 4 (b) and 4
(f) of this Agreement for a period of one (1) year from the effective date of
the termination subject to Employee meeting his obligations under this
Agreement. The term "Due Cause" shall mean:
(i) Employee has committed a material breach of this Agreement, a
misappropriation of funds, or other willful serious act against Company or
any of its Affiliates (as defined hereunder) intending to enrich himself at
the expense of Company or any of its Affiliates, or has been convicted of a
felony,
(ii) Employee has engaged in conduct that has caused demonstrable and
serious injury, monetary or otherwise, to Company or any of its Affiliates
as evidenced by a binding and final judgment, order, or decree of a court
or administrative agency of competent jurisdiction in effect after
exhaustion of all rights of appeal of the action, suit, or proceeding,
whether civil, criminal, administrative, or investigative,
(iii) Employee, in carrying out his duties hereunder, has been guilty
of willful gross neglect or willful gross misconduct, resulting in either
case in material harm to Company or any of its Affiliates, or
(iv) Employee has refused to carry out his duties in gross dereliction
of duty and, after receiving notice to such effect from the Board of
Directors, Employee fails to cure the existing problem within 30 days.
For purposes of this Agreement, "Affiliate" shall mean any individual or any
corporation, partnership, association, limited liability company, or other
entity that directly or indirectly through one or more intermediary's controls,
or is controlled by, or is under common control with Company.
(b) Upon Death. In the event of the death of Employee, this Agreement shall
terminate on the date of death and the estate of Employee shall be entitled to
Employee's Base Salary and any additional incentive or bonus compensation
apportioned to the date of death and all compensation described in this
Agreement shall then cease. In the event any of Employee's immediate family
members are covered under any group sickness, accident, dental and health
insurance plan maintained by Company at the date of Employee's death, Company
shall maintain and provide all payments with respect to such coverages for a
period of twelve months.
(c) Upon Disability. In the event Employee suffers a disability (as
hereinafter defined), this Agreement shall terminate on "the date on which the
disability occurs" (as hereinafter defined) and Employee shall be entitled to
the compensation outlined in paragraphs 4 (a), 4 (b) and 4 (f) of this Agreement
for a period of one (1) year from the effective date of the termination subject
to Employee meeting his obligations under this Agreement.
(d) Voluntary Termination. Employee may voluntarily terminate his
employment under this Agreement at any time. In such event, Employee shall be
entitled to the compensation outlined in paragraphs 4 (a), 4 (b) and 4 (f) of
this Agreement for a period of one (1) year from the effective date of the
termination subject to Employee meeting his obligations under this Agreement.
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6. Acknowledgements by Employee. Employee acknowledges that: (a) the services to
be performed by him under this Agreement are of a special, unique, and
intellectual character; (b) Company's business is national in scope and its
services are marketed throughout the United States; and (c) Company competes
with other businesses that are or could be located in any part of the United
States.
7. Non-Compete and Non-Solicitation Covenants of Employee.
(a) Covenants. During the Employment Term and during the Post-Employment
Period (defined below), Employee covenants that he will not, directly or
indirectly:
(i) engage or invest in, own, manage, operate, finance, control, or
participate in the ownership, management, operation, financing, or control
of, be employed by, associated with, or in any manner connected with, lend
Employee's name or any similar name to, lend Employee's credit to or render
services or advice to, any business whose products, services, or activities
compete in whole or in part with the products, services, or activities of
Company anywhere within the Applicable Geographic Area (as defined below);
provided, however, that Employee may purchase or otherwise acquire less
than five percent of any class of securities of any enterprise (but without
otherwise participating in the activities of such enterprise) if such
securities are listed on any national or regional securities exchange or
have been registered under Section 12(g) of the Securities Exchange Act of
1934;
(ii)whether for Employee's own account or for the account of any other
person, solicit business of the same or similar type being carried on by
Company, from any person known by Employee to be a customer of Company,
whether or not Employee had personal contact with such person during and by
reason of Employee's employment with Company; and
(iii) whether for Employee's own account or the account of any other
person, (A) solicit, employ, or otherwise engage as an employee,
independent contractor, or otherwise, any person who is or was an employee
of Company at any time during the Employment Term or in any manner induce
or attempt to induce any employee of Company to terminate his employment
with Company; or (B) interfere with Company's relationship with any person,
including any person who at any time during the Employment Term was an
employee, contractor, supplier, or customer of Company.
(b) Post-Employment Period. For purposes of this Section 7, the term
"Post-Employment Period" means, the one year period following termination of
employment in which Employee continues to receive the compensation outlined in
paragraphs 4 (a), 4 (b) and 4 (f) of this Agreement. The compensation provided
under these paragraphs during the Post-Employment Period is in consideration of
Employee continuing to meet his obligations under Sections 7, 8, 9 and others of
this Agreement.
(c) Applicable Geographic Area. For purposes of this Section 7, the term
"Applicable Geographic Area" means the United States.
(d) Reformation. If any covenant in this Section 7 is held to be
unreasonable, arbitrary, or against public policy, such covenant will be
considered to be divisible with respect to scope, time, and geographic area, and
such lesser scope, time, or geographic area, or all of them, as a court of
competent jurisdiction may determine to be reasonable, not arbitrary, and not
against public policy, will be effective, binding, and enforceable against
Employee.
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(e) Future Employment. Employee will, while the covenant under this Section
7 is in effect, give notice to Company, within ten days after accepting any
other employment, of the identity of Employee's employer. Company may notify
such employer that Employee is bound by this Agreement and, at Company's
election, furnish such employer with a copy of this Agreement or relevant
portions thereof.
8. Property Rights. Employee agrees promptly to disclose to Company any and all
ideas, concepts, discoveries, inventions, developments, original works of
authorship, software programs, software and systems documentation, trade
secrets, technical data, and know-how that are conceived, devised, invented,
developed, or reduced to practice or tangible medium by Employee, under
Employee's direction, or jointly with others during any period that Employee is
employed or engaged by Company, whether or not during normal working hours or on
the premises of Company, which relate, directly or indirectly, to the business
of Company and arise out of Employee's employment with Company (hereinafter
"Property and Rights"). Employee hereby assigns (and agrees to assign in the
future) to Company all of his right, title and interest to the Property and
Rights and any and all related patent rights, copyrights, and applications and
registrations therefore. During and after his employment, Employee shall
cooperate with Company, at Company's expense, in obtaining proprietary
protection for the Property and Rights and Employee shall execute all documents
which Company shall reasonably request in order to perfect Company's rights in
the Property and Rights. Employee hereby appoints Company his attorney to
execute and deliver any such documents on his behalf in the event Employee
should fail or refuse to do so within a reasonable period following Company's
request. Property and Rights which are subject to copyright registration shall
be "works made for hire" and shall be the property of Company. Employee
understands that, to the extent this Agreement shall be construed in accordance
with the laws of any state which limits the assignability to Company of certain
employee inventions, this Agreement shall be interpreted not to apply to any
such invention which a court rules or Company agrees is subject to such state
limitation.
9. Confidentiality. Employee understands that Company continually obtains and
develops valuable proprietary and confidential information concerning its
business, business relationships, and financial affairs (the "Confidential
Information") which may become known to Employee in connection with his
employment. Employee acknowledges that all Confidential Information, whether or
not in writing and whether or not labeled or identified as confidential or
proprietary, is and shall remain the exclusive property of Company or the third
party providing such information to Company. By way of illustration, but not
limitation, Confidential Information may include Property and Rights, trade
secrets, technical information, know-how, research and development activities of
Company, product and marketing plans, customer and supplier information, and
information disclosed to Company or Employee by third parties of a proprietary
or confidential nature or under an obligation of confidence. Confidential
Information is contained in various media, including without limitation, patent
applications, documentation, manuals, plans, drawings, designs, technical
specifications, laboratory notebooks, supplier and customer lists, internal
financial data and other documents and records of Company. Employee agrees that
Employee shall not, during the Employment Term and thereafter, publish,
disclose, or otherwise make available to any third party, other than employees
of Company, any Confidential Information except as expressly authorized in
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writing by Company. Employee agrees that Employee shall use such Confidential
Information only in the performance of his duties for Company and in accordance
with any Company policies with respect to the protection of Confidential
Information. Employee agrees not to use such Confidential Information for his
own benefit or for the benefit of any other person or business entity. Employee
agrees to exercise all reasonable precautions to protect the integrity and
confidentiality of Confidential Information in his possession and not to remove
any materials containing Confidential Information from Company's premises except
to the extent necessary to his employment. Upon the termination of his
employment, or at any time upon Company's request, Employee shall return
immediately to Company any and all materials containing any Confidential
Information then in his possession or under his control. Confidential
Information shall not include information which (a) is or becomes generally
known within Company's industry through no fault of Employee; (b) is lawfully
and in good faith made available to Employee by a third party who did not derive
it from Company and who imposes no obligation of confidence on Employee; or (c)
is required to be disclosed by a governmental authority or by order of a court
of competent jurisdiction, provided that such disclosure is subject to all
applicable governmental or judicial protection available for like material and
reasonable advance notice is given to Company.
10. Injunctive Relief and Additional Remedy. Employee acknowledges that the
injury that would be suffered by Company as a result of a breach of the
provisions of this Agreement (including any provisions of Section 7) would be
irreparable and that an award of monetary damages to Company for such a breach
would be an inadequate remedy. Consequently, Company will have the right, in
addition to any other rights it may have, to obtain injunctive relief to
restrain any breach or threatened breach or otherwise to specifically enforce
any provision of this Agreement. and Company will not be obligated to post bond
or other security in seeking such relief. Without limiting Company's rights
under this Section 10 or any other remedies of Company and notwithstanding any
other provisions of this Agreement, if Employee breaches any of the provisions
of Section 7, Company will have the right to cease making any payments otherwise
due to Employee under this Agreement.
11. Preservation of Business and Fiduciary Responsibility. Employee shall use
his best efforts to preserve the business and organization of Company, to keep
available to Company the services of present employees, and to preserve the
business relations of Company with suppliers, distributors, customers, and
others. Employee shall not commit any act, or in any way assist others to commit
any act, that would injure Company or its Affiliates. So long as Employee is
employed by Company, Employee shall observe and fulfill proper standards of
fiduciary responsibility attendant upon his service and office.
12. Third Party Trade Secrets. Employee shall disclose to Company any
obligations that Employee owes to any third party regarding trade secrets,
know-how or intellectual property whether written, verbal or implied. Employee
shall maintain these obligations and not disclose to Company or any of Company's
employees any information which might violate these obligations.
13. Visa. If Employee is not a US citizen, Employee shall be responsible for
obtaining and maintaining the proper US visa and other governmental permits to
allow Employee to work in the United States. Employee shall provide Company with
proof of such visas and/or other permits.
14. Stock Transfer Conditions. Employee represents that the Shares will be
acquired solely for the account of the Employee for investment purposes only and
not with a view to or for distribution, assignment, or resale. Employee
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understands that the Shares will not be registered under the Securities Act of
1933, as amended, or under the securities laws of any state, and that Company
will not be obligated to register the Shares on the Employee's behalf or to
assist the Employee in complying with any exemption from registration. Employee
further understands that the certificates representing the Shares will bear a
restrictive legend stating that the Shares may not be transferred in the absence
of an effective registration statement with respect to such Shares, or an
opinion of Employee's counsel, satisfactory to Company, that registration is not
required pursuant to a valid exemption therefrom.
15. Miscellaneous.
(a) Notices. All notices, requests, demands and other communications given
under or by reason of this Agreement shall be in writing and shall be deemed
given when delivered in person or when mailed, by certified mail (return receipt
requested), postage prepaid, addressed as follows:
To Company: To Employee:
Cyber Defense Systems, Inc. Xxxxx Xxxxxx
10901 Xxxxxxxxx Blvd., Ste. 100-D 0000 Xxxxxxxx Xxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000 Xxxxxxxxx, XX 00000
(b) Governing Law. The execution, validity, interpretation and performance
of this Agreement shall be governed by and construed in accordance with the laws
of the State of Florida.
(c) Headings. The headings of this Agreement are not part of the provisions
hereof and shall have no force or effect.
(d) Entire Agreement and Amendments. This Agreement contains the entire
agreement of Employee and Company relating to the matters contained herein and
supersedes all prior agreements and understandings, oral or written, between
Employee and Company with respect to the subject matter hereof. This Agreement
may be changed only by an agreement in writing signed by the party against whom
enforcement of any waiver, change, modification, extension or discharge is
sought.
(e) Severability. If any provision of this Agreement is rendered or
declared illegal or unenforceable by reason of any existing or subsequently
enacted legislation or by the decision of any arbitrator or by any court of
competent jurisdiction, Employee and Company shall either meet and negotiate
substitute provisions or promptly request the court to substitute provisions for
those rendered or declared illegal or unenforceable to preserve the original
intent of this Agreement to the extent legally possible, but all other
provisions of this Agreement shall remain in full force and effect.
(f) Effect and Assignment of Agreement. This Agreement shall be binding
upon Employee and his heirs, executors, administrators, legal representatives
and assigns and upon Company and its respective successors and assigns. No
assignment of this Agreement or of any of the rights or obligations hereunder by
any party hereto shall be valid without the written consent of the other party.
(g) Previous Agreements. This Agreement supersedes all previous agreements
between Employee and Company whether oral or written. Employee also agrees to
waive any claim he may have against Company and its affiliated companies under
any employment and/or independent contractor agreements, including but not
limited to the Independent Contractor Agreement between On Alert Systems, Inc.
and Xxxxx Xxxxxx date April 1, 2003. Employee and SRC., further agree to waive
or exercise for Company's benefit at Company's discretion any rights Employee or
SRC, might have under the CLS Agreement. Employee and SRC further agree to
terminate the above mentioned Independent Contractor Agreement and CLS Agreement
at the discretion of Company.
IN WITNESS WHEREOF, Employee and Company have executed this Agreement on the
date first above written.
"Company" "Employee"
Cyber Defense Systems, Inc.
By: /s/ Xxxxxxx Xxxxxxxx By: /s/ Xxxxx Xxxxxx
--------------------------------- ------------------------------------
Name: Xxxxxxx Xxxxxxxx Name: Xxxxx Xxxxxx
Sales Resources Consultants, Inc.
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