EMPLOYMENT AGREEMENT
BETWEEN BLUEGATE CORPORATION AND
XXXXX XXXXXX
This Employment agreement (the "Agreement") is made effective as of the 1st
day of September 2005, by and between Bluegate Corporation, a Nevada corporation
("Bluegate"), and Xxxxx Xxxxxx (the "Executive").
WHEREAS, The Executive is willing to be employed by Bluegate from and after
the effective date on the basis and 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:
1. Employment.
Bluegate hereby employs the Executive, and the Executive hereby accepts
such employment, for the period stated in Section 3 below and upon the
other terms and conditions herein provided.
2. Position and Duties.
During the Employment Period the Executive agrees to serve as President of
Trilliant Technology Group, a subsidiary of Bluegate. In his capacity of
President of Trilliant Technology Group, the Executive will be responsible
for managing the day to day operations of the firm including office
personnel, revenue generation, and all other functions required for growing
the volume of sales of Trilliant. The Executive will perform such
additional duties and responsibilities for Bluegate as may from time to
time be assigned to him by the Chief Executive Officer.
3. Term.
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.
4. Compensation.
In consideration of such service, Bluegate agrees to pay the Executive as
compensation an annual salary of $125,000.00, in accordance with Bluegate's
regular payroll practices in effect from time to time.
Stock Options. In addition to the compensation set forth above, the
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Executive shall be entitled to receive options to purchase 250,000 shares
of Bluegate shares of common stock, par value $.001 per share ("Option
Shares"), at the per-share option price of $1.08, granted pursuant to a
Stock Option Agreement being entered into in connection herewith. This
option shall become vested and exercisable with respect to 10,416.82 Option
Shares immediately upon the execution and delivery of the related
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Stock Option Agreement, and this option shall become vested and exercisable
with respect to another 10,416.66 Option Shares every 30 days thereafter
until this option becomes fully vested.
Quarterly Bonus. In addition to the compensation set forth above, the
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Executive shall be entitled to receive up to twenty percent (20%) of the
quarterly salary each calendar quarter based on performance objectives
determined by Bluegate. This bonus will be paid quarterly.
Annual. In addition to the compensation set forth above, the Executive
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shall be entitled to receive options to purchase additional shares of
Bluegate shares of common stock, par value $.001 per share ("Option
Shares"), at the per-share option price of $1.08 according to the following
schedule:
a) At 100% performance objectives - 50,000 shares
b) At 125% performance objectives - 100,000 shares
Performance objectives will be determined by the Chief Executive Officer of
Bluegate.
5. Confidentiality.
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 Bluegate or any of its
affiliates. Without the prior written consent of Bluegate, 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 Bluegate and that at the termination and/or expiration of this
Agreement, at Bluegate's written request, Executive shall promptly return
to Bluegate any and all such information so requested by Bluegate.
The provisions of this Section shall not, however, prohibit
Executive from disclosing to others or using in any manner information
that:
(a) has been published or has become part of the public domain
other than by acts, omissions or fault of Executive;
(b) 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;
(c) was in the possession of Executive prior to obtaining such
information from Bluegate in connection with the performance of this
Agreement; or
(d) is required to be disclosed by law.
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6. Indemnification.
Bluegate shall to the fullest extent permitted by law or as set forth in
the Articles of Incorporation and the Bylaws of Bluegate, 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.
7. Termination.
This Agreement and the employment relationship created hereby will
terminate : (i) with cause under Section 7(a); or (ii) upon the voluntary
termination of employment by Executive under Section7(b).
(a) With Cause. Bluegate may terminate this Agreement at any time for
the following reasons: (i) it is determined that the Executive
has committed an act or acts constituting a felony or other crime
involving moral turpitude, dishonesty, theft or fraud; or (ii)
the Executive's willful misconduct in the performance of his
duties hereunder. Such determination to terminate the Executive
with cause pursuant to this Section 7(a) shall be made by the
Chief Executive Officer, in his sole discretion
(b) Voluntary Termination. The Executive may terminate his employment
voluntarily.
In the event of the termination of Executive's employment pursuant to
Section 7(a) or 7(b), Executive shall be entitled only to the compensation
earned by him hereunder as of the date of such termination.
8. Death of Executive.
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.
9. Waiver of Breach.
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. Arbitration.
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 Bluegate and Executive.
11. Covenant Not to Compete.
So long as the Executive is employed by Bluegate and for a period of
eighteen (18) months after either (i) the voluntary termination of
employment by Executive or (ii) the termination of the Executive by
Bluegate for cause, as set forth in Section 7(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
Bluegate (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 Bluegate 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 Bluegate at the time
of termination of the Executive's employment.
Executive's Acknowledgments and Agreements. The Executive acknowledges and
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agrees that:
(1) Due to the nature of Bluegate's business, the foregoing covenants
place no greater restraint upon the Executive than is reasonably necessary
to protect the business and goodwill of Bluegate;
(2) These covenants protect a legitimate interest of Bluegate and do
not serve solely to limit Bluegate's future competition;
(3) This Agreement is not an invalid or unreasonable restraint of
trade;
(4) A breach of these covenants by the Executive would cause
irreparable damage to Bluegate;
(5) These covenants will not preclude the Executive from becoming
gainfully employed following termination of employment with Bluegate;
(6) These covenants are reasonable in scope and are reasonably
necessary to protect Bluegate's business and goodwill and valuable and
extensive trade which Bluegate has established through its own expense and
effort;
(7) The signing of this Agreement is necessary for the Executive's
employment; and
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(8) 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 Bluegate.
Remedies, Injunction. In the event of the Executive's actual or threatened
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breach of any provisions of this Agreement, the Executive agrees that
Bluegate 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 Bluegate 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
Bluegate's legal remedies would be inadequate and that Bluegate would
suffer irreparable harm as a result of the Executive's violation of the
provisions of this Agreement. In any proceeding brought by Bluegate 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 Bluegate
will be defense thereto. The foregoing remedy provisions are subject to the
provisions of Sec.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.
12. Benefits Insurance.
(i)Medical, Dental and Vision Benefits. During this Agreement,
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Executive and his dependents will be entitled to receive such group
medical, dental and vision benefits as Bluegate may provide to its
other executives, provided such coverage is reasonably available, or
be reimbursed if Executive is carrying his own similar insurance.
(ii)Benefit Plans. The Executive will be entitled to participate in
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any benefit plan or program of Bluegate which may currently be in
place or implemented in the future.
(iii)Other Benefits. During the Term, Executive will be entitled to
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receive, in addition to and not in lieu of base salary, bonus or other
compensation, such other benefits and normal perquisites as Bluegate
currently provides or such additional benefits as Bluegate may provide
for its executive officers in the future.
13. Vacation and Sick Leave.
Vacation Pay. The Executive shall be entitled to an annual vacation leave
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of two (2) weeks at full pay.
Sick Pay. The Executive shall be entitled to sick leave as needed.
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14. Reimbursement of Expenses.
Upon submission of a detailed statement and reasonable documentation,
Bluegate 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.
15. Withholding of Taxes.
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.
16. Entire Understanding.
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.
17. Severability.
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.
18. Governing Law.
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.
19. Notices.
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:
Xxxxx Xxxxxx
0000 Xxx Xxxxxxxx
Xxxxxxxx, Xxxx, XX 00000
If to Bluegate:
Bluegate Communications, Inc.
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. Successors, Binding Agreement.
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.
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.
Bluegate: Executive:
______________________________ _____________________________
XXXXXXX XXXXXXXXX, CEO Xxxxx Xxxxxx
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