Exhibit 10.2 Agreement with Xxxxx XxXxxxx
XXXXX BIOMETRY, INC.
EMPLOYMENT AND NON-COMPETITION AGREEMENT
This AGREEMENT, effective as of the 31st day of July, 2003, is made by
and between Xxxxx Biometry, Inc., a Florida corporation (the "Company"), and
Xxxxxxxxxxx X. XxXxxxx, a resident of the state of New Hampshire (the
"Executive").
RECITALS
A. The Company is in the business of developing a Finger Print Biometrics
business (the "Business");
B. The Company desires to retain the services of the Executive;
C. The Executive is willing to be employed by the Company; and
D. The parties hereto desire to enter into this Agreement in order to set
forth the respective rights, limitations and obligations of both the
Company and the Executive with respect to the Executive's employment
with the Company, the Confidential Information, the Discoveries, and
the other matters set forth herein.
NOW THEREFORE, in consideration of the employment of the Executive by the
Company, the compensation paid to the Executive, and the Company continuing to
provide Confidential Information to the Executive, as well as the other mutual
promises and consideration hereinafter contained, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1. Term.
Subject to the provisions for termination hereinafter provided, the Executive's
employment hereunder shall commence on the first day of the month after the
Company receives funding in the amount of US$ 100,000 (the "Employment Date")
and unless otherwise extended, end one year after the Employment Date commences
(the "Contract Termination Date"). The Contract Termination Date shall be
automatically extended for a successive one (1) year period at the end of each
contract year unless the Board of Directors of the Company (the "Board") shall
give contrary notice to the Executive, pursuant to the terms of Section 11
below, at least ninety (90) days prior to the end of the each contract year. In
the event that the Company does not receive funding in the amount of $100,000 on
or before December 31, 2003, this agreement shall become null and void.
2. Position and Duties.
During the Employment Term, the Executive shall serve as Chief Operating
Officer. The Executive will report to the Company's President, and perform such
employment duties, consistent with his position, as specified in the Job
Description, and more particularly defined in Exhibit A, attached hereto and
incorporated into this Agreement. The Executive shall not have the ability to
enter into any agreements or contracts or otherwise legally bind the Company
without the express consent and written approval of the President. The Executive
shall devote his full productive time, energy and ability to the proper and
efficient conduct of the Company's business. The Executive may only devote
reasonable periods of time to service as a Director of other businesses, with
the prior written approval and consent of the President, to the extent that such
service does not interfere with the performance of his obligations hereunder.
Similarly, the Executive may engage in such charitable or community activities
as shall not interfere with the performance of his obligations hereunder. The
Executive shall observe and comply with all lawful and reasonable rules of
conduct set by the Board for executives of the Company, and shall endeavor to
promote the business, reputation and interests of the Company.
3. Compensation.
(a) Base Compensation.
As defined in further detail below, during the Employment Term the Company shall
pay the Executive a Base Compensation, subject to annual review, as the Board,
in its sole discretion, may determine. The Base Compensation shall be paid in
U.S. Dollars in accordance with the Company's normal payroll practices. The Base
Compensation paid to the Executive shall be forty eight thousand US Dollars (US$
48,000) per year, payable bi-weekly in arrears.
Other Compensation.
(i) Annual Bonus: The Executive shall be eligible to receive a Performance
Bonus (the "Bonus") for the achievement of the performance goals as
determined by the Board, and dependent upon the financial performance of
the Company.
(ii) Stock Options: The Executive shall be eligible to participate in any
Stock Option Plan established by the Company under the terms and conditions
of the Plan and any Stock Option Agreement.
(b) Expenses.
The Executive shall be entitled to receive prompt reimbursement for all
reasonable business expenses pre-approved in writing by the President (exclusive
of any commuting expenses) incurred by him in the course of his employment by
the Company.
(c) Other Benefits.
(i) Insurance: The Executive shall be entitled to participate in or receive
benefits on the same basis as other executive officers of the Company under
any employee benefit plans and arrangements applicable to senior management
including life insurance plans, pension and profit-sharing plans, medical
and health plans or other employee welfare benefit plans, annual paid
vacation, sick leave, sick pay and short-term and long-term disability
benefits and holidays, as in effect from time to time.
(ii) Vacation: The Executive shall be entitled to receive three (3) weeks
of paid vacation per contract year. Such vacation days shall accrue and
become vested on the first anniversary day of each year of the Employment
Term. This benefit shall be reviewed by the Board of Directors and the
Executive from time to time and increased when appropriate.
(iii) Holidays: The Executive shall be entitled to the designated Company
holidays.
4. Termination.
The Executive's employment by the Company pursuant hereto is subject to
termination during the Employment Term as follows:
(a) Death. The Executive's employment hereunder shall terminate upon his death.
In such event, the Executive's Base Compensation and any prorated amount of the
Bonus, if any, shall be paid through the date of the Executive's death.
Eligibility for all other benefits shall be determined by the terms of any
applicable plan or program.
(b) Disability. The Company may, by written notice to the Executive, terminate
the Executive's employment if, as a result of the Executive's incapacity due to
physical or mental illness, the Executive shall have been absent from his duties
hereunder for ninety (90) consecutive days or for a total of one hundred eighty
(180) days in any three hundred sixty five (365) day period (the "Disability
Period"). In the event of such termination, the Executive shall receive the same
benefits payable in the event of death; provided however that, if the Company
should adopt a disability policy at any time during the Employment Term, the
terms of such policy shall govern.
(c) Termination by the Company for Cause or Executive's Voluntary Termination.
The Company shall be entitled to terminate the Executive's employment at any
time, by written notice to the Executive, for:
(i) fraud or embezzlement on the part of the Executive;
(ii) conviction of or the entry of a plea of nolo contendere by the
Executive to any felony or other crime of fraud or moral turpitude;
(iii) any act of willful or negligent misconduct by the Executive which is
either intended to result in substantial personal enrichment of the
Executive at the expense of the Company or any of its subsidiaries or
affiliates, or has a material adverse impact on the business or reputation
of the Company, any of its subsidiaries or affiliates, or directors or
other officers (such determination to be made by the Company's Board of
Directors in the good faith exercise of its reasonable judgment); or
(iv) insubordination.
In the event of termination for Cause, the Executive's Base Compensation and
other benefits shall be paid through the Date of Termination (as hereafter
defined), and the Executive shall have no further rights to compensation or
benefits other than as determined by the terms of any applicable plan or
program. The Executive shall not be eligible to receive any portion of his
Annual Bonus.
The Executive may terminate his employment hereunder voluntarily at any time
with ninety (90) day's written notice to the Board. In the event of the
Executive's voluntary termination, the Executive shall be entitled to receive
his Base Compensation and prorated Bonus, if any, and benefits through the Date
of Termination.
(d) Without Cause. The Company may terminate the Executive's employment at any
time by giving written notice to the Executive of its intent to terminate this
Agreement without Cause. In such event:
(i) the Executive shall be paid his Base Compensation, any prorated Bonus
and other benefits to which the Executive is entitled for the remainder of
the Employment Term;
(ii) all stock options held by the Executive under any stock option plan of
the Company shall become fully exercisable, and shall remain exercisable
for a period of ninety (90) days following the Date of Termination; and
(iii) the Executive shall have such other rights in respect of any
incentive, other compensation plan or benefit plan or program as may be set
forth in such plan or program.
(e) Date of Termination. The date upon which a termination pursuant to this
Section 4 becomes effective (the "Date of Termination" or "Termination Date")
shall be: the date upon which the party terminating this Agreement gives the
other party written notice thereof in accordance with Section 11 hereof.
5. Confidential Information.
(a) The Executive recognizes that the services to be performed by him hereunder
are special, unique and extraordinary and that, by reason of his employment with
the Company, he may acquire Confidential Information (as hereinafter defined)
concerning the operation of the Company, the use or disclosure of which would
cause the Company substantial loss and damage which could not be readily
calculated and for which no remedy at law would be adequate. Accordingly, the
Executive agrees that he will not (directly or indirectly) at any time, whether
during or after the Employment Term:
(i) knowingly use for an improper personal benefit any Confidential
Information that he may learn or has learned by reason of his employment
with the Company; or
(ii) disclose any such Confidential Information to any person except (A) in
the performance of his obligations to the Company hereunder, (B) as
required by a court of competent jurisdiction, (C) in connection with the
enforcement of his rights under this Employment Agreement or (D) with the
prior consent of the Board.
As used herein, "Confidential Information" includes information with respect to
the Company's facilities and methods, trade secrets and other intellectual
property, systems, patents and patent applications, procedures, manuals,
confidential reports, financial information, business plans, prospects or
opportunities, personnel information or lists of customers and suppliers;
provided, however, that such term shall not include any information that is or
becomes generally known or available publicly other than as a result of
disclosure by the Executive which is not permitted as described in clause (ii)
above, or the Company discloses to others without obtaining an agreement of
confidentiality.
(b) The Executive confirms that all Confidential Information is the exclusive
property of the Company. All business records, papers and documents and
electronic materials kept or made by the Executive relating to the business of
the Company which comprise Confidential Information shall be and remain the
property of the Company during the Employment Term and at all times thereafter.
Upon the termination of his employment with the Company or upon the request of
the Company at any time, the Executive shall promptly deliver to the Company,
and, without the express consent of the Board, shall retain no copies of any
written or electronic materials, records and documents made by the Executive or
coming into his possession concerning the business or affairs of the Company and
which comprise Confidential Information.
(c) The Executive shall keep the terms of this Agreement strictly confidential,
other than as may be necessary to enforce his rights hereunder or as otherwise
required by law, or for estate planning or personal financial reasons.
6. Non-Competition.
(a) During the Employment Term and for a period of one (1) year after the
Termination Date (the "Restricted Period"), the Executive shall not directly or
indirectly, for his own account or for the account of others, serve as an
officer, director, stockholder, owner, partner, employee, promoter, consultant,
advisor, manager or otherwise participate in the promotion, financing,
ownership, operation, or management of, or assist in or carry on through a
proprietorship, corporation, partnership or other form of business entity or
otherwise that intends to compete against the Company or any of its affiliates
or customers.
Nothing in this Section 6 shall prohibit the Executive from acquiring or holding
any issue of stock or securities of any Person that has any securities
registered under Section 12 of the Exchange Act, listed on a national securities
exchange or quoted on the automated quotation system of the National Association
of Securities Dealers, Inc. so long as the Executive is not deemed to be an
"affiliate" of such Person as such term is used in paragraphs (c) and (d) of
Rule 145 under the Securities Act and the Executive, members of his immediate
family, or persons under his control do not own or hold more than five percent
(5%) of any voting securities of any such Person.
(b) During the Restricted Period, the Executive shall not, whether for his own
account or for the account of any other person (excluding the Company):
(i) solicit or contact in an effort to do business with any person who was
a customer or a potential customer of the Company during the term of this
Agreement, or any affiliate of any such person, if such solicitation or
contact is for the purpose of competition with the Company;
(ii) solicit or induce any of the Company's employees to leave their
employment with the Company or accept employment with anyone except the
Company; or
(iii) interfere in a similar manner with the business of the Company.
Nothing herein shall prohibit or preclude the Executive from performing any
other types of services that are not precluded by Section 6 (a) for any
other Person.
(c) The Executive has carefully read and considered the provisions of this
Section 6 and, having done so, agrees that the restrictions set forth in this
Section 6 (including the Restricted Period, scope of activity to be restrained
and the geographical scope) are fair and reasonable and are reasonably required
for the protection of the interests of the Company, its officers, directors,
employees, creditors and shareholders. The Executive understands that the
restrictions contained in this Section 6 may limit his ability to engage in a
business similar to the Company's business, but acknowledges that he will
receive sufficiently high remuneration and other benefits from the Company
hereunder to justify such restrictions.
7. Inventions.
(a) Disclosure of Inventions: The Executive shall promptly disclose to the
Company (or any persons designated by it) all discoveries, developments,
designs, improvements, inventions, blueprints, formulae, processes, techniques,
computer programs, strategies, and data, whether or not patentable or
registerable under copyright or similar statutes, made or conceived or reduced
to practice or learned by the Executive, either alone or jointly with others,
during the period of employment that result directly from tasks assigned to the
Executive by the Company and relate specifically to the Business or result from
the use of premises or property (including computer systems and engineering
facilities) owned, leased or contracted for by the Company (all such
discoveries, developments, designs, improvements, inventions, formulae,
processes, techniques, computer programs, strategies, blueprints, know-how and
data are hereinafter referred to as "Inventions"). The Executive will also
promptly disclose to the Company, and the Company hereby agrees to receive all
such disclosures in confidence, all other discoveries, developments, designs,
improvements, inventions, formulae, processes, techniques, computer programs,
strategies, blueprints and data, whether or not patentable or registerable under
copyright or similar statutes, made or conceived or reduced to practice or
learned by the Executive, either alone or jointly with others, during the period
of employment for the purpose of determining whether they constitute
"Inventions", as defined above.
(b) Ownership of Inventions.
(i) All Inventions shall be the sole property of the Company and its
assigns, and the Company and its assigns shall be the sole owner of all
patents, copyrights, trademarks and other rights in connection therewith.
The Executive does hereby assign to the Company any rights the Executive
may have or acquire in such Inventions. The Executive shall assist the
Company (at the Company's expense) in obtaining and, from time to time,
enforcing patents, copyrights, trademarks and other rights and protections
relating to said Inventions in any and all countries. The Executive will
execute all documents necessary to apply for and obtain such patents,
copyrights, trademarks and other rights and protections on such Inventions,
as the Company may request, together with any assignments thereof to the
Company or persons designated by it. The Executive's obligation to assist
the Company in obtaining and enforcing patents, copyrights, trademarks and
other rights and protections relating to such Inventions shall continue
beyond the termination of employment, but the Company shall compensate the
Executive at a reasonable rate after the Executive's termination, for time
actually spent by the Executive at the Company's request on such
assistance.
(ii) In the event the Company is unable, after reasonable effort, to secure
the Executive's signature on any document or documents needed to apply for
or prosecute any patent, copyright or other right or protection relating to
an Invention, for any reason whatsoever, the Executive does hereby
irrevocably designate and appoint the Company and its duly authorized
officers and agents as his agent and attorney-in-fact, to act for and on
his behalf to execute and file any such application or applications and to
do all other lawfully permitted acts to further the prosecution and
issuance of patents, copyrights or similar protections solely with respect
to Inventions with the same legal force and effect as if executed by the
Executive and the Executive does ratify, affirm and approve all such
lawfully permitted acts accordingly.
8. Specific Performance.
The Executive acknowledges that a breach of any of the covenants contained in
this agreement may result in material, irreparable injury to the Company for
which there is no adequate remedy at law, that it will not be possible to
measure damages for such injuries precisely and that, in the event of such a
breach, any payments remaining under the terms of this Agreement shall cease and
the Company, without posting any bond, shall be entitled to obtain a temporary
restraining order and a preliminary or permanent injunction restraining the
Executive from engaging in activities prohibited by this agreement or such other
relief as may be required to enforce any of the covenants contained in this
agreement.
9. Successors; Binding Agreement.
(a) The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business or assets of the Company to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform if no such succession had taken place. Failure of the
Company to obtain such assumption and agreement prior to the effectiveness of
any such succession shall be a material breach of this Agreement. As used in
this Employment Agreement, "Company" shall mean the Company as defined in this
Agreement and any successor to its business or assets as aforesaid which assumes
and agrees to perform this Agreement by operation of law, or otherwise.
(b) This Agreement shall inure to the benefit of and be enforceable by the
Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Executive should
die while any amount would still be payable to him hereunder if he had continued
to live, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the Executive's spouse or, if
there is no such spouse, to the Executive's estate. This Agreement is personal
to the Executive and may not be assigned by him.
10. Resignation as Officer and/or Director.
In the event that the Executive's employment is terminated for any reason
whatsoever or the Executive voluntarily terminates his employment, the Executive
agrees to resign immediately as an Officer and/or Director of Company.
11. Notice.
For the purposes of this Agreement, notices and all other communications
provided for in this Agreement shall be in writing and shall be deemed to have
been duly given when delivered by hand or mailed by United States overnight
express mail, or nationally recognized private delivery service on an overnight
basis, return receipt requested, postage prepaid, addressed as follows:
If to the Executive: Xxxxxxxxxxx XxXxxxx
000 Xxxxxx Xxxx
Xxxxxx, XX 00000
(000) 000-0000
With copies to: Xxxxxxxx, Xxxxxx & Xxxxxx, P.A.
0 Xxxx Xxxxxx Xxxx, Xxxxx 000
Xxxx Xxxxx, Xxxxxxx
Attention: Xxxxxx Xxxxxxxx Esq.
Telephone: (000) 000-0000
Fax: (000) 000-0000
If to the Company: Xxxxx Biometry, Inc.
Notices may also be sent to such other address as either party may have
furnished to the other in writing in accordance herewith, except that notice of
change of address shall be effective only upon receipt.
12. Arbitration of Disputes.
Any controversy or claim arising out of or relating to this Agreement or the
breach hereof, other than an action brought by the Company for injunctive or
other equitable relief in the enforcement of the Company's rights under Section
8 above, in which case such action may be brought in any court of competent
jurisdiction, shall be settled by arbitration in accordance with the laws of the
State of New Hampshire by three arbitrators, one of whom shall be appointed by
the Company, one by the Executive and the third by the first two arbitrators. If
the first two arbitrators cannot agree on the appointment of a third arbitrator,
then the third arbitrator shall be appointed by the American Arbitration
Association in the City of Nashua, New Hampshire. Such arbitration shall be
conducted in the City of Nashua, New Hampshire in accordance with the rules of
the American Arbitration Association, except with respect to the selection of
arbitrators which shall be as provided in this Section 12. Judgment upon the
award rendered by the arbitrators may be entered in any court having
jurisdiction thereof. In the event that it shall be necessary or desirable for
the Executive to retain legal counsel and/or incur other costs and expenses in
connection with the enforcement of any or all of the Executive's rights under
this Agreement, the Company shall pay (or the Executive shall be entitled to
recover from the Company, as the case may be) the Executive's reasonable
attorneys' fees and other reasonable costs and expenses in connection with the
enforcement of said rights (including the enforcement of any arbitration award
in court) in the event that an arbitration award is made in favour of the
Executive, unless and to the extent that the arbitrators shall determine that
under the circumstances recovery by the Executive of all or part of any such
fees and costs and expenses would be inequitable or otherwise unjust.
13. Attorneys' Fees.
The prevailing party in any legal or arbitration proceedings brought by or
against the other party to enforce any provision of this Agreement shall be
entitled to recover against the non-prevailing party the reasonable attorneys'
fees, court costs, arbitration fees and other expenses incurred by the
prevailing party.
14. Representations and Warranties.
The Executive hereby represents and warrants that he is willing and able to
enter into this Employment Agreement and to render his services pursuant hereto
and that neither the execution and delivery of this Employment Agreement, nor
the performance of his duties hereunder, violates the provisions of any other
agreement to which he is a party or by which he is bound. It is further provided
that the Executive shall indemnify the Company for any and all damages and/or
expenses (including attorney's fees) that may result from a breach of such
representations.
15. Expenses.
Each party shall pay its own expenses incident to the performance or enforcement
of this Agreement, including all fees and expenses of its counsel for all
activities of such counsel undertaken pursuant to this Agreement, except as
otherwise herein specifically provided.
16. Waivers and Further Agreements.
Any waiver of any terms or conditions of this Agreement shall not operate as a
waiver of any other breach of such terms or conditions or any other term or
condition, nor shall any failure to enforce any provision hereof operate as a
waiver of such provision or of any other provision hereof; provided, however,
that no such written waiver, unless it, by its own terms, explicitly provides to
the contrary, shall be construed to effect a continuing waiver of the provision
being waived and no such waiver in any instance shall constitute a waiver in any
other instance or for any other purpose or impair the right of the party against
whom such waiver is claimed in all other instances or for all other purposes to
require full compliance with such provision. Each of the parties hereto agrees
to execute all such further instruments and documents and to take all such
further action as the other party may reasonably require in order to effectuate
the terms and purposes of this Agreement.
17. Amendments.
This Agreement may not be amended, nor shall any waiver, change, modification,
consent or discharge be effected except by an instrument in writing executed by
or on behalf of the party against whom enforcement of any waiver, change,
modification, consent or discharge is sought.
18. Severability.
If any provision of this Agreement shall be held or deemed to be, or shall in
fact be, invalid, inoperative or unenforceable as applied to any particular case
in any jurisdiction or jurisdictions, or in all jurisdictions or in all cases,
because of the conflict of any provision with any constitution or statute or
rule of public policy or for any other reason, such circumstance shall not have
the effect of rendering the provision or provisions in question invalid,
inoperative or unenforceable in any other jurisdiction or in any other case or
circumstance or of rendering any other provision or provisions herein contained
invalid, inoperative or unenforceable to the extent that such other provisions
are not themselves actually in conflict with such constitution, statute or rule
of public policy, but this Employment Agreement shall be reformed and construed
in any such jurisdiction or case as if such invalid, inoperative or
unenforceable provision had never been contained herein and such provision
reformed so that it would be valid, operative and enforceable to the maximum
extent permitted in such jurisdiction or in such case.
19. Counterparts.
This Agreement may be executed in two or more counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument, and in pleading or proving any provision of this Agreement, it
shall not be necessary to produce more than one of such counterparts.
20 Survival.
Sections 3, 4, 5, 6, 7, 8, 11, 12, and 20 shall survive the termination of this
Agreement.
21. Section Headings.
The headings contained in this Agreement are for reference purposes only and
shall not in any way affect the meaning or interpretation of this Agreement.
22. Gender.
Whenever used herein, the singular number shall include the plural, the plural
shall include the singular, and the use of any gender shall include all genders.
23. Entire Agreement.
This Agreement together with any attachments or Exhibits hereto contains the
entire agreement of the parties and there are no other promises or conditions in
any other agreement, whether oral or written. This Agreement supersedes any
prior written or oral agreements between the parties.
24. Governing Law.
This Agreement shall be governed by and construed and enforced in accordance
with the law (other than the law governing conflict of law questions) of the
State of Florida.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and
year first above written.
Executive:
Name: /s/Xxxxxxxxxxx X. XxXxxxx 7/31/03
Xxxxxxxxxxx X. XxXxxxx
Xxxxx Biometry, Inc.
By: /s/Xxx Ko Chau August 11,2003
Xxx Xx Xxxx
President
