EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is effective as of June 1,
2004 (the "Effective Date") by and between NUWAVE TECHNOLOGIES, INC., a Delaware
corporation (the "Company"), and XXXXXX XXXXXXX (the "Employee").
RECITALS:
Employee's participation in the business of the Company is essential to
the Company's success. The parties wish to provide for the employment of
Employee by the Company from and after the date hereof, and to restrict the
ability of Employee to compete with the Company, all on the terms and conditions
herein set forth.
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants and agreements herein contained, and for other valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
1. Employment. Subject to Section 3 below, the Company hereby employs
Employee for a term of five (5) years (the "Employment Term"), commencing on the
Effective Date, to serve as the President and Chief Executive Officer of the
Company and to perform such services and duties as are consistent with such
position and as may be directed by the Company's Board of Directors. Employee
shall report to the Board of Directors of the Company. Employee hereby accepts
such employment. During the term of his employment hereunder, Employee shall
devote his full business time, attention, knowledge and skills faithfully,
diligently and to the best of his ability to perform his duties hereunder, and
Employee shall not engage in any venture or activity that materially interferes
with Employee's performance of his duties hereunder.
2. Compensation and Benefits. During the Employment Term, the Company
shall pay Employee the compensation and other amounts set forth below.
2.1. Salary. The Company shall pay Employee an annual salary
("Salary") in the amount of $125,000, subject to increases as determined by the
Company's Board of Directors. The Employee's salary shall be payable in weekly
installments subject to such deductions as may be required by law.
2.2. Bonus.
(a) The Employee shall be entitled to a bonus equal
to 12.5% of the net income attributable to each of the Company's subsidiaries.
In calculating the bonus hereunder, all items of income (including, without
limitation, all items of revenue and capital gains) and expenses attributable to
each such subsidiary shall be taken into account. Such calculations shall be
made for each subsidiary on a stand-alone basis and shall not be consolidated
with the Company or any other subsidiary.
(b) The Employee shall be eligible for incentive
bonus compensation (a "Bonus") in an amount to be determined by the Board of
Directors.
2.3. Stock and Option Grants. On the date hereof, Employee
shall receive a grant of 75,000 shares of the Company's common stock and options
to purchase 100,000 shares of the Company's common stock at an exercise price
equal to the closing bid price of the Company's common stock on the date
immediately prior to the date of grant. All grants hereunder shall be fully
earned as of the date hereof. Additional grants shall be at the discretion of
the Company's Board of Directors.
2.4. Benefits. On the date hereof, Employee shall receive: (i)
the employee benefits and perquisites provided by the Company to its executive
officers from time-to-time, including health insurance and 5 weeks' paid
vacation during each calendar year, (ii) reimbursement of automobile lease
payments up to $1,000 per month, (iii) reimbursement for parking charges at the
Company's offices and automobile insurance and (iv) reimbursement for reasonable
and necessary out-of-pocket expenses incurred in the performance of his duties
hereunder, including, but not limited to, parking, travel and entertainment
expenses (such expenses shall be reimbursed by the Company, from time to time,
upon presentation of appropriate receipts therefore).
3. Termination.
3.1. The Employee's employment pursuant to this Agreement
shall be terminated by the first to occur of the following events:
(a) The death of Employee.
(b) The Complete Disability of Employee. "Complete
Disability" as used herein shall mean the inability of Employee, due to illness,
accident or any other physical or mental incapacity, to perform the services
provided for in this Agreement for an aggregate of 90 days within any period of
twelve (12) consecutive months during the term hereof.
(c) The discharge of Employee by the Company for
Cause. "Cause" as used herein shall mean:
(i) illegal drug use or alcohol abuse;
(ii) conviction of a felony or a crime
involving moral turpitude;
(iii) acts of fraud by Employee against the
Company or its affiliates, or in connection with the performance of his duties
hereunder, as determined by the Company after investigation, notice of the
charge to Employee and after allowing Employee an opportunity to explain the
conduct in question; or
(iv) the Employee's willful failure or
refusal to comply with the provisions of this Agreement or to perform Employee's
duties and obligations under this Agreement, in any material respect, in the
Board of Directors' discretion (a "Default"); provided, however, that in the
case of this subsection (iv), termination for "Cause" shall occur only if the
Company has given written notice of the Default to Employee and Employee has
failed to cure the Default in question during a period of seven (7) days after
the date of Employee's receipt of such notice.
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3.2. Upon any termination pursuant to Section 3.1, the Company
shall be released from all obligations hereunder (except for the obligation to
pay any compensation and benefits described in Section 2 hereof which are
accrued and unpaid as of the date of termination), including, without
limitation, the obligation to compensate Employee pursuant to Section 2 hereof.
4. Confidentiality/Covenant Against Unfair Competition.
4.1. The Company and the Employee acknowledge that the
services to be performed by the Employee under this Agreement are unique and
extraordinary and, as a result of such employment, the Employee will be in
possession of confidential information relating to the business practices of the
Company. The term "Confidential Information" shall mean any and all information
(verbal and written) relating to the Company or any of its affiliates, or any of
their respective activities, other than such information which can be shown by
the Employee to be in the public domain (such information not being deemed to be
in the public domain merely because it is embraced by more general information
which is in the public domain) other than as the result of breach of the
provisions of this Section 4.1, including, but not limited to, information
relating to: trade secrets, personnel lists, financial information, research
projects, services used, pricing, software, software code, technical memoranda,
designs and specifications, new products and services, comparative analyses of
competitive products, technology, know-how, customers, customer lists and
prospects, product sourcing, marketing and selling and servicing. The Employee
agrees that he will not, during or for a period of three (3) years after the
termination of employment, directly or indirectly, use, communicate, disclose or
disseminate to any person, firm or corporation any Confidential Information.
4.2. Employee agrees that during the Employment Term and for a
period of two (2) years following the termination of his employment (for any
reason), he will not, for his own account or jointly with another, directly or
indirectly, for or on behalf of any individual (including, without limitation,
any person related by blood, adoption or marriage or other person), partnership,
corporation, or other legal entity, as principal, agent or otherwise:
(a) own, control, manage, be employed by, consult
with, or otherwise participate in, a business involved within the Trade Area (as
hereinafter defined) involved in any business or activity which competes with
the business conducted by the Company or any of its subsidiaries at the time of
such termination.
(b) solicit or induce, or in any manner attempt to
solicit or induce, any person (i) which is or was a customer of the Company or
any of its future subsidiaries or any successor of any such customer or (ii)
employed by the Company or any of its future subsidiaries to leave such
employment, whether or not such employment is pursuant to a written contract and
whether or not such employment is at will, or hire any person who has been
employed by the Company or any its future subsidiaries at any time during the
six (6) month period preceding such hiring; or
(c) interfere with the Company's business
relationships, including, without limitation, the business relationships with
the Company's customers, clients, vendors or referral sources.
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4.3. As used herein, the term "Trade Area" shall mean any
locations in which the Company has conducted business at any time during the six
(6) month period preceding the termination of employment.
4.4. Employee recognizes the importance of the covenants
contained in this Section 4 and acknowledges that, based on his past experience
and his position as an executive of the Company and the projected expansion of
the Company's business, the restrictions imposed herein are: (a) reasonable as
to scope, time and area; (b) necessary for the protection of the Company's
legitimate business interests, including, without limitation, the Company's
trade secrets, goodwill, and its relationship with customers and suppliers; (c)
not unduly restrictive of any Employee's rights as an individual; and (d)
supported by adequate consideration. Employee acknowledges and agrees that the
covenants contained in this Section 4 are essential elements of this Agreement.
Such covenants shall be construed as agreements independent of any other
provision of this Agreement.
4.5. If Employee commits a breach or threatens to commit a
breach of any of the provisions of this Section 4, the Company shall have the
right and remedy, in addition to any others that may be available, at law or in
equity, to have the provisions of this Section 4 specifically enforced by any
court having equity jurisdiction, through injunctive or other relief (without
any bond or security being required to be posted), it being acknowledged that
any such breach or threatened breach will cause irreparable injury to the
Company, the amount of which will be difficult to determine, and that money
damages will not provide an adequate remedy to the Company.
4.6. If any covenant contained in this Section 4, or any part
thereof, is hereafter construed to be invalid or unenforceable, the same shall
not affect the remainder of the covenants, which shall be given full effect,
without regard to the invalid portions, and any court having jurisdiction shall
have the power to reduce the duration, scope and/or area of such covenant and,
in its reduced form, said covenant shall then be enforceable. If Employee
breaches the covenants set forth in this Section 4, the running of the
noncompete period described herein (but not his obligation) shall be tolled for
so long as such breach continues. The provisions of this Section 4 shall survive
the expiration and termination of this Agreement, and the termination of
Employee's employment hereunder.
5. Company Property. The Company shall be the sole owner of all
products and proceeds of the Employee's services hereunder, including, but not
limited to, all software, software products and code, technical memoranda,
design and specifications, materials, ideas, concepts, formats, suggestions,
developments, arrangements, packages, programs and other intellectual properties
that the Employee may have or may in the future acquire, obtain, develop or
create in connection with and during the term of the Employee's employment with
the Company (including his employment with the Company prior to the date
hereof), free and clear of any claims by the Employee (or anyone claiming under
the Employee) of any kind or character whatsoever (other than the Employee's
right to receive compensation hereunder). The Employee shall, at the request of
the Company, execute such assignments, certificates or other instruments as the
Company may from time to time deem necessary or desirable to evidence,
establish, maintain, perfect, protect, enforce or defend its right, title and
interest in or to any such properties. Upon the termination of the Employee's
employment for any reason whatsoever, all documents, records, notebooks,
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equipment, price lists, specifications, programs, customer and prospective
customer lists and other materials which refer or relate to any aspect of the
Business which are in the possession of the Employee (including all copies
thereof), shall be promptly returned to the Company.
6. Related Party Transactions. So long as Employee is employed by the
Company, he shall not, without the prior written consent of the Company, cause
or permit the Company, or any subsidiary to enter into or effect any agreement
or transaction, or provide or receive any service, between the Company or any
subsidiary on the one hand, and Employee or a Related Party (defined below), on
the other hand, except for the employment relationship contemplated hereby. In
any event, any such agreements, transactions or services shall be at prices and
terms which are equal to the prices and terms available for similar agreements,
transactions or services with unrelated third parties. As used herein, "Related
Party" means (i) any person related by blood, adoption, or marriage to the
Employee, (ii) any director or officer of the Company or any of its
subsidiaries, (iii) any corporation or other entity in which the Employee has,
directly or indirectly, at least five percent (5%) beneficial interest in the
capital stock or other type of equity interest in such corporation or other
entity, or (iv) any partnership in which the Employee is a general partner or a
limited partner having a five percent (5%) or more interest therein.
7. Successors. This Agreement is personal to Employee and without the
prior written consent of the Company shall not be assignable by Employee. This
Agreement is not assignable by the Company except in connection with the sale of
all or substantially all of the Company's assets. Subject to the foregoing, this
Agreement shall inure to the benefit of and be binding upon the Company and its
successors and assigns.
8. Miscellaneous.
8.1. Modification and Waiver. Any term or condition of this
Agreement may be waived at any time by the party hereto that is entitled to the
benefit thereof; provided, however, that any such waiver shall be in writing and
signed by the waiving party, and no such waiver of any breach or default
hereunder is to be implied from the omission of the other party to take any
action on account thereof. A waiver on one occasion shall not be deemed to be a
waiver of the same or of any other breach on a future occasion. This Agreement
may be modified or amended only by a writing signed by both parties hereto.
8.2. Governing Law. The validity and effect of this Agreement
shall be governed by and construed and enforced in accordance with the laws of
the State of New Jersey.
8.3. Tax Withholding. The Company may withhold from any
amounts payable under this Agreement such taxes as shall be required to be
withheld pursuant to any applicable law or regulation.
8.4. Section Captions. Section and other captions contained in
this Agreement are for reference purposes only and are in no way intended to
describe, interpret, define or limit the scope, extent or intent of this
Agreement or any provision hereof.
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8.5. Severability. Every provision of this Agreement is
intended to be severable. If any term or provision hereof is illegal or invalid
for any reason whatsoever, such illegality or invalidity shall not affect the
validity of the remainder of this Agreement.
8.6. Integrated Agreement. This Agreement constitutes the
entire understanding and agreement among the parties hereto with respect to the
subject matter hereof, and supersedes any other employment agreements executed
before the date hereof. There are no agreements, understandings, restrictions,
representations, or warranties among the parties other than those set forth
herein or herein provided for.
8.7. Interpretation. No provision of this Agreement is to be
interpreted for or against any party because that party or that party's legal
representative drafted such provision. For purposes of this Agreement: "herein,"
"hereby," "hereunder," "herewith," "hereafter," and "hereinafter" refer to this
Agreement in its entirety, and not to any particular section or subsection. This
Agreement may be executed in any number of counterparts, each of which shall be
deemed an original, and all of which shall constitute one and the same
instrument.
8.8. Notices. All notices, requests, demands, or other
communications required or permitted hereunder shall be in writing and shall be
deemed to have been duly given upon receipt if delivered in person or by Federal
Express (or similar overnight courier service) to the parties at the following
addresses:
If to Employee: Xxxxxx Xxxxxxx
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If to the Company: NuWave Technologies, Inc.
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxx, Xxx Xxxxxx 00000
With a Copy to: Xxxx X. Xxxxxx, Esq.
Xxxxxxxxxxx & Xxxxxxxx LLP
000 Xxxxx Xxxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Any party may change the address to which notices, requests, demands or other
communications to such party shall be delivered or mailed by giving notice
thereof to the other parties hereto in the manner provided herein. Any notice
may be given on behalf of a party by its counsel.
8.9. NO JURY TRIAL. THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVE THE RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION BASED HEREON OR ARISING OUT OF, UNDER OR IN CONNECTION
WITH THIS AGREEMENT AND ANY DOCUMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION
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HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE PARTIES' ACCEPTANCE OF THIS AGREEMENT.
IN WITNESS WHEREOF, the parties hereto have entered into this
Employment Agreement as of the Effective Date.
COMPANY:
NUWAVE TECHNOLOGIES, INC.
By: /s/ Xxxxxx Xxxxxxxx
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Name: Xxxxxx Xxxxxxxx
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Title: Director
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EMPLOYEE:
/s/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx
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