EXHIBIT 10.3
E M P L O Y M E N T A G R E E M E N T
Employment Agreement, dated as of September 12, 1997 between Financial
Intranet, Inc., a Nevada company (the "Company"), and Xxxxx Xxxxx residing at
0000 Xxxxx Xxxxx Xxxxxx Xxxxxxx, XX 32810(the "Executive").
WITNESSETH
WHEREAS, the Company is engaged in the business of operating a financial
information service firm (the Business"); and
WHEREAS, the Company desires to retain the services of the Executive in the
capacities of Managing Director and Secretary and the Executive desires to
provide such services in such capacities to the Company, on the terms and
subject to the conditions set forth in this Employment Agreement;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and obligations hereinafter set forth, the parties hereto, intending
to be legally bound, hereby agree as follows:
1. Employment and Term. The Company hereby employs the Executive, and the
Executive hereby accepts employment by the Company, in the capacities and on the
terms and subject to the conditions set forth herein. Subject to the provisions
for termination as hereinafter provided, the term of this Employment Agreement
shall commence on the date hereof (the "Commencement Date") and
end on December 31, 2002 (herein the "Original Term of Employment"). The term of
this Employment Agreement may be extended by the Company for an additional
period, commencing on January 1, 2003, and ending on December 31, 2005 provided
(a) the Company expressly informs Executive in writing six (6) months before the
third anniversary of the Original Term Of Employment, that it intends to extend
the term of this Employment Agreement on terms equal to, or better than, the
terms of the Original Term Of Employment. The additional period, if any,
together with the initial term hereinafter collectively referred to as ("Term of
Employment"); and (b) the Executive accepts the extension and terms of this
Employment Agreement for such additional period. If the Company does not so
inform the Executive of the extension of this Employment Agreement, Executive
shall assume that this Employment Agreement will expire on December 31, 2002,
unless terminated earlier as provided herein.
2. Duties. During the Term of Employment, the Executive shall continue to
serve as the Company's Managing Director and Secretary. In his capacity as
Secretary, the Executive shall have
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such powers, perform such duties and shall have such responsibilities with
respect to the Business of the Company usually pertaining and attributed by law,
custom or otherwise to the office of the Secretary, except as may be expressly
limited by the Board of Directors of the Company. In his capacity as Managing
Director the Executive will be involved in corporate planning and development,
capital raising, regional sales, marketing of corporate products and services,
and approving corporate documents for signature.
The Executive shall not without the prior written consent of the Company's
Board of Directors, during the term of this Employment Agreement, other than in
the performance of duties naturally inherent in the business of the Company as
applicable, and in furtherance thereof, render services of a business,
professional or commercial nature to any other person or firm, whether for
compensation or otherwise; provided, however, that so long as it does not
interfere with his employment hereunder, the Executive may: (a) attend to
outside investments and serve as a director of a corporation which does not
compete with the Company; (b) serve as a director, trustee or officer of or
otherwise participate in educational, welfare, social, religious and civic
organizations; (c) serve as a director, officer or employee of any other entity
if and to the extent consented to in writing by the Board of Directors of the
Company.
The Executive shall arrange his affairs and lifestyle so that he can
perform his duties from the Company's offices currently located at 0 Xxx
Xxxxxxxxxxxx Xxxxx, Xxx Xxxx, XX 00000 or at an office facility in Orlando,
Florida or at such other locations approved by the Executive. The Executive
shall travel as reasonably required in connection with the performance of his
duties hereunder. If elected, the Executive may agree to serve any part of the
Term of Employment as any other officer of the Company or as an officer or
director of any of the Company's subsidiaries without any additional
compensation other than as specified in this Employment Agreement, provided no
other liabilities or obligations are imposed on Executive outside the scope of
this Employment Agreement. So long as this Employment Agreement is in effect,
the Executive shall be nominated as a member of the Board of Directors of the
Company.
3. Compensation and Benefits. As compensation to the Executive for his
execution and delivery of this Employment Agreement and performance of services
required hereunder, the Company shall pay, grant or provide the Executive, and
the Executive agrees to accept, the following salary and other compensations and
benefits (all such amounts calculated in U.S. dollars):
(a) a base salary, payable in accordance with the Company s standard
payroll practices for senior executive officers, of $150,000.00 per annum ("Base
Salary").
(b) as an inducement to the Executive to agree to the Executive s future
employment with the Company under certain terms and conditions, the Company
agreed to issue an initial 1,500,000 shares of common stock, par value $.001, of
the Company (the "Common Stock") in accordance with the terms of a compensatory
agreement for the Executive's prior services to the Company during the period
commencing October 2, 1996 and ending at the time that the Executive and Company
execute a contemplated Employment Agreement. These shares were granted at par
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value, which were issued in reliance of Rule 701 and are "restricted
securities" as defined in Rule 144, as amended through the operation of Rule
701, promulgated under the Securities Act of 1933, as amended ("The Act").
Such Common Stock were granted January 1, 1997 and required certificates
representing the granted shares of Common Stock to be issued in the name of the
Executive contemporarily with the signing of the Employment Agreement.
(c) In addition, The Executive, upon the signing of this Employment
Agreement is hereby granted an option to purchase the Company's Common Stock at
a price per share equal to eighty percent (80%) of the per share bid price
averaged over five working days prior to the date of this Agreement (the "Grant
Date").
The option shall permit the Executive to purchase, at any time while the
Executive is employed by the Company, the number of shares of the Company's
Common Stock par value $0.001 equal to twenty seven percent (27%) of the
Company's issued and outstanding shares of Common Stock less; (i) 1,500,000
shares previously issued by the Company to the Executive hereinabove; (ii) and
less any shares previously issued to the Executive as a result of the exercise
of the option granted to the Executive; and (iii) any shares issued to the
Executive in lieu of cash expenses advanced by the Executive or accepted as
previously earned consulting fees paid to the Executive in lieu of cash.
The number of the Company's issued and outstanding Common Stock, for the
purpose for calculating the total number of shares which may be purchased by the
Executive in exercising the option granted hereunder on the exercise date (the
"Exercise Date") shall be; (i) the number of shares issued on a fully diluted
basis on the later date of the Exercise Date; or (ii) any date between January
31, 1997 and prior to December 31, 1998; providing that (iii) the total number
of shares issued on a fully diluted basis utilized in the calculation of the
shares available for purchase under the Option shall not exceed the number of
shares issued and outstanding at December 31, 1998 as recorded on the Company's
stock ledger as reported by the Companys Transfer Agent.
Such options shall expire upon the last date of the Original Employment
Term or any extension thereof whether exercised in whole of in part. The option
is personal to the Executive and shall not be encumbered or otherwise disposed
of, except that in the event of the death of Executive, his estate shall have
right, within six (6) months after his death, to exercise the options available
to Executive at the time of his death. The option shall be exercised by written
notice as called for in this Employment Agreement.
Delivery of the certificates representing the shares called for under the
within option shall be made promptly after receipt of such notice of exercise,
against the payment of the purchase price by certified check or cashier's check.
The shares issued pursuant to the grant of the Option in accordance with
the terms of this
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paragraph shall be restricted shares and may not be sold, exchanged,
transferred, pledged, hypothecated, or otherwise disposed of except as provided
for under Rule 144 of the Act.
(i) Said Common Stock must be held indefinitely unless (1) distribution of
said Common Stock has been made registered under The Act, (2) a sale of said
Common Stock is made in conformity with the provisions of Rule 144 of The Act,
or (3) in the opinion of counsel acceptable to the Company, some other exemption
from registration is available;
(ii) The Executive will not make any sale, transfer or other disposition of
said Common Stock except in compliance with The Act and Rules and Regulations
thereunder;
(iii) The Executive is familiar with all of the provisions of Rule 144
including (without limitation) the holding period thereunder;
(iv) The Company is under no obligation to register the sale, transfer or
other disposition of said Common Stock by the Executive or on his behalf or to
take any other action necessary in order to make compliance with an exemption
from registration available;
(v) there will be a restrictive legend placed on the certificates for said
Common Stock stating in substance
"The shares represented by this certificate have not been registered under
the Securities Act of 1933 and may not be sold, pledged, or otherwise
transferred except pursuant to an effective registration statement under said
Act, SEC Rule 144 or an opinion of counsel acceptable to the Company that some
other exemption from registration is available."
(d) appointment as a Director of the Company;
(e) the right to participate in any savings and stock option plans or
programs and in any medical, hospitalization, dental, disability, retirement,
insurance, savings, vacation, holiday or other plans as in effect from time to
time for the benefit of the Company's senior executive officers; provided that
any medical, hospitalization and dental plans shall include coverage for
Executive's wife and children, if any, with the understanding that premiums paid
by the Company relating to family coverage shall be reported as income to the
Executive.
(f) an automobile through a vehicle lease program, commensurate with the
vehicle policies and procedures of the Company as in effect from time to time
for senior executive officers, and which vehicle lease shall not exceed payments
of $600.00 per month; provided that the Company shall be responsible for
five-sevenths (5/7ths) of the monthly gasoline, insurance, and maintenance
payments and the Executive shall be responsible for two-sevenths (2/7ths) of the
monthly gasoline, insurance and maintenance payments;
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(g) a Company credit card, in accordance with the credit card policies and
procedures of the Company as in effect from time to time for senior executive
officers; provided that the Executive use such credit card solely for reasonable
business-related purposes and expenses incurred by the Executive;
(h) prompt reimbursement for all reasonable business-related expenses
incurred by the Executive in accordance with the policies and procedures of the
Company as in effect from time to time for senior executive officers including
50% of monthly dues plus any reasonable business expenses incurred at the Brae
Burn Country Club, together with prompt reimbursement of all travel and related
expenses incurred by Executive prior to the Commencement Date in preparation for
Executive's employment hereunder and any and all attorney's fees and expenses
incurred by Executive in connection with the negotiation and execution of this
Employment Agreement;
(i) paid vacation, in accordance with the policies and procedures of the
Company as in effect from time to time for senior executive officers, which
shall initially be three (3) weeks per annum ("Paid Vacation Time") during the
Term of Employment. Any Paid Vacation Time unused in any calendar year during
the Term of Employment may not be accrued to the following calendar year;
(j) such periods of paid sick leave which shall not be less than nine (9)
months.
4. Indemnification. For service as a director or officer of the Company and
of any subsidiary of the Company, the Executive shall be entitled to: (i) the
protection of the applicable indemnification provisions of the charter and
by-laws of the Company and any such subsidiary; and (ii) the benefits of any
other indemnification provisions as may be separate and apart from the charter
and by laws of the Company and any subsidiary of the Company (as for example
provisions provided by separate agreement). Insofar as any other officer of the
Company or its subsidiaries has any separate written indemnification protection
of the type referenced in the preceding sentence, the Executive shall be
entitled to avail himself of such provisions to the extent he so elects (just as
if such provisions were set forth herein in full). Such indemnification shall be
guaranteed through a policy of insurance to be provided by the Company for the
benefit of the Executive.
5. Key Man Term Life insurance, Life Insurance and Disability Insurance. If
requested by the Company, the executive shall submit to such physical
examinations and otherwise take such actions and execute and deliver such
documents as may be reasonably necessary to enable the Company, at its expense
and for its own benefit to obtain policies of key man term life insurance, life
insurance and/or disability insurance on the life of the Executive. At all times
during the Term of Employment, the Company may maintain key man term life
insurance, life insurance and/or disability insurance on respectively, the
health and life of the Executive, with the Company as beneficiary, in an amount
which is not less than the amounts payable under subsection 6(a) hereof. For
purposes of this Section 5 only, the Executive's estate shall be deemed a third
party beneficiary hereof.
6. Termination.
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(a) Death or Permanent Disability. In the event of the Executive s death or
permanent disability (as hereinafter defined) during the Term of Employment, the
Executive or his estate, as the case may be, shall be entitled to receive an
amount equal to three (3) times the Executive s then effective annual rate of
salary, as determined under Section 3 of this Employment Agreement (the "Salary
Benefit") in addition to the following payments: any unpaid portions of the
Signing Bonus, Incentive Awards, rights of Stock Options, accrued but unpaid
vacation and sick days, and any other payments owed to the Executive under this
Employment Agreement (all such additional payments hereinafter referred to as
"Additional Benefits"). In the Company's sole discretion, the Salary Benefit and
the Additional Benefits to be paid pursuant to this Section 6 shall be paid to,
as applicable, the Executive, his legal representative or his designated
beneficiary, either on the date of such death or permanent disability, as the
case may be, in one (1) lump sum paid within ninety (90) days after the date of
such death or permanent disability. For purposes of this paragraph, "permanent
disability" means: (a) any disability as defined under the Company's applicable
disability insurance policy and (b) any physical or mental disability or
incapacity which renders the Executive incapable of performing the services
required of him in accordance with his obligations under Section 2 for a period
of two hundred seventy (270) days. In the event the Executive, after receipt of
notice from the Company, shall dispute that his permanent disability shall have
occurred, he shall promptly submit to an examination to be conducted or
supervised by the Chief of Medicine of a major accredited hospital in the
metropolitan area of Executive e choice and, unless such physician shall issue
his written statement to the effect that in his opinion, based on his diagnosis,
the Executive is capable of resuming his employment and devoting his full time
and energy to discharging his duties within ten (10) days after the date of such
statement, such permanent disability shall be deemed to have occurred without
further dispute by the Executive or the Company. Until the Executive is
determined to be permanently disabled hereunder and his employment is terminated
therefor, Executive shall continue to receive his Base Salary, payable in
bi-weekly, monthly or other increments as is the policy of the Company for its
employees under Section 3(a) hereof, which amount shall not be offset against
any other amounts payable to the Executive hereunder. If the Executive's
employment is terminated due to a permanent disability, the Company shall
continue to provide the Executive, at the Company's expense and in addition to
any other amounts due hereunder, medical, dental, disability and life insurance
benefits provided by the Company to its employees notwithstanding the existence
of COBRA, and the Company shall pay all insurance premiums with respect thereto,
including COBRA. Any such expenses of the Company shall not be offset against
any other amounts payable to the Executive under this Section 6(a).
(b) The Company shall have the right, upon written notice to the Executive
to terminate the Executive's employment under this Employment Agreement for the
following reasons, effective upon the giving of such notice (or such later date
as shall be specified in such notice), and the Company shall no further
obligations hereunder, except to pay the Executive any amounts or provide the
Executive any benefits to which the Executive may otherwise have been entitled
prorated to the effective date of termination.
(i) By mutual agreement of the Parties to this Agreement, in writing;
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(ii) Upon the death of the Executive
(iii) Upon the Executive's inability or continued refusal to perform his
duties as provided for hereinabove, for any reason whatsoever, for a period of
three (3) consecutive months.
(iv) For Cause. For purposes of this Employment Agreement, "Cause" means
conviction of (and such conviction is sustained on appeal) or the entry of a
plea of guilty by the Executive to a felony involving fraud, conversion,
embezzlement, theft, or a type of similar felony involving the Company's
property.
7. Confidentiality, Ownership.
(a) During the Term of Employment and for a period of twelve (12) months
thereafter, so long as the Company is in business, the Executive shall not
disclose, divulge, discuss, copy or otherwise use or suffer to be used in any
manner, in competition with or contrary to the interests of, the Company, or any
of its subsidiaries, the customer lists, market research or other trade secrets
of the Company or any of its subsidiaries, it being acknowledged by the
Executive that all such information regarding the business of the Company and
its subsidiaries complied or obtained by or furnished to Executive while
Executive shall have been employed by or associated with the Company is
confidential information and the Company's exclusive property; provided,
however, this restriction shall not apply to: (a) any information that is
considered by law, custom or otherwise to be generic to the industry or trade of
the Company; (b) any information developed by Executive either individually or
jointly with others prior to his employment with the Company shall not be deemed
confidential or proprietary information of the Company, (c) information which is
now in or hereafter enters the public domain without any violation of this
Agreement; and (d) information disclosed in good faith to the Executive by a
third party legally entitled to disclose the same. Notwithstanding anything to
the contrary contained in this Section 7, the Executive may disclose any
confidential or proprietary information to the extent required by court order or
decree or by the rules and regulations of a governmental agency or as otherwise
required by law provided that the Executive shall provide the Company with
prompt notice of such required disclosure in advance thereof so that the Company
may seek an appropriate protective order in respect of such required disclosure.
8. Omitted.
9. Deduction and Withholding: Expenses. The Executive agrees that the
Company or its subsidiaries and affiliates, as applicable shall withhold from
any and all compensation paid to and required to be paid to the Executive
pursuant to this Employment Agreement, other than the amounts paid to the
Executive pursuant to Section 3(d), all Federal, state, local and/or other taxes
which the Company determines are required to be withheld in accordance with
applicable statutes or regulations from time to time in effect and all amounts
required to be deducted in respect of the Executive's coverage under applicable
benefit plans. for such purposes of this Employment Agreement and calculations
hereunder, all such deductions and withholdings shall be deemed to have been
paid to and received by the Executive.
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10. Entire Agreement. This Employment Agreement embodies the entire
agreement of the parties with respect to the Executive's employment and
superseded and other prior oral or written agreements, arrangements or
understandings between the Executive and the Company. This Employment Agreement
may not be changed or terminated orally but only by an agreement in writing
signed by the parties hereto.
11. Waiver. The waiver by the Company of a breach of any provision of this
Employment Agreement by the Executive shall not operate or be construed as a
waiver of any subsequent breach by him. The waiver by the Executive of a breach
of any provision of this Employment Agreement by the Company shall not operate
or be construed as a waiver of any subsequent breach by the Company.
12. Arbitration. All claims, disputes and other matters in question between
the parties to this Employment Agreement or the breach thereof, shall be decided
by Arbitration in accordance with the commercial rules of the American
Arbitration Association then in effect unless the parties mutually agree in
writing otherwise. Notice of the demand for Arbitration shall be filed in
writing with the other party to this Employment Agreement and the American
Arbitration Association. Any Arbitration shall take place in New York, New York.
13. Assignability. The obligations of the Executive may not be delegated
and, except with respect to the designation of beneficiaries in connection with
any of the benefits payable to the Executive hereunder, the Executive may not,
without the Company's written consent thereto, assign, transfer, convey, pledge,
encumber, hypothecate or otherwise dispose of this Employment Agreement or any
interest therein. Any such attempted delegation or disposition shall be null,
and void without effect. The Company and the Executive agree that this
Employment Agreement and all of the Company's rights and obligations hereunder
may be assigned or transferred by the Company to and shall be assumed by and
binding upon any successor to the Company. The term "successor" means, with
respect to the Company or any of its subsidiaries, any corporation or other
business entity which, by merger consolidation, purchase of the assets or
otherwise, including after a Change in Control, acquires all or a material part
of the assets of the Company.
14. Severability. If any provision of this Employment Agreement or any part
thereof, including, without limitation, Section 7, as applied to either party or
to any circumstances which shall be adjudged by a court of competent
jurisdiction to void or unenforceable, the same shall in no way affect any other
provision of this Employment Agreement or remaining part thereof, which shall be
given full effect without regard to the invalidity or unenforceability part
thereof, or the validity or enforceability to this Employment Agreement.
If any court construes any of the provisions of Section 7 or any part
thereof, to be unreasonable because of the duration of such provision or the
geographic scope thereof such court may reduce the duration or restrict or
redefine the geographic scope of such provision and enforce such provision as so
reduced, restricted or redefined.
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15. Notices. All notices to the Company or the Executive permitted to be
required hereunder shall be in writing and shall be delivered personally, by
telecopier or by courier service providing for next-day delivery or sent by
registered or certified mail return receipt requested to the following address:
The Company: Financial Intranet Inc.
0 Xxx Xxxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
The Executive: Xxxxx Xxxxx
0000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, XX 00000
Either party may change the address to which notices shall be sent by
sending written notice of such change of address to the other party. Any such
notice shall be deemed given if delivered personally upon receipt; if
telecopies, when telecopied; if sent by courier service; and if sent by
certified or registered mail, three (3) days after deposit (postage prepaid)
with the U.S. Postal Service.
16. No Conflicts. The Executive hereby represents and warrants to the
Company that his execution, delivery and performance of this Employment
Agreement and any other agreement to be delivered pursuant to this Employment
Agreement will not (i) require the consent, approval or action of any other
person or (ii) violate conflict with or result in breach of any of the terms of
, or constitute (or with notice of lapse of time or both constitute) a default
under, any agreement, arrangement or understanding with respect to the
Executive's employment to which the Executive is a party or by which the
Executive is bound or subject. The Executive hereby agrees to indemnify and hold
harmless the Company, its directors, officers, employees, agents,
representatives and affiliates (and such affiliates, directors, officers,
employees, agents and representatives) from and against any and all losses,
liabilities or claims (including interest, penalties and reasonable attorneys
fees, disbursements, and related charges) based upon or arising out of the
Executive s breach of any of the foregoing representations and warranties.
17. Effective Date. This Employment Agreement shall be effective as of the
date first written above.
18. Paragraph Heading. The paragraph headings contained in this Employment
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Employment Agreement.
19. Representations and Warranties of the Company.
(a) The Company is a corporation duly organized, validly existing and in
good
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standing under the laws of Nevada and has all requisite corporation power
and authority to enter into execute and deliver this Employment Agreement,
fulfill its obligations hereunder and consummate the transactions contemplated
hereby.
(b) The execution and delivery of, performance of obligations under and
consummation of the transaction contemplated by this Employment Agreement has
been duly authorized and approved by all requisite corporation action.
20. Counterparts. This Employment Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
taken together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this Employment
Agreement as of the date first above written.
EXECUTIVE:
/s/Xxxxx Xxxxx
Xxxxx Xxxxx
FINANCIAL INTRANET, INC.
/s/Xxxxxxx Xxxxxxxx
By: Xxxxxxx Xxxxxxxx
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FINANCIAL INTRANET, Inc.
0 Xxx Xxxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
January ,1998
Mr. Xxxxx Xxxxx
Orlando, Florida
Dear Xxxxx,
This letter constitutes a Termination Benefits ("Benefits") Agreement
(hereinafter "Agreement") between you and the Company. It has been prepared with
the expectation that you will make a major contribution to the profitability,
growth and financial strength of the Company. Your continued services to the
Company and its shareholders are in their best interests and we wish to assure
your continued services on behalf of the Company without distraction in the
event of an attempt to obtain control of the Company. You have indicated that
you are willing to remain in the employ of the Company upon the understanding
that the Company will provide income security upon the terms and conditions
contained below if your employment is terminated voluntarily for good reason or
involuntarily by us without good reason.
1. Undertaking. The Company agrees to pay you the Benefits specified below
if (a) control of the Company is acquired (as defined in par. 3(a) hereof) and
(b) within three (3) years after the acquisition of control occurs (i) the
Company terminates your employment for any reason other than cause (as defined
in par. 3(b) hereof), death, your attaining the age of 65 or total and permanent
disability, or (ii)you voluntarily terminate employment for good reason (as
defined in par. 3(c) hereof).
2. Benefits. If you are entitled to Benefits pursuant to par. 1 above, the
Company agrees to pay same in a lump-sum payment within thirty (30) days of the
termination of your employment. Said payment shall be computed by multiplying
(i) your average annual compensation payable by the Company which was included
in your gross income for the most recent two (2) calendar years ending
coincident with or immediately before the date on which control of the Company
is acquired (or such portion of such period during which you were an employee of
the Company by (ii) two hundred percent (200%) 2x Stock & Cash.
3. Definitions. For purposes of the Agreement:
a. "acquisition of control" means (i) attaining twenty-five (25%) or more
of the voting stock of the Company by any person or group (not including you or
those affiliated with you), or (ii) the occurrence of a "change of control"
pursuant to the proxy disclosure rule of the Securities and Exchange Commission.
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b. "cause" means an act(s) of dishonesty constituting a felony under
applicable law and resulting or intending to result in your enrichment at the
Company's expense. Notwithstanding the above, termination for cause shall
require a resolution adopted by our Board of Directors that in their good faith
opinion you were guilty of conduct described herein and specifying the
particular details thereof.
c. "good reason" means (i) change in your status, position,
responsibilities which, in your reasonable judgment does not represent a
promotion from existing status, position and responsibilities as in effect
immediately prior to the change in control; the assignment of any duties or
responsibilities which in your reasonable judgment are not consistent with such
status, position or responsibilities; any removal from or failure to reappoint
or reelect you to any of such positions other than for good reason or total and
permanent disability; (ii) a reduction in your salary after a change in control;
(iii) the relocation of the Company outside the Borough of Manhattan, counties
of Westchester or Fairfield after a change in control; (iv) any action which
terminates or materially reduces your participation in any Company incentive,
bonus or other compensation plan (including but not limited to stock option
plans) in connection with the change in control; (v) failure to continue to
provide you with benefits substantially similar to those enjoyed or entitled
under any of the Company's compensation or health benefits plans (or deprive you
of any material fringe benefits) at the time of a change in control; (vi)
failure of the Company to obtain an agreement from any successor or assign of
the Company to perform this Agreement; (vii) any purported termination of your
employment which is not effected pursuant to par. 4(c) hereof (and, if
applicable, par. 3(b) hereof); and for purposes of this Agreement, no such
purported termination shall be effective; or (viii) any request by the Company
that you participate in an unlawful act (or commission of such act by another
officer or director for which you might be held liable) or take any action
constituting a breach of professional standards of conduct. Notwithstanding
anything in this par. 3(c) to the contrary, your right to terminate employment
pursuant to this par. 3(c) shall not be affected by incapacity due to physical
or mental illness.
4. Enforcement of Agreement. The Company is aware that upon the occurrence
of a change in control, actions may be undertaken to deny you the benefits of
this Agreement. It is the intent of the Company that you should not be required
to incur the expenses associated with enforcing your rights under this Agreement
because such expenses would detract from the benefits intended to be extended
hereunder. Accordingly, if following a change in control it should appear that
the Company has failed to comply with any of its obligations under this
Agreement, the Company irrevocably authorizes you to from time to time to retain
counsel of your choice, at the expense of the Company to represent you in
connection with the initiation or defense of any litigation or other legal
action, whether such action is by or against the Company or any Director,
officer, shareholder, or other person affiliated with the Company, in any
jurisdiction. The reasonable fees and expenses of counsel selected from time to
tome by you as hereinabove provided shall be paid or reimbursed to you by the
Company on a periodic basis upon presentation by a of a statement(s) prepared by
such counsel up to a maximum aggregate amount of $250,000. The Company shall not
take any action to seek reimbursement for its expense in connection with any
disputes relating to the enforceability of this Agreement.
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5. Severance Pay; No Duty to Mitigate. Payments to you under this Agreement
shall not be treated as damages but as severance compensation to which you are
entitled by reason of termination of employment. The Company shall not be
entitled to set off against the amounts payable to you of any amounts earned by
you in other employment after termination of employment by the Company, or any
amounts which might have been earned by you in other employment had other such
employment been sought.
6. Notice of Termination. Any purported termination by the Company or you
of this agreement shall require a notice which indicates the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of you employment under the provision so indicated.
7. Assignment. This Agreement shall be binding upon the parties hereto and
their respective personal representatives, heirs successors and assigns, but
neither this Agreement nor any right hereunder may be assigned or transferred by
either party. Notwithstanding the foregoing, the Company will assign this
Agreement to any corporation or other business entity succeeding to
substantially all of the business and assets of the Company by merger,
consolidation, sale of assets, or otherwise and shall obtain the assumption of
this Agreement by such successor.
8. Entire Agreement. This letter contains the entire agreement of the
parties. It may not be changed orally, but only by an agreement in writing
signed by the party against whom enforcement of any waiver, change,
modification, amendment, extension or discharge is sought.
9. Governing Law. This Agreement shall be governed by and subject to the
laws of the State of New York.
10. Severability. The invalidity or enforceability of any particular
provisions of this Agreement shall not affect the other provisions, and this
Agreement shall be construed in all respects as if such invalid or unenforceable
provision has not been contained herein.
11. Notices. Notices hereunder shall be in writing and shall be deemed to
have been duly given if delivered in person or sent by certified mail, return
receipt requested, postage prepaid, addressed as set forth above, or to such
other address as shall be furnished in writing by any party to the other.
Please signify your agreement with the above by signing and returning to us
the enclosed copy of this letter.
Cordially,
FINANCIAL INTRANET, INC.
/s/Xxxxxxx Xxxxxxxx
by: Xxxxxxx Xxxxxxxx
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Accepted and Agreed:
/s/Xxxxx Xxxxx
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Mr. Xxxxx Xxxxx
% Financial Intranet Inc.
0000 Xxxxx Xxxxx Xxxxxx
Apt, 132 B
Xxxxxxx, XX 00000
Dear Xxxxx:
Preamble of this Letter::
As you are aware, at least one major telecom group has opened conservations
with Financial Intranet Inc. ("FNTN") regarding a merger/acquisition
transaction. Needless to say, if FNTN becomes a merger candidate for a major
private/public corporation, your current employment agreement between FNTN may
need to be revised and/or terminated. Since you have expended a great deal of
your expertise and time in developing the business of FNTN, which in turn may
make FNTN an attractive merger candidate, a plan must be approved by FNTN s
Board of Directors to properly compensate you in the event that any merger
negatively affects your employment benefits currently in place.
1. Intent of this Letter of Agreement. FNTN is aware that upon any
occurrence that creates a change of control of FNTN, actions may be undertaken
that may result in denying you the benefits of your current employment
agreement, or deny you the full benefits of any options you may enjoy to
purchase additional shares of FNTN in the future, or the benefits provided by
this Letter of Agreement. The above preamble, therefore is hereby included into,
and made a part of, this Letter of Agreement to act to clearly represent the
intent of this Letter of Agreement (Agreement).
2. Benefits to be made available. This Agreement, subject to the approval
of FNTN's Board of Directors will constitute an agreement to the provision of
the benefits hereinbelow and made available to you by FNTN which shall become
automatically effective, (the "Effective Date") on the date that:
(a) Control of the business activities of FNTN is acquired by any person or
group ( not including you or those affiliated with you) through the issue of
additional voting shares, or the exchange of previously issued FNTN's voting
shares to third parties under a single control; and
(b) Not less than twenty five (25%) of the issued and outstanding voting
shares of FNTN is sold and/or exchanged with any person or group (not including
you or those affiliated with you) in one or multiple transactions during any
concurrent 12 month period; or
(c) The occurrence of a "change of control" pursuant to the proxy
disclosure rule of the Securities and Exchange Commission ("SEC").
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(d) Change of the terms of and/or termination of your Current Employment
Agreement on or subsequent to the Effective Date providing that:
(i) You had continued to be employed by FNTN under the terms of your
Employment Agreement, which terms remained in full operation from its initial
execution date of January 1, 1998 and up to and including the Effective Date of
this Agreement.
(ii) Upon the Effective Date there is a proposed or actual change of your
employment status with FNTN; or
(iii) Any term of your employment agreement with FNTN is changed in any
way; or
(e) You are not provided the opportunity to renew the term of your
employment agreement with FNTN as provided for in the current Employment
Agreement or you are not reelected to the Board of Directors of FNTN or to the
Board of Directors of the surviving entity in the event of a merger or
acquisition of FNTN with any person or group acquiring control as provided for
hereinabove.
4. Benefits provided. If you are automatically entitled to the Benefits in
accordance with, and pursuant to, paragraphs 1, 2, 3 hereinabove, FNTN or the
surviving entity resulting from the change of control of FNTN upon the Effective
Date agrees to pay to you, and extend the following Benefits as the case may be:
(a) A Lump Sum amount equal to your annual employment compensation
pro-rated for the period remaining of your current employment agreement,
providing that the employment agreement had not been previously terminated for
cause by the FNTN prior to the Effective Date; plus
(b) A lump sum of two (2) times or your annual compensation averaged over
the most recent two (2) year calendar years ending coincident with or
immediately before the Effective Date
(c) Any Options granted to you as compensation under the terms of paragraph
3 (c) of your current employment agreement shall be automatically amended to
provide the following amendments of the option terms and conditions:
(i) the options granted will expire upon the one thousand eight hundred and
twenty fifth (1,825) day following the grant date: and
(ii) the options may be encumbered, sold, transferred or other wise be
disposed of without any restrictions whatsoever and shall not be considered
being issued to you as solely for your personal exercise.
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5. Enforcement of the terms of this Agreement. It is the further the intent
of FNTN that you should not be required to incur the expenses associated with
enforcing your rights under this Agreement because such expenses would detract
from the benefits intended to be extended hereunder. Accordingly, if following
the Effective Date, it should appear that FNTN has not, or will attempt not to,
comply with any of its obligations under this Agreement, FNTN irrevocably
authorizes you to, from time to time, retain counsel of your choice, at the
expense of FNTN to represent you in connection with the defense of any
litigation or other legal action, whether such action is by, or against, FNTN,
any director, officer, shareholder or other person affiliated with FNTN and in
any jurisdiction. The reasonable fees and expenses of counsel selected from time
to time by you as hereinabove provided shall be paid directly by, or reimbursed
to you, by FNTN on a periodic basis upon presentation to FNTN of a statement(s)
prepared by such counsel up to a maximum in the aggregate of two hundred and
fifty thousand ($250,000) dollars.
(a) FNTN shall not take any action to seek reimbursement for its expenses
in connection with any disputes relating to the enforceability of this
Agreement.
6. Severance Pay: Any payments made to you, or required to be paid to you,
under this Agreement shall not be treated as damages but rather as severance
compensation to which you are entitled to by reason of your termination of your
current employment or change in the status of your current employment terms.
(a) FNTN shall not be entitled to set off against the amounts payable to
you under the terms of this Agreement of any amounts earned by you, or any
amounts earned by you in other employment after termination of your employment
with FNTN, or any amounts which might have been earned by you in other
employment had other such employment been sought by you.
7. Assignment. This Agreement shall be binding upon the parties hereto and
their respective personal representatives, heirs, successors and assigns but
neither this Agreement nor any right hereunder may be assigned or transferred to
either party. Notwithstanding the foregoing:
(a) FNTN is obligated to assign this Agreement to any corporation or other
business entity succeeding to control FNTN and/or succeeding to substantially
all of the FNTN's business and assets by merger, consolidation, sale of assets,
or otherwise and FNTN is obligated to obtain the assumption of this Agreement by
such successor; and
(b) You may assign, transfer or other dispose of, or encumber, any Options
granted to you prior to the Effective Date as provided for in paragraph of this
Agreement.
8. Entire Agreement. This Letter Agreement contains the entire agreement
between the parties. This Agreement may be changed only through a writing signed
by both party seeking any waiver, change modification, amendment, and/or
extension of this Agreement.
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9. Governing Law: This Agreement shall be governed by, and subject to, the
laws of the State of New York.
10. Severability. The invalidity or enforceability of any particular
provision of this Agreement shall not affect any other provision(s) and this
Agreement and shall be construed in all respects as if such invalid or
unenforceable provision had not been contained herein.
11. Notices. Notices hereunder shall be in writing and shall be deemed to
have been duly given if delivered in person or sent by certified mail, return
receipt requested, postage prepaid, addressed as set forth above, or at such
address as shall be furnished in writing by any party to the other.
Please signify your agreement with the above terms of this Agreement by
signing and returning to FNTN the enclosed copy of this Agreement
Cordially
Financial Intranet Inc.
/s/Xxxxxxx Xxxxxxxx
By Xxxxxxx Xxxxxxxx (title) President
Accepted and Agreed
/s/Xxxxx Xxxxx
Xxxxx Xxxxx
