EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT entered into as of August 1, 2003 by and between FullCircle
Registry, Inc. ("Employer" or the "Company") a Nevada corporation, with an
office at 2310 PNC Plaza, 000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000
(the "Premises") and Xxxxx Xxxxx Oakley ("Executive") employed at Premises.
WHEREAS, the Employer is engaged in the business of developing and
marketing secure data storage and retrieval, medical expense
reimbursement plans, and various resale agreements of some or all
components of FullCircle Registry membership benefits, among various
other products, services and enterprises in which the Company may
engage now or in the future ("Employer's Business"); and
WHEREAS, the Employer desires to continue to employ the Executive, and
the Executive desires to accept such continued employment on the terms
and conditions set forth in this Agreement.
WHEREAS, the Employer and the Executive mutually agree and stipulate
that the circumstances of Executive's current employment have
substantially changed due to the Company's sale of Paradigm Solutions
Group, LLC, formerly a wholly-owned subsidiary of the Company.
WHEREAS, the Employer and the Executive both agree to mutually
terminate and release each other from any and all provisions of any
and all prior agreements of whatever type, whether oral or written,
that make the Executive, either directly or indirectly, the
beneficiary of any W-2 and/or 1099 compensation and/or Stock options.
NOW, THEREFORE, in consideration of the mutual conditions and covenants
contained in this Agreement, and for other good and valuable consideration, the
sufficiency of which is hereby acknowledged, it is hereby stipulated, consented
to and agreed by and among Employer and Executive as follows:
1. Employment.
(a) During the Executive's employment under this Agreement, Employer
agrees to employ Executive, as Executive Vice President and Chief
Marketing Officer, or other position(s) as may, from time to time be
designated by the Company (the "Position"), subject to the direction
and control at all times of Senior Management (as defined below) of
the Employer. Executive agrees to act in the foregoing capacity, in
accordance with the terms and conditions contained in this Agreement,
and the terms of employment applicable to regular employees of the
Company. In the event of any conflict or ambiguity between the terms
of the Agreement and terms of employment applicable to regular
employees, the terms of this Agreement shall control.
(b) Executive shall devote substantially all of Executive's working time
to Employer's Business as conducted from time to time. Executive shall
render services, in connection with the operation of Employer's
Business, including activities of Affiliates and subsidiaries of the
Employer as may exist from time to time. For purposes of this
Agreement, Employer's Senior Management shall mean any executive
officer of Employer, any parent company or any subsidiary of Employer
for which Executive is rendering services and any supervisory person
designated to oversee Executive's activities for Employer, or in the
absence of any supervisory person, the applicable board(s) of
directors of the Employer. As used in this Agreement, the term
"Affiliate" shall mean any entity or person that, directly or
indirectly, is controlled or under common control with Employer.
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2. Compensation.
(a) Base Salary
Employer shall pay to Executive an annual base salary of ninety-two
thousand dollars ($91,000) during the Initial Term ("Base Salary").
The amount of Executive's annual base salary shall be subject to
annual review and minimum annual increases to reflect changes in cost
of living by Senior Management; provided, however, that in no event
shall such base salary be less than the initial salary provided in
this Section 2(a). All payments shall be made in equal weekly
installments, or such other installments as may be consistent with the
payroll practices of Employer for its employees.
(b) Bonus Compensation
(i) The Employer agrees and stipulates that Executive has forfeited
the fully vested perpetual ownership interest in compensation
that would have been payable by Company under prior agreements
had this Agreement not been entered into (the "Forfeited
Compensation").
(ii) In consideration of the Forfeited Compensation contemplated by
Section (2)(b)(i) (above), the Employer shall pay the Executive
the Bonus Compensation defined in (2)(b)(iii) (below).
(iii)Bonus Compensation within the meaning of this Agreement shall
mean a fully vested perpetual ownership interest by the
Executive, his heirs and assigns, equal to five percent (5%) of
the gross revenue generated by any and all contracts that are
executed and sales that are procured by the Employer while the
Executive performs services hereunder (the "Revenue").
(iv) (A) During the time the Executive is performing services
hereunder, the Employer shall pay as W-2 compensation the greater
of five hundred dollars ($500) or the Bonus Compensation on the
payroll date concurrent with or next following the fifteen (15th)
calendar day of each month for the Revenue received by the
Employer during the prior calendar month. (B) Upon non-renewal or
termination of this Agreement for any reason except Cause as
contemplated in Section 5, the Employer shall pay the Bonus
Compensation as 1099 compensation on or before the fifteen (15th)
calendar day of each month for the Revenue received by the
Employer during the prior calendar month.
(v) The parties acknowledge and agree that compensation provided for
in (2)(b)(iv) (above) is substantially less than the Forfeited
Compensation.
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(vi) Executive agrees and stipulates that the compensation as
contemplated by Section 2(c)(i), together with the Stock Option
provided for by Section 2(c)(i) constitutes adequate compensation
in lieu of Forfeited Compensation and agrees to indemnify and
hold the Employer harmless for the difference.
(c) In exchange for services, the Executive shall also be entitled to receive
Stock options to purchase shares S-8 of common stock of Employer under all
of the circumstances listed below, exercisable at a price of one tenth of
one cent ($0.001) ("Stock") as set forth below, if Executive is then
employed by the Company:
(i) One hundred thousand ($100,000) shares of Stock upon the execution of
this Agreement; and
(ii) Twenty thousand (20,000) shares of Stock upon the completion of each
full calendar month of employment under this Agreement; and
(iii)One hundred thousand (100,000) shares for the redevelopment of the
105 medical care reimbursement plan and Health Reimbursement
Arrangement (HRA) that were released upon the sale of Paradigm
Solutions Group by the Company; and
(iv) Ten-thousand (10,000) shares of Stock for each new increment of ten
thousand dollars ($10,000) of monthly revenue that is generated by the
Employer's Business; and
(v) An additional one hundred thousand (100,000) shares of Stock for each
new increment of one hundred thousand dollars ($100,000) of monthly
revenue that is generated by the Employer's Business.
The options will be granted to the Executive to purchase shares of
common stock of the Company, in accordance with and subject to the
terms of an equity plan of the Company and an award agreement between
the Executive and the Company. All grants shall be exempt grants under
Rule 16b-3 of the Securities and Exchange Commission.
3. Additional Executive Benefits
(a) Employer shall reimburse Executive for all expenses, which are
reasonably incurred by Executive in connection with the performance of
Executive's duties under this Agreement against Executive's
pre-submitted documented vouchers for such expenses, which must be
approved in writing by Employer prior to the reimbursement of such
expense.
(b) Executive shall be entitled to a total of four weeks of vacation, sick
leave and personal time per year, during which his compensation will
be paid in full ("Paid Time Off"); provided, however, the Executive
shall not take more than two weeks of consecutive vacation without the
approval of the Executive's immediate superior in Senior Management of
the Employer.
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(c) The Executive will be eligible to participate in all benefit and
equity plans, arrangements, policies and programs and fringe benefits
and perquisites generally offered to other employees of the Employer
(i.e., any and all life, dental, medical, and other group benefit
plans provided by the Employer for eligible employees during the term
of this Agreement). In lieu of group medical coverage offered by the
Employer, the Employer shall, at the Executive's option, reimburse
Executive for health coverage Executive obtains on his own.
4. Term and Termination Without Cause or Good Reason.
The initial term of Executive's employment under this Agreement shall commence
on August 1, 2003 and shall continue for a period of one (1) year, (the "Initial
Term"). This Agreement will renew thereafter automatically on the same terms and
conditions for additional successive periods of one year (a "Renewal Term").
(a) Unless this agreement is terminated by the Employer for Cause as
contemplated by Section 5, the Employer may terminate this Agreement
at any time without Cause upon giving the Executive at least
forty-five (45) days advance notice and paying the Executive :
(i) within the forty-five (45) days of the advance notice period (A)
the remaining Base Salary for the then current Initial Term or
Renewal Term that would have been paid to him had the Employer
not terminated this Agreement before the end of such term, (B)
the remaining Stock options for the then current Initial Term or
Renewal Term that would have been paid to him had the Employer
not terminated this Agreement before the end of such term, (C)
his accrued vacation pay up to the date of termination, (D) any
unreimbursed expenses, (E) any other amounts or benefits owed to
the Executive under the then applicable employee benefit plans
and
(ii) the Bonus Compensation provided for in Section 3(b).
(b) As a material inducement to Employer to pay the Payout as contemplated
in Section 2(a), Executive covenants and agrees to the restrictive
covenants in Section 6.
(c) Unless this Agreement is terminated by the Executive for Good Reason
under Section 5, the Executive may terminate this Agreement by giving
the Employer written notice of his intention not to renew at least
forty-five (45) days before the end of the Initial Term or each
subsequent Renewal Term.
(d) In the event this Agreement is not renewed for any reason, Employer
shall pay Executive :
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(i) within the forty-five (45) days of the advance notice period (A)
the remaining Base Salary for the then current Initial Term or
Renewal Term that would have been paid to him had the Employer
not terminated this Agreement before the end of such term, (B)
the remaining Stock options for the then current Initial Term or
Renewal Term that would have been paid to him had the Employer
not terminated this Agreement before the end of such term, (C)
his accrued vacation pay up to the date of termination, (D) any
unreimbursed expenses, (E) any other amounts or benefits owed to
the Executive under the then applicable employee benefit plans;
and
(ii) the Bonus Compensation provided for in Section 2(b).
5. Termination with Cause or Good Reason
(a) Employer may terminate this Agreement for cause.
(b) "Cause" within the meaning of this Agreement shall mean:
(i) failure by Executive to comply in any material respect with the
terms of any provision contained in this Agreement, or any
written policies or written directives of Employer's Senior
Management; provided that Cause shall not be deemed to exist with
respect to this paragraph 5(b)(i) unless Executive has first
received notice from Employer advising Executive of the specific
acts or omissions alleged to constitute such failure, and such
failure continues for a period of ten (10) business days from the
date Executive receives said notice;
(ii) failure of Executive to cure such failure, if curable, within
(10) business days after receipt of said notice;
(iii)physical incapacity or disability of Executive to perform the
services required to be performed under this Agreement. For
purposes of this Section 5(b)(iii), Executive's incapacity or
disability to perform such services for any continuous period of
sixty (60) days during any twelve-month period or any cumulative
period of ninety (90) days during any twelve-month period, shall
be deemed "cause" hereunder;
(v) executive is convicted of, pleads guilty to or confesses to a
felony involving fraud, misappropriation or embezzlement or an
intentional act causing physical harm to other persons or the
property of others.
(c) Unless Executive is terminated for Cause within the meaning of this
Agreement, nothing in this Agreement shall be construed as preventing
the Executive, upon the termination or non-renewal of this Agreement,
from acting on behalf of Employer to continue to xxxxxx relationships
on Employer's behalf under an independent contractor or agency
agreement.
(d) Executive may terminate this Agreement for good reason.
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(e) "Good Reason" within the meaning of this Agreement shall mean:
(i) the material reduction of Executive's title, authority, duties or
responsibilities, or the assignment to Executive of duties
materially inconsistent with Executive's positions with Employer
as stated in Section 1 hereof;
(ii) a reduction in any compensation and/or Stock options payable to
Executive under Section 3;
(iii)the relocation of Executive's office to more than 30 miles from
the Executive's residence(s).
(iv) Employer's failure to pay Executive any amounts otherwise due
hereunder or under any plan, policy, program, agreement,
arrangement or other commitment of Employer if such failure is
not cured by Employer within ten (10) business days of notice of
such failure;
(v) the failure by Employer to obtain an agreement in form and
substance reasonably satisfactory to Executive from any successor
to the business of Employer to assume and agree to perform this
Agreement; or
(vi) any other material breach by Employer of this Agreement.
(f) If the Executive's employment is terminated by the Employer for Cause,
then the Executive's vested perpetual ownership interest in Bonus
Compensation is forfeited, and the Executive will be entitled to: the
sum of (i) his accrued Base Salary and vacation pay up to the date of
termination, (ii) any unreimbursed expenses and (iii) any other
amounts or benefits owed to the Executive under the then applicable
employee benefit plans.
(g) If the Executive terminates his employment for Good Reason, then
Company shall immediately pay Executive: (i) the remaining Base Salary
for the then current Initial Term or Renewal Term that would have been
paid to him had the Employer not terminated this Agreement before the
end of such term, (ii) the remaining Stock options for the then
current Initial Term or Renewal Term that would have been paid to him
had the Employer not terminated this Agreement before the end of such
term, (iii) his accrued vacation pay up to the date of termination,
(iv) any unreimbursed expenses and (v) any other amounts or benefits
owed to the Executive under the then applicable employee benefit
plans.
(h) If Employer notifies Executive of its election to terminate this
Agreement for Cause, or If Executive notifies Employer of its election
to terminate this Agreement for Good Reason, this termination shall
become effective at the time notice is deemed to have been given in
accordance with Section 10.
(i) This Agreement shall automatically terminate upon the death of
Executive; provided, however, if the Executive's employment is
terminated because of death or disability, then the Executive (or his
estate and beneficiaries) will be entitled to: the sum of (i) his
accrued base salary, and vacation pay up to the date of termination,
(ii) Bonus
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Compensation, (iii) any unreimbursed expenses and (iv) any other
amounts or benefits owed to the Executive under the then applicable
employee benefit plans.
6. Restrictive Covenants
In consideration for Bonus Compensation, Executive agrees to the
covenants set forth in this Section 6 ("Restrictive Covenenants").
(a) Non-Solicitation.
During the Initial Term or any Renewal Term, and for a period of one
(1) year from the date of expiration or termination of the Executive's
employment under this Agreement (the "Restricted Period"), Executive
covenants and agrees that Executive will not, directly or indirectly,
either for himself or for any other person or business entity:
(i) solicit any employee of Employer to terminate his employment with
Employer or employ such individual during his employment with
Employer and for a period of one (1) year after such individual
terminates his employment with Employer;
(ii) make any disparaging statements concerning Employer, Employer's
Business or its officers, directors, or employees, that could
injure, impair or damage the relationships between Employer or
Employer's Business on the one hand and any of the employees,
customers or suppliers of Employer's Business, or any lessor,
lessee, vendor, supplier, customer, distributor, Executive or
other business associate of Employer's Business;
(iii)persuade or attempt to persuade any person or entity, which is
or was a customer or client of the Company on the date that the
Executive's employment with the Company is terminated, to cease
doing business with the Company, or to reduce the amount of
business it does with the Company.
(b) Non-Disclosure and Non-Use.
(i) Description of Confidential Information. For purposes of this
Section 6(b), Confidential Information means any information
disclosed during the Restricted Period, which is clearly either
marked or reasonably understood as being confidential or
proprietary, including, but not limited to, information disclosed
during the Executive's employment under this Agreement regarding
the Company's finances, public relations, customer lists, plans
and other unpublished information.
(ii) Standard of Care. Executive shall protect the Confidential
Information from disclosure to any person other than other
employees of Employer, by using a reasonable and prudent degree
of care, in light of the significance of the Confidential
Information, to prevent the unauthorized use, dissemination, or
publication of such Confidential Information.
(iii)Exclusion. This Section 6(b) imposes no obligation upon
Executive with respect to information that: (A) was in
Executive's possession before receipt
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from Employer; (B) is or becomes a matter of public knowledge
through no fault of Executive; (C) is rightfully received by
Executive from a third party who does not have a duty of
confidentiality; (D) is disclosed under operation of law, except
that Executive will disclose only such information as is legally
required and give Employer prompt prior notice; or (E) is
disclosed by Executive with Employer's prior written consent.
(iv) Stock Trading. If the information disclosed or of which Executive
becomes aware is material non-public information about the
Employer, then Executive agrees not to trade in the securities of
FullCircle Registry, Inc., or in the securities of or any
appropriate and relevant third party until such time as no
violation of the applicable federal and state securities laws
would result from such securities trading.
(v) Return of Confidential Information. The Executive will
immediately destroy or return all tangible material embodying
Confidential Information, without limitation, all summaries,
copies and excerpts of Confidential Information upon the earlier
of (i) the completion or termination of the dealings between the
Employer and Executive under the Agreement or (ii) at such time
that Employer may so request.
(vi) Notice of Breach. Executive shall notify Employer immediately
upon discovery of any unauthorized use or disclosure of
Confidential Information, or any other breach of the Agreement by
Executive, and will cooperate with Employer in every reasonable
way to help Employer regain possession of Confidential
Information and prevent its further unauthorized use.
(c) Geographical Limitations. Executive agrees with the Company that the
current state of the Employer's Business, taken in context of modern
and advancing methods of communications, renders meaningless,
geographical limitations the Executive's post-employment obligations
to the Company.
(d) Interpretation of Enforceability. Executive acknowledges that the
restrictive covenants (the "Restrictive Covenants"), contained in this
Section 6 are a condition of the Executive's employment and are
reasonable and valid in geographical and temporal scope and in all
other respects. If any Court determines that any of the Restrictive
Covenants, or any part of any of the Restrictive Covenants, is invalid
or unenforceable, the remainder of the Restrictive Covenants and parts
thereof shall not thereby be affected and shall be given full effect,
without regard to the invalid portion. If any Court determines that
any of the Restrictive Covenants, or any part thereof, is invalid, or
enforceable because of the geographic or temporal scope of such
provision, such court shall have the power to reduce the geographic or
temporal scope of such provision, as the case may be, and, in its
reduced form, such provision shall then be enforceable.
(e) Injunctive Relief and Liquidated Damages. If Executive breaches or
threatens to breach any of the Restrictive Covenants, the Company, in
addition to and not in lieu of any other rights and remedies it may
have at law or in equity, shall have the right to injunctive relief;
it being acknowledged and agreed to by the Executive that any such
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breach or threatened breach would cause irreparable and continuing
injury to the Company and that money damages would not provide an
adequate remedy to the Company.
7. Representation and Indemnification
Executive hereby represents and warrants that Executive is not a party to any
agreement, whether oral or written, which would prohibit Executive from being
employed by Employer, and Executive further agrees to indemnify and hold
Employer, its directors, officers, shareholders and agents, harmless from and
against any and all losses, cost or expense of every kind, nature and
description (including, without limitation, whether or not suit be brought, all
reasonable costs, expenses and fees of legal counsel), based upon, arising out
of or otherwise in respect of any breach of such representation and warranty.
8. Indemnification of Executive
Employer, its directors, officers, parent company, any subsidiaries and any
Affiliates agree to indemnify and hold Executive harmless from and against any
and all damages to reputation, losses, costs or expenses of every kind, nature
and description (including, without limitation, whether or not suit be brought,
all reasonable costs, expenses and fees of legal counsel), based upon, arising
out of or otherwise in respect of any statements, claims, charges and demands
arising out of or otherwise in respect of Employer's Business.
9. Injunctive Relief
The parties acknowledge that the services to be rendered hereunder by Executive
are special, unique and of extraordinary character, and that in the event of a
breach or a threatened breach of Executive of any of Executive's obligations
under this Agreement, Employer will not have an adequate remedy at law.
Accordingly, in the event of any breach or threatened breach of Executive,
Employer shall be entitled to such equitable and injunctive relief as may be
available to restrain Executive and any business, firm, partnership, individual,
corporation or entity participating in the breach of this agreement. Nothing in
this agreement shall be construed as prohibiting Employer from pursing any other
remedies available at law or in equity for such breach or threatened breach,
including the recovery of damages and the immediate termination of the
employment of Executive under this agreement.
10. Notices
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All notices shall be in writing and shall be delivered personally (including by
courier), sent by facsimile transmission (with appropriate documented receipt
thereof), by overnight receipted courier service (such as UPS or Federal
Express) or sent by certified, registered or express mail, postage prepaid, to
the parties at their address set forth at the beginning of this Agreement with
Employer's copy being sent to Employer at its then principal office. Any such
notice shall be deemed given when so delivered personally, or if sent by
facsimile transmission, when transmitted, or, if mailed, forty-eight (48) hours
after the date of deposit in the mail. Any party may, by notice given in
accordance with this Section to the other party, designate another address or
person for receipt of notices hereunder. Copies of any notices to be given to
Employer shall be given simultaneously to: Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP,
1065 Avenue of the Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 Attention:
Xxxxxxx Xxxxxxxxx, Esq.
11. Miscellaneous
(a) This Agreement shall be governed by and interpreted in accordance with the
laws of the Commonwealth of Kentucky, without regard to the conflict of
laws provisions thereof. The parties hereto hereby consent to the personal
jurisdiction of the United States District Court for the Western District
of Kentucky, and the courts of the State of Kentucky in Jefferson County,
in any action, suit or proceeding for injunctive relief, as described in
Section 5, for any violation by the Executive of the provisions of Section
6, and the parties agree that any such action, suit or proceeding may be
brought in such courts and they further agree that service of process or
notice in any such action, suit or proceeding shall be effective if given
in the manner set forth in Section 10 hereof.
(b) This Agreement may be amended, superseded, canceled, renewed or extended,
and the terms hereof may be waived, only by a written instrument signed by
authorized representatives of the parties or, in the case of a waiver, by
an authorized representative of the party waiving compliance. No such
written instrument shall be effective unless it expressly recites that it
is intended to amend, supersede, cancel, renew or extend this Agreement or
to waive compliance with one or more of the terms hereof, as the case may
be. No delay on the part of any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof, nor shall any waiver
on the part of any party of any such right, power or privilege, or any
single or partial exercise of any such right, power or privilege, preclude
any further exercise thereof or the exercise of any other such right, power
or privilege. The rights and remedies herein provided are cumulative and
are not exclusive of any rights or remedies that any party may otherwise
have at law or in equity.
(c) In view of Employer's need and desire to maintain a proper working
environment with suitable demeanor of its employees and in light of
Employer's sensitivity to the views of its customers and potential
customers and to regulatory bodies having jurisdiction over Employer's
Business activities, Employer has instituted a policy of requiring
employees to be subject to, at Employer's sole reasonable discretion,
alcohol and drug testing procedures and requirements. Executive
specifically consents to the same, agrees to be subject to whatever
procedures may now or hereinafter be put in place covering such testing and
understands and agrees that Executive's consent to
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this is a material inducement to Employer to enter into this agreement and
to provide for the employment of Executive hereunder.
(d) If any provision or any portion of any provision of this Agreement or the
application of any such provision or any portion thereof to any person or
circumstance, shall be held invalid or unenforceable, the remaining portion
of such provision and the remaining provisions of this Agreement, or the
application of such provision or portion of such provision as is held
invalid or unenforceable to persons or circumstances other than those as to
which it is held invalid or unenforceable, shall not be affected thereby
and such provision or portion of any provision as shall have been held
invalid or unenforceable shall be deemed limited or modified to the extent
necessary to make it valid and enforceable; in no event shall this
Agreement be rendered void or unenforceable.
(e) The headings to the Sections of this Agreement are for convenience of
reference only and shall not be given any effect in the construction or
enforcement of this Agreement.
(f) This Agreement shall inure to the benefit of and be binding upon the
successor and assigns of Employer, but no interest in this Agreement shall
be transferable in any manner by Executive.
(g) This Agreement constitutes the entire employment agreement and
understanding between the parties and supersedes all prior discussions,
agreements and undertakings, written or oral, with respect to W-2
compensation and Stock options.
(h) This Agreement may be executed by the parties hereto in separate
counterparts which together shall constitute one and the same instrument.
(i) In the event of the termination or expiration of this Agreement, the
provisions of Sections 6, 7, 8 and 10 hereof shall remain in full force and
effect, in accordance with their respective terms.
(j) All pronouns and any variation thereof shall be deemed to refer to the
masculine, feminine, singular or plural as the identity of the person or
persons may require.
IN WITNESS WHEREOF, this Agreement has been executed as of the date stated at
the beginning of this Agreement.
FullCircle Registry, Inc.: Executive:
By: ____________________________ ______________________________
Name: X. Xxxxxxxx Xxxxx Name: Xxxxx Xxxxx Oakley
Title: President
