Exhibit 10.1
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of
this 30th day of June 2005, by and between Xxxxxx X. Xxxxxxx (the "Executive")
and Innova Holdings, Inc., a Delaware corporation (the "Company").
R E C I T A L S:
A. Company is in the primary business of developing, marketing and
selling software products for use in the operation of robots and
automated systems for the industrial and service markets. The
Company also designs and sells computer hardware necessary to
operate the software.
B. Executive has certain business planning, financial and accounting
experience that the Company believes to be valuable to it.
C The Company desires to employ the Executive and the Executive
desires to accept such employment.
NOW THEREFORE, in consideration of the promises, mutual covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and the
Executive do hereby agree as follows:
1. Employment and Duties. On the terms and subject to the job conditions
set forth in this Agreement, the Company shall employ the Executive as the Chief
Financial Officer, and to perform such duties as are consistent with such
position as may be assigned, from time to time, by the Chief Executive Officer
of the Company and to render such additional services and discharge such other
responsibilities as the Company may, from time to time, stipulate.
2. Performance. Performance. The Executive accepts the employment
described in Paragraph 1 of this Agreement and agrees to devote all of his
business time and efforts to the faithful and diligent performance of the
services described therein, including the performance of such other services and
responsibilities as the Corporation may, from time to time, stipulate.
3. Term. The term of employment as the Chief Financial Officer under this
Agreement is effective as of June 14, 2005 (the "Commencement Date") and shall
remain in effect for a period of five (5) years from the date Executive first
became an Executive, ending on June 13, 2010 (the "Termination Date") (and each
subsequent one year anniversary, if extended, as provided herein shall also be
referred to herein as a Termination Date) unless sooner terminated hereunder
(the "Employment Period"). This Agreement shall be automatically extended each
year for an additional one (1) year period unless terminated by either party by
giving written notice to the other no less than thirty (30) days prior to the
Termination Date.
4. Compensation. For all the services to be rendered by the Executive
beginning on the Commencement Date and ending December 14, 2005, and in lieu of
1
all other compensation - cash or otherwise, Executive shall be granted stock
options to purchase eighteen million (18,000,000) shares of common stock of the
Company at the purchase price of $.036. Such options shall be granted under the
terms of the Company's Stock Option Plan and shall vest equally over a period of
three years, or upon the death of the Executive if sooner. After December 14,
2005, Executive shall be paid a salary of Fifteen Thousand Dollars ($15,000) per
month. The Company shall have the option to pay the salary in cash or in S-8
shares of common stock of the Company. The stock price shall be determined by
the ending market price for the shares on the first business day of the month in
which the salary is earned (the "Market Price").
If the Executive is terminated without Just Cause as defined in Section 11
(b) hereof, all remaining outstanding stock options that have not been exercised
by the Executive, including additional stock options to purchase twelve million
one hundred twenty one thousand two hundred seventy six (12,121,276) shares of
common stock of the Company awarded by the Board of Directors of the Company to
Stratex Solutions, LLC on April 12, 2005 and the stock options granted under
this section 4. of this agreement shall immediately vest one hundred percent
(100%) to the benefit of the Executive on the effective date of termination. If
there is a change of ownership of the Company or any of its subsidiaries, all
remaining outstanding stock options that have not been exercised by the
Executive shall immediately vest one hundred percent (100%) to the benefit of
the Executive on the day immediately preceding the effective date of the change
of ownership.
5. Incentive Bonus Opportunity. During the Employment Period, the
Executive shall be eligible for such incentive bonus as may be deemed advisable
by the Board of Directors of the Company in consideration of the Executive's
performance during each year of the Employment period and the Company's
profitability. The Company, however, shall not be obligated to pay any bonus
until the Board of Directors approves and declares such incentive fee.
6. Reimbursement of Expenses. The Company shall reimburse Executive for
Executive's health insurance expenses until such time as the Company offers a
health insurance plan for its employees and Executive is eligible gor such plan,
and for other normal expenses, including cell phone expenses, on a monthly
basis. Executive shall provide the Company with copies of all bills associated
with reimbursed expenses. The Company has the option to reimburse Executive
either in cash or in S-8 shares of common stock of the Company at the Market
Price
7. Surrender of Properties. Upon termination of the Executive's employment
with the Company, regardless of the cause therefore, the Executive shall
promptly surrender to the Company all property provided Executive by the Company
for use in relation to Executive's Employment, and, in addition, the Executive
shall surrender to the Company any and all financial and tax records, accounting
work papers, correspondence relating to SEC or legal matter, any other materials
related to financial or SEC matters, sales materials, lists of customers and
prospective customers, price lists, files, patent applications, records, models,
software files, listings, copies of Windows(R) software, or other materials and
information of or pertaining to the Company or its customers or prospective
customers or the products, business, and operations of the Company.
2
8. Inventions and Secrecy. Except as otherwise provided in this Section 8,
the Executive: (a) shall hold in a fiduciary capacity for the benefit of the
Company all secret or confidential information, knowledge, or data of the
Company or its business operations obtained by the Executive during Executive's
employment by the Company, which shall not be generally known to the public or
recognized as standard practice (whether or not developed by the Executive) and
shall not, during his employment by the Company and after the termination of
such Employment for any reason, communicate or divulge any such information,
knowledge or data to any person, firm or corporation other than the Company or
persons, firms or corporations designated by the Company; (b) shall promptly
disclose to the Company all inventions, ideas, devices, and processes made or
conceived by Executive alone or jointly with others, from the time of entering
the Company's employment until such employment is terminated and within the six
(6) month period immediately following such termination, relevant or pertinent
in any way, whether directly or indirectly, to the Company's business or
production operations or resulting from or suggested by any work which the
Executive may have done for the Company or at its request; (c) shall, at all
times during his Employment with the Company, assist the Company in every proper
way (entirely at the Company's expense) to obtain and develop for the Company's
benefit patents or copyrights on such inventions, ideas, devices and processes
including without limitation software and software files and listings to be used
with industrial automation and industrial robots, whether or not patented; and
(d) shall do all such acts and execute, acknowledge and deliver all such
instruments as may be necessary or desirable in the opinion of the Company to
vest in the Company the entire interest in such inventions, ideas, devices, and
processes referred to above. The foregoing to the contrary notwithstanding, the
Executive shall not be required to assign or offer to assign to the Company any
of the Executive's rights in any invention for which no equipment, supplies,
facility, or trade secret information of the Company was used and which was
developed entirely on the Executive's own time, unless (a) the invention related
to (i) the business of the Company or (ii) the Company's actual or demonstrably
anticipated research or development, or (b) the invention results from any work
performed by the Executive for the Company. The Executive acknowledges
Executive's prior receipt of written notification of the limitation set forth in
the preceding sentence on the Executive's obligation to assign or offer to
assign to the Company the Executive's rights in inventions.
9. Confidentiality of Information; Duty of Non-Disclosure.
(a) The Executive acknowledges and agrees that Executive's
Employment by the Company under this Agreement necessarily involves Executive's
understanding of and access to certain trade secrets and confidential
information pertaining to the business of the Company. Accordingly, the
Executive agrees that after the date of this Agreement at all times Executive
will not, directly or indirectly, without the express written consent of the
Company, disclose to or use for the benefit of any person, corporation or other
entity, or for Executive any and all files, trade secrets or other confidential
information concerning the internal affairs of the Company, including, but not
limited to, information pertaining to its trade secrets, business plans,
clients, services, products, earnings, finances, operations, methods or other
activities, provided, however, that the foregoing shall not apply to information
3
which is of public record or is generally known, disclosed or available to the
general public or the industry generally. Further, the Executive agrees that
Executive shall not, directly or indirectly, remove or retain, without the
express prior written consent of the Company, and upon termination of this
Agreement for any reason shall return to the Company, any figures, calculations,
letters, papers, records, computer disks, computer print-outs, lists, documents,
instruments, drawings, designs, programs, brochures, sales literature, business
plans or any copies thereof, or any information or instruments derived
therefrom, or any other similar information of any type or description, however
such information might be obtained or recorded, arising out of or in any way
relating to the business of the Company or obtained as a result of his
Employment by the Company except as disseminated to the public at large or
industry generally. The Executive acknowledges that all of the foregoing are
proprietary information, and are the exclusive property of the Company. The
covenants contained in this Section 9 shall survive Executive's employment and
the termination of this Agreement.
(b) The Executive agrees and acknowledges that the Company does not
have any adequate remedy at law for the breach or threatened breach by the
Executive of Executive's covenant, and agrees that the Company shall be entitled
to injunctive relief to bar the Executive from such breach or threatened breach
in addition to any other remedies which may be available to the Company at law
or in equity.
10. Covenant Not to Compete.
(a) During Employment Period. During the Employment Period, the
Executive shall not engage its services for a firm or business that directly or
indirectly competes with the business activities of the Company and its
subsidiaries, nor engage in or in any manner be connected or concerned, directly
or indirectly, whether as an officer, director, stockholder, partner, owner,
employee, creditor, or otherwise, with the operation, management, or conduct of
any business that competes with or is of a nature similar to that of the
Company.
(b) Following Termination of Employment Period. Within the one (1)
year period immediately following the later of the end of the Employment Period
or termination of the Executive's Employment with the Company, for any reason
except as set forth below, the Executive shall not, without the prior written
consent of the Company, which consent may be withheld at the sole discretion of
the Company: (a) engage in or in any manner be connected or concerned, directly
or indirectly, whether as an officer, director, stockholder, partner, owner,
employee, creditor, or otherwise with the operation, management, or conduct of
any business similar to the business of the Company being conducted at the time
of such termination anywhere in the United States, and any other area in which
the Company is, or reasonably contemplating, doing business at the time of such
termination; (b) solicit, contact, interfere with, or divert any customer served
by the Company, or any prospective customer identified by or on behalf of the
Company, during the Executive's Employment with the Company; or (c) solicit any
person then or previously employed by the Company to join the Executive, whether
as a partner, agent, employee or otherwise, in any enterprise engaged in a
business similar to the business of the Company being conducted at the time of
such termination. For purposes of this Agreement, the business is deemed to be
4
the development and maintenance of computer software, controls, and hardware
electronics for use in robotics, manufacturing, and automation industries and
that all such software and hardware is owned and shall be exclusively owned by
the Company.
(c) Severability. The covenants of the Executive contained in
Sections 8, 9, and 10 of this Agreement shall each be construed as an agreement
independent of any other provision in this Agreement, and the existence of any
claim or cause of action of the Executive against the Company, whether
predicated on this Agreement or otherwise, shall not constitute a defense to the
enforcement by the Company of such covenants. Both parties hereby expressly
agree and contract that it is not the intention of either party to violate any
public policy, or statutory or common law, and that if any sentence, paragraph,
clause, or combination of the same of this Agreement is in violation of the law,
such sentence, paragraph, clause or combination of the same shall be void, and
the remainder of such paragraph and this Agreement shall remain binding on the
parties to make the covenants of this Agreement binding only to the extent that
it may be lawfully done. In the event that any part of any covenant of this
Agreement is determined by a court of law to be overly broad thereby making the
covenant unenforceable, the parties hereto agree, and it is their desire, that
such court shall substitute a judicially enforceable limitation in its place,
and that as so modified the covenant shall be binding upon the parties as if
originally set forth herein.
11. Termination.
(a) Termination for Just Cause. The Company shall have the option to
terminate the Employment Period, effective immediately upon written notice of
such termination to the Executive, for Just Cause. For purposes of this
Agreement, the term "Just Cause" shall mean the occurrence of any one or more of
the following events: (a) the death or permanent total disability of the
Executive or Executive's absence from active Employment by reason of illness or
incapacity for a period of sixty (60) consecutive days; (b) the breach by the
Executive of Executive's covenants under this Agreement; (c) the commission by
the Executive of theft or embezzlement of Company property or other acts of
dishonesty; (d) the commission by the Executive of a crime resulting in injury
to the business, property or reputation of the Company or any affiliate of the
Company or commission of other significant activities harmful to the business or
reputation of the Company or any affiliate of the Company; (e) the willful
refusal to perform or substantial neglect of the activities to be performed by
the Executive pursuant to Section 1 hereof; or (f) termination of the business
of the Company for any reason, other than the sale of substantially all of the
assets or common stock of the Company or its wholly-owned subsidiaries
Upon termination of the Employment period for Just Cause, the
Executive shall have no rights to any future fees for any period beyond the
effective date of termination.
(b) Termination without Just Cause. If the Employment Period is
terminated by the Company without Just Cause, the Executive shall receive a
payment equal to twenty four (24) months of salary paid to the Executive monthly
prior to the effective date of termination (Severance Fee). For purposes only of
determining the Severance Fee through December 14, 2005, salary is defined as a
$15,000 per month payment. The Company has the option to pay such Severance Fee
either in cash or in the common stock of the Company based on the per share
price of common stock applicable in Section 4 hereof.
5
12. Change of Control. If during the Employment Period the Company enters
into an agreement which effectively will result in a change of control of the
ownership of either the Company or Robotic Workspace Technologies, Inc., the
Company's wholly-owned subsidiary, or if during the Employment Period the
Company enters into an agreement which effectively will result in a change of
ownership of the assets of the Company or Robotic Workspace Technologies, Inc.,
the Executive shall receive a payment equal to twenty four (24) months of the
monthly salary paid to the Executive prior to the effective date of the change
of control (Change of Control Fee). For purposes only of determining the Change
of Control Fee through December 14, 2005, salary is defined as a $15,000 per
month payment. The Company shall pay such Change of Control Fee in the common
stock of the Company based on a price per share of $.005 if the effective date
of the change of control is December 14, 2005 or sooner; thereafter the price
per share shall be the Market Price. Such payment to Executive shall be made on
the day immediately preceding the effective date of the change of ownership.
Regarding the change of ownership of the assets of the Company or Robotic
Workspace Technologies, Inc., such change of ownership shall be deemed to have
occurred if the rights to use the software of Robotic Workspace Technologies,
Inc., which software is the product of and protected by the patents of Robotic
Workspace Technologies, Inc., is granted or sold to a party or parties in
settlement of claims made by the Company and/or Robotic Workspace Technologies,
Inc. of trade secret violations and/or patent infringements, and such rights to
use the software results in a settlement payment to the Company and/or to
Robotic Workspace Technologies, Inc. in a single payment or multiple payments
other than a long term licensing agreement typical of software licensing
agreements.
13. Indemnification. The Company agrees to indemnify and hold harmless
Executive to the full extent lawful, from and against all losses, claims,
damages, judgments, liabilities and expenses incurred by Executive (including
attorneys' fees, disbursements, expenses, judgments, penalties, fines and
amounts paid in settlement actually and reasonably incurred by Executive, or on
Executive's behalf, in connection with any proceeding or any claim, issue or
matter therein. Expenses shall include all attorneys' fees, retainers, court
costs, transcript costs, fees of experts, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage,
delivery service fees and all other disbursements or expenses of the types
customarily incurred in connection with prosecuting, defending, preparing to
prosecute or defend, investigating, participating, or being or preparing to be a
witness in a proceeding. Expenses also shall include expenses incurred in
connection with any appeal resulting from any proceeding, including without
limitation the premium, security for, and other costs relating to any cost bond,
supersede as bond, or other appeal bond or its equivalent. The Company shall pay
the entire amount of any judgment or settlement of any threatened, pending or
completed action, suit or proceeding without requiring Executive to contribute
to such payment and the Company hereby waives and relinquishes any right of
contribution it may have against Executive. In addition to, and without regard
to any limitations on, the indemnification provided for in this Section 13 of
6
this Agreement, the Company shall and hereby does indemnify and hold harmless
Executive against all losses, claims, damages, judgments, liabilities and
expenses incurred by Executive including attorneys' fees, disbursements,
expenses, judgments, penalties, fines and amounts paid in settlement actually
and reasonably incurred by Executive or on Executive's behalf if Executive is,
or is threatened to be made, a party to or participant in any proceeding. The
Company hereby agrees to fully indemnify and hold Executive harmless from any
claims of contribution which may be brought by officers, directors or employees
of the Company. Notwithstanding any other provision of this Section 13, the
Company shall advance all expenses incurred by or on behalf of Executive in
connection with any proceeding within thirty (30) days after the receipt by the
Company of a statement or statements from Executive requesting such advance or
advances from time to time, whether prior to or after final disposition of such
proceeding.
14. General Provisions.
(a) Goodwill. The Company has invested substantial time and money in
the development of its products and services, soliciting clients and creating
goodwill. By accepting this Employment Agreement with the Company, the Executive
acknowledges that the customers are the customers of the Company, and that any
goodwill created by the Executive belongs to and shall inure to the benefit of
the Company.
(b) Notices. Any notice required or permitted hereunder shall be
made in writing (i) either by actual delivery of the notice into the hands of
the party thereunder entitled, or (ii) by the mailing of the notice in the
United States mail, certified or registered mail, return receipt requested, all
postage prepaid and addressed to the party to whom the notice is to be given at
the party's respective address as set forth in the records of the Company.
The notice shall be deemed to be received in case (i) on the date of its actual
receipt by the party entitled thereto and in case (ii) on the date which is
three (3) days after its mailing.
(c) Amendment and Waiver. No amendment or modification of this
Agreement shall be valid or binding upon the Company unless made in writing and
signed by an officer of the Company duly authorized by the Board of Directors or
upon the Executive unless made in writing and signed by Executive. The waiver by
the Company of the breach of any provision of this Agreement by the Executive
shall not operate or be construed as a waiver of any subsequent breach by
Executive. The waiver by the Executive of the breach of any provision of this
Agreement by the Company shall not operate or be construed as a waiver of any
subsequent breach by Company.
(d) Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the Executive's duties and payment
as a Executive to the Company, and there are no representations, warranties,
agreements or commitments between the parties hereto with respect to Executive's
Employment except as set forth herein.
(e) Governing Law. Except for the Indemnification covered under
Section 13 hereof, this Agreement shall be governed by and construed in
accordance with the internal laws (and not the law of conflicts) of the State of
Florida. Regarding the Indemnification covered under Section 13, and only for
7
Section 13, this agreement and the legal relations among the parties shall be
governed by, and construed and enforced in accordance with, the laws of the
State of Delaware, without regard to its conflict of laws rules. The Company and
Executive hereby irrevocably and unconditionally (i) agree that any action or
proceeding arising out of or in connection with Section 13 of this Agreement
shall be brought only in the Chancery Court of the State of Delaware (the
"Delaware Court"), and not in any other state or federal court in the United
States of America or any court in any other country, (ii) consent to submit to
the exclusive jurisdiction of the Delaware Court for purposes of any action or
proceeding arising out of or in connection with Section 13 of this Agreement.
(f) Severability. If any provision of this Agreement shall, for any
reason, be held unenforceable, such provision shall be severed from this
Agreement unless, as a result of such severance, the Agreement fails to reflect
the basic intent of the parties. If the Agreement continues to reflect the basic
intent of the parties, then the invalidity of such specific provision shall not
affect the enforceability of any other provision herein, and the remaining
provisions shall remain in full force and effect.
(g) Assignment. The Executive may not under any circumstances
delegate any of Executive's rights and obligations hereunder without first
obtaining the prior written consent of the Company. This Agreement and all of
the Company's rights and obligations hereunder may be assigned or transferred by
it, in whole or in part, to be binding upon and inure to the benefit of any
subsidiary or successor of the Company.
(h) Costs of Enforcement. In the event of any suit or proceeding
seeking to enforce the terms, covenants, or conditions of this Agreement, the
prevailing party shall, in addition to all other remedies and relief that may be
available under this Agreement or applicable law, recover its or its reasonable
attorneys' fees and costs as shall be determined and awarded by the court.
IN WITNESS WHEREOF, this Agreement is entered into as of the day and year
first above written.
COMPANY:
Innova Holdings, Inc.
/s/ Xxxxxx Xxxxxx
-----------------
By: Xxxxxx Xxxxxx
Its: Chairman and CEO
EXECUTIVE:
/s/ Xxxxxx Xxxxxxx
------------------
Xxxxxx X. Xxxxxxx
8
