EXHIBIT 10.8
EMPLOYMENT AGREEMENT
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AGREEMENT, dated as of the 31st day of January, 2001, between PALADYNE
CORP., a Delaware corporation with its principal office at 000 Xxxxxxxxx
Xxxxxxxx Xxxxx, Xxxxx 000, Xxxx Xxxx, Xxxxxxx 00000 (the "Corporation"), and
Xxxxxx X. Xxxxxx, an individual residing at 0000 Xxxxxx Xxxxxxxxx, Xxxxxxx, XX
00000 (the "Executive").
WITNESSETH:
WHEREAS, the Corporation provides various services, including the
development and servicing of software and customer support services to entities
with electronic commerce initiatives (the "Business"), which Business has been
developed after the expenditure of significant time, money and human resources;
WHEREAS, as of the date hereof, the Corporation is acquiring (the
"ecom Acquisition") e-commerce support centers, inc., a North Carolina
corporation ("ecom"), and a condition to the Closing of the ecom Acquisition is
the entry into this Agreement, and accordingly, effective upon such Closing the
Corporation desires to employ the Executive on the terms and conditions herein;
and
WHEREAS, prior to the ecom Acquisition, the Executive has been an
employee of the Corporation, and desires to continue as an employee of the
Corporation, and the Corporation desires to continue the employment of the
Executive, on the terms and conditions herein.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Employment Term. Subject to the terms and conditions hereof, the
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Corporation hereby employs the Executive, and the Executive agrees to be so
employed by the Corporation, from the date hereof through January 31, 2002.
Thereafter, this Agreement shall be automatically renewed for an additional one
(1) year term unless either party notifies the other party at least thirty (30)
days prior to the expiration of the initial term of his or its desire to
terminate the Agreement (the "Employment Term").
2. Duties. The Executive shall serve as Vice President Finance and
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Administration and Controller of the Corporation . The Executive shall report to
the CEO and the President and the Chief Financial Officer of the Corporation.
3. Time and Efforts. During the Employment Term, the Executive shall
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diligently and conscientiously devote his full business time, attention and
ability to the business of the Corporation and shall faithfully serve the
Corporation from its Orlando, Florida office. The Executive shall fulfill the
duties and responsibilities hereby conferred upon him honestly, diligently, in
good faith, with his best efforts and in the best interests of the Corporation.
The Executive shall not, during the Employment Term, engage in any other
business activity without the prior written approval of the Corporation, except
for personal investments in a passive capacity.
4. Remuneration.
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4.1 Compensation. During the Employment Term, the Corporation
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shall pay the Executive base compensation and other compensation for his
services as set forth in Schedule A attached to this Agreement.
4.2 Benefits. During the Employment Term, the Executive, by
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reason of his position, title, tenure, health and other qualifications that make
him eligible, shall participate in employee health, disability, vacation and
other benefit plans offered by the corporation and additional items, if any, as
set forth in Schedule B attached to this Agreement.
5. Expenses. The Corporation shall pay or reimburse the Executive
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for all reasonable and necessary expenses incurred by him in carrying out his
duties under this Agreement upon presentation by the Executive of an itemized
account of such expenditures in accordance with the Corporation reimbursement
policies.
6. Termination.
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6.1 By the Corporation. Notwithstanding anything contained
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herein to the contrary, this Agreement may be terminated by the Corporation
immediately and without notice for Cause. For purposes of this Section, "Cause"
means: (i) any act or acts of the Executive which would constitute a felony (or
its equivalent) or fraud, (ii) any breach by Executive in the performance of his
duties under this Agreement which is not cured within fifteen (15) days after
notice thereof, or (iii) any gross neglect, gross malfeasance, willful neglect,
willful misconduct or dishonesty by the Executive in the performance of his
duties under this Agreement which if curable is not cured within fifteen (15)
days after notice thereof. In addition, this Agreement shall automatically
terminate, without any further action of either party, upon the death or
disability of the Executive. For the purposes of this Agreement, "disability"
shall mean a mental or physical illness or condition rendering the Executive
incapable of performing his usual and customary duties on behalf of the
Corporation on a full time basis for ninety (90) consecutive days. During the
ninety (90) day period of time prior to termination for basis for reason of
disability, the Executive shall continue to receive his base compensation, but
shall not be entitled to any other compensation.
6.2 Termination Benefit. In the event the Executive's
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employment hereunder is terminated by reason of Section 6.1 hereof, the
Corporation's obligations hereunder shall terminate and no payments of any kind,
including without limitation any claim to unpaid bonus amounts, shall, except as
otherwise provided herein, thereafter be made by the Corporation to the
Executive hereunder; provided, however, that in the event that the Executive's
employment is terminated due to his death, the Executive (or his estate) shall
be entitled to a pro rata portion of his base compensation earned through the
date of termination.
6.3 By the Executive. Notwithstanding anything contained
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herein to the contrary, this Agreement may be terminated by the Executive
immediately and without notice for Cause For purposes of this Section, "Cause"
means: (i) any act or acts of the Corporation which would constitute a felony
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(or its equivalent) or fraud, or (ii) any breach by Corporation in the
performance of its duties under this Agreement which is not cured within fifteen
(15) days after notice thereof.
6.4 Executive Termination Benefits. In the event the Executive
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terminates his employment for Cause pursuant to Section 6.3 hereof, the
Corporation shall pay the Executive's base compensation for the remainder of the
then Employment Term and continue to pay the premiums on his health insurance
policy for the balance of the then Employment Term.
6.5 Relocation. In the event the Company relocates its executive
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offices from the Orlando, Florida area during the Employment Term and the
Executive does not desire to move to the relocated executive offices, the
Executive may terminate this Agreement. Upon the foregoing termination of this
Agreement, as severance, the Corporation shall continue to make the payments to
the Executive under Sections 4 and 5 hereof for the balance of the then
Employment Term. In lieu of the severance payments in the immediately preceding
sentence, the Corporation and the Executive shall seek a mutually agreeable
consulting arrangement; however, neither the Corporation nor the Executive shall
be obligated to enter into any consulting arrangement.
7. Confidentiality.
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7.1 Confidentiality of the Corporation's and Clients'
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Information. The Executive acknowledges that the Corporation currently
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possesses, will develop and will come into the possession of business
information which is owned by or may be valuable to the Corporation or the
clients of the Corporation. The Executive shall not use, exploit, reveal,
divulge or make known to any person, firm or corporation, any information or
materials supplied by the Corporation or the Corporation's clients to the
Executive or otherwise learned by the Executive while employed by the
Corporation, including without limitation, discoveries, works, source code,
know-how, developments, inventions, accounting and financial information,
technology, computer software, computer programs, trade secrets, forms, customer
lists, mailing lists, databases, pricing, operating records, marketing
strategies, processes, plans, business practices and strategies, sales
information and commercial and other information or data, whether communicated
in writing, electronically, orally, by observation or other sensory detection
(the "Proprietary Information"). The Proprietary Information of the Corporation
and its clients shall also include all letters, memoranda, notes, reports and
other documents containing or referencing the Proprietary Information, and all
copies, reproductions and extracts thereof, prepared by the Executive or the
Corporation or its agents. Any prior Confidentiality Agreements or
Non-Disclosure Agreements between the Executive and the Corporation are
incorporated herein, and in the event of any inconsistency between the provision
of any such agreements and this Agreement, the provisions of this Agreement
shall govern as of the date hereof.
7.2 Limitations. The Executive shall have the right to
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communicate the Proprietary Information to such of the Corporation's officers,
directors, employees, agents and other representatives as may be necessary to
enable the Corporation to provide services to its clients. Further, the
obligation with regard to confidentiality and non-use contained in this Section
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7 shall not extend to any Proprietary Information which: (a) at the time of
disclosure is, through no fault of the Executive, in the public domain or
thereafter becomes part of the public domain by publication or otherwise through
no fault of the Executive, (b) the Executive can establish was properly in the
Executive's possession prior to the time of disclosure to the Executive, (c) is
independently made available to the Executive by a third party who has not
violated a confidential relationship with the Corporation or its clients, or (d)
is required to be disclosed by legal process, provided that the Executive uses
his best efforts to timely inform the Corporation or the client and permit the
Corporation or its client to attempt by appropriate legal means to limit such
disclosure. The exclusions enumerated above shall not apply to any specific
information merely because it is included in more general non-proprietary
information nor to any specific combination of information merely because
individual elements, but not the combination, are included in non-proprietary
information.
7.3 Definition. For purposes of this Section 7 and also for
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Sections 8 through 11 hereof the term the "Corporation" shall be deemed to
include any subsidiary or affiliate of Paladyne Corp., including, but not
limited to, ecom.
8. Work Product. The Executive agrees and acknowledges that all work
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product made or conceived by the Executive during his employment by the
Corporation, jointly or with others, that relates to the Business (including
actual or demonstrably anticipated research or development of the Corporation),
or results from any work performed by the Executive for the Corporation, shall
be owned by the Corporation. The term "work product" includes, but is not
limited to, software, source code, databases, correspondence, reports, customer
lists, marketing plans and strategies and business plans and strategies,
including any new idea or concept which is developed by the Corporation as a
business strategy. The Executive shall: (a) promptly notify, make full
disclosure to, and execute and deliver any documents requested by the
Corporation to evidence or better assure title to such work product in the
Corporation, (b) assist the Corporation in obtaining or maintaining for itself
at its own expense United States and foreign copyrights, patents, trade secret
protection or other protection of any and all such work product, and (c)
promptly execute, whether during the Executive's employment by the Corporation
or thereafter, all applications or other endorsements necessary or appropriate
to maintain rights for the Corporation and to protect its title thereto.
9. Corporate Opportunity. The Executive agrees that during the
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Employment Term he shall not take any action which might divert from the
Corporation any opportunity which would be within the scope of any of the
present or future businesses of the Corporation, the loss of which would have,
in the reasonable judgment of the Board of Directors of the Corporation, an
adverse effect upon the Corporation, unless the Board of Directors of the
Corporation has given prior written approval, including but not limited to, the
following: (a) entering into or engaging in competition with the Corporation,
(b) contacting any customer, client or prospective client or customer of the
Corporation on any matter relating to the Business of the Corporation except for
the benefit of the Corporation, or (c) owning, managing, operating, controlling,
being employed by, participating in or being connected in any manner with the
ownership, operation or control of any business or venture which competes in any
manner with the Corporation or otherwise engages in the Business, provided that
the foregoing restriction shall not prohibit the Executive form owning less than
a five percent (5%) equity interest in a publicly held corporation.
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10. Restriction on Competition.
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10.1 Non-Competition. For one (1) year following the termination
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of the Executive's employment with Corporation by the Corporation other than
pursuant to Section 6.1 hereof or by the Executive pursuant to Section 6.3 or
6.5 hereof, or for two (2) years following the termination of the Executive's
employment with the Corporation for any other reason, the Executive shall not,
either directly or indirectly, act as sole proprietor, an agent, consultant or
employee of, or on behalf of, or in conjunction with, a person, firm,
corporation or other entity, or as a partner of or an investor in a partnership,
or as a member of or an investor in a limited liability company, or as a
shareholder, director or officer of a corporation: (a) enter into or engage in
competition with the Corporation in the continental United States (the
"Territory"), (b) contact any client or prospective client of the Corporation on
any matter relating to the Business of the Corporation except for the benefit of
the Corporation, or (c) own, manage, operate, control, be employed by,
participate in or be connected in any manner with the ownership, operation or
control of any business or venture in the Territory which competes in any manner
with the Corporation or otherwise engages in the Business; provided, however,
that a foregoing restriction shall not prohibit the Executive from owning less
than a five percent (5%) equity interest in a publicly held company. This
Section 10.1 will not apply with regard to employment or retention by any
company of the Executive where the Executive will be performing solely
accounting or other financial services for such company.
10.2 Non Solicitation. For one (1) year following the termination
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of the Executive's employment with the Corporation by the Corporation other than
pursuant to Section 6.1 hereof or by the Executive pursuant to Section 6.3 or
6.5 hereof, or for two (2) years following the termination of Executive's
employment with the Corporation for any other reason, the Executive shall not,
either directly or indirectly, as a sole proprietor, agent, consultant or
employee of, or on behalf of, or in conjunction with, a person, firm,
corporation or other entity, or as a partner of or an investor in a partnership,
or as a member of or an investor in a limited liability company, or as a
shareholder, director or officer of a corporation, or by means of any corporate
or other device entice away, employ or solicit for employment any current or
former employee of the Corporation, or engage, whether as an employer, employee,
partner, member, agent, owner, shareholder, operator or otherwise, or by means
of any corporate or other device, in any business with any current of former
employee of the Corporation that competes with the Business of the Corporation.
11. Remedies.
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11.1 Injunctive Relief. The Executive agrees that the remedy of
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monetary damages for any breach or threatened breach by him of the covenants set
forth in this Agreement will be inadequate to remedy fully the breach because
any breach or attempted breach by the Executive would cause immediate,
substantial and irreparable loss of business and profits to the Corporation in
an amount which would be impossible to ascertain. Accordingly, in the event of
any breach or threatened breach of any of said covenants by the Executive, in
addition to any and all other legal and equitable remedies which may be
available, including suit for recovery of actual damages, the Corporation,
and/or any parent, affiliated or related company, or any successor of the
Corporation, shall be entitled to preliminary and permanent injunctive relief,
without the necessity of proving actual loss of business to the Corporation, by
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reason of such breach and, to the extent permissible under the applicable law, a
temporary restraining order shall be granted immediately on commencement of any
such suit by the Corporation. The Executive hereby waives any requirement for
the Corporation to post a bond or similar indemnification in any proceeding
instituted by the Corporation in seeking enforcement of the covenants of the
Executive in this Agreement.
11.2 Reasonableness. The Executive acknowledges and agrees that
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the Executive has weighed all the facts, conditions and circumstances pertaining
to this Agreement and that the Executive acknowledges and agrees that all of the
provisions of this Agreement, including the covenants herein, are reasonable.
The Executive agrees not to contest the validity of any provision of this
Agreement and waives any and all rights that he may have to bring any claim,
action or suit or to raise any defense regarding the validity and reasonableness
of this Agreement or any provision or covenant herein.
11.3 Validity. If any paragraph, sentence, clause or other
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provision of this Agreement, or the application of such provision, is held
invalid or unenforceable by a court of competent and relevant jurisdiction, such
provision shall be deemed to be modified in a manner consistent with the intent
of such original provision, so as to make it valid and enforceable, and this
Agreement, and the application of such provision to persons or circumstances
other than those with respect to which it would be invalid or unenforceable,
shall not be affected thereby.
12. Miscellaneous.
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12.1 Assignment. The Executive acknowledges that the services to
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be rendered by him are unique and personal. Accordingly, Executive may not
assign any of his rights or delegate any of his duties or obligations under this
Agreement, except as otherwise expressly provided herein.
12.2 Binding Effect. This Agreement shall inure to the benefit of
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and be binding upon the Corporation, its successors and assigns, including
without limitation any person, partnership, company or corporation which may
acquire substantially all of the Corporation's assets or business, or with or
into which the Corporation may be consolidated, merged or otherwise combined,
and shall inure to the benefit and be binding upon Executive, his heirs,
distributes and personal representatives.
12.3 Notice. All offers, acceptances, notices, requests, replies,
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waivers, consents, demands and other communications hereunder or relating hereto
are effective as of the date they are sent if: (a) sent by certified mail,
postpaid with return receipt requested, or (b) sent by prepaid "overnight"
delivery service. Any communication given in any other manner shall be effective
only if and when received by the party to be notified. For the purposes of this
Section 12.3, the addresses of the parties shall be as set forth in the heading
of this Agreement. Either party may change the address to which such
communications are to be sent by notice to the other party as provided herein.
12.4 Waiver. Failure of either party to insist in any one or more
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instances upon performance of any of the terms or conditions of this Agreement
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shall not be construed as a waiver of future performance of any such term,
covenant or condition, but the obligations of either party with respect thereto
shall continue in full force and effect.
12.5 Entire Agreement. This Agreement contains the entire
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understanding and agreement between the parties with respect to the subject
matter hereof and cannot be amended, modified or supplemented in any respect
except by a subsequent written agreement entered into by both parties.
12.6 Governing Law. This Agreement is a contract made under, and
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shall be governed by and construed in accordance with, the law of the State of
Florida applicable to contracts made and to be performed entirely within such
State and without giving effect to choice of law principles of such State.
12.7 Heading. The headings are to be used solely for convenience
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and are not to be used in construing or interpreting this Agreement.
12.8 Counterparts. This Agreement may be executed in two or more
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counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the day and year first above written.
PALADYNE CORP.
/s/ Xxxx X. Xxxxxx
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By: Xxxx X. Xxxxxx
Its: Chairman of the Board
/s/ Xxxxxx X. Xxxxxx
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XXXXXX X. XXXXXX
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SCHEDULE A
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SALARY
1. Base Compensation. During the Employment Term, the Corporation
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shall pay the Executive as base compensation for his services a salary of
Seventy-Five Thousand Dollars ($75,000) paid bi-monthly at the rate of $3,125.00
in accordance with normal payroll practices; provided that upon the Corporation
receiving an aggregate of $3,000,000 in outside financing, the base salary shall
be increased to Ninety Thousand Dollars ($90,000) paid bi-monthly at the rate of
$3,750.00.
2. Bonus. $10,000 incentive bonus based upon the following
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performance criteria, based upon a degree of achievement determined by the
Executive's then supervisor:
(a) $5,000 to be equally weighted according to the degree of
achievement in integrating financial and Human Resources
systems:
(i) Financial systems and reporting to be fully integrated
by the end of Fiscal Year 2001 (August 31, 2001);
(ii) Human Resources policy and practices to be integrated
by December 31, 2001.
(b) $5,000 to be based on EBITDA achievement level of breakeven
or better for the first fiscal quarter of 2002 (ending
November 30, 2001).
3. Options. The Employee may be granted stock options under the
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Corporation's 1996 Stock Option Plan or other plan as may be in effect from time
to time during the Employment Term, at the sole discretion of the Board of
Directors or Committee thereof which may then be administering the plan. In
addition to the foregoing, Employee shall be granted Fifteen Thousand (15,000)
options as of the date hereof.
SCHEDULE B
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EMPLOYEE BENEFITS
