EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT
(this
"Agreement"),
dated
as of the 21st day of September, 2006, by and between Advanced
Communication Technologies, Inc., a Florida corporation ("ACT"),
and
Xxxx X. Xxxxxxx, an individual whose current address is 000 X. 000 Xxxxxx,
#00,
Xxx Xxxx, XX 00000 ("Executive").
ACT
together with any and all of its respective subsidiaries shall be referred
to
collectively herein as the "Company."
WITNESSETH
WHEREAS,
the
Company desires to employ Executive, and Executive desires to accept employment
by the Company, on the terms and conditions set forth herein.
NOW,
THEREFORE,
in
consideration of the mutual covenants and promises herein contained, and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Employment.
(a) ACT
hereby employs Executive, and Executive hereby accepts employment with ACT,
as
Chief Financial Officer and Assistant Secretary, or such other executive
position with similar responsibilities and duties of a chief operating officer
and assistant secretary of a company as may be determined by the Board of
Directors of ACT (the "Board")
from
time to time during the Employment Period (as defined below).
(b) In
addition to his duties set forth in this Section 1 and in Section 3 below,
Executive shall at the request of the ACT CEO (as defined below) or the Board
serve as an officer or director of a subsidiary of ACT, without additional
compensation and subject to any policy of the Compensation Committee of the
Board (the "Compensation
Committee")
with
respect to directors' fees.
2. Term.
The
initial term of this Agreement shall commence on September 25, 2006
(the “Effective
Date”)
and
expire on the second anniversary thereof (the "Initial
Employment Period"),
unless earlier terminated in accordance with its terms; provided,
however,
that
the Company shall have the option of retaining the services of Executive, on
the
terms set forth in this Agreement, for an additional one-year period by
providing Executive with written notice thereof not less than thirty (30) days
prior to the expiration of the Initial Employment Period (the "Option
Period"
and
together with the Initial Employment Period, the "Employment
Period").
Unless earlier terminated in accordance herewith, upon expiration of the Option
Period, this Agreement shall be deemed to have been extended for additional
terms of successive one year periods commencing on the day after the expiration
of the then current Employment Period.
3. Employment
and Duties.
3.1 Duties
and Responsibilities.
(a) Executive’s
area of responsibility during the Employment Period shall be that of Chief
Financial Officer of ACT and any such other position as an officer or director
of a subsidiary of ACT to which the ACT CEO or the Board may appoint him.
Executive shall directly report to the Chief Executive Officer of ACT (the
"ACT
CEO"),
or
such other senior executive officer of ACT, as determined from time to time
by
the Company. The services to be rendered by Executive pursuant to this Agreement
shall consist of such services as defined and directed by the Board or the
ACT
CEO.
(b) During
the Employment Period, Executive shall serve the Company faithfully and to
the
best of his ability; shall devote his entire working time, attention, energy
and
skill to his employment and the benefit and business of the Company; and shall
use his best efforts, skills and ability to promote its interests and to perform
such duties as from time to time may be reasonably assigned to him and are
consistent with his titles and positions with the Company.
(c) During
the Employment Period, in addition to any other duties or responsibilities
the
Company gives to Executive, Executive shall be required to sign, and shall
sign,
all certifications and such other documents or instruments required of an
executive of a public company or otherwise by (i) the Securities and Exchange
Commission, (ii) any exchange or association on which the Company's shares
of
capital stock are listed, (iii) any federal, state or local authority, (iv)
any
other governmental, quasi-governmental or non-governmental entity or
organization (foreign or domestic) that regulates or has authority over the
Company, and/or (v) the Company in connection with any of the
foregoing.
(d) During
the Employment Period, Executive shall be required to be physically present
at
ACT’s headquarters, currently located at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx, xx a regular basis and no less than four (4) days per month to ensure
the
efficient conduct of the Company’s business.
3.2 Observance
of Rules and Regulations.
Executive agrees to observe and comply with all applicable laws and regulations,
as well as the rules and regulations of the Company, with respect to the
performance of his duties.
3.3 Resignation
from Other Positions.
On or
prior to the date hereof, Executive shall resign from any and all other
positions he may hold as an officer or director with any other company that
is
not an affiliate of ACT.
4. Compensation;
Benefits and Expenses.
4.1 Restricted
Stock Award.
Upon
the Effective Date, ACT shall grant to Executive an award of 50,000,000
restricted shares of common stock, no par value, of ACT, priced at the Fair
Market Value per share as of the date of grant, of which (i) 10,000,000 shares
shall be vested immediately upon the Effective Date, (ii) 15,000,000 shares
will
fully vest on September 26, 2007, and (iii) 25,000,000 shares will
fully vest on September 26, 2008 (together, the "ACT
Shares");
provided, as to each vesting tranche, that Executive is then employed by the
Company; and provided further that the number of ACT Shares shall be adjusted
accordingly for stock splits, reverse stock splits and other recapitalizations
effected by ACT. The Fair Market Value per share shall be determined as follows:
(x) if the principal trading market for the common stock of ACT is a national
securities exchange, the closing price thereof on the relevant date or (if
there
were no trades on that date) the latest preceding date upon which a sale was
reported, or (y) if the common stock of ACT is not principally traded on such
exchange, the mean between the last reported “bid” and “asked” prices of the
common stock of ACT on the relevant date, as reported by the NASDAQ OTC Bulletin
Board, the National Daily Quotation Bureau, Inc. or as reported in a customary
financial reporting service, as applicable and as the Board determines. If
the
common stock of ACT is not publicly traded or, if publicly traded, is not
subject to reported transactions or “bid” or “asked” quotations as set forth
above, the Fair Market Value per share shall be as determined by the
Board.
2
4.2 Base
Salary.
As
compensation for the services to be rendered hereunder, during the Initial
Employment Period, the Company shall pay to Executive an annual base salary
(the
"Base
Salary")
of
$250,000 during the first and second years of the Initial Employment Period;
and
during the Option Period, the Base Salary shall be $275,000. The Base Salary
shall be payable in accordance with usual payroll practices of the Company.
4.3 Bonus.
(a) For
each
fiscal year or portion thereof after the Effective Date and during the
Employment Period, the Company shall pay to Executive an annual performance
bonus, in cash, options to purchase shares of ACT’s common stock and/or
restricted shares of ACT’s common stock, in an amount determined at the sole
discretion of the Compensation Committee, taking into account such factors
as it
considers appropriate, including but not necessarily limited to, Executive's
contribution to ACT's consolidated net earnings and stock appreciation during
such fiscal year (the "Performance
Bonus").
(b) In
addition to the Performance Bonus, the Company may grant cash bonuses, options
to purchase shares of ACT’s common stock and/or restricted shares of ACT’s
common stock to Executive, with a vesting schedule and other terms established
by the Compensation Committee, in its sole discretion (the "Incentive
Bonus").
(c) Executive
acknowledges that the amount of the Performance Bonus, if any, and the amount
of
the Incentive Bonus, if any, shall at all times be determined by the
Compensation Committee, in its sole discretion. The Company shall pay each
of
the Performance Bonus and the Incentive Bonus to Executive within thirty (30)
days after the Company's audited results for the applicable fiscal year are
delivered to the Company, but in no event later than September 15th of the
immediately following fiscal year.
4.4 Life
Insurance.
(a) During
the Employment Period, the Company shall provide Executive with term life
insurance with a death benefit equal to $1,000,000, provided that Executive
is
insurable. The Company shall pay all premiums with respect to such life
insurance. Such life insurance may be provided either through the Company's
group life insurance programs, by an individual policy, or by a combination
of
both group and individual policies. Executive shall at all times designate
the
beneficiary(ies) of such life insurance.
3
(b) In
addition to Section 4.4(a) above, the Company shall maintain "key man" life
insurance on the life of Executive with a death benefit equal to $2,000,000.
The
Company shall pay all premiums with respect to such life insurance. The Company
shall at all times designate the beneficiary(ies) of such "key man" life
insurance.
4.5 Other
Benefits.
Executive shall also be eligible to participate in any life and health insurance
programs that the Company makes available to all of its executives of similar
seniority. Executive shall also be eligible to receive discretionary performance
based bonuses as approved and authorized by the Compensation Committee,
including any incentive stock programs approved by ACT’s
shareholders.
4.6 Business
Expenses.
Executive will be reimbursed, in accordance with the Company’s expense
reimbursement policy, for travel and lodging expenses as contemplated by Section
3.1(d) hereof and for business expenses that have been pre-approved by the
Board
or the ACT CEO upon presentation of vouchers or other documents reasonably
necessary to verify the expenditures and sufficient, in form and substance,
to
satisfy Internal Revenue Service requirements for such expenses.
4.7 Automobile
Allowance.
Executive will receive an automobile allowance of Seven Hundred Fifty Dollars
($750.00) per month, payable at the time and in the manner dictated by the
Company’s payroll policies and procedures, but not less frequently than monthly.
Executive shall provide his own automobile and pay all operating expenses of
any
nature whatsoever with regard to such automobile.
4.8 Vacation. Executive
shall be entitled to take up to four (4) weeks of vacation per calendar year,
which shall be taken in accordance with the Company’s vacation policy in effect
from time to time for executives of comparable seniority.
5. No
Competitive Activities; Confidentiality; Invention
5.1 General
Restriction.
During
the Employment Period and for a period of two (2) years thereafter (the
"Restricted
Period"),
Executive covenants and agrees that, except on behalf of the Company, he will
not, directly or indirectly:
(a) Competing
Business.
Own,
manage, operate, control, participate in the ownership, management, operation
or
control of, be employed by, or provide services as a consultant to, any
individual or business that is involved in business activities that are the
same
as, similar to or in competition with, directly or indirectly, with any business
activities conducted, or actively being planned, by the Company during the
Restricted Period (it being acknowledged that the Company's business is national
in scope). The ownership of less than one percent (1%) of the outstanding stock
of any public corporation shall not be deemed a violation of this
provision.
4
(b) Soliciting
Customers.
Attempt
in any manner to contact or solicit any individual, firm, corporation or other
entity (i) that is or has been, a customer of the Company at any time during
the
Restricted Period, (ii) to which a proposal has been made by the Company during
the Restricted Period or (iii) appearing on the Company's new business target
list on the date of Executive's termination (as such list has been prepared
and
maintained in accordance with the Company's past practice), for the purpose
of
providing services or products similar to the services and products provided
by
the Company, or engaging in any activity which could be, directly or indirectly,
competitive with the business of the Company.
(c) Interfering
with Other Relations.
Persuade or attempt to persuade any supplier, vendor, licensor or other entity
or individual doing business with the Company to discontinue or reduce its
business with the Company or otherwise interfere in any way with the business
relationships and activities of the Company.
(d) Employees.
Attempt
in any manner to solicit any individual, who is at the time of such attempted
solicitation, or at any time during the one (1) year period preceding the
termination of Executive's employment, an employee or consultant of the Company,
to terminate his or her employment or relationship with the Company, or engage
such individual, as an employee or consultant. Cooperate with any other person
in persuading, enticing or aiding, or attempting to persuade, entice or aid,
any
employee of or consultant to the Company to terminate his or her employment
or
business relationship with the Company, or to become employed as an employee
or
retained as a consultant by any person other than the Company.
5.2 Confidentiality
Agreement.
Executive shall not, either during the Employment Period or at any time
thereafter, use or disclose to any third person any Confidential Information
of
the Company, other than at the direction of the Company, or pursuant to a court
order or subpoena, provided that Executive will give notice of such court order
or subpoena to the Company prior to such disclosure. Upon the termination of
Executive’s employment with the Company for any reason, Executive shall return
any notes, records, charts, formulae or other materials (whether in hard copy
or
computer readable form) containing Confidential Information, and will not make
or retain any copies of such materials. Without limiting the generality of
the
foregoing, the parties acknowledge that the Company from time to time may be
subject to agreements with its customers, suppliers or licensors to maintain
the
confidence of such other persons’ confidential information. The terms of such
agreements may require that the Company's employees, including Executive, be
bound by such agreements, and Executive shall be deemed so bound upon notice
to
him of the terms of such agreements. The term "Confidential
Information"
as used
herein shall mean any confidential or proprietary information of the Company
whether of a technical, engineering, operational, financial or economic nature,
including, without limitation, all prices, discounts, terms and conditions
of
sale, trade secrets, know-how, customers, inventions, business affairs or
practices, systems, products, product specifications, designs, plans,
manufacturing and other processes, data, ideas, details and other information
of
the Company. Confidential Information shall not include information which can
be
proven by Executive to have been developed by his own work as of the Effective
Date completely independent of its disclosure by the Company or which is in
the
public domain, provided such information did not become available to the general
public as a result of Executive's breach of this Section 5.2.
5
5.3 Disclosure
of Innovations.
Executive shall make prompt and full written disclosure to the Company and
solely the Company of all writings, inventions, processes, methods, plans,
developments, improvements, procedures, techniques and other innovations of
any
kind that Executive may make, develop or reduce to practice, alone or jointly
with others, at any time during the Employment Period and for a period of one
(1) year thereafter, whether during working hours or at any other time and
whether at the request or upon the suggestion of the Company or otherwise,
and
whether or not they are eligible for patent, copyright, trademark, trade secret
or other legal protection (collectively, "Innovations").
Examples of Innovations shall include, but are not limited to, discoveries,
research, formulas, tools, know-how, marketing plans, new product plans,
production processes, advertising, packaging and marketing techniques and
improvements to computer hardware or software. The written disclosures provide
for herein shall be made to the ACT CEO or the Board.
5.4 Assignment
of Ownership of Innovations.
All
Innovations shall be the sole and exclusive property of the Company. Executive
hereby assigns all rights, title or interest in and to the Innovations to the
Company. At the Company's request and expense, during the Employment Period
and
at any time thereafter, Executive will assist and cooperate with the Company
in
all respects and will execute documents and give testimony to obtain, maintain,
perfect and enforce for the Company any and all patent, copyright, trademark,
trade secret and other legal protections for the Innovations.
5.5 Remedies.
Executive acknowledges that the restrictions contained in the foregoing Sections
5.1 through 5.4, in view of the nature of the business in which the Company
is
engaged, are reasonable and necessary in order to protect the legitimate
interests of the Company, and that the legal remedies for a breach of any of
the
provisions of this Section 5 will be inadequate and that such provisions may
be
enforced by restraining order, injunction, specific performance or other
equitable relief. Such equitable remedies shall be cumulative and in addition
to
any other remedies which the injured party or parties may have under applicable
law, equity, this Agreement or otherwise. Executive shall not, in any action
or
proceeding to enforce any of the provisions of this Section 5, assert the claim
or defense that an adequate remedy at law exists. The prevailing party shall
be
entitled to recover its legal fees and expenses in any action or proceeding
for
breach of this Section 5.
5.6 Company
Property.
All
Confidential Information; all Innovations; and all correspondence, files,
documents, advertising, sales, manufacturers' and other materials or articles
or
other information of any kind, in any media, form or format furnished to
Executive by the Company, which may not deemed confidential, shall be and remain
the sole property of the Company ("Company
Property").
Upon
termination or at the Company's request, whichever is earlier, Executive shall
immediately deliver to the Company all such Company Property.
5.7 Public
Policy/Severability.
The
parties do not wish to impose any undue or unnecessary hardship upon Executive
following his departure from the Company's employment. The parties have
attempted to limit the provisions of this Section 5 to achieve such a result,
and the parties expressly intend that all provisions of this Section 5 be
construed to achieve such result. If, contrary to the effort and intent of
the
parties, any covenant or other obligation contained in this Section 5 shall
be
found not to be reasonably necessary for the protection of the Company, to
be
unreasonable as to duration, scope or nature of restrictions, or to impose
an
undue hardship on Executive, then it is the desire of the parties that such
covenant or obligation not be rendered invalid thereby, but rather that the
duration, scope or nature of the restrictions be deemed reduced or modified,
with retroactive effect, to render such covenant or obligation reasonable,
valid
and enforceable. The parties further agree that in the event a court, despite
the efforts and intent of the parties, declares any portion of the covenants
or
obligations in this Section 5 invalid, the remaining provisions of this Section
5 shall nonetheless remain valid and enforceable.
6
6. Termination.
6.1 Termination
For Cause.
Notwithstanding anything to the contrary contained herein, this Agreement may
be
terminated prior to the expiration of the Employment Period upon seven (7)
days'
prior written notice from the Company to Executive for "cause," at which time
the Company shall have no further obligations or liabilities to Executive
whether under this Agreement or otherwise and Executive's right to further
compensation and benefits hereunder (including, but not limited to, unvested
stock) shall immediately cease, other than payment to Executive of Base Salary
accrued, and reimbursement of expenses incurred in accordance with Section
4.6,
prior to the effective date of termination of this Agreement (the "Termination
Date").
As
used herein and throughout this Agreement, the term “cause” shall mean (i) any
act or omission by Executive that constitutes malfeasance, misfeasance or
nonfeasance in the course of Executive’s duties hereunder, or in the judgment of
the Board or the ACT CEO, Executive has been grossly negligent (including
habitual neglect of duties), incompetent or insubordinate in carrying out his
duties hereunder, (ii) a material breach of this Agreement that is not cured
within ten (10) days of receipt of notice thereof, (iii) Executive's breach
of a
fiduciary duty owed to the Company or its affiliates, or (iv) Executive’s
conviction of, or pleading nolo contendere to, a criminal offense or crime
constituting a misdemeanor or felony, or conviction in respect to any act
involving fraud, dishonesty or moral turpitude (other than minor traffic
infractions or similar minor offenses).
6.2 Termination
without Cause.
(a) Without
Cause.
This
Agreement may be terminated by the Company without cause and for any reason
or
no reason prior to the expiration of the Employment Period upon thirty (30)
days' prior written notice from the Company to Executive. In the event that
the
Company terminates Executive’s employment without cause (other than in
connection with a “Change in Control” as described in Section 6.2(c) and (d)
below), the Company shall pay to Executive (i) Base Salary accrued, and expenses
incurred in accordance with Section 4.6, prior to the Termination Date, (ii)
any
earned and accrued unpaid bonus owed to Executive for the current and prior
fiscal years ((i) and (ii) together, the "Accrued
Payments"),
which
Accrued Payments shall be paid to Executive in accordance with Sections 4.2,
4.3
and 4.6, as applicable, and (iii) an additional amount of Base Salary which
would have been payable to Executive during the six (6) month period immediately
following the Termination Date (the "Severance
Payment"),
which
Severance Payment shall be payable in cash to Executive in a lump sum no later
than 30 days after the Termination Date. Notwithstanding the foregoing sentence,
if the Executive’s Severance Payment under this Section 6.2(a) exceeds the
exempt amount under Section 409A of the Internal Revenue Code (the “Code”) for
an involuntary separation pay arrangement, any amount in excess of the exempt
amount for involuntary separation pay arrangements will be paid to the Executive
in a lump sum on the first business day of the seventh month following the
Termination Date. If it is determined that the payment of the amount in excess
of the exempt amount in this manner nonetheless violates Code Section 409A,
then
such provision shall be deemed void and all Severance Payments under this
Section 6.2(a) shall be paid to the Executive in a lump sum on the first
business day of the seventh month following the Termination Date. Except as
provided in the preceding sentences, the Company shall have no further
obligations or liabilities to Executive whether under this Agreement or
otherwise and Executive's right to further compensation and benefits hereunder
(including, but not limited to, unvested stock) shall immediately
cease.
7
(b) Good
Reason.
This
Agreement may be terminated upon seven (7) days' prior written notice from
Executive to the Company for “Good Reason,” which notice must be given within
thirty (30) days after the occurrence of the event giving rise to the “Good
Reason.” As used herein, Good Reason shall mean the occurrence of any of the
following without Executive’s consent: (i) a material reduction in Executive’s
duties or authority, or a change in reporting relationship which requires
Executive to report to any person or persons other than the ACT CEO, or such
other senior executive officer of ACT, as determined from time to time by the
Company; (ii) a requirement that Executive be relocated to an office outside
of
the New York City metropolitan area; (iii) a reduction in Base Salary; or (iv)
the Company is a party to a merger or consolidation in which it is not the
surviving entity, and the surviving or new entity does not undertake to assume
and perform the Company’s obligations under this Agreement. In the event that
the Executive terminates this Agreement for Good Reason (other than in
connection with a “Change in Control” as described in Sections 6.2(c) and (d)
below), the Company shall pay to Executive Accrued Benefits, which shall be
payable in accordance with Sections 4.2, 4.3 and 4.6, as applicable, and
Severance Payments in a lump-sum on the first business day of the seventh month
following the Termination Date. Except as provided in the preceding sentence,
the Company shall have no further obligations or liabilities to Executive
whether under this Agreement or otherwise and Executive's right to further
compensation and benefits hereunder (including, but not limited to, unvested
stock) shall immediately cease.
(c) Change
in Control.
(i) In
the
event that within three months prior to a Change in Control (as defined below),
the Company terminates this Agreement without cause (including the Company’s
refusal or failure to exercise the Option Period), or Executive terminates
this
Agreement with Good Reason under clause (iii) or (iv) of Section 6.2(b) within
three months prior to, or 12 months following a Change in Control, the Severance
Payment shall be increased to an amount which, when added to the Base Salary
paid to Executive from the date of Change of Control to the Termination Date,
if
any, equals 299% of the amount of Base Salary which would have been payable
to
Executive during the twelve (12) month period immediately following the
Termination Date (the “Change
in Control Benefit”).
In
addition, upon a termination described in this subsection (c)(i) or (c)(ii),
all
unvested stock options or stock awards held by Executive shall immediately
become accelerated and vested. Any payment due pursuant to this subsection
(c)
shall be paid in a lump sum on the first business day of the seventh month
following the last to occur of the termination or Change in
Control.
8
(ii) In
the
event that within 12 months following a Change in Control (as defined below),
the Company terminates this Agreement without cause (including the Company’s
refusal or failure to exercise the Option Period), the Severance Payment shall
be increased to an amount which equals the Change in Control Benefit. Any
payment due under this subsection (c)(ii) shall be paid in a lump sum no later
than 30 days following the termination.
(d) Definition.
As used
in this Agreement, “Change in Control” means any one of the
following:
(i) The
date
a “change in ownership” of the Company occurs. For purposes of this Section
6.2(d)(i), the term “change in ownership” shall be determined under the Treasury
Regulations promulgated under Code Section 409A;
(ii) The
date
a “change in effective control” occurs. For purposes of this Section 6.2(d)(ii),
the term “change in effective control” shall be determined under the Treasury
Regulations promulgated under Code Section 409A; or
(iii) The
date
a “change in ownership of a substantial portion of the corporation’s assets”
occurs. For purposes of this Section 6.2(d)(iii), the term “change in ownership
of a substantial portion of the corporation’s assets” shall be determined under
the Treasury Regulations promulgated under Code Section 409A. However, a change
in ownership of a substantial portion of the corporation’s assets will not occur
unless a person or group acquires (or has acquired during the 12-month period
ending on the date of the most recent acquisition) assets from the Company
that
have a total gross fair market value equal to or more than 40 percent of the
total gross fair market value of all of the assets of the Company immediately
prior to such acquisition or acquisitions.
Notwithstanding
the foregoing, a Change in Control shall not include any transaction under
subparagraphs (i) or (ii) unless Executive has voted his shares of the Company
against such transaction.
6.3 Termination
of Other Positions.
Upon
the Termination Date, Executive hereby resigns as Chief Financial Officer of
ACT
and any and all other positions as officer or director Executive may then hold
with the Company, and as fiduciary of any benefit plan of the Company. Executive
shall promptly execute any further documentation as requested by the Company
and, if Executive is to receive any payments from the Company, execution of
such
further documentation shall be a condition thereof.
7. Disability
or Death.
7.1 Disability.
If,
during the Employment Period, Executive becomes disabled or incapacitated as
determined under the Company's Long Term Disability Policy ("Permanently
Disabled"),
the
Company shall have the right at any time thereafter (but in no event less than
120 days after the event causing such disability or incapacity), so long as
Executive is then still Permanently Disabled, to terminate this Agreement upon
thirty (30) days' prior written notice to Executive. In the event the Company
does not have a Long Term Disability Policy at the time of the event causing
the
Executive to become Permanently Disabled, "Permanently
Disabled"
shall
mean Executive's inability to fully perform his duties and responsibilities
hereunder to the full extent required by the Company by reason of illness,
injury or incapacity for 120 consecutive days or for more than six (6) months
during any twelve (12) month period. If the Company elects to terminate this
Agreement in the event that Executive becomes Permanently Disabled, the Company
shall have no further obligations or liabilities to Executive, whether under
this Agreement or otherwise (including, but not limited to, unvested stock),
other than payment to Executive of the Accrued Payments, which Accrued Payments
shall be paid to Executive in accordance with Sections 4.2, 4.3 and 4.6, as
applicable.
9
7.2 Death.
If
Executive dies during the Employment Period, this Agreement shall automatically
terminate as of the date of Executive's death, and the Company shall have no
further obligations or liabilities to Executive, whether under this Agreement
or
otherwise (including, but not limited to, unvested stock), other than payment
to
Executive's estate of the Accrued Payments, which Accrued Payments shall be
paid
to Executive in accordance with Sections 4.2, 4.3 and 4.6, as
applicable.
8. Gross-Up
Payment.
If any
payments to be made to Executive pursuant to Section 6.2(c) or otherwise under
this Agreement would be deemed to be “parachute payments” as defined in Section
280G of the Code, and subject to excise taxes under Section 4999 of the Code,
the Company shall, to the extent lawfully permitted under the Code, pay
Executive additional
compensation so as to make Executive whole on an after-tax basis with respect
to
all such excise taxes, including any tax attributable to such additional
compensation. The amount of the payments under this Section 8 (the
“Parachute Gross-Up”) shall be computed by the Company’s accountants (or by
another certified public accounting firm of national reputation mutually
agreeable to the Company and Executive). If either the Company or Executive
desires to dispute the computation rendered by such accounting firm, the
disputing party may select an alternative certified public accounting firm
of
national reputation to perform the applicable computations. If the two
accounting firms cannot agree upon the computations, Executive and the Company
will jointly appoint a third certified public accounting firm of national
reputation, reasonably acceptable to Executive and the Company, within ten
(10)
calendar days after the two conflicting computations have been rendered. Such
third accounting firm shall be asked to determine within thirty (30) calendar
days the computation of the Parachute Gross-Up to be paid to Executive. The
Parachute Gross-Up payment, if any, shall be paid to Executive in a lump-sum
on
the first business day of the seventh month following a Change in
Control.
9. Indemnification. Each
of
the Company and Executive shall indemnify the other for any losses, damages,
liabilities, judgments, claims, costs, penalties and expenses incurred by such
other party (including, without limitation, costs and reasonable attorneys’ fees
and costs), resulting from the indemnifying party’s failure to perform any of
their obligations contained in this Agreement. The Company shall be obligated
to
indemnify Executive against those liabilities incurred by him in connection
with
any proceeding to which he is made a party as the result of his performing
his
duties hereunder solely in accordance with, and as permitted by, the Company’s
bylaws.
10. Governing
Law. This
Agreement shall be governed by the internal laws of the State of Delaware.
Any
action to enforce any term hereof shall be brought exclusively within the state
or federal courts of Delaware to which jurisdiction and venue all parties hereby
submit themselves.
10
11. Binding
Effect. Except
as
otherwise herein expressly provided, this Agreement shall be binding upon,
and
shall inure to the benefit of the parties hereto, their respective heirs, legal
representatives, successors and assigns.
12. Assignment.
Any
assignee of the Company shall have the right to enforce the restrictive
covenants set forth in this Agreement, and the Company shall have the right
to
assign this Agreement and the right to enforce such covenants to any successor
or assign of the Company.
13. Notices. All
notices, designations, consents, offers, acceptances, waivers or any other
communication provided for herein, or required hereunder, shall be sufficient
if
in writing and if sent by registered or certified mail, return receipt
requested, overnight courier, or delivered by hand to (i) Executive at his
last
known address on the books of ACT or (ii) ACT at its principal place of
business.
14. Additional
Documents. Each
of
the parties hereto agrees to execute and deliver, without cost or expense to
any
other party, any and all such further instruments or documents and to take
any
and all such further action reasonably requested by such other of the parties
hereto as may be necessary or convenient in order to effectuate this Agreement
and the intents and purposes thereof.
15. Counterparts. This
Agreement may be executed simultaneously in several counterparts, each of which
shall be deemed an original, but all of which together shall constitute one
and
the same instrument, and such counterparts may be delivered by facsimile
transmission, which facsimile copies shall be deemed originals.
16. Entire
Agreement. This
Agreement contains the sole and entire agreement and understanding of the
parties and supersedes any and all prior agreements, discussions, negotiations,
commitments and understandings among the parties hereto with respect to the
subject matter hereof. There are no representations, agreements,
arrangements or understandings, oral or written, between or among the parties
concerning the subject matter hereto, which are not fully expressed herein
or in
any supplemental written agreements of even or subsequent date
hereof.
17. Severability. If
any
provision of this Agreement, or the application thereof to any person or
circumstances, shall, for any reason and to any extent, be invalid or
unenforceable, the remainder of this Agreement and the application of such
provision to other persons or circumstances shall not be affected thereby,
but
rather shall be enforced to the greatest extent permitted by
law.
18. Modification. This
Agreement cannot be changed, modified or discharged orally, but only if
consented to in writing by both parties.
11
19. Contract
Headings. All
headings of the Sections of this Agreement have been inserted for convenience
of
reference only, are not to be considered a part of this Agreement, and shall
in
no way affect the interpretation of any of the provisions of this
Agreement.
20. Waiver. Failure
to insist upon strict compliance with any of the terms, covenants, or conditions
hereof shall not be deemed a waiver of such term, covenant, or condition, nor
shall any waiver or relinquishment of any right or power hereunder at any one
time or more times be deemed a waiver or relinquishment of such right or power
at any other time or times.
21. Representation
of Executive. Executive,
with the full knowledge that the Company is relying thereon, represents and
warrants that he has not made any commitment inconsistent with the provisions
hereof and that he is not under any disability which would prevent him from
entering into this Agreement and performing all of his obligations
hereunder.
22. Joint
Participation in Drafting.
Each
party to this Agreement participated in the drafting of this Agreement. As
such,
the language used herein shall be deemed to be the language chosen by the
parties hereto to express their mutual intent, and no rule of strict
construction shall be applied against any party to this Agreement.
[SIGNATURE
PAGE FOLLOWS]
12
IN
WITNESS WHEREOF
the
parties hereto have executed this Agreement as of the day and year first above
written.
| ADVANCED COMMUNICATIONS TECHNOLOGIES, INC. | ||
| |
|
|
| By: | ||
|
Xxxxx X. Xxxxxx |
||
| Chief Executive Officer | ||
| EXECUTIVE: | ||
| |
|
|
|
|
||
13
