EXHIBIT 10.1
EMPLOYMENT AGREEMENT
BETWEEN BLUEGATE CORPORATION AND
XXXXXXX XXXXXXXXX
This Employment agreement (the "Agreement") is made effective as of the 1st
day of February 2005, by and between Bluegate Corporation, a Nevada corporation
("Bluegate"), and Xxxxxxx Xxxxxxxxx (the "Executive").
WHEREAS, The Executive is willing to be employed by Bluegate from and after
the effective date on the basis and terms and conditions set forth in this
Agreement.
THEREFORE, upon the mutual promises and covenants of the parties, and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and intending to be legally bound, the parties agree as follows:
1. Employment.
Bluegate hereby employs the Executive, and the Executive hereby
accepts such employment, for the period stated in section (3) below and
upon the other terms and conditions herein provided.
2. Position and Duties.
During the Employment Period the Executive agrees to serve as Chief
Executive Officer ("CEO") of Bluegate. In his capacity of CEO, the
Executive will perform such duties and responsibilities for Bluegate as may
from time to time be assigned to him by the Board of Directors of Bluegate.
The Executive shall have no responsibility for payroll nor for the filing
of any payroll tax return, nor for payment of any tax of any kind that may
be due or payable by Bluegate or any of its divisions.
3. Term.
By this Agreement, Bluegate employs the Executive, and the Executive
accepts employment with Bluegate, for a period consisting of two (2) years,
commencing on the date of this Agreement.
4. Compensation.
In consideration of such service, Bluegate agrees to pay the Executive
as compensation an annual salary of $180,000.00, in accordance with
Bluegate's regular payroll practices in effect from time to time.
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Stock Options. . In addition to the compensation set forth above, the
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Executive shall be entitled to receive options to purchase 1,000,000 shares
of Bluegate shares of common stock, par value $.001 per share ("Option
Shares"), at the per-share option price of $.50, granted pursuant to a
Stock Option Agreement being entered into in connection herewith. This
option shall become vested and exercisable with respect to 50,000 Option
Shares immediately upon the execution and delivery of the related Stock
Option Agreement, and this option shall become vested and exercisable with
respect to another 50,000 Option Shares every 30 days thereafter until this
option become fully vested.
Bonus. In addition to the compensation set forth above, Executive and
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Bluegate agree to enter into good faith negotiations with a view to
reaching an agreement on the payment of one or more bonuses (the "Bonuses")
in such amounts as are mutually agreed upon by Executive and Bluegate, if
major transactions (such as acquisitions and financings) agreed mutually
upon by them shall be achieved. The Bonuses shall be payable at such time
as is mutually agreed upon by Executive and Bluegate.
All options previously granted under the immediately prior Employment
Contract in the total amount of 275,000 options for an equal number of
shares are hereby reduced in strike price to $2.00 per share. This
Employment Contract serves to cancel the Employment Contract between
Crescent Communications Inc. and Executive dated January 2004 and this
contract serves as the consideration for the cancellation.
5. (Intentionally Left Blank)
6. Confidentiality.
In the course of the performance of Executive's duties hereunder,
Executive recognizes and acknowledges that Executive may have access to
certain confidential and proprietary information of Company or any of its
affiliates. Without the prior written consent of Company, Executive shall
not disclose any such confidential or proprietary information to any person
or firm, corporation, association, or other entity for any reason or
purpose whatsoever, and shall not use such information, directly or
indirectly, for Executive's own behalf or on behalf of any other party.
Executive agrees and affirms that all such information is the sole property
of Company and that at the termination and/or expiration of this Agreement,
at Company's written request, Executive shall promptly return to Company
any and all such information so requested by Company.
The provisions of this Section shall not, however, prohibit
Executive from disclosing to others or using in any manner information
that:
(a) has been published or has become part of the public domain
other than by acts, omissions or fault of Executive;
(b) has been furnished or made known to Executive by third
parties (other than those acting directly or indirectly for or on
behalf of Executive) as a matter of legal right without restriction on its
use or disclosure;
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(c) was in the possession of Executive prior to obtaining such
information from Company in connection with the performance of this
Agreement; or
(d) is required to be disclosed by law.
7. Indemnification.
The Company shall to the full extent permitted by law or as set forth
in the Articles of Incorporation and the Bylaws of the Company, indemnify,
defend and hold harmless Executive from and against any and all claims,
demands, liabilities, damages, loses and expenses (including reasonable
attorney's fees, court costs and disbursements) arising out of the
performance by him of his duties hereunder except in the case of his
willful misconduct.
8. Termination.
This Agreement and the employment relationship created hereby will
terminate (i) with cause under Section 8(a); or (ii) upon the voluntary
termination of employment by Executive under Section8(b).
(a) With Cause. The Company may terminate this Agreement at any time
because of (i) the determination by the Board of Directors in the exercise
of its reasonable judgment that Executive has committed an act or acts
constituting a felony or other crime involving moral turpitude, dishonesty
or theft or fraud; or (ii) Executive's willful misconduct in the
performance of his duties hereunder, provided, in each case, however, that
the Company shall not terminate this Agreement pursuant to this Section
unless the Company shall first have delivered to the Executive, a notice
which specifically identifies such breach or misconduct and the executive
shall not have cured the same within fifteen (15) days after receipt of
such notice.
(b) Voluntary Termination. The Executive may terminate his employment
voluntarily.
Obligations of Company Upon Termination. In the event of the
termination of Executive's employment pursuant to Section 8 (a) or (b),
Executive will be entitled only to the compensation earned by him hereunder
as of the date of such termination (plus any life insurance benefits). In
the event of the termination of Executive's employment for any reason other
than Section 8 (a) or (b) as described immediately above, all compensation
of every nature described in this Agreement shall immediately vest and
become due and owing to Executive.
In the event of the Death of the Executive prior to the end of the
Term of this Agreement, Executive's spouse shall be entitled to receive
Compensation pursuant to this Agreement through the end of its Term as it
accrues.
9. Waiver of Breach.
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The waiver by any party hereto of a breach of any provision of this
Agreement will not operate or be construed as a waiver of any subsequent
breach by any party.
10. Arbitration.
If a dispute should arise regarding this Agreement the parties agree
that all claims, disputes, controversies, differences or other matters in
question arising out of this relationship shall be settled finally,
completely and conclusively by arbitration in Houston, Texas in accordance
with the Commercial Arbitration Rules of the American Arbitration
Association (the "Rules"). The governing law of this Agreement shall be the
substantive law of the State of Texas, without giving effect to conflict of
laws. A decision of the arbitrator shall be final, conclusive and binding
on the Company and Executive.
11. Covenant Not to Compete.
So long as the Executive is employed by the Company and for a period
of eighteen (18) months after either (i) the voluntary termination of
employment by Executive or (ii) the termination of the Executive by the
Company for cause, as set forth in Section 8(b) hereof, the Executive
specifically agrees that he will not, for himself, on behalf of, or in
conjunction with any person, firm, corporation or entity, other than the
Company (either as principal, employee, shareholder, member, director,
partner, consultant, owner or part-owner of any corporation, partnership or
any type of business entity) anywhere in any county in which the Company is
doing business at the time of termination, directly or indirectly, own,
manage, operate, control, be employed by, participate in, or be connected
in any manner with the ownership, management, operation, or control of any
business similar to the type of business conducted by the Company at the
time of termination of the Executive's employment.
Executive's Acknowledgments and Agreements. The Executive acknowledges
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and agrees that:
(1) Due to the nature of the Company's business, the foregoing
covenants place no greater restraint upon the Executive than is reasonably
necessary to protect the business and goodwill of the Company;
(2) These covenants protect a legitimate interest of the Company and
do not serve solely to limit the Company's future competition;
(3) This Agreement is not an invalid or unreasonable restraint of
trade;
(4) A breach of these covenants by the Executive would cause
irreparable damage to the Company;
(5) These covenants will not preclude the Executive from becoming
gainfully employed following termination of employment with the Company;
(6) These covenants are reasonable in scope and are reasonably
necessary to protect the Company's business and goodwill and valuable and
extensive trade which the Company has established through its own expense
and effort;
(7) The signing of this Agreement is necessary for the Executive's
employment; and
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(8) He has carefully read and considered all provisions of this
Agreement and that all of the restrictions set forth are fair and
reasonable and are reasonably required for the protection of the interests
of the Company.
Remedies, Injunction. In the event of the Executive's actual or
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threatened breach of any provisions of this Agreement, the Executive agrees
that the Company shall be entitled to a temporary restraining order,
preliminary injunction and/or permanent injunction restraining and
enjoining the Executive from violating the provisions herein. Nothing in
this Agreement shall be construed to prohibit the Company from pursuing any
other available remedies for such breach or threatened breach, including
the recovery of damages from the Executive. The Executive further agrees
that for the purpose of any such injunction proceeding, it shall be
presumed that the Company's legal remedies would be inadequate and that the
Company would suffer irreparable harm as a result of the Executive's
violation of the provisions of this Agreement. In any proceeding brought by
the Company to enforce the provisions of this Agreement, no other matter
relating to the terms of any claim or cause of action of the Executive
against the Company will be defense thereto. The foregoing remedy
provisions are subject to the provisions of Sec.15.51 of the Texas Business
and Commerce Code, as amended (the "Code"), which Code provisions shall
control in the event of any conflict between the provisions hereof and the
Code or any other law in effect relevant and applicable hereto.
12. Benefits Insurance.
(i)Medical, Dental and Vision Benefits. During this Agreement,
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Executive and his dependents will be entitled to receive such group
medical, dental and vision benefits as Company may provide to its
other executives, provided such coverage is reasonably available, or
be reimbursed if Executive is carrying his own similar insurance.
(ii)Benefit Plans. The Executive will be entitled to participate
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in any benefit plan or program of the Company which may currently be
in place or implemented in the future.
(iii)Other Benefits. During the Term, Executive will be entitled
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to receive, in addition to and not in lieu of base salary, bonus or
other compensation, such other benefits and normal perquisites as
Company currently provides or such additional benefits as Company may
provide for its executive officers in the future.
13. Vacation and Sick Leave.
Vacation Pay. The Executive shall be entitled to an annual vacation
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leave of four (4) weeks at full pay. Executive is specifically permitted to
work from home or other
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remote location in his discretion, which time shall not be considered
as vacation leave.
Sick Pay. The Executive shall be entitled to sick leave as needed.
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14. Reimbursement of Expenses.
Upon submission of a detailed statement and reasonable documentation,
Company will reimburse Executive in the same manner as other executive
officers for all reasonable and necessary or appropriate out-of-pocket
travel and other expenses incurred by Executive in rendering services
required under this Agreement. Executive shall be entitled to a $750 per
month car allowance and up to a $1,000 per month discretionary expense
account.
15. Withholding of Taxes.
Bluegate may withhold from any payments under this Agreement all
applicable taxes, as shall be required pursuant to any law or governmental
regulation or ruling.
16. Entire Understanding.
This Agreement sets forth the entire understanding between the parties
with respect to the subject matter hereof and cancels and supersedes all
prior oral and written agreements between the parties with respect to the
subject matter hereof.
17. Severability.
If for any reason any provision of this Agreement shall be held
invalid, such invalidity shall not affect any other provision of this
Agreement not held so invalid.
18. Governing Law.
This Agreement has been executed and delivered in the State of Texas
and its validity, interpretation, performance and enforcement shall be
governed by and construed in accordance with the laws thereof applicable to
contracts executed and to be wholly performed in Texas.
19. Notices.
All notices shall be in writing and shall have been duly given if
delivered by hand or mailed, certified or registered mail, return receipt
requested to the following address or to such other address as either party
may designate by like notice:
If to Executive:
Xxxxxxx Xxxxxxxxx
0000 Xxxxxx Xxxxx
0
Xxxxxxx, Xxxxx 00000
If to Bluegate:
Bluegate Corp.
Attn: Chairman of the Board of Directors
000 X. Xxxx Xxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Bluegate has caused this Agreement to be executed by its officer and
the Executive has signed this Agreement.
20. Successors, Binding Agreement.
This Agreement is binding upon Bluegate's successors. Bluegate will
require any successor (whether direct or indirect, by purchase, merger,
consolidation, or otherwise) to all or substantially all of the business
and/or assets of Bluegate to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that Bluegate would be
required to perform it as if no such succession had taken place. Failure of
Bluegate to obtain such assumption and agreement prior to the effectiveness
of any such succession shall constitute a breach of this Agreement.
This Agreement shall inure to the benefit of both Bluegate and its
successors and assigns and the Executive and his personal or legal
representatives, executors, administrators, heirs, distributes, successors
and assigns.
Bluegate: Executive:
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XXXXXXX XXXXXXX XXXXXXX XXXXXXXXX
DIRECTOR
BOARD OF DIRECTOR
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