EXHIBIT 10.3
EMPLOYMENT AGREEMENT
This Agreement, made and entered into this 1 day of June, 2001 by and
between HALIFAX INTERNATIONAL, INC. and XXXXXXX XXXXXXX ("Employee").
WITNESSETH:
WHEREAS, HII. Plans to engage in the business of providing
miscellaneous telecommunication prepaid products and financial services
worldwide and maintains offices at Xxxxx 000, 000 X. Xxxxxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxx 00000, and
WHEREAS, Employee desires to be employed by HII and it desires to
employ Employee; and
WHEREAS, Employee recognizes that HII would not employ (or continue to
employ) Employee, but for the Agreements and covenants being made in this
Agreement by Employee.
WHEREAS, Employee understands and agrees that while he will be paid by
and be on the payroll of HII his activities will be on behalf of both HII or
other companies controlled by Halifax at the direction of the Board of Directors
of Halifax.
NOW, THEREFORE, in consideration of employment and continued employment
and the mutual benefits and covenants set forth herein, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. Definitions.
(a) For purposes of this Agreement: (1) "business,"
"activities," "services" or "products" will mean any line of
trade or business, products or services engaged in or
conducted by HII or as well as those activities described in
this Agreement; (2) "products" or "services" will mean
anything of commercial value, including without limitation:
goods, personal, real or intangible services; or any other
object or aspect of business or the conduct thereof.
(b) "HII" and include all other of its affiliates and
subsidiaries.
2. Services, Duties and Obligations. HII employs Employee to
serve as the Company's Chief Operating Officer (COO) to be responsible for
implementation and success of HII's business plan as currently developed and in
conjunction with future modifications as required planning, team development,
financial controls, capital allocation criteria, acquisition efforts and
integration of all business activities to assure the achievement of operating
objections, perform such other responsibilities as are assigned by HII to
Employee form time to time, it being agreed between all parties that the Board
of Directors of HII will be responsible for assigning Employee duties and
responsibilities and Employee hereby accepts such employment (the "Employment").
Employee will perform such duties as may be assigned from time to time
by HII. Employee agrees to faithfully, industriously, and to the best of his
ability, perform all the duties that may be required by the Employment.
HII agrees to use its best efforts to cause Employee to be elected to
the Company's Board of Directors during the time that he serves as its Chief
Operating Officer. If for any reason not of his own volition Employee ceases to
be a member of the Board of Director's during the term hereof, Employee may, at
his option, consider the failure to be elected, re-elected or otherwise denied
the right to serve on the Board of Director's as a Change of Control and be
entitled to all of the rights he would have hereunder if a Change of Control had
occurred except that Employee will receive three (3) years compensation instead
of one (1) year's compensation as he would under a Change of Control as defined
herein.
Employee agrees during the term of Employment not to engage in, work
for, assist or be associated with in any way, or has any interest in (except as
a shareholder of less than 10% of equity) any other business.
3. Compensation, Expenses and Vacation. HII agrees to pay
Employee and Employee agrees to accept form HII in full payment for the
Employment compensation set forth on Exhibit "A" attached to this Agreement, to
be paid on a regular and periodic basis in accordance with the normal payroll
procedures of HII, pro-rated for any partial pay period at the beginning or end
of the Employment and subject to required withholding under applicable tax laws.
Employee's compensation will cease upon termination of the Employment.
HII will reimburse Employee for all reasonable and necessary business
expenses paid by Employee in the course of the Employment, to the extent the
expenses are documented consistent with the policies and procedures of HII.
Employee will provided with such fringe benefits and vacation that are
appropriate and usual for senior management of U.S. companies including auto
lease, travel/expense allowance, health/life insurance benefits, corporate perks
(to be determined) paid vacation.
4. Employment Term. The term of this Agreement is for four years
commencing on July 1, 2001. After July 1, 2005, this contract shall renew for
another year unless either party notifies the other party that the employment
shall terminate at the expiration of the term of employment at least one
hundred-eighty (180) days prior to the expiration of the term of employment.
Thereafter the term of employment shall continue from year to year unless
terminated by either.
At any time during this Agreement, HII shall have the right to
terminate Employee for cause. For purposes of this Agreement, "cause" shall
mean:
A. Employee's (1) conviction of a felony or Employee's
commission of any other act or omission involving dishonesty
or fraud with respect to the Company or any if its affiliates
or any of their customers, vendors or suppliers or (2)
misappropriation of funds or assets of the Company for
personal use or (3) engaging in any conduct relating to the
Company's business or involving moral
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turpitude that actually brought the Company or any of its
affiliates into public disgrace or disrepute;
B. Executive's continued substantial and repeated
neglect of his duties, after written notice thereof from the
Board, and such neglect has not been cured within 30 days
after Employee receives notice from the Board;
C. Employee's gross negligence or willful misconduct in
the performance of his duties hereunder that results, or is
reasonably expected to result in material damage to the
Company.
5. Termination. In the event of termination of this Agreement or
of the Employment be either party, each will continue to be liable for all
portions of this Agreement that are to remain in effect following termination of
this Agreement. Employee further agrees that within five (5) days after
termination of the Employment, he will return to HII and all equipment,
documents, supplies, stationery, and any other property of HII which HII
furnished to him as well as all copies or duplicates of the same. Upon receipt
of such materials, HII will compensate Employee for all final compensation and
bonuses that may be owed Employee by HII or within 45 calendar days. HII shall
have the right to offset any amounts owed to Employee against any amounts owed
to HII or by Employee.
6. Confidential and Proprietary Information. Employee
acknowledges that during the Employment (a) he will be privy to certain
confidential and proprietary information which constitutes trade secrets; and
(b) he will be privy to certain other confidential and proprietary information
that may not constitute trade secrets.
Employee acknowledges that HII must protect both the above kinds of
information from disclosure or misappropriation, and Employee further
acknowledges that the processes, machines, technical documentation, computer
programs, customer lists, business plans, marketing plans and techniques,
pricing data, financial data, marketing programs, customer files, financial
institution files, technical expertise and know how, and other information and
trade secrets, whether as defined in the Act or which may lie beyond it
(collectively the "Property"), which have been or will be provided to Employee
by HII, are unique, confidential and proprietary Property of HII and by the
provision of such Property to Employee, HII is not conveying any ownership or
other interest to Employee. Employee acknowledges that such confidential and
proprietary information derives independent, actual and potential commercial
value from not being generally, readily ascertainable through independent
development and is the subject of efforts by HII that are reasonable under the
circumstances to maintain its secrecy. Employee agrees to hold in trust and
confidence for HII and not to disclose to any third party without prior written
consent of HII, said Property and information, whether it is tangible or
intangible. Employee further agrees not to use any such confidential information
or trade secrets to his personal benefit or for the benefit of any third party.
Employee also agrees to return to HII all such information and Property which is
tangible upon the termination of the Employment.
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Employee agrees and HII agree that Employee's obligations under the
above non-disclosure provision as it relates to confidential information that
does not constitute trade secrets shall apply for a period of two (2) years
following the termination of the Employment.
7. Non-Solicitation of Employees. Employee agrees during the two
years following the termination of the Employment, not to actively recruit,
engage in passive hiring efforts, solicit or induce any person or entity who,
during such two-year period, or within one (1) year prior to the termination of
Employee's employment with HII, was an Employee, agent, representative or sales
person of HII to leave or cease his or her employment or other relationship with
HII for any reason whatsoever or hire or engage the services of such person for
Employee in any business substantially similar to or competitive with that in
which HII or any of its affiliated companies were engaged during the Employment.
8. Non-Solicitation of Customers. Employee acknowledges that in
the course of the Employment, he will learn about HII business, services,
materials, programs and products and the manner in which they are developed,
marketed, serviced and provided. Employee knows and acknowledges that HII has
invested considerable time and money in developing its programs, Agreements,
offices, representatives, services, products and marketing techniques and that
they are unique and original. Employee further acknowledges that HII keep secret
all pertinent information divulged to Employee about HII business concepts,
ideas, programs, plans and processes, so as not to aid HII's competitors.
Accordingly, HII is entitled to the following protection, which Employee agrees
is reasonable:
Employee agrees that for a period of two (2) years following the
termination of the Employment, he will not, on his own behalf or on behalf of
any person, firm, partnership, association, corporation, or other business
organization, entity or enterprise, knowingly solicit, call upon, or initiate
communication or contact with any person or entity or any representative of any
person or entity, with whom Employee had contact during the Employment, with a
view to the sale or the providing of any product, equipment or service sold or
provided or under development by HII during the period of two (2) years
immediately preceding the date of Employee's termination. The restrictions set
forth in this section shall apply only to persons or entities with whom Employee
had actual contact during the two (2) years prior to termination of the
employment with a view toward the sale or providing of any product, equipment or
services sold or provided under development by HII.
9. Non-Competition. Employee acknowledges that he will be a "high
impact" person in HII's business who is in possession of selective and
specialized skills, learning abilities, customers contacts, and customer
information as a result of his relationship with HII, and agrees that HII has a
substantial business interest in the covenant described below. Employee,
therefore, agrees for a period of one (1) year from the termination of the
Employment, not to, either directly, whether as an Employee, sole proprietor,
partner, shareholder, joint venturer or the like, in the same or similar
capacity in which he worked for HII, work for any person or entity that competes
with HII in business activities substantially similar to those in which Employee
was engaged on behalf of HII. The territory in which this non-competition
covenant shall apply will be limited to the area commensurate with the territory
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in which HII is actively engaged in business activities, and in which Employee
participated in customer contract during the two years preceding termination of
Employment.
10. Consent to Injunction. It is understood and agreed that a
breach by Employment of these covenants will cause irreparable damages to HII
and, therefore, the parties agree that in the event Employee breaches any of
these covenants, HII shall be entitled to a grant of injunctive relief from a
court of competent jurisdiction in addition to any and all other remedies
allowed by law.
11. Directors and Officers Liability Insurance. HII agrees to keep
an appropriate officers and directors liability policy in full force throughout
the term of this Agreement.
12. Copyrights.
(a) The Employee agrees that any copyrightable work of
authorship, including without limitation, any technical
descriptions of products, user guides, illustrations,
advertising to such materials [collectively "The Works"]
created by the Employee in the course of the Employee's duties
as an Employee of HII are subject to the "Work for Hire"
provisions contained in Sections 101 and 201 of the Untied
States Copyright Law, Title 17 of the United States Code. All
right, title and interest to copyrights in all Works which
have been or will be prepared by the Employee within the scope
of the Employee's employment with the Company will be the
property of the Company. The Employee further acknowledges and
agrees that, to the extent the provisions of Title 17 of the
United States Code do not vest in the Company the copyrights
to any Works, the Employee will assign and hereby does assign
to HII the copyrights to any Works, the Employee will assign
and hereby does assign to HII all right, title and interest to
copyrights which the Employee may have in such Works.
(b) The Employee must disclose to HII all Works referred
to in Section 12(a) and will execute and deliver all
applications for registration, registrations, and further
documents relating to the copyrights to the Works and provide
such additional assistance, as HII may deem necessary and
desirable to secure HII's title to the copyrights in the
Works. HII will be responsible for all expenses incurred in
connection with the registration of all such copyrights.
(c) The Employee claims no ownership rights in any Works.
13. Change of Control. In the event of a Change of Control of the
Company Employee's options are described on Exhibit A, hereto.
14. Arbitration of Disputes. If there is any dispute involving
matters relating to the Employment (including any issues relating to Equal
Employment Laws, ADA, 1964 Civil Rights Act or other laws, State and Federal)
the parties agree that such matters shall be determined by arbitration pursuant
to the rules and regulations of the American Arbitration Association appropriate
for resolving employment disputes.
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15. Entire Agreement. This Agreement embodies the entire Agreement
of the parties concerning the subject matter hereof. No representations or
warranties have been made to any party other than those expressed in this
Agreement.
16. Severability. The provisions of this Agreement are separate
and distinct, and shall be severable.
17. Modification. No change or modification of this Agreement
shall be valid or binding unless the same is in writing and signed by the
parties hereto.
18. Attorney's Fees. In the event of any judicial proceeding or
arbitration between the parties, the prevailing party shall be entitled to
reasonable attorney's fees and costs.
19. Waiver of Breach. The failure of HII at any time to require
performance by Employee of any provision of this Agreement shall in no way
affect HII's right thereafter to enforce the same, nor shall the waiver by HII
of any breach of any provision of this Agreement be taken or held to be a waiver
of any succeeding breach of any provision, or as a waiver of the provision
itself.
20. Choice of law. This Agreement shall be construed under the
laws of the State of Georgia.
IN WITNESS WHEREOF, HII and Employee have duly executed this Agreement
on the date and year first written above.
HALIFAX INTERNATIONAL, INC. EMPLOYEE:
By:/s/ Xxxxxxx X. Xxxxxxxxx /s/ Xxxxxxx Xxxxxxx
-------------------------------- --------------------------------
XXXXXXX X. XXXXXXXXX XXXXXXX XXXXXXX
By:
--------------------------------
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EXHIBIT "A" - Schedule of Compensation
1. Employee will receive an annual salary before his BONUS in the amount
of one hundred eighty thousand dollars ($180,000.00) to be paid in accordance
with the Company's normal payroll practices.
2. Employee shall receive a bonus to be determined by the Board subject to
criteria and bonus standards set by the Board of up to $60,000.00 per year.
Bonus standards shall be approved by the Board by no later than December 1 of
each year.
3. HII will employee 500,000 shares of its common stock effective July 1,
2001 and 2,000,000 effective October 1, 2001. All shares transferred to employee
shall bear appropriate legends restricting the transferability thereof as
appropriate under applicable Federal and State security laws and shall note any
other restrictions on transfer applicable.
4. HII will grant employee an additional 500,000 shares of restricted
common stock based on the following schedule:
125,000 upon installation of the first 500 terminals
125,000 upon installation of the 1,000th terminal
125,000 upon installation of the 1,500th terminal
125,000 upon installation of the 2,000th terminal
5. HII will pay the premiums on a $1,000,000.00 ten (10) year term life
insurance policy on the life of the Employee, such policy to be owned by
Employee or such trust or person as he may select. HII and Employee recognize
that the payment of the premium will be taxable income to Employee and for that
reason agrees to pay Employee an amount equal to the premium on such insurance
policy annually. HII will have no ownership interest in such policy nor to any
of the proceeds thereof. HII's obligation to pay the insurance premium and
additional amount to Employee described herein shall cease if this Agreement is
terminated for any reason hereunder except Change of Control and herein after
described. If there is a Change of Control, and Employee exercises the option to
terminate this Agreement then and in that event HII shall continue to pay the
amounts described herein for two (2) policy years after termination.
6. HII, through its Board of Directors, will grant Employee the right to
buy 500,000 shares of the Company's common stock at a price of Twenty-Five Cents
($.25) a share, as an Incentive Stock Option pursuant to the Company's Stock
Option Plan, such option to be effective July 1, 2001, with the options to vest
at the rate of 166,666 shares each July 1, starting 2002 until fully vested.
7. Additional compensation and financial arrangements include:
a. Cash incentive bonus
b. Profit Sharing Plan incorporating incentive bonus performance
and criteria to be determined by the HII Board of Directors
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c. Separate investment in Smash Media to be determined
8. If HII has a Change of Control as herein after defined, Employee may,
at his option, treat this Agreement as terminated and, upon such termination as
a result of a change in control, Employee shall be entitled to one year's salary
(based upon his annual salary at the time of termination) as severance and all
non-vested stock grants, if any, shall immediately vest. Employee's termination
as a result of a Change of Control shall not affect Employee's rights accrued
under the Company's Stock Option Plan or any other rights accrued under any
Employee benefit plan adopted by the Company.
A Change of Control shall be deemed to have occurred at such time as:
(1) Any Person or an affiliate of any Person other than
the Company or any subsidiary of the Company is or becomes the
beneficial owner, directly or indirectly, through a purchase,
merger or other transaction or series of transaction, of
shares of capital stock, whether presently issued or which may
be issued in the future, of the Company entitling such Person
to exercising forty percent (40%) of the total voting power of
all shares of the capital stock of the Company entitled to
vote generally in the election of directors; or
(2) Any consolidation of the Company with or merger of
the Company into, any other Person, or any merger of another
Person into the company other than a merger which does not
result in any reclassification, conversion, exchange or
cancellation of outstanding shares of the Company's common
stock or which is effected solely to change the jurisdiction
of incorporation of the Company.
"Person" shall mean any individual, trust, estate, partnership,
corporation, association, company, limited liability company or
unincorporated organization, and/or any combination thereof, other than
the Company or an affiliate thereof.
9. During the term herein, the Employee shall receive all rights and
benefits for which he is eligible under any Employee benefit plan which the
Company generally provides for its Employees or any group of Employees. Such
benefits shall include but not be limited to medical, disability and health
insurance for Employees.
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