Exhibit 10.35
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EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as
of the 1 day of May, 2002, by and between Category 5 Technologies, Inc., a Utah
corporation ("Category 5" or the "Company) and XXXXXXX XXXXXX (hereinafter
referred to as the "Executive).
WITNESSETH:
WHEREAS, the Executive is currently employed by the Company; and
WHEREAS, the Company desires to have the benefit of the Executive's
efforts and services, both for and on behalf of the Company and on behalf of the
Company.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements hereinafter set forth, the parties hereto mutually
covenant and agree as follows:
1. DEFINITIONS. Whenever used in this Agreement, the following terms
shall have the meanings set forth below:
(a) "Accrued Benefits" shall mean the amount payable not later
than ten (10) days following an applicable Termination Date and which shall be
equal to the sum of the following amounts:
(i) All salary earned or accrued through the Termination
Date;
(ii) Reimbursement for any and all monies advanced in
connection with the Executive's employment for reasonable and necessary expenses
incurred by the Executive through the Termination Date;
(iii) Any and all other cash benefits previously earned
through the Termination Date and deferred at the election of the Executive or
pursuant to any deferred compensation plans then in effect
(iv) The full amount of any stated bonus payable to the
Executive in accordance with Section 6 herein with respect to the year in which
termination occurs; and
(v) All other payments and benefits to which the Executive
may be entitled under the terms of any benefit plan of the Company.
(b) "Board" shall mean the Board of Directors of Category 5, Inc.
(c) "Xxxxxx shall mean any of the following:
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(i) The engaging by the Executive in fraudulent conduct, as
evidenced by a determination in a binding and final judgment, order or decree of
a court or administrative agency of competent jurisdiction, in effect after
exhaustion or lapse of all rights of appeal, in an action, suit or proceeding,
whether civil, criminal, administrative or investigative, which the Board
determines, in its sole discretion, has a significant adverse impact on the
Company in the conduct of the Company's business;
(ii) Conviction of a felony, as evidenced by a binding and
final judgment, order or decree of a court of competent jurisdiction, in effect
after exhaustion or lapse of all rights of appeal, which the Board determines,
in its sole discretion, has a significant adverse impact on the Company in the
conduct of the Company's business;
(iii) Neglect or refusal by the Executive to perform the
Executive's duties or responsibilities; or
(iv) A significant violation by the Executive of the
Company's established policies and procedures.
Notwithstanding the foregoing, Cause shall not exist under
subparagraphs (iii) and (iv) above unless the Company furnishes written notice
to the Executive of the specific offending conduct and the Executive fails to
correct such offending conduct within the fifteen (15) day period commencing on
the receipt of such notice.
(d) "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
(e) "Company" shall mean Category 5, Inc.
(f) "Disability" shall mean a physical or mental condition whereby
the Executive is unable to perform on a full-time basis the customary duties of
the Executive under this Agreement.
(g) "Good Reason" shall mean a failure by the Company to comply
with any material provision of this Agreement which has not been cured within
thirty (30) days after written notice of such noncompliance has been given by
the Executive to the Company.
(h) "Notice of Termination" shall mean the notice described in
Section 11 herein.
(i) "Person" shall mean any individual, partnership, joint
venture, association, trust, corporation or other entity, other than an employee
benefit plan of the Company or an entity organized, appointed or established
pursuant to the terms of any such benefit plan
(j) "Termination Date" shall mean:
(i) The Executive's date of death;
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(ii) Thirty (30) days after the delivery of the Notice of
Termination terminating the Executive's employment on account of Disability
pursuant to Section 9 herein, unless the Executive returns on a full-time basis
to the performance of his or her duties prior to the expiration of such period;
(iii) Thirty (30) days after the delivery of the Notice of
Termination if the Executive's employment is terminated by the Executive
voluntarily; and
(iv) Thirty (30) days after the delivery of the Notice of
Termination if the Executive's employment is terminated by the Company for any
reason other than death or Disability.
2. EMPLOYMENT. The Company hereby agrees to employ the Executive and
the Executive hereby agrees to serve the Company, on the terms and conditions
set forth herein
3. TERM. The employment of the Executive by the Company pursuant to the
provisions of this Agreement shall commence on the date hereof and end on
December, 31, 2003, unless further extended or sooner terminated as hereinafter
provided. On December 31, 2003, and on the last day of December each year
thereafter, the term of the Executive's employment shall, unless sooner
terminated as hereinafter provided, be automatically extended for an additional
one year period from the date thereof unless, at least thirty (30) days before
such December 31, the Company shall have delivered to the Executive or the
Executive shall have delivered to the Company written notice that the term of
the Executive's employment hereunder will not be extended beyond its existing
duration (the term of employment and any extensions thereto shall be referred to
as the "Period of Employment").
4. POSITIONS AND DUTIES. The Executive shall serve as Executive Vice
President of the Company and in such additional capacities as may be assigned to
the Executive by the Board. In connection with the foregoing positions, the
Executive shall have such duties, responsibilities and authority as may from
time to time be assigned to the Executive by the Board. The Executive shall
devote substantially all the Executive's working time and efforts to the
business and affairs of the Company.
5. PLACE OF PERFORMANCE. In connection with the Executive's employment
by the Company, the Executive shall be based at the offices of the Company in
Salt Lake City, Utah, except for required travel on Company business.
6. COMPENSATION AND RELATED MATTERS.
(a) Salary. The Company shall pay to the Executive $90,000, as his
annualized base salary (subject to adjustment as provided herein) in equal
installments (as nearly as practicable), in accordance with the Company's
standard payroll policy (as in effect from time to time), which currently
provides for payments to be made every two weeks, in arrears. Such annualized
base salary may be increased from time to time in accordance with normal
business practices of the Company. The annualized base salary of the Executive
shall not be decreased below its then existing amount during the term of this
Agreement.
(b) Bonus. The Executive shall be entitled to receive bonuses,
when and as declared by the Board of Directors.
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(c) Expenses. The Executive shall be ended to receive prompt
reimbursement for all reasonable expenses incurred by the Executive in
performing services hereunder, including all expenses for travel and living
expenses while away from home on business or at the request of and in the
service of the Company, provided that such expenses are incurred and accounted
for in accordance with the policies and procedures established from time to time
by the Company.
(d) Other Benefits. The Company shall provide Executive with all
other benefits normally provided to an employee of the Company similarly
situated to Executive, including being added as a named officer on the Company's
existing directors' and officers' liability insurance policy. At a minimum, the
benefits will include:
(i) Health Insurance (medical, dental vision); and
(ii) 401(k) - 50% employer match on up to 6% of employee
contribution; and
(iii) Paid vacation; and
(iv) Car allowance, $500 plus insurance, gas and
maintenance.
(e) Vacations. The Executive shall be entitled to the number of
vacation days in each calendar year, and to compensation in respect of earned
but unused vacation days, determined in accordance with the Company vacation
plan, but in no event less than fifteen (15) days. The Executive shall also be
entitled to all paid holidays given by the Company to its executives.
(f) Services Furnished. The Company shall furnish the Executive
with office space, and such other facilities and services as shall be suitable
to the Executive's position and adequate for the performance of the Executive's
duties as set forth in Section 4 hereof.
7. OFFICES. The Executive agrees to serve without additional
compensation, if elected or appointed thereto, as a member of the Board of
Directors of any parent or any subsidiary of the Company, provided, however,
that the Executive is indemnified for serving in any and all such capacities on
a basis no less favorable than is currently provided in the Company's bylaws, or
otherwise.
8. TERMINATION AS A RESULT OF DEATH. If the Executive shall die during
the term of this Agreement, the Executive's employment shall terminate on the
Executive's date of death and the Executive's surviving spouse, or the
Executive's estate if the Executive dies without a surviving spouse, shall be
entitled to the Executive's Accrued Benefits as of the Termination Date.
9. TERMINATION FOR DISABILITY. If, as a result of the Executive's
Disability, the Executive shall have been unable to perform the Executive's
duties hereunder on a full-time basis for two (2) consecutive months and within
thirty (30) days after the Company provides the Executive with a Termination
Notice, the Executive shall not heve returned to the performance of the
Executive's duties on a full-time basis, the Company may terminate the
Executive's employment. During the term of the Executive's Disability prior to
termination, the Executive shall continue to receive all salary and benefits
payable under Section 6 herein, including participation in all employee benefit
plans, programs and arrangements in which the Executive was enticed to
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participate immediately prior to the Disability; provided, however, that the
Executive's continued participation is permitted under the terms and provisions
of such plans, programs and arrangements. In the event that the Executive's
participation in any such plan, program or arrangement is barred as the result
of such Disability, the Executive shall be entitled to receive an amount equal
to the contributions, payments, credits or allocations which would have been
paid by the Company to the Executive, to the Executive's account or on the
Executive's behalf under such plans, programs and arrangements. In the event the
Executive's employment is terminated on account of the Executive's Disability in
accordance with this Section 9, the Executive shall receive the Executive's
Accrued Benefits as of the Termination Date and shall remain eligible for all
benefits provided by any long-term disability programs of the Company in effect
at the time of such termination.
10. OTHER TERMINATION.
(a) For Cause. The Company may terminate this Agreement for cause
at any time upon notice to Executive.
(b) Termination by the Executive. The Executive may terminate his
employment hereunder (i) for Good Reason or (ii) if his health should become
impaired to an extent that makes his continued performance of his duties
hereunder hazardous to his physical or mental health or his life, provided that
the Executive shall have furnished the Company with a written statement from a
qualified doctor to such effect and provided further, that, at the Company's
request, the Executive shall submit to an examination by a doctor selected by
the Company and such doctor shall have concurred in the conclusion of the
Executive's doctor.
11. TERMINATION NOTICE. Any termination by the Company or the Executive
of the Executive's employment during the Employment Period shall be communicated
by written Notice of Termination to the Executive, if such Notice of Termination
is delivered by the Company, and to the Company, if such Notice of Termination
is delivered by the Executive. The Notice of Termination shall indicate the
specific termination provision in this Agreement relied upon and shall set forth
the effective date of termination
12. NONDISCLOSURE OF PROPRIETARY INFORMATION. Recognizing that the
Company is presently engaged, and may hereafter continue to be engaged, in the
research and development of processes, the manufacturing of products or
performance of services, which involve experimental and inventive work and that
the success of its business depends upon the protection of the processes,
products and services by patent, copyright or by secrecy and that the Executive
has had, or during the course of his engagement as an employee or consultant may
have, access to Proprietary Information, as hereinafter deemed, of the Company
or other information and data of a secret or proprietary nature of the Company
which the Company wishes to keep confidential and the Executive has furnished,
or during the course of his engagement may furnish, such information to the
Company, the Executive agrees that:
(a) Proprietary Information shall mean any and all methods,
inventions, improvements or discoveries, whether or not patentable or
copyrightable, and any other information of a similar nature related to the
business of the Company disclosed to the Employee or otherwise made known to him
as a consequence of or through his engagement by the Company (including
information originated by the Executive) in any technological area previously
developed by the Company or developed, engaged in, or researched, by the Company
during the term of the Executive's engagement, including, but not limited to,
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trade secrets, processes, products, formulae, apparatus, techniques, know-how,
marketing plans, data, improvements, strategies, forecasts, customer lists, and
technical requirements of customers, unless such information is in the public
domain to such an extent as to be readily available to competitors.
(b) The Executive acknowledges that the Company has exclusive
property rights to all Proprietary Information and the Executive hereby assigns
all rights he might otherwise possess in any Proprietary Information to the
Company. Except as required in the performance of his duties to the Company, the
Executive will not at any time during or after the term of his engagement, which
term shall include any time in which the Executive may be retained by the
Company as a consultant, directly or indirectly use, communicate, disclose or
disseminate any Proprietary Information or any other information of a secret,
proprietary, confidential or generally undisclosed nature relating to the
Company, its products, customers, processes and services, including information
relating to testing, research, development, manufacturing, marketing and
selling.
(c) All documents, records, notebooks, notes, memoranda and
similar repositories of, or containing, Proprietary Information or any other
information of a secret, proprietary, confidential or generally undisclosed
nature relating to the Company or its operations and activities made or compiled
by the Executive at any time or made available to him prior to or during the
term of his engagement by the Company, including any and all copies thereof,
shall be the properly of the Company, shall be held by him in trust solely for
the benefit of the Company, and shall be delivered to the Company by him on the
termination of his engagement or at any other time on the request of the
Company.
(d) The Executive will not assert any rights under any inventions,
copyrights, discoveries, concepts or ideas, or improvements thereof; or know-how
related thereto, as having been made or acquired by him prior to his being
engaged by the Company or during the term of his engagement if based on or
otherwise related to Proprietary Information.
13. ASSIGNMENT OF INVL1iTIONS.
(a) For purposes of this Paragraph 13, the term Inventions shall
mean discoveries, concepts, and ideas, whether patentable or copyrightable or
not, including but not limited to improvements, know-how, data, processes,
methods, formulae, and techniques, as well as improvements thereof or know-how
related thereto, concerning any past, present or prospective activities of the
Company which the executive makes, discovers or conceives (whether or not during
the hours of his engagement or with the use of the Company's facilities,
materials or personnel), either solely or jointly with others during his
engagement by the Company or any affiliate and, if based on or related to
Proprietary Information, at any time after termination of such engagement. All
Inventions shall be the sole property of the Company, and Executive agrees to
perform the provisions of this paragraph 13 with respect thereto without the
payment by the Company of any royalty or any consideration therefor other than
the regular compensation paid to the Executive in the capacity of an employee or
consultant.
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(b) The Executive shall maintain written notebooks in which he
shall set forth, on a current basis, information as to all Inventions,
describing in detail the procedures employed and the results achieved as well as
information as to any studies or research projects undertaken on the Company's
behalf. The written notebooks shall at all times be the property of the Company
and shall be surrendered to the Company upon termination of his engagement or,
upon request of the Company, at any time prior thereto.
(c) The Executive shall apply, at the Company's request and
expense, for United States and foreign letters patent or copyrights either in
the Executive's name or otherwise as the Company shall desire.
(d) The Executive hereby assigns to the Company all of his rights
to such Inventions, and to applications for United States and/or foreign letters
patent or copyrights and to United States and/or foreign letters patent or
copyrights granted upon such Inventions.
(e) The Executive shall acknowledge and deliver promptly to the
Company, without charge to the Company, but at its expense, such written
instruments (including applications and assignments) and do such other acts,
such as giving testimony in support of the Executive's inventorship, as may be
necessary in the opinion of the Company to obtain, magnum, extend, reissue and
enforce United States and/or foreign letters patent and copyrights relating to
the Inventions and to vest the entire right and title thereto in the Company or
its nominee. The Executive acknowledges and agrees that any copyright developed
or conceived of by the Executive during the term of Executive's employment which
is related to the business of the Company shall be a "work for hire" under the
copyright law of the United States and other applicable jurisdictions.
(f) The Executive represents that his performance of all the terms
of this Agreement and as an employee of or consultant to the Company does not
and will not breach any trust prior to his employment by the Company. The
Executive agrees not to enter into any agreement either written or oral in
conflict herewith and represents and agrees that he has not brought and will not
bring with him to the Company or use in the performance of his responsibilities
at the Company any materials or documents of a former employer which are not
generally available to the public, unless he has obtained written authorization
from the former employer for their possession and use, a copy of which has been
provided to the Company.
(g) No provisions of this Paragraph shall be deemed to limit the
restrictions applicable to the Executive under Paragraphs 12, 14 and 15.
14. SHOP RIGHTS. The Company shall also have the royalty-free right to
use in its business, and to make, use and sell products, processes and/or
services derived from any inventions, discoveries, concepts and ideas, whether
or not patentable, including but not limited to processes, methods, formulas and
techniques, as well as improvements thereof or know-how related thereto, which
are not within the scope of Inventions as defined in Paragraph 13 but which are
conceived or made by the Executive during the period he is engaged by the
Company or with the use or assistance of the Companies facilities, materials or
personnel.
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15. NON-COMPETE. The hereby agrees that during the Period of Employment
and the Consulting Period, and for a period of two years from the termination
thereof, the Executive will not:
(a) Within any jurisdiction or marketing area in the United States
in which the Company or any subsidiary thereof is doing business, own, manage,
operate or control any business of the type and character engaged in and
competitive with the Company or any subsidiary thereof. For purposes of this
paragraph, ownership of securities of not in excess of five percent (5%) of any
class of securities of a public company shall not be considered to be
competition with the Company or any subsidiary thereof; or
(b) Within any jurisdiction or marketing area in the United States
in which the Company or any subsidiary thereof is doing business, act as, or
become employed as, an officer, director, employee, consultant or agent of any
business of the type and character engaged in and competitive with the Company
or any of its subsidiaries; or
(c) Solicit any similar business to that of the Compares for, or
sell any products that are in competition with the Company's products to, any
company in the United States, which is, as of the date hereof, a customer or
client of the Company or any of its subsidiaries, or was such a customer or
client thereof within two years prior to the date of this Agreement; or
(d) Solicit the employment of, or hire, any full time employee
employed by the Company or its subsidiaries as of the date of termination of
this Agreement
16 REMEDIES AND JURISDICTION.
(a) The Executive hereby acknowledges and agrees that a breach of
the agreements contained in Sections 12, 13, 14 and 15 of this Agreement will
cause irreparable harm and damage to the Company, that the remedy at law for the
breach or threatened breach of the agreements set forth in Sections 12, 13, 14
and 15 of this Agreement will be inadequate, and that, in addition to all other
remedies available to the Company for such breach or threatened breach
(including, without limitation the right to recover damages), the Company shall
be entitled to injunctive relief for any breach or threatened breach of the
agreements contained in Sections 12, 13, 14 and 15 of this Agreement;
(b) All claims, disputes and other matters in question between the
parties arising under this Agreement shall, unless otherwise provided herein, be
decided by arbitration in Salt Lake City, Utah, in accordance with the Model
Employment Arbitration Procedures of the American Arbitration Association
(including such procedures governing selection of the specific arbitrator or
arbitrators), unless the parties mutually agree otherwise. The losing party
shall pay the costs of any such arbitration. The award by the arbitrator or
arbitrators shall be final, and judgment may be entered upon it in accordance
with applicable law in any state or Federal court having jurisdiction thereof.
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17. INDEMNIFICATION. Company hereby agrees to indemnify Executive
against any action, claim, suit or proceeding involving the Executive in his
capacity as an officer of the Company.
18. ATTORNEYS' FEES. In the event that either party hereunder
institutes any legal proceedings in connection with its rights or obligations
under this Agreement, the prevailing party in such proceeding shall be entitled
to recover from the other party, all costs incurred in connection with such
proceeding, including reasonable attorneys' fees, together with interest thereon
from the date of demand at the rate of twelve percent (12%) per annum.
19. SUCCESSORS. This Agreement and all rights of the Executive shall
inure to the benefit of and be enforceable by the Executive's personal or legal
representatives, estates, executors, administrators, heirs and beneficiaries. In
the event of the Executive's death, all amounts payable to the Executive under
this Agreement shall be paid to the Executive's surviving spouse, or the
Executive's estate if the Executive dies without a surviving spouse. This
Agreement shall inure to the benefit of, be binding upon and be enforceable by,
any successor, surviving or resulting corporation or other entity to which all
or substantially all of the business and assets of the Company shall be
transferred whether by merger, consolidation, transfer or sale.
20. ENFORCEMENT. The provisions of this Agreement shall be regarded as
divisible, and if any of said provisions or any part hereof are declared invalid
or unenforceable by a court of competent jurisdiction, the validity and
enforceability of the remainder of such provisions or parts hereof and the
applicability thereof shall not be affected thereby.
21. AMENDMENT OR TERMINATION. This Agreement may not be amended or
terminated during its term, except by written instrument executed by the Company
and the Executive.
22. SURVIVABILITY. The provisions of paragraphs 12, 13, 14, 15 and 16
shall survive termination of this Agreement.
23. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement
between the Executive and the Company with respect to the subject matter hereof,
and supersedes all prior oral or written agreements, negotiations, commitments
and understandings with respect thereto.
24. VENUE; GOVERNING LAW. This Agreement and the Executive's and
Company's respective rights and obligations hereunder shall be governed by and
construed in accordance with the laws of the State of Utah without giving effect
to the provisions, principles, or policies thereof relating to choice or
conflict laws.
25. NOTICE. Notices given pursuant to this Agreement shall be in
writing and shall be deemed given when received, and if mailed, shall be mailed
by United States registered or certified mail return receipt requested,
addressee only, postage prepaid, if to the Company, to:
Category 5, Inc.
0000 X. Xxxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
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or to such other address as the Company shall have given to the Executive or, if
to the Executive, to such address as the Executive shall have given to the
Company.
26. NO WAIVER. No waiver by either party at any time of any breach by
the other party of, or compliance with, any condition or provision of this
Agreement to be performed by the other party shall be deemed a waiver of similar
or dissimilar provisions or conditions at the same time or any prior or
subsequent time.
27. HEADINGS. The headings herein contained are for reference only and
shall not affect the meaning or interpretation of any provision of this
Agreement.
28. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer, and the Executive has executed this
Agreement, on the date and year first above written.
Category 5, INC.
By:___________________
Its:__________________
EXECUTIVE
___________________
Xxxxxxx Xxxxxx
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