EXHIBIT 99.2
XACT AID, INC.
Employment Agreement
This Employment Agreement ("Agreement") is made and entered into this 14th
day of September,2004 by and between Xact Aid Inc., a Nevada corporation (the
"Company"), and Xxxxxxxx X. Cabo ("Executive").
RECITALS
WHEREAS, Executive has the experience to provide services to the Company
of an extraordinary character which gives such services a unique value; and
WHEREAS, the Company desires to retain the services of Executive, and
Executive desires to be employed by the Company for the term of this Agreement.
NOW AND THEREFORE, the Company and Executive, intending to be legally
bound, hereby agree as follows:
1. Employment. The Company hereby employs Executive as the CHIEF EXECUTIVE
OFFICER of the Company. For the term of Executive's employment, and upon the
other conditions set forth in this Agreement, Executive accepts such employment
and agrees to perform services for the Company, subject always to such
resolutions as are established from time to time by the Board of Directors of
the Company.
2. Term. The term of Executive's employment hereunder shall commence on
the execution date of this Agreement and continue through September 13, 2007
subject to the termination provisions contained herein. The Agreement may be
terminated by the Company only for cause as set forth below, and shall not
constitute "at will" employment.
3. Position and Duties.
3.1. Services with the Company. During the term of this Agreement,
Executive agrees to perform such duties and exercise such powers related thereto
as may from time to time be assigned to him by the Company's Board of Directors
(the "Board"). Executive shall duly and diligently perform all duties assigned
to him while in the employ of the Company. He shall be bound by and faithfully
observe and abide by all rules and regulations of the Company which are brought
to his notice or of which he should be reasonably aware. Executive hereby
accepts such employment, agrees to serve the Company in the capacities
indicated, and agrees to use Executive's best efforts in, and shall devote
sufficient working time, attention, skill and energies to, the advancement of
the interests of the Company and the performance of Executive's duties and
responsibilities hereunder.
3.2. No Conflicting Duties. Executive shall devote sufficient
productive time, ability, and attention to the business of the Company during
the term of this Agreement in a manner that will serve the best interests of the
Company. This Agreement shall not be interpreted to prohibit Executive from
making passive personal investments or conduct other business affairs if those
activities do not materially interfere with the services required under this
Agreement.
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4. Compensation.
4.1 Annual Salary. As compensation for all services to be rendered
by Executive under this Agreement, the Company shall pay to Executive an annual
salary of Sixty Thousand Dollars ($60,000.00) (the "Annual Salary"). Executive's
Annual Salary shall be paid on a regular basis in accordance with the Company's
normal payroll procedures and policies. On or before the yearly anniversary date
of this Agreement, the Board of Directors shall determine the increase to the
Annual Salary, but in no event shall it be less than ten (10%) . The adjusted
Annual Salary shall become effective on September 14th of each year.
4.2 Gross Revenue Bonus. The Company shall pay Executive a Bonus
("Gross Revenue Bonus"). The Gross Revenue Bonus shall equal One percent (1%) of
the Company's gross income, calculated using Generally Accepted Accounting
Principles. The Bonus shall be payable and based on the following formula. For
each period that the Company attains a gross revenue of $2,500,000, in the
aggregate, Executive shall be entitled to a payment of One percent (1%) of said
gross revenue or $25,000 thirty days thereafter. The .Bonus shall not exceed the
sum of $250,000 without being extended by the Board of Directors of the Company.
4.3 Incentive Stock Options. The Company shall issue incentive stock
options to Executive pursuant to the Company's qualified Incentive Stock Option
Plan. At the discretion of, and in an amount to be determined by, the Board of
Directors, no later than seventy five (75) days following the end of each of the
Company's fiscal years, Executive will receive incentive stock options at an
exercise price equal to the fair market value at the end of each fiscal year.
However, if the Executive owns at least 10% of the Company's common stock, then
the purchase price that will be paid to the Company when the option is exercised
and the stock purchase must equal 110% of the fair market value of the common
stock as of the date of grant. The Incentive Stock Options shall vest
immediately and shall terminate ten years from the date of grant. Executive may
exercise the incentive stock options, at his sole and absolute discretion, by
providing the Company with written notice accompanied by (1) cash or a cashier's
check an amount equal to the product of the incentive stock option exercise
price and the number of shares Executive desires to purchase pursuant to this
provision; or (2) by a cashless exercise whereby Executive receives the net
amount of shares after deducting the value of the exercise price.
4.4 Stock and Option Registration Rights. In the event the Company
with or without the assistance of an investment banking firm, conducts a
registered offering of the Company's shares, the Company shall provide Executive
with registration rights to all shares, warrants and/or options which Executive
then holds or otherwise directly or constructively owns.
4.5 Expenses. The Company shall reimburse Executive for all
reasonable business or travel expenses and office related expenses incurred by
Executive in the performance of his duties; including but not limited to:
airfare, automobile rental, lodging, meals, telephone, copy costs, and supplies.
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4.6 Annual Vacation. Executive shall be entitled to Ten (10)
business days' vacation time for the fist year, Fifteen (15) business days for
the second year and Twenty (20) business days for the third year without loss of
compensation. In the event that Executive is unable for any reason to take the
total amount of vacation time authorized herein during any year, any unused
vacation time shall carry over from year to year. Any earned but unused vacation
time will be paid to Executive based upon his annual rate of all compensation
paid in the previous twelve months upon termination or expiration of this
Agreement.
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4.7 Sick Leave. Executive shall be entitled to seven (7) days sick
leave each year without loss of compensation. In the event that Executive does
not take the total amount of sick leave authorized herein during any year, any
unused sick leave shall carry over from year to year. Any entitled but unused
sick leave will be paid to Executive based upon his annual rate of all
compensation paid in the previous twelve months upon termination or expiration
of this Agreement.
4.8 Health Insurance. The Company, at its sole cost and expense,
shall provide Executive and his immediate family members with comprehensive PPO
or HMO health insurance including but not limited to medical, dental, vision and
disability coverage.
4.9 Payment Upon Sale or Merger of Company. In the event the Company
shall merge, sell a controlling interest, or sell a majority of its assets, the
Company shall provide for Executive to vested any but unexercised options to
purchases shares in the Company which are held by Executive at the earlier of
(1) the Company's execution of a Letter of Intent to (a) merge, (b) sell a
controlling interest, or (c) sell a majority of its assets, or (2) the date of
any such merger or sale is consummated, the Company shall pay Executive cash in
the amount equal to the difference between the consideration paid to the Company
on a per share basis less the exercise price of the option, the value of which
is multiplied by the number of options which Executive holds.
4.10 Automobile Allowance. The Company shall provide Executive a
monthly automobile allowance in the amount of $700.00 (the "Automobile
Allowance"). In the event this Agreement is terminated prior to its expiration
for any reason, all payments of the Automobile Allowance shall cease immediately
and Executive shall be responsible for any and all payments remaining on any
lease, loan or rental agreement in connection with said Automobile Allowance.
Payment of the aforesaid allowance shall be subject to any applicable
withholdings tax. The Executive shall be responsible for all income taxes
imposed on the Executive by reason of the automobile allowance.
5. Termination and Termination Benefits. Notwithstanding the provisions of
Section 2, Executive's employment under this Agreement shall terminate under the
following circumstances set forth in this Section 5.
5.1 Termination by the Company for Cause. Executive's employment
under this Agreement may be terminated for Cause without further liability on
the part of the Company other than for accrued but unpaid Annual Salary through
the date of termination effective immediately upon written notice to Executive.
No termination for Cause may be invoked by the Company without first providing
Executive with at least thirty (30) days written notice to correct any breach,
default or causation. Such written notice shall set forth with reasonable
specificity the Company's basis for such notice of termination and Executive
shall have thirty (30) days to correct the condition set forth in the notice.
"Cause" shall mean the following:
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(i) Commission of a criminal act involving fraud, embezzlement
or breach of trust or other act which would prohibit Executive
from holding his position under the rules of the Securities
and Exchange Commission.
(ii) Willful, knowing and malicious violation of written
corporate policy or rules of the Company.
(iii) Willful, knowing and malicious misuse, misappropriation,
or disclosure of any of the Proprietary Matters.
(iv) Misappropriation, concealment, or conversion of any money
or property of the Company.
(v) Being under the habitual influence of intoxicating liquors
or controlled substances while in the course of employment.
(vi) Reckless and wanton conduct which endangers the safety of
other persons or property during the course of employment or
while on premises leased or owned by the Company.
(vii) The performance of duties in a habitually unsatisfactory
manner after being repeatedly advised in writing by the
Company of such unsatisfactory performance.
(viii) Continued incapacity on the part of Executive to
perform his duties, unless waived by the Company.
5.2 Termination Without Cause.
5.2.1 Disability. Executive's employment shall terminate
upon Executive becoming totally or permanently disabled for a period of six (6)
months or more. For purposes of this Agreement, the term "totally or permanently
disabled" or "total or permanent disability" means Executive's inability on
account of sickness or accident, whether or not job related, to engage in
regularly or to perform adequately his assigned duties under this Agreement as
determined reasonably and in good faith by the Company. Prior to terminating the
Agreement pursuant to this provision, the Company shall engage and consult one
or more physicians as may be reasonable. In the event of termination pursuant to
this paragraph, Executive shall be entitled to receive any accrued and unpaid
base salary and any and all accrued, earned but unpaid bonuses or benefits
described in Section 4 to which Executive is entitled on the date of such
termination. All other rights Executive has under any benefit or stock option
plans and programs shall be determined in accordance with the terms of such
plans and programs.
5.2.2 Death. Executive's employment shall terminate
immediately upon the death of Executive. Upon such termination, the obligations
of Executive and Company under this Agreement shall immediately cease. If
Executive's employment is terminated pursuant to this paragraph, Company shall
pay Executive's beneficiary or beneficiary designated by Executive in writing to
the Company, or in the absence of such beneficiary, Executive's estate, shall be
entitled to receive (i) any accrued but unpaid base salary and any and all
accrued, earned but unpaid bonuses or benefits described in Section 4 to which
Executive is entitled on the date of such termination, and (ii) Executive's then
current base salary through ninety (90) days after the date of death in
accordance with Company's payroll procedures as if Executive's employment by
Company had continued for such period. All other rights Executive has under any
benefit or stock option plans and programs shall be determined in accordance
with the terms and conditions of such plans and programs.
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5.2.3 Election By Executive. Executive's employment may
be terminated at any time by Executive upon not less than ninety (90) days
written notice by Executive to the Board of Directors. Upon such termination,
the obligations of the Executive and Company under this Agreement shall
immediately cease. In the event of termination pursuant to this paragraph,
Executive shall be entitled to receive any accrued and unpaid base salary and
any and all accrued, earned but unpaid bonuses or benefits described in Section
4 to which Executive is entitled on the date of such termination. All other
rights Executive has under any benefit or stock option plans and programs shall
be determined in accordance with the terms of such plans and programs.
5.2.4 Election By Company. Executive's employment may be
terminated at any time by the Company upon not less than ninety (90) days
written notice by the Company to Executive. Upon such termination, the
obligations of the Executive and Company under this Agreement shall immediately
cease. In the event of termination pursuant to this paragraph, Executive shall
be entitled to receive (i) any accrued and unpaid base salary and (ii) any and
all accrued, earned but unpaid bonuses or benefits described in Section 4 to
which Executive is entitled on the date of such termination. Additionally, in
the event of termination of Executive's employment with the Company pursuant to
this Section 5.2.4, the Company shall pay to Executive (i) In the event of
Executive's termination within the first year of the Term, Two Hundred percent
(200%) of Executive's Annual Salary for the remainder of the Term, payable on
the date of termination; (ii) In the event of Executive's termination within the
second year of the Term, One Hundred Fifty percent (150%) of Executive's annual
salary for the remainder of the Term, payable on the date of termination; and
(iii) In the event of Executive's termination within the third year of the Term,
One Hundred Twenty Five percent (125%) of Executive's annual salary for the
remainder of the Term, payable on the date of termination.. All other rights
Executive has under any benefit or stock option plans and programs shall be
determined in accordance with the terms of such plans and programs.
5.3 Surrender of Records and Property. Upon termination of his
employment with the Company, Executive shall deliver promptly to the Company all
records, electronic media, manuals, books, blank forms, documents, letters,
memoranda, notes, notebooks, reports, data, tables, and calculations or copies
thereof, which are the property of the Company and which relate in any way to
the business, products, practices or techniques of the Company, and all other
property (keys, office equipment, computers, mobile phones, credit cards, etc.)
of the Company and Proprietary Matter, including but not limited to, all
documents which in whole or in part contain any trade secrets or confidential
information of the Company, which in any of these cases are in his possession or
under his control.
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5.4 Full Satisfaction of Claims. The parties hereto agree that the
benefits upon termination described in this Section 5 are to be in full
satisfaction, compromise and release of any claims arising out of any
termination of the Executive's employment pursuant to Section 6(c), and such
amounts shall be contingent upon the Executive's delivery of a general release
of such claims upon termination of employment in a form reasonably satisfactory
to the Company, it being understood that none of the benefits shall be provided
unless and until the Executive determines to execute and deliver such release.
5.5 Survival of Terms. Notwithstanding termination of this Agreement
as provided in this Section 5 or any other termination of Executive's employment
with the Company, Executive's obligations under Sections 6, 8, 9 and 10 hereof
shall survive any termination of Executive's employment with the Company at any
time and for any reason.
6. Proprietary Matter. Except as permitted or directed by the Company,
Executive shall not during the term of his employment or at any time thereafter
divulge, furnish, disclose, or make accessible (other than in the ordinary
course of the business of the Company) to anyone for use in any way any
confidential, secret, or proprietary knowledge or information of the Company
("Proprietary Matter") which Executive has acquired or become acquainted with or
will acquire or become acquainted with, whether developed by himself or by
others, including, but not limited to, any trade secrets, confidential or secret
designs, processes, formulae, software or computer programs, plans, devices or
material (whether or not patented or patentable, copyrighted or copyrightable)
directly or indirectly useful in any aspect of the business of the Company, any
confidential customer, distributor or supplier lists of the Company, any
confidential or secret development or research work of the Company, or any other
confidential, secret or non-public aspects of the business of the Company.
Executive acknowledges that the Proprietary Matter constitutes a unique and
valuable asset of the Company acquired at great time and expense by the Company,
and that any disclosure or other use of the Proprietary Matter other than for
the sole benefit of the Company would be wrongful and would cause irreparable
harm to the Company. Both during and after the term of this Agreement, Executive
will refrain from any acts or omissions that would reduce the value of
Proprietary Matter to the Company. The foregoing obligations of confidentiality,
however, shall not apply to any knowledge or information which is now published
or which subsequently becomes generally publicly known, other than as a direct
or indirect result of the breach of this Agreement by Executive nor shall it
apply to any knowledge or information Executive had prior to the execution of
this Agreement.
7. Ventures. If, during the term of this Agreement, Executive is engaged
in or associated with the planning or implementing of any project, program, or
venture involving the Company and a third party or parties, all rights in the
project, program, or venture shall belong to the Company and shall constitute a
corporate opportunity belonging exclusively to the Company. Except as expressly
approved in writing by the Company, Executive shall not be entitled to any
interest in such project, program, or venture or to any commission, finder's fee
or other compensation in connection therewith, other than the compensation to be
paid to Executive as provided in this Agreement.
8. Non-Solicitation of Employees. During Executive's employment by the
Company hereunder and for the one (1) year period following the termination of
such employment for any reason, Executive shall not, either directly or
indirectly, on his own behalf or in the service or on behalf of others solicit,
divert or hire away, or attempt to solicit, divert or hire away any person then
employed full time by the Company.
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9. Non-Competition. Executive agrees that he shall not, during the term of
this Agreement, and for a period of one (1) year thereafter:
(i) directly or indirectly own, engage in, manage, operate,
join, control, or participate in the ownership, management,
operation, or control of, or be connected as a stockholder,
partner, member, joint venturer, director, officer, employee,
consultant, agent, beneficiary, or otherwise with, any
corporation, limited liability company, partnership, sole
proprietorship, association, business, trust, or other
organization, entity or individual which develops,
manufactures or markets products or performs services which
are competitive with or similar to the products or services of
the Company or its subsidiaries; provided, that Executive may
own, directly or indirectly, securities of any entity traded
on any national securities exchange or listed on the National
Association of Securities Dealers Automated Quotation System
if Executive does not, directly or indirectly, own 1% or more
of any class of equity securities, or securities convertible
into or exercisable or exchangeable for 1% or more of any
class of equity securities, of such entity;
(ii) call upon, solicit, direct, take away, provide products
or services to, or attempt to call upon, solicit, direct, take
away or provide products or services to, or accept any orders
of business from any customers or clients of the Company for
products or services which are competitive with or similar to
the products or services of the Company or its subsidiaries.
(iii) directly or indirectly request or advise any present or
future supplier, service provider or financial resource of the
Company to withdraw, curtail or cancel the furnishing of such
service or resource to the Company.
10. Confidentiality.
10.1 Confidentiality. In the course of performing services hereunder
on behalf of the Company and its affiliates, Executive has had and from time to
time will have access to Confidential Information. Executive agrees (i) to hold
the Confidential Information in strict confidence, (ii) not to disclose the
Confidential Information to any person (other than in the regular business of
the Company or its affiliates), and (iii) not to use, directly or indirectly,
any of the Confidential Information for any purpose other than on behalf of the
Company and its affiliates. All documents, records, data, apparatus, equipment
and other physical property, whether or not pertaining to Confidential
Information, that are furnished to Executive by the Company or are produced by
Executive in connection with Executive's employment will be and remain the sole
property of the Company. Upon the termination of Executive's employment with the
Company for any reason and as and when otherwise requested by the Company, all
Confidential Information (including, without limitation, all data, memoranda,
customer lists, notes, programs and other papers and items, and reproductions
thereof relating to the foregoing matters) in Executive's possession or control,
shall be immediately returned to the Company.
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10.2 Confidential Information. As used in this Agreement, the term
"Confidential Information" shall mean information belonging to the Company of
value to the Company or with respect to which Company has right in the course of
conducting its business and the disclosure of which could result in a
competitive or other disadvantage to the Company. Confidential Information
includes information, whether or not patentable or copyrightable, in written,
oral, electronic or other tangible or intangible forms, stored in any medium,
including, by way of example and without limitation, trade secrets, ideas,
concepts, designs, configurations, specifications, drawings, blueprints,
diagrams, models, prototypes, samples, flow charts processes, techniques,
formulas, software, improvements, inventions, domain names, data, know-how,
discoveries, copyrightable materials, marketing plans and strategies, sales and
financial reports and forecasts, customer lists, studies, reports, records,
books, contracts, instruments, surveys, computer disks, diskettes, tapes,
computer programs and business plans, prospects and opportunities (such as
possible acquisitions or dispositions of businesses or facilities) which have
been discussed or considered by the management of the Company. Confidential
Information includes information developed by Executive in the course of
Executive's employment by the Company, as well as other information to which
Executive may have access in connection with Executive's employment.
Confidential Information also includes the confidential information of others
with which the Company has a business relationship. Notwithstanding the
foregoing, Confidential Information does not include information in the public
domain, unless due to breach of Executive's duties under Section 10.1.
11. Assignment. This Agreement shall not be assignable, in whole or in
part, by either party without the written consent of the other party, except
that the Company may, without the consent of Executive, assign its rights and
obligations under this Agreement to any corporation, firm or other business
entity (i) with or into which the Company may merge or consolidate, or (ii) to
which the Company may sell or transfer all or substantially all of its assets or
of which fifty percent (50%) or more of the equity investment and of the voting
control is owned, directly or indirectly, by, or is under common ownership with,
the Company. Upon such assignment by the Company, the Company shall obtain the
assignees' written agreement enforceable by Executive to assume and perform, and
after the date of such assignment, the terms, conditions, and provisions imposed
by this Agreement upon the Company. After any such assignment by the Company and
such written agreement by the assignee, the Company shall be discharged from all
further liability hereunder and such assignee shall thereafter be deemed to be
the Company for the purposes of all provisions of this Agreement including this
section.
12. Indemnification. The Company shall indemnify Executive as provided in the
Delaware General Corporations Code, Company's Charter or Bylaws in effect at the
commencement of this Agreement. The scope of indemnification to which Executive
is entitled shall not be diminished, but may be expanded by the Company, by
amendment of the Company's Bylaws, Articles of Incorporation or otherwise.
Executive shall indemnify and hold the Company harmless from all liability for
loss, damages or injury resulting from the negligence or misconduct of
Executive.
13. Liability Insurance. The Company shall provide, at its sole cost and
expense, under which Executive shall be covered, Directors and Officers
Liability Insurance and Errors and Omissions Liability Insurance in coverage
amounts not less than $10 million, respectively.
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14. Miscellaneous.
14.1 Preparation of Agreement. This Agreement was prepared by the
Company solely on behalf of such party. Each party acknowledges that: (i) he or
it had the advice of, or sufficient opportunity to obtain the advice of, legal
counsel separate and independent of legal counsel for any other party hereto;
(ii) the terms of the transactions contemplated by this Agreement are fair and
reasonable to such party; and (iii) such party has voluntarily entered into the
transactions contemplated by this Agreement without duress or coercion. Each
party further acknowledges that such party was not represented by the legal
counsel of any other party hereto in connection with the transactions
contemplated by this Agreement, nor was he or it under any belief or
understanding that such legal counsel was representing his or its interests.
Except as expressly set forth in this Agreement, each party shall pay all legal
and other costs and expenses incurred or to be incurred by such party in
negotiating and preparing this Agreement; in performing due diligence or
retaining professional advisors; in performing any transactions contemplated by
this Agreement; or in complying with such party's covenants, agreements and
conditions contained herein. Each party agrees that no conflict, omission or
ambiguity in this Agreement, or the interpretation thereof, shall be presumed,
implied or otherwise construed against any other party to this Agreement on the
basis that such party was responsible for drafting this Agreement.
14.2 Cooperation. Each party agrees, without further consideration,
to cooperate and diligently perform any further acts, deeds and things, and to
execute and deliver any documents that may be reasonably necessary or otherwise
reasonably required to consummate, evidence, confirm and/or carry out the intent
and provisions of this Agreement, all without undue delay or expense.
14.3 Governing Law. This Agreement is made under and shall be
government by and construed in accordance with the laws of the State of
California.
14.4 Entire Agreement. This Agreement contains the entire agreement
of the parties relating to the subject matter hereof and supersedes all prior
agreements and understandings with respect to such subject matter, and the
parties hereto have made no agreements, representations or warranties relating
to the subject matter of this Agreement which are not set forth herein.
14.5 Legal Proceedings. Should any party institute or should the
parties otherwise become a party to any action or proceeding to enforce or
interpret this Agreement, the prevailing party in any such action or proceeding
shall be entitled to receive from the non-prevailing party all costs and
expenses of prosecuting or defending the action or proceeding. This Agreement
and the rights of each party under this Agreement shall be governed by,
interpreted under, and construed and enforced in accordance with the laws of the
State of California.
14.6 Withholding Taxes. The Company shall undertake to make
deductions, withholdings and tax reports with respect to payments and benefits
under this Agreement to the extent that it reasonably and in good faith believes
that it is required to make such deductions, withholdings and tax reports.
Payments under this Agreement shall be in amounts net of any such deductions or
withholdings. Nothing in this Agreement shall be construed to require the
Company to make any payments to compensate the Executive for any adverse tax
effect associated with any payments or benefits or for any deduction or
withholding from any payment or benefit.
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14.7 Amendments. No amendment or modification of this Agreement
shall be deemed effective unless made in writing signed by the parties hereto.
14.8 No Wavier. No term or condition of this Agreement shall be
deemed to have been waived nor shall there be any estoppel to enforce any
provisions of this Agreement, except by a statement in writing signed by the
party against whom enforcement of the waiver or estoppel is sought. Any written
waiver shall not be deemed a continuing waiver unless specifically stated, shall
operate only as to the specific term or condition waived and shall not
constitute a waiver of such term or condition for the future or as to any act
other than that specifically waived.
14.9 Severability. To the extent any provision of this Agreement
shall be invalid or unenforceable, it shall be considered deleted here from and
the remainder of such provision and of this Agreement shall be unaffected and
shall continue in full force and effect.
14.10 Notices. Any and all notices, requests or other communications
required or permitted in or by any provision of this Agreement shall be in
writing and may be delivered personally or by certified mail directed to the
addressee at such person's or entity's last known post office address, and if
given by certified mail, shall be deemed to have been delivered when deposited
in such, mail postage prepaid.
This Agreement is executed on the date first written above at Westlake,
California.
Company: Executive:
Xact Aid Inc.
By: _________________________ ___________________________
Title Xxxx Xx Xxxx, Secretary Xxxxxxxx X. Cabo
_____________________________
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EXHIBIT A
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