Employment Agreement
Employment Agreement made effective as of the date of signing, by
and between XxxxxxXxxxxxxx.xxx a Nevada corporation, with
principal offices in Colorado Springs, Colorado ("Company"), and
Xxxx X. Xxxxxxxxx, residing in, Boca Raton, Florida ("Employee").
In consideration of the promises and mutual covenants herein set
forth, the Company and the Employee agree as follows:
ARTICLE 1: EMPLOYMENT TERMS
Section 1.1 Employment and Term. The Company hereby employs the
Employee, and the Employee accepts such employment, upon the
terms and conditions hereinafter set forth, for the period
("Employment Term") commencing on and as of the date of this
contract signing hereunder and terminating as provided in Section
1.7 hereof.
Section 1.2 Employment Services. The Employee shall devote his
full working time and effort to promote the business and affairs
of the Company and its Affiliates as necessary in order to enable
them to achieve their business objectives. The Employee's
principal assignment shall be to serve as President and Chief
Executive Officer. In this capacity as an executive of the
company, the Employee shall be responsible for and shall also
perform other duties and assignments, which are consistent with
his responsibilities, which may be reasonably assigned to him
from time to time by the CEO of the Company. Nothing in this
Section 1.2 shall be deemed to prevent the Employee from:
A. Investing his assets in a manner not prohibited by Section
2.5 hereof, and in such form or manner as shall not require any
material services on his part in the operations or affairs of the
companies or other entities in which such investments are made;
B. Serving on the board of directors of any other company,
subject to the prohibitions set forth in Section 2.5 hereof,
provided the Board of Directors of the Company shall have
approved such service in writing, or;
C. Engaging in religious, charitable or other community or non-
profit activities, which do not impair his ability to fulfill his
duties and responsibilities under this Agreement.
Section 1.3. Employment Compensation.
A. Base Salary - For services rendered by the Employee under
this Agreement, the Company shall pay the Employee an initial
annual salary of $200,000.00 per annum, payable in equal semi-
monthly installments (the "Base Salary"). The Base Salary shall
be subject to annual review by the Board of Directors of the
Company on or about each January 1 thereafter for so long as this
Agreement is in effect.
B. Incentive Bonus Compensation - For services rendered by the
Employee under this Agreement, the Company,, by action of the
Board of Directors, shall establish an annual executive incentive
bonus plan in which the Employee shall participate in recognition
of the Employee's contribution to the overall performance of the
Company ("Bonus"). Such Bonus shall be granted within ninety (90)
days following the conclusion of each calendar year commencing
December 31, 1999, after assessment of the Employee's and
Company's performance pursuant to the criteria, terms and
conditions of the bonus plan to be established. The amount of any
Bonus, which the Company may grant to the Employee from time to
time shall be in addition to his Base Salary and shall, under no
circumstances, be included in the Employee's Base Salary.
C. Stock Options - The Employee shall be entitled to
participate The Company's Stock Option Plan ("Option Plan").
Grants under the Option Plan shall be in amounts determined by
the Option Plan administrators or Board of Directors of the
Company. The initial amount of stock, which has been granted to
the Employee under the Company Stock Option Plan, vesting in
equal amounts at the conclusion of each of the subsequent (3)
three years, beginning June 1, 1999, is 2,000,000 shares for
founding the company.
Section 1.4 Benefits. The Employee will participate in any
employee benefit programs provided by the Company and its
Subsidiaries, if any.
Section 1.5 Withholding. The amount of payments to be made by
the Company to the Employee are set forth herein prior to the
deduction of any taxes or other amounts, and all such payments
shall be made by the Company to the Employee under this Agreement
net of any tax or other amounts required to be withheld by the
Company under applicable law.
Section 1.6 Vacation. The Employee shall be entitled to
vacation and holiday plans under the same terms and
considerations, as they are available to all Company employees,
in accordance with Company policy.
Section 1.7 Employment Term; Termination The Employment Term
shall run indefinitely, unless terminated pursuant to the
following provisions of this Section 1.7.
A. "The Employment Term" shall terminate:
1. At the death or 60 days after the Permanent Disability (as
hereinafter defined) of the Employee
2. Immediately at the election of the Company, for Cause (as
hereinafter defined), or
3. At the election of either the Company or the Employee upon
fifteen (15) days' prior written notice to the other.
B. "Permanent Disability", for purposes of this Section 1.7,
shall mean any physical or mental incapacitation which would
materially hinder the Employee from performing the
responsibilities of his assigned duties, as determined by a
medical professional of the company's choosing.
C. "Cause", for purposes of this Section 1.7, shall mean any of
the following, as determined by the management of The Company:
1. Refusal of the Employee to perform his duties hereunder or
other material breach by the Employee of the terms of this
Agreement;
2. Any substantial dishonesty by the Employee in connection
with the performance of his duties hereunder; or
3. Any conviction of, or plea of guilty by, the Employee with
respect to any crime, which conviction or plea is likely in the
reasonable judgment of the management of the Company to adversely
affect the Employee's professional reputation, the reputation of
the Company or of any other member of the Group or the ability of
the Employee to perform his duties satisfactorily hereunder.
4. The Company's right of termination pursuant to this Section
1.7 shall be in addition to, and shall not affect, its rights and
remedies under any other provisions of this Agreement or under
applicable law, and all such rights and remedies shall survive
termination of this Agreement and the employment of the Employee
hereunder. Nothing herein shall be deemed to constitute a waiver
by the Employee of any rights he may have under applicable laws.
5. In the event such termination of employment pursuant to the
terms of this Section 1.7, the Employee shall have no right to
receive any compensation or fees for any period subsequent the
date of such termination; except that:
6. In the event such termination is due to death or Permanent
Disability pursuant to Section 1.7 (b)(I), the Company shall pay
the Employee or his estate, as the case may be, a pro tanto
portion of the Bonus, if any, for the year in which such
termination occurs, a special 90 ninety day bonus severance, and
vesting of the current year's stock options;
7. In the event that such termination is made by the Company
pursuant to Section 1.7 (b)(II or III) hereof, the Company agrees
that during the Severance Period (as such term is defined below)
it will continue to pay the Employee his then current Base
Salary.
D. "Severance Period", for purposes of this Section 1.7, shall
mean the period commencing on the date of such termination and
ending: fifteen (15) calendar days thereafter.
E. "The obligations" of the Employee pursuant to Sections 2.3
and 2.4 of this Agreement shall survive the termination for any
reason of the Employment Term. The obligations of the Employee
pursuant to Section 2.5 hereof shall survive the termination of
this Agreement as provided for in Section 2.5.
1.7.1 Company Change of Control. Notwithstanding any
provisions contained in this Plan or in a Stock Option Agreement
deferring the right of employee to exercise an option, the option
(referred to in 1.3.c above) shall, at the discretion of the
Board, become fully vested and employee shall be entitled to
exercise such option, in whole or in part, during the 30-day
period following the first purchase of Shares of the Company
pursuant to a tender offer or exchange offer (other than an offer
by the Company) for all, or any part of, the Company's Shares or;
A. Commencing on the date of approval by the shareholders of
the Company of an agreement for:
1. A merger or consolidation or similar transaction in which
the Company will not survive as an independent corporation, or
2. A sale, exchange or other disposition of all or more than
75% of all the Company's assets.
ARTICLE 2: GENERAL PROVISIONS
Section 2.1. Expense Account and Allowance. The Company agrees
to reimburse the Employee for all reasonable travel,
entertainment and other documented, itemized business expenses
incurred by him in connection with the performance of his duties
under this Agreement; provided, however, that the amount
available for such travel, entertainment, and other business
expenses shall be consistent with expense reimbursement policies
adopted by the Company as in effect at the time of the incidence
of such expenses by the Employee or as may be fixed in advance by
the Company's Board of Directors.
Section 2.2. Location. The Employee shall perform services
under this agreement at the Employee's private office and at such
other location or locations reasonably specified by the Company.
The Employee shall also make himself available to make reasonable
business trips at the Company's expense, both within and outside
the United States of America, for purposes of consulting with
customers, agents, representatives and suppliers of the Company
and its Affiliates, as well as with other members of the
Company's management.
Section 2.3. Confidential Information Sensitive Company data
and information is the property of the Company, and must be
protected:
A. The Employee hereby agrees to hold and maintain confidential
and private all papers, plans, drawings, specifications, methods,
processes, techniques, shop practices, formulae, customer lists,
personnel and financial data, plans, trade secrets and all
proprietary information belonging to the Company or any Affiliate
thereof of which the Employee may have knowledge or acquire
knowledge whether prior to, during or after the termination of
the Employment Term, and to maintain as confidential and secret
any new processes, formulations, designs, devices, research data,
machines or compositions of matter of the Company or any of its
Affiliates revealed to the Employee or discovered, originated,
made or conceived by the Employee in connection with the
furnishing of employment and consulting services to the Company
or any of its Affiliates.
B. The Employee hereby agrees that he shall not at any time,
either during or subsequent to the Employment Term, disclose or
divulge to any person, other than to the Company's or any of its
Affiliates' officers and other employees as required by the
Employee's duties under this Agreement and to third parties when
required in the ordinary course of business of the company, any
of its Affiliates of which the Employee may have or acquire
knowledge. Notwithstanding anything to the contrary set forth
above, the confidentiality and nondisclosure provisions contained
in this Section 2.4 shall not apply to any information data, if
and when such information or data becomes a matter of public
knowledge through no act or omission of the Employee or to any
information or data which was already known by the Employee or
the other party in question other than as a result of a breach of
this Agreement.
C. Immediately upon the Company's request or promptly upon
termination for any reason or expiration of this Agreement, the
Employee shall deliver to the Company all memoranda, notes,
records, reports, photographs, drawings, plans, papers, or other
documents made or compiled by the Employee in the course of his
services to the Company or any of its Affiliates which are in the
possession of or under the control of the Employee, and any
copies or abstracts thereof, whether or not of a secret or
confidential nature, and all such memoranda or other documents
shall, during and after the termination of the Employment Term,
be deemed to be and shall be the property of the Company.
Section 2.4. Intellectual Property. Intellectual property is
the property of the Company, and must be protected:
A. any and all inventions, improvements, ideas and innovations,
whether or not patentable, which the Employee may invent,
discover, originate, make or conceive during his services to the
Company or any of its Affiliates, whether prior to or during the
Employment Term, either solely or jointly with others, and which
in any way relate to or are or may be used in connection with the
business of the Company or any of its Affiliates shall be, to the
extent of the Employee's interest therein, the sole and exclusive
property of the Company or such Affiliate and the Employee's
interest therein, shall be assigned by the Employee to the
Company or such Affiliate, as the case may be, or to the
Company's or such Affiliate's nominee(s). The Employee, upon the
request and at the expense of the Company, shall and shall use
the best efforts to cause any such other person(s) to promptly
and fully disclose each and all such discoveries, inventions,
improvements, ideas or innovations to the Company, the applicable
Affiliate or any nominee(s) thereof. Further, the Employee, upon
the request and at the expense of the company, shall and shall
use his best efforts to cause any such other person(s) to, assign
to the Company or the applicable Affiliate, without further
compensation therefore, all right, title and interest or
innovations which are reduced to writings, drawings or practice
within two (2) years after the termination of the Employment
Term.
B. The Employee further agrees to execute at any time, upon the
request and at the expense of the Company, for the benefit of the
Company, any of its Affiliates or any nominee(s) thereof, any and
all appropriate applications, instruments, assignments and other
documents, which the Company shall deem necessary or desirable to
protect its (or any of its Affiliates) entire right, title and
interest in and to any of the discoveries, inventions,
improvements, ideas and innovations described in Section 2.5 (a)
hereof:
C. The Employee agrees, upon the request and at the expense of
the company or any person to whom the Company or any of its
Affiliates may have granted or grants rights, to execute any and
all appropriate applications, assignments, instruments and
papers, which the Company shall deem necessary for the
procurement in the United States of America and foreign countries
of patent protection for the discoveries, inventions,
improvements, ideas or innovations to be so assigned, including
the execution of new, provisional, continuing and reissue
applications, to make all rightful oaths, to testify in any
proceeding before any governmental authority authorized to grant
or administer patent protection or before any court, and
generally to do everything lawfully possible to aid the Company,
its Affiliates and its and their successors, assigns and nominees
to obtain, enjoy and enforce proper patent protection for the
discoveries, inventions, improvements, ideas or innovations
conceived or made by him during the course of his services to the
Company or any of its Affiliates for a period of two (2) years
after the termination of the Employment Term.
Section 2.5. Non-competition. The Company and the Employee
acknowledge that Florida Law with respect to contracts entered
into subsequent to July 1, 1996 shall govern the non-competition
provisions of this Agreement. The parties t this Agreement
acknowledge further that this is a development-stage company, and
as such the compensation contacted shall way heavily on the issue
of consideration sufficient for this provision. In the event of
the Employee resigns from the Company, for the period commencing
on the date of resignation and ending one (1) year after the
termination of the Employment Term (the "Restricted Period"), the
Employee shall not:
A. Except as an officer and director of the Company and its
Affiliates, utilize intellectual property or trade secrets,
gained form the Company, which is an asset of the Company, to
engage in business directly competitive to the Company or its
Affiliates, whether directly or indirectly, for his own account
or as an employee, partner, officer, director, consultant or
holder of more than five percent (5%) of the equity interest in
any other person, firm, partnership of corporation
B. Divert to any competitor of the Company or its Affiliates
any customer of the Company or its Affiliates, or
C. Solicit or encourage any officer, key employee or consultant
of the Company or its Affiliates to leave its or their employ for
alternative employment in the Designated Industry, or hire or
offer for employment to any person to whom the Company or any of
its Affiliates has offered employment within the three (3) years
preceding the termination of the Employment Term. The Employee
will continue to be bound by the terms of this Section 2.5 until
their expiration and shall not be entitled to any compensation
with respect thereto.
D. In the event the Company terminates the Employment Term of
the Employee, the Employee shall not utilize intellectual
property or trade secrets, gained form the Company for a period
of two (2) years..
E. With respect to any ambiguity of this provision of the
Agreement it shall be construed with a presumption in favor of
the Employee.
F. Nothing contained within this provision shall be deemed to
limit Employees' ability to earn a living and to support his/her
family.
Section 2.6. Severability. If any provision of this Agreement
shall, in whole or in part, prove to be invalid for any reason,
such invalidity shall affect only the portion of such provision
which shall be invalid, and in all other respects this Agreement
shall stand as if such invalid provision, or other invalid
portion thereof, had not been a part hereof. Without limiting the
generality of the preceding sentence, if any provision of Section
2.6 hereof shall be held to be invalid or unenforceable under any
applicable law, as unreasonably restrictive in duration or
geographical area or otherwise, it is the intention of the
parties hereto that such provision shall be deemed to be
immediately amended to provide for such maximum restriction as
shall be determined t be reasonable and enforceable by the court
or other body having jurisdiction; and the Company and the
Employee expressly agree that such provision, as so amended,
shall be valid and binding.
Section 2.7. Equitable Remedies. Each of the parties hereto
acknowledges and agrees that upon any breach by the Employee of
his obligations under Section 2.3, 2.4 or 2.5 hereof, the Company
will have no adequate remedy at law, and accordingly will be
entitled to specific performance and other appropriate injunctive
and equitable relief.
Section 2.8. Assignment. The rights and obligations of the
Company under this Agreement shall inure to the benefit of and
shall be binding upon the successors and assigns of the Company,
provided that neither this Agreement nor the rights and
obligations of the Company under this Agreement may be assigned
by the Company other than to an Affiliate of the Company. The
Employee may not assign to any other person his rights and/or
obligations under this Agreement.
Section 2.9. Amendment. This Agreement and any term, covenant,
condition or other provision hereof may be changed, waived,
discharged or terminated solely by an instrument in writing
signed by the parties hereto.
Section 2.10. Waiver of Breach. The waiver by the Company of a
breach of any provision of this Agreement by the Employee shall
not operate or be construed as a waiver of any breach by the
Employee.
Section 2.11. Notices. All notices, requests, demands, consents
and other communications in connection with this Agreement shall
be in writing or by written telecommunication and shall be
delivered personally or mailed as follows: by registered or
certified mail or by overnight courier, postage prepaid, or sent
by written telecommunication as follows:
If to the Company:
XxxxxxXxxxxxxx.xxx
Xxxxxxxx Xxxxxxx, XX 00000
If to the Employee:
Xxxx X. Xxxxxxxxx
Boca Raton, Florida
Or, at such other address as the parties hereto may from time to
time designate in writing.
Section 2.12. Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of Florida.
Section 2.13. Arbitration of Disputes. Any controversy or claim
arising out of or relating to this Agreement or the breach
thereof shall be settled by arbitration in accordance with
Florida by two arbitrators, one of whom shall be appointed by the
Company, one of whom shall be appointed by the Employee and if
agreement cannot be reached, by the third arbitrator which shall
be appointed by agreement of the first two arbitrators, such
arbitration shall be conducted in Nevada in accordance with the
rules of the prevailing Arbitration Association, except with
respect to the selection of arbitrators which shall be as
provided in this Section 2.13. Judgment upon the award rendered
by the arbitrators may be entered in any court having
jurisdiction thereof. All fees and expenses of the arbitration
process shall be borne equally by the parties hereto regardless
of the final outcome, unless and to the extent the arbitrators
shall determine that under the circumstances the sharing of all
or a part of any such fees and expenses would be unjust.
Section 2.14. Entire Agreement. This Agreement embodies the
entire agreement between the Company and the Employee relating to
the subject matter hereof, and except as other wise expressly
provided herein, this Agreement shall not be affected by
reference to any other document.
Section 2.15. Headings, Etc. The headings of the sections of
this agreement have been inserted for convenience of reference
only and shall not be deemed to be a part of this Agreement.
Section 2.16. Counterparts. This Agreement may be executed in
several identical counterparts, each of which when executed by
the parties hereto and delivered shall be an original, but all of
which together shall constitute a single instrument. In making
proof of this Agreement, it shall not be necessary to produce or
account for more than one such counterpart.
Section 2.17. Additional Defined Terms:
A. "Affiliate" means any person, corporation or other business
entity that directly or indirectly controls, or is controlled by,
or is under common control with another person, corporation or
business entity.
B. "Subsidiary" means any corporation fifty percent (50%) or
more of the capital stock of which having ordinary voting power
for the election of directors is owned directly or indirectly by
another corporation or business entity.
IN WITNESS WHEREOF, the parties have executed this Agreement as
of this written date: May 22, 1999.
Accepted and Agreed to:
Employee Signature /s/ Xxxx X. Xxxxxxxxx
Employee Name Xxxx X. Xxxxxxxxx Social Security
####-##-####
Company Officer Signature /s/ Xxxxx Xxxxxxx,
Secretary
Company Officer Name Xxxxx Xxxxxxx, Secretary
