EXHIBIT 10.2
EMPLOYMENT AGREEMENT
Employment Agreement, dated as of November 15, 2004, between Colorado Xxxxx
("Executive") an individual residing at 000 Xxxxx Xxx Xxxxxx Xxx Xxxx, XX 00000
and Enigma Software Group, Inc., a Delaware Corporation (the "Company") with an
office at 00 Xxxxx Xxxxxx Xxx Xxxx, Xxx Xxxx.
WHEREAS, the Executive is currently employed by the Company as its Chairman of
the Board of Directors and an executive of the Company;
WHEREAS, the Company would like the Executive to continue as an employee of the
Company in his current position;
WHEREAS. the Executive and Company desire to set forth in writing the terms of
Executive's continued employment with the Company
NOW, THEREFORE, for good and valuable consideration, the receipt of which is
hereby acknowledged, the parties agree as follows;
1. EMPLOYMENT
The Company agrees to continue the employment of Executive and Executive agrees
to continue as an employee of the Company upon the terms and conditions set
forth in this Agreement.
2. POSITION
The Company agrees that Executive shall continue to serve as Chairman of the
Board of Directors (the "`Board"), and an executive of the Company and shall
have the title Executive Chairman and Secretary.
3. DUTIES
Executive agrees to continue to perform the duties and responsibilities
currently being performed by Executive, together with such other duties and
responsibilities which are consistent with those typically delegated to the
Chairman of the Company's Board or to a senior executive of the Company that the
Board may from time to time assign to him. Executive shall devote substantially
all of his business time, attention and energies to the business of the Company
and to the performance of his responsibilities and duties. Executive shall carry
out such responsibilities and duties in good faith and to the best of his
ability.
4. TERM
The term of Executive employment (the "Term") shall be for three years
commencing January 1, 2004 and terminating December 31, 2006; provided, that at
the end of each calendar year such Term shall be automatically extended for an
additional one year term unless either party to this Agreement shall have
notified the other in writing within 30 days prior to the end of the current
calendar year of such party's determination not to renew this Agreement.
5. COMPENSATION
a. Salary
Company shall pay Executive, in accordance with its normal payroll practices, an
annual salary of no less than $150,000 per year commencing January 1, 2004. The
Board may increase such salary from time to time after December 31, 2004 to take
into account such factors as the Board, in its sole discretion, shall consider
including the annual percentage change in the Consumer Price Index prepared by
the Bureau of Labor Statistics ("CPI") and salary levels of top executives at
comparable public or private companies.
b. Annual Performance Bonus
Commencing January 1, 2005 Executive shall be entitled to receive an annual
bonus based on the Company's financial performance. The Board, in its sole
discretion, shall determine the terms of such bonus including;
i. Financial performance criteria that must be achieved for a bonus
to be earned,
ii. Formula for calculating such annual bonus, and
iii. Payment of any bonus earned in cash and/or stock.
c. Additional Incentive Awards
The Board, in its sole discretion, may establish one or more long-term incentive
programs for Executive consisting of (but not limited to):
i. Equity awards such as shares of Company stock or
stock options to purchase shares of Company stock;
and
ii. Awards payable in cash or shares of Company stock
that are based on Company financial performance over
a period of at least 2 Years.
The terms of any award granted to Executive under this Paragraph 5(c) shall be
in accordance with the provisions specified in a separate written agreement
evidencing such award and executed by Executive and the Company.
d. Transaction Bonus
Executive shall receive a special bonus of $500,000.00 payable in cash or stock
at the discretion of the Board in the event that the Company becomes a public
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owned Company on or after January 1, 2004 through an initial public offering of
stock under the Securities Act of 1933, as amended, or the acquisition or merger
by the Company with a company whose stock is publicly traded on an established
United States securities market (provided that the Company is the surviving
entity with respect to such acquisition or merger).
6. BENEFITS
During the Term of this Agreement, Executive shall be entitled to participate in
any employee benefit plan or program established by the Company for its senior
executives or other employees including, but not limited to, medical,
prescription, dental, disability, life, accidental death or other insurance
plans and any deferred compensation or retirement plan or program.
7. PERQUISITES
The Company shall provide the Executive with each of the following benefits set
forth below.
a. Company shall reimburse Executive for ordinary, necessary and
reasonable business expenses that Executive incurs in
connection with the performance of his duties under this
Agreement including, but not limited to, travel, office, and
entertainment expenses.
b. Executive shall be entitled to five weeks paid vacation per
year. Vacation time shall accrue at a rate of 1 day for each
14.6 calendar days that elapse. Within 30 days of the end of
each calendar year, the Company shall pay Executive in cash an
additional amount equal to the number of days vacation accrued
and unused over such year multiplied by the base salary in
effect for Executive.
c. The Company shall provide Executive with a vehicle of a model
and type selected by Executive, and Company shall pay all
expenses related to the care and maintenance of such vehicle.
d. The Company shall reimburse Executive for all legal,
accounting and other costs directly or indirectly related to
the preparation and filing of Executive's federal and state
income tax returns, including any fees incurred with respect
to any court, administrative or other proceeding instituted by
Executive or any government or administrative body with
respect to such tax returns.
8. TERMINATION OF EMPLOYMENT
Upon the Executive's termination of employment with the Company for any reason,
the Executive shall receive any accrued and unpaid salary and benefits and any
additional compensation payable to Executive under this Agreement, any other
agreement between Executive and Company, and any other Company compensation and
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benefit program or plan including but not limited to: any bonus plan, stock
plan, health and welfare plan, retirement or deferred compensation plan, Change
of Control benefit plan or severance plan.
9. NON-COMPETE; NON-DISCLOSURE; NON-SOLICITATION
a. Duty not to Compete
During the Term of this Agreement and for 12 months thereafter, Executive will
not, anywhere, directly or indirectly, own, manage, operate, control, be
employed by, participate in, provide services to, or be connected in any manner
with the ownership, management, operation or control of any entity that is
principally engaged in a business that is directly competitive with that of the
Company within the continental United States, except that Executive may own, for
investment purposes only, the capital stock or indebtedness of any company whose
capital stock is publicly traded.
b. Duty of Confidentiality
During the term of this Agreement and for 12 months thereafter, Executive shall
hold in a fiduciary capacity for the benefit of the Company and its affiliates
all secret or confidential information, knowledge or data relating directly to
the business of the Company or its affiliates, and their respective businesses,
including but not limited to trade secrets, (i) obtained by Executive during
Executive's employment by the Company and (ii) not otherwise in the public
knowledge. Executive shall not, without prior written consent of the Company,
except to the extent compelled pursuant to the order of a court or other body
having jurisdiction over such matter or based upon the advice of counsel
communicate or divulge any such information, knowledge or data to anyone other
than the Company and those designated by the Company; provided, however, that
Executive will assist the Company, at the Company's expense, in obtaining a
protective order, other appropriate remedy or other reliable assurance that
confidential treatment will be accorded such information disclosed pursuant to
the terms of this Agreement.
c. Solicitation of Employees
Executive agrees that while he is employed by the Company, and for a period of
12 months following the termination of such employment for any reason, he will
not employ, engage as a consultant, or form an association with any person who
is then or who, during the preceding 6 months, was an employee of the Company,
nor will he assist any other person in the solicitation of any person who is
then or who, during the preceding 6 months was an employee of the Company.
d. Solicitation of Customers
Executive agrees that while he is employed by the Company and for a period of 12
months following the termination of such employment for any reason, he will not
disturb, attempt to disturb or assist another in disturbing or attempting to
disturb any business relationship or agreement between the Company or any other
person or entity.
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[missing text]
e. [should be g once missing text is found] This Agreement will
be interpreted and the rights of the parties determined in
accordance with the laws of the United States applicable
thereto and the internal laws of the State of New York
applicable to an agreement executed, delivered and performed
therein without giving effect to the choice-of-law rules
thereof or any other principle that could require the
application of the substantive law of any other jurisdiction.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
Enigma Software Group, Inc.
/s/ Xxxxx Xxxxxxx
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By: Xxxxx Xxxxxxx
President and Chief Executive Officer
/s/ Colorado Xxxxx
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Colorado Xxxxx
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