EXHIBIT 10.4
EMPLOYMENT AGREEMENT
Employment Agreement, dated as of December 30th, 2004, between Xxxxxxx X.
Xxxxxxxx ("Executive") an individual residing at 0000 Xxxxxxxx Xxxxxx, Xxx. 0X,
Xxxxxxx Xxxxxx, Xxx Xxxx 00000 and Enigma Software Group, Inc., a Delaware
Corporation (the "Company") with an office at 00 Xxxxx Xxxxxx Xxx Xxxx, Xxx
Xxxx.
WHEREAS, the Company would like the Executive to begin full time as an employee
of the Company in the Position of Chief Financial Officer;
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 start the employment of Executive and Executive agrees to
start as an employee of the Company upon the terms and conditions set forth in
this Agreement.
2. POSITION
The Company agrees that Executive shall serve as Chief Financial Officer.
3. DUTIES
Executive agrees to perform the duties and responsibilities which are consistent
with those typically delegated to the Chief Financial Officer of a publicly
traded company or to a senior executive. 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's employment (the "Term") shall be for three years
commencing January 3, 2005 and terminating December 31, 2007; 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 $110,000 per year commencing January 1, 2005. The
Board may increase such salary from time to time after December 31, 2005 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 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 and shall be
consistent with the terms of the long-term incentive programs established for
other senior executives of the Company.
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 four weeks paid vacation per year. 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.
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c. 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
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,
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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.
e. Enforcement
Executive represents to the Company that the enforcement of the restrictions
contained in this section would not be unduly burdensome to Executive. Executive
agrees that the remedy at law for any breach by Executive of the provisions of
this section may be inadequate and that the Company shall be entitled to
injunctive relief. This section constitutes an independent and separable
covenant that shall be enforceable notwithstanding any right or remedy that the
Company may have under any other provision of this Agreement or otherwise.
10. MISCELLANEOUS
a. This Agreement constitutes the entire agreement between the parties with
respect to the subject matter hereof and supersedes all, previous written,
and all prior or contemporaneous oral, negotiations, understandings,
arrangements, and agreements. Any amendment to this Agreement must be in
writing and signed by the parties to this Agreement, or their successors in
interest.
b. The headings in this Agreement are for reference only and are not part of
the substance of this Agreement.
c. All notices under this Agreement shall be delivered in writing to the
Company at 00 Xxxxx Xxxxxx Xxx Xxxx, Xxx Xxxx 00000 and to Executive at the
address listed in the first paragraph of this agreement by Certified Mail,
Return Receipt Requested, or such other method mutually agreeable to the
Company and Executive.
d. This Agreement and all of the provisions hereof shall inure to the benefit
of and be binding upon the legal representatives, heirs, distributees,
successors (whether by merger, operation of law or otherwise) and assigns
of the parties hereto; provided, however, that Executive may not delegate
any of Executive's duties hereunder, and may not assign any of Executive's
rights hereunder, without the prior written consent of the Company.
e. This Agreement may be executed in any number of counterparts by the parties
hereto, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument
f. If any section, paragraph, term or provision of this Agreement shall be
held or determined to be unenforceable, the balance of this Agreement shall
nevertheless continue in full force and effect unaffected by such holding
or determination. In any such event, the Executive and Company hereby agree
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that any such section, paragraph, term or provision that is held or
determined to be unenforceable as written, shall nonetheless be in force
and binding to the fullest extent permitted by law.
g. 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/ Xxxxxxx Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx
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