EMPLOYMENT AGREEMENT (XXXXXX XXXXXXX)
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 Xxxxx Xxxxxxx, residing in, Delray Beach,
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 Executive Vice- President
and Chief Operating 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 fo the Company. Nothing
in this Section 1.2 shall be deemed to prevent the Employee from:
D. 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;
E. Serving on the board of directors of any other company,
subject to the prohibitions set forth in Section 2.5 hereof,
provided the Borad of Directors of the Company shall have
approved such service in writing, or;
F. 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.
D. Base Salary - For services rendered by the Employee under this
Agreement, the Company shall pay the Employee an initial annual salary
of $175,000.00 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.
E. 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
performanc eof 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 int eh Employee's Base Salary. F. 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 xxx xxx
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 t othe Employee
under this Agremeent 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.
F. "The Employment Term" shall termintate:
1. At the death or 60 days after the Permanent Disability (as
hereinafter defined) of the Employee
2. Immediately at the election of theCompnay, 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.
G. "Permanent Disability", for purposes of this Seciton 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.
H. "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 convictio nfo, 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.
I. "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.
J. "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.
1.7.2 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;
B. 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:
D. 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 fo 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.
E. 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 ro 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.
F. 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:
D. 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 fo 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.
E. 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:
F. 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 to
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 fo 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:
G. 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
H. Divert to any competitor of the Company or its Affiliates any customer of the
Company or its Affiliates, or I. Solicit or encourage any officer, key employee
or consultant fo 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.
J. 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..
K. With respect to any ambiguity of this provision fo the Agreement it shall
be construed with a presumption in favor of the Employee.
L. 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
unjunctive 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 fo the Company, provided that neither this Agreement nor the rights
and obligations fo the Company under th is 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
shallnot 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:
Xxxxx Xxxxxxx
Delray Beach, 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:
C. "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.
D. "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:
/s/Xxxx X. Xxxxxxxxx
Employer Signature Employee Signature /s/
Xxxx X. Xxxxxxxxx Employee Name Xxxxx Xxxxxxx
