EMPLOYMENT AGREEMENT
AGREEMENT dated September 15, 1999, by and between Enterprises Solutions
Inc., a Florida corporation ("Company"), and Xxxx X. Xxxxxxx ("Employee").
WHEREAS, the Company is engaged in the business of developing and operating
internet and computer security solutions, government and corporate systems
integration and contract selling and development work;
WHEREAS, the Company and the Employee wish to enter into an Employment
Agreement in order to retain Employees ongoing services as the President and
Chief Executive of the Company or in such capacities as the Company's Board from
time to time determines;
WHEREAS, Employee is employed by the company in a confidential relationship
wherein Employee, in the course of his employment with the Company, will become
familiar with and aware of information as to the specific manner of doing
business and the customers of the Company and its affiliates and future plans
with respect thereto, all of which will be established and maintained at great
expense to the Company; this information is a trade secret and constitutes the
valuable goodwill of the Company.
WHEREAS, employee recognizes that the Company's business is dependent upon
a number of trade secrets, including locations, trade contacts, supplies,
techniques, methods and data. The protection of the trade secrets is of critical
importance to the successful operation of the Company.
WHEREAS, the Company will sustain great loss and damage if during the terms
of this Agreement or Employee's employment with the Company, or for a period of
two (2) years immediately following the termination of the Agreement or
Employee's employment, for whatever reason, Employee should violate the
provisions of Articles III or IV of this Agreement. Further, monetary damages
for such losses would be extemely difficult to measure.
NOW, THEREFORE, in consideration of the mutual promises, terms, covenants
and conditions set forth herein and the performance of each, it is hereby agreed
as follows:
ARTICLE I
Employment and Duties
A. The Company hereby employs Employee as its President and Chief Executive
Officer. Additional or different duties, titles or positions, however, may
be assigned to Employee or may be taken from Employee from time to time by
the Board of Directors ("Board") of the Company. Employee hereby accepts
this employment upon the terms and conditions herein contained and agrees
to devote his time, attention and efforts to promote and further the
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business and services of the Company. Employee shall faithfully adhere to,
execute and fulfill all policies established by the Company.
B. Employee shall perform such duties, assume such responsibilities and devote
such time, attention and energy to the business of the Company as the Board
shall from time to time require and shall not, during the term of his
employment hereunder, be engaged in any other business activity pursued for
gain, profit or other pecuniary advantage if such activity interferes with
Employee's duties and responsibilities hereunder. However, the foregoing
limitations shall not be construed as prohibiting Employee from making
personal investments in such form or manner as will neither require his
services in the operation or affairs of the companies or enterprises in
which such investments are made nor violate the terms of Paragraphs 3 or 4
hereof.
C. All funds received by Employee on behalf of the Company, if any, shall be
held in trust for the Company and shall be delivered to the Company as soon
as practicable.
ARTICLE II
Compensation
2.01 Salary. From and after the effective date of this Agreement, the Employee
shall receive a salary ("Salary") from the Company in an amount equal to
$200,000.00 per year.
The Employee's Salary shall be payable pursuant to a monthly schedule
consisting of semi-monthly payments ("Salary"), each such payment being in an
amount equal to 1/72 of $600,000.00 or $8,333.33.
2.02 Expense Reimbursement. The Company shall reimburse Employee for all
reasonable travel, entertainment and other expenses related to his employment by
or promotion of the Company. Employee shall provide a written accounting and
receipt of all expenses for which reimbursement is sought on a monthly basis and
the Company shall reimburse all such expenses within ten (10) days following
receipt of each written accounting.
2.03 Bonuses. The Employee shall be entitled to receive such bonuses as the
Board shall determine from time to time in accordance with Company policy and at
the sole discretion of the Board, but not less than 7% of the Net Before Tax
corporate profits in each year of employment.
2.04 Plan Participation. The Employee shall be entitled to participate in any
and all stock option, stock bonus, pension, profit sharing, retirement or other
similar plans adopted by the Company.
2.05 Other. The Employee shall be entitled to such fringe benefits as the
Company shall establish for its employees generally which shall include with
respect to the Employee at least four weeks paid vacation annually, (family)
medical, life and disability insurance, disability pay and
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such other benefits as the Company shall adopt, subject to the discretion of the
Company to add or delete such standard benefits as the Board deems appropriate,
from time to time.
2.06 Stock Compensation. The Employee shall be entitled to receive in the form
of Common Stock of the Company shares in the amount of 225,000, said shares
which shall be held in escrow by the Company, with 1/3rd being released to the
Employee at the end of each year of employment completion. The right to the
first 1/3rd of Common Stock shall vest upon execution of this contract and shall
be issued to Employee on or before December 31, 1999.
In the event the Employee's employment by the Company is terminated on or before
September 14, 2002 or following a "change in control of the Company", as defined
in section 5.02E below, any stock bonus provided for above shall be deemed to be
earned in full and shall be paid by the Company simultaneously with such change
in control.
ARTICLE III
Non-Competition Agreement
A. Employee will not, during the period of this Agreement or of his employment
by or with the Company, and for a period of two (2) years immediately
following the termination of this Agreement or his employment, whichever is
longer, for any reason whatsoever, directly or indirectly, for himself or
on behalf of or in conjunction with any other person, persons, company,
partnership, corporation or business of whatever nature (i) call upon any
customer of the Company (including, but not limited to, any customer
obtained for the Company by Employee) for the purpose of soliciting or
selling any products or services in competition with those of the Company
or its affiliates; (ii) call upon any employee of the Company or any of its
affiliates for the purpose or with the intent of enticing them away from or
out of the employ of the Company or any reason whatever, (iii) establish,
enter it, be employed by or, advise, consult with or become a part of, any
company, partnership, corporation or other business entity or venture, or
in any way engage in business for himself or for others, in competition
with the Company or its affiliates within one hundred (100) miles of the
home office of the Company and/or any affiliated company location, such
location having a permanent and known facility wherein the Employee has
served in any capacity and wherever Employee has performed duties or had
management responsibility on behalf of the Company or its affiliates; or
(iv) during or after the term of his employment with the Company, disclose
the Company's customers or any other trade secrets of the Company whether
in existence or proposed, to any person, firm partnership, corporation or
business for any reason or purpose whatsoever.
B. Because of the difficulty of measuring economic losses to the Company and
its affiliates as a result of his breach of the foregoing covenant and
because of the immediate and irreparable damage that would be caused to the
Company and its affiliates for which it would have no other adequate
remedy, Employee agrees that the foregoing covenant may be enforced by the
Company and its affililiates in the event of breach by him by injunctions
and restraining orders.
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C. It is agreed by the parties that the foregoing covenants in this
Paragraph 3 are necessary to protect the goodwill and business interests of
the Company and its affiliates and impose a reasonable restraint on
Employee in light of the activities and business of the Company and its
affiliates on the date of the execution of this Agreement and the future
plans of the Company; but it is also the intent of the Company and Employee
that such covenants be construed and enforced in accordance with the
activities and business of the Company and its affiliates on the date of
the termination of the employment of the Employee.
D. The covenants in this Paragraph 3 are severable and separate and the
unenforceability of any specific covenant shall not affect the provisions
of any other covenant. Moreover, in the event any court of competent
jurisdiction shall determine that the scope, time or territorial
restriction set forth are unreasonable, then it is the intention of the
parties that such restrictions be enforced to the fullest extent which the
court deems reasonable and the Agreement shall thereby be reformed.
E. All of the covenants in this Paragraph 3 shall be construed as an agreement
independent of any other provision in this Agreement and the existence of
any claim or cause of action of Employee against the Company or its
affiliates, whether predicated in this Agreement or otherwise, shall not
constitute a defense to the enforcement by the Company of such covenants.
It is specifically agreed that the period of two (2) years stated at the
beginning of this Paragraph 3, during which the agreements and covenants of
Employee made in this Paragraph 3 shall be effective, shall be computed by
excluding from such computation any time during which Employee is in
violation of any provision of this Paragraph 3 and any time during which
there is pending in any court of competent Jurisdiction any action
(including any appeal from any final judgment) brought by any person,
whether or not a party to this Agreement, in which action the Company or
its affiliates seeks to enforce the agreements and covenants of Employee or
in which any person contests the validity of such agreements and covenants
or their unenforceability or seeks to avoid their performance or
enforcement.
ARTICLE IV
Non-Disclosure Agreement and Proprietary Information.
A. The Employee recognizes and acknowledges that the information, techniques,
processes, formulas, developments, experimental work, work in progress,
business, list of the Company's customers and any other trade secret or
other secret or confidential information relating to Company's business as
they may exist from time to time are valuable, special and unique assets of
Company's business. In addition, Employee recognizes that Company is
continually engaged in research and development of new inventions and
improvements to the information, techniques, processes, formulas,
developments, trade secrets, and other secrets and confidential matters
relating to Company's business. Therefore, Employee agrees as follows:
1. That Employee will hold in strictest confidence and not disclose,
reproduce, publish or use in any manner, whether during or subsequent to
his employment, without the express
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authorization of the Board of Directors of the Company, any information,
manufacturing technique, process, business customer lists, trade secrets or
any other secrets or confidential matter relating to any aspect of the
Company's business as designated from time to time by the Board of
Directors of Company, except as such disclosure or use may be required in
connection with Employee's work for the Company.
2. That upon request or at the time of leaving the employ of the Company, the
Employee will deliver to the Company, and not keep or deliver to anyone
else, any and all notes, memoranda, documents and, in general, any and all
material relating to the Company's business.
3. That the Board of Directors of the Company may from time to time designate
other subject matters requiring confidentiality and secrecy which shall be
deemed to be covered by the terms of this Agreement.
B. In the event of a breach or threatened breach by the Employee of the
provisions of this Paragraph 4, the Company shall be entitled to an
injunction:
1. Restraining the Employee from disclosing, in whole or in part, any
information as described above or from rendering any services to any
person, firm, corporation association or other entity to whom such
information, in whole or in part, has been disclosed or is threatened to be
disclosed; and/or
2. Requiring that Employee deliver to Company all information, documents,
notes, memoranda and any and all discoveries or other material as described
above upon Employee's leave of the employ of the Company. Nothing herein
shall be construed as prohibiting the Company from pursuing other remedies
available to the Company for such breach or threatened breach, including
the recovery of damages from the Employer.
ARTICLE V
Term: Terminations
5.01 Term. The term of this agreement shall begin on September 15, 1999 and
continue until September 14, 2002, unless further extended or sooner terminated
as herein provided. On September 14, 2002, and on the 14th day of September each
year thereafter, the term of the Employee's employment shall be automatically
extended one (1) additional year unless, on or before sixty (60) days in advance
of such 14th day of September 2002, the Company shall have delivered to the
Employee or the Employee shall have delivered to the Company written notice that
the term of the Employee's employment hereunder will not be extended.
5.02 Termination. This Agreement and Employee's employment may be terminated in
any one of the following ways:
A. The death of Employee.
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B. The Company may terminate the Agreement after thirty (30) days written
notice ("Notice of Termination") to Employee if, because of illness or
physical or mental disability or other incapacity which continues for
a period in excess of three (3) months, Employee is unable to perform
his duties under this agreement.
C. Employee shall not be discharged during the Employment Period except
for justifiable cause. For purposes of this Agreement, justifiable
cause is limited to the following: willful, material dishonesty,
including theft, misappropriation or material intentional falsehood;
invidious discrimination or significant harassment, battery or assault
of an officer, employee, customer, client or vendor of the Company,
whether associated with race, color, religion, national origin, age,
sex, non-job related disability or any other factor or status
protected by law; willful or wanton breach of fiduciary duties;
material and persistent refusal to carry out lawfully assigned duties;
intentional or grossly reckless defamation conviction of a felony or
other illegal public action that materially damages the Company's
reputation. The termination of the Employee for reasons other than
those specified in the preceding paragraph shall be deemed to be
without justifiable cause. No action or inaction by the Employee shall
be deemed to have occurred under this Agreement unless written notice
of such action or inaction shall have been given to the Employee by
the Company and the Employee shall have failed to cure or remedy such
defect to the Company's reasonable satisfaction within sixty (60) days
after the Employee receives written notice of the offending action or
inaction. Any termination of the Employee without justifiable cause
shall entitle the Employee to a minimum severance package of two (2)
years current salary payable over six (6) monthly installments, or the
balance of $600,000 less any payments made to Employee pursuant to
this agreement, whichever is less. Employee will also be entitled to
immediate issuance of shares in the Company equal to 225,000 less
shares already issued Employee.
D. Thirty (30) days notice by Employee of his intent to resign his
position.
E. For purposes of this Agreement a "change in control of the Company"
shall mean a change in control that would be required to be reported
in response to Item I(a) of Form 8-K under the Securities Exchange Act
of 0000 (xxx "Xxxxxxxx Xxx"); provided that, without limitation, such
a change in control shall be deemed to have occurred if (i) any
"person" (as that term is used in Sections 13(d) and 14(d) of the
Exchange Act), other than the Company, as constituted, is or becomes
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company
representing 25% or more of the combined voting power of the Company's
then outstanding securities, (ii) during any period of three
consecutive years during the term of this Agreement, individuals who
at the beginning of such period constitute the Board cease for any
reason to constitute at least a majority thereof, unless the election
of each director who was not a director at the beginning of such
period has been approved in advance by directors representing at least
two-thirds of the directors then in office who were directors at the
beginning of the period.
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F. In the event the Company terminates, or attempts to terminate, the
employment of the Employee other than as provided above, or the
Company otherwise is in breach of the terms of this Agreement, the
Company agrees to pay or reimburse the Employee for, all legal fees,
costs and other damages, including back-pay and benefits if
applicable, incurred as a result of such breach or wrongful
termination.
5.03 Compensation Upon Termination or During Disability
A. During any period that the Employee fails to perform his duties
hereunder as a result of incapacity due to physical or mental illness
("disability period"), the Employee shall continue to receive his full
salary at the rate then in effect for such period until his employment
is terminated pursuant to section 5.02B hereof.
B. If the Employee's employment shall be terminated pursuant to Section
5.02B, the Company shall pay the Employee his full salary through the
date of termination, at the rate in effect at the time Notice of
Termination is given, plus all outstanding expenses payable pursuant
to section 2.02 hereof and the Company shall have no further
obligations to the Employee under this Agreement.
C. If the Employee shall terminate his employment und Section 5.02D
hereof, the Company shall pay the Employee his full salary through the
date of termination at the rate in effect at the date of termination,
plus all outstanding expenses payable pursuant to section 2.02 hereof.
D. If the Company shall terminate the Employee's employment in breach
hereof or within one year of a "change in control of the Company", for
any reason other than death or disability under section 5.02A or B,
then:
1. The Company shall pay the Employee for any termination without
justified cause a minimum severance package of (2) years
current salary payable over six (6) months installments, or
the balance of $600,000 less any payments made to Employee
pursuant to this agreement, whichever is less. Employee will
also be entitled to immediate issuance of shares in the
Company equal to 225,000 less shares already issued Employee.
2. The Company shall maintain in full force and effect, for the
continued benefit of the Employee for three (3) months from
the date of termination, any employee benefit plans and
programs in which the Employee was entitled to participate
immediately prior to the date of termination provided that the
Employee's continued participation is possible under the
general terms and provisions of such plans and programs. All
such benefit plans and programs shall be maintained at the
level and value provided immediately prior to the date of
termination. In the event that the Employee's participation in
any such
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plan or program is barred, the Company shall arrange to
provide the Employee with benefits substantially similar to
those which the Employee would otherwise have been entitled to
receive under such plans and programs from which his continued
participation is barred.
Employer shall be permitted to take key man life insurance out
on employee, with the company as beneficiary in the amount up
to $1,000,000.
Except as required above, the Company shall not be required to
maintain in force for the benefit of the Employee any employee
benefit plans or programs following the date of termination.
E. The Employee shall not be required to mitigate the amount of any
payment provided for in this Section by seeking other employment or
otherwise.
ARTICLE VI
Representations of Employee
Employee has represented and hereby represents and warrants to the Company
that he is not subject to any restriction or non-competition covenant in favor
of a former employer or any other persons or entity and that the execution of
this Agreement by Employee and his employment by the Company or its affiliates
and the performance of his duties hereunder will not violate or be a breach of
any agreement with a former employer or any other person or entity. Further,
Employee agrees to indemnify the Company and its affiliates for any claim,
including, but not limited to, attorney's fees and expenses of investigation, by
any such third party that such third party may now have or may hereafter come to
have against the Company or its affiliates based upon or arising out of any
non-competition agreement or invention and secrecy agreement between Employee
and such third party.
ARTICLE VII
Miscellaneous
7.01 Complete Agreement. This Agreement is not a promise of future employment.
There are no oral representations, understandings or agreements with the Company
or any of its officers, directors or representatives covering the same subject
matter as this Agreement. This written Agreement is the final, complete and
exclusive statement and expression of the agreement between the Company and
Employee and of all the terms of this Agreement and it cannot be varied,
contradicted or supplemented by evidence of any prior or contemporaneous oral or
written agreements. This written agreement may not be later modified except by a
further writing signed by the Company and Employee, and no term of this
Agreement may be waived except by writing signed by the party waiving the
benefit of such terms.
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7.02 No Waiver. No waiver by the parties hereto of any default or breach of any
terms, condition or covenant of this Agreement shall be deemed to be a waiver of
any subsequent default or breach of the same or any other term, condition or
covenant contained herein.
7.03 Non Delegation of Duties. Employee understands that he has been selected
for employment by the Company on the basis of his personal qualifications,
experience and skills. Employee agrees, therefore, that he cannot delegate any
part of his duties under this Agreement.
7.04 Notice. Whenever any notice is required hereunder, it shall be given in
writing addressed as follows:
To the Company: Enterprises Solutions Inc.
0000 X. Xxxxx Xxxxxxx
Xxxx Xxxxx, XX 00000
To Employee: Xxxx X. Xxxxxxx
00 Xxxxx Xxxx
Xxxxxx, XX 00000
Notice shall be deemed given and effective three (3) days after the deposit in
the Unites States mail of a writing addressed as above and sent first class
mail, certified, return receipt requested, or when actually received. Either
party may change the address for notice by notifying the other party of such
change in accordance with this Section 7.04.
7.05 Severability Headings. If any portion of this Agreement is held invalid or
inoperative, the other portions of this Agreement shall be deemed valid and
operative and, so far as is reasonable and possible, effect shall be given to
the intent manifested by the portion held invalid or inoperative. The paragraph
headings herein are for reference purposes only and are not intended in any way
to describe, interpret, define or limit the extent or intent of this Agreement
or of any part hereof.
7.06 Arbitration. Any controversy or claim arising out of or relating to this
Agreement or the breach thereof shall be settled by arbitration in the City of
Boca Raton, Florida in accordance with the rules then existing of the American
Arbitration Association and judgement upon the award may be entered in any Court
having jurisdiction thereof.
7.07 Governing Law. This Agreement shall in all respects be construed according
to the laws of the State of Florida.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
date herein first set forth.
ENTERPRISES SOLUTIONS INC.
WITNESSED BY:
________________________ /s/ Xxxxx X. Xxxxx
-------------------------
Xxxxx Xxxxx
Dated: _________________ Corporate President
EMPLOYEE:
WITNESSED BY:
________________________ _________________________
Xxxx X. Xxxxxxx
Dated: _________________
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