EXECUTIVE EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made and entered into as
of this 20th day of July, 1999, by and between ValuSALES, Inc., a Florida
Corporation (the "Company"), and Xxxxxxxx Xxxxxxxxxxx, (the "Employee").
RECITALS
A. The Company desires to employ the Employee from the date set forth
above (the "Effective Date") until expiration of the term of this Agreement, and
Employee is willing to be employed by Company during that period, on the terms
and subject to the conditions set forth in this Agreement. In consideration of
the mutual covenants and promises of the parties, the Company and Employee
covenant and agree as follows:
1. Duties
During the term of this Agreement, Employee will be employed by the
Company to serve as Vice-President of the Company. The Employee will devote such
amount of business time to the conduct of the business of the Company as may be
reasonably required to effectively discharge Employee's duties under this
Agreement and, subject to the supervision and direction of the Company's Board
of Directors (the "Board"), will perform those duties and have such authority
and powers as are customarily associated with the offices of a Vice-President of
a company engaged in a business that is similar to the business of the Company,
including (without limitation) (a) the authority to direct and manage the
day-to-day operations and affairs of the Company, and (b) the authority to hire
and discharge employees of the Company provided, however, that Employee will not
be required to perform services for any affiliate of the Company and will not be
required to accept any other offices with the Company without Employee's
consent. Unless the parties agree otherwise in writing, during the term of this
Agreement, Employee will not be required to perform services under this
Agreement other than at Company's principal place of business which is located
in Broward County, Florida provided, however, that Company may, from time to
time, require Employee to travel temporarily to other locations on the Company's
business.
2. Term of Employment
2.1 Definitions
For purposes of this Agreement the following terms have the following
meanings:
(a) "Termination for Cause" means termination by Company of Employee's
employment (i) by reason of Employee's willful dishonesty towards, fraud upon,
or deliberate injury or attempted injury to, the Company, (ii) by reason of
Employee's material breach of this Agreement or (iii) by reason of Employee's
gross negligence or intentional misconduct with respect to the performance of
Employee's duties under this Agreement; provided, however, that no such
termination will be deemed to be a Termination for Cause unless the Company has
provided Employee with written notice of what it reasonably believes are the
grounds for any Termination for Cause and Employee fails to take appropriate
remedial actions during the 15 day period following receipt of such written
notice.
(b) "Termination Other than For Cause" means termination by the Company
of Employee's employment by the Company for reasons other than those which
constitute Termination for Cause.
1
(c) "Voluntary Termination" means termination by the Employee of the
Employee's employment with the Company, excluding termination by reason of
Employee's death or disability as described in Sections 2.5 and 2.6.
2.2 Basic Term
The term of employment of Employee by the Company will commence on the
Effective Date and will extend through the period ending on December 31, 2000,
(the "Termination Date"). Company and Employee may extend the term of this
Agreement by mutual written agreement.
2.3 Termination for Cause
Termination for Cause may be effected by Company at any time during the
term of this Agreement and may be effected by written notification to Employee;
provided, however, that no Termination for Cause will be effective unless
Employee has been provided with the prior written notice and opportunity for
remedial action described in Section 2.1. Upon Termination for Cause, Employee
is to be immediately paid all accrued salary, incentive compensation to the
extent earned, vested deferred compensation (other than pension plan or profit
sharing plan benefits, which will be paid in accordance with the applicable
plan), and accrued vacation pay, all to the date of termination, but Employee
will not be paid any severance compensation.
2.4 Termination Other Than for Cause
Notwithstanding anything else in this Agreement, Company may effect a
Termination Other Than for Cause at any time upon giving notice to Employee of
such Termination Other Than for Cause. Upon any Termination Other Than for
Cause, Employee will immediately be paid all accrued salary, all incentive
compensation to the extent earned, severance compensation as provided in Section
4, vested deferred compensation (other than pension plan or profit sharing plan
benefits, which will be paid in accordance with the applicable plan), and
accrued vacation pay, all to the date of termination.
2.5 Termination Due to Disability
In the event that, during the term of this Agreement, Employee should,
in the reasonable judgment of the Board, fail to perform Employee's duties under
this Agreement because of illness or physical or mental incapacity
("Disability"), and such Disability continues for a period of more than three
(3) consecutive months, Company will have the right to terminate Employee's
employment under this Agreement by written notification to Employee and payment
to Employee of all accrued salary and incentive compensation to the extent
earned, severance compensation as provided in Section 4, vested deferred
compensation (other than pension plan or profit sharing plan benefits, which
will be paid in accordance with the applicable plan), and all accrued vacation
pay, all to the date of termination. Any determination by the Board with respect
to Employee's Disability must be based on a determination of competent medical
authority or authorities, a copy of which determination must be delivered to the
Employee at the time it is delivered to the Board. In the event the Employee
disagrees with the determination described in the previous sentence, Employee
will have the right to submit to the Board a determination by a competent
medical authority or authorities of Employee's own choosing to the effect that
the aforesaid determination is incorrect and that Employee is capable of
performing Employee's duties under this Agreement. If, upon receipt of such
determination, the Board wishes to continue to seek to terminate this Agreement
under the provisions of this section, the parties will submit the issue of
Employee's Disability to arbitration in accordance with the provisions of this
Agreement.
2
2.6 Death
In the event of Employee's death during the term of this Agreement,
Employee's employment is to be deemed to have terminated as of the last day of
the month during which Employee's death occurred, and Company will pay to
Employee's estate accrued salary, incentive compensation to the extent earned,
vested deferred compensation (other than pension plan or profit sharing plan
benefits, which will be paid in accordance with the applicable plan), and
accrued vacation pay, all to the date of termination.
2.7 Voluntary Termination
In the event of a Voluntary Termination, Company will immediately pay
to Employee all accrued salary, all incentive compensation to the extent earned,
vested deferred compensation (other than pension plan or profit sharing plan
benefits, which will be paid in accordance with the applicable plan), and
accrued vacation pay, all to the date of termination, but Employee will not be
paid any severance compensation.
3. Salary, Benefits and Other Compensation
3.1 Base Salary
As payment for the services to be rendered by Employee as provided in
Section 1 and subject to the terms and conditions of Section 2, Company agrees
to pay to Employee a "Base Salary," payable equal bi-monthly installments. The
Base Salary payable to Employee under this Section will initially be $78,000.00.
Employee will be entitled to regular salary reviews and raises during the term
of this Agreement in the same general manner as other officers of the Company.
3.2 Incentive Bonus Plans
During the term of his employment under this Agreement, the Employee
will be eligible to participate in any and all bonus and incentive plans to be
established by the Board including.
3.3 Benefit Plans
During the term of Employee's employment under this Agreement, the
Employee is to be eligible to participate in all employee benefit plans to the
extent maintained by the Company, including (without limitation) any life,
disability, health, accident and other insurance programs, paid vacations, and
similar plans or programs, subject in each case to the generally applicable
terms and conditions of the plan or program in question and to the
determinations of any committee administering such plan or program. On
termination of the Employee for any reason, the Employee will retain all of
Employee's rights to benefits that have vested under such plan, but the
Employee's rights to participate in those plans will cease on the Employee's
termination unless the termination is a Termination Other Than for Cause, in
which case Employee's rights of participation will continue for a period of one
(1) year following Employee's termination. Notwithstanding anything herein to
the contrary, the Employee's spouse and children shall be afforded participation
in Employer's comprehensive medical and hospitalization benefits.
3.4 Withholding of Taxes
The Employee understands that the services to be rendered by Employee
under this Agreement will cause the Employee to recognize taxable income, which
is considered under the Internal Revenue Code of 1986, as amended, and
applicable regulations thereunder as compensation income subject to the
withholding of income tax (and Social Security or other employment taxes). The
Employee hereby consents to the withholding of such taxes as are required by the
Company.
3
3.5 Vacation
During the term of this Agreement, Employee will be entitled to two (2)
weeks paid vacation time per year.
3.6 Expenses
During the term of this Agreement, Company will reimburse Employee for
Employee's reasonable out-of-pocket expenses incurred in connection with
Company's business, including travel expenses, food, and lodging while away from
home, subject to such policies as Company may from time to time reasonably
establish for its employees.
3.7 Performance Bonus
During the term of this Agreement, Employee shall be shall be entitled
to a monthly performance bonus equivalent to ten percent (10%) of the net
profits of the Employer. "Net Profits" shall be defined as profits available for
distribution following the Employer's payment of any and all operating expenses,
salaries, rents, and taxes.
3.8 Automobile Allowance
Commencing on September 1, 1999 and monthly thereafter, the Employee
shall be entitled to a monthly automobile allowance of US$350.00.
3.9 Stock Bonus
Employer shall tender to Xxxxxxxxxxx 25,000 shares of Stock in Employer
which shares shall be restricted pursuant to Rule 144 of the United States
Security Act of 1933 for each US$50,000.00 of Gross Profit of marketing and
advertising revenue generated and collected by VALUE. Xxxxxxxxxxx shall be
entitled to no greater than 300,000 shares of restricted stock in VALUE
allocable to the stock bonus referenced in this Section 3.9.
4. Severance Compensation
4.1 Termination Other Than for Cause; Payment in Lieu of Notice
In the event Employee's employment is terminated in a Termination Other
Than for Cause, Employee will be paid as severance pay Employee's Base Salary
for the period commencing on the date that Employee's employment is terminated
and ending on the date which is six (6) months thereafter, on the dates
specified in Section 3.1 for payment of Employee's Base Salary.
4.2 Termination for Disability
In the event Employee's employment is terminated because of Employee's
disability pursuant to Section 2.5, Employee will be paid as severance pay
Employee's Base Salary for the period commencing on the date that Employee's
employment is terminated and ending on the date which is one (1) month
thereafter, on the dates specified in Section 3.1 for payment of Employee's Base
Salary.
4
4.3 Other Termination
In the event of a Voluntary Termination, Termination for Cause or
Death, Employee or Employee's estate will not be entitled to any severance pay.
5. Confidentiality and Non-Competition
5.1 Confidentiality
Because of Employee's employment by Company, Employee will have access
to trade secrets and confidential information about Company, its products, its
customers, and its methods of doing business (the "Confidential Information").
During and after the termination of Employee's employment by the Company,
Employee may not directly or indirectly disclose or use any such Confidential
Information for a period of five (5) years; provided, that Employee will not
incur any liability for disclosure of information which (a) is required in the
course of Employee's employment by the Company, (b) was permitted in writing by
the Board or (c) is within the public domain or comes within the public domain
without any breach of this Agreement.
5.2 Non-Competition
In consideration of Employee's access to the Confidential Information,
Employee agrees that for a period of two (2) years after termination of
Employee's employment, Employee will not, directly or indirectly, use such
Confidential Information to compete with the business of the Company, as the
business of the Company may then be constituted, within any state, region or
locality in which the Company is then doing business or marketing its products.
Employee understands and agrees that direct competition means development,
production, promotion, or sale of products or services competitive with those of
Company. Indirect competition means employment by any competitor or third party
providing products competing with Company's products, for whom Employee will
perform the same or similar function as he performs for Company. In addition,
for a period of two (2) years after termination of Employee's employment,
Employee will not induce or attempt to induce any employee of the Company to
discontinue his or her employment with the Company for the purpose of becoming
employed by any competitor of Company, nor will Employee initiate discussions,
negotiations or contacts with persons known by Employee to be a customer or
supplier of the Company at the time of Employee's termination of employment for
the purpose of competing with the Company.
5.3 Reasonableness of Restrictions
Employee hereby acknowledges and agrees that the provisions of Sections
5.1 and 5.2 are wholly in compliance with Florida Law including but not limited
to Florida Statute 534.335. In addition, The Restrictions are reasonable and
necessary for the proper protection of the business and constitutes legitimate
business interests of Employer and will not deprive him of the means or
opportunity for suitably supporting and maintaining himself and his family or
for obtaining employment.
5.4 Remedies
The parties acknowledge and agree that compliance with the agreement is
necessary to protect Employer and that a breach of any of these agreements will
result in irreparable and continuing damage to Employer for which there will be
no adequate remedy at law. The parties hereby agree that in the event of any
such breach of any of said agreements, Employer, its successors and assigns
shall be entitled to injunctive relief and to such other, further relief as is
proper under the circumstances and any remedy provided by law.
5
6. Assignment of Inventions
All processes, inventions, patents, copyrights, trademarks, and other
intangible rights (collectively the "Inventions") that may be conceived or
developed by Employee, either alone or with others, during the term of
Employee's employment, whether or not conceived or developed during Employee's
working hours, and with respect to which the equipment, supplies, facilities, or
trade secret information of Company was used, or that relate at the time of
conception or reduction to practice of the Invention to the business of the
Company or to Company's actual or demonstrably anticipated research and
development, or that result from any work performed by Employee for Company,
will be the sole property of Company, and Employee hereby assigns to the Company
all of Employee's right, title and interest in and to such Inventions. Employee
must disclose to Company all inventions conceived during the term of employment,
whether or not the invention constitutes property of Company under the terms of
the preceding sentence, but such disclosure will be received by Company in
confidence. Employee must execute all documents, including patent applications
and assignments, required by Company to establish Company's rights under this
Section.
7. Miscellaneous
7.1 Waiver
The waiver of any breach of any provision of this Agreement will not
operate or be construed as a waiver of any subsequent breach of the same or
other provision of this Agreement.
7.2 Entire Agreement; Modification
Except as otherwise provided in the Agreement, this Agreement
represents the entire understanding among the parties with respect to the
subject matter of this Agreement, and this Agreement supersedes any and all
prior understandings, agreements, plans, and negotiations, whether written or
oral, with respect to the subject matter hereof, including without limitation,
any understandings, agreements, or obligations respecting any past or future
compensation, bonuses, reimbursements, or other payments to Employee from
Company. All modifications to the Agreement must be in writing and signed by the
party against whom enforcement of such modification is sought.
7.3 Notice
All notices and other communications under this Agreement must be in
writing and must be given by personal delivery, telecopier or telegram, or first
class mail, certified or registered with return receipt requested, and will be
deemed to have been duly given upon receipt if personally delivered, five (5)
days after mailing, if mailed, or 8 hours after transmission, if delivered by
telecopier or telegram, to the respective persons.
7.4 Headings
The Section headings of this Agreement are intended for reference and
may not by themselves determine the construction or interpretation of this
Agreement.
7.5 Governing Law and Venue
This Agreement is to be governed by and construed in accordance with
the laws of the State of Florida applicable to contracts entered into and wholly
to be performed within the State of Florida by Florida residents. Venue of any
action arising out of this Agreement shall be in the Circuit Court in and for
Broward County, Florida.
6
7.6 Survival of Company's Obligations
This Agreement will be binding on, and inure to the benefit of, the
executors, administrators, heirs, successors, and assigns of the parties;
provided, however, that except as expressly provided in this Agreement, this
Agreement may not be assigned either by Company or by Employee.
7.7 Counterparts
This Agreement may be executed in one or more counterparts, all of
which taken together will constitute one and the same Agreement. Facsimile
signatures shall constitute original signatures.
7.8 Withholdings
All sums payable to Employee under this Agreement will be reduced by
all federal, state, local, and other withholdings and similar taxes and payments
required by applicable law.
7.9 Enforcement
If any portion of this Agreement is determined to be invalid or
unenforceable, that portion of this Agreement will be adjusted, rather than
voided, to achieve the intent of the parties under this Agreement.
7.10 Indemnification
The Company agrees that it will indemnify and hold the Employee
harmless to the fullest extent permitted by applicable law from and against any
loss, cost, expense or liability resulting from or by reason of the fact of the
Employee's employment hereunder, whether as an officer, employee, agent,
fiduciary, director or other official of the Company, except to the extent of
any expenses, costs, judgments, fines or settlement amounts which result from
conduct which is determined by a court of competent jurisdiction to be knowingly
fraudulent or deliberately dishonest or to constitute some other type of willful
misconduct.
7.11 Further Assurances
The Parties hereby agree to cooperate, execute and deliver any and all
documents reasonably deemed necessary to effectuate the intent and the terms and
conditions of this Agreement. Each party reciprocally agrees to promptly and
duly execute and deliver to the other such further documents and assurances and
take such further action as may from time to time be reasonably requested in
order to more effectively carry out the intent and purpose of this Agreement and
to establish and protect the rights and remedies created or intended to be
created in favor of the other party hereunder.
7.12 Construction
Each party has reviewed and participated in the formation of this
Agreement and, accordingly, any rule or construction to the effect that
ambiguities be resolved against the drafting party shall not be employed in the
interpretation of this Agreement.
7
7.13 Corporate Authority
This Agreement has been duly authorized by all necessary action on the
part of Employer and neither the execution and delivery hereof nor the
consummation of the transactions contemplated hereby nor compliance by Employer
with any of the terms and provisions hereof will contravene any law applicable
to Employer or result in any breach of the corporate charter or bylaws, or other
agreement or instrument to which Employer is a party. This Agreement has been
duly entered into and delivered by Employer and constitutes the valid, legal,
and binding obligations of Employer, enforceable in accordance with its terms.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
EMPLOYER
VALUSALES, INC.
By:
------------------------------------ ------------------------------
Witness XXXXXXXX XXXXX, President
------------------------------------
Witness
EMPLOYEE
XXXXXXXX XXXXXXXXXXX
By:
------------------------------------ -------------------------------
Witness XXXXXXXX XXXXXXXXXXX
------------------------------------
Witness
