THE
MARKED PORTIONS OF THIS EMPLOYMENT AGREEMENT HAVE BEEN OMITTED
AND FILED
SEPARATELY
WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this
“
Agreement ”),
dated as of the 17th day of August, 2007 (“
Effective Date ”),
by and between Advanced Communication Technologies, Inc., a Florida
corporation (“
ACT ”
or the “
Company ”)
and John E. Donahue, an individual whose current address is 527 W.
110 Street, #65, New York, NY 10025 (“
Executive ”).
WITNESSETH
WHEREAS, the
Company desires to employ Executive, and Executive desires to
accept employment by the Company, on the terms and conditions set
forth herein.
NOW, THEREFORE ,
in consideration of the mutual covenants and promises herein
contained, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, and intending to
be legally bound hereby, the parties hereto agree as
follows:
1.
Employment .
(a)
ACT
hereby employs Executive, and Executive hereby accepts
employment with ACT, as Chief Financial Officer, or such other
executive position with similar responsibilities and duties of
a Chief Financial Officer of a company as may be determined by
the Board of Directors of ACT (the “
Board ”)
from time to time during the Employment Period (as defined
below).
(b)
In
addition to his duties set forth in this Section 1 and in
Section 3 below, Executive shall at the request of the ACT CEO
(as defined below) or the Board serve as an officer or
director of a subsidiary of ACT, without additional
compensation and subject to any policy of the Compensation
Committee of the Board (the “
Compensation Committee ”)
with respect to directors’ fees.
2.
Term .
The initial term of employment of Executive hereunder shall
commence on the Effective Date and shall continue until the second
anniversary of the Effective Date (the “
Initial Term ”),
unless earlier terminated pursuant to §6, and shall be
automatically renewed for additional one (1) year terms
(collectively with the Initial Term, the “
Employment Period ”)
thereafter unless terminated by either party by written notice to
the other given at least thirty (30) days prior to the expiration
of the then current term. If, prior to the second anniversary of
the Initial Term, a Specified Event (as defined in Section 4.1(b)
below) has occurred, the Initial Term shall automatically be
extended by one (1) year to the third anniversary of the Effective
Date.
3.
Employment and Duties .
3.1.
Duties and Responsibilities .
(a)
Executive
shall perform all duties and functions customary for
executives holding similar offices with similarly situated
companies. In addition, Executive shall perform such duties
and accept such responsibilities reasonably related to and
consistent with his positions as may be directed or assigned
by the Board. The Executive shall report solely to the Board
and its committees.
(b)
During
the Employment Period, Executive shall (a) serve ACT
faithfully and to the best of his ability; (b) use his best
efforts to carry out his duties and responsibilities; (c)
devote such working time, attention and energy to his services
for the Company and the business of the Company as shall be
reasonably required; and (d) use his best efforts, skills and
ability to promote the Company’s interests and to
perform such duties as from time to time may be reasonably
assigned to him and are consistent with his titles and
positions with the Company.
(c)
During
the Employment Period, in addition to any other duties or
responsibilities assigned to Executive, Executive shall be
required to sign, and shall sign, all certifications and such
other documents or instruments required of the Chief Financial
Officer of a public company or otherwise by (i) the Securities
and Exchange Commission, (ii) any exchange or association on
which the Company’s shares of capital stock are listed,
(iii) any federal, state or local authority, (iv) any other
governmental, quasi-governmental or nongovernmental entity or
organization (foreign or domestic) that regulates or has
authority over the Company, and/or (v) the Company in
connection with any of the foregoing.
3.2.
Observance of Rules and Regulations .
Executive agrees to observe and comply with all applicable laws and
regulations, as well as rules and regulations of the Company with
respect to the performance of his duties, which do not conflict
with the provisions of this Agreement.
4.
Compensation; Expenses; Relationship
.
4.1.
Base Salary .
(a)
As
compensation for the services to be rendered hereunder by
Executive, the Company shall pay to Executive an annual Base
Salary (the “
Base Salary ”)
of $237,500 during each year of the Employment Period. The Base
Salary shall be payable in equal monthly installments in accordance
with the Company’s standard payroll practices.
(b)
The
annual Base Salary shall be increased to $250,000 for the
portion of the Employment Term thereafter (which increase
shall be made on a ratable basis for the remainder of the then
current calendar year) if (i) the Company or one of its wholly
owned subsidiaries completes the acquisition of all of the
assets or stock of [REDACTED] prior to the second anniversary
of the date of this Agreement or (ii) EBITDA of the Company
for any twelve (12) consecutive calendar month period ending
prior to the second anniversary of the date of this Agreement
exceeds $[REDACTED] (each a “
Specified Event ”).
The determination of EBITDA for any twelve (12) complete calendar
month period shall be made by the Compensation Committee based on
the Company’s financial statements for the applicable period.
In the event that the Company or any of its subsidiaries acquires
all or substantially all of the stock, equity or assets of another
company, companies, business, or businesses, EBITDA of the Company
for any twelve (12) complete calendar month period ending on the
date of such acquisition or for any complete 12 month period ending
thereafter shall be determined by the Compensation Committee in
good faith on a pro forma basis based on the financial statements
of the Company and the acquired entity or business for the
applicable period.
4.2.
Bonus Compensation .
(a)
Subject
to Section 4.2(c), Executive shall receive from the Company in
each fiscal year during which this Agreement is in effect,
beginning with the fiscal year ending June 30, 2008, an annual
“Performance Bonus” if earned in accordance with
the bonus plan set forth on
Schedule 1 hereto.
The amount of the Performance Bonus earned for the fiscal year
ending June 30, 2008 shall be reduced by the amount of the
“Special Bonus”, if any, earned for the five month
period ending December 31, 2007. The Performance Bonus, if earned
for any fiscal year of the Employer, shall be paid in cash on the
earlier of 30 days after the completion of the audit with respect
to such fiscal year or November 15 of the following fiscal
year.
(b)
Executive
shall receive a one time “Exit Bonus” in
accordance with the Exit Bonus Plan set forth on
Schedule 2 hereto.
Any Exit Bonus payable to Executive by the Company shall be paid in
cash not later than thirty (30) days after a Disposition Event (as
defined on
Schedule 2, paragraph (a) .
(c)
Executive
shall receive a one time “Special Bonus” if earned
in accordance with the bonus plan set forth on
Schedule 1 hereto.
The Special Bonus, if earned, shall be paid in cash on or about
March 15, 2008.
(d)
Bonus
compensation earned under this Section 4.2 will be paid to
Executive no later than the time period specified in Treas.
Reg. § 1.409A-1(4) to qualify as a short-term
deferral.
4.3.
Life Insurance .
(a)
During
the Employment Period, the Company shall provide term life
insurance on the life of Executive with a death benefit equal
to $2,000,000. The Company shall pay all premiums with respect
to such life insurance. Executive shall designate the
beneficiary of such life insurance.
(b)
In
addition to Section 4.3(a) above, the Company may, at its
option, maintain “
key man ”
life insurance on the life of Executive. Executive will cooperate
with and assist the Company in the procurement of any such policy.
The Company shall pay all premiums for, and shall at all times be
the beneficiary of, such “
key man ”
life insurance.
4.4.
Other Benefits .
Executive shall be eligible to participate in any health insurance
programs (but not life insurance programs) that the Company makes
available to all of its executives, and the Company shall pay the
premiums for such benefits.
4.5.
Business Expenses .
Executive will be reimbursed, in a reasonable amount of time, in
accordance with the Company’s expense reimbursement policy,
for business expenses upon presentation of vouchers or other
documents reasonably necessary to verify the expenditures and
sufficient, in form and substance, to satisfy Internal Revenue
Service requirements for such expenses.
4.6.
Automobile Allowance .
Company shall pay to Executive an automobile allowance in the
amount of Seven Hundred Fifty Dollars ($750.00) per month, payable
at the time and in the manner dictated by the Company’s
regular payroll policies and procedures, but not less frequently
than monthly. Executive shall provide his own automobile and pay
all operating expenses of any nature whatsoever with regard to such
automobile.
4.7.
Vacation .
Executive shall be entitled to take up to four (4) weeks of paid
vacation per calendar year, which shall be taken in accordance with
the Company’s vacation policy in effect from time to time for
executives of comparable seniority. Executive shall also be
entitled to take a reasonable number of personal and sick leave
days, taking into account his responsibilities, the Company’s
policies and the practices of similarly situated
companies.
4.8.
Stock Option Agreement .
The parties incorporate herein as part of this Employment Agreement
the Stock Option Agreement between the Company and the Executive
that is being executed contemporaneously with this Employment
Agreement.
5.
No Competitive Activities; Confidentiality;
Invention
5.1.
General Restriction .
During the Employment Period, and for the Restricted Period (as
defined below), Executive covenants and agrees that, except on
behalf of the Company, he will not, directly or
indirectly:
(a)
Competing Business .
During the Restricted Period, own, manage, operate, control,
participate in the ownership, management, operation or control of,
be employed by, or provide services as a consultant to, any
individual or business that is involved in business activities that
are the same as, similar to or in competition with, directly or
indirectly, with any business activities conducted, or actively
planned, by the Company and/or its subsidiaries during the
Employment Period (it being acknowledged that the Company’s
and its subsidiaries’ businesses are national in scope). The
ownership of less than five percent (5%) of the outstanding stock
of any public corporation shall not be deemed a violation of this
provision.
(b)
Soliciting Customers .
During the Restricted Period, attempt in any manner to contact or
solicit any individual, firm, corporation or other entity (i) that
is or has been, a customer of the Company or any of its
subsidiaries at any time during the Employment Period, (ii) to
which a proposal has been made by the Company or any of its
subsidiaries during the Employment Period or (iii) appearing on the
Company’s new business target list, as such list has been
prepared and maintained in accordance with the Company’s past
practice, in any of the above cases for the purpose of providing
services or products similar to the services and products provided
by the Company or any of its subsidiaries, or engaging in any
activity which could be, directly or indirectly, competitive with
the business of the Company or any of its
subsidiaries.
(c)
Interfering with Other Relations .
During the Restricted Period, persuade or attempt to persuade any
supplier, vendor, licensor or other entity or individual doing
business with the Company or any of its subsidiaries to discontinue
or reduce its business with the Company or any of its subsidiaries
or otherwise interfere in any way with the business relationships
and activities of the Company or any of its
subsidiaries.
(d)
(i)
Employees .
During the Restricted Period, attempt in any manner to solicit any
individual, who is at the time of such attempted solicitation, or
at any time during the one (1) year period preceding the
termination of Executive’s service, an employee or consultant
of the Company or any of its subsidiaries, to terminate his or her
employment or relationship with the Company or any of its
subsidiaries, or engage such individual, as an employee or
consultant.
(ii)
During
the Restricted Period, cooperate with any other person in
persuading, enticing or aiding, or attempting to persuade,
entice or aid, any employee of or consultant to the Company or
any of its subsidiaries to terminate his or her employment or
business relationship with the Company or any of its
subsidiaries, or to become employed as an employee or retained
as a consultant by any person other than the Company or any of
its subsidiaries.
(e)
Exceptions .
Nothing in paragraphs (a) through (d) shall prohibit Executive from
providing tax accounting, financial accounting or tax consulting
services to any business or person after the termination of his
employment with the Company.
(f)
Restricted Period .
The Restricted Period shall be equal to two (2) years after the
Employment Period,
provided,
however ,
that in the event the Severance Period is determined in accordance
herewith to be six (6) months, the Restricted Period shall be
reduced to one (1) year.
5.2.
Confidentiality Agreement .
Executive shall not, either during the Employment Period or at any
time thereafter, other than in the performance of his duties
hereunder, use or disclose to any third person any Confidential
Information of the Company or any of its subsidiaries, other than
at the direction of the Company, or pursuant to a court order or
subpoena, provided that Executive will give notice of such court
order or subpoena to the Company prior to such disclosure. Upon the
termination of Executive’s service with the Company for any
reason, Executive shall return any notes, records, charts, formulae
or other materials (whether in hard copy or computer readable form)
containing Confidential Information, and will not make or retain
any copies of such materials. Without limiting the generality of
the foregoing, the parties acknowledge that the Company and its
subsidiaries from time to time may be subject to agreements with
its customers, suppliers or licensors to maintain the confidence of
such other persons’ confidential information. The terms of
such agreements may require that the Company’s employees,
consultants, contractors and other personnel, including Executive,
be bound by such agreements, and Executive shall be deemed so bound
upon notice to him of the terms of such agreements. The term
“
Confidential Information ”
as used herein shall mean any confidential or proprietary
information of the Company or any of its subsidiaries whether of a
technical, engineering, operational, financial or economic nature,
including, without limitation, all prices, discounts, terms and
conditions of sale, trade secrets, know-how, customers, inventions,
business affairs or practices, systems, products, product
specifications, designs, plans, manufacturing and other processes,
data, ideas, details and other information of the Company.
Confidential Information shall not include information which can be
proven by Executive to have been developed by his own work as of
the Effective Date completely independent of its disclosure by the
Company or which is in the public domain, provided such information
did not become available to the general public as a result of
Executive’s breach of this Paragraph 5.2.
5.3.
Disclosure of Innovations .
Executive shall make prompt and full disclosure to the Company and
solely the Company of all writings, inventions, processes, methods,
plans, developments, improvements, procedures, techniques and other
innovations of any kind that Executive may make, develop or reduce
to practice, alone or jointly with others, at any time during the
Employment Period and for a period of one (1) year thereafter,
whether during working hours or at any other time and whether at
the request or upon the suggestion of the Company or otherwise, and
whether or not they are eligible for patent, copyright, trademark,
trade secret or other legal protection (collectively,
“
Innovations ”).
Examples of Innovations shall include, but are not limited to,
discoveries, research, formulas, tools, know-how, marketing plans,
new product plans, production processes, advertising, packaging and
marketing techniques and improvements to computer hardware or
software.
5.4.
Assignment of Ownership of Innovations .
All Innovations shall be the sole and exclusive property of the
Company. Executive hereby assigns all rights, title or interest in
and to the Innovations to the Company. At the Company’s
request and expense, during the Employment Period and at any time
thereafter, Executive will assist and cooperate with the Company in
all respects and will execute documents and give testimony to
obtain, maintain, perfect and enforce for the Company any and all
patent, copyright, trademark, trade secret and other legal
protections for the Innovations.
5.5.
Remedies .
Executive acknowledges that the restrictions contained in the
foregoing paragraphs 5.1 through 5.4, in view of the nature of the
businesses in which the Company and its subsidiaries are engaged,
are reasonable and necessary in order to protect the legitimate
interests of the Company and its subsidiaries, and that the legal
remedies for a breach of any of the provisions of this section 5
will be inadequate and that such provisions may be enforced by
restraining order, injunction, specific performance or other
equitable relief. Such equitable remedies shall be cumulative and
in addition to any other remedies which the injured party or
parties may have under applicable law, equity, this Agreement or
otherwise. Executive shall not, in any action or proceeding to
enforce any of the provisions of this Paragraph 5, assert the claim
or defense that an adequate remedy at law exists. The prevailing
party shall be entitled to recover its legal fees and expenses in
any action or proceeding for breach of this section 5.
5.6.
Company Property .
All Confidential Information; all Innovations; and all
correspondence, files, documents, advertising, sales,
manufacturers’ and other materials or articles or other
information of any kind, in any media, form or format furnished to
Executive by the Company, which may not deemed confidential, shall
be and remain the sole property of the Company (“
Company Property ”).
Upon termination or at the Company’s request, whichever is
earlier, Executive shall immediately deliver to the Company all
such Company Property.
5.7.
Public Poli
|
