Employment Agreement - Thomas N. Harvey

EMPLOYMENT AGREEMENT


EMPLOYMENT AGREEMENT dated as of January 7, 1998 between A-55, Inc., a Delaware corporation (the "Company"), and Thomas N. Harvey (the "Executive).


WHEREAS, on May l, 1998, Executive will be appointed by the Company's Board of Directors ("the Board") to serve as the Company's President;


WHEREAS, the parties further desire to set forth in this Agreement the terms and conditions of the Executive's employment by the Company as President, and


THEREFORE, in consideration of the mutual obligations contained in this Agreement and the mutual benefits to be derived from those obligations, and intending to be legally bound by this Agreement, the Executive and the Company agree as follows:


SECTION 1. CAPACITY AND DUTIES


1.1 EMPLOYMENT: ACCEPTANCE OF EMPLOYMENT. Company hereby employs Executive and Executive hereby accepts employment by the Company, as President effective May 1, 1998, upon the terms and conditions set forth below in this Agreement.


1.2 CAPACITY AND DUTIES.


(a) Executive shall be employed by Company as its President, subject
to the supervision of the Board in his President responsibilities,
and to the Chief Executive Officer in his President
responsibilities, and shall perform such duties and shall have such
authority as set forth in the Company's By-laws and as may from
time-to-time be specified by the Board, its Executive committee, its
Chairman, or the Chief Executive Officer. Executive shall report
directly to the Board and Chief Executive Officer and shall perform
his duties for Company principally from Company's office located in
Reno, Nevada, except for periodic travel that may be necessary or
appropriate in connection with the performance of Executive's duties
under this Agreement.


(b) Executive shall devote his full working time, energy, skill and best
efforts to the performance of his duties under this Agreement, in a
manner which will faithfully and diligently further the business and
interests of the Company and its affiliates (as defined below).
Executive is allowed to continue his relationships with Roy F.
Weston, Inc., The Columbus Group, Global Environment & Technology
Foundation, Global Initiatives, Inc., and GlobeQuest International
as long as these activities do not conflict with the best interests
of A-55, Inc.


SECTION 2. TERM OF EMPLOYMENT


2.1 TERM. The Executive's employment under this Agreement shall commence as of May 1, 1998, and shall continue at will until terminated in accordance with the provisions of this Agreement.


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SECTION 3. COMPENSATION


3.1 BASIC COMPENSATION. As compensation for Executive's services under this Agreement, Company shall pay to Executive a salary at the annual rate of $250.000 (the "Base Salary") for the First year of employment, payable in periodic installments in accordance with the Company's regular payroll practices in effect from time-to-time. The Base Salary. After the first year of employment, the Executive shall be paid an annual salary of $300,000.


3.2 INCENTIVE COMPENSATION: STOCK OPTIONS *.


(a) Stock Option Grants. As an inducement to the Executive to increase
shareholder value, the Company desires that the Executive acquire a
substantial number of shares of the Company's common stock. To carry
out this purpose, the following stock options grants will be
provided by the Company to Executive:


(i) One-Time Stock Purchase at Initial Public Offering (IPO). The
Executive shall be given the opportunity to purchase up to
15,000 shares at the time of A-55 Inc.'s IPO under the
"friends-of-the-family" share allotment at the initial
offering price.


(ii) One-Time Grant. On May 1, 1998 or thereabout, the Company
will grant a five year, non-qualified stock option to the
Executive to purchase no less than 150,000 shares of the
Company's common stock ("Stock") pursuant to a separate stock
options agreement made under and subject to A-55, Inc.'s stock
option plan with the exercise price under the option to be the
initial price at the initial public offering exercisable in
five equal lots of 30,000 shares each, the first exercisable
on the date of grant and an equal lot subsequently on March 1,
1999, 2000, 2001, and 2002.


(iii) Annual Stock Option Grants. Subject to approval by the
Company's Board and/or its Compensation Committee, during the
Executive's employment under this Agreement, the Company may
make, commencing in 1998, annual grants of non-qualified stock
options to the Executive for shares of Stock or such other
number of shares of stock as may be approved by the Board
and/or its Compensation Committee. Such annual grants shall be
made generally at such times, at such exercise prices, and in
a manner consistent with and under the same terms and
conditions as are contained in, options granted to other
senior officers of the Company, as determined by the Board
and/or its Compensation Committee, and shall be made under and
subject to the Stock Option Plan, or any successor plan. All
such options shall terminate on the Employment Ending Date.


* (The stock option grants are based on the following estimations:


1. The Company's valuation at the time of the IPO is estimated to range from
$1.5 to $2.0 billion.


2. The Company's initial stock offering to the public is estimated to be
$100 million more or less, and the initial offering price is estimated to
be $20/share more or less.


3. Based on estimations 1 and 2 above, there will likely be 75 to 100 million
shares of A-55, Inc. common stock issued and outstanding at the time of
the IPO, of which approximately 5 to 6 million will likely be publicly
held.


4. It is estimated that approximately 1 million shares will be allocated to
the Company's employee stock option plan as identified in the S-I
registration filing.)


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3.3 EXECUTIVE BENEFITS. In addition to the compensation provided for in Sections 3.1 and 3.2 hereof, the Executive shall be entitled during the term of his employment under this Agreement to participate in all benefit plans maintained by the Company in which senior corporate officers are entitled to participate. Such benefit plans include, among others, the Company's Group Life, Disability and Medical Plans. The Executive will be provided an allowance to purchase up to $2,000,000 in term life insurance, not to exceed $4,000/year. Executive shall be paid the allowance upon submitting invoices for the insurance to the Company.


3.4 VACATION/BENEFIT. Executive shall be entitled to 3 weeks paid vacation in accordance with the Company's vacation policy for officers for the first year of employment. Beginning February 1, 1999, Executive shall be entitled to 4 weeks paid vacation. Executive shall be reimbursed the actual costs of health insurance premiums, under COBRA options from the time of employment at A-55. Inc. until the company's medical plan is in effect.


3.5 EXPENSE REIMBURSEMENT. During the term of his employment under this Agreement, Company shall reimburse Executive for all reasonable expenses incurred by him in connection with the performance of his duties under this Agreement, in accordance with Company's regular reimbursement policies in effect from time-to-time, and upon receipt of itemized vouchers for such expenses and such other supporting information as Company may reasonably require. The Company shall reimburse Executive for moving expenses incurred by him in moving his family's residence from Virginia to Reno, Nevada to commence employment under this Agreement, including specifically the cost of the physical move of household goods; $500 temporary living expenses, and the cost of travel expenses of no more than one trip from Virginia to Nevada for two.


3.6 AUTOMOBILE. During his employment by Company, Company shall pay Executive an automobile allowance of $400 per month.


3.7 AIR TRAVEL. Executive shall be entitled to travel either Business Class or First Class.


SECTION 4. TERMINATION OF EMPLOYMENT


4.1 DEFINITIONS.


a) For Cause. As used in this Agreement "for cause" shall mean that
the Executive committed or engaged in an intentional act of (i)
fraud, embezzlement, dishonesty or theft in connection with his
duties under this Agreement or in the course of his employment with
Company, (ii) wrongful damage to Company's property, (iii) wrongful
disclosure of Company's secret processes or confidential
information, or (iv) any other kind which is materially harmful to
Company. No act, or failure to act, shall be deemed "intentional" if
it was due primarily to an error in judgement or to negligence, but
shall be deemed "intentional" only if done, or omitted to be done,
by Executive not in good faith and without reasonable belief that
his act or omission was in Company's best interest.


b) Good Reason Resignation. As used in this Agreement, Executive shall
be deemed to have resigned his employment by Company for "good
reason" if either:


(i) Executive, at any time elects in good faith to discontinue his
employment with Company because his responsibilities, duties
or authority have


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changed materially from their level at the time of
commencement of his employment under this Agreement, which
change substantially reduces the rank or level, responsibility
or scope of Executive's position with Company (or its
successor in the case of a merger, consolidation, acquisition
or transfer of substantially all of its business assets) below
that which he has on the effective date of this Agreement as
Company's President or


(ii) Executive elects to discontinue his employment with the
Company within 365 days after there is a change in control of
the Company within two (2) years of the date hereof.


If Executive elects to end his employment by Company for a reason which Executive believes is a good reason as defined by this section 4.3 (b), he shall provide the Company with written notice of such resignation and shall state in that notice the specific matter or matters which he asserts constitute the "good reason" for his resignation.


c) Disability. As used in this Agreement, "Disability" or "Disabled" shall mean a physical or mental disability which is either (i) a total and permanent disability as defined in any disability benefit plan offered by the C ...