EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into
as of the 29th day of June 1998, (the "Effective Date"), between TEE-RIFIK CORP.
(name to be changed to Shop T.V., Inc.), a Nevada corporation, whose principal
place of business is 0000 Xxxxx Xxxxxxx, Xxxxx 000, Xxx Xxxxx, Xxxxxx 00000 (the
"Company") and XXXX XXXXXXX an individual whose address is 0000 X.X. 00xx Xxxxx,
Xxxx Xxxxx, Xxxxxxx 00000 (the "Executive").
RECITALS
A. The Company is a Nevada corporation and is principally engaged in
the business of multimedia sales and marketing (the "Business").
B. The Company desires to employ the Executive and desires to continue
to employ the Executive and the Executive desires to continue in the employ of
the Company.
C. The Company has established a valuable reputation and goodwill in
the Business.
D. The Executive, by virtue of the Executive's employment with the
Company has become familiar with and possessed with the manner, methods, trade
secrets and other confidential information pertaining to the Company's business,
including the Company's customer base.
NOW, THEREFORE, in consideration of the mutual agreements herein made, the
Company and the Executive do hereby agree as follows:
1. Recitals. The above recitals are true, correct, and are herein
incorporated by reference.
2. Employment. The Company hereby employs the Executive as its
President, and the Executive hereby accepts employment, upon the terms
and conditions hereinafter set forth.
3. Authority and Power During Employment Period.
a. Duties and Responsibilities. During the term of this Agreement,
the Executive shall serve as President of the Company and shall
have general executive operating supervision over the business and
affairs of the Company, its subsidiaries and divisions, subject to
the guidelines and direction of the Board of Directors of the
Company. It is further the intention of the parties that at all
times during the "Term," as hereinafter defined, of the Agreement,
the Executive shall serve as a member of the Board of Directors of
the Company, in accordance with the Bylaws of the Company.
b. Time Devoted. Throughout the term of the Agreement, the
Executive shall devote substantially all of the Executive's
business time and attention to the business and affairs of the
Company consistent with the Executive's senior executive position
with the Company, except for reasonable vacations and illness or
incapacity, but nothing in the Agreement shall preclude the
Executive from engaging in any business for Tricom Pictures &
Productions, Inc. or any personal business including as a member of
the board of directors of related companies, charitable and
community affairs, provided that such activities do not interfere
with the regular performance of the Executive's duties and
responsibilities under this Agreement.
4. Term. The Term of employment hereunder will commence on the date as
set forth above and terminate three (3) years from the Effective Date,
and such term shall automatically be extended for successive one (1)
year terms thereafter unless (1) the parties mutually agree in writing
to alter or amend the terms of the Agreement; or(2) one or both of the
parties exercises their right, pursuant to Section 6 herein, to
terminate this employment relationship. For purposes of this Agreement,
the Term (the "Term") shall include the initial term and all renewals
thereof.
5. Compensation and Benefits.
a. Salary and Bonus. The Executive shall be entitled to salary and
bonus as set forth on Exhibit A attached hereto.
b. Signing Bonus. Upon execution of this Agreement, Executive
shall receive $125,000.
c. Executive Benefits. The Executive shall be entitled to
participate in all benefit programs of the Company currently
existing or hereafter made available to executives and/or other
salaried employees, including, but not limited to, pension and,
other retirement plans, group life insurance, hospitalization,
surgical and major medical coverage, sick leave, disability and
salary continuation, vacation and holidays, cellular telephone and
all related costs and expenses, long-term disability, and other
fringe benefits.
d. Vacation. During each fiscal year of the Company, the Executive
shall be entitled to reasonable vacation time and to utilize such
vacation as the Executive shall determine; provided however, that
the Executive shall evidence reasonable judgment with regard to
appropriate vacation scheduling. Notwithstanding the foregoing,
employee shall be entitled to four (4) weeks vacation per year,
with unused vacation accruing to the following year.
e. Business Expense Reimbursement. During, the Term of employment,
the Executive shall be entitled to receive proper reimbursement for
all reasonable, out-of-pocket expenses incurred by the Executive
(in accordance with the policies and procedures established by the
Company for its senior executive officers) in performing services
hereunder, provided the Executive properly accounts therefor.
f. Automobile Expenses. The Company shall provide the Executive
with an automobile allowance not to exceed $1,200.00 per month plus
insurance. The Company shall also pay all reasonable maintenance of
for the automobile that is the subject of the automobile allowance.
6. Consequences of Termination of Employment.
a. Death. In the event of the death of the Executive during the
Term, salary shall be paid to the Executive's designated
beneficiary, or, in the absence of such designation, to the estate
or other legal representative of the Executive for a period of one
(1) year from and after the date of death.
b. Disability.
(1) In the event of the Executive's disability, as hereinafter
defined, the Executive shall be entitled to compensation in
accordance with the Company's disability compensation practice
for senior executives, including any separate arrangement or
policy covering the Executive, but in all events the Executive
shall continue to receive the Executive's salary for a period,
at the annual rate in effect immediately prior to the
commencement of disability, of not less than 180 days from the
date on which the disability has been deemed to occur as
hereinafter provided below. Any amounts provided for in this
Section 6(b) shall be offset by other long-term disability
benefits provided to the Executive by the Company.
(2) "Disability," for the purposes of this Agreement, shall be
deemed to have occurred in the event (A) the Executive is
unable by reason of sickness or accident, to perform the
Executive's duties under this Agreement for an aggregate of
180 days in any twelve-month period or (B) the Executive his a
guardian of the person or estate appointed by a court of
competent jurisdiction. Termination due to disability shall be
deemed to have occurred upon the first day of the month
following the determination of disability as defined in the
preceding sentence.
Anything herein to the contrary notwithstanding, if, following a
termination of employment hereunder due to disability as provided in
the preceding paragraph, the Executive becomes reemployed, whether as
an Executive or a consultant to the Company, any salary, annual
incentive payments or other benefits earned by the Executive from such
reemployment shall offset any salary continuation due to the Executive
hereunder commencing with the date of re-employment.
c. Termination by the Company for Cause.
(1) Nothing herein shall prevent the Company from terminating
Employment for "Cause," as hereinafter defined. The Executive
shall continue to receive salary for a period ending two (2)
years after the date of such termination plus any accrued
Bonus through such date of termination. Any rights and
benefits the Executive may have in respect of any other
compensation shall be determined in accordance with the terms
of such other compensation arrangements or such plans or
programs.
(2) "Cause" shall mean and include those actions or events
specified below in subsections (A) through (E) to the extent
the same occur, or the events constituting the same take
place, subsequent to the date of execution of this Agreement:
(A) Committing or participating in an injurious act of fraud,
gross neglect or embezzlement against the Company;
(B)committing or participating in any other injurious act or
omission wantonly, willfully, recklessly or in a manner which
was grossly negligent against the Company, monetarily or
otherwise; (C) engaging in a criminal enterprise involving
moral turpitude; (D) conviction of an act or acts constituting
a felony under the laws of the United States or any state
thereof, or (E) any assignment of this Agreement by the
Executive in violation of Section 13 of this Agreement. No
actions, events or circumstances occurring or taking place at
any time prior to the date of this Agreement shall in any
event constitute or provide any basis for any termination of
this Agreement for Cause;
(3) Notwithstanding anything else contained in this Agreement,
this Agreement will not be deemed to have been terminated for
Cause unless and until there shall have been delivered to the
Executive a notice of termination stating that the Executive
committed one of the types of conduct set forth in this
Section 6(c)contained in this Agreement and specifying the
particulars thereof and the Executive shall be given a thirty
(30) day period to cure such conduct, if possible.
d. Termination by the Company Other than for Cause
(1) The foregoing notwithstanding, the Company may terminate
the Executive's employment for whatever reason it deems
appropriate; provided, however, that in the event such
termination is not based on Cause, as provided in Section 6(c)
above, the Company may terminate this Agreement upon giving
three (3) months' prior written notice. During such three (3)
month period, the Executive shall continue to perform the
Executive's duties pursuant to this Agreement, and the Company
shall continue to compensate the Executive in accordance with
this Agreement The Executive will receive, at the Executive's
option, either (A) a lump sum equal to the "Compensation and
Benefits," as hereinafter defined, for the remaining balance
of the Term of this Agreement, at the then current rate,
reduced to present value, as set forth in Section 280G of the
Internal Revenue Code or (B) for the remaining balance of the
Term of this Agreement from and after the date of any such
termination, the Company shall on the last day of each
calendar month pay to the Executive such "Compensation and
Benefits," which shall be an amount equal to (Y) One Hundred
percent (100%) of the Executive's compensation and benefits
set forth in Section 5, which shall specifically include the
Salary and Executive Benefits (the "Compensation and
Benefits"), on the date of any such termination, divided by
(Z) twelve (12). provided, however, that if (A) there is a
decrease in the Executive's Compensation and Benefits of more
than five (5%) percent prior to termination for any reason
other than for "Cause", and (B) the Executive is terminated
without cause, the Compensation and Benefits shall be as
existed immediately prior to such a decrease. The Executive
will be entitled to continued Compensation and Benefits
coverage and credits as provided in Section 5 or to
reimbursement for the cost of providing the Executive with
comparable benefit coverage during the term in which the
Executive is receiving payments from the Company after
termination pursuant to Section 6(d). Such benefit coverage
will be offset by comparable coverage provided to the
Executive in connection with subsequent employment.
(2) In the event that the Executive's employment with the
Company is terminated pursuant to this Section 6(d), Section
6(f), Section 6(g) of this Agreement and all references
thereto shall be inapplicable as to the Executive and the
Company.
e. Voluntary Termination. In the event the Executive terminates the
Executive's employment on the Executive's own volition (except as
provided in Section 6(f) and/or Section 6(g)) prior to the
expiration of the Term of this Agreement, including any renewals
thereof, such termination shall constitute a voluntary termination
and in such event the Executive shall be limited to the same rights
and benefits as provided in connection with a termination for Cause
as provided in Section 6(c).
f. Constructive Termination of Employment. If the Executive so
elects, a termination by the Company without Cause under Section
6(d) shall be deemed to have occurred upon the occurrence of one or
more of the following events without the express written consent of
the Executive:
(1) a significant change in the nature or scope of the
authorities, powers, functions, duties or responsibilities
attached to Executive's position as described in Section 3; or
(2) any reduction in the Executive's salary; or
(3) a material breach of the Agreement by the Company, or
(4) a material reduction of the Executive's benefits under any
employee benefit plan, program or arrangement (for Executive
individually or as part of a group) of the Company as then in
effect or as in effect on the effective date of the Agreement,
which reduction shall not be effectuated for similarly
situated employees of the Company; or
(5) failure by a successor company to assume the obligations
under the Agreement.
Anything herein to the contrary notwithstanding, the Executive shall
give written notice to the Board of Directors of the Company that the
Executive believes an event has occurred which would result in a
Constructive Termination of the Executive's employment under this
Section 6(f), which written notice shall specify the particular act or
acts, on the basis of which the Executive intends to so terminate the
Executive's employment, and the Company shall then be given the
opportunity, within fifteen (15) days of its receipt of such notice to
cure said event, provided, however, there shall be no time period
permitted to cure a second or subsequent occurrence under this Section
6(f)(whether such second occurrence be of the same or a different event
specified in subsections (1) through (5) above).
g. Termination Following a Change of Control.
(1) In the event that a "Change in Control" or an "Attempted
Change in Control" as hereinafter defined, of the Company
shall occur at any time during the Term hereof, the Executive
shall have the right to terminate the Executive's employment
under this Agreement upon thirty (30) days written notice
given at any time within one year after the occurrence of such
event, and such termination of the Executive's employment with
the Company pursuant to this Section 6(g)(1), and, in any such
event, such termination shall be deemed to be a Termination by
the Company Other than for Cause and the Executive shall be
entitled to such Compensation and Benefits as set forth in
Subsection 6(h) of this Agreement.
(2) For purposes of this Agreements a "Change in Control" of
the Company shall mean a change in control (A) as set forth in
Section 280G of the Internal Revenue Code or (B) of a nature
that would be required to be reported in response to Item 1 of
the current report on Form 8-K, as in effect on the date
hereof, pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 0000 (xxx "Xxxxxxxx Xxx"); provided that,
without limitation, such a change in control shall be deemed
to have occurred at such time as:
(A) any "person" other than the Executive, (as such term
is used in Section 13(d) and 14(d) of the Exchange Act)
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 fifty percent
(50%)or more of the combined voting power of the
Company's outstanding securities then having the right
to vote at elections of directors; or,
(B) the individuals who at the commencement date of the
Agreement constitute the Board of Directors cease for
any reason to constitute a majority thereof unless the
election, or nomination for election, of each new
director was approved by a vote of at least two thirds
of the directors then in office who were directors at
the commencement of the Agreement; or
(C) there is a failure to elect three or more (or such
number of directors as would constitute a majority of
the Board of Directors) candidates nominated by
management of the Company to the Board of Directors; or
(D) the business of the Company for which the
Executive's services are principally performed is
disposed of by the Company pursuant to a partial or
complete liquidation of the Company, a sale of assets
(including stock of a subsidiary of the Company) or
otherwise.
Anything herein to the contrary notwithstanding, this Section 6(g)(2)
will not apply where the Executive gives the Executive's explicit
written waiver stating that for the purposes of this Section 6(g)(2) a
Change in Control shall not be deemed to have occurred. The Executive's
participation in any negotiations or other matters in relation to a
Change in Control shall in no way constitute such a waiver which can
only be given by an explicit written waiver as provided in the
preceding sentence.
An "Attempted Change in Control" shall be deemed to have occurred if
any substantial attempt, accompanied by significant work efforts and
expenditures of money, is made to accomplish a Change in Control, as
described in subparagraphs (A), (B), (C) or (D) above whether or not
such attempt is made with the approval of a majority of the then
current members of the Board of Directors.
(3) In the event that, within twelve (12) months of any Change
in Control of the Company or any Attempted Change in Control
of the Company, the Company terminates the employment of the
Executive under this Agreement, for any reason other than for
Cause as defined in Section 6(c), or the Executive's
employment is constructively terminated as defined in Section
6(f), then, in any such event such termination shall be deemed
to be a Termination by the Company Other than for Cause and
the Executive shall be entitled to such Compensation and
Benefits as set forth in Subsection 6(d) of this Agreement.
h. Compensation and Benefits Upon Termination of Executive
Employment. In the event of any termination of Executive's
employment Other than for Cause under Section 6(d), or any
termination of Executive's employment pursuant to Section 6(f) or
Section 6(g), on the effective date of any such termination, the
Executive shall be entitled to receive the following:
(1) All life, disability and health insurance benefits to
which he was entitled to continue to receive thirty (30) days
prior to the Effective Date of the Settlement Agreement, for a
period of two (2) years following the effective date of such
termination; provided that in the Executive's sole discretion,
the Executive may receive the cash equivalent of all or any
part of such life, disability and/or health insurance benefits
from the Company in lieu of receiving such benefits; plus
(2) Compensation equal to three (3) times the Executive's
annual Salary, based upon the greater of the Executive's
Salary (i) immediately prior to the effective date of
termination or (ii) or as of ninety (90) days prior to the
effective date of termination. All Compensation shall be
payable to the Executive bi-weekly; provided that in the event
that the Executive is entitled to receive the Compensation as
a result of a Change in Control, at the Executive's option,
the Executive may receive either (i) a lump sum equal to the
Compensation due to the Executive pursuant to Section 6(h)
reduced to present value, as set forth in Section 280G of the
Internal Revenue Code or (ii) bi-weekly; plus
(3) The provisions of this Section 6(h) notwithstanding, the
Compensation and Benefits to be received by the Executive
pursuant to this Section 6(h) shall not exceed the amount set
forth in Section 162(m) of the Internal Revenue Code, or its
successor provision.
7. Indemnification. The Executive shall continue to be covered by the
Certificate of Incorporation and/or the Bylaws of the Company with
respect to matters occurring on or prior to the date of termination of
the Executive's employment with the Company, subject to all the
provisions of Nevada and Federal law and the Certificate of
Incorporation and Bylaws of the Company then in effect. Such reasonable
expenses, including attorneys' fees, that may be covered by the
Certificate of Incorporation and/or Bylaws of the Company shall be paid
by the Company on a current basis in accordance with such provision,
the Company's Certificate of Incorporation and Nevada law. To the
extent that any such payments by the Company pursuant to the Company's
Certificate of Incorporation and/or Bylaws may be subject to repayment
by the Executive pursuant to the provisions of the Company's
Certificate of Incorporation or Bylaws, or pursuant to Nevada or
Federal law, such repayment shall be due and payable by the Executive
to the Company within twelve (12) months after the termination of all
proceedings, if any, which relate to such repayment and to the
Company's affairs for the period prior to the date of termination of
the Executive's employment with the Company and as to which Executive
has been covered by such applicable provisions.
8. Withholding. Anything to the contrary notwithstanding, all payments
required to be made by the Company hereunder to the Executive or the
Executive's estate or beneficiaries shall be subject to the withholding
of such amounts, if any, relating to tax and other payroll deductions
as the Company may reasonably determine it should withhold pursuant to
any applicable law or regulation. In lieu of withholding such amounts,
the Company may accept other arrangements pursuant to which it is
satisfied that such tax and other payroll obligations will be satisfied
in a manner complying with applicable law or regulation.
9. Notices. Any notice required or permitted to be given under the
terms of this Agreement shall be sufficient if in writing and if sent
postage prepaid by registered or certified mail return receipt
requested, by overnight delivery; by courier; or by confirmed telecopy,
in the case of the Executive to the Executive's last place of business
or residence as shown on the records of the Company, or in the case of
the Company to its principal office as set forth in the first paragraph
of this Agreement, or at such other place as it may designate.
10. Waiver. Unless agreed in writing, the failure of either party, at
any time, to require performance by the other of any provisions
hereunder shall not affect its right thereafter to enforce the same,
nor shall a waiver by either party of any breach of any provision
hereof be taken or held to be a waiver of any other preceding or
succeeding breach of any term or provision of this Agreement. No
extension of time for the performance of any obligation or act shall be
deemed to be an extension of time for the performance of any other
obligation or act hereunder.
11. Completeness and Modification. This Agreement constitutes the
entire understanding between the parties hereto superseding all prior
and contemporaneous agreements or understandings among the parties
hereto concerning the Employment Agreement. This Agreement may be
amended, modified, superseded or canceled, and any of the terms,
covenants, representations, warranties or conditions hereof may be
waived, only by a written instrument executed by the parties or in the
case of a waiver, by the party to be charged.
12. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of
which shall constitute but one agreement.
13. Binding Effective/Assignment. This Agreement shall be binding upon
the parties hereto, their heirs, legal representatives, successors and
assigns. This Agreement shall not be assignable by the Executive but
shall be assignable by the Company in connection with the sale,
transfer or other disposition of its business or to any of the
Company's affiliates controlled by or under common control with the
Company.
14. Governing Law. This Agreement shall become valid when executed and
accepted by Company. The parties agree that it shall be deemed made and
entered into in the State of Florida and shall be governed and
construed under and in accordance with the laws of the State of
Florida. Anything in this Agreement to the contrary notwithstanding,
the Executive shall conduct the Executive's business in a lawful manner
and faithfully comply with applicable laws or regulations of the state,
city or other political subdivision in which the Executive is located.
15. Further Assurances. All parties hereto shall execute and deliver
such other instruments and do such other acts as may be necessary to
carry out the intent and purposes of this Agreement.
16. Headings. The headings of the sections are for convenience only and
shall not control or affect the meaning or construction or limit the
scope or intent of any of the provisions of this Agreement.
17. Survival. Any termination of this Agreement shall not, however,
affect the ongoing provisions of this Agreement, which shall survive
such termination in accordance with their terms.
18. Severability. The invalidity or unenforceability, in whole or in
part, of any covenant, promise or undertaking, or any section,
subsection, paragraph, sentence, clause, phrase or word or of any
provision of this Agreement shall not affect the validity or
enforceability of the remaining portions thereof.
19. Enforcement. Should it become necessary for any party to institute
legal action to enforce the terms and conditions of this Agreement the
successful party will be awarded reasonable attorneys' fees at all
trial and appellate levels, expenses and costs.
20. Venue. Company and Executive acknowledge and agree that the U.S.
District for the Southern District of Florida, or if such court lacks
jurisdiction, the 15th Judicial Circuit (or its successor) in and for
Broward County, Florida, shall be the venue and exclusive proper forum
in which to adjudicate any case or controversy arising either, directly
or indirectly, under or in connection with this Agreement and the
parties further agree that, in the event of litigation out of or in
connection with this Agreement in these courts, they will not contest
or challenge the jurisdiction or venue of these courts.
21. Construction. This Agreement shall be construed within the fair
meaning of each of its terms and not against the party drafting the
document.
THE EXECUTIVE ACKNOWLEDGES THAT THE EXECUTIVE HAS READ ALL OF THE TERMS OF THIS
AGREEMENT, UNDERSTANDS THE AGREEMENT, AND AGREES TO ABIDE BY ITS TERMS AND
CONDITIONS.
IN WITNESS WHEREOF, he parties have executed this Agreement as of date set forth
in the last paragraph of this Agreement.
Witness: The Company:
TEE-RIFIK CORP.
/S/XXXX WARM By:/S/XXXX XXXXXX
------------ ------------------
Xxxx Warm Xxxx Xxxxxx, Vice President
Witness: THE EXECUTIVE
/S/XXXX WARM /S/XXXX XXXXXXX
------------ ---------------
Xxxx Warm Xxxx Xxxxxxx
SCHEDULE A
1998 $450,000.00 Base Salary
1999 $250,000.00 Base Salary
BONUS STRUCTURE
Net Income to Company Bonus Payment (1)
------------------------- ------------------
$1.00 - $250,000.00 No Bonus
$250,000.01 - $350,000.00 A $50,000.00 Bonus
$350,000.01 - $450,000.00 An additional $50,000.00 Bonus
$450,000.01 - $500,000.00 An additional $25,000.00 Bonus
------------------------------------
(1) Bonuses will be proportionate to the Company receiving a minimum bottom line
of $250,000.00 after bonuses paid.
2000 $250,000.00 Base Salary
BONUS STRUCTURE
Net Income to Company Bonus Payment (1)
------------------------- ------------------
$1.00 - $500,000.00 No Bonus
$500,000.01 - $600,000.00 A $50,000.00 Bonus
$600,000.01 - $700,000.00 An additional $50,000.00 Bonus
$700,000.01 - $750,000.00 An additional $25,000.00 Bonus
----------------------------
(1) Bonuses will be proportionate to the Company receiving a minimum bottom line
of $500,000.00 after bonuses paid.
Witness: The Company:
TEE-RIFIK CORP.
/S/XXXX WARM By:/S/XXXX XXXXXX
------------ -----------------
Xxxx Warm Xxxx Xxxxxx, Vice President
Witness: THE EXECUTIVE
/S/XXXX WARM /S/XXXX XXXXXXX
------------ ---------------
Xxxx Warm Xxxx Xxxxxxx
