Exhibit 10.1 - Executive Employment Agreement
EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement ("Agreement") is made and deemed
effective as of January 5th , 2002, by and between FTS Apparel, Inc., a Colorado
corporation ("FTSA"), on one side, and Xxxxx Xxxxxxxxx ("Executive"), on the
other side, with reference to the herein recitals, terms and conditions.
RECITALS
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WHEREAS, Executive is negotiating the purchase of 1,861,618 shares of
FTSA's common stock from certain shareholders of that company and Executive may
thereby gain a significant equity position thereby;
WHEREAS, FTSA recognizes the experience and knowledge of Executive in
matters relating to the FTSA's future business activities as a public company,
and further, recognizes that it is in the best interests of FTSA to retain the
services of Executive;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained in this Agreement, it is hereby agreed as follows:
AGREEMENT
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Employment.
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FTSA hereby employs Executive as FTSA's Chairman of the Board and Chief
Executive Officer, and Executive hereby accepts employment by FTSA in accordance
with the terms and conditions set forth in this Agreement.
Term.
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Executive's initial term of employment and the services to be provided
hereunder shall commence on January 7th ,2002 and continue for a period of two
(2) years from such date (the "Initial Term"), subject to earlier termination as
hereinafter provided.
Compensation.
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FTSA shall pay Executive the following aggregate compensation for all
services rendered by him to FTSA under this Agreement:
3.1 Base Salary.
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FTSA shall pay Executive a base salary during the term of this Agreement
commencing at the rate of one hundred thousand dollars ($100,000) per annum (the
"Base Salary"). The Base Salary shall be payable in arrears, in substantially
equal monthly installments or more frequently in accordance with the policies of
FTSA. FTSA shall review Executive's base salary bi-annually with Executive for
the purpose of determining a reasonable increase based on Executive's service
and performance, taking into consideration a good-faith assessment of any other
incentive and/or bonus plans to which Executive may be a party. Such review
shall be in accordance with FTSA's policies and practices with other executives
in similar positions with FTSA and its subsidiaries, if any. Notwithstanding the
foregoing, any increase in Executive's Base Salary shall be determined by FTSA
at its sole discretion. In the event that FTSA is not able to pay the
Executive's salary in cash, the Executive's salary will accrue and may be
converted into common stock at market value. Market Value will be the average
closing price of FTSA common stock over the preceding 30 day period. Accrued
salary may be converted quarterly at the board's discretion.
3.2 Annual Bonus.
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FTSA shall pay Executive an annual bonus (the "Annual Bonus") in a minimum
amount of twenty five percent (25%) of Executive's annual Base Salary based on
the achievement of certain predetermined quantitative and qualitative goals
related to the operating performance of FTSA as mutually determined and agreed
upon by Executive and FTSA and in accordance with FTSA's policies and practices.
3.3 Payment of Annual Bonus.
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Executive's Annual Bonus for each fiscal year shall be determined as soon
as practicable following the end of each fiscal year, but in no event later than
sixty (60) days following the end of each fiscal year. Any Annual Bonus due to
Executive shall be paid promptly upon its final determination. FTSA shall cause
and arrange to provide Executive with an annual statement showing the manner in
which the Annual Bonus was calculated.
3.4 Other Benefits.
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Executive shall be entitled to participate, to the full extent eligible and
available in accordance with the terms of the program in which he desires to
participate in all group life and medical insurance programs which FTSA shall
from time to time have for the benefit of its officers, directors and/or
employees, subject to the rules and requirements then in effect regarding
participation of executives or employees therein. Executive shall also be
entitled to participate in any management compensation and benefit program on a
basis similar to that which is made available to other members of FTSA's
management team operating in a similar capacity as the Executive. FTSA reserves
the right to modify, terminate, and/or reduce benefits at any time, provided
such modification, termination and/or reduction is applied to all other members
of the management team operating in a similar capacity as Executive.
3.5 Stock.
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FTSA shall deliver to Executive, upon execution of this Agreement, one
million two-hundred thousand (1,200,000) shares of its unrestricted common stock
(the "Stock"), which tender shall be irrevocable. The Stock shall be free and
clear of all liens, restrictions, security interests, charges or other
encumbrances.
Duties of Executive.
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4.1 Business Development/Operations.
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Subject to the oversight and direction of the FTSA's board of directors,
Executive shall be responsible for managing and developing all aspects of FTSA's
operations and business development affairs.
4.2 Additions and Changes.
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Executive shall perform such reasonable additional work as may be required
by FTSA from time to time under the terms and conditions and according to the
directions, instructions and control of FTSA's board of directors.
4.3 Best Efforts.
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Executive shall devote his best skill, effort and attention to his duties
set forth herein and to further enhance and develop FTSA's business affairs,
interests and welfare. Executive shall be entitled to perform his duties from
whatever location he deems appropriate.
4.4 Policies.
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Executive shall adhere to the employment policies of FTSA in effect from
time to time. References to the policies or practices of FTSA shall mean its
policies or practices of which Executive has notice as in effect and modified
from time to time.
4.5 Other Employment.
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Executive may engage in other employment with the prior written consent of
FTSA. Further, this provision shall not be construed to prevent the Executive
from personally, and for Executive's own account, owning, managing, investing or
trading in real estate, stocks, bonds, securities, commodities, or any other
forms of investment, so long as such owning, managing, investing or trading is
not in competition with FTSA and does not interfere with the performance of
Executive's duties hereunder. However, Executive is not required to devote his
full time to FTSA, but is required to devote up to 100% of his time to FTSA if
necessary.
Expenses.
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FTSA shall reimburse Executive for reasonable and necessary business
expenses in accordance with the expense reimbursement policies and practices of
FTSA and in accordance with a predetermined budget to be approved by the board
of directors of FTSA.
Director's and Officer's Insurance.
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FTSA shall be required to maintain, for the benefit of Executive, a
director's and officer's policy of insurance in accordance with the same terms
and amounts as with other FLIP officers/directors.
Fringe Benefits.
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FTSA shall provide Executive with all fringe benefits regularly provided to
other similarly situated officers, directors of FTSA, generally and with such
other fringe benefits as the Executive and FTSA shall mutually agree upon in
writing.
7.1 Vacation.
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FTSA shall provide Executive with two (2) weeks of paid vacation as well as
holidays in accordance with FTSA's policies.
7.2 Insurance.
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FTSA shall provide Executive with family health insurance pursuant to
FTSA's health insurance plan if one exists and in accordance with the policies
and practices of FTSA.
Termination.
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8.1 Termination with Cause.
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FTSA may terminate Executive "with cause" without notice, for reason of
Executive's (i) misappropriation or embezzlement of funds of FTSA, (ii)
intentional misrepresentation of a product or service offered by FTSA, (iii)
soliciting a client's or customer's business for personal or competitive gain,
(iv) use or sale of illegal drugs in the work place, or repeated intoxication
from alcohol or controlled substances in the work place, (v) physical, mental or
sexual abuse or harassment of any employee, customer or prospective client or
customer, (vi) criminal negligence or criminal acts in the work place; (vii)
commission of a felony or crime of moral turpitude, (viii) selling or providing
confidential information of FTSA to a competitor, or (ix) theft or destruction
of property of FTSA. FTSA may terminate Executive "with cause" if, after ten
(10) days prior written notice by FTSA to Executive, Executive has failed to
cure any of the following occurrences: (i) violation of FTSA policies or
procedures, (ii) breach of any other of the covenants of this Agreement not
specifically set forth in (i) through (viii) above, or (iii) breach of an
employee's customary obligations to the employer. In the event that Executive is
terminated "with cause," Executive shall be entitled solely to the payment of
(i) Executive's then current Base Salary through the date Executive is
terminated and (ii) all accrued and unused vacation and sick leave as of the
date of termination. Executive shall not be entitled to receive any other
amounts or benefits from FTSA.
8.2 No Termination Without Cause.
---------------------------------
FTSA may not terminate Executive "without cause." In the event that FTSA
terminates Executive "without cause," Executive shall be paid (i) all Base
Salary accrued and unpaid through the date of termination and (ii) all accrued
and unused vacation and sick leave as of the date of termination in addition to
other legal and equitable remedies available to Executive.
8.3 Termination Due to Executive's Death or Disability.
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In the event that this Agreement is terminated due to Executive's death or
disability (as defined below), Executive (or Executive's legal representatives)
shall be paid (i) two (2) months' Base Salary as severance, (ii) Base Salary
through the date of termination, (iii) all Bonus payments earned through the
date of termination or previously awarded and unpaid and (iv) all accrued and
unused vacation and sick leave as of the date of termination. For purposes of
this Agreement, the term "Disability" shall mean the mental and physical
inability to perform satisfactorily Executive's regular full time duties - with
or without a reasonable accommodation - as determined by a physician chosen by
mutual agreement of a physician selected by Executive and a physician selected
by FTSA, provided, however, that any Disability which continues for thirty (30)
days (whether or not consecutive) in any eighteen (18) month period shall be
deemed a Disability.
Indemnification.
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9.1 Definition.
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As used in this provision, "Damages" means all claims, damages,
liabilities, losses, judgments, settlements, and expenses, including, without
limitation, all reasonable fees and disbursements of counsel incident to the
investigation or defense of any claim or proceeding or threatened claim or
proceeding.
9.2 Terms of Indemnification.
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FTSA agrees to indemnify, defend and hold harmless Executive from all
Damages (i) proximately caused by the fault or negligence of FTSA, its officers,
directors, employees or agents; (ii) which relate in any manner to the terms and
obligations of this Agreement; (iii) which relate to any other failure by FTSA
to comply with any terms of this Agreement; (iv) which relate to any failure by
FTSA to comply with applicable laws and/or regulations in accordance with this
Agreement; and/or (v) resulting from any breach of any representation, warranty,
covenant or promise made by FTSA in this Agreement.
9.3 Notice of Claim.
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FTSA shall promptly notify Executive in writing of any claim asserted by a
third person that might give rise to any indemnity obligation hereunder. Failure
of any FTSA to promptly give such notice shall not relieve that individual of
his indemnification obligations under this Agreement. Together with or following
such notice, FTSA shall deliver to Purchaser copies of all notices and documents
received by such party relating to the asserted claim (including court papers).
9.4 FTSA Indemnification.
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Executive will indemnify and hold harmless, previous board members and
officers of the corporation from any claim that arises relating to the business
activities of FTSA after the "closing" date.
Transfer and Assignment of Intellectual Property Rights.
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Executive agrees to transfer and assign to FTSA all of his rights, if any,
to that certain intellectual Internet property known as "XXXxxxxxxx.xxx,"
subject to FTSA's full compliance with the terms and conditions of this
Agreement. However, Executive expressly disclaims any (i) warranty as to the
viability, marketability, and/or functionality of that Internet property. In no
event shall Executive be liable or responsible for any claims made against that
Internet property in any respect and FTSA will be indemnified for all claims
made prior to the "closing" date, FTSA will not be held responsible for any
claims or liabilities relating to "XXXxxxxxxx.xxx prior to closing.
Miscellaneous.
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12.1 Survival of Representations and Warranties.
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The representations and warranties of the parties including indemnification
obligations contained herein shall survive following the termination of
Executive's employment with FTSA.
12.2 Waivers.
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No action taken pursuant to this Agreement, including any investigation by
or on behalf of any party shall be deemed to constitute a waiver by the party
taking such action or compliance with any representation, warranty, covenant or
agreement contained herein, therein and in any documents delivered in connection
herewith or therewith. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach.
12.3 Notices.
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All notices, requests, demands and other communications, which are required
or may be given under this Agreement shall be in writing and shall be deemed to
have been duly given if delivered or mailed, first class mail, postage prepaid:
To FTSA: ___________________
To Executive: Xxxxx Xxxxxxxxx
Xxx Xxxxxx Xxxxxx, Xxx. 000
Xxxxxxxxx, XX 00000
With copy to: Xxxxxx X. Xxxxxx, Esq.
Xxxxxx & Associates
00000 Xxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
or to such other address as such party shall have specified by notice in writing
to the other party.
12.4 Merger and Integration.
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This Agreement contains the entire understanding of the parties. There are
no representations, covenants or understandings other than those, either
express, implied or referred to herein. Each party acknowledges that there are
no conditions to this agreement other than those expressed or referred to
herein. Each party further acknowledges that no other party or any agent or
attorney of any other party has made any promise, representation or warranty
whatsoever, express or implied or statutory, not contained or referred to
herein, concerning the subject matter hereof, to induce him to execute this
Agreement, and he acknowledges that he has not executed this Agreement in
reliance on any such promise, representation or warranty not specifically
contained or referred to herein.
12.5 Sections and Other Headings.
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The section and other headings contained in this Agreement are for
reference purposes only and shall not affect the meaning or interpretation of
this Agreement.
12.6 Governing Law.
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This Agreement, and all transactions contemplated hereby, shall be governed
by, construed and enforced in accordance with the laws of the State of
Pennsylvania. The parties herein submit to personal jurisdiction and venue of a
court of subject matter jurisdiction which is appropriate for Langhorne,
Pennsylvania.
12.7 Attorney's Fees and Court Costs.
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In the event that litigation results from or arises out of this Agreement
or the performance thereof, the parties agree to reimburse the prevailing
party's reasonable attorney's fees, court costs, and all other expenses, whether
or not taxable by the court as costs, in addition to any other relief to which,
the prevailing party may be entitled.
12.8 Contractual Procedures.
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Unless specifically disallowed by law, should litigation arise hereunder,
service of process therefore, may be obtained through certified mail, return
receipt requested; the parties hereto waiving any and all rights they may have
to object to the method by which service was perfected.
12.9 Partial Invalidity.
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If any provision in this Agreement is held by a court of competent
jurisdiction to be invalid, void, or unenforceable, the remaining provisions
will nevertheless continue in full force without being impaired or invalidated
in any way.
12.10 Further Assurances.
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The parties agree to take all further actions, including execution of
documents, which are reasonably necessary to effectuate the transaction
contemplated by this Agreement.
12.11 Binding on Successors.
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This Agreement and covenants and conditions herein contained shall apply
to, be binding upon and inure to the benefit of the respective heirs,
administrators, executors, legal representatives, assignees, successors and
agents of the parties hereto.
12.12 Specific Performance.
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The parties agree that remedies, at least for any breach or threat of
breach of this Agreement, may be inadequate and that, in the event of any such
breach or threat of breach, the non-breaching party will be entitled, in
addition to all other rights and remedies otherwise available at law or in
equity, to the equitable remedy of injunctive relief to enforce the provisions
of this Agreement.
12.13 Joint Preparation.
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This Agreement is to be deemed to have been jointly prepared by the parties
hereto and any uncertainty and ambiguity existing herein shall not be
interpreted against any party hereto, but according to the application of the
rules of interpretation of contracts, if any such uncertainty or ambiguity
exists.
12.14 Counterparts.
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This Agreement can be executed in one or more counterparts and the
counterparts signed in the aggregate shall constitute a single, original
instrument. A facsimile/photocopy of this Agreement may be used in lieu of the
original for all purposes.
12.15 Contingencies.
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This agreement must be signed by all board members of FTSA in addition to
the following other documents and actions: the lease agreement settlement must
be signed, the stock purchase agreement must be signed, all board members must
resign as officers and board members of FTSA effective immediately and Xx. Xxxxx
Xxxxxxxxx must be elected as COB/CEO and is responsible for all outstanding
obligations of FTSA.
IN WITNESS WHEREOF, the parties have executed this Agreement (consisting of
6 pages) so that it is deemed effective as of the day and year first written
above.
FTS APPAREL, INC. XXXXX XXXXXXXXX
By: /s/ XxXxx Xxxxxxxx /s/ Xxxxx Xxxxxxxxx
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XxXxx Xxxxxxxx, Chairman/CEO
By: /s/ Xxx XxXxxxx Dated: 1/11/02
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Xxx XxXxxxx, Director
By: /s/ Xxxxx Xxxxxxx
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Xxxxx Xxxxxxx, Director
Dated: 1/14/02
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