EMPLOYMENT AGREEMENT
This Agreement, dated as of May 1, 2005 (the "Effective Date"), is between
Xxxxxx X. Xxxxx (the "Executive"), a21, Inc., a corporation formed under the
laws of the State of Texas (the "Company" or "a21") and SuperStock, Inc., a
corporation formed under the laws of the State of Florida ("SuperStock").
W I T N E S S E T H:
WHEREAS, the Company and SuperStock desire to employ the Executive, and
the Executive is willing to render services to the Company and SuperStock, on
the terms and subject to the conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual covenants,
agreements and promises hereinafter set forth, the parties hereto covenant and
agree as follows:
1. EMPLOYMENT. The Company shall employ the Executive as its Vice Chairman
and President, and SuperStock shall employ the Executive as its Chief Executive
Officer, and the Executive hereby accepts such employment upon the terms and
subject to the conditions hereinafter set forth, commencing on the Effective
Date and continuing until terminated pursuant to Paragraph 4 hereof (the
"Employment Period").
2. DUTIES.
(a) The Executive shall report to the Company's Board of Directors
through the Company's Chairman and Chief Executive Officer (the "Board"). The
Executive shall perform and discharge diligently and faithfully such duties as
may be assigned to him from time to time by (i) the Board as are customary for
the position of Vice Chairman and President of the Company, and (ii)
SuperStock's Board of Directors as are customary for the position of Chief
Executive Officer of SuperStock. The Executive shall be based in Chapel Hill,
North Carolina, will regularly travel to the Jacksonville, Florida metropolitan
area on a regular basis, and his position will require reasonable travel outside
of such area.
(b) The Executive shall devote his full business time, attention,
skills and energies to the performance of his duties hereunder and to the
promotion of the business of the Company and SuperStock, consistent with such
duties, and shall not during the Employment Period be employed or engaged in any
other business activity, whether or not such activity is pursued for gain,
profit or other pecuniary advantage which would not allow him to contribute his
full business time, attention, skills and energies to the performance of his
duties hereunder and to the promotion of the business of the Company and
SuperStock; provided, however, that this shall not be construed as preventing
the Executive from investing his personal assets in businesses which do not
compete with the Company or SuperStock and engaging in not-for-profit and civic
activities that do not interfere with the Executive's duties.
3. COMPENSATION.
(a) Salary. For services rendered by the Executive hereunder during
the Employment Period, SuperStock shall pay him a base salary (the "Salary") at
the annual gross rate of One Hundred Twenty Five Thousand Dollars ($125,000) in
accordance with SuperStock's ordinary payroll practices. An employment review
will take place on an annual basis. Any increases in the Salary rate shall be
determined by the Board and the employment review. If SuperStock's revenue
increases based on a pro forma basis or based on a three (3) month trailing
revenue run rate equal to or greater than $12 million per year, and the Company
is profitable for that period, then the Salary shall increase to One Hundred
Fifty Thousand Dollars ($150,000) as of the first day of the month thereafter.
(b) Bonus. At the beginning of the Employment Period, the Company
shall pay the Executive additional compensation in the form of a bonus (the
"Bonus") of 1,200,000 common shares of a21. All of the shares comprising the
Bonus shall be issued as of the Effective Date, but shall vest in equal shares
on each of June 30, 2005, September 30, 2005, December 31, 2005 and March 31,
2006. In addition, during the Employment Period, the Executive is eligible to
receive an additional bonus (the "Additional Bonus") the amount of which, if
any, shall be determined solely and in the good faith judgment of the Company,
taking into consideration and giving equal weight to (i) the Executive's
performance, and (ii) the performance of the Company. Additional Bonuses shall
be determined on an annual basis or otherwise determined by the Board and are
subject to the Company's ordinary payroll practices and may be paid in cash and
nonqualified stock options or restricted common shares of a21. The entire Bonus
and any Additional Bonus shall immediately vest upon a change in control of the
Company. If nothing contained in this agreement is to the contrary, any unvested
portion of the Bonus or Additional Bonus may be repurchased by the Company for
$.01 per common share (with customary adjustments for splits etc.) within 30
days of Termination, as defined in and subject to the terms and conditions of
Paragraph 4.
(c) Stock Options. Subject to final approval of the Board of
Directors of a21, the Executive shall be entitled to receive, as soon as
practicable following the Effective Date, nonqualified stock options in
accordance with the terms of the a21 stock option plan and the standard stock
option agreement thereunder; provided, however, that such options shall provide
the Executive with the right to purchase 800,000 common shares of a21 at a
purchase price of $.30 per common share and 25% of which shall vest on each of
August 31, 2005, February 28, 2006, August 31, 2006 and February 28, 2007. All
options shall immediately vest upon a change in control.
(d) Benefits. During the Employment Period, SuperStock shall provide
the Executive with any medical, insurance, 401(k), pension, vacation or other
employee benefits made available to similarly situated executives of SuperStock
from time to time in accordance with the terms of SuperStock's standard benefits
plans and policies pro rata based on his Duties under Paragraph 2(b).
Notwithstanding the foregoing, the Executive will receive four (4) weeks
vacation.
2
(e) Expense Reimbursement. The Executive is authorized to incur
reasonable expenses related to the performance of his duties under this
Agreement in accordance with budgets and guidelines established by SuperStock
from time to time or otherwise approved by the Chairman. SuperStock shall
promptly reimburse the Executive for all such expenses in accordance with its
expense reimbursement policy in effect from time to time.
(f) Taxes. All payments and benefits provided to the Executive
hereunder shall be reported as taxable income to the extent required by law and
shall be subject to applicable income and payroll withholding taxes.
4. TERM AND TERMINATION.
(a) The term of this Agreement (the "Employment Period") shall
commence on the Effective Date and continue for thirty-six (36) months unless
terminated earlier in accordance with this Paragraph 4.
(b) Termination Without Cause. Either party hereto may terminate
this Agreement and the Executive's employment for any reason at any time during
the Employment Period, effective upon sixty (60) days written notice to the
other party. In the event the Company and SuperStock terminates this Agreement
and the Executive's employment without Cause (as hereinafter defined),
SuperStock shall pay to the Executive (i) any unpaid Salary accrued as of the
date of termination, (ii) any unused vacation days accrued as of the date of
termination, and (iii) the lesser of 1) the Salary due under any remaining term
of this Agreement (but no less than six(6) months), and 2) the Salary due for a
period of ten (10) months following the date of notice of termination - in
either case in installments in accordance with the Company's ordinary payroll
practices. In addition, solely for purposes of determining the portion of any
Bonus or Additional Bonus awarded to the Executive under Paragraph 3(b) and
Stock Options under Paragraph 3(c) that has vested, the shares or options that
would have vested on the vesting date next succeeding the date of termination of
employment, but for the termination without Cause, shall be vested as of the
date of termination of Executive's employment. The Executive shall not be
entitled to any further payments or benefits except as required by any federal
or state law requiring continuation of benefits and except as may be provided in
any stock option agreement.
(c) Termination for Cause. The Company and SuperStock may terminate
this Agreement and the Executive's employment for Cause (as hereinafter defined)
at any time, effective immediately upon giving the Executive written notice of
such termination. As used herein, the term "Cause" shall mean any of the
following events:
(i) the Executive's conviction of or plea of guilty or nolo
contendere, or no contest to a misdemeanor involving moral turpitude (which is
likely to have an adverse effect on the Company or SuperStock or the Executive's
ability to perform his duties hereunder) or a felony which may result in a term
of imprisonment;
(ii) the Executive's breach of this Agreement or willful
failure to carry out the lawful directives of the Board or the board of
SuperStock consistent with Paragraph 2(a) hereof (provided the Company and/or
SuperStock, as the case may be, have given the Employee advance written notice
3
specifying the nature of such breach or failure to carry out the lawful
directives of the Board or the board of SuperStock and a period of at least
fifteen (15) days to cure such breach or failure); or
(iii) the Executive's (A) willful gross misconduct, including,
without limitation, dishonesty, fraud or theft, or (B) willful bad faith act or
failure to act that is injurious to the business or reputation of the Company
and/or SuperStock.
In the event of termination for Cause, SuperStock shall pay to the
Executive any unpaid Salary and any unused vacation days accrued as of the date
of termination, and the Executive shall not be entitled to any further payments
or benefits except as required by any federal or state law requiring
continuation of benefits and except as may be provided in any stock option
agreement , as the case may be.
(d) Death. If the Executive dies during the Employment Period, this
Agreement and the Executive's employment shall terminate as of the date of his
death. SuperStock shall pay to the Executive's estate any unpaid Salary and any
unused vacation days accrued as of the date of termination, and the Executive's
estate shall not be entitled to any further payments or benefits pursuant to
Paragraph 3 except as required by any federal or state law requiring
continuation of benefits and except as may be provided in any stock option
agreement, as the case may be.
(e) Disability. If the Executive is incapacitated by accident,
sickness or otherwise so as to render him mentally or physically incapable of
performing the services required of him under this Agreement (referred to herein
as a "Disability") for (i) a period of ninety (90) consecutive days or (ii) for
an aggregate of one hundred twenty (120) business days during any twelve (12)
month period, the Company and SuperStock may terminate this Agreement and the
Executive's employment effective immediately after the expiration of either of
such periods, upon giving the Executive written notice of such termination.
Notwithstanding the foregoing provision, if it is determined by the Company or
SuperStock that the Executive has a "disability" as defined under the Americans
with Disabilities Act, the Executive's employment shall not be terminated on the
basis of such disability unless it is first determined by the Company and
SuperStock after consultation with the Executive that there is no reasonable
accommodation which would permit the Executive to perform the essential
functions of his position without imposing an undue hardship on the Company or
SuperStock.
In the event the Executive is determined to have a Disability
hereunder and receives payments under any disability plan maintained by the
Company or SuperStock for its employees or under any other arrangement
maintained by the Company or SuperStock for the Executive, such payments shall
reduce and offset any Salary payable to the Executive pursuant to Paragraph 3
hereof, to extent permitted under such plan or arrangement. In the event of
termination pursuant to this Subparagraph 4(e), SuperStock shall pay to the
Executive (i) any unpaid Salary accrued as of the date of termination, and (ii)
any unused vacation days accrued as of the date of termination, and the
Executive shall not be entitled to any further payments or benefits pursuant to
Paragraph 3 except as required by any federal or state law requiring
continuation of benefits and except as may be provided in any stock option
agreement, as the case may be.
4
5. NON-SOLICITATION.
(a) Non-Solicitation of Employees. The Executive hereby agrees that
during the Employment Period and for a period of one (1) year thereafter (the
"Survival Period"), he shall not, directly or indirectly through any other
individual, person or entity, employ, solicit or induce any individual who is,
or was at any time during the last twelve (12) months of the Executive's
employment by the Company, an employee of the Company to terminate or refrain
from renewing or extending his or her employment by the Company or to become
employed by or enter into a contractual relationship with the Executive or any
other individual, person or entity. For the purposes of Paragraphs 5, 6 and 7 of
this Agreement the "Company" shall be deemed to include the Company and each of
its Affiliates. For the purposes hereof, Affiliates shall mean with respect to
any person, any person directly or indirectly controlling, controlled by, or
under common control with, such other person at any time during the period for
which the determination of affiliation is being made.
(b) Non-Solicitation of Suppliers or Vendors. The Executive hereby
agrees that during the Employment Period and the Survival Period he shall not,
directly or indirectly through any other individual, person or entity, solicit,
persuade or induce any individual, person or entity which is, or at any time
during the Employment Period was, a supplier of any product or service to the
Company, or vendor of the Company (whether as a distributor, agent, commission
agent, employee or otherwise), to terminate, reduce or refrain from renewing or
extending his, her or its contractual or other relationship with the Company.
(c) Non-Solicitation of Customers. The Executive hereby agrees that
during the Employment Period and the Survival Period he shall not, directly or
indirectly through any other individual, person or entity, solicit, persuade or
induce any t 12 individual, person or entity which is, or at any time during the
Employment Period was, a customer of the Company to terminate, reduce or refrain
from renewing or extending its contractual or other relationship with the
Company in regard to the purchase of products or services manufactured, marketed
or sold by the Company, or to become a customer of or enter into any contractual
or other relationship with the Executive or any other individual, person or
entity in regard to the purchase of products or services similar or identical to
those manufactured, marketed or sold by the Company.
6. CONFIDENTIALITY. The Executive agrees that during the Employment
Period, and thereafter, he shall not divulge to anyone, other than as necessary
in the performance of his duties hereunder or as required by law or legal
process, confidential information of the Company, its affiliates or its
customers, including, without limitation, know-how, trade secrets, customer
lists, costs, profits or margin information, markets, sales, pricing policies,
operational methods, plans for future development, data, drawings, samples,
processes or products and other information disclosed to the Executive or known
by him as a result of or through his employment by the Company, which is not
generally known in the businesses in which the Company is engaged and which
relates directly or indirectly to the Company's products or services or which is
directly or indirectly useful in any aspect of the Company's business. In the
event the Company is bound by a confidentiality agreement with a customer,
supplier or other party regarding the confidential information of such customer,
supplier or other party, which provides greater protection than specified above
in this Paragraph 6, the provisions of such other confidentiality agreement
5
shall be binding upon the Executive and shall not be superseded by this
Paragraph 6. Upon the termination of the Executive's employment hereunder or at
any other time upon the Company's request, the Executive shall deliver forthwith
to the Company all memoranda, notes, records, reports, computer disks and other
documents (including all copies thereof) containing such confidential
information.
7. NON-COMPETITION. The Executive hereby agrees that during the Employment
Period and the Survival Period, the Executive shall not, directly or indirectly,
anywhere in the entire United States, own, manage, operate, control or
participate in the ownership, management, operation or control of, or be
connected as an officer, employee, partner, director, independent contractor or
in any other capacity with, or have any financial interest in, or aid or assist
anyone else in the manufacture, sale or representation of products or the
provision of services identical or similar to the products and services
manufactured, sold, represented or provided by the Company, and which products
or services are marketed to the same customer base as the products or services
offered by the Company, at any time during the Employment Period or the Survival
Period, or which are included in any business plans of the Company in existence
and under consideration at the time of termination and of which Executive was
aware.
8. REMEDIES. The Executive acknowledges and agrees that the Company's
remedy at law for a breach or threatened breach of any of the provisions of
Paragraphs 5, 6 or 7 of this Agreement would be inadequate and, in recognition
of that fact, in the event of a breach or threatened breach by the Executive of
any of the provisions of Paragraphs 5, 6 or 7 of this Agreement, it is agreed
that in addition to its remedy at law, the Company shall be entitled to
appropriate equitable relief in the form of specific performance, preliminary or
permanent injunction, temporary restraining order or any other appropriate
equitable remedy which may then be available. Notwithstanding any provision of
this Agreement to the contrary, it is expressly understood and agreed that,
although the Executive and the Company consider the restrictions contained in
Paragraphs 5, 6 and 7 to be reasonable for the purpose of preserving the
Company's goodwill and other proprietary rights, if a final judicial
determination is made by a court having jurisdiction that the time and scope of
the restrictions in such Paragraphs is an unreasonable or otherwise
unenforceable restriction against the Executive, the provisions of such
Paragraphs shall not be rendered void but shall be deemed amended to apply as to
the maximum time and scope permitted and to such other extent as the court may
determine to be reasonable.
9. REPRESENTATION/WARRANTY. The Executive represents and warrants that he
is not bound by the terms of a confidentiality agreement or non-competition
agreement or any other agreement with a former employer or other third party
which would preclude him from accepting employment by the Company or which would
preclude him from effectively performing his duties for the Company. The Company
represents and warrants that it has all requisite corporate power and authority
to consummate the transactions contemplated by this Agreement and that this
Agreement is binding on the Company and enforceable against the Company in
accordance with its terms.
10. NOTICES. Any notices or other communications required to be given
pursuant to this Agreement shall be in writing and shall be deemed given: (i)
upon delivery, if by hand; (ii) after two (2) business days if sent by express
mail or air courier; (iii) four (4) business days after being mailed (seven (7)
business days for international mailings), if sent by registered or certified
mail, postage prepaid, return receipt requested; or (iv) upon transmission, if
6
sent by facsimile (provided that a confirmation copy is sent in the manner
provided in clause (ii) or clause (iii) of this Paragraph 10 within thirty-six
(36) hours after such transmission), except that if notice is received by
facsimile after 5:00 p.m. on a business day at the place of receipt, it shall be
effective as of the following business day. All communications hereunder shall
be delivered to the respective parties at the following addresses:
If to the Company:
a21, Inc.
0000 Xxxxxxxxx Xxxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Chairman & Chief Executive Officer
with a copy to:
Loeb & Loeb LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxxxx, Esq.
If to the Executive:
Xxxxxx X. Xxxxx
At his residential address on file
at the corporate office of a21, INc.
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
11. GOVERNING LAW/JURISDICTION. This Agreement shall be governed by and
construed in accordance with the law of the State of Florida, regardless of the
law that might otherwise govern under applicable principles of conflicts of laws
thereof. The parties hereto hereby irrevocably consent to the exclusive
jurisdiction of the state or federal courts sitting in Jacksonville, Florida in
connection with any controversy or claim arising out of or relating to this
Agreement, or the negotiation or breach thereof, and hereby waive any claim or
defense that such forum is inconvenient or otherwise improper. Each party hereby
agrees that any such court shall have in personam jurisdiction over it and
consents to service of process in any matter authorized by Florida law.
12. SEVERABILITY. Whenever possible, each provision or portion of any
provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision or portion of any
provision of this Agreement is found to be invalid or unenforceable in any
respect under any applicable law or rule in any jurisdiction, such finding or
construction shall not affect the remainder of the provisions of this Agreement,
which shall be given full force and effect without regard to the invalid or
unenforceable provision, and such invalid or unenforceable provision shall be
7
modified automatically to the least extent possible in order to render such
provision valid and enforceable, but only if the provision as so modified
remains consistent with the parties' original intent.
13. WAIVER OF BREACH. The waiver by either party hereto of a breach of any
provision of this Agreement by the other party shall not operate or be construed
as a waiver of any subsequent breach.
14. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective heirs,
successors, representatives and assigns. This Agreement is assignable to any
legal successor of the Company. This Agreement may not be assigned by the
Executive.
15. ENTIRE AGREEMENT. This Agreement constitutes the entire understanding
and agreement between the Company and the Executive with regard to all matters
contained herein and incorporates and supersedes all prior agreements between
the parties concerning the employment of the Executive by the Company. There are
no other agreements, conditions or representations, oral or written, express or
implied, with regard thereto. This Agreement may be amended only in writing,
signed by both parties.
IN WITNESS WHEREOF, the parties have executed this Agreement on May 13,
2005 as of the date set forth above.
a21, INC. EXECUTIVE
By: /s/ Xxxxxx X. Xxxxx /s/ Xxxxxx X. Xxxxx
---------------------- --------------------------
Name: Xxxxxx X. Xxxxx Xxxxxx X. Xxxxx
Title: Chief Executive Officer
SuperStock, Inc.
By: /s/ Xxxx Xxxxx
----------------------
Name: Xxxx Xxxxx
Title: President
8
