EXHIBIT 10.7
This EXECUTIVE EMPLOYMENT AGREEMENT, dated as of March ,2000 is
by and between IAM Group, Ltd., a New York Corporation (the "Company") with its
principal executive offices located at 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, and Xxxx Xxxxxxxx, (the "Executive").
WHEREAS, the Company and the Executive have entered into an Employment Agreement
dated as of March , 2000 (the "Agreement"); WHEREAS, the Company and the
Executive desire to state the terms of the Agreement as set forth herein.
NOW, THEREFORE, in consideration of the foregoing recital and the respective
covenants and agreements of the parties contained in this document, the Company
and the Executive agree as follows:
1. Employment and Duties. During the Employment Period (as defined in paragraph
2 below), the Executive will serve as President and Chief Executive Officer of
the Company. The duties and responsibilities of the Executive shall include the
duties and responsibilities for the Executive's corporate offices and positions
as set forth in the Company's bylaws from time to time in effect and such other
duties and responsibilities as the board of directors of the Company (the "Board
of Directors") may from time to time reasonably assign to the Executive, in all
cases to be consistent with the Executive's corporate offices and positions. The
Executive shall perform faithfully the executive duties assigned to him to the
best of his ability.
2. Employment Period.
(a) Basic Rule. The employment period commenced on March ,
2000 (the "Commencement Date") and shall continue thereafter for three (3) years
(the "Employment Period"), unless sooner terminated pursuant to the provisions
of this Agreement.
(b) Early Termination. The Company may terminate the
Executive's employment prior to the end of the Employment Period by giving the
Executive 30 days' advance notice in writing. If the Company terminates the
Executive's employment prior to the end of the Employment Period for any reason
other than Cause, as defined below, or if the Executive terminates his
employment for Good Reason, as defined below, the provisions of paragraphs 1
1(a)(I), 11(b) and 11(c) shall apply. The Executive may terminate his employment
prior to the end of the Employment Period by giving the Company 90 days advance
written notice. If the Executive terminates his employment prior to the end of
the Employment Period other than for Good Reason, the provisions of paragraph 1
1(a)(ii) shall apply. Upon termination of the Executive's employment with the
Company, the Executive's rights under any applicable benefit plans shall be
determined under the provisions of those plans. Any waiver of notice shall be
valid only if it is made in writing and expressly refers to the applicable
notice requirement of this subparagraph 2.
(c) Death. The Executive's employment shall terminate in the
event of his death. The Company shall have no obligation to pay or provide any
compensation or benefits under this Agreement on account of the Executive's
death, or for periods following the Executive's death; provided however that the
Company's obligations under paragraphs 11 (a)(I), 11(b) and 11(c) shall not be
interrupted as a result of the Executive's death, and the Executive's estate or
its representative(s) shall be entitled to exercise all the rights of the
Executive under such Sections. The Executive's rights (and the rights of his
estate) under the benefit plans of the Company in the event of the Executive's
death shall be determined under the provisions of those plans.
(d) Cause. The Company may terminate the Executive's
employment for cause by giving the Executive 30 days' advance notice in writing.
For all purposes under this Agreement, "Cause" shall mean a willful act by the
Executive which constitutes gross misconduct and which is injurious to the
Company. No act, or failure to act, by the Executive shall be considered
"willful" unless committed without good faith without a reasonable belief that
the act or omission was in the Company's best interest. No compensation or
benefits will be paid or
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provided to the Executive under this Agreement on account of a termination for
Cause for periods following the date when such a termination of employment is
effective. The Executive's rights under the benefit plans of the Company in the
event of a termination for Cause shall be determined under the provisions of
those plans.
(e) Disability. The Company may terminate the Executive's
employment for Disability by giving the Executive 30 days advance notice in
writing. For all purposes under this Agreement, "Disability" shall mean that the
Executive, at the time notice is given, has been unable to substantially perform
his duties under this Agreement for a period of not less than six (6)
consecutive months as the result of his incapacity due to physical or mental
illness. In the event that the Executive resumes the performance of
substantially all of his duties hereunder before the termination of his
employment under this subparagraph (e) becomes effective, the notice of
termination shall automatically be deemed to have been revoked. No compensation
or benefits will be paid or provided to the Executive under this Agreement on
account of termination for Disability for periods following the date when such a
termination of employment is effective; provided however that the Company's
obligations under paragraphs II (a)(I), 11(b) and 11(c) shall not be interrupted
as a result of the Executive's Disability, and the Executive or his guardian(s)
or other representative(s) shall be entitled to exercise all the rights of the
Executive under such Sections. The Executive's rights under the benefit plans of
the Company in the event of his Disability shall be determined under the
provisions of those plans.
(f) Good Reason. Employment with the Company may be regarded
as having been constructively terminated by the Company, and the Executive may
therefore terminate his employment for Good Reason and thereupon become entitled
to the benefits of paragraphs 11 (a)(i) and 11(b) below, if, before the end of
the Employment Period, one or more of the following events shall occur: (i)
without the Executive's express written consent, the assignment to the Executive
of any duties or the reduction of the Executive's duties, either of which
results in a significant diminution in the Executive's position or
responsibilities with the Company in effect immediately prior to such
assignment, or the removal of the Executive from such position and
responsibilities; (ii) without the Executive's express written consent, a
substantial reduction,
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without good business reasons, of the facilities and perquisites (including
office space and location) available to the Executive immediately prior to such
reduction; (iii) a material reduction by the Company in the Base Salary of the
Executive as in effect immediately prior to such reduction; (iv) a material
reduction by the Company in the kind or level of employee benefits to which the
Executive is entitled immediately prior to such reduction with the result that
the Executive's overall benefits package is significantly reduced; (v) the
relocation of the Executive to a facility or a location more than 50 miles from
the Executive's then present location or from the Company's principal executive
offices, without the Executive's express written consent; (vi) any purported
termination of the Executive's employment by the Company which is not effected
for death, Disability or for Cause, or any purported termination for which the
grounds relied upon are not valid; (vii) the failure of the Company to obtain
the assumption of this Agreement by any successor; or (viii) any material breach
by the Company of any material provision of this Agreement.
3. Place of Employment. The Executive's services shall be performed at the
Company's principal executive offices in Vero Beach, Florida and New York City,
and at such other places as the Company may locate its executive offices. The
Company shall reimburse the Executive for expenses incurred by travel to and
from Vero Beach, Florida, and to and from New York City and by intermittent
living expenses (including rent or equivalent hotel costs) in connection with
the performance of his duties hereunder.
4. Base Salary. For all services to be rendered by the Executive pursuant to
this Agreement, the Company agrees to pay the Executive during the Employment
Period a base salary (the "Base Salary") at an annual rate of not less than
$300,000. The Base Salary shall be paid in periodic installments in accordance
with the Company's regular payroll practices. The Company agrees solely for the
purpose of considering possible salary increases to review the Base Salary at
least annually as of November of each year (beginning in 200 1) and to make such
increases as the Board of Directors may approve.
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5. Bonus. For all services rendered by the Executive pursuant to this Agreement
during the period ("Initial Bonus Period") beginning on March , 2000 and ending
on March 31, 2001 the Executive was (or shall be if any such amount shall not
have been paid before the date hereof) paid a bonus (the "Initial Bonus"). The
Initial Bonus was payable on a monthly basis for each month during the Initial
Bonus Period at a rate equal to the product of (a) .01% and (b) the amount of
Net Sales by the Company during the preceding Initial Bonus Period. For all
services to be rendered by the Executive pursuant to this Agreement during the
period ("Second Bonus Period") beginning on April 1,2001 and ending on March
31,2001 the Company agrees to issue in favor of the Executive a fully-vested
option (the "Second Bonus") to purchase 300,000 shares of common stock of the
Company at the price of $2.00 per share pursuant to an option agreement in the
form of Exhibit A, such option to be delivered oh or prior to April 1, 2001. For
all services to be rendered by the Executive pursuant to this Agreement during
the Employment Period subsequent to the Second Bonus Period, the Executive shall
be paid a bonus which shall be achievable, progressive, of a magnitude
comparable in aggregate to the magnitude of the Initial Bonus and the Second
Bonus, as adjusted to reflect the growth in the Company's sales of products
(i.e. increased if such sales increase and decreased if they decrease) and based
on appropriate measures of success based on Company Business Plans as adopted
and modified by the Board of Directors of the Company. Any bonus payable
hereunder by reference to the financial results of the Company (such as the
Initial Bonus) shall be verified in accordance with the Company's normal
practices and policies and shall be conclusively determined on the basis of
audited financial statements. No adjustments in the amount of any such Bonus
previously paid shall be made in any circumstance whatever except as a result of
such audit revealing arithmetic errors in amounts paid. Such amounts shall be
paid by the Executive or the Company, as then case may be, within 30 days after
such statements have been finally delivered to the Board of Directors or as
otherwise agreed by the Board of Directors and the Executive. Any bonus payable
hereunder in equity of the Company or other securities of the Company (such as
the Second Bonus) shall be treated as a negotiated and agreed amount not subject
to adjustment after such amount has been established by the Board of Directors
of the Company, notwithstanding any subsequent event.
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6. Stock Options. The Executive shall be entitled to participate in any stock
option grant programs established by the Company for the benefit of its key
employees. The terms of any individual grant shall be determined pursuant to a
stock option agreement or restricted stock purchase agreement between the
Company and the Executive entered into at the time of grant, subject to the
provisions of Section 11(c) hereof
7. Expenses. The Executive shall be entitled to prompt reimbursement by the
Company for all reasonable ordinary and necessary travel (including travel and
living expenses pursuant to Section 3 hereof), entertainment, and other expenses
incurred by the Executive during the Employment Period (in accordance with the
policies and procedures established by the Company for its senior executive
officers) in the performance of his duties and responsibilities under this
Agreement; provided, that the Executive shall properly account for such expenses
in accordance with Company policies and procedures. The parties agree that for
purposes of this paragraph, the Executive's air travel shall be coach class
domestically and business class internationally.
8. Other Benefits. During the Employment Period, the Executive shall be entitled
to participate in employee benefit plans or programs of the Company, if any, to
the extent that his position, tenure, salary, age, health and other
qualifications make him eligible to participate, subject to the rules and
regulations applicable thereto.
9. Vacations and Holidays. The Executive shall be entitled to four (4) weeks
paid vacation and Company holidays in accordance with the Company's policies in
effect from time to time for its senior executive officers.
10. Other Activities. The Executive shall devote substantially all of his
working time and efforts during the Company's normal business hours to the
business and affairs of the Company and its subsidiaries and to the diligent and
faithful performance of the duties and responsibilities duly assigned to him
pursuant to this Agreement, except for vacations, holidays and sickness.
However, the Executive may devote a reasonable amount of his time to civic,
community, or charitable activities and, with the prior written approval of the
Board of Directors, to serve as a director of other corporations and of other
types of business or public activities not expressly mentioned in this
paragraph.
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11. Termination Benefits. In the event the Executive's employment terminates
prior to the end of the Employment Period, then the Executive shall be entitled
to receive severance and other benefits as follows: (a) Severance.
(i) Involuntary Termination. If the Company
terminates the Executive's employment other than for
Cause, or if the Executive terminates his employment
for Good Reason, or if the Executive's employment
terminates by reason of his death or Disability then,
in lieu of any severance benefits to which the
Executive may otherwise be entitled under any Company
severance plan or program, the Executive shall be
entitled to payment of his Base Salary until the end
of the Employment Period or, if earlier, until a
breach by the Executive of his obligations under
paragraph II hereof.
(ii)Other Termination. In the event the Executive's
employment terminates for any reason other than as
described in paragraph II (a)(i) above, including by
reason of the Executive's resignation other than for
Good Reason and the Company's termination of the
Executive for Cause, then the Executive shall be
entitled to receive severance and any other benefits
only as may then be established under the Company's
existing severance and benefit plans and policies at
the time of such termination.
(b) Bonuses. In the event the Executive's employment
is terminated as described in paragraph 11 (a)(i)
above, then the Executive shall be entitled to
receive continuing bonuses as described in paragraph
5 as though he had remained an employee through the
end of the Employment Period. In the event the
Executive's employment terminates for any other
reason during the Employment Period (other than for
Cause), then the Executive shall be entitled to
payment of a portion of subsequent bonuses
determined, after the end of the fiscal year of the
Company in which such termination occurs, by
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multiplying the amount of the most recent bonus
established by the Board of Directors of the Company
for Executive prior to such termination (if in cash,
calculated according to the applicable formula
approved by the Board, and if in equity, calculated
by valuing the equity granted to Executive upon such
date of termination) by a fraction, the numerator of
which will be the number of days in which he was
employed by the Company (or any of its subsidiaries)
in such fiscal year, and the denominator of which
shall be the number of days in such fiscal year. To
the extent all or any portion of the Bonus is payable
to the Executive pursuant to the preceding sentence,
such amount shall be paid in accordance with
paragraph 5. In the event the Executive's employment
is terminated by the Company for Cause, then the
Executive shall not be entitled to receive any
bonuses hereunder with respect to any period
subsequent to such termination, but shall receive any
unpaid bonus with respect the period prior to such
termination and shall not in any event have any
obligation to refund or reimburse any bonus paid or
granted to him prior to such termination.
(c) Options and Restricted Stock. Notwithstanding
anything to the contrary contained in any Option
Agreement or Restricted Stock Purchase Agreement that
the Executive may sign, upon any involuntary or
involuntary termination of Executive's employment
with the Company, including without limitation
termination by the Company for Cause: (i) all
unvested options to purchase shares of the capital
stock of the Company then held by the Executive shall
immediately and without further action on the part of
the Executive or the Company become fully vested in
the Executive, who may exercise them at any time or
from time to time during the three months following
the date of such termination; and (ii) repurchase
rights with respect any shares of the capital stock
of the Company then held by the Executive shall
immediately and without further action on the part of
the Executive or the Company expire on the date of
such termination.
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12. Proprietary Information. During the Employment Period and thereafter, the
Executive shall not, without the prior written consent of the Board of
Directors, disclose or use for any purpose (except in the course of his
employment under this Agreement and in furtherance of the business of the
Company or any of its affiliates or subsidiaries) any confidential information
or proprietary data of the Company. As an express condition of the Executive's
employment with the Company, the Executive agrees to execute confidentiality
agreements as requested by the Company.
13. Non-Solicit. The Executive covenants and agrees with the Company that during
his employment with the Company and for a period expiring one (1) year after the
date of termination of such employment, he will not solicit any of the Company's
then-current employees to terminate their employment with the Company or to
become employed by any firm, company or other business enterprise with which the
Executive may then be connected.
14. Right to Advice of Counsel. The Executive acknowledges that he has had the
right to consult with counsel and is fully aware of his rights and obligations
under this Agreement.
15. Successors. The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. Failure of the Company to obtain such assumption agreement
prior to the effectiveness of any such succession shall entitle the Executive to
the benefits described in paragraphs 11(a)(i), 11(b) and 11(c) of this
Agreement, subject to the terms and conditions therein.
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16. Arbitration. Any dispute or controversy arising under or in connection with
this Agreement shall be settled exclusively by arbitration in New York city, in
accordance with the rules of the American Arbitration Association then in effect
by an arbitrator selected by both parties within 10 days after either party has
notified the other in writing that it desires a dispute between them to be
settled by arbitration. In the event the parties cannot agree on such arbitrator
within such 10-day period, each party shall select an arbitrator and inform the
other party in writing of such arbitrator's name and address within 5 days after
the end of such 10-day period and the two arbitrators so selected shall select a
third arbitrator within 15 days thereafter; provided, however, that in the event
of a failure by either party to select an arbitrator and notify the other party
of such selection within the time period provided above, the arbitrator selected
by the other party shall be the sole arbitrator of the dispute. Each party shall
pay its own expenses associated with such arbitration, including the expense of
any arbitrator selected by such party and the Company will pay the expenses of
the jointly selected arbitrator. The decision of the arbitrator or a majority of
the panel of arbitrators shall be binding upon the parties and judgment in
accordance with that decision may be entered in any court having jurisdiction
thereof Punitive damages shall not be awarded.
17. Absence of Conflict. The Executive represents and warrants that his
employment by the Company as described herein shall not conflict with and will
not be constrained by any prior employment or consulting agreement or
relationship.
18. Assignment. This Agreement and all rights under this Agreement shall be
binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective personal or legal representatives, executors,
administrators, heirs, distributees, devisees, legatees, successors and assigns.
This Agreement is personal in nature, and neither of the parties to this
Agreement shall, without the written consent of the other, assign or transfer
this Agreement or any right or obligation under this Agreement to any other
person or entity; except that the Company may assign this Agreement to any of
its affiliates or wholly-owned subsidiaries, provided, that such assignment will
not relieve the Company of its obligations hereunder. If the Executive should
die while any amounts are still payable to the Executive hereunder, all such
amounts, unless otherwise provided herein, shall be paid in accordance with the
terms of this Agreement to the Executive's devisee, legatee, or other designee
or, if there be no such designee, to the Executive's estate.
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19. Notices. For purposes of this Agreement, notices and other communications
provided for in this Agreement shall be in writing and shall be delivered
personally or sent by United States certified mail, return receipt requested,
postage prepaid, addressed as follows: If to the Executive: Xxxx Xxxxxxxx do
IAMNY, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, If to the Company: IAMNY, 00
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 or to such other address or the attention
of such other person as the recipient party has previously furnished to the
other party in writing in accordance with this paragraph. Such notices or other
communications shall be effective upon delivery or, if earlier, three days after
they have been mailed as provided above.
20. Integration. This Agreement represents the entire agreement and
understanding between the parties as to the subject matter hereof and supersedes
all prior or contemporaneous agreements whether written or oral. No waiver,
alteration, or modification of any of the provisions of this Agreement shall be
binding unless in writing and signed by duly authorized representatives of the
parties hereto.
21. Waiver. Failure or delay on the part of either party hereto to enforce any
right, power, or privilege hereunder shall not be deemed to constitute a waiver
thereof. Additionally, a waiver by either party or a breach of any promise
hereof by the other party shall not operate as or be construed to constitute a
waiver of any subsequent waiver by such other party.
22. Severability. Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
construed and enforced in such jurisdiction as if such invalid, illegal or
unenforceable provision had never been contained herein.
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23. Headings. The headings of the paragraphs contained in this Agreement are for
reference purposes only and shall not in any way affect the meaning or
interpretation of any provision of this Agreement.
24. Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal substantive laws, and not the choice of law rules,
of the State of New York.
25. Counterparts. This Agreement may be executed in one or more counterparts,
none of which need contain the signature of more than one party hereto, and each
of which shall be deemed to be an original, and all of which together shall
constitute a single agreement.
IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case
of the Company by its duly authorized officer, as of the day and year first
above written.
IAM Group, Ltd.
By: /s/ XXXX XXXXXXXX
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CFO\Executive
By: /s/ XXXX XXXXXXXX
-----------------------
Xxxx Xxxxxxxx
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