EXHIBIT 10.66
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated August 29, 2000, between WORLDWIDE WEB NETWORX
COMPANY, a Delaware Company (the "COMPANY") and XXXXX XXXXXX ("EXECUTIVE", an
individual residing at 0 Xxxxx Xxxxx Xxxx, Xxxxxxx, XX 00000.
RECITAL:
The parties hereto desire to enter into this Agreement to provide for the
employment of Executive by the Company and for certain other matters in
connection with such employment, all as set forth more fully in this Agreement.
NOW, THEREFORE, in consideration of the premises and covenants set forth
herein, and intending to be legally bound hereby, the parties to this Agreement
hereby agree as follows:
1. DUTIES. The Company hereby employs Executive as its President and Chief
Executive Officer, reporting only to the Board of Directors of the Company (the
"BOARD"), and Executive agrees to be so employed and to devote substantially her
business time and efforts to performing her duties hereunder. The Executive
shall be based at the Company's executive offices, which the Company agrees may
be moved by Executive to a location in the New York City metropolitan area.
2. APPOINTMENT AS DIRECTOR AND RIGHT TO APPOINT AN INDEPENDENT DIRECTOR.
Executive shall also be appointed as a member of the Board and shall have the
right to designate one independent director as a member of the Board, effective
at or about the commencement of the Term of this Agreement (as defined
hereafter), each to serve until his or her successor is elected and qualified.
Neither Executive nor her designee shall be removed as a director without their
consent and, if the designee ceases to be a director for any reason, Executive
may designate a replacement designee (who shall be similarly elected and serve).
Executive shall also be appointed Chairman of the Board and serve in such
capacity during the term of her employment.
3. TERM. The Company hereby agrees to continue to employ the Executive and
the Executive hereby accepts continued employment, in accordance with the terms
and conditions set forth herein, for a term (the "EMPLOYMENT TERM") commencing
September 1, 2000 (the "EFFECTIVE DATE") and terminating, unless otherwise
terminated earlier in accordance with Section 6 hereof, on the third anniversary
of the Effective Date (the "ORIGINAL EMPLOYMENT TERM"), provided that the
Employment Term shall be automatically extended, subject to earlier termination
as provided in Section 6 hereof, for successive additional one (1) year periods
(the "ADDITIONAL TERMS"), unless, at least ninety (90) days prior to the end of
the Original Employment Term or the then Additional Term, the Company or the
Executive has notified the other in writing that the Employment Term shall
terminate at the end of the then current term. Notice of nonextension by the
Company shall be treated as a Termination without Cause by the Company as of the
end of the then current Employment Term or, if so elected in writing by the
Executive, at any time after the giving of such notice.
4. COMPENSATION.
(a) SALARY. Executive shall be paid an annual salary at the rate of
not less than $200,000.00 (the "BASE SALARY"), payable in accordance with the
Company's regular payroll practices, during the Term of this Agreement. The Base
Salary may be increased from time to time by the Board in its sole and absolute
discretion but may not be decreased for any reason. The Board shall review the
Base Salary at least annually at the end of each fiscal year of the Company.
(b) BONUSES. At the end of each fiscal year of the Company that ends
during the Term of this Agreement and at such other times as the Board
determines, the Board shall award a performance bonus to Executive for such
fiscal year based on the achievement of objective performance goals agreed upon
by Executive and the Board. The target bonus award shall be at least fifty
percent (50%) of Base Salary.
(c) FRINGE BENEFITS. Executive shall be entitled to participate in
all insurance, vacation and other fringe benefit programs of the Company to the
extent and on the same terms and conditions as are accorded to other senior
officers and key executives of the Company from time to time, which shall
include life insurance coverage with a death benefit of at least One Million
($1,000,000.00) Dollars and long-term disability insurance coverage with
benefits of at least One Hundred Twenty Thousand ($120,000.00) Dollars per
annum.
(d) REIMBURSEMENT OF EXPENSES. Executive shall be reimbursed for all
normal items of travel, entertainment and miscellaneous business expenses
reasonably incurred by her on behalf of the Company, provided that such expenses
are documented and submitted in accordance with the reimbursement policies of
the Company as in effect from time to time.
(e) STOCK OPTIONS. The Company shall adopt a stock option plan, and
make the grant required below, on or before the expiration of a period of thirty
(30) days from the date of this Agreement (the "ADOPTION PERIOD"), which plan
and option grant, except as provided herein, shall not include any vesting,
exercise, forfeiture or other limitations on shares of Company stock for which
options are granted to Executive. Failure by the Company to adopt such plan
within the required Adoption Period shall, for the purposes of this Agreement,
constitute "Good Reason" for which the Executive may terminate at any time and
shall be treated as is Executive terminated for Good Reason as of such date.
Subject to the adoption of such stock option plan by the Company within the
required Adoption Period, Executive will be granted under such stock option plan
an option to purchase up to 5,000,000 shares of the Common Stock of the Company
(the "OPTION SHARES"), for the sum of $.40 per share. The option shall terminate
on the tenth (10th) anniversary of the date of the grant, upon the terms and
subject to the conditions set forth in a stock option agreement, Executive's
rights with respect to up to 1,500,000 of the Option Shares shall vest in
accordance with the following schedule:
LENGTH OF TIME EMPLOYED NUMBER OF OPTION SHARES
----------------------- -----------------------
0 months 500,000
12 months 1,000,000
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Executive's rights with respect to the remaining Option Shares shall vest on the
fifth (5th) anniversary of the Commencement Date if the Executive is then
employed by the Company, or if earlier, if the bid price for the Company's
Common Stock on the open market reaches or exceeds, and remains at for a period
of at least ten (10) consecutive trading days, the following levels, in
accordance with the following schedule (subject to an appropriate adjustment in
the number of Option Shares and bid price in the event of a stock split or a
reverse stock split or other capitalization event):
BID PRICE NUMBER OF OPTION SHARES
--------- -----------------------
$1.50 1,000,000
$2.25 1,000,000
$3.00 1,000,000
$4.50 500,000
Notwithstanding the foregoing to the contrary, vesting of all unvested
Option Shares under this Agreement shall be immediate in the event death
pursuant to Section 5(a) hereof, Total Disability pursuant to Section 5(b)
hereof, Other Termination by the Company pursuant to Section 6(b) hereof, or
Termination by Executive for Good Reason pursuant to Section 6(c) hereof, or a
Change in Control (as defined in Exhibit A hereof).
(f) ENTIRE COMPENSATION. The compensation provided for in this Agreement
shall constitute full payment for the services to be rendered by Executive to
the Company hereunder, except as otherwise awarded by the Board.
5. DEATH OR TOTAL DISABILITY OF EXECUTIVE.
(a) DEATH. In the event of the death of Executive during the term of
this Agreement, employment under this Agreement shall terminate effective as of
the date of Executive's death, and the Company shall not have any further
obligation or liability under this Agreement except that the Company shall: (i)
pay to Executive's estate any portion of Executive's Base Salary for the period
up to Executive's date of death that has been earned but remains unpaid
("ACCRUED BASE SALARY"); (ii) pay to Executives, estate any earned but unpaid
bonus for any completed bonus period (the "PRIOR YEAR BONUS"); (iii) pay to
Executive's estate at the time it would otherwise have been paid based on actual
results a pro rata bonus based on the percentage of the year during which the
Executive was employed (the "PRO RATA BONUS"); (iv) pay to Executive's estate
any benefits that have accrued to Executive under the terms of the benefit plans
of the Company in which she is a participant, which benefits shall be paid in
accordance with the terms of those plans; and (v) Executive's rights with
respect to all unvested Option Shares shall immediately and automatically vest,
such Option Shares to be exercisable by
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the Executive's devisee, legatee or other designee, or in the absence thereof,
by the Executive's estate, for the entire remainder of the 10-year exercise
period.
(b) TOTAL DISABILITY. In the event of the Total Disability (as that term
is hereinafter defined) of Executive, for a period of 180 consecutive days at
any time during the term of this Agreement, the Company shall have the right to
terminate Executive's employment hereunder by giving Executive 30 days' written
notice thereof, and, upon expiration of such 30- day period, without Executive
returning to full-time employment, the Company shall have no further obligation
or liability to Executive hereunder, except that (i) Executive shall be entitled
to Accrued Base Salary, Prior Year Bonus and Pro Rata Bonus, (ii) Executive
shall continue to receive sixty percent (60%) of her Base Salary and all of her
benefits for a period of one (1) year following the date of termination, less
the amount of any long term disability insurance proceeds actually received by
Executive with respect to such period of time pursuant to an insurance policy
provided or paid for by the Company; and (ii) Executive's rights with respect to
100% of all unvested Option Shares shall immediately and automatically vest,
such Option Shares to be exercisable for the entire remainder of the 10-year
exercise period. The term "TOTAL DISABILITY," when used herein, shall mean a
mental or physical condition that renders Executive unable or incompetent to
carry out the essential functions of her job responsibilities.
6. TERMINATION.
(a) TERMINATION BY THE COMPANY FOR CAUSE. The Company may discharge
Executive and thereby terminate her employment hereunder upon written notice to
Executive provided within 60 days of the event, for any of the following
reasons: (i) material and continued violation of any policy regarding substance
abuse as may be promulgated by the Company from time to time and given in
writing to Executive; (ii) the willful failure to attempt to substantially
perform the duties or responsibilities of her position; (iii) any material
breach of any covenant or agreement contained in SECTIONS 7 AND 8 of this
Agreement; (iv) engaging in willful misconduct with regard to the Company that
causes material damage to the Company or its business reputation; (v) conviction
(by trial or guilty plea) or a plea of non-contest, NOLO CONTENDERE or similar
plea to a felony which has become non-appealable; (vi) adjudication as an
incompetent; or (vii) misappropriation of any funds or property of the Company
materially affecting the Company; provided, however, that with respect only to
subsections (i), (ii) and (iii) above, the Company shall not discharge Executive
for cause unless Executive fails, refuses or for any reason does not cure such
violation to the reasonable satisfaction of the Company within 30 days following
written notice from the Company that there exists a reason for discharge for
cause. Notice shall indicate the specific termination provision in Section 6(a)
relied upon and shall set forth in reasonable detail the facts and circumstances
which provide for a basis for Termination for Cause. Further, notice shall be
required to include a copy of a resolution duly adopted by at least two-thirds
(2/3) of the entire membership of the Board at a meeting of the Board which was
called for the purpose of considering such termination and which Executive and
his representative had the right to attend and address the Board, finding that,
in the good faith of the Board, Executive engaged in conduct set forth in the
definition of Cause herein and specifying the particulars thereof in reasonable
detail. The date of termination for a Termination for Cause shall be the date
indicated in the notice. Any purported Termination for Cause which is held by a
court not to have been based on the grounds set forth in this Agreement or not
to have followed
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the procedures set forth in this Agreement shall be deemed a Termination by the
Company without Cause. No action or inaction should be deemed willful if not
demonstrably willful and if taken or not taken by the Executive in good faith as
not being adverse to the best interests of the Company. In the event that the
Company shall discharge Executive pursuant to this SECTION 6(A), the Company
shall not have any further obligation or liability under this Agreement, except
that the Company shall pay to Executive: (i) any portion of Executive's Base
Salary for the period up to the date of termination that has been earned but
remains unpaid; and (ii) any benefits that have accrued to Executive under the
terms of the benefit plans of the Company in which she is a participant, which
benefits shall be paid in accordance with the terms of those plans.
(b) OTHER TERMINATION BY THE COMPANY. In the event that the Company
discharges Executive and thereby terminates her employment hereunder at any time
during the Term for any reason other than one specified in SECTION 6(A),
Executive shall be entitled to receive (i) her full Accrued Base Salary and
Prior Year Bonus, (ii) payment, during January of the calendar year following
the date of the Executive's termination, of an amount equal to the Executive's
Termination Year Target Bonus multiplied by a fraction, the numerator of which
is the number of days during the fiscal year of the Executive's termination that
the Executive was employed by the Company and the denominator is three hundred
sixty-five (365), (iii) promptly after termination a lump sum equal to the
greater of (A) one (1) and (B) the number of years and fractional years
remaining in the then Employment Term times the sum of her Base Salary, and the
greater of: (x) the Termination Year Target Bonus, or (y) the Executive's
highest annual incentive compensation award earned for the prior two (2) fiscal
years ending prior to the fiscal year of termination (whether or not deferred),
provided such amount shall be increased to three (3) times if after or within
four (4) months prior to a Change in Control, (iv) benefits for one (1) year
after termination and (v) Executive's rights with respect to all unvested Option
Shares shall immediately and automatically vest such Option Shares to be
exercisable for the entire remainder of the 10-year exercise period.
(c) TERMINATION BY EXECUTIVE FOR GOOD REASON. Executive may
terminate her employment hereunder at any time upon 10 business days' prior
written notice for Good Reason (as defined below) unless the Good Reason event
is cured within such 10-day period. If the Agreement is so terminated, Executive
shall be entitled to be treated as if she was terminated under (b) above. For
purposes of this Agreement, "GOOD REASON" means, without Executive's express
written consent, any of the following circumstances:
(A) Executive's removal from any of her positions as
President, Chief Executive Officer or director, or a significant
diminution in the nature or status of Executive's responsibilities
or authority; or
(B) Executive being assigned to any duties inconsistent with
Executive's status as an executive of the Company holding the
position of Chairman, President and Chief Executive Officer; or
(C) A reduction by the Company in Executive's Base Salary or
benefits, including, without limitation, failure by the Company to
adopt a stock option plan and grant options as required under
section 4(e) hereof; or
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(D) Relocation of the Executive from the principal office of
the Company (excluding reasonable travel on the Company's business
to an extent substantially consistent with the Executive's business
obligations) or relocation of the principal office of the Company to
a location which is at least thirty-five (35) miles from the
Company's headquarters after it has been relocated to the New York
City metropolitan area; or
(E) The failure of the Company to obtain and deliver to the
Executive a satisfactory written agreement from any successor to the
Company to assume and agree to perform this Agreement; or
(F) Any material breach by the Company of this Agreement that
is not cured within ten (10) days after written notice thereof; or
(G) A Change in Control occurs as defined in Exhibit A hereto.
In the event that the Executive becomes entitled to payments and/or
benefits which would constitute "parachute payments" within the
meaning of Section 280G of the Code, the provisions of Exhibit B
will apply; or
(H) Any other material breach of this Agreement by the Company
or any successor.
(d) TERMINATION BY EXECUTIVE WITHOUT GOOD REASON. Notwithstanding
anything in this Agreement to the contrary, the Executive shall be entitled to
terminate employment without Good Reason, and in such event, shall be entitled
to receive all accrued obligations under this Agreement.
7. NON-DISCLOSURE AND NON-COMPETITION.
(a) NON-DISCLOSURE. Executive acknowledges that in the course of
performing services for the Company, Executive may have had access to
confidential and proprietary information and records, data and other trade
secrets of the Company ("CONFIDENTIAL INFORMATION"). Confidential Information
shall include, without limitation, the following types of information or
material, both existing and contemplated, regarding the Company, or its
subsidiary or affiliated companies: corporate information, including plans,
strategies, policies, resolutions, and any litigation or negotiations; marketing
information, including strategies, methods, customers, prospects, or market
research data; financial information, including cost and performance data, debt
arrangement, equity structure, investors, and holdings; operational and
scientific information, including trade secrets and technical information; and
personnel information, including personnel lists, resumes, personnel data,
organizational structure, compensation structure, and performance evaluations.
Executive agrees that, during her employment by the Company hereunder and after
the termination or expiration of Executive's employment hereunder, to keep the
Confidential Information secret and confidential; not to publish, disclose or
divulge the Confidential Information to any other party; not to use any of the
Confidential Information for Executive's own benefit or to the detriment of the
Company without the prior written consent of the Company, whether or not such
Confidential Information was discovered or developed by Executive. Executive
also agrees not to divulge, publish or use any
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proprietary and/or confidential information of others that the Company is
obligated to maintain in confidence for the relevant time period of the
Company's obligation; provided, that the Executive has knowledge of such
obligation. Notwithstanding the foregoing, the provisions of this SECTION 7(A)
will not apply when the Confidential Information (i) is publicly disclosed other
than by Executive, (ii) is the subject of a valid order of a court or
administrative agency, or (iii) is information that is at the time of disclosure
public knowledge or generally known within the industry. Except as specifically
provided in (b) below, the Company agrees that it will not assert to enjoin or
otherwise limit the Executive's post employment activities based on an argument
of inevitable disclosure of confidential information.
(b) NON-COMPETITION. Executive agrees that, during her employment by
the Company hereunder and for an additional period of one (1) year after the
termination or expiration of Executive's employment hereunder, Executive shall
not, directly or indirectly, (i) be engaged, directly or indirectly, in any
Competitive Business (as that term is hereinafter defined) or (ii) solicit,
hire, contract for services or otherwise employ, directly or indirectly, any of
the employees of the Company. Nothing herein contained shall be deemed to
prevent Executive from investing in or acquiring five per cent or less of any
class of securities of any company if such class of securities is listed on a
national securities exchange or is quoted on the Nasdaq Stock Market, or in
inventory in any mutual fund or other pooled-type fund. For purposes of this
SECTION 7(b), the term "COMPETITIVE BUSINESS" shall mean any business that in
competition with the Company is primarily engaged in the business of assisting
unrelated companies in developing methods to sell their products or services
through the Internet (other than as incidental to other activities of the
entity). Notwithstanding the foregoing, the Company acknowledges and agrees that
the provisions of this SECTION 7(b) shall not apply if Executive's employment is
terminated under the provisions of SECTION 6(b) OR 6(c).
8. COMPANY DOCUMENTATION. Executive shall hold in a fiduciary capacity for
the benefit of the Company all documentation, disks, programs, data, records,
drawings, manuals, reports, sketches, blueprints, letters, notes, notebooks and
all other writings, electronic data, graphics and tangible information and
materials of a secret, confidential or proprietary information nature relating
to the Company or the Company's business that are in the possession or under the
control of Executive; provided, that the Executive may retain her rolodex and
similar phone directories (collectively, the "ROLODEX") to the extent the
Rolodex does not contain information other than name, address, telephone number
and similar information.
9. INJUNCTIVE RELIEF. Executive acknowledges that her compliance with the
agreements in SECTIONS 7 AND 8 is necessary to protect the good will and other
proprietary interests of the Company and that she is one of the principal
executives of the Company and conversant with its affairs, its trade secrets and
other proprietary information, Executive acknowledges that a breach of any of
her agreements in SECTIONS 7 AND 8 hereof will result in irreparable and
continuing damage to the Company for which there will be no adequate remedy at
law; and Executive agrees that in the event of any breach of the aforesaid
agreements, the Company and its successors and assigns shall be entitled to
injunctive relief and to such other and further relief as may be proper.
10. SUPERSEDES OTHER AGREEMENTS. This Agreement supersedes and is in lieu
of any and all other employment arrangements between Executive and the Company.
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11. AMENDMENTS. This Agreement may not be amended or terminated orally.
Any amendment to this Agreement shall be made in writing and signed by the
parties hereto.
12. ENFORCEABILITY. If any provision of this Agreement shall be invalid or
unenforceable, in whole or in part, then such provision shall be deemed to be
modified or restricted to the extent and in the manner necessary to render the
same valid and enforceable, or shall be deemed excised from this Agreement, as
the case may require, and this Agreement shall be construed and enforced to the
maximum extent permitted by law as if such provision had been originally
incorporated herein as so modified or restricted or as if such provision had not
been originally incorporated herein, as the case may be.
13. CONSTRUCTION. This Agreement shall be construed and interpreted in
accordance with the internal laws of the State of Delaware.
14. ASSIGNMENT.
(a) BY THE COMPANY. This Agreement may and shall be assigned or
transferred to, and shall be binding upon and shall inure to the benefit of, any
permitted successor of the Company, and any such successor shall be deemed
substituted for all purposes of the "Company" under the terms of this Agreement.
The Agreement may not otherwise be assigned or transferred by the Company. The
Company shall require each such permitted successors to expressly assume and
agree to perform this Agreement in the same manner and to the same extent the
Company would be required to perform it if no such succession had taken place.
As used in this Agreement, the term "permitted successor" shall mean any person,
firm, corporation or business entity which at any time, whether by merger,
purchase, or otherwise, acquires all or substantially all of the assets of the
Company. As used in this Agreement, "the Company" shall mean the Company as
hereinbefore defined and any permitted successor to its business and/or assets
as provided above that executes and delivers the agreement provided for in this
SECTION 14(A) or that otherwise becomes bound by all the terms and provisions of
this Agreement by operation of law. Notwithstanding the provisions of this
SECTION 14(A), if the Company and Executive agree to the employment of Executive
by an affiliate or subsidiary of the Company, then this Agreement may be
assigned by the Company to such affiliate or subsidiary; provided, that such
assignment shall not release the Company from any obligation under this
Agreement without a signed release provided by the Executive. Notwithstanding
any assignment of this Agreement under this paragraph, the Company shall remain,
with such successor, jointly and severally liable for each of its obligations
hereunder. Except as herein provided, this Agreement may not otherwise be
assigned by the Company.
(b) BY EXECUTIVE. This Agreement and the obligations created
hereunder may not be assigned by Executive, but all rights of Executive
hereunder shall inure to the benefit of and be enforceable by her heirs,
devisees, legatees, executors, administrators and personal representatives.
15. PAYMENT OF LEGAL FEES. The Company shall pay the Executive's
reasonable legal fees and costs associated with entering into this Agreement. To
the fullest extent permitted by law, the Company shall promptly pay upon
submission of statements all legal and other
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professional fees, costs of litigation, prejudgment interest, and other expenses
incurred in connection with any dispute arising hereunder; provided, however,
the Company shall be reimbursed by the Executive for (i) the fees and expenses
advanced in the event the Executive's claim is in a material manner in bad faith
or frivolous and the arbitrator or court, as applicable, determines that the
reimbursement of such fees and expenses is appropriate, or (ii) to the extent
that the arbitrator or court, as appropriate, determines that such legal and
other professional fees are clearly and demonstrably unreasonable.
16. INCOME TAX GROSS UP. In the event that the Executive becomes entitled
to payments and/or benefits which would constitute "parachute payments" within
the meaning of section 280G of the Code, the provisions of Exhibit B will apply.
17. ARBITRATION. All disputes and controversies arising under or in
connection with this Agreement, other than the seeking of injunctive or other
equitable relief pursuant to Section 7 hereof, shall be settled by arbitration
conducted before a panel of three (3) arbitrators sitting in New York City, New
York, or such other location agreed by the parties hereto, in accordance with
the rules for expedited resolution of commercial disputes of the American
Arbitration Association then in effect. The determination of the majority of the
arbitrators shall be final and binding on the parties. Judgment may be entered
on the award of the arbitrator in any court having proper jurisdiction. All
expenses of such arbitration, including the fees and expenses of the counsel of
the Executive, shall be borne by the Company and the Executive shall be entitled
to reimbursement of her expenses as provided in Section 16 hereof.
18. INDEMNIFICATION. The Company shall indemnify and hold harmless
Executive to the fullest extent permitted by law for any action or inaction of
Executive while serving as an officer and director of the Company or, at the
Company's request, as an officer or director of any other entity or as a
fiduciary of any benefit plan. The Company shall cover the Executive under
directors and officers liability insurance both during and, while potential
liability exists, after the Employment Term in the same amount and to the same
extent as the Company covers its other officers and directors, but in an amount
less than $10 million.
19. NOTICES. All notices required or permitted to be given hereunder shall
be in writing and shall be deemed to have been given when mailed by certified
mail, return receipt requested, or delivered by a national overnight delivery
service addressed to the intended recipient as follows:
If to the Company:
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: General Counsel
Fax: 000-000-0000
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If to Executive:
0 Xxxxx Xxxxx Xxxx, Xxxxxxx, XX 00000, Fax: 000-000-0000
Any party may from time to time change its address for the purpose of notices to
that party by a similar notice specifying a new address, but no such change
shall be deemed to have been given until it is actually received by the party
sought to be charged with its contents.
20. WAIVERS. No claim or right arising out of a breach or default under
this Agreement shall be discharged in whole or in part by a waiver of that claim
or right unless the waiver is supported by consideration and is in writing and
executed by the aggrieved party hereto or her or its duly authorized agent. A
waiver by any party hereto of a breach or default by the other party hereto of
any provision of this Agreement shall not be deemed a waiver of future
compliance therewith, and such provisions shall remain in full force and effect.
21. SURVIVAL OF COVENANTS. The provisions of SECTIONS 7, 8 AND 9 hereof
shall survive any termination of this Agreement or expiration of the employment
term. Furthermore, any provision of this Agreement which provides a benefit to
Executive and which by the express terms hereof does not terminate upon the
termination of Executive's employment shall remain binding upon the Company
until such time as such benefits are paid in full to Executive or her
successors.
22. IN WITNESS WHEREOF, this Agreement has been executed by the parties as
of the date first above written.
WORLDWIDE WEB NETWORX COMPANY
By: /s/ Xxxxxx Xxxxxxxxx
----------------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Acting President
/s/ Xxxxx X. Xxxxxx
--------------------------------------------
XXXXX X. XXXXXX
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EXHIBIT A
CHANGE IN CONTROL
(a) Any "person" or "group" (within the meaning of Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), other than the Company, any trustee or other fiduciary holding Company
common stock under an employee benefit plan of the Company or a related company,
or any corporation which is owned, directly or indirectly, by the stockholders
of the Company in substantially the same proportions as their ownership of the
Company's common stock, is or becomes the beneficial owner (as defined in Rule
13d-3 under the Exchange Act) of more than fifty percent (50%) of the then
outstanding voting stock;
(b) During any period of two (2) consecutive years, individuals who at
the beginning of such period constitute the Board and any new director whose
election by the Board or nomination for election by the Company's stockholders
was approved by a vote of at least two-thirds of the directors then still in
office who either were directors at the beginning of the two year period of
whose election or nomination for election was previously so approved, cease for
any reason to constitute at least a majority of the Board;
(c) The consummation of a merger or consolidation of the Company with
any other corporation, other than a merger or consolidation which would result
in the voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or being converted into
voting securities of the surviving entity) more than fifty percent (50%) of the
combined voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation; or
(d) The approval of the stockholders of the Company of a plan of
complete liquidation of the Company or an agreement for the sale or disposition
by the Company of all or substantially all of its assets.
EXHIBIT B
PARACHUTE GROSS UP
(e) In the event that the Executive shall become entitled to payments
and/or benefits provided by this Agreement or any other amounts in the "nature
of compensation" (whether pursuant to the terms of this Agreement or any other
plan, arrangement or agreement with the Company, any person whose actions result
in a change of ownership or effective control covered by Section 280G(b)(2) of
the Code or any person affiliated with the Company or such person) as a result
of such change in ownership or effective control (collectively the "Company
Payments"), and such Company Payments will be subject to the tax (the "Excise
Tax") imposed by Section 49999 of the Code (and any similar tax that may
hereafter be imposed by any taxing authority) the Company shall pay to the
Executive at the time specified in subsection (d) below an additional amount
(the "Gross-up Payment") such that the net amount retained by the Executive,
after deduction of any Excise Tax on the Company Payments and any U.S. federal,
state, and for local income or payroll tax upon the Gross-up Payment provided
for by this paragraph (a), but before deduction for any U.S. federal, state, and
local income or payroll tax on the Company Payments, shall be equal to the
Company Payments.
(f) For purposes of determining whether any of the Company Payments and
Gross-up Payments (collectively the "Total Payments") will be subject to the
Excise Tax and the amount of such Excise Tax, (x) the Total Payments shall be
treated as "parachute payments" within the meaning of Section 280G(b)(2) of the
Code, and all "parachute payments" in excess of the "base amount" (as defined
under Code Section 280G(b)(3) of the Code) shall be treated as subject to the
Excise Tax, unless and except to the extent that, in the opinion of the
Company's independent certified public accountants appointed prior to any change
in ownership (as defined under Code Section 280G(b)(2)) or tax counsel selected
by such accountants (the "Accountants") such Total Payments (in whole or in
part) either do not constitute "parachute payments," represent reasonable
compensation for services actually rendered within the meaning of Section
280G(b)(4) of the Code in excess of the "base amount" or are otherwise not
subject to the Excise Tax, and (y) the value of any non-cash benefits or any
deferred payment or benefit shall be determined by the Accountants in accordance
with the principles of Section 280G of the Code.
(g) For purposes of determining the amount of the Gross-up Payment, the
Executive shall be deemed to pay U.S. federal income taxes at the highest
marginal rate of U.S. federal income taxation in the calendar year in which the
Gross-up Payment is to be made and state and local income taxes at the highest
marginal rate of taxation in the state and locality of the Executive's residence
for the calendar year in which the Company Payment is to be made, net of the
maximum reduction in U.S. federal income taxes which could be obtained from
deduction of such state and local taxes if paid in such year. In the event that
the Excise Tax is subsequently determined by the Accountants to be less than the
amount taken into account hereunder at the time the Gross-up Payment is made,
the Executive shall repay to the Company, at the time that the amount of such
reduction in Excise Tax is finally determined, the portion of the prior Gross-up
Payment attributable to such reduction (plus the portion of the Gross-up
Payment attributable to the Excise Tax and U.S. federal, state and local income
tax imposed on the portion of the Gross-up Payment being repaid by the Executive
if such repayment results in a reduction in Excise Tax or a U.S. federal, state
and local income tax deduction), plus interest on the amount of such repayment
at the rate provided in Section 1274(b)(2)(B) of the Code. Notwithstanding the
foregoing, in the event any portion of the Gross-up Payment to be refunded to
the Company has been paid to any U.S. federal, state and local tax authority,
repayment thereof (and related amounts) shall not be required until actual
refund or credit of such portion has been made to the Executive, and interest
payable to the Company shall not exceed the interest received or credited to the
Executive by such tax authority for the period it held such portion. The
Executive and the Company shall mutually agree upon the course of action to be
pursued (and the method of allocating the expense thereof) if the Executive's
claim for refund or credit is denied.
(h) In the event that the Excise Tax is later determined by the
Accountant or the Internal Revenue Service to exceed the amount taken into
account hereunder at the time the Gross-up Payment is made (including by reason
of any payment the existence or amount of which cannot be determined at the time
of the Gross-up Payment), the Company shall make an additional Gross-up Payment
in respect of such excess (plus any interest or penalties payable with respect
to such excess) at the time that the amount of such excess is finally
determined.
(i) The Gross-up Payment or portion thereof provided for in subsection
(c) above shall be paid not later than the thirtieth (30th) day following an
event occurring which subjects the Executive to the Excise Tax; provided,
however, that if the amount of such Gross-up Payment or portion thereof cannot
be finally determined on or before such day, the Company shall pay to the
Executive on such day an estimate, as determined in good faith by the
Accountant, of the minimum amount of such payments and shall pay the remainder
of such payments (together with interest at the rate provided in Section
1274(b)(2)(B) of the Code), subject to further payments pursuant to subsection
(c) hereof, as soon as the amount thereof can reasonably be determined, but in
no event later than the ninetieth day after the occurrence of the event
subjecting the Executive to the Excise Tax. In the event that the amount of the
estimated payments exceeds the amount subsequently determined to have been due,
such excess shall constitute a loan by the Company to the Executive, payable on
the fifth day after demand by the Company (together with interest at the rate
provided in Section 1274(b)(2)(B) of the Code).
(j) In the event of any controversy with the Internal Revenue Service
(or other taxing authority) with regard to the Excise Tax, the Executive shall
permit the Company to control issues related to the Excise Tax (at its expense),
provided that such issues do not potentially materially adversely affect the
Executive, but the Executive shall control any other issues. In the event the
issues are interrelated, the Executive and the Company shall in good faith
cooperate so as not to jeopardize resolution of either issue, but if the parties
cannot agree the Executive shall make the final determination with regard to the
issues. In the event of any conference with any taxing authority as to the
Excise Tax or associated income taxes, the Executive shall permit the
representative of the Company to accompany the Executive, and the Executive and
the Executive's representative shall cooperate with the Company and its
representative.
(k) The Company shall be responsible for all charges of the Accountant.
(l) The Company and the Executive shall promptly deliver to each other
copies of any written communications, and summaries of any verbal
communications, with any taxing authority regarding the Excise Tax covered by
this Exhibit B.
