EMPLOYMENT AGREEMENT
Exhibit
10.1
This
Employment Agreement (the “Agreement”), effective as of
October 1, 2008 (the “Effective
Date”), is by and between R. XxXxxxx Xxxxxxx (the “Executive”) and a21, Inc., a
corporation formed under the laws of the State of Delaware (the “Company” or “a21”).
W I T N E
S S E T H:
WHEREAS, the Company desires
to employ the Executive, and the Executive is willing to render services to the
Company, 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 Chief Financial Officer and Vice
President, 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 a21’s Board of Directors (the “a21 Board”) through its Chief
Executive Officer. The Executive shall perform and discharge
diligently and faithfully such duties as may be assigned to him from time to
time by the a21 Board and its Chief Executive Officer as are customary for the
position of Chief Financial Officer. The Executive shall be based in
the Jacksonville, Florida, metropolitan area, but 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. The Executive may 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 without the written consent of the Chief Executive Officer of the
Company. Nothing in this paragraph will be construed as preventing
the Executive from investing his personal assets in businesses which do not
compete with the Company and engaging in not-for-profit and civic activities
that do not interfere with the Executive’s duties hereunder.
3. COMPENSATION.
(a) Salary. For
services rendered by the Executive hereunder during the Employment Period, the
Company shall pay Executive a base salary (the “Salary”) at the annual gross
rate of One Hundred Fifty Thousand Dollars ($150,000) in accordance with the
Company’s ordinary payroll practices. An employment review will take
place on an annual basis. Any increases in the Salary shall be
determined on an annual basis by the Board in its sole discretion.
(b) Benefits. During
the Employment Period, the Company shall pay Nine Hundred Dollars ($900) per
month (the “Benefit
Amount”) of medical, dental, life insurance, pension or other employee
benefits for the Executive, each as determined by the Executive, whether the
Executive elects to use the benefit plans provided by the Company from time to
time or otherwise. The Company will permit the Executive to make
contributions to the Company’s 401(k) plan, subject to the terms and conditions
of such plan. The Executive is entitled to such amount of paid time
off (“PTO”) as is in the best interests of the Company after coordination with
the Chief Executive Officer of the Company, which in no event shall be less than
four (4) calendar weeks.
(c) 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 the Company from time to time or otherwise
approved by the Chief Executive Officer of the Company. The Company
shall promptly reimburse the Executive for all such documented expenses in
accordance with its expense reimbursement policy in effect from time to
time.
(d) Special
Bonus. If both a Change in Control and a greater than
$9,000,000 reduction in the amount of the Company’s outstanding promissory notes
occur after the Effective Date (collectively, the “Conditions”), then the Company
shall pay the Executive a special bonus (the “Special
Bonus”). The Special Bonus shall be equal to the lesser of
(i)(a) 1.5% multiplied by the amount the Company’s outstanding promissory notes
are reduced below the amount of such notes in existence at the Effective Date,
plus (b) 1.5% multiplied by the amount of capital (whether in the form of equity
and/or debt) received by the Company within ninety (90) days after the Effective
Date, unless such capital is used to reduce the amount of the Company’s
outstanding promissory notes in existence at the Effective Date, and (ii) Fifty
Thousand Dollars ($50,000). The Company shall pay the Special Bonus
within ten (10) days after satisfaction of both of the Conditions in accordance
with its ordinary payroll practices. The Special Bonus shall only be
paid once. Debt forgiveness, conversion or exchange of outstanding
promissory notes into or for the Company’s equity securities shall satisfy the
Conditions.
(e) 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 October 1, 2008, and continue 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 ten (10) days prior written notice to the other
party. In the event the Company terminates this Agreement and the
Executive’s employment without Cause (as hereinafter defined), the Company
shall, subject to Executive’s compliance with Sections 5, 6 and 7 hereof, the
Executive’s resignation from all positions (including any directorships) with
the Company or its Affiliates (as defined below) and the execution and delivery
by the Executive of a separation agreement and general release, in a form
reasonably acceptable to the Company, of all claims related to his employment or
termination thereof through and including the date Executive signs such release,
pay to the Executive (i) any unpaid Salary accrued as of the date of
termination, (ii) any earned but unused PTO prorated through the last full
calendar month of service, (iii) Salary at the annual rate in effect on the date
of termination for a period of six (6) months in installments in accordance with
the Company’s ordinary payroll practices, (iv) benefits at a monthly rate not to
exceed Nine Hundred Dollars ($900) for a period of six (6) months, and (v)
reimbursement of any outstanding business expenses for which Executive is
entitled to be reimbursed in accordance with this Agreement up to and including
the date of termination. The Executive shall not be entitled to any
further payments or benefits from the Company or any of its Affiliates, except
as required by any federal or state law requiring continuation of benefits and
except as may be provided in any other written agreement with the
Company.
(c) Termination for
Cause. The Company 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, nolo contendere, or no contest to a
misdemeanor involving moral turpitude or a felony which may result in a term of
imprisonment;
(ii) the
Executive’s material breach of this Agreement or willful failure to carry out
the lawful directives of the Board consistent with Paragraph 2(a) hereof
(provided the Company has given the Employee advance written notice specifying
the nature of such breach or failure to carry out the lawful directives of the
Board and the Executive has not cured such breach within thirty (30) days of
having received such notice); 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 in the sole discretion of the Board injurious to the business or reputation
of the Company.
In the
event of termination for Cause, the Company shall pay to the Executive
(i) any unpaid Salary accrued as of the date of termination, and (ii)
reimbursement of any outstanding business expenses for which Executive is
entitled to be reimbursed in accordance with this Agreement up to and including
the date of termination. 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 other
written agreement with the Company.
(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. The Company shall pay to the Executive’s estate any unpaid
Salary and the Executive’s estate shall not be entitled to any further payments
or benefits from the Company or any of its Affiliates except as required by any
federal or state law requiring continuation of benefits and except as may be
provided in any other agreement with the Company.
(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 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 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, 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.
In the
event the Executive is determined to have a Disability hereunder and receives
payments under any disability plan maintained by the Company for its employees
or under any other arrangement maintained by the Company for the Executive or by
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), the Company shall pay to the Executive any unpaid Salary
accrued as of the date of termination and the Executive shall not be entitled to
any further payments or benefits from the Company or any of its Affiliates
except as required by any federal or state law requiring continuation of
benefits and except as may be provided in any other agreement with the
Company.
5. NON-SOLICITATION.
(a) Non-Solicitation of
Employees and Consultants. The Executive hereby agrees that
during the Employment Period and for a period equal to six (6) months after the
Employment Period (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 or consultant of the Company, to terminate or refrain from renewing or
extending his or her employment or relationship with 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 term “Company” shall be deemed to
include the Company and each of its Affiliates. For the purposes of
this Agreement, the term “Affiliate” 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 may 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 may 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 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, the
Executive 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
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 acknowledges that he has substantial experience and expertise, that in
the course of providing services to the Company he will become familiar with the
Company’s trade secrets and with other confidential information concerning the
Company and that Executive’s services have been and will be of special, unique
and extraordinary value to the Company. 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 and Europe,
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 during the Employment
Period and of which Executive was aware.
8. REASONABLE
RESTRICTIONS. The parties acknowledge that (i) the type and
periods of restriction imposed in this Agreement are fair and reasonable and are
reasonably required in order to protect and maintain the proprietary interests
of the Company described above, other legitimate business interests of Company
and the goodwill associated with the business of the Company, and (ii) that the
time, scope, geographic area and other provisions of this Agreement have been
specifically negotiated by sophisticated commercial parties, represented by
legal counsel, and are given as an integral part of the transactions
contemplated by this Agreement. Accordingly, you agree not to contest
the validity or enforceability of any provision of this Agreement and agree that
if any court should hold any provision of this Agreement to be unenforceable,
the remaining provisions will nonetheless be enforceable according to their
terms.
9. 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. Notwithstanding
the foregoing, in the event the Company breaches any of its payment obligations
under Section 4 of this Agreement (provided the Executive has given the Company
written notice specifying the nature of such breach and a period of at least
thirty (30) days to cure such breach), Executives obligations under Sections 5
and 7 of this Agreement shall terminate and be of no further force and effect
after the expiration of such thirty (30) day period if the Company has not cured
such breach.
10. SECTION
409A COMPLIANCE. All payments of “nonqualified deferred
compensation” (within the meaning of Section 409A of the Internal Revenue Code
of 1986, as amended (“Code”)) are intended to comply
with the requirements of Code Section 409A, and shall be interpreted in
accordance therewith. Neither party individually or in combination
may accelerate any such deferred payment, except in compliance with Code Section
409A, and no amount shall be paid prior to the earliest date on which it is
permitted to be paid under Code Section 409A. In the event that the
Executive is determined to be a “key employee” (as defined in Code Section
416(i) (without regard to paragraph (5) thereof)) of the Company at a time when
its stock is deemed to be publicly traded on an established securities market,
payments determined to be “nonqualified deferred compensation” payable following
termination of employment shall be made no earlier than the earlier of (i) the
last day of the sixth (6th) complete calendar month following such termination
of employment, or (ii) the Executive’s death, consistent with the provisions of
Code Section 409A. Unless otherwise expressly provided, any payment
of compensation by Company to the Executive, whether pursuant to this Agreement
or otherwise, shall be made within two and one-half months (2½ months) after the
end of the calendar year in which the Executive’s right to such payment vests
(i.e., is not subject
to a substantial risk of forfeiture for purposes of Code Section
409A). Notwithstanding anything herein to the contrary, no amendment
may be made to this Agreement if it would cause the Agreement or any payment
hereunder not to be in compliance with Code Section 409A.
11. 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.
12. 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 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:
0000
Xxxxxxxxx Xxxxxxx
Xxxxxxxxxxxx,
Xxxxxxx 00000
Attention:
Chairman of Compensation Committee, Board of Directors
with a
copy to:
Loeb
& Loeb LLP
000 Xxxx
Xxxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Attention:
Xxxxx X. Xxxxxxxxxx, Esq.
If to the
Executive:
R.
XxXxxxx Xxxxxxx
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.
13. GOVERNING
LAW/JURISDICTION. This Agreement shall be governed by and
construed in accordance with the law of the State of New York, 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 New York
County, State of New York, 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 New York law.
14. 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 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.
15. 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.
16. 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.
17. 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 by and
between the Executive and the Company, 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 a writing
signed by both parties.
IN WITNESS WHEREOF, the
parties have executed this Agreement as of the date set forth
above.
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EXECUTIVE
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By:
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Name:
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R.
XxXxxxx Xxxxxxx
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Title:
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