EMPLOYMENT AGREEMENT - XXXXXXX X. XXXXXX
AGREEMENT made as of November 11, 2004 by and between CENTALE,
INC., a New York corporation with offices at 000 Xxxx Xxxxxx, Xxxx
Xxxxxx, XX 00000 (the "Corporation"), and XXXXXXX X. XXXXXX, residing
at 0000 X. Xxxxxxxxxxx Xxxxx, Xxxxxxxx, XX 00000 ("Xxxxxx").
WHEREAS, the Corporation wishes to employ Xxxxxx as Chairman and
Chief Executive Officer, and to provide Xxxxxx with assurance of
compensation and terms of employment which will competitively motivate
Xxxxxx, and Xxxxxx desires to be so employed.
NOW, THEREFORE, it is agreed:
1. Title; Capacities.
(a) The Corporation hereby employs Xxxxxx as Chairman and Chief
Executive Officer of the Corporation. In such capacity, Xxxxxx shall
be responsible for supervising the implementation of the plans and
policies adopted from time-to-time by the Corporation's Board of
Directors. Xxxxxx shall be subject to the supervision of the
Corporation's Board of Directors. Likewise, the Corporation shall
keep Xxxxxx informed as to developments within the Corporation, and the
Board of Directors and Xxxxxx shall confer on all major acquisitions
and/or mergers.
(b) Xxxxxx agrees that he will devote substantially all of his
business time, labor, skill, attention and best ability to the
performance of his duties under this Agreement. To that end, Xxxxxx
agrees to assist the Corporation in promptly establishing executive
offices in the vicinity of Xxxxxx'x residence in Parkland. Xxxxxx
agrees to abide by such reasonable rules, regulations, personnel
practices and policies of the Corporation, and any changes therein,
which may be reasonably adopted from time to time by the Corporation
and delivered in writing to Xxxxxx.
(c) Xxxxxx will serve on the Corporation's Board of Directors
immediately upon the Effective Date of the Agreement, without
additional compensation. Xxxxxx shall also be entitled to recommend
individuals to be considered by the Board for appointment as members of
the Board.
2. Compensation.
(a) Salary. The Corporation will pay Xxxxxx a salary at the
rate of Two Hundred Forty Thousand Dollars ($240,000) per annum. No
salary shall accrue or be payable to Xxxxxx with respect to the first
ninety days of service under this Agreement, except that Xxxxxx shall
be paid salary at his stated rate for any calendar month in those first
ninety days during which the Corporation realizes net income in excess
of Fifty Thousand Dollars ($50,000). Salary shall accrue from and
after the ninety-first day after the Effective Date, and shall be
payable on the days when the salaries of other Corporation employees
are paid, which shall be no less than once each month.
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(b) Income-Based Bonus. The Corporation will pay Xxxxxx a
bonus after each fiscal quarter during which the Corporation realizes
net income (prior to deduction of any bonus paid to Xxxxxx) in excess
of Three Hundred Thousand Dollars ($300,000). The bonus will equal
Xxxxxx'x salary for the quarter. The bonus will be payable when the
Corporation files its quarterly report (or, as to the fourth fiscal
quarter, its annual report) with the Securities and Exchange Commission
for the quarter with respect to which the bonus is paid. The bonus will
be payable notwithstanding the termination of this agreement with
respect to any full or partial fiscal quarter preceding the effective
date of termination.
(c) Revenue-Based Bonus. The Corporation will pay
Xxxxxx a bonus after each fiscal year during which the Corporation
realizes gross revenue in excess of a "Threshold" specified below.
The bonus will equal "Applicable Percentage" of net pre-tax income
associated with that Threshold. The bonus will be payable when the
Corporation files its annual report with the Securities and Exchange
Commission for the year with respect to which the bonus is paid. The
bonus will be payable notwithstanding the termination of this agreement
with respect to any full or partial fiscal year preceding the effective
date of termination.
Applicable
Threshold Percentage
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$ 7,000,000 3%
$ 8,000,000 4%
$ 9,000,000 5%
$ 10,000,000 6%
$ 25,000,000 7.5%
(d) Restricted Stock Grant. Upon the Effective Date of this
Agreement, the Corporation will grant to Xxxxxx two million five
hundred twenty thousand (2,520,000) shares of restricted stock on the
terms set forth in the "Award Agreement - Restricted Stock" annexed as
Appendix X. Xxxxxx will have all voting rights attendant to such
shares, notwithstanding the restrictions set forth in the Award
Agreement.
(e) Benefits. The Corporation shall pay premiums for health
insurance coverage chosen by Xxxxxx, provided that the premium shall
not exceed $700 per month. In addition, following any month in which
the Corporation realizes net income exceeding Fifty Thousand Dollars
($50,000), the Corporation shall pay up to $500 for the premium for
disability insurance chosen by Xxxxxx and shall pay up to $1900 for the
premium for life insurance chosen by Xxxxxx.
(f) Reimbursement of Business Expenses. Xxxxxx shall be
entitled to reimbursement of all reasonable business expenses actually
incurred by Xxxxxx in the discharge of Xxxxxx'x duties hereunder,
including expenses for entertainment, travel, employee training and
similar items, upon submission of the related invoice or other sufficient
documentation.
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3. Term.
(a) The "Effective Date" of this Agreement will be the date on
which the Corporation's Board of Directors formally approves the
Agreement; provided, however, that if the Board does not approve the
Agreement prior to November 30, 2004, the Agreement will terminate on
that date.
(b) The "Term" of this Agreement and of Xxxxxx'x employment
hereunder shall commence on the Effective Date and shall terminate on
October 31, 2007, unless earlier terminated pursuant to Sec 3(c)
hereunder.
(c) Prior to October 31, 2007, Xxxxxx'x employment
hereunder may be terminated as follows:
(i) by Xxxxxx, at will;
by the Corporation for Cause. As used herein, the term "Cause"
shall mean only the following: (A) conviction during the Term of a
crime involving moral turpitude, (B) material, willful or gross
misconduct by Xxxxxx in the performance of his duties hereunder, or (C)
the failure by Xxxxxx to perform or observe any substantial lawful
obligation of such employment that is not remedied within fifteen (15)
days after the receipt of written notice thereof from the Board of
Directors (provided such neglect or failure is unrelated to
disability).
(iii) by the Corporation, upon the death or disability of
Xxxxxx. "Disability" shall mean Xxxxxx'x inability to perform Xxxxxx'x
normal employment functions due to any medically determinable physical
or mental disability, which can last or has lasted three months or is
expected to result in death.
(d) Termination of Xxxxxx'x employment, when permitted
hereunder, may be effectuated by delivery of written notice to Xxxxxx,
stating the grounds for termination. Such notice shall be effective
upon receipt.
(e) At any time during the Term of the Agreement, the Board of
Directors may remove Xxxxxx from his positions as Chairman and/or Chief
Executive Officer, if it determines that such removal is in the best
interests of the Corporation. Upon such removal, Xxxxxx may assume
another role in the Corporation if Xxxxxx and the Corporation so agree,
or he may have no further responsibilities to the Corporation. A
removal from office pursuant to this Section 3(e) shall not be deemed
to be a termination of this agreement, and Xxxxxx shall remain employed
under the terms of this Agreement until the Agreement terminates
pursuant to either Section 3(b) or Section 3(c).
4. Assignment of Assets. In consideration of the undertakings
by the Corporation herein, Xxxxxx will on the Effective Date assign to
the Corporation all of his right, title and interest in the Assets
identified on Schedule A annexed hereto. To implement the assignment,
Xxxxxx will execute such instruments of transfer and assignment as the
Corporation shall reasonably request.
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5. Covenant of Non-Competition. In consideration of
the undertakings by the Corporation herein, Xxxxxx covenants for the
benefit of the Corporation and the shareholders thereof as follows:
(a) The "Restricted Period" for purposes of this Covenant shall
commence on the Effective Date of this Agreement and shall continue for
a period ending on the date which is six months after the date on which
Xxxxxx ceases to be employed by the Corporation. In the event,
however, that this Agreement is terminated prior to April 17, 2005 for
any reason other than pursuant to Section 3(c)(i) hereof, then the
Restricted Period will end on the effective date of termination.
(b) During the Restricted Period Xxxxxx shall not, directly or
indirectly, as an employee, consultant or principal, through equity
ownership or otherwise, for himself or for any other person, engage in,
or assist any other person to engage in, any Competitive Activities.
For purposes hereof, "Competitive Activities" shall mean the following:
(i) Directly or indirectly soliciting, diverting, taking
away or attempting to solicit, divert, or take away any business
opportunities which became available to the Corporation or any of
its subsidiaries or affiliated entities during the Term of this
Agreement;
(ii) Engaging in business with any person or entity with
which the Corporation was engaged in business during the six
months preceding Xxxxxx'x business engagement;
(iii) Engaging in (A) the business of marketing desktop
software applications, (B) the business of compiling and/or
marketing databases, or (C) the business of generating and/or
marketing marketing leads; or
(iv) Hiring, offering to hire, enticing away or in
any manner persuading or attempting to persuade any person
affiliated (as employee or as independent contractor) with the
Corporation or any affiliate or subsidiary of the Corporation to
discontinue his relationship with such company, or to become
employed by any other entity.
6. Assignment. The Corporation and Xxxxxx acknowledge that the
relationship established hereby is unique and personal and that neither
the Corporation nor Xxxxxx may assign or delegate any of their
respective rights and/or obligations hereunder without the prior
written consent of the other party except as follows:
In the event of a future disposition of (or including) the
properties and business of the Corporation, substantially as an
entirety, by merger, consolidation, sale of assets, or otherwise, then
the Corporation shall be obligated to assign this Agreement and all of
its rights and obligations hereunder to the acquiring or surviving
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corporation, and such acquiring or surviving corporation shall assume
in writing all of the obligations of the Corporation hereunder;
provided, however, that the Corporation (in the event and so long as it
remains in business as an independent going enterprise) shall remain
liable for the performance of its obligations hereunder in the event of
an unjustified failure of the acquiring corporation to perform its
obligations under this Agreement.
7. Indemnification. The Corporation shall indemnify Xxxxxx to
the fullest extent authorized by the Business Corporation Law of the
State of New York against claims or liability arising from his service
on behalf of the Corporation.
8. Governing Law. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of New York
applicable to contracts made and to be performed therein.
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first above written.
CENTALE, INC.
By: /s/ Xxxx Xxxxxxxx
------------------------
Xxxx Xxxxxxxx, President
/s/ Xxxxxxx X. Xxxxxx
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XXXXXXX X. XXXXXX
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SCHEDULE A
CENTALE, INC.
Employment Agreement - Xxxxxxx X. Xxxxxx
Assigned Assets
1. A database of over 100,000 email addresses of active investors,
collected on an opt-in basis.
2. The following domain names:
- xxxxxxxxxxxxxx.xxx
- xxxxxxxxxxxxx.xxx
- xxxxxxxxxxxxxxxxxxx.xxx
- xxxxxxxxxxxxxxxx.xxx
- xxxxxxxxxxxxxx.xxx
- xxxxxxxxxxxxxxxxxxxxxxxxx.xxx
- xxxxxxxxxxxxxxxxxxxxxxxxxxx.xxx
- xxxxxxxxxxxxxxxxxxxx.xxx
- xxxxxxxxxxxxxxxxxxx.xxx
- xxxxxxxxxxxxxxx.xxx
- xxxxxxxxxxxxxxxx.xxx
- xxxxxxxxxxxxxxxxxxxxxx.xxx
- xxxxxxxxxxxxxxxxxxxxxx.xxx
- xxxxxxxxxxxxxxxxxx.xxx
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APPENDIX A
CENTALE, INC.
Date: November 11, 2004 Number of Shares: 2,520,000
Grantee: Xxxxxxx X. Xxxxxx
Restriction: The shares may not be transferred, pledged or hypothecated
unless and until they "vest." If the Grantee's employment by Centale, Inc.
(the "Corporation") is terminated, all unvested shares shall be cancelled by
the Corporation.
Vesting Schedule:
The vesting schedule will be:
1,260,000 of the shares will vest on the Effective Date of the
Employment Agreement between the Corporation and the Grantee.
1,260,000 of the shares will vest on the date on which the aggregate
amount invested by individuals or entities in the Corporation in
exchange for equity securities after the Effective Date equals or
exceeds One Million Dollars ($1,000,000).
If a Change in Control occurs and the Grantee remains an employee of the
Corporation on the effective date of the Change in Control, then all of the
shares will vest on the effective date of the Change in Control.
A "Change in Control" shall be deemed to have occurred if (i) any
"person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act), other than (A) a person who on October 18, 2004 was the
beneficial owner of more than 25% of the Corporation's outstanding
shares, (B) a trustee or other fiduciary holding securities under an
employee benefit plan of the Corporation or (C) a corporation owned
directly or indirectly by the shareholders of the Corporation in
substantially the same proportions as their ownership of stock of the
Corporation, is or becomes the "beneficial owner" (as defined in Rule
13d-3 under said Act), directly or indirectly, of securities of the
Corporation representing fifty percent (50%) or more of the total
voting power represented by the Corporation's then outstanding voting
securities, or (ii) during any period of two (2) consecutive years,
individuals who at the beginning of such period constitute the Board of
Directors of the Corporation and any new Director whose election by
the Board of Directors or nomination for election by the Corporation's
shareholders was approved by a vote of at least two-thirds (2/3) of
the Directors then still in office who either were Directors at the
beginning of the period or whose election or nomination for election
was previously so approved, cease for any reason to constitute a
majority thereof, or (iii) the shareholders of the Corporation approve
a merger or consolidation of the Corporation with any other
corporation, other than a merger or consolidation which would result in
the voting securities of the Corporation outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity) at
least fifty-five percent (55%) of the total voting power represented
by the voting securities of the Corporation or such surviving entity
outstanding immediately after such merger or consolidation, or the
shareholders of the Corporation approve a plan of complete liquidation
of the Corporation or an agreement for the sale or disposition by the
Corporation of all or substantially all the Corporation's assets.
Note: The certificate for the shares will bear a legend referencing this
Award Agreement. The legend may be removed as to any vested shares
immediately upon vesting on behalf of the Grantee by the Corporation.
CENTALE, INC.
By: /s/ Xxxx Xxxxxxxx
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Name: Xxxx Xxxxxxxx
Title: President
