EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (the "Agreement") is entered into
as of the date signed below between Xxxxxx X. Xxxxxxx, (the "Executive"), whose
address is 0000 Xxxxx Xxxxxxxx, Xxx Xxxxxxxx, XX 00000, and The IXATA Group,
Inc., a Delaware corporation whose address is 0000 Xxxxxx Xxxxxx, Xxxxx 000, Xxx
Xxxxx, XX 00000, and its wholly-owned subsidiary, XXXXX.XXX, Inc. located at the
same address (the "Company" or "XXXXX.XXX"). All compensation and benefits
addressed herein shall be retroactive to January 1, 2000.
RECITALS:
WHEREAS, XXXXX.XXX wishes to obtain the services of the Executive; and
WHEREAS, the Executive desires to obtain employment with XXXXX.XXX
pursuant to the terms of this Agreement;
NOW THEREFORE, in consideration of the mutual promises contained
herein and other consideration the receipt and sufficiency of which is hereby
acknowledged, the Executive and XXXXX.XXX agree as follows:
1. EMPLOYMENT. XXXXX.XXX will employ the Executive as President of
XXXXX.XXX, Inc. The Company reserves the right to assign the Executive
to other roles as the Company's business evolves.
2. DUTIES. The Executive will devote his full time efforts to the
business of XXXXX.XXX and its related organizations performing such
duties as are customary to his position and as may be reasonably
requested by the Chief Executive Officer of the Company or the Board
of Directors of the Company. The Executive will at all times conduct
himself in conformity with the policies of the Company. The Executive
is required to perform the following duties and responsibilities:
a. Develop and implement the necessary programs and strategies,
consistent with operating budget targets and funding levels, to
further expand the Company's business-to-business ("B2B")
Internet-based e-commerce services in the travel and hospitality
sectors and meet the Company's business objectives for the
duration of this Agreement.
b. Ensure the Company's revenue and profitability targets are
achieved and properly managed and reported, working closely with
the Company's Chief Executive Officer and Chief Financial
Officer.
c. Recruit and effectively manage a qualified management team and
supporting staff to meet the Company's revenue and profitability
targets, consistent with Company operating budget targets and
funding levels.
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d. Support the funding initiatives as required with financial
institutions and funding sources to meet company's funding needs
and maximize shareholder value, working closely with the
Company's Chief Executive Officer and Chief Financial Officer.
e. Identify and pursue new strategic alliance partners consistent
with XXXXX.XXX's strategic plan and to maximize shareholder value
3. COMPENSATION. For the successful performance of his duties through
December 31, 2000, the Executive will earn an annual salary of $160,000
which will be payable every two weeks, consistent with the Company's
standard payroll system. Executive agrees to defer receipt of the $4,334
monthly difference between his present compensation and the compensation
agreed to herein until closing of new funding expected on or about April
2000 but in no event later than May 31, 2000. All accrued salary under this
Agreement will be settled at that time. For the period January 1, 2001
through December 31, 2001, Executive's annual salary will increase to
$200,000. All further increases will be determined by the Company's Board
of Directors. Upon closing of minimum new funding of $3 million, the
Executive shall also receive payment in full for $3,000 in deferred
compensation from consulting services provided to the Company from its
inception through February 29, 2000, less $ 2,875.30 owed by Executive to
the Company.
4. STOCK OPTION BENEFIT. The Company will grant the Executive stock
options, which will be granted, based upon the Executive's successful
performance, and the ability of the Company to meet specified objectives.
The option schedule is set forth below.
a. The Company shall grant to the Executive Qualified Stock Options
for 150,000 shares of the Company's Common Stock. The Option
shall be granted pursuant to a Plan adopted by the Company's
Board of Directors and approved by the Company's Shareholders.
The exercise price of the option will be the current market price
on the date of the grant. This Option shall vest and be
exercisable if Executive is still employed by the Company
according to the following schedule:
1. Initial 50,000 shares vested and exercisable one year from
the date of this Agreement.
2. Additional 50,000 shares vested and exercisable two years
from the date of this Agreement.
3. Additional 50,000 shares vested and exercisable three years
from the date of this Agreement.
b. The Company shall grant to the Executive Qualified Stock Options
for 150,000 shares of the Company's Common Stock. The Option
shall be granted pursuant to a Plan adopted by the Company's
Board of Directors and approved by the Company's Shareholders.
The exercise price of the option will be the current market price
on the date of the grant. The options will be granted and are
exercisable only in the target
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period specified, subject to the Company meeting the following
market capitalization objectives and Executive being employed by
the Company:
1. Initial 50,000 shares vested and exercisable after Company
achieves minimum market capitalization of $60 million based
on the average Common Stock price over a 10-day period
during the vesting period anytime within calendar year 2000.
2. Additional 50,000 shares vested and exercisable after
Company achieves minimum market capitalization of $100
million based on the average Common Stock price over a
10-day period during the vesting period anytime within
calendar year 2001.
3. Additional 50,000 shares vested and exercisable after
Company achieves minimum market capitalization of $120
million based on the average Common Stock price over a
10-day period during the vesting period anytime within
calendar year 2002.
c. The Company shall grant to the Executive Qualified Incentive
Options for 150,000 shares of the Company's Common Stock. The
Option shall be granted pursuant to a Plan adopted by the
Company's Board of Directors and approved by the Company's
Shareholders. The exercise price of the option will be the
current market price upon the date of the grant. The options will
be granted and are exercisable only in the target period
specified, subject to the Company meeting the following business
performance objectives and Executive being employed by the
Company:
1. Initial 50,000 shares vested and exercisable after Company
achieves minimum reported revenue of $7.0 million in fiscal
year 2000.
2. Additional 50,000 shares vested and exercisable after
Company achieves minimum reported revenue of $25 million in
fiscal year 2001 or in prior year.
3. Additional 50,000 shares vested and exercisable after
Company achieves minimum reported positive EBITDA of $1.5
million in fiscal year 2001 or in prior years.
4. Options will be exercisable after performance targets are
achieved in the period indicated, based on the Company's
quarterly SEC filings issued for the respective quarter, and
at any time thereafter until the termination date of this
Agreement.
d. As additional incentive to increase the Company's shareholder
value through the Executive's business development efforts, the
Company shall grant to the Executive Qualified Incentive Options
for 100,000 shares of the Company's Common Stock. The Option
shall be granted pursuant to a Plan adopted by the Company's
Board of Directors and approved by the Company's Shareholders.
The exercise price of the option will be the current market price
upon the date of the grant. This Option shall vest and be
exercisable only during first quarter Year 2001, subject to the
Company achieving a minimum market capitalization of $100 million
based on the average Common Stock price over a 10-day period
during fourth quarter of fiscal year 2000.
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5. BENEFIT PLANS. During the term of this Agreement, Executive shall be
entitled to participate in all employee benefit plans which are maintained
or established by the Company from time to time and which cover XXXXX.XXX's
senior executives, provided he satisfies any applicable eligibility
requirements therefore. Executive shall be entitled to participate in other
cash and stock incentives as granted at the discretion of the Board of
Directors based on achieving selected milestones. Executive acknowledges
the right of the Company to amend or terminate such plans at any time in
the exercise of its discretion. Executive further acknowledges that the
Company may wish to maintain insurance on his life for its benefit and
agrees to submit to any physical examination, which may be required in
order to obtain such insurance. Neither the Company nor XXXXX.XXX has any
current employee benefit plan in existence. Executive will receive a total
monthly car allowance of $700, in addition to a total monthly housing
allowance of $1,200. Executive shall receive four (4) weeks paid vacation
per year, commencing upon execution date of this Agreement.
6. EXPENSES. The Executive will be reimbursed in a timely manner for all
reasonable expenses incurred by him in performing his duties hereunder,
provided that such expenses are incurred and accounted for in accordance
with the policies and procedures established by XXXXX.XXX.
7. TERMINATION OF EMPLOYMENT.
a. DEATH; DISABILITY. In the event of Executive's death or
Disability (as hereinafter defined), his employment with the
Company shall be deemed terminated as of the end of the month in
which such death or Disability occurs, and all rights, duties and
obligations of the parties hereunder shall thereupon cease,
except that in the case of the termination due to Disability,
Executive's obligations under Sections 11 and 12 shall continue.
For purpose of this Section, Disability shall be deemed to have
occurred if (a) Executive shall be unable to perform his duties
on an active full-time basis by reason of disability or
impairment of health for a period of at least one hundred eighty
(180) consecutive calendar days or (b) the Company shall have
received a certificate from a physician reasonably acceptable to
both the Company and the Executive (or his representative) to the
effect that Executive is incapable of reasonably performing
services under this Agreement in accordance with past practices.
b. BY COMPANY FOR GOOD CAUSE. Executive's employment with the
Company may be terminated at the option of and by written notice
from the Company if the Board of Directors of the Company shall
find Good Cause for termination. For purposes of this Agreement,
Good Cause shall mean only (i) Executive's willful failure to
perform his duties under this Agreement or to abide by the
Company's written employment policies within a reasonable period
of time after receipt of written notice from the Company setting
forth in reasonable detail the duties which Executive has failed
to perform and the corrective actions expected of him; (ii) a
breach of Executive's duty of loyalty to the Company, including
but not limited to a breach of Executive's obligations under
Sections 11 or 12 below; (iii) indictment for, conviction of, or
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written confession to a crime against the Company or a crime
which otherwise materially adversely affects Executive's ability
to perform his obligations under this Agreement, any business
relationship which the Company maintains or the general
reputation and good will of the Company; or (iv) Executive shall
have been found by the Board of Directors of the Company to have
been repeatedly and excessively using alcohol, drugs and/or any
other intoxicating or controlled substance. Upon any such
termination all rights, obligations and duties of the parties
hereunder shall immediately cease, , and except for Executive's
obligations under Sections 11 and 12 hereof.
c. BY COMPANY WITHOUT GOOD CAUSE. The Company may also terminate
Executive's employment at any time by written notice without Good
Cause, whereupon all rights, obligations and duties of the
parties hereunder shall immediately cease, except that the
Company shall fulfill its obligations to Executive under Section
8 hereof, and except for Executive's obligations under Section 12
hereof.
d. BY EXECUTIVE FOR GOOD REASON. Executive may terminate his
employment with the Company upon not less than thirty (30) days
advance written notice for "Good Reason." Upon the effective date
of any such termination all rights, obligations and duties of the
parties hereunder shall immediately cease, except that (i) the
Company shall fulfill its obligations to Executive under Section
8 hereof, and (ii) Executive's obligations under Section 12
hereof shall remain effective. For purposes of this Agreement,
the Executive will have "Good Reason" if the Company shall fail
to pay when due any compensation provided for in this Agreement
and such failure is not corrected within ten (10) days after
notice thereof to the Company by the Executive
e. BY EXECUTIVE WITHOUT GOOD REASON. Executive may terminate his
employment with the Company upon not less than sixty (60) days
advance written notice. Upon the effective date of any such
termination all rights, obligations and duties of the parties
hereunder shall immediately cease, except for Executive's
obligations under Sections 11 and 12 hereof; provided, however,
that the Company shall not be prohibited from terminating
Executive under Section 7(b) above following receipt of a notice
of termination from Executive, subject to its obligations
hereunder.
8 TERMINATION COMPENSATION: SEVERANCE PAY. If Executive's employment is
terminated pursuant to Section 7(c) or 7(d), Executive shall be entitled to
the continued payment of the annual salary and employee benefits described
in Section 2 above for a period of six (6) months following such
termination.
9.TERM. This Agreement will continue in effect from the date hereof until
December 31, 2002 unless sooner terminated under Section 7 hereof. The
Agreement shall automatically renew from year to year unless either party
gives no less than thirty (30) days and no more than ninety (90) days of
its/his intent not to renew this Agreement.
10. SPECIAL PROVISIONS
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a. The issuance of the stock options provided for in this Agreement to
the Executive is contingent upon the Company expanding one of its
existing stock option plans or adopting a new stock option plan. The
Company agrees to use its good faith efforts to obtain stockholder
approval to expand one of its existing plans or adopt a new plan and
agrees to issue the options upon receipt of such approval. If such
approval is not obtained within a reasonable amount of time, the
Company and Executive may agree to issue non-incentive options instead
of qualified options under a stockholder approved plan.
b. Executive recognizes that the Company is now in negotiations with
various financial institutions for additional financing, with an expected
close date on or before April 30, 2000. Recognizing that the results of
these negotiations may involve staff changes, possible re-organization and
reassignment of management personnel, the Executive agrees that all terms
and conditions set forth in the Agreement will be subject to mutual
agreement by the new financing institutions, the Board of Directors of the
Company and the Executive.
c.Executive is currently a major shareholder and principal in a consulting
company now providing travel management services to a Company client.
Recognizing the potential conflict of interest, Executive agrees to work
with the Company to either integrate these operations into the Company
under reasonable terms or terminate all business relationships with the
specified entity. The parties agree that the integration or termination
will occur within 90 days of execution of this Agreement.
11. NON-COMPETITION.
a. RESTRICTIONS. As consideration for the compensation and benefits to be
provided to the Executive under this Agreement, and as an additional
incentive for Executive to enter into this Agreement, the Executive
will not during the term of this Agreement and for a period of six (6)
months thereafter if Executive's employment is terminated pursuant to
Section 7(a), (b) and (e), directly or indirectly, for himself or for
others, in any state of the United States or in any foreign country
where XXXXX.XXX or any of its Affiliates (as defined below) is then
conducting the Business (as defined below) or has, during the previous
six (6) months, conducted the business:
(1) engage in the Business;
(2) render advice, consultation, or services to or otherwise assist
any other person or entity who competes, directly or indirectly,
with XXXXX.XXX or any of its Affiliates;
(3) transact any business in any manner pertaining to suppliers or
customers of XXXXX.XXX or any of its Affiliates which, in any
manner, would have, or is likely to have, an adverse effect upon
the conduct of the Business of XXXXX.XXX or any of its
Affiliates; or
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(4) induce any employee, agent or representative of XXXXX.XXX or any
of its Affiliates to terminate his or her employment with
XXXXX.XXX or such Affiliate.
b. DEFINITIONS. For purposes of this Section 11, the "Business" will mean
the business activities of XXXXX.XXX and their Affiliates in the
business of offering Internet-based, electronic commerce services in
the travel and hospitality sectors. The term "Affiliates" shall mean
any entity controlling, controlled by or under common control with
XXXXX.XXX, including, but not limited to, XXXXX.XXX and other
subsidiaries, and any licensee, franchisee or agent of XXXXX.XXX
products or services.
c. REASONABLENESS; ENFORCEMENT. The Executive understands that the
foregoing restrictions may limit his ability to engage in certain
business pursuits during the period provided for above, but
acknowledges that he will receive sufficiently higher remuneration and
other benefits from XXXXX.XXX hereunder than he would otherwise
receive to justify such restriction. The Executive acknowledges that
he understands the effect of the provisions of the provisions of this
Section 11, and that he was encouraged to and had an opportunity to
consult an attorney with respect to these provisions. XXXXX.XXX and
the Executive consider the restrictions contained in this Section 11
to be reasonable and necessary. Nevertheless, if any aspect of these
restrictions is found to be unreasonable or otherwise unenforceable by
a Court of competent jurisdiction, the parties intend for such
restrictions to be modified by such Court so as to be reasonable and
enforceable and, so as modified by the Court, to be fully enforced. In
the event of a breach or threatened breach of this Section 11 by
Executive, XXXXX.XXX will be entitled to preliminary and permanent
injunctive relief, sufficient to enforce the provisions thereof and
XXXXX.XXX will be entitled to pursue such other remedies at law or in
equity which it deems appropriate.
12. CONFIDENTIAL INFORMATION.
a. PROHIBITION ON DISCLOSURE OR USE OF CONFIDENTIAL INFORMATION. The
Executive will at all times keep and maintain Confidential Information
(as defined below) confidential and will not, at any time, either
during or subsequent to his employment with XXXXX.XXX, unless required
by law or order, either directly or indirectly, use any Confidential
Information for his own benefit, or otherwise divulge, disclose, or
communicate any Confidential Information to any person or entity in
any manner whatsoever, other than employees or agents of XXXXX.XXX or
its Affiliates who have a need to know such information, and then only
to the extent necessary to perform their responsibilities on behalf of
XXXXX.XXX or its Affiliates.
b. DEFINITION OF CONFIDENTIAL INFORMATION. "Confidential Information"
will mean any and all information (excluding information in the public
domain) relating to the Business, including, without limitation, all
patents and patent applications; copyrights (whether registered or to
be registered in the United States or elsewhere) which are applied
for, issued to or owned by XXXXX.XXX or any of its Affiliates;
inventions;
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trade secrets; computer programs; engineering and technical data;
drawings or designs; manufacturing techniques; information concerning
pricing and pricing policies; marketing techniques; suppliers; methods
and manner of operations; and information relating to the identity and
location of all past, present and prospective customers.
c. ENFORCEMENT. The Executive's obligations contained in this Section 12
are of a special and unique character, which gives him a peculiar
value to XXXXX.XXX. The parties recognize that XXXXX.XXX cannot be
reasonably or adequately compensated in damages alone in an action at
law should the Executive breach such obligations. The Executive
therefore expressly agrees that, in addition to any other rights or
remedies which XXXXX.XXX may possess, it will be entitled to
injunctive and other equitable relief in the form of preliminary and
permanent injunctions, without bond or other security, in the event of
any actual or threatened breach of such obligations by the Executive,
in order to enforce this Section 12.
13. SUCCESSORS. This Agreement is personal to the Executive and will not be
assignable by him without the prior written consent of XXXXX.XXX, except
that Executive's right to receive compensation may be assigned by
Executive, in writing. Any amounts payable after the death of the Executive
shall be paid to the executor or administrator of his estate. This
Agreement will inure to the benefit of and be binding upon XXXXX.XXX, its
Affiliates and their successors and assigns.
14. INDEMNIFICATION. The Certificate of Incorporation of the Company provides,
in Article VII thereof, captioned "Indemnification", that the Company shall
indemnify certain persons under certain conditions. The Company agrees that the
Executive shall be a person covered by Article VII, that the Executive shall be
entitled to the benefit of all of the provisions of Article VII, and that such
provisions shall remain in full force and effect with respect to the Executive
throughout the term of this Agreement, without regard to any amendment to
Article VII which might be adopted after the date hereof.
15 TIME. The parties acknowledge that time is of the essence in the performance
of the obligations of each party hereto, and that the timely performance of such
obligations is a pre-condition to the continuation of the obligations of the
other party.
16. GOVERNING LAW. This Agreement will be governed by and construed iaccordance
with the laws of the State of Delaware without reference to principles of
conflict of laws. Any action brought to enforce this Agreement or to seek
relief based upon any provision of it will be brought in a court of
competent jurisdiction in the State of Delaware.
17. MERGER. This Agreement supersedes any and all prior agreements, whether
written or oral, with respect to the Executive's employment by XXXXX.XXX or
any of its Affiliates and contains all of the promises, representations,
warranties and agreements between the parties with respect to such
employment.
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18. MODIFICATION. This Agreement may not be amended or modified otherwise than
by a written agreement executed by the parties or their respective
successors.
19. NOTICES. All notices or other communications hereunder will be in writing
and will be given by hand delivery to the other party or by registered or
certified mail, return receipt requested, postage prepaid, or by fax, to
the following:
If to the Executive:
Xxxxxx X. Xxxxxxx
0000 Xxxxx Xxxxxxxx
Xxx Xxxxxxxx, XX 00000
If to XXXXX.XXX:
The IXATA Group, Inc.
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Fax: (000)-000-0000
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With a copy to:
Xxxxxxxxxxx Xxxxxxx, Esq.
Xxxxxxx Xxxxxxx & Xxxxxx P.L.L.
00xx Xxxxx, Xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Fax: (000)-000-0000
Any party may from time to time change its address for purposes of this
Agreement by giving notice of such change to the other party, but no such change
will be deemed effective until actually received by the party to whom it is
directed. Notice and communications under this Agreement will be effective when
actually received by the party to whom they are directed.
IN WITNESS WHEREOF the parties have executed this April 17, 2000.
The IXATA Group, Inc.
a Delaware corporation
By: /s/ Xxxx X. Xxxxxxxxx
--------------------------------------------
Its: Chairman and Chief Executive Officer
-------------------------------------------
/s/ Xxxxxx X. Xxxxxxx
-----------------------------------------------
XXXXXX X. XXXXXXX
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