EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Employment Agreement"), is made and
entered into as of April 14, 2005 by and between IMAGE INNOVATIONS HOLDINGS
INC., a Nevada corporation, having a principal place of business at 000 Xxxx
Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Company"), and Xxxxxxx Xxxxxxx
having a residence address at 000 Xxxxxxxxxx Xxxx, Xxxxxxxxxx, Xxx Xxxx, 00000
(the "Executive").
RECITALS
WHEREAS, the Company desires to employ the Executive to render services to
the Company as a director and Chief Executive Officer ("CEO"), and the Executive
desires to render such services on behalf of the Company; and
WHEREAS, the Company and the Executive desire to set forth the terms and
conditions on which (i) the Company will employ the Executive, (ii) the
Executive will render services to the Company and any other corporation or
business entity controlling, controlled by or under common control with the
Company (each, an "Affiliate"), and (iii) the Company will compensate the
Executive for such services.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein set forth, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. Employment.
The Company hereby employs the Executive, and the Executive hereby
accepts such employment, upon the terms and conditions herein set forth.
2. Term.
Subject to the provisions for termination provided herein, the
initial term of employment of the Executive under this Employment Agreement
shall be for a period of three years commencing on April 14, 2005 and ending on
April 13, 2008 (the "Initial Term"). The Executive's employment under this
Employment Agreement shall be automatically extended thereafter for two
additional one-year periods (each, an "Extension Term") unless either party
gives a termination notice not earlier than 180 days and not later than 90 days
prior to the expiration of the Initial Term or any Extension term. The Initial
Term and all Extension Terms, if any, are referred to herein as the "Term."
3. Duties and Responsibilities.
3.1 The Executive shall devote his full attention and apply his
reasonable efforts, energies and skills, on a substantially full-time basis, to
the business of the Company and each Affiliate (such corporations or other
business entities being referred to herein collectively as the "Image Group").
Executive shall be permitted to maintain his interests in the entities described
in Schedule 3.1, attached hereto, provided same does not conflict with his
duties as CEO of the Company.
3.2 During the Term, the Executive shall serve as and perform the
function of CEO and shall perform such duties and have such authority as is
consistent with the position of CEO.
3.3 In order to induce the Company to enter into this Employment
Agreement, the Executive represents and warrants to the Company that:
(a) the Executive is not a party or subject to any employment
agreement or arrangement with any other person, firm, company, corporation or
other business entity; and
(b) the Executive is subject to no restraint, limitation, or
restriction by virtue of any agreement or arrangement or by virtue of any law or
rule or otherwise,
which would impair the Executive's right or ability to enter the employ of the
Company or any other member of the Image Group or to perform fully his duties
and obligations pursuant to this Employment Agreement.
4. Compensation.
4.1 For all services rendered by the Executive under this Employment
Agreement, the Company shall pay the Executive, and the Executive shall accept,
the following compensation.
4.1.1 A base salary of $250,000 per annum ("Salary") payable
in accordance with the Company's regular payroll practices but not less
frequently than in regular bi-weekly installment and as described in Schedule
4.1.1. Executive shall also receive such other additional compensation in the
nature of bonus, incentive compensation, profit sharing or other similar plan,
arrangement or program as the Board of Directors may determine from time to time
("Additional Compensation"). The Additional Compensation may be in the form of
cash compensation or stock grants and may be based on performance by the
Executive.
In addition to the foregoing, the parties shall implement an arrangement whereby
Executive shall have the economic benefit as if the Executive were the owner of
1,000,000 shares of the Company's common stock (measured as of the date of this
Employment Agreement). The Company and the Executive shall finalize such
economic arrangements within 30 days of the date of this Employment Agreement.
4.1.2 The Executive's Salary and Additional Compensation shall
be payable subject to such deductions as are then required by law and such
further deductions as may be agreed to by the Executive in accordance with the
Company's prevailing salary payroll practices.
4.2 On or about January 1, 2006, the Board of Directors of the
Company and the Executive shall review the Executive's compensation under this
Employment Agreement, at which time such compensation may be adjusted to such
greater (but not lesser) amount as shall be approved by mutual agreement of the
parties.
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5. Benefits.
5.1 The Executive shall be entitled to four (4) weeks of paid
vacation per calendar year, provided that the Executive shall not take more than
three consecutive weeks of vacation during any year. Not more than one week of
unused vacation from each year shall be carried over to a subsequent period
unless specifically authorized by the Board of Directors of the Company.
5.2 The Executive shall be entitled to health insurance coverage for
the Executive, his spouse and his dependent children at no cost to Executive.
The Company will make a cash contribution to the Executive's current heath
insurance plan each year in an amount equivalent to what the Company would have
to pay to insure the Executive, his spouse and his dependent children under the
Company's now or hereafter existing health insurance plan afforded to all of the
employees of the Company. The Executive shall also be entitled to participate in
any pension or profit sharing plan, stock purchase plan, stock option plan,
group life, dental or vision insurance plan, hospitalization insurance plan,
medical services plan and other similar plans, now or hereafter existing,
afforded to the employees of the Image Group.
5.3 The Company shall furnish the Executive with an office located
in New York County, New York, Rockland County, New York, or Westchester, County,
New York or the surrounding area, of a size and with the furnishings and other
appointments, and such other facilities, services and staff, in each case at a
level that is consistent with his position, duties and responsibilities.
6. Expenses.
The Executive shall be authorized to incur ordinary and necessary
business expenses in connection with the performance of his duties hereunder,
including travel expenses and entertainment expenses, as shall be authorized by
the Board of Directors of the Company. Such expenses shall be reimbursed only
upon presentation of paid receipts and/or original invoices and such other
information as shall be required for tax purposes.
7. Sick Leave.
The Executive shall be entitled to annual sick leave in length to
conform with the Company's general employment practices, but not less than three
weeks paid sick leave per annum.
8. Termination of Employment.
The Executive's employment under this Employment Agreement may be
terminated prior to the expiration of the Term under any of the circumstances
set forth in this Section 8.
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8.1 The Executive's employment shall terminate upon the death of the
Executive. The Company may terminate the Executive's employment for
"Disability". For purposes of this Employment Agreement, a "Disability" shall
mean physical or mental disability preventing Executive from performing
Executive's duties hereunder for a consecutive period of 6 months or an
aggregate of 180 days in any 12 month period as determined by the written
opinion of a physician selected in good faith by the Company and agreed to by
Executive, his family or his duly appointed personal representative, which
Employment Agreement is not to be unreasonably withheld.
8.2 The Company may terminate the Executive's employment for "Cause"
at any time by providing written notice of such termination to the Executive in
accordance with the provisions of this Employment Agreement. For purposes of
this Employment Agreement, the term "Cause" shall mean any of the following: (1)
Executive has been convicted by, or shall have entered a plea of guilty or nolo
contendere, in a court of competent and final jurisdiction for any crime
involving moral turpitude, fraud, embezzlement, misappropriation, or any other
felony or crime punishable by imprisonment, (2) Executive shall commit any
material act of fraud, embezzlement or other act of misappropriation, which act
causes harm to the Company, or (3) Executive shall continually and habitually
neglect Executive's duties and shall fail to correct such breach within 30 days
after written notice of such habitual and continual neglect, then, in each such
case, the Company shall have the right to give Notice of Termination (as defined
below) of the Executive's employment. Notwithstanding the foregoing, the Company
may not terminate the Executive's employment for Cause unless (a) a
determination that Cause exists is made and approved by a majority of the
members of the Board of Directors, (b) Executive is given at least 10 days
written notice of the Board of Directors meeting called to make such
determination, (c) Executive and his legal counsel are given the opportunity to
address such meeting, and (d) the conduct constituting Cause is capable of cure,
and such conduct is not cured to the Board of Directors' satisfaction within 30
days following receipt of written notice delivered by the Company to the
Executive specifying in reasonable detail the nature of the conduct and states
that it is grounds for termination for Cause. The Company may give Executive
Notice of Termination for Cause only after the conditions set forth in
sub-clauses (a), (b), (c), and (d) of this Section 8.2 have been met.
8.3 The Executive may terminate his employment hereunder by written
notice given to the Company for Good Reason. For purposes of this Agreement,
"Good Reason" shall mean any material breach of this Agreement by the Company,
including without limitation: (i) any reduction in the Executive's Salary; (ii)
the Company requires the Executive to be based at an office or location other
than New York County, New York, Rockland County, New York, or Westchester
County, New York, except for travel reasonably required in the performance of
the Executive's responsibilities; or (iii) the Company requires that the
Executive perform duties not commensurate with his status as CEO; provided,
however, that a material breach of this Employment Agreement by the Company
shall not constitute Good Reason unless the Executive notifies the Company in
writing of the breach, specifying in detail the nature of the breach and stating
that such breach is grounds for Good Reason, and unless the Company fails to
cure such breach within 10 days after such notice is sent or given under this
Agreement.
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8.4 Any termination by the Company under this Employment Agreement
shall be communicated by Notice of Termination to the Executive. Except as
otherwise specifically and expressly provided in this Employment Agreement,
"Date of Termination" shall mean the actual effective date of any termination of
this Employment Agreement. If the Company terminates the Executive for Cause,
the Date of Termination shall be the close of business on the day that is 30
days after receipt by the Executive of Notice of Termination for Cause. If the
Company terminate the Executive without Cause, the Date of Termination shall be
the close of business on the day that is 90 days following receipt by Executive
of Notice of Termination without Cause. If the Executive terminates for Good
Reason, the Date of Termination shall be the close of business on the day that
is the 10th business day after written notice is given in accordance with
Section 8.4, unless cured by the Company. No Notice of Termination without Cause
shall be effective if sent prior to the first anniversary of this Employment
Agreement. If the Company terminates the Executive's employment because of death
or Disability, the Date of Termination shall be the close of business on the day
that is 90 days following the death or Disability of the Executive. For purposes
of this Employment Agreement, a "Notice of Termination" shall mean a notice in
writing that shall indicate the specific termination provision in this
Employment Agreement relied upon to terminate the Executive's employment and, if
applicable, shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's employment under
the provision so indicated.
9. Compensation and Benefits Payable Following Termination.
If the Executive's employment is terminated prior to the expiration
of the Term, the Executive (or his surviving spouse, beneficiary or estate, as
the case may be) shall receive the following compensation and benefits:
9.1 Upon any termination of the Executive's employment under Section
8 hereof, the Company shall pay the Executive (or his personal representative)
any accrued but unpaid Salary for services rendered to the Date of Termination,
the amount of any compensation previously earned and deferred by the Executive,
any earned but unpaid incentive compensation for any calendar year ended prior
to the year in which his employment terminates, any accrued but unpaid expenses
required to be reimbursed under this Employment Agreement, and any vacation pay
accrued to the date of the termination. The Company shall pay all of the
foregoing amounts, except for earned but unpaid Additional Compensation, within
30 days after the Date of Termination. Earned but unpaid Additional Compensation
for any calendar year ended prior to the year in which the Executive's
employment terminates shall be paid at the same time as the Company pays
Additional Compensation to its other senior executives.
If the Executive's employment is terminated for any reason prior to the last day
of a calendar year, the Company shall pay the Executive (or his personal
representative) as severance pay, an amount equal to the pro rata portion (based
on the number of days of employment prior to the termination date) of the annual
Additional Compensation that would have been payable to the Executive if he had
continued in employment through the end of the calendar year. Such amount will
be paid at the same time and in the same manner as the annual Additional
Compensation for such year is paid to other senior executive officers.
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9.2 In the event that the Executive's employment is terminated by
the Company without Cause pursuant to Section 8 above, the Company shall
continue to provide the Executive the Salary and benefits set forth in Sections
4.1 and 5.2 above that would have been payable to him if he had continued to
perform his normal duties and responsibilities on a full-time basis until the
earlier of (i) one year from the date of this Employment Agreement or the
expiration of the Term or (ii) his death.
9.3 If the Executive terminates his employment for Good Reason, then
the Company shall pay to the Executive as severance pay the following amounts:
(i) his then unpaid Salary, in accordance with the regular payroll
practices of the Company, through the Date of Termination at the rate in effect
as of the Date of Termination;
(ii) after the Termination Date, the Executive shall continue to
receive his Salary, in accordance with the regular payroll practices of the
Company, at the rate that is in effect as of the Date of Termination through the
six month period following the Date of Termination; and
(iii) the payments set forth in Section 9.3 above.
9.4 Except as may otherwise be provided under this Employment
Agreement,
(i) any benefits to which the Executive may be entitled pursuant to
the plans, policies and arrangements referred to in Section 5 above shall be
determined and paid in accordance with the terms of such plans, policies and
arrangements; and
(ii) the Executive shall have no right to receive any other
compensation, or to participate in any other plan, arrangement or benefit, with
respect to future periods after such termination or resignation.
10. Restrictive Covenants.
10.1 The Executive acknowledges that (i) the business activities of
the Image Group include and are expected to include the manufacture and sale of
celebrity image memorabilia and sports branded products ("Sports Memorabilia and
Branding Business"), (ii) he will have a major responsibility for the
development, management and operation of the business of the Company, (iii) the
Company's business is intended to be international in scope, (iv) his employment
by the Company will bring him into close contact with confidential information
of the Company, its Affiliates, its customers, and its suppliers, and (v) the
agreements and covenants contained in this Section 10 are essential to protect
the business interests of the Company and that the Company would not enter into
this Employment Agreement but for such agreements and covenants. Accordingly,
the Executive agrees as follows:
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10.2 Except as otherwise specifically provided for in this
Employment Agreement, throughout the Employment Period and the Post-Termination
Period (as such terms are defined below) the Executive shall not, directly or
indirectly, (i) engage in any aspect of the Sports Memorabilia and Branding
Business or (ii) without limiting the generality of clause (i) above, be or
become, or agree to be or become, interested in or associated with, in any
capacity (including, without limitation, as a partner, shareholder, owner,
officer, director, employee, principal, agent, creditor, trustee, consultant,
co-venturer or otherwise), any individual, corporation, firm, association,
partnership, joint venture or other business entity, which is engaged in or
which is planning to engage in any aspect of the Sports Memorabilia and Branding
Business; provided, however, that the Executive may own, solely as an
investment, securities of any publicly held corporation traded on any national
securities exchange in the United States of America, if the Executive is not a
controlling person of or member of a group that controls, such corporation and
does not, directly or indirectly, own more than 1% of any class of securities of
such corporation.
10.2.1 Throughout the Employment Period and the
Post-Termination Period, the Executive shall not, directly or indirectly (i)
induce or attempt to influence any executive of any member of the Image Group to
leave its employ, (ii) aid or agree to aid any competitor, customer or supplier
of the Image Group in any attempt to hire any person who shall have been
employed by any member of the Image Group within the one (1) year period
preceding such requested aid, or (iii) induce or attempt to influence any person
or business entity who was a customer or supplier of any member of the Image
Group during any portion of such period to transact business with a competitor
of the Image Group in the Sports Memorabilia and Branding Business.
10.2.2 Throughout the Employment Period and thereafter, the
Executive shall not disclose to anyone any information about the affairs of any
member of the Image Group, including without limitation, trade secrets, trade
"know-how", inventions, customer lists, client lists, business plans,
operational methods, pricing policies, marketing plans, sales plans, identity of
suppliers, trading positions, sales, profits or other financial information,
which is confidential to any member of the Image Group or is not generally known
in the relevant trade (collectively, "Proprietary Information"), regardless of
whether the Executive developed such Proprietary Information, nor shall the
Executive make use of any such Proprietary Information for his own benefit.
10.3 For the purposes of this Employment Agreement the following
terms shall have respective meanings ascribed to them below:
10.3.1 "Employment Period" means the period of the Executive's
employment by the Company, including such period of employment, if any,
extending beyond the Term.
10.3.2 "Post-Termination Period" means the two-year period
commencing with the end of the Employment Period.
10.4 If the Executive breaches, or threatens to commit a breach of,
any of the provisions of Subsection 10.1 (the "Restrictive Covenants"), the
Company shall have the following rights and remedies, each of which shall be
independent of the others and severally enforceable, and each of which is in
addition to, and not in lieu of, any other rights and remedies available to the
Company at law or in equity:
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10.4.1 The Executive shall account for and pay over to the
Company all compensation, profits, monies, accruals and other benefits derived
or received by the Executive or any person or business entity affiliated with
the Executive as a result of any action or transactions constituting a breach of
any of the Restrictive Covenants.
10.4.2 Notwithstanding the provisions of Subsection 10.3.1
above, the Executive acknowledges and agrees that in the event of a violation or
threatened violation of any of the Restrictive Covenants, the Company shall have
no adequate remedy at law and shall therefore be entitled to enforce each
provision by temporary or permanent injunctive or mandatory relief obtained in
any court of competent jurisdiction without the necessity of proving damages,
posting any bond or other security, and without prejudice to any other rights
and remedies which may be available at law or in equity.
10.4.3 If any of the Restrictive Covenants, or any part
thereof, is held to be invalid or unenforceable, the same shall not affect the
remainder of the covenant or covenants, which shall be given full force and
effect, without regard to the invalid or unenforceable portions.
10.4.4 If any of the Restrictive Covenants, or any part
thereof, is held to be unenforceable because of the duration of such provision
or the area covered thereby, the parties hereto agree that the court making such
determination shall have the power to reduce the duration and/or area of such
provision and, in its reduced from, such provision shall then be enforceable.
10.4.5 The parties hereto intend to and hereby confer
jurisdiction to enforce the Restrictive Covenants upon the courts of any
jurisdiction within the geographical scope of such Restrictive Covenants. In the
event that the courts of any one or more of such jurisdiction shall hold such
Restrictive Covenants wholly unenforceable by reason of the breadth of such
scope or otherwise, it is the intention of the parties hereto that such
determination not bar or in any way affect the Company's right to the relief
provided above in the courts of any other jurisdictions within the geographical
scope of such Restrictive Covenants, as to breaches of such covenants in such
other respective jurisdictions, the above covenants as they relate to each
jurisdiction being, for this purpose, severable into diverse and independent
covenants.
11. Inventions.
All inventions, discoveries, investigations, improvements, know-how,
trade secrets, and developments in technology ("Inventions") that directly
relate to the business carried on, or to be carried on, by any member the Image
Group that have been or shall be made of or reduced to practice by the
Executive, either alone or with others, whether the activity in question takes
place within or outside the usual working hours of the Executive or on or off
the premises of the Company, shall be held by the Executive for the exclusive
benefit of the Company, and the Executive shall assign in writing to the
Company, without any payment being required or the part of the Company, all of
the right, title and interest which he may have acquired in and to any
Inventions. In addition, he shall both during and at any time prior to two (2)
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years after the Employment Period, assist the Company in every way reasonably
requested by the Company, at the expense of the Company without cost to the
Executive (and with reasonable compensation to the Executive in the event his
employment has then ended), to obtain for the Company in any and all countries,
and to maintain and enforce patents or the reissue or extension thereof on all
Inventions which have been or may be assigned.
12. Documentation of Proprietary Information and Inventions.
All documents, records, models, prototypes or other tangible
embodiments or evidence of Proprietary Information or Inventions, and all copies
of the foregoing ("Materials"), which may at any time be acquired by or come
into the possession of the Executive are the sole and exclusive property of the
Company. All Materials shall be surrendered to the Company upon the request by
the Company at any time. In addition, upon the reasonable request by the Company
at any time, the Executive shall prepare materials accurately and adequately to
describe, set forth or embody any Proprietary Information or Inventions and
deliver the same to the Company in order to accomplish or complete the transfer
thereof to the Company, and the Executive shall be reimbursed by the Company for
all of his reasonable out-of-pocket expenses incurred in so doing. During or at
any time prior to two (2) years after the Employment Period, the Executive shall
execute all documents and take all such other action as the Company may
reasonably require (being reimbursed for all of his reasonable out-of-pocket
expenses in this connection) in order to assign the Company any and all
copyrights and reproduction rights to any Materials prepared by him during and
in connection with such employment.
13. Insurance.
The Company may, from time to time, apply for, purchase and
maintain, in its own name and at its own expense, life, health, accident,
disability or other insurance upon the Executive in any sum or sums that it may
deem necessary to protect its interests, and the Executive agrees to aid and
cooperate in all reasonable respects with the Company in procuring any and all
such insurance, including, without limitation, submitting to the usual and
customary medical examinations, and by filling out, executing and delivering
such applications and other instruments in writing as may be reasonably required
by an insurance company or companies to which an application or applications for
such insurance may be made by or for the Company.
14. Miscellaneous.
14.1 This Employment Agreement is a personal contract, and the rights and
interests of the Executive hereunder may not be sold, transferred, assigned,
pledged or hypothecated by the Executive, except as otherwise expressly
permitted by the provisions of this Employment Agreement. The Executive shall
not under any circumstances have any option or right to require payment
hereunder otherwise than in accordance with the terms hereof. Except as
otherwise expressly provided herein, the Executive shall not have any power of
anticipation, alienation or assignment of payments contemplated hereunder, and
all rights and benefits of the Executive shall be for the sole personal benefit
of the Executive, and no other person shall acquire any right, title or interest
hereunder by reason of any sale, assignment, transfer, claim or judgment or
bankruptcy proceedings against the Executive; provided, however, that (i) the
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Executive shall have the right to assign his right to receive any payment
previously due and owing, subject to all claims and defenses of the Company, and
(ii) in the event of the Executive's death, the Executive's estate, legal
representatives or beneficiaries (as the case may be) shall have the right to
receive all of the benefits that accrued to the Executive pursuant to, and in
accordance with, the terms of this Employment Agreement.
14.2 Any notice required or permitted to be given pursuant to this
Employment Agreement shall be in writing and sent to the party for whom or which
intended, at the address of such party set forth below, by registered or
certified mail, return receipt requested or at such other address as either
party shall designate by notice to the other in the manner provided herein for
giving notice:
(a) If to the Company to:
Image Innovations Holdings Inc.
000 Xxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: [ ]
Facsimile: (000) 000-0000
with a copy to:
Xxxx Xxxxx, LLP
000 Xxxxxxxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 000000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
(b) If to Executive, to:
Xxxxxxx Xxxxxxx
000 Xxxxxxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
email: xxxxxxxxxxxxxx00@xxxxxxx.xxx
14.3 This Employment Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
14.4 If any provision of this Employment Agreement, or any part
thereof, is held to be illegal or unenforceable, the remainder of this
Employment Agreement shall nevertheless remain in full force and effect.
14.5 Each of the parties hereto shall, at any time and from time to
time hereafter, upon the reasonable request of the other, take further action
and execute, acknowledge and deliver all such instruments of further assurance
as necessary to carry out the provisions of this Employment Agreement.
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14.6 This Employment Agreement contains the entire agreement and
understanding between the Company and the Executive with respect to the subject
matter hereof. No representations or warranties of any kind or nature relating
to the Company or its business, assets, liabilities, operations, future plans or
prospects have been made by or on behalf of the Company to the Executive.
14.7 All controversies or claims arising out of or relating to this
Employment Agreement, or the breach hereof, shall be subject to the laws of the
State of New York and submitted to the Courts of the State and County of New
York for resolution.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement as of the date first above written.
IMAGE INNOVATIONS
HOLDINGS INC.:
--------------------------------
Xxxxxx Xxxxxxxx
Chairman, Compensation Committee
EXECUTIVE:
--------------------------------
Xxxxxxx Xxxxxxx
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SCHEDULE 3.1
The Executive shall be entitled to maintain his interests and continue his
duties and responsibilities in the entities described below:
1. Non-Executive Director of Phosphagenics Limited, an Australian biotech
corporation, listed on the Australian Stock Exchange and the AIM in London;
2. Non-Executive Director of Edentify, Inc., a United States identity fraud
company;
3. Partner in Alberdale & Co., a London based FSA-regulated corporate finance
firm; and
4. The Executive shall be entitled to accept additional board memberships
provided such board memberships do not conflict with his duties to the Company.
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SCHEDULE 4.1.1
The Executive's Salary of $250,000, as provided in Section 4 of the Employment
Agreement, shall initially be paid as follows:
1. Upon execution of the Employment Agreement, the Executive shall receive his
salary at the rate of $10,000 per month and accrue the balance of his Salary;
2. On the day of the closing of the first round of financing by the Company, the
Executive shall receive his salary at the rate of $15,000 per month and accrue
the balance of his salary;
3. On the day that is six months from the date of this Employment Agreement, or
at such date as the Executive deems fit, being fully aware of the financial
condition of the Company, the Executive shall receive his Salary at the rate of
$20,833 per month which shall be payable according to the Company's regular
payroll practices but not less frequently than in regular bi-weekly
installments; and
4. In the event that, for any reason, the financing referred to in Paragraphs 1
and 2 do not occur, the Executive shall nonetheless be entitled to his accrued
and unpaid Salary on 12/31/05.
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