EMPLOYMENT AGREEMENT 1.4
Exhibit
10.25
THIS
EMPLOYMENT AGREEMENT (the "Agreement"), dated January __, 2007
By
and
Between:
MAGNITUDE
INFORMATION SYSTEMS, INC., a Delaware corporation (the "Company" or the
"Employer"),
AND
___________________________,
an individual having an address at _____________________________________and
one of three (3) shareholders of Kiwibox Media, Inc.
("Executive")
WHEREAS,
the Company desires to hire the Executive and employ him in the position
of Executive Officer; and
WHEREAS,
Executive has agreed to serve as the Company's Executive Officer ,
pursuant to the terms and conditions set forth herein.
NOW
THEREFORE THIS AGREEMENT WITNESSETH THAT in consideration of the premises and
the mutual covenants, agreements, representations and warranties contained
herein,
and other good and valuable consideration, the receipt and sufficiency
of
which
are hereby acknowledged, Executive and the Company hereby agree as follows:
ARTICLE
1
EMPLOYMENT
1.1
Employer hereby hires the Executive as the Executive Officer of the Company
and
Executive hereby affirms and accepts such positions and employment by Employer
for the Term (as defined in Article 3 below), upon the terms and conditions
set
forth herein.
1.2
The
Employer shall utilize its best efforts to cause its Board of Directors to
appoint one
of the three Kiwibox Shareholders
as a
member of the Employer's Board of Directors throughout the Term.
ARTICLE
2
DUTIES
During
the Term, Executive shall serve Employer faithfully, diligently and to the
best
of his ability, under the direction and supervision of the Board of Directors
of
Employer ("Board of Directors") and shall use his best efforts to promote the
interests and goodwill of Employer and any affiliates, successors, assigns,
parent corporations, subsidiaries, and/or future purchasers of Employer.
Executive shall render such services during the Term at Employer's principal
place of business or at such other place of business as may be determined by
the
Board of Directors, as Employer may from time to time reasonably require of
him,
and shall devote all of his business time to the performance thereof. Executive
shall have those duties and powers as generally pertain to each of the offices
of which he holds, as the case may be, subject to the control of the Board
of
Directors. Employer and Executive also agree that Employer shall utilize its
best efforts to have its Board of Directors appoint one
of the three Kiwibox Shareholders
to be a
member of the Employer's Board of Directors during the Term.
ARTICLE
3
TERM
The
term
of this Agreement (the "Term") shall commence on the date hereof (the "Effective
Date"), and continue thereafter for a term of two (2) years, as may be extended
or earlier terminated pursuant to the terms and conditions of this Agreement.
The Term is renewable upon the agreement of the parties hereto.
ARTICLE
4
COMPENSATION
4.1
Salary and Equity Compensation
(a)
In
consideration of Executive's services to Employer, Employer shall pay to
Executive an annual base salary (the "Base Salary") of One Hundred Fifty
Thousand Dollars ($150,000.00), payable in equal installments at the end of
each
regular payroll accounting period as established by Employer, or in such other
installments upon which the parties hereto shall mutually agree, and in
accordance with Employer's usual payroll procedures, but no less frequently
than
monthly.
(b)
In
addition to the Base Salary, Employer shall pay to Executive an annual bonus,
based upon the attainment of certain business goals (the “Performance Bonus”),
equal to (i) $100,000 in the event the Kiwi Business has received no less than
an average 215,000 Unique Visitors during either the 10th, 11th or 12th month
of
the first year of the term or $316,000 in gross revenues within the 12 moth
period following the Effective Date, or (ii) $50,000 in the event the Kiwi
Business has received at least an average 175,000 but less than an average
215,000 Unique Visitors during either the 10th, 11th or 12th month of the first
year of the term or at least $237,000 in gross revenues but less than $316,000
within the 12 moth period following the Effective Date, and: (x) $100,000 in
the
event the Kiwi Business has received no less than an average 550,000 Unique
Visitors during either the 22nd, 23rd or 24th month of the second year
of the term or $1,961,000 in gross revenues within the 12 moth period following
the first anniversary of the Effective Date, or (ii) $50,000 in the event the
Kiwi Business has received at least an average 415,000 but less than an average
550,000 Unique Visitors during either the 22nd, 23rd or 24th month of
the second year of the term or at least $1,500,000 in gross revenues but
less than $1,961,000 within the 12 moth period following the first anniversary
of the Effective Date.
(c)
In
addition to the Base Salary and Executive’s right to earn the Performance Bonus,
Employer shall issue to Executive a Stock Option to purchase 7,500,000 shares
of
the Employer's common stock, at an exercise price equal to Employer's common
stock fair market value as of the date of this
Agreement (the
"Stock Option"). The Stock Option shall vest (i.e., become exercisable) in
three
installments, as follows: One half of the Stock Options shall vest on the first
anniversary date of the Effective Date; an additional quarter of the Stock
Option shall vest on each of the 18th
month
and second anniversaries of the Effective Date. Executive must be continuously
a
full-time employee of the Company through the time he exercises part or all
of
the Stock Option, except, however, in the event this Agreement is terminated
by
the Executive for a Good Reason, as defined in Article 10.1 and 10.2 below,
or
by the Employer without Cause, as defined in Article 10.3 below, in which cases
the Stock Option shall immediately and fully vest upon such termination provided
further that the events surrounding any such termination have not been the
subject of any claim, proceeding or lawsuit by either the Executive or the
Company in which further case the Stock Option shall only vest upon final
adjudication, determining that such termination was a valid termination by
the
Executive for Good Reason or by the Employer without Cause pursuant to the
applicable above referenced articles of this Agreement. The Stock Option shall
be deemed a non-qualified stock option (i.e., not an ISO).
(d
) In
addition to the Base Salary, the Stock Option and the Executive’s right to earn
the Performance Bonus, Employer shall issue to Executive a second Stock Option
to purchase 3,000,000 shares of the Employer's common stock, at an exercise
price equal to the
“Market Price” of the Company’s publicly traded common shares. “Market Price”
means the average sales price of a Company Common Share for the twenty (20)
trading days immediately preceding the date of this Agreement as recorded by
the
Electronic Bulletin Board, over-the-counter market, and
which
shall vest based upon the attainment of certain business goals (the "Performance
Stock Option"). The Performance Stock Option shall vest (i.e., become
exercisable) in two installments: 1,500,000 upon the first anniversary of the
Effective Date, provided that the Kiwi Business has received no less than an
average 215,000 Unique Visitors during either the 10th, 11th or 12th month
of
the first year of the term or $316,000 in gross revenues within the 12 month
period following the first anniversary of the Effective Date, and; one half
upon
the second anniversary date of the Effective Date, provided that the Kiwi
Business has received at least an average 550,000 Unique Visitors during either
the 22nd, 23rd or 24th month of the second year of the term or
$1,961,000 in gross revenues within the 12 month period following the first
anniversary of the Effective Date. Executive must be continuously a full-time
employee of the Company through the time he exercises part or all of the
Performance Stock Option, except, however, in the event this Agreement is
terminated by the Executive for a Good Reason, as defined in Article 10.1 and
10.2 below, or by the Employer without Cause, as defined in Article 10.3 below,
in which cases the Performance Stock Option shall immediately and fully vest
upon such termination provided further that the events surrounding any such
termination have not been the subject of any claim, proceeding or lawsuit by
either the Executive or the Company in which further case the Performance Stock
Option shall only vest upon final adjudication, determining that such
termination was a valid termination by the Executive for Good Reason or by
the
Employer without Cause pursuant to the applicable above referenced articles
of
this Agreement. The Performance Stock Option shall be deemed a non-qualified
stock option (i.e., not an ISO). A "Unique Visitor" is a person who visits
a
Kiwibox website during any month during the term of this Agreement.
(e)
Executive hereby acknowledges that the Stock Option, the performance Stock
Option and the shares issuable upon the exercise thereof shall be "restricted
securities" as such term is defined under Rule 144, unless and until an
effective registration covering these shares takes place, promulgated under
the
Securities Act of 1933, as amended (the "1933 Act"); that the Executive hereby
represents that he shall accept such compensation and has no present intent
to
distribute or transfer such securities; that such securities shall bear the
appropriate restrictive legend providing that they may not be transferred except
pursuant to the registration requirements of the 1933 Act or pursuant to
exemptions therefrom, and; the Executive further acknowledges that he may be
required to hold such securities for an indeterminable amount of
time.
Benefits
4.2
Executive shall be entitled to participate in all medical and other executive
benefit plans, including four (4) weeks vacation, sick leave, retirement
accounts and other executive benefits provided by Employer to any of the other
senior officers of the Employer on terms and conditions no less favorable than
those offered to such senior officers. Such participation shall be subject
to
the terms of the applicable plan documents and Employer's generally applicable
policies.
4.3
Expense Reimbursement
Employer
shall reimburse Executive for reasonable and necessary expenses incurred
by him on behalf of Employer in the performance of his duties hereunder
during
the Term, including any and all travel and entertainment expenses related
to
the
Employer's business in accordance with Employer's then customary policies,
provided that such expenses are adequately documented.
ARTICLE
5
OTHER
EMPLOYMENT
During
the Term, Executive shall devote all of his business and professional time
and
effort, attention, knowledge, and skill to the management, supervision and
direction of Employer's business and affairs as Executive's highest professional
priority. Employer shall be entitled to all benefits, profits or other
remuneration arising from or incidental to all work, services and advice
performed or provided by Executive. Nothing in this Agreement shall preclude
Executive from:
(a)
serving as a director or member of a committee of any organization or
corporation involving no conflict of interest with the interests of Employer,
provided that Executive must obtain the prior written approval of the
independent members of the Board;
(b)
serving as a consultant in his area of expertise (in areas other than in
connection with the business of Employer), to government, industrial, and
academic panels provided that only de minimis time shall be devoted thereto
and
Executive must obtain the prior written approval of the independent members
of
the Board of Employer and where it does not conflict with the interests of
Employer, provided that such written consent shall not be unreasonably withheld,
delayed or conditioned; and
(c)
managing his personal investments or engaging in any other non-competing
business; provided that such activities do not materially interfere with the
regular performance of his duties and responsibilities under this
Agreement.
ARTICLE
6
CONFIDENTIAL
INFORMATION/INVENTIONS
Confidential
Information
6.1
Executive shall not, in any manner, for any reasons, either directly or
indirectly, divulge or communicate to any person, firm or corporation, any
confidential information concerning any matters not generally known in the
website industry (the "Website Industry") or otherwise made public by Employer
which affects or relates to Employer's business, finances, marketing and/or
operations, research, development, inventions, products, designs, plans,
procedures, or other data (collectively, "Confidential Information") except
in
the ordinary course of business or as required by applicable law. Without regard
to whether any item of Confidential Information is deemed or considered
confidential, material, or important, the parties hereto stipulate that as
between them, to the extent such item is not generally known in the Website
Industry, such item is important, material, and confidential and affects the
successful conduct of Employer's business and goodwill, and that any breach of
the terms of this Section 6.1 shall be a material and incurable breach of this
Agreement. Confidential Information shall not include: information in the public
domain other than because of a breach of this Agreement.
Documents
6.2
Executive further agrees that all documents and materials furnished to Executive
by Employer and relating to Employer's business or prospective business are
and
shall remain the exclusive property of Employer. Executive shall deliver all
such documents and materials, and all copies thereof and extracts therefrom,
to
Employer upon demand therefor and in any event upon expiration or earlier
termination of this Agreement.
Inventions and Intellectual Property
6.3
All
ideas, inventions, and other developments or improvements conceived
or reduced
to practice by Executive, alone or with others, during the Term of this
Agreement, whether or not during working hours, that are within the scope of
the
business
of Employer or that relate to or result from any of Employer's work or
projects
or the services provided by Executive to Employer pursuant to this Agreement,
shall be the exclusive property of Employer. Executive agrees to assist
Employer, at Employer's expense, to obtain patents and copyrights on any
such
ideas, inventions, writings, and other developments, and agrees to execute
all
documents necessary to obtain such patents and copyrights in the name of
Employer.
Exhibit
A attached to and incorporated by reference into this Agreement is a list of
assets owned by the Kiwibox Shareholders, are not related to the business of
Kiwicox Media, Inc. and which are not within the scope of this Article
6.3
Disclosure
6.4
During the Term, Executive will promptly disclose to the Board of Directors
full
information concerning any interest, direct or indirect, of Executive (as owner,
shareholder, partner, lender or other investor, director, officer, executive,
consultant or otherwise) or any member of his immediate family in any business
that is reasonably known to Executive to purchase or otherwise obtain services
or products from, or to sell or otherwise provide services or products to,
Employer or any of their suppliers or customers.
ARTICLE
7
COVENANT
NOT TO COMPETE
7.1
No
Competitive Activities. Except as expressly permitted in Article 5 above,
during
the Term, Executive shall not engage in any activates that are competitive
with
the actual or prospective business of the Company, including without limitation:
(a) engaging directly or indirectly in any business substantially similar to
any
business or activity engaged in (or proposed to be engaged in) by Employer,
including and not limited to business that relates to the Website Industry;
(b)
engaging directly or indirectly in any business or activity competitive with
any
business or activity engaged in (or proposed to be engaged in) by Employer;
(c)
soliciting or taking away any executive, employee, agent, representative,
contractor, supplier, vendor, customer, franchisee, lender or investor of
Employer, or attempting to so solicit or take away; (d) interfering with any
contractual or other relationship between Employer and any executive, employee,
agent, representative, contractor, supplier, vendor, customer, franchisee,
lender or investor; or (e) using, for the benefit of any person or entity other
than Employer any Confidential Information of Employer.
7.2
The
foregoing covenant prohibiting competitive activities shall survive the
termination of this Agreement, and shall extend, and shall remain enforceable
against Executive, for the period of two (2) years following the date this
Agreement is terminated. In addition, during the two-year period following
such
expiration or earlier termination, neither Executive nor Employer shall make
or
permit the making of any negative statement of any kind concerning Employer
or
their affiliates, or their directors, officers or agents or
Executive.
ARTICLE
8
SURVIVAL
Except
as
otherwise provided, Executive agrees that the provisions of Articles 6, 7,
8 and
9 shall survive expiration or earlier termination of this Agreement for any
reasons whether voluntary or involuntary, with or without Cause, and shall
remain in full force and effect thereafter.
ARTICLE
9
INJUNCTIVE
RELIEF
Executive
acknowledges and agrees that the covenants and obligations of Executive set
forth in Articles 6 and 7 with respect to non-competition, non-solicitation,
confidentiality and Employer's property relate to special, unique and
extraordinary matters and that a violation of any of the terms of such covenants
and obligations will cause Employer irreparable injury for which adequate
remedies are not available at law. Therefore, Executive agrees that if Executive
breaches this Agreement than Employer shall be entitled to apply for an
injunction, restraining order or such other equitable relief as a court of
competent jurisdiction as limited by Section 13.3 may deem necessary or
appropriate to restrain Executive from committing any violation of the covenants
and obligations referred to in this Article 9. Executive shall have the right
to
appeal from such injunction or order and to seek reconsideration. These
injunctive remedies are cumulative and in addition to any other rights and
remedies Employer may have at law or in equity.
ARTICLE
10
TERMINATION
Termination
by Executive
10.1
Executive may terminate this Agreement for Good Reason at any time upon 30
days'
written notice to Employer, provided the Good Reason has not been cured
within
such period of time. In addition, Executive may terminate this agreement
anytime,
upon providing a 60 days' written notice.
Good
Reason
10.2
In
this Agreement, "Good Reason" means, without Executive's prior written
consent,
the occurrence of any of the following events, unless Employer shall
have
fully cured all grounds for such termination within thirty (30) days after
Executive
gives notice thereof:
(i)
any
reduction in his then-current Salary or benefits, other than in connection
with a percentage pay cut that is applicable to all senior executives
and
which
is the same percentage for all such persons or in connection with a general
reduction in benefits;
(ii)
any
material failure to timely grant, or timely honor, the Stock Option
set forth in Article 4.1;
(iii)
failure to pay or provide required expenses;
(iv)
Any
diminution in authority or responsibility to a non-executive position;
The
written notice given for Good Reason by Executive to Employer shall specify
in reasonable detail the cause for termination, and such termination
notice shall not be effective until thirty (30) days after Employer's
receipt of such notice, during which time Employer shall have the
right
to respond to Executive's notice and cure the breach or other event
giving rise to the termination.
Termination
by Employer
10.3
Employer may terminate its employment of Executive under this Agreement
with
or
without Cause at any time by written notice to Executive. For purposes
of
this
Agreement, the term Cause for termination by Employer shall be (a) a
conviction
of or plea of guilty or nolo contendere by Executive to a felony, or
any
crime
involving fraud, securities laws violations, embezzlement or
moral turpitude;
(b) the refusal by Executive to perform his material duties and obligations
hereunder or to follow the proper instructions of the Board of Directors; (c)
Executive's willful or intentional misconduct in the performance of his duties
and obligations; (d) conduct that is known or that should have been known by
Executive to be detrimental to the best interests of the Company, as determined
by the independent members of the board; (e) if Executive or any member of
his
family makes any personal profit arising out of or in connection with a
transaction to which Employer is a party or with which it is associated without
making disclosure to and obtaining the prior written consent of the independent
members of the Board; or (f) the entry by the Securities and Exchange Commission
or a self-regulatory organization of a consent decree relating to a securities
law violation by Executive. The written notice given hereunder by Employer
to
Executive shall specify that it is without Cause or if it is with Cause shall
specify in reasonable detail the cause for termination. For purposes of this
Agreement, "family" shall mean "immediate family" as defined in the rules of
the
Securities and Exchange Commission. In the case of a termination for the causes
described in (a), (d) and (e) above, such termination shall be effective upon
receipt of the written notice. In the case of the causes described in (b) and
(c) above, such termination notice shall not be effective until thirty (30)
days
after Executive's receipt of such notice, during which time Executive shall
have
the right to respond to Employer's notice and cure (if curable) the breach
or
other event giving rise to the termination. In the case of termination without
Cause, such termination notice shall not be effective until thirty (30) days
after Executive's receipt of such notice.
Severance
10.4
Upon
a termination of this Agreement with Good Reason by Executive or without
cause by Employer, Employer shall pay to Executive all accrued and unpaid
compensation and expense reimbursement, as of the date of such termination
and the "Severance Payment." The Severance Payment shall be payable in
a lump
sum, subject to Employer's statutory and customary withholdings. The
Severance
Payment shall be paid by Employer within thirty (30) business days of
the
expiration of any applicable cure period. The "Severance Payment" shall equal
the total amount of the Salary payable to Executive under Section 4.1 of this
Agreement for a period of one (1) year.
Termination
Upon Death
10.5
If
Executive dies during the Term , this Agreement shall terminate, except that
Executive's legal representatives shall be entitled to receive any earned but
unpaid compensation or expense reimbursement due hereunder through the date
of
death.
Termination
Upon Disability
10.6
If,
during the Term , Executive suffers and continues to suffer from a "Disability"
(as defined below), then Employer may terminate this Agreement by delivering
to
Executive ten (10) calendar days' prior written notice of termination based
on
such Disability, setting forth with specificity the nature of such Disability
and the determination of Disability by Employer. For purposes hereof,
"Disability" means "permanent and total disability" as defined in Section
22(e)(3) of the Internal Revenue Code. Upon any such termination for Disability,
Executive shall be entitled to receive any earned but unpaid compensation or
expense reimbursement due hereunder through the date of termination and the
Severance Payment.
ARTICLE
11
PERSONNEL
POLICIES, CONDITIONS, AND BENEFITS
Except
as
otherwise provided herein, Executive's employment shall be subject to the
personnel policies and benefit plans which apply generally to Employer's
Executives as the same may be interpreted, adopted, revised or deleted from
time
to time, during the Term of this Agreement, by Employer in its sole discretion.
During the Term hereof, Executive shall be entitled to vacation during each
year
of the Term at the rate of four (4) weeks per year. Within 30 days after the
end
of each year of the Term, Employer shall elect to (a) carry over and allow
Executive the right to use any accrued and unused vacation of Executive, or
(ii)
pay Executive for such vacation in a lump sum in accordance with its standard
payroll practices. Executive shall take such vacation at a time approved in
advance by the Board of Directors of Employer, which approval will not be
unreasonably withheld but will take into account the staffing requirements
of
Employer and the need for the timely performance of Executive's
responsibilities.
ARTICLE
12
BENEFICIARIES
OF AGREEMENT
This
Agreement shall inure to the benefit of the parties hereto, their respective
heirs, successors and permitted assigns.
ARTICLE
13
GENERAL
PROVISIONS
No
Waiver
13.1
No
failure by either party to declare a default based on any breach by the other
party of any provisions of this Agreement, nor failure of such party to act
quickly with regard thereto, shall be considered to be a waiver of any such
breach, or of any future breach.
Modification
13.2
No
waiver or modification of this Agreement or of any covenant, condition, or
limitation herein contained shall be valid unless in writing and duly executed
by the parties to be charged therewith.
Submission
to Jurisdiction; Consent to Service of Process.
13.3
Submission to Jurisdiction; Consent to Service of Process. This Agreement shall
be governed in all respects, by the laws of the State of New York, including
validity, interpretation and effect, without regard to principles of conflicts
of law. The parties hereto irrevocably and unconditionally consent to submit
to
the exclusive jurisdiction of the state and federal courts in the State of
New
Jersey or in the State of New York for any lawsuits, actions or other
proceedings arising out of or related to this Agreement and agree not to
commence any lawsuit, action or other proceeding except in such courts. The
parties hereto further agree that service of process, summons, notice or
document by mail to their addresses set forth above shall be effective service
of process for any lawsuit, action or other proceeding brought against them
in
any such court. The parties hereto irrevocably and unconditionally waive any
objection to the laying of venue of any lawsuit, action or other proceeding
arising out of or related to this Agreement in such courts, and hereby further
irrevocably and unconditionally waive and agree not to plead or claim in any
such court that any such lawsuit, action or proceeding brought in any such
court
has been brought in an inconvenient forum.
Entire
Agreement
13.4
This
Agreement embodies the whole agreement between the parties hereto regarding
the
subject matter hereof and there are no inducements, promises, terms, conditions,
or obligations made or entered into by Employer or Executive other than
contained herein.
Severability
13.5
In
the event a court of competent jurisdiction determines that a term or provisions
contained in this Agreement is overly broad in scope, time geographical location
or otherwise, the parties hereto authorize such Court to modify and reduce
any
such term or provision deemed overly broad in scope, time, geographic location
or otherwise so that it complies with then applicable law.
Headings
13.6
The
headings contained herein are for the convenience of reference and are not
to be
used in interpreting this Agreement.
Independent
Legal Advice
13.7
Employer and Executive each acknowledge that he or it has obtained legal advice
concerning this Agreement.
No
Assignment
13.8
No
party may pledge or encumber its respective interests in this Agreement nor
assign any of its rights or duties under this Agreement without the prior
written consent of the other party.
IN
WITNESS WHEREOF the parties have executed this Agreement as of the day
and
year
first above written.
| EMPLOYER: | ||
| MAGNITUDE INFORMATION SYSTEMS, INC. | ||
| |
|
|
| By: | ||
|
Xxxxxx Xxxxxx |
||
| Title: | President | |
| EXECUTIVE: | ||
| By: | ||
|
Name:
|
|
|
