EXECUTIVE EMPLOYMENT AGREEMENT
THIS
EXECUTIVE EMPLOYMENT AGREEMENT (“Agreement”) is effective as of February 1,
2005, by and between IFT COMPANY, a Delaware Company with offices at the Quorum
Business Center, 000 Xxxxx Xxxxxxxx Xxxxx, Xxxxxxxxx Xxxxx, Xxxxxxx 00000 (the
“Company”), and Xxxxxxx X. Xxxxx an individual residing at The Preserve at Deer
Creek, 000 Xxxxxxxxx Xxxxx, Xxxxxxxxx Xxxxx, Xxxxxxx 00000 (the
“Executive”).
W I T N E
S S E T H :
WHEREAS,
the Company wishes to employ the Executive and the Executive wishes to accept
such employment, subject to the terms and conditions hereinafter set
forth;
WHEREAS,
the Company acknowledges that Executive has been working for the Company in
various capacities since January 1997 and is currently employed as the Chief
Executive Officer under an employment agreement beginning on January 1, 2002 and
ending December 31, 2005 (“Prior Agreement”);
WHEREAS,
the Company wishes to continue Executive’s employment for an additional period
of time, beginning on February 1, 2005 and ending on January 31, 2008, and the
Executive wishes to enter into such Agreement, subject to the terms and
conditions hereinafter set forth;
WHEREAS,
the Prior Agreement between the Company and Executive, except for certain
provisions as hereinafter carried forth into this Agreement, shall be terminated
in al respects upon execution of this Agreement; and
NOW
THEREFORE, the parties hereto, in consideration of the premises and mutual
promises contained herein and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, agree as
follows:
1. EMPLOYMENT
TERM. The
Company hereby agrees to employ the Executive, and the Executive hereby accepts
such employment for a period of four (4) years from February 1, 2005 through
January 31, 2008, unless sooner terminated in accordance with Section 6 hereof
(the “Employment Period”).
2. POSITION;
DUTIES. During
the Employment Period, the Executive shall hold the title and position of Chief
Executive Officer of the Company and shall have the duties and responsibilities
usually vested in such capacity, as determined from time to time by the Chairman
of the Board, Board of Directors, and Bylaws.
3. MANNER
OF PERFORMANCE. The
Executive shall serve the Company and devote all his business time, his best
efforts and all his skill and ability in the performance of his duties
hereunder. The Executive shall carry out his duties in a competent and
professional manner, to the reasonable satisfaction of the Chairman of the Board
and Board of Directors of the Company, shall work with other Executives of the
Company and of its affiliates and generally promote the best interests of the
Company and its customers. The Executive shall not, in any capacity engage in
any activity which is, or may be, contrary to the welfare, interest or benefit
of the business now or hereafter conducted by the Company or any of its
affiliates.
4. COMPENSATION
AND RELATED MATTERS. The
Executive’s compensation for his services hereunder shall be as
follows:
4.1 Base
Compensation. During
the Employment Period, Executive shall receive an annual base salary (the
"Annual Base Salary") of $108,750, payable in accordance with the Company’s
normal payroll practices. Executive’s Annual Base Salary will be reviewed on an
annual basis by the Compensation Committee of the Board of Directors and may be
increased from time to time, in the discretion of the Compensation Committee.
Any increase in Annual Base Salary shall not serve to limit or reduce any other
obligation to Executive under this Agreement. Annual Base Salary shall not be
reduced at any time (including after any such increase) unless agreed to between
the parties in writing. The term Annual Base Salary as utilized in this
Agreement shall refer to Annual Base Salary as adjusted from time to
time.
4.2 Restricted
Common Stock. During
the Employment Period, Executive is entitled to earn up to One Million
(1,000,000) shares of restricted common stock (“Shares”) of the Company, subject
to the following Sales Goal Thresholds being met by the
Company:
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4.2.1 150,000
Shares upon reaching $ 6 Million in Sales during a calendar year;
4.2.2 150,000
Shares upon reaching $ 12 Million in Sales during a calendar year;
4.2.3 150,000
Shares upon reaching $ 18 Million in Sales during a calendar year;
4.2.4 150,000
Shares upon reaching $ 24 Million in Sales during a calendar year;
4.2.5 150,000
Shares upon reaching $ 30 Million in Sales during a calendar year;
and
4.2.6 100,000
Shares upon reaching $ 40 Million in Sales during a calendar year.
4.3 Sales
Goals Non-Repetitive. The
Sales Goals Thresholds and number of Shares referenced in Section 4.2 are
non-repetitive, which means once a particular Sales Goal Threshold has been met
during any calendar year, that same Sales Goal is not eligible to be used again
for additional shares (e.g. if the Sales Goal in 4.2.1 is met during the 2005
calendar year, then that same opportunity is not available for any other
calendar year during the Employment Period). The determination of whether or not
a particular Sales Goal Threshold has been met during a given year will be made
by the Compensation Committee, subject to adjustment, if any, from the
independent audit of the Company’s end of year financial statements, and
ratification and approval of such determination by the Board of
Directors.
4.4 Gross
Profit Margin Requirement.
Executive is required to not only meet the Sales Goal Thresholds set forth in
Section 4.2 but also a 25% Gross Profit Margin in order to receive the Shares
described in Section 4.2. Gross Profit Margin is calculated taking Gross Profit
and dividing it by Total Revenue. Notwithstanding the foregoing, at the sole
discretion of the Company’s Board of Directors, upon recommendation of the
Compensation Committee, the Gross Profit Margin Requirement described in this
Section 4.4 may be decreased or waived entirely for an acquisition(s) or merger.
This Section 4.4 in no way requires the Corporation to make an acquisition(s) or
merge with any other entity.
4.4 Acquisitions
and Mergers Calculations. The
Corporation is actively searching for synergistic acquisitions and/or merger
targets, the full or pro rata amount of Sales immediately prior to the
acquisition or merger, are includable towards the Sales Goal Thresholds set
forth in Section 4.2, which are calculated at the end of the year in which the
acquisition or merger transaction is completed, subject to Section 4.3; except
Executive, in his sole discretion, may opt to vest the amount of Shares solely
earned from an acquisition or merger, if such acquisition or merger meets one or
any of the Sales Goal Thresholds set forth in Section 4.2 upon the close of the
transaction.
4.4.1 For
illustration purposes: Assume the Corporation acquires or merges with ABC
Company, which has $8 Million in Sales for the twelve months immediately prior
to being acquired or merged. The Executive opts to take delivery of Shares prior
to the end of the year in which the acquisition or merger takes place, pursuant
to Section 4.4. The acquisition or merger transaction closes on February 28,
2005. Executive calculates the pro rata per month ($8 Million divided by 12
months to get a pro rata monthly sales figure, which equals $666,667 per month)
or two year average per month (the prior two year's average per month sales
figures of the ABC Company, which equals $785,000 for March, $923,000 for April,
etc.) sales figures plus the pro rata month or two year average month amounts
for the remaining months in the 2005 year available for the Corporation to
generate sales, which equals $6.67 Million or $7.652 Million, respectively.
Executive chooses to use the two year average per month method to determine
which Sales Goal Threshold (as described in Section 4.2) has been met. Under
this illustration, Executive meets the Sales Goal Threshold described in Section
4.2.1 of $6 M and has earned and vested 150,000 Shares, subject to Sections 4.2
and 4.3. The remaining $1.652 Million ($7.652 Million minus $6 Million) are
carried forward towards meeting the next eligible Sales Goal Threshold for 2005
or later.
4.5 Earning
and Vesting of Shares. The
Shares shall be other compensation to the Executive for his services hereunder
and shall be earned and vest immediately upon Executive meeting the Sales Goals
Thresholds in Section 4.2, subject to Sections 4.3 and 4.4. The Shares, when
vested, shall be subject to the following conditions:
4.5.1 The
Shares may not be sold, assigned, transferred, pledged, hypothecated or
otherwise disposed of, alienated or encumbered until the restrictions are
removed according to the terms of this Agreement or expire.
4.5.2 The
Shares shall not be assignable by the Executive or be subject to any claims by
creditors until they shall have been earned and vested in accordance with this
section. In addition to any other restrictions on the Shares described in this
section, which may be incorporated by reference in the stock certificates
evidencing the Shares, such certificates shall bear a legend substantially as
follows:
"The
securities evidenced hereby have not been registered under the Securities Act of
1933, as amended ("Securities Act"). The holder hereof, by acquiring such
securities, agrees that such securities may not be resold, pledged or otherwise
transferred except pursuant to an effective registration statement duly filed
under the Securities Act, or pursuant to an exemption effective under the
Securities Act."
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4.5.3 The
Executive hereby agrees with Company that the holding period set forth in Rule
144 of the Securities Act of 1933, as amended, shall only begin to run, with
respect to any Shares, on the date that such Shares are earned and vest in
accordance herewith.
4.5.4 Executive
shall be entitled to all of the Shares described in Section 4.2, to the extent
such Shares are not earned and vested, upon acquisition or merger of the Company
where a change-in-control, as such term is defined in Section 7(c), which Shares
shall immediately be deemed earned and vested.
4.6 Prior
Agreement. In
addition to the foregoing, Executive shall be entitled to the remaining benefits
under his Prior Agreement as follows:
4.6.1 16,000
shares of restricted common stock of the Company, subject to vesting in 4,000
share increments on a quarterly basis, with the first 4,000 shares vesting on
March 31, 2005 and the remaining shares at the end of each calendar year quarter
thereafter until the full amount is satisfied.
4.6.2 6,500
incentive stock options of the Company, subject to vesting at the end of the
2005 calendar year, for time served only. The terms of the incentive stock
option remain the same as originally granted on January 1, 2002. The Stock
Options shall have an exercise price equal to one hundred percent (100%) of the
fair market value of Company's common stock as of the date of grant, and,
subject to vesting, shall be exercisable at any time, in whole or in part,
within five (5) years of the date of grant.
4.7 Compensation
and Benefit Programs. During
the Employment Period, Executive shall be entitled to participate in the
following plans as they may exist from time to time during the term hereof, to
wit, any and all medical, dental, hospitalization, accidental death and
dismemberment, disability, travel and life insurance plans, and any and all
other plans as offered by the Company from time to time to its Executives,
including savings, pension, profit-sharing, stock options, and deferred
compensation plans, subject to the general eligibility and participation
provisions set forth in such plans.
4.8 Vacation
and Other Benefits. During
the Employment Period, Executive shall be entitled to such paid vacation, fringe
benefits and perquisites as are provided from time to time by the Company to
similarly situated executives. Vacation will be taken at such times as the
Executive and the Company shall mutually determine and provided that no vacation
time shall interfere with the duties required to be rendered by Executive
hereunder. Notwithstanding the foregoing, as an officer of Company, Executive is
expected to utilize his vacation time judiciously and so as not to jeopardize
the business of Company. Unused vacation may not be carried forth to the next
calendar year without prior written consent by the Company, except that no
written consent is required for carrying over a maximum of fourteen days to any
subsequent year. The Company shall also provide the Executive reasonable
reimbursement of out-of-pocket expenses incurred by him in connection with his
duties hereunder, upon submission of appropriate documentation, and an
automobile or automobile allowance, which expense or allowance shall not exceed
$750 per month, net.
4.9 Adjustments. If the
outstanding shares of common stock of the Company are increased, decreased or
exchanged for a different number or kind of shares or other securities, or if
additional shares or new or different shares or other securities are distributed
in respect of such shares of common stock (or any stock or securities received
with respect to such common stock), through merger, consolidation, sale or
exchange of all or substantially all of the properties of the Company,
reorganization, recapitalization, reclassification, stock dividend, stock split,
reverse stock split, spin-off or other distribution with respect to such shares
of Common Stock (or any stock or securities received with respect to such common
stock), then the number of shares of common stock shall be equitably and
appropriately adjusted. Adjustments under this Section 4.9 will be made by the
applicable authority, whose determination as to what adjustments will be made
and the extent thereof will be final, binding and conclusive. No fractional
interests will be issued from any such adjustments. Notice of any adjustment
shall be given by Company to Executive and shall be final and binding on
Executive.
4.10 Tax
Withholding. The
Company shall have the right to deduct or withhold from the compensation due to
Executive hereunder any and all sums required for any and all federal, social
security, state and local taxes, assessments or charges now applicable or that
may be enacted and become applicable in the future.
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5. NON-COMPETITION;
NON-DISCLOSURE.
5.1 Non-Competition. During
the Employment Period and for a period of twelve (12) months after the
termination of the Executive’s employment with the Company for any reason
(collectively the “Restriction Period”), the Executive shall not, either
directly or indirectly, for himself or any third party, anywhere within or
outside the United States (a) engage in or have any interest in any activity
that directly or indirectly competes with the business of the Company or of any
of its affiliates (which for purposes hereof shall include all subsidiaries or
parent companies of the Company, now or in the future during the Employment
Period), as conducted at any time during the Employment Period, including
without limitation, accepting employment from or providing consulting services
to any such competitor, owning any interest in or being a partner, shareholder
or owner of any such competitor, (b) solicit, induce, recruit, or cause another
person in the employ of the Company or its affiliates or who is a consultant or
independent contractor for the Company or its affiliates to terminate his
employment, engagement or other relationship with the Company or its affiliates,
or (c) solicit or accept business from any individual or entity which shall have
obtained the goods or services of, or purchased goods or services from, the
Company or its affiliates during the two year period immediately prior to the
end of the Employment Period or which otherwise competes with or engages in a
business which is competitive with or similar to the business of the Company or
any of its affiliates, (d) call on, solicit or accept any business from any of
the actual or targeted prospective customers of the Company or its affiliates
(the identity of and information concerning which constitute trade secrets and
Confidential Information of the Company) on behalf of any person or entity in
connection with any business competitive with the business of the Company, nor
shall the Executive make known the names and addresses of such customers or any
information relating in any manner to the Company’s trade or business
relationships with such customers, other than in connection with the performance
of Executive’s duties under this Agreement.
5.2 Non-disclosure. The
Executive shall not at any time during the term
hereof or thereafter divulge, communicate, or use in any way, any Confidential
Information (as hereinafter defined) pertaining to the business of the Company.
Any Confidential Information or data now or hereafter acquired by the Executive
with respect to the business of the Company (which shall include, but not be
limited to information concerning the Company’s financial condition, prospects,
technology, customers, suppliers, sources of leads and methods of doing
business) shall be deemed a valuable, special and unique asset of the Company
that is received by the Executive in confidence and as a fiduciary, and
Executive shall remain a fiduciary to the Company with respect to all of such
information. For purposes of this Agreement, the term “Confidential Information”
includes, but is not limited to, information disclosed to the Executive or known
by the Executive as a consequence of or through his employment by the Company
(including information conceived, originated, discovered or developed by the
Executive) prior to or after the date hereof, and not generally known, about the
Company or its business. Notwithstanding the foregoing, nothing herein shall be
deemed to restrict the Executive from disclosing Confidential Information to the
extent required by law provided that prior to disclosing any such information
required by law, Executive shall give prior written notice thereof to Company
and provide Company with the opportunity to contest the disclosure. The
Executive shall not disclose, without limitation as to time, Confidential
Information to any person, firm, Company, association or other entity for any
purpose or reason whatsoever, except (i) to authorized representatives of the
Company, (ii) during the Employment Period, such information may be disclosed by
the Executive as is specifically required by Company in the course of performing
his duties for the Company, and (iii) to counsel and other advisers of Company
subject to Company’s prior approval and provided that such advisers agree to the
confidentiality provisions of this Section 5.2.
5.3 Ownership
of Developments. All
copyrights, patents, trade secrets, or other intellectual property rights
associated with any ideas, concepts, techniques, inventions, processes or works
of authorship developed or created by Executive during the course of performing
work for the Company or its customers (collectively, the “Work Product”) shall
belong exclusively to the Company and shall, to the extent possible, be
considered a work made by the Executive for hire for the Company within the
meaning of Title 17 of the United States Code. To the extent the Work Product
may not be considered work made by the Executive for hire for the Company, the
Executive agrees to assign, and automatically assign at the time of creation of
the Work Product, without any requirement of further consideration, any right,
title, or interest the Executive may have in such Work Product. Upon the request
of the Company, the Executive shall take such further actions, including
execution and delivery of instruments of conveyance, as may be appropriate to
give full and proper effect to such assignment. All of the foregoing shall also
be deemed Confidential Information for the purposes of Section 5.2,
above.
5.4 Books
and Records. All
books, records, and accounts relating in any manner to the Company (i.e.,
financial information, customer, supplier, vendor identity, etc.), whether
prepared by the Executive or otherwise coming into the Executive’s possession,
shall be the exclusive property of the Company and shall be returned immediately
to the Company on termination of the Executive’s employment hereunder or
otherwise on the Company’s request at any time.
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5.5 Definition
of Company. Solely
for purposes of this Agreement, the term “Company” also shall include any
existing or future subsidiaries of the Company that are operating during the
time periods described herein and any other entities that directly or
indirectly, through one or more intermediaries, control, are controlled by or
are under common control with the Company during the periods described
herein.
5.6 Acknowledgment
by Executive. The
Executive acknowledges and confirms that (i) the restrictive covenants contained
in this Section 5 are reasonably necessary to protect the legitimate business
interests of the Company, and (ii) the restrictions contained in this Section 5
(including without limitation the geographic area and length of the term of the
provisions of this Section 5) are not overbroad, overlong, or unfair and are not
the result of overreaching, duress or coercion of any kind. The Executive
acknowledges and confirms that his special knowledge of the business of the
Company is or will be such as would cause the Company serious injury or loss if
he were to use such ability and knowledge to the benefit of a competitor or were
to compete with the Company in violation of the terms of this Section 5. The
Executive further acknowledges that the restrictions contained in this Section 5
are intended to be, and shall be, for the benefit of and shall be enforceable
by, the Company’s successors and assigns and shall be enforced to the fullest
extent of the law applicable at the time that Company deems it necessary or
advisable to enforce the restrictive covenants and other provisions of this
Section 5.
5.7 Injunctive
Relief; Damages. Because
of the difficulty of measuring economic losses to the Company as a result of a
breach of the foregoing covenants in this Section 5, and because of the
immediate and irreparable damage that could be caused to the Company for which
it would have no other adequate remedy, the Executive agrees that the foregoing
covenants may be enforced by the Company in the event of breach by the
Executive, by injunctions and restraining orders. Nothing herein shall be
construed as prohibiting the Company from pursuing any other available remedy
for such breach or threatened breach, including the recovery of
damages.
5.8 Severability;
Reformation; Independent Covenants. The
covenants in this Section 5 are severable and separate, and the unenforceability
of any specific covenant shall not affect the provisions of any other covenant.
Moreover, in the event any court of competent jurisdiction shall determine that
the scope, time or territorial restrictions set forth are unreasonable, then it
is the intention of the parties that such restrictions be enforced to the
fullest extent which the court deems reasonable, and the Agreement shall thereby
be reformed. Each covenant and agreement of Executive in this Section 5 shall be
construed as an agreement independent of any other provision in this Agreement,
and the existence of any claim or cause of action by the Executive against the
Company (including the affiliates thereof), whether predicated on this Agreement
or otherwise, shall not constitute a defense to the enforcement by the Company
of such covenants or agreements. It is specifically agreed that the periods of
restriction during which the agreements and covenants of the Executive made in
this Section 5 shall be effective, shall be computed by extending such periods
by the amount of time during which the Executive is in violation of any
provision of Section 5. The covenants contained in this Section 5 shall not be
affected by any breach of any other provision hereof by any party
hereto.
5.9 Survival. The
obligations of the parties under this Section 5 shall survive the termination of
this Agreement.
6. EARLY
TERMINATION OF EXECUTIVE EMPLOYMENT. This
Agreement may be terminated by either party before the expiration of the
Employment Period for any reason, but subject to the terms, conditions and
remedies set forth in this Section 6, which shall provide the sole and exclusive
remedy for any such termination.
6.1 Uncompensated
Terminations. If the
Executive resigns from the Executive's employment hereunder without Cause (as
defined in Section 7(a), or if the Company terminates the Executive for Cause
(as defined in Section 7(b)), then the Executive shall be entitled to receive a
cash sum payment of the portion of Annual Base Salary earned up to and including
the Date of Termination (as defined in Section 6.4(b)), and any benefits that
have accrued under Sections 4.2 and 4.8 up to and including the Date of
Termination. The amount of cash payable to the Executive under this Section 6.1
shall be payable in accordance with the Company's normal payroll practices and
any other benefits described in Sections 4.2 through 4.8 will be handled in
accordance with the established procedures for each applicable benefit. More
particularly, Executive shall be entitled only to (a) such Shares that have
actually vested as of the Date of Termination; (b) such Stock Options that he
has exercised or entitled to exercise as of the Date of Termination; and (c)
such bonuses, if any, that he has earned as of the Date of Termination. Any
payments or benefits to which Executive is otherwise entitled under this Section
6.1 shall be subject to setoff to the extent of any claims, which Company has
against Executive.
6.2 Compensated
Termination. If the
Executive resigns for Cause or other than a Change in Control (except for a
forced resignation as described in Section 6.3(a)), or is terminated by the
Company without Cause, in each case prior to the expiration of the Employment
Period, the Executive's employment hereunder shall terminate on the Date of
Termination and the Executive shall be entitled to the
following:
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(a) the
unpaid portion of Salary due the Executive for the period of time through the
Date of Termination, payable in accordance with the Company's regular payroll
practices;
(b) a
severance cash payment equal to six (6) months of the then current Annual Base
Salary of Executive;
(c) the
product of (I) any Sales Goal Thresholds Shares described in Section 4.2 which
Executive can show that he reasonably would have received had Executive remained
in such Executive capacity with the Company through the end of the calendar year
in which occurs Executive’s Date of Termination, multiplied by (II) a fraction,
the numerator of which is the number of days in the calendar year in which the
Date of Termination occurs through the Date of Termination and the denominator
of which is 365, but only to the extent not previously paid; provided that any
payments pursuant to this Section 6.2(c) shall be made within 30 days following
the end of the calendar year in which occurs Executive’s Date of
Termination;
(d) all of
the shares of restricted common stock described in Section 4.6.1, which shares
of restricted common stock shall be deemed earned and vested, and any
restrictions on such shares of restricted common stock, except as required by
applicable law shall immediately lapse and such shares of restricted common
stock shall become nonforfeitable. The shares of restricted common stock shall
be delivered to Executive within thirty (30) days form the date of
termination;
(e) all of
the stock options described in Section 4.6.2, and the number of stock options
equal to six (6) months of and any other Company stock options granted to
Executive, which stock options shall be deemed vested, and any restrictions on
such stock options except as required by applicable law shall immediately lapse
and such stock options shall be fully exercisable in accordance with the
requirements (except continued employment) of the applicable stock option
plans.
(f) for six
(6) months following the Date of Termination, Company shall continue to provide
medical and dental benefits only to Executive on the same basis as such benefits
are provided during such period to the senior executive officers of Company;
provided, however, that if Company’s welfare plans do not permit such coverage,
Company will provide Executive the medical benefits (with the same after tax
effect) outside of such plans; and
(g) to the
extent not theretofore paid or provided, Company shall timely pay or provide to
Executive any other amounts or benefits which Executive is entitled to receive
through the Date of Termination under any plan, program, policy or practice or
contract or agreement of Company and its affiliates, including accrued vacation
to the extent unpaid (such other amounts and benefits shall be hereinafter
referred to as the "Other Benefits").
6.3 Termination
Due to Change in Control; Death or Permanent Disability.
(a) If the
Company undergoes a Change in Control (as defined in Section 7(c)), the
Executive has 120 days on or following the date of the Change in Control to
terminate his employment under this Agreement pursuant to this Section 6.3(a);
provided, however, that if the Executive is forced to resign, then Executive
shall be entitled to all of the compensation and benefits described in Section
6.2.
(b) If the
Executive becomes Permanently Disabled (as defined in Section 7(e)) or dies
prior to the expiration of the Employment Period, the Executive's employment
hereunder shall terminate on the Date of Termination.
(c) If the
Executive’s employment is Terminated pursuant to either Sections 6.3(a) (except
for a forced resignation) or 6.3(b), the Executive or, in the case of the
Executive’s death, the Executive’s beneficiary or other legal representative,
shall be entitled to: (i) the unpaid portion of the Annual Base salary described
in Section 4.1 due the Executive up to the Date of Termination, which amount
shall be payable in accordance with the Company's regular payroll practices,
(ii) the Shares described in Section 4.2, in the Compensation Committee’s
discretion and 4.6.1, to the extent earned and vested, which restrictions, if
any, shall immediately lapse and become nonforfeitable except as otherwise
required by law, (iii) all of the shares of restricted common stock described in
Section 4.6.1, which shares of restricted common stock shall be deemed earned
and vested, and any restrictions on such shares of restricted common stock,
except as required by applicable law shall immediately lapse and such shares of
restricted common stock shall become nonforfeitable; (iv) all of the stock
options described in Section 4.6.2, and the number of stock options equal to six
(6) months of and any other Company stock options granted to Executive, which
stock options shall be deemed vested, and any restrictions on such stock options
except as required by applicable law shall immediately lapse and such stock
options shall be fully exercisable in accordance with the requirements (except
continued employment) of the applicable stock option plans; and (v) continuation
of medical and dental benefits to Executive’s spouse and/or eligible dependents,
if any, for six (6) months, on the same basis as such benefits are provided
during such period to the senior executive officers of Company; provided,
however, that if Company’s welfare plans do not permit such coverage, Company
will provide Executive the medical benefits (with the same after tax effect)
outside of such plans, and (vi) to the extent not theretofore paid or provided,
any unpaid vacation pay or expense reimbursement or other applicable Other
Benefits.
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6.4 Notice
and Date of Termination.
(a) Any
termination of the Executive's employment hereunder by the Company or the
Executive (other than termination due to the Executive's death) shall be
communicated by a written "Notice of Termination" to the other Party in
accordance with Section 11 hereof. A Notice of Termination shall indicate the
specific provision of Section 6 relied upon and 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.
(b) "Date of
Termination" shall mean
(i) If the
Executive resigns, the date that the Executive sets forth as his last day, but
not later than thirty (30) days after the date Executive sends the Notice and,
subject to Company’s right to accelerate the Date of Termination to any earlier
date;
(ii) If the
Executive's employment hereunder is terminated by the Company, the date
specified in the Notice of Termination, which shall be such date determined by
the Company; provided, however, that if such termination by the Company is for
Cause, the Date of Termination shall not be earlier than the expiration of any
applicable remedy period and no later than sixty (60) days following the Notice
of Termination;
(iii)
If the
Executive's employment hereunder is terminated due to the Executive becoming
Permanently Disabled, the date the Company reasonably determines that he has
become Permanently Disabled;
(iv)
If the
Executive's employment hereunder is terminated due to death, the date of death;
or
(v) If the
Executive's employment hereunder is terminated by reason of the expiration of
the Employment Period, the date determined or set forth in Section
1.
6.5 Company’s
Rights Not Prejudiced.
Notwithstanding anything to the contrary in this Agreement, any payments or
distributions of Shares, restricted common stock, stock options or Other
Benefits of any nature which Company makes to Executive shall be without
prejudice to Company’s rights to assert any claims that Company has or may have
against Executive.
7.
DEFINITIONS. As used
in this Agreement, the following terms shall have the following
meanings:
(a) "Cause,"
when used by the Executive as the basis for resigning from his employment
hereunder, shall mean: (i) the Company's willful, material breach of any
material obligation of the Company under this Agreement, after giving the
Company notice of such breach and thirty (30) days to cure such breach; or (ii)
the occurrence of a Change in Control (as defined below), subject to Section
6.3(a).
(b) "Cause,"
when used by the Company as a basis for terminating the Executive's employment
hereunder, shall mean: (i) the Executive's willful, material breach of any
material obligation of the Executive under this Agreement, including
unreasonable failure or refusal to perform the duties required of him, after
giving the Executive notice of such breach and thirty (30) days to cure such
breach; (ii) any willful misconduct in connection with his employment that could
materially impair the financial condition or reputation of the Company; or (iii)
the Executive's conviction for, or plea of guilty or nolo contendre (or similar
plea) to any criminal offense that is a felony or includes fraud as an element
of the offense.
(c) "Change
in Control" means the following and shall be deemed to occur if any of the
following events occur:
(i) Any
"person," as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") (a "Person"), is or
becomes the "beneficial owner," as defined in Rule 13d-3 under the Exchange Act
(a "Beneficial Owner"), directly or indirectly, of securities of the Company
representing (i) 20% or more of the combined voting power of the Company's then
outstanding voting securities, which acquisition is not approved in advance of
the acquisition or within thirty (30) days after the acquisition by a majority
of the Incumbent Board (as hereinafter defined) or (ii) 33% or more of the
combined voting power of the Company's then outstanding voting securities,
without regard to whether such acquisition is approved by the Incumbent
Board;
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(ii) Individuals
who, as of the date hereof, constitute the Board of Directors (the "Incumbent
Board"), cease for any reason to constitute at least a majority of the Board of
Directors, provided that any person becoming a director subsequent to the date
hereof whose election, or nomination for election by the Company's stockholders,
is approved by a vote of at least a majority of the directors then comprising
the Incumbent Board (other than an election or nomination of an individual whose
initial assumption of office is in connection with an actual or threatened
election contest relating to the election of the directors of the Company, as
such terms are used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act) shall, for the purposes of this Director Plan, be considered as
though such person were a member of the Incumbent Board of the
Company;
(iii) The
consummation of a merger, consolidation or reorganization involving the Company,
other than one which satisfies both of the following conditions:
(A) a merger,
consolidation or reorganization which would result in the voting securities of
the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of
another entity) at least 55% of the combined voting power of the voting
securities of the Company or such other entity resulting from the merger,
consolidation or reorganization (the "Surviving Company") outstanding
immediately after such merger, consolidation or reorganization and being held in
substantially the same proportion as the ownership in the Company's voting
securities immediately before such merger, consolidation or reorganization,
and
(B) a merger,
consolidation or reorganization in which no Person is or becomes the Beneficial
Owner, directly or indirectly, of securities of the Company representing 20% or
more of the combined voting power of the Company's then outstanding voting
securities; or
(iv) The
stockholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or other disposition by the Company of all
or substantially all of the Company's assets.
Notwithstanding
the preceding provisions of this Paragraph (c), a Change in Control shall not be
deemed to have occurred if the Person described in the preceding provisions of
this Paragraph (c) is (1) an underwriter or underwriting syndicate that has
acquired any of the Company's then outstanding voting securities solely in
connection with a public offering of the Company's securities, (2) the Company
or any subsidiary of the Company or (3) an employee stock ownership plan or
other employee benefit plan maintained by the Company that is qualified under
the provisions of the Code. In addition, notwithstanding the preceding
provisions of this Paragraph (c), a Change in Control shall not be deemed to
have occurred if the Person described in the preceding provisions of this
Paragraph (c) becomes a Beneficial Owner of more than the permitted amount of
outstanding securities as a result of the acquisition of voting securities by
the Company which, by reducing the number of voting securities outstanding,
increases the proportional number of shares beneficially owned by such Person,
provided, that if a Change in Control would occur but for the operation of this
sentence and such Person becomes the Beneficial Owner of any additional voting
securities (other than through the exercise of options granted under any stock
option plan of the Company or through a stock dividend or stock split), then a
Change in Control shall occur.
(d) "Disability"
means Executive’s absence from his duties with Company on a full-time basis for
90 days during any consecutive twelve-month period as a result of incapacity due
to mental or physical illness as determined by a physician selected by Company
and acceptable to Executive. If Company determines in good faith that
Executive’s Disability has occurred during the Employment Period, it may give
Executive written notice in accordance with Section 6.4(a) of this Agreement of
its intention to terminate Executive’s employment. In such event, Executive’s
employment shall terminate effective on the thirtieth (30th) day after
Executive’s receipt of such notice (the "Disability Effective Date"), unless,
within the thirty (30) days after such receipt, Executive shall have been
cleared by the physician to return to work and has returned to full-time
performance of his duties.
(e) "Permanently
Disabled" shall mean when, and only when, the Executive is unable, by reason of
illness or accident, to perform, for a continuous 180-day period, the material
elements of his duties hereunder, and the Company has reasonably determined,
based upon medical documentation, that the Executive for such reason is unlikely
to be able to resume such duties in the foreseeable future.
8. ASSIGNMENT.
Executive shall not have the right to assign or delegate his rights or
obligations hereunder, or any portion thereof, to any other person.
9. GOVERNING
LAW. This
Agreement shall be governed by and construed in accordance with the laws of the
State of Florida without regard to its conflict of laws principles to the extent
that such principles would require the application of laws other than the laws
of the State of Florida. Venue for any action brought hereunder shall be
exclusively in Broward County, Florida and the parties hereto waive any claim
that such forum is inconvenient.
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10. ENTIRE
AGREEMENT. This
Agreement constitutes the entire agreement between the parties hereto with
respect to the subject matter hereof and, upon its effectiveness, shall
supersede all prior agreements, understandings and arrangements, both oral and
written, between the Executive and the Company (or any of its affiliates) with
respect to such subject matter, except for the items carried forth and described
in Section 4.6 hereinabove related to the Prior Agreement. This Agreement may
not be modified in any way unless by written instrument signed by both the
Company and the Executive.
11. NOTICES. All
notices required or permitted to be given hereunder shall be in writing and
shall be personally delivered by courier, sent by registered or certified mail,
return receipt requested or sent by confirmed facsimile transmission addressed
as set forth herein. Notices personally delivered, sent by facsimile or sent by
overnight courier shall be deemed given on the date of delivery and notices
mailed in accordance with the foregoing shall be deemed given upon the earlier
of receipt by the addressee, as evidenced by the return receipt thereof, or
three (3) days after deposit in the U.S. mail. Notice shall be sent (i) if to
the Company, addressed to its General Counsel and Corporate Secretary at Xxxxxx
Xxxxxxxx Xxxxxx, Xxxxxxxxx Xxxxx, Xxxxxxx 00000 with a copy to Xxxxx &
XxXxxxx, P.A., 0000 Xxxx Xxxxxxx Xxxxx Xxxx, Xxxxx 000, Xxxx Xxxxxxxxxx, Xxxxxxx
00000, Attention: Xxxxxx X. Xxxxx, Esquire, and (ii) if to the Executive, to his
address as reflected on the payroll records of the Company, or to such other
address as either party hereto may from time to time give notice of to the
other.
12. BENEFITS;
BINDING EFFECT. This
Agreement shall be for the benefit of and binding upon the parties hereto and
their respective heirs, personal representatives, legal representatives,
successors and, where applicable, assigns, including, without limitation, any
successor to the Company, whether by merger, consolidation, sale of stock, sale
of assets or otherwise.
13. SEVERABILITY. The
invalidity of any one or more of the words, phrases, sentences, clauses or
sections contained in this Agreement shall not affect the
enforceability of the remaining portions of this Agreement or any part thereof.
If any invalidity is caused by length of time or size of area, or both, the
otherwise invalid provision will be considered to be reduced to a period or area
which would cure such invalidity.
14. WAIVER. The
waiver by either party hereto of a breach or violation of any term or provision
of this Agreement shall not operate nor be construed as a waiver of any
subsequent breach or violation.
15. CONSTRUCTION. This
Agreement shall be construed without regard to any presumption or other rule
requiring construction against the party causing the drafting hereof, each party
having been given the opportunity to be represented by counsel of their choice
in connection with the negotiation of this Agreement.
16. SECTION
HEADINGS. The
section headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this
Agreement.
17. SINGULAR,
PLURAL; GENDER.
Whenever used herein, nouns in the singular shall include the plural, and the
masculine pronoun shall include the feminine gender.
18. NO
THIRD PARTY BENEFICIARY. Nothing
expressed or implied in this Agreement is intended or shall be construed, to
confer upon or give any person other than the Company, the parties hereto and
their respective heirs, personal representatives, legal representatives,
successors and permitted assigns, any rights or remedies under or by reason of
this Agreement.
19. EMPLOYEE
HANDBOOK; OTHER INSTRUMENTS. The
provisions of this Agreement shall, to the extent of any conflict, supercede and
take precedence over any provisions of the Company’s employee handbook, as it
exists from time to time, or any other existing or future agreements or
instruments pertaining to or governing the rights and obligations of the parties
to one another insofar as permissible under applicable laws.
IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first above written.
| WITNESS | IFT CORPORATION | ||
| /s/ Xxxxx X. Xxxxxx | By | /s/ Xxxxxxx X. Xxxxx | |
|
|
| ||
| Name: | Xxxxxxx X. Xxxxx | ||
|
| |||
| Title: | Chairman of the Board | ||
|
|
| WITNESS | |||
| /s/ Xxxxxxxx Xxxxx | By | /s/ Xxxxxxx X. Xxxxx | |
|
|
| ||
| Name: | Xxxxxxx X. Xxxxx | ||
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