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Exhibit (10)(ii)(13)
EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement (Agreement) is made and effective this 13th
Day of August 2001 by and between Infotopia, Inc. (Company) and Xxxxxxx X.
Xxxxxxx (Executive).
NOW, THEREFORE, the parties hereto agree as follows:
1. EMPLOYMENT
The Company hereby agrees to employ the Executive for a term beginning on the
date of this Agreement and ending August 3, 2004 as its CFO and the Executive
hereby accepts such employment in accordance with the terms of this Agreement.
Notwithstanding the aforesaid, if this Agreement shall not have been terminated
in accordance with the provisions herein on or before August 3, 2004, the
Agreement shall automatically be extended from year to year unless (a) the
Agreement is terminated earlier in accordance with the provisions herein or (b)
on or after August 3, 2004, the Board of Directors or the Executive Committee of
the Company notifies the Executive in writing of its determination to have the
date of this Agreement expire one year from the date of such notification.
2. DUTIES OF THE EXECUTIVE
The Executive shall devote full-time attention and energy to the affairs of the
Company and/or its subsidiaries during the term of this Agreement and shall have
such duties, responsibilities and authority as shall be of the character and
dignity appropriate and consistent with the position and title of CFO or such
responsibility or authority as from time to time additionally authorized by the
Board of Directors. The Executive may engage in other activities, such as
activities including serving on the Board of Directors of other
corporations/organizations, and/or advising other corporations/organizations in
each case to the extent that such activities do not materially detract from or
limit the performance of the Executive's duties under this Agreement, or inhibit
in any material way the business of the Company and its subsidiaries. The
Executive will engage in no activity, paid or otherwise, for a competitor of the
Company so long as this Agreement is in effect. The Executive shall perform all
duties in a professional, ethical and businesslike manner. The CFO will be the
primary contact for all equity or debt financing, work directly and be the
primary contact with all the outside investor relations consultants and a
primary objective will be to work closely with the Board of Directors to
facilitate a move from the OTCBB to either the NASDAQ, AMEX, or NYSE.
3. COMPENSATION
The Executive will be paid compensation during this Agreement as follows:
A.) A base salary, commencing August 3, 2001 of not less than
$350,000.00 per year, (or such greater amounts as may be
approved by the Board of Directors or the executive committee
in accordance with authority given by the Board of Directors)
payable in installments on a semi-monthly but not less than a
monthly schedule. The Executive's base salary may be increased
consistent with recommendations of the Executive Committee of
the Board. At least annually the Executive Committee shall
review
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the Executive's base salary for competitiveness and
appropriateness in the industry. At the earlier of either
August 13th, 2001 or when annual revenue for IFTA exceeds $140
million per year the Executive's base salary shall be
increased to $430,000.
B.) This Executive will be able to participate in an executive
stock options plan during the term of his Employment
Agreement. Effective August 3, 2001 the Executive will be
entitled to purchase 2,500,000 shares of common stock at $1.04
per share; effective August 3, 2002 the Executive will be
entitled to purchase 1,250,000 shares of common stock at $1.04
per share and effective August 3, 2003 the Executive will be
entitled to purchase 1,250,000 shares of common stock at $1.04
per share. Shares for 2001 are considered vested upon signing
of this Agreement. The remaining shares will be considered
vested provided the Company has increased its Net Income by a
minimum of 10% from the previous year. These numbers are based
on the Annual 10k which will be filed no later than March 31,
2002 and each March thereafter. These options are subject to
any forward or reverse split by Infotopia, Inc.
C.) A bonus of 2% of the Total Net Income of Infotopia and all its
subsidiaries net income before taxes will be awarded each quarter to the
executive. This bonus is payable within seven business days from the filing of
the 10Q or 10K. In the event that 2% of the annual total of financings, mergers
and acquisitions or equity placements (excluding Buyers Online, ENP, Modern
Media or Infomercial Management) is greater than the annual total of the bonus
above the Executive will be paid the incremental amount of 2% of annual total of
financings, mergers and acquisitions or equity placements (excluding Buyers
Online, ENP, Modern Media or Infomercial Management) less the amount received
quarterly of the net income bonus. The incremental bonus is payable within seven
business days from filing of the 10k.
D.) This Agreement shall be binding upon and inure to the benefit
of the successors by merger or consolidation of Infotopia,
Inc. (Ohio) and/or Infotopia, Inc. (Nevada), or the sale of
all or substantially all of the assets of each or both of
those companies, the permitted assigns of the respective
parties hereto, and Executive's estate, heirs, executors,
administrators, personal and legal representatives,
distributes and legatees. This Agreement and the rights and
obligations hereunder are personal to the Company, on the one
hand, and the Executive, on the other, except as contemplated
hereby; provided, however, that, in the event of the merger or
consolidation of Infotopia, Inc. (Ohio) and/or Infotopia, Inc.
(Nevada), whether or not either is the surviving or resulting
corporation, or in the event of the sale of all or
substantially all of the assets of Infotopia, Inc. (Ohio)
and/or Infotopia, Inc. (Nevada) the surviving or resulting
corporation in the case of a merger or consolidation or the
acquirer of such assets in the case of such a sale of asses
shall not constitute or be deemed to be a termination of
Executive's employment hereunder by the Company. This
Agreement shall not confer benefits on any person or entity
not referred to hereinabove in this Section 3.D.).
In the event that the acquiring company is not publicly traded
on the OTCBB, American Stock Exchange, New York Stock
Exchange, NASDAQ National or Small Cap Market then the options
in this contract are required to be bought out at $5,04 per
share per option. The options in this contract that are
carried forward in the event of an acquisition by a publicly
traded company, are subject to any forward or reverse splits.
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4. BENEFITS
A.) Holidays: The Executive will be entitled to nine (9) paid
holidays each calendar year and twelve (12) personal days. The
Company will notify the Executive on or about the beginning of
each calendar year with respect to the holiday schedule for
the coming year. Personal holidays, if any, will be scheduled
in advance subject to the requirements of the Company. Such
holidays must be taken during the calendar year and unused
days shall not carry forward into the next year.
B.) Vacation: The Executive shall be entitled to five (5) weeks or
Twenty-five (25) paid vacation days per year effective as of
the date of the Agreement. Any unused vacation time will be
carried to the following year. Upon termination of this
agreement all vacation time shall be paid to the Executive.
C.) Sick Leave: The Executive shall be entitled to sick leave and
emergency leave according to the regular policies and
procedures of the Company. Additional sick leave or emergency
leave over and above paid leave provided by the Company, if
any, shall be granted at the discretion of the Executive
Committee of the Board of Directors.
D.) Medical and Group Life Insurance: Company agrees to include
Executive and his family members in the group medical and
hospital plan of the Company and provide group life insurance
at no charge to the Executive, in the amount of $2,000,000
payable to the Company and another policy in the amount of
$1,000,000 payable to the Executive's estate. Executive shall
be responsible for any state or federal tax imposed upon these
benefits. If the Company does not provide Medical and Group
Life insurance the Executive may be reimbursed for his own
coverage.
E.) The Company shall provide at its expense disability insurance
for the Executive for the term of this Agreement. If the
Company does not provide disability insurance the Executive
may be reimbursed for his own coverage.
F.) The Company shall provide at its expense Officer's and
Director's liability insurance covering the Executive for the
term of this Agreement. Such coverage shall be in the amount
of not less than $5 million and shall be effective not later
than June 29, 2001.
G.) Pension and Profit Sharing Plan: The Executive shall be
eligible to participate in any pension or profit sharing plan
or other type plan adopted by the Company for the benefit of
its officers and/or regular employees.
H.) In addition to any other compensation, the Executive is
entitled to $1,200 per month car allowance or the Executive
may opt to lease a company car up to $1,200 per month and be
reimbursed for all expenses including insurance, maintenance,
repair and gas.
I.) Expense Reimbursement: The Executive shall be entitled to
reimbursement for all reasonable expenses, including travel
and entertainment incurred by the Executive in the performance
of his duties. The
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Executive will maintain records and written receipts as
required by Company policy and reasonably requested by the
Board of Directors to substantiate such expenses. Subject to
the terms of Section 2, the Executive may, at his sole
discretion, work from his residence or a location of his
choice. The Company will reimburse the Executive for
reasonable home office use, including but not limited to an
appropriate telephone/computer/modem installation and
telephone/internet charges.
J.) Cell phone Reimbursement: The Executive shall be entitled to
reimbursement for cell phone service or the Company may at its
expense provide the Executive with such service.
K.) Financial and Tax Advice: During (a) the term of this
Agreement (b) the 12 month period following the termination of
this Agreement as a result of Death and/or Disability, and (c)
the three year period following the voluntary termination by
the Executive with good reason or the involuntary termination
by the Company without cause... the Company shall provide the
Executive (or, if Executive shall have died, his estate) at
the Company's expense, third party professional financial and
tax advisory services, primarily oriented to planning in light
of the Executive's entitlement to compensation and benefits
and appropriate in light of circumstances of Executive or his
estate. Executive (or his estate) may select the service
professional of his choice.
5. TERMINATION
A. The Company shall have the right to terminate this Agreement under the
following circumstances:
i. Upon the death of the Executive.
ii. Upon notice to the Executive in the event of notice of illness
or other disability which has incapacitated him from
performing his duties for 12 consecutive months as determined
in good faith by the Board.
iii. For good cause upon notice from the Company. Termination by
the Company of the Executive for "good cause" as used in this
Agreement shall be limited to mean gross negligence,
misappropriation or theft of Company funds or conviction of
state or federal offenses which would prevent the Executive
from performance of his duties.
With respect to any termination for good cause by the Company, the specifics of
the cause shall be communicated to the Executive in writing at least thirty (30)
days prior to the date on which the termination is proposed to take effect. The
Executive shall be given the opportunity to correct or respond to such cause.
B. If this Agreement is terminated pursuant to Section 5 (A - iii) above,
Executive's rights and the Company's obligations hereunder shall
forthright terminate except as expressly provided in this Agreement.
C. If this Agreement is terminated pursuant to Section 5 (A - i or ii)
hereof, Executive or his estate shall be entitled to receive 100% of
the Executives salary and incentives for the balance of the term of the
Agreement, together with bonus and other incentives as provided for in
this Agreement.
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6. TERMINATION BY EXECUTIVE
The Executive shall have the right to terminate this Agreement with thirty (30)
days written notice to the Company given within sixty (60) days of the
occurrence of any of the following events:
A. The Executive is not elected or retained as CFO of the Company.
B. The Company acts to materially reduce the Executive's position, title,
duties, authority or responsibilities.
C. The Company acts to reduce the compensation, bonus or incentives of the
Executive.
7. CONSEQUENCES OF BREACH BY THE COMPANY
A. If this Agreement is terminated pursuant to Section 5 (A-I or ii)
hereof, or if the Company shall terminate the Executive or the
Executive's duties under this Agreement in any way that is a breach by
the Company, the following shall apply:
i. The Executive shall receive a cash payment that is equal to
the present value of the Executive's base salary hereunder for
the remainder of the term, payable within 30 days of the date
of such termination.
ii. The Executive shall be entitled to bonus payments and benefits
as provided in Section 3 (it being understood, however, that
all such bonus payments, if made pursuant to this clause,
shall be paid in cash regardless of whether or not such
payments exceed the cash limit).
iii. All stock options and common stock and restricted stock
granted by the Company to the Executive under this Agreement
shall accelerate and become immediately vested and
exercisable.
B. If any payments due the Executive under this Agreement result in the
Executive's liability for an excise tax ("parachute tax") under Section
49 of the Internal Revenue Code of 1986, as amended (the "Code") the
Company will pay to the Executive, after deducting any Federal, State
or local income tax imposed, the "parachute tax" liability. Such
payment shall be made to the Executive no later than 30 days prior to
the due date of the "parachute tax."
8. CHANGE OF CONTROL
If, within twenty-four (24) months following a change of control the Executive
is terminated, the termination shall be deemed a "Change of Control
Termination." For the purpose of this paragraph... (a) the delivery of a notice
of termination by the Company... within 24 months of a Change of Control and (b)
a Constructive Discharge within 24 months following a Change of Control will
also be deemed a Change of Control Termination. In the event of a Change of
Control Termination, the Company will pay to the Executive a lump sum payment of
299% of the Executive's average annual base salary plus both quarterly and
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annual incentive bonuses during the preceding 3 year period. In the event that a
Change of Control Termination occurs before the Executive completes three (3)
years of service, the lump sum payment will be valued at 299% of the Executive's
average annual base salary plus both quarterly and annual incentive bonuses
during all years of service. Additionally, any options and or restricted stock
granted to the Executive shall become fully vested as of the date of the Change
of Control Termination. Provided further, the Executive will receive a cash
payment equal to the value of any options anticipated to be granted... within
three (3) years following the Change of Control Termination.
If any portion of any payment or distribution by the Company, to or for the
benefit of the Executive, whether paid or payable or distributed or
distributable pursuant to the terms of this section ... shall be subject to the
excise tax imposed by section 4999 of the (Internal Revenue) Code, or any
interest or penalties are incurred by the Executive with respect to such excise
tax... the Company shall pay to the Executive an additional payment (the
Gross-up Payment) in an amount such that after the payment of such Excise Tax,
including, without limitation, any income tax and excise tax imposed on the
Gross-up payment, the Executive retains an amount including the Gross-up Payment
equal to the total payment hereunder without regard to the Gross-up Payment.
"Change of Control" shall be deemed to have occurred if at any time or from time
to time after the date of this agreement:
i. Any "person" or "group" ... is or becomes the "beneficial
owner" ... directly or indirectly, of securities of the
Company representing 40% or more of the combined voting power
of the Company's then outstanding securities... or,
ii. The stockholders of the Company approve a merger or
consolidation with any other corporation, other than a merger
or consolidation which would result in the voting securities
of the Company... continuing to represent... more than 50% of
the combined voting power of the voting securities or such
surviving entity outstanding immediately after such merger or
consolidation, or the stockholders of the Company approve a
plan of complete liquidation of the Company or an agreement
for the sale or disposition by the Company of all or
substantially all of the Company's assets...or
iii. The Company has a change in Board Majority unapproved by at
least three-fourths of the directors.
9. REMEDIES
The Company recognizes that because of the Executive's special talents, stature,
and opportunities in the industry, and because of the creative nature of and
compensation practices of the industry and the material impact that individual
projects can have on a company's results of operations, in the event of
termination by the Company hereunder or in the event of termination by the
Executive before the end of the agreed term, the Company acknowledges and agrees
that the provisions of this Agreement regarding further payments of base salary,
bonuses and the exercisability of stock options constitute fair and reasonable
provisions for the consequences of such termination, do not constitute a penalty
and such payments and benefits shall not be limited or reduced by amounts that
the Executive might earn or be able to earn from any other employment or
ventures during the remainder of the agreed term of this Agreement.
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10. NOTICES
Any notice required by this Agreement or given in connection with it, shall be
in writing and shall be given to the appropriate party by personal delivery or
be certified mail, postage pre-paid, or recognized overnight delivery service;
If to the Company:
Infotopia, Inc.
0000 Xxxxxxxx Xxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Attn.: Xxxxxx Xxxxx, CEO
If to the Executive:
Xx. Xxxxxxx X. Xxxxxxx
XX Xxx 0000
Xxxxxx, Xxxx 00000
11. FINAL AGREEMENT
This Agreement terminates and supersedes all prior understandings or agreements
on the subject matter hereof. This Agreement may be modified only by a further
writing that is duly executed by both parties.
12. GOVERNING LAW
This Agreement shall be construed and enforced in accordance with the internal
laws of the State of Ohio.
13. HEADINGS
Headings in this Agreement are provided for convenience only and shall not be
used to construe meaning or intent.
14. BINDING AGREEMENT
This Agreement shall be binding upon and inure to the benefit of the Executive,
his heirs, distributees and assigns.
15. SEVERABILITY
If any term of this Agreement is held by a court of competent jurisdiction to be
invalid or unenforceable, then this Agreement, including all of the remaining
terms, will remain in full force and effect as if such invalid or unenforceable
term had never been included.
16. ARBITRATION
The parties agree that they will use their best efforts to amicably resolve any
dispute arising out of or relating to this Agreement. Any controversy, claim or
dispute that cannot be so resolved shall be settled by final binding arbitration
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in accordance with the rules of the American Arbitration Association and
judgement upon the award rendered by the arbitrator or arbitrators may be
entered in any court having jurisdiction thereof. Any such Arbitration shall be
concluded in such place as shall be mutually agreed upon by the parties. Within
fifteen (15) days of the commencement of the arbitration, each party shall
select one person to act as arbitrator, and the two arbitrators shall select a
third arbitrator within ten (10) days of their appointment. Each party shall
bear its own costs and expenses and an equal share of the arbitrator's expenses
and administrative fees of arbitration.
16. PROTECTION OF THE COMPANY'S INTERESTS
During the term of this Agreement, the Executive shall not directly or
indirectly engage in competition with the Company. At no time shall the
Executive divulge, furnish, or make accessible to any person any information of
a confidential or proprietary nature obtained by him while in the employ of the
Company except as necessary in the performance of his duties.
17. INTERPRETATION
In the event of any conflict or ambiguity between the terms of this Agreement
and terms of employment applicable to regular employees, the terms of this
Agreement shall control.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
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Xxxxxxx X. Xxxxxxx
Executive's Signature and Acceptance
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Xxxxxx Xxxxx Xxxxx Xxxxxxxxx
CEO Secretary
Infotopia, Inc. Infotopia, Inc.
