EXHIBIT 10.13
EXECUTIVE EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "Agreement") dated as of August 15th, 2004 (the
"Effective Date"), between Video Without Boundaries, Inc. a Florida corporation
(the "Company"), and Xxxxx Xxxxx (the "Executive").
W I T N E S S E T H
WHEREAS, the Company desires to employ the Executive as its Executive Vice
President - Sales and Marketing.
WHEREAS, the Company and the Executive desire to enter into the Agreement as to
the terms of his employment by the Company;
NOW THEREFORE, in consideration of the foregoing, of the mutual promises
contained herein and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. POSITION/DUTIES.
(a) During the Employment Term (as defined in Section 2 below), the
Executive shall serve as Executive Vice President of the Company.
In this capacity the Executive shall have such duties, authorities,
and responsibilities commensurate with the duties, authorities, and
responsibilities of persons in similar capacities in similarly
sized companies, related to the marketing of convergent electronic
products, website management, and company representative
spokesperson and other duties and responsibilities as mutually
agreed as per semi-annual Executive performance and management
objectives reviews. The Executive shall report exclusively to the
Chief Executive Officer ("CEO") of the Company.
(b) During the Employment Term, the Executive shall only serve on the
board of directors or advisory boards of other companies or
educational organizations with prior written approval by the
Company.
2. EMPLOYMENT TERM. The Executive's term of employment under this
Agreement (such term of employment, as it may be extended or
terminated, is herein referred to as the "Employment Term") shall be
for a term commencing on the Effective Date and, unless terminated
earlier as provided in Section 7 hereof, ending three (3) years from
the Effective Date (the "Original Employment Term"), provided that the
Employment Term shall be automatically extended, subject to earlier
termination as provided in Section 6 hereof, for successive additional
one (1) year periods (the "Additional Term(s)"), unless, at least sixty
(60) days prior to the end of the Original Employment Term or the then
Additional Term, the Company or the Executive has notified the other in
writing that the Employment Term shall terminate at the end of the then
current term.
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3. BASE SALARY. The Company agrees to pay the Executive a base salary (the
"Base Salary") at an annual rate of not less than US $150,000, payable
in accordance with the regular payroll practices of the Company, but
not less frequently than twice monthly. The Executive's Base Salary
shall be subject to annual review by the CEO and the Company's Board of
Directors (or a committee thereof) and may be increased from time to
time by the CEO or the Board and decreased only by written agreement by
the Executive. No increase to Base Salary shall be used to offset or
otherwise reduce any obligations of the Company to the Executive
hereunder or otherwise. The base salary as determined herein from time
to time shall constitute "Base Salary" for purposes of this Agreement.
Any calculation to be made under this Agreement with respect to Base
Salary shall be made using the then current Base Salary in effect at
the time of the event for which such calculation is made.
4. BONUSES.
(a) MINIMUM ANNUAL BONUS. The Executive shall receive a minimum cash
bonus payable within thirty (30) days of the end of each fiscal
quarter, equal to 2% of the gross profit for Video Without
Boundaries, Inc. products, excluding sales of wholly-owned
subsidiary Graphics Distribution, Inc. mutually agreed or
determined in accordance with generally accepted accounting
practices by a mutually selected independent accounting firm at the
Company's expense. The determination of the Gross Profit for VWB
products made by the independent accounting firm shall be final and
binding upon Executive and Company.
(b) PERFORMANCE BASED BONUS. Executive shall receive an annual
performance based bonus of no less than 50% and up to 100% of Base
Salary payable at the end of each "Performance Year" The first day
of the Performance Year shall be the same as the effective date of
this agreement. Bonus payable by November 15th of the calendar year
relating to the financial information filed in the Company's 10K
and 10Q. The milestones for payment of this bonus and the
corresponding percentage to be paid are to be mutually agreed
between the Executive and the Company.
(c) VWB "144" BONUS. The Executive shall be granted as of the Effective
Date, 120,000 144 shares. Upon completion of each year of
employment of the 3 year contract, the Executive shall be granted
an additional 300,000 144 shares on each anniversary of the
Effective Date for the remainder of his employment.
5. EMPLOYEE BENEFITS.
(a) BENEFIT PLANS.
(i) The Executive shall be entitled to participate in all employee
benefit plans of the Company including, but not limited to, equity,
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pension, thrift, profit sharing, medical coverage, education, or
other retirement or welfare benefits that the Company has adopted
or may adopt, maintain or contribute to for the benefit of its
senior executives at a level commensurate with his position subject
to satisfying the applicable eligibility requirements. Such
benefits, in the aggregate, shall be no less favorable than the
level of benefits in effect on the Effective Date; provided,
however, that in the event there is a reduction of employee
benefits applicable to senior executives generally, nothing herein
shall preclude the Company's ability to reduce the Executive's
benefits consistent with such reduction.
(ii) Without limiting the generality of the foregoing, during the
Employment Term, the Company shall either (A) provide for the
Executive and his family, (B) pay the Executive quarterly in
advance for, or (C) pay the invoices for (at the Executive's
discretion) health insurance, dental insurance, vision insurance,
term life insurance, accidental death and dismemberment insurance,
and short-term and long-term disability insurance covering the
Executive and his family. The policies for such insurance shall
provide coverage parameters, such as but not limited to
co-payments, deductibles, and limits, equivalent to the 2004 United
Healthcare policy from the Executive's prior employer. Without
limiting the Executive's alternatives for the insurance coverages
provided for in this Section 5(a)(ii) the Executive's COBRA plan is
hereby agreed to be one example of such insurance coverages. In the
case of (B) or (C), annual payment of premiums is capped at
fourteen thousand five hundred US dollars (US $14,500).
(b) VACATIONS. The Executive shall be entitled to an annual paid
vacation in accordance with the Company's policy applicable to
senior executives, but in no event less than four weeks per year
(as prorated for partial years), which vacation may be taken at
such times as the Executive elects with due regard to the needs of
the Company. The Executive shall accrue vacation time year-to-year
with a cap of twelve (12) weeks.
(c) BUSINESS AND ENTERTAINMENT EXPENSES.
(i) Upon presentation of appropriate documentation, the Executive
shall be reimbursed in accordance with the Company's expense
reimbursement policy for all reasonable business and entertainment
expenses incurred in connection with the performance of his duties
hereunder.
TRAVEL. All expenses related to business travel shall be paid by the Company.
All frequent flyer miles earned while traveling for the Company are the
Executive's for use at his discretion.
(d) LOCATION AND RELOCATION.
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(i) The Executive's principal place of employment shall be at the
Company's principal headquarters in Fort Lauderdale, Florida.
(ii) In the event the Company and the Executive mutually agree to
relocate the Executive's principal place of employment to a new
principal Company headquarters location, the Executive will
relocate to the vicinity of the Company's new principal
headquarters within a time frame mutually agreed upon between the
Executive and the Company (the "Relocation Period"). The Executive
shall be entitled to relocation benefits in accordance with the
Company's relocation policy and such additions thereto as mutually
agreed to by the Executive and the Company, including, but not
limited to, reimbursement for all costs associated with moving the
Executive and his family, possessions, and vehicles, and any costs
and commissions associated with the sale of the Executive's
residence and purchase of a new residence. In addition, the Company
shall pay for or reimburse the Executive for the reasonable cost of
travel between the Executive's current residence and the Company's
new principal headquarters and, prior to the Executive's
relocation, the Company shall provide suitable temporary housing
for the Executive's use when he is at the Company's new principal
headquarters plus living expenses, as mutually agreed to by the
Executive and the Company. The Company shall gross up for tax
purposes any deemed income arising pursuant to the payment of
benefits provided under this Section 5(e)(ii), so that the economic
benefit is the same to the Executive as if such payment or benefits
were provided on a non-taxable basis to the Executive.
6. TERMINATION. The Executive's employment and the Employment Term shall
terminate on the first of the following to occur:
(a) DISABILITY. Upon written notice by the Company to the Executive of
termination due to Disability, while the Executive remains
Disabled. For purposes of this Agreement, "Disability" shall be
defined as the inability of the Executive to have performed his
material duties hereunder due to a physical or mental injury,
infirmity or incapacity for 180 days (including weekends and
holidays) in any 365-day period. An independent physician mutually
selected by the Company and the Executive shall determine the
existence or nonexistence of a Disability.
(b) DEATH. Automatically on the date of death of the Executive.
(c) CAUSE. Immediately upon written notice by the Company to the
Executive of a termination for Cause. "Cause" shall mean:
(i) The Executive shall have been indicted for a felony other than
one based on Limited Vicarious Liability, or
(ii) The termination is evidenced by a resolution adopted in good
faith by the current Board of Directors. concluding that Executive
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intentionally and continually failed substantially to perform his
reasonably assigned duties with the Company (other than a failure
resulting from Executive's incapacity due to physical or mental
illness or from the assignment to Executive of duties that would
constitute Good Reason), which failure has continued for a period
of at least 30 days after a written notice of demand for
substantial performance, signed by the CEO, has been delivered to
Executive specifying the manner in which Executive has failed
substantially to perform.
(iii) Notwithstanding anything in the foregoing to the contrary, if
the Executive has been terminated ostensibly for Cause because he
has been indicted for a felony (other than one involving Limited
Vicarious Liability), and he is not convicted of, or does not plead
guilty or nolo contendere to, such felony or a lesser offense
(based on the same operative facts), such termination shall be
deemed to be a termination without Cause as of the date of the
termination; provided, however, that, in the event that the
Executive has been terminated ostensibly for Cause because he has
been indicted for a felony (other than one involving Limited
Vicarious Liability)
(A) Undelivered Rule-144 stock shares shall only be forfeited
in the event that the Executive is convicted of or pleads
guilty or nolo contendere to a felony or a lesser offense and
any vesting or distribution shall be suspended until a final
determination in such proceeding is reached;
(e) WITHOUT CAUSE. Upon fifteen (15) business days written notice by
the Company to the Executive of an involuntary termination without
Cause, other than for death or Disability.
(f) GOOD REASON. Upon written notice by the Executive to the Company of
a termination for Good Reason, unless such events are corrected in
all material respects by the Company within thirty (30) days
following written notification by the Executive to the Company that
he intends to terminate his employment hereunder for one of the
reasons set forth below. "Good Reason" shall mean, without the
express written consent of the Executive, the occurrence of any of
the following events:
(i) assignment to the Executive of any duties inconsistent in any
material respect with the Executive's position (including titles
and reporting relationships), authority, duties or responsibilities
as contemplated by this Agreement, or any other action by the
Company which results in a significant diminution in such position,
authority, duties or responsibilities;
(ii) any failure by the Company to comply with any of the material
provisions regarding Executive's Base Salary, bonuses, employee
benefits and amounts payable to Executive provided for in Sections
3, 4 and 5 of this Agreement;
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(iii) the Executive being required to relocate to a principal place
of employment more than thirty (30) miles from the Company's
principal headquarters in Fort Lauderdale, Florida;
(iv) the delivery by the Company of a notice of non-renewal
pursuant to Section 2 hereof;
(v) any breach of the Company's representations set forth in
Section 17 hereof which has a material adverse impact on the
Company; or
(g) WITHOUT GOOD REASON. Upon fifteen (15) business days' prior written
notice by the Executive to the Company of the Executive's voluntary
termination of employment without Good Reason (which the Company
may, in its sole discretion, make effective earlier than any notice
date).
7. CONSEQUENCES OF TERMINATION. Upon termination as per Section 6 above
the following amounts and benefits shall be due and paid to the
Executive.
(a) DISABILITY. Upon such termination, the Company shall pay or provide
the Executive:
(i) any unpaid Base Salary through the date of termination and any
accrued vacation;
(ii) any unpaid bonuses earned on or preceding the date of
termination;
(iii) reimbursement for any unreimbursed expenses incurred through
the date of termination; and
(iv) all other payments, benefits or fringe benefits to which the
Executive may be entitled under the terms of any applicable
compensation arrangement or benefit, equity or fringe benefit plan
or program or grant or this Agreement (sections 7 (i) through (iv)
are collectively, "Accrued Amounts").
(b) DEATH. In the event the Employment Term ends on account of the
Executive's death, the Executive's estate shall be entitled to any
Accrued Amounts.
(c) TERMINATION FOR CAUSE OR WITHOUT GOOD REASON. If the Executive's
employment should be terminated (i) by the Company for Cause, or
(ii) by the Executive without Good Reason, the Company shall pay to
the Executive any Accrued Amounts.
(d) TERMINATION WITHOUT CAUSE OR FOR GOOD REASON. If the Executive's
employment by the Company is terminated by the Company other than
for Cause (other than a termination for Disability) or by the
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Executive for Good Reason, the Company shall pay or provide the
Executive with:
(i) Accrued Amounts;
(ii) a pro-rata portion of the Executive's bonuses for the
performance year in which the Executive's termination occurs
(determined by multiplying the amount the Executive would have
received had employment continued through the end of the
performance year by a fraction, the numerator of which is the
number of days during the performance year of termination that the
Executive is employed by the Company and the denominator of which
is 365);
(iii) Cash in an amount equal to three (3) months of the then
current Base Salary ("Severance Pay");
(iv) Continuation of Benefit Plans for three (3) months
8. NON-COMPETE.
(i) In the event the Executive is paid the Severance Pay in full as
defined in Section 8, during the three (3) month period thereafter,
the Executive will not directly or indirectly (as an employee,
director, officer, consultant, manager, independent contractor, or
advisor) engage in competition with, or own any interest in,
perform any services for, participate in or be connected with the
division or business unit of any business or organization which
engages in direct competition with the Company as defined in
Section 8(e)(ii) below; provided, however, that the provisions of
this Section shall not be deemed to prohibit the Employee's (A)
ownership of stock outstanding of any publicly held company, or (B)
ownership, whether through direct or indirect stock holdings or
otherwise, of any other business.
(ii) For the purposes of this Section 8(e) the division or business
unit of a business or organization shall be deemed to be engaging
in direct competition with the Company if such division or business
unit is engaged in the manufacture of PC-television convergence
devices. The parties agree that the intent of Section 8 is to
prohibit the Executive from directly competing against the Company.
As a result, the parties agree that the Company or the Executive
may request a revision of Section 8(e)(ii) on an annual basis to
ensure that the definition accurately reflects the business of the
company. Upon request of either party, the definition may be
revised annually. However, as stated in Section 15, any revision to
the definition, and thus, any amendment or supplement to this
agreement, must be in writing and signed by the Executive and such
officer or director as may be designated by the Company.
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9. CONFIDENTIALITY, NONSOLICITATION, NONDISPARAGMENT, REFORMATION,
SURVIVAL OF PROVISIONS, INVENTIONS
(a) CONFIDENTIALITY. The Executive agrees that he shall not, directly
or indirectly, use, make available, sell, disclose or otherwise
communicate to any person, other than in the course of the
Executive's assigned duties and for the benefit of the Company,
either during the period of the Executive's employment or at any
time thereafter, any nonpublic, proprietary or confidential
information, knowledge or data relating to the Company, any of its
subsidiaries, affiliated companies or businesses, which shall have
been obtained by the Executive during the Executive's employment by
the Company. The foregoing shall not apply to information that
(i) was known to the public prior to its disclosure to the
Executive;
(ii) becomes known to the public subsequent to disclosure to the
Executive through no wrongful act of the Executive or any
representative of the Executive; or
(iii) the Executive is required to disclose by applicable law,
regulation or legal process (provided that the Executive provides
the Company with prior notice of the contemplated disclosure and
reasonably cooperates with the Company at its expense in seeking a
protective order or other appropriate protection of such
information). Notwithstanding clauses (i) and (ii) of the preceding
sentence, the Executive's obligation to maintain such disclosed
information in confidence shall not terminate where only portions
of the information are in the public domain.
(b) NONDISPARAGMENT. Each of the Executive and the Company agrees not
to make any public statements that disparage the other party, or in
the case of the Company, its respective affiliates, employees,
officers, directors, products or services. Notwithstanding the
foregoing, statements made in the course of sworn testimony in
administrative, judicial or arbitral proceedings (including,
without limitation, depositions in connection with such
proceedings) shall not be subject to this Section 8 (b).
(c) REFORMATION. If it is determined by a court of competent
jurisdiction in any state that any restriction in this Section 8 is
excessive in duration or scope or is unreasonable or unenforceable
under the laws of that state, it is the intention of the parties
that such restriction may be modified or amended by the court to
render it enforceable to the maximum extent permitted by the law of
that state.
(d) SURVIVAL OF PROVISIONS. The obligations contained in this Section 9
shall survive the termination or expiration of the Executive's
employment with the Company .
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10. INDEMNIFICATION. The Company shall defend Executive, indemnify
Executive and hold Executive harmless from and against any claim, loss
or cause of action arising from or out of Executive's good faith
performance as an officer, director or employee of the Company or any
of its subsidiaries or in any other capacity, including any fiduciary
capacity, in which Executive serves at the request of the Company to
the maximum extent permitted by applicable law. Such obligations shall
include payment of all fees, costs and expenses, including attorney's
fees, incurred or to be incurred as a result of such claim, loss or
cause of action. The Company shall also maintain insurance for the
benefit of Executive with the same coverage, limits, terms and
conditions as maintained for other directors and officers of the
Company.
11. ATTORNEY'S FEES.
In the event of any dispute arising out of or under this Agreement or the
Executive's employment with the Company, if the arbitrator or court of
competent jurisdiction, whichever is hearing the matter, determines that
the Executive has prevailed on the issues in the arbitration or court
proceeding, as the case may be, the Company shall, upon presentment of
appropriate documentation, at the Executive's election, pay or reimburse
the Executive for all reasonable legal and other professional fees, costs
of arbitration and other reasonable expenses incurred in connection
therewith by the Executive.
12. NO ASSIGNMENTS.
(a) This Agreement is personal to each of the parties hereto. Except as
provided in Section 12 (b) below, no party may assign or delegate
any rights or obligations hereunder without first obtaining the
written consent of the other party hereto.
(b) The Company may assign this Agreement to any successor to all or
substantially all of the business and/or assets of the Company
provided the Company shall require such successor to expressly
assume and agree to perform this Agreement in the same manner and
to the same extent that the Company would be required to perform it
if no such succession had taken place.
13. NOTICE. For the purpose of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given (i) on the date of delivery if
delivered by hand, (ii) on the date of transmission, if delivered by
confirmed facsimile, (iii) on the first business day following the date
of deposit if delivered by guaranteed overnight delivery service, or
(iv) on the fourth business day following the date delivered or mailed
by United States registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:
If to the Executive:
Xxxxx Xxxxx
0000 Xxxxxxxx Xxxxxx
Xxxx Xxxxx, Xxxxxxx 00000
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If to the Company:
Video Without Boundaries, Inc.
Xxxxxxx Xxxxxxx
President
000 Xxxx Xxx Xxxx Xxxxxxxxx, Xxxxx 000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
or to such other address as either party may have furnished to the
other in writing in accordance herewith, except that notices of change
of address shall be effective only upon receipt.
14. ARBITRATION. Any dispute or controversy arising under or in connection
with this Agreement, other than damages for breach of Section 9, shall
be settled exclusively by arbitration, conducted before a single
independent arbitrator mutually selected by the Company and the
Executive. The arbitrator will have the authority to permit discovery
and to follow the procedures that he or she determines to be
appropriate. The arbitrator will have no power to award consequential
(including lost profits), punitive or exemplary damages. The decision
of the arbitrator will be final and binding upon the parties hereto.
Judgment may be entered on the arbitrator's award in any court having
jurisdiction.
15. MISCELLANEOUS. No provision of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed
to in writing and signed by the Executive and such officer or director
as may be designated by the Company. No waiver by either party hereto
at any time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent
time. This Agreement together with all exhibits hereto sets forth the
entire agreement of the parties hereto in respect of the subject matter
contained herein. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been
made by either party which are not expressly set forth in this
Agreement. The validity, interpretation, construction and performance
of this Agreement shall be governed by the laws of the State of Florida
without regard to its conflicts of law principles.
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16. FULL SETTLEMENT. Except as set forth in this Agreement, the Company's
obligation to make the payments provided for in this Agreement and
otherwise to perform its obligations hereunder shall not be affected by
any circumstances, including without limitation, set-off, counterclaim,
recoupment, defense or other claim, right or action which the Company
may have against the Executive or others, except to the extent any
amounts are due the Company or its subsidiaries or affiliates pursuant
to a judgment against the Executive. In no event shall the Executive be
obliged to seek other employment or take any other action by way of
mitigation of the amounts payable to the Executive under any of the
provisions of this Agreement, nor shall the amount of any payment
hereunder be reduced by any compensation earned by the Executive as a
result of employment by another employer.
17. REPRESENTATIONS.
(a) The Company represents and warrants that, as of the Effective Date,
all financial statements for each quarter and fiscal year since
Company inception fairly present in all material respects the
financial position of the Company in conformity with Generally
Accepted Accounting Principles as of the applicable reporting dates
except as reported in the notes to those financial statements.
(b) The Executive represents and warrants to the Company that he has
the legal right to enter into this Agreement and to perform all of
the obligations on his part to be performed hereunder in accordance
with its terms and that he is not a party to any agreement or
understanding, written or oral, which could prevent him form
entering into this Agreement or performing all of his obligations
hereunder.
18. WITHHOLDING. The Company may withhold from any and all amounts payable
under this Agreement such federal, state and local taxes as may be
required to be withheld pursuant to any applicable law or regulation.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.
Video Without Boundaries, Inc.
By: /s/ Xxxxxxx Xxxxxxx
--------------------------------------------
Name: Xxxxxxx Xxxxxxx
Its: President
/s/ Xxxxx Xxxxx
--------------------------------------------
Xxxxx Xxxxx
/s/ Xxxx Xxxxxxxxx
------------------------------------------------
Witness
Printed: Xxxx Xxxxxxxxx
/s/ Xxxxx X. Xxxxx
------------------------------------------------
Witness
Printed: Xxxxx X. Xxxxx
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