Exhibit 10.1
Employment Offer
Dear Xxxx,
As an Offer Letter dated October 3, 2003, IDI Global Inc., (the "Company") is
pleased to offer you employment. This offer is made on the following terms:
Position - You will serve in a full-time capacity as President of Sports
Media International ("SMI") effective October 2, 2003 for a period of one
year. You will be located in New York, New York for the term of this
agreement. By signing this letter agreement, you represent and warrant to the
Company that you are under no contractual commitments inconsistent with your
obligations to the Company. You will also be a member of the Board (as
defined below).
Salary - Your target annual cash compensation, including base salary,
will be determined by the Board of Directors of SMI (the "Board"), which
salary is to be determined by yourself and by the Board Members which you have
selected to administer the affairs of SMI. A majority of the members of the
Board shall be designated by you and the Company agrees to vote its stock in
support of such designees. The exact requirements and benchmarks that will
trigger your commissions and bonuses enabling you to reach your target annual
cash compensation will be determined by the Board, based on the SMI Business
Plan, a copy of which is attached hereto. Your base salary will be paid twice
monthly. The salary for 2004 will be determined by the Board and will not
exceed $180,000. Your commissions will be paid, based on your performance, on
a regular basis to be determined by the Board.
Incentive Bonuses - You will be eligible to be considered for an annual
incentive bonus. Such bonus (if any) shall be awarded based on objective or
subjective criteria established in advance by the Board, and may be in the
form of either cash or stock. The determinations of the Board with respect to
such bonus shall be final and binding.
Stock Grant - The Company hereby grants you 450,000 shares of common
stock of the Company, which will vest over a twelve month period (Jan. Dec.
2004) with one twelfth (1/12) of the total amount of the common stock vesting
each month based on the achievement of the revenue and net income projections
(the "Projections") set forth in the SMI Business Plan. If the actual revenue
and net income is less than the Projections in any given month, the stock
vested for that month will be reduced by that pro-rata percentage. If the
actual twelve-month revenues and net income equal the Projections, you will
receive 100% of the shares, or 450,000 shares of common stock of the Company.
(i.e. if the first month is only 50% of the Projections for such month then
you will only vest in 50% of the stock for that month, however, if the next
month SMI produces 150% of the Projections for such month, you will then vest
in the full amount of stock for both the first and second months). At the end
of the twelve-month period, you will receive the exact percent of stock SMI
has earned based on the exact percent of actual revenue and income achieved
for the twelve-month period. If SMI produces 80% of Projections at the end of
twelve months, you will receive 80% of the stock of the Company (i.e.360,000
shares).
You will be given a budget of $50,000 per month for at least six months to
build and operate SMI. The Company will pursue other funding sources to
extend your budget requirements, but at the time of this agreement both
parties agree that a total of $300,000 dollars, with equal monthly
disbursements, will be allocated to build SMI for the next six months, October
thru March 2004. Should the Company experience any unforeseeable budgetary
constraints that would necessitate the reduction of your budget by any
percentage, than that exact percent reduction in budget will also be applied
to the Projections, and will reduce the corresponding revenue and net profit
requirements of the Projections, which trigger your earn-out of 450,000 shares
of common stock of the Company, referred to above. For example, if your
budget is reduced by 50%, and you receive $150,000 for six months, instead of
the $300,000 anticipated by this agreement then your revenue and net profit
requirements in the Projections would also be cut in half and all of the
450,000 shares would be earned and vested so long as you achieve one half of
your Projections.
In connection with the budget set forth above, on the date of execution of
this agreement, the Company hereby agrees to wire transfer $175,000 to you (in
accordance with your written wire transfer instructions), which shall
represent the monthly budget of $50,000 for each of October, November and
December plus $25,000 in connection with the establishment of the New York
office.
Stock Options - You will be granted options to purchase an amount of
Company Stock to be determined by the Board of Directors of the Company. Such
options will be consistent with 2004 options granted to other executives at
your level, and adjusted for the profitability of each subsidiary. If SMI
provides the largest contribution of net income, than SMI executives will
receive the largest distribution of options. The options will be subject to
the terms and conditions applicable to options granted, based on performance
and overall contribution to the Company's profitability, as described in the
Company Stock Option Plan and the applicable stock option agreement. The
option will vest over two years. You will vest in 50 percent of the option
shares after 12 months of service, and the balance will vest in monthly
installments over the next 12 months as will be described in the applicable
stock option agreement. In the event of a Change in Control (as defined in
the Plan), the vesting of your option shares will accelerate such that 25
percent of your unvested option shares will become vested.
Vacation and Employee Benefits - During the term of your employment, you
will be eligible for paid vacations in accordance with the Company's policy
for similarly situated employees. During the term of your employment, you
will also be eligible to participate in any employee benefit plans and health
plans maintained by the Company for similarly situated employees, subject in
each case to the generally applicable terms and conditions of the plan in
question to the determinations of any person or committee administering such
plan.
Proprietary Information and Inventions Agreement - Like all Company
employees you will be required, as a condition to your employment with the
Company, to sign the Company's standard Proprietary Information and Inventions
Agreement.
Period of Employment - Your employment will be "at will" employment,
allowing either you or the Company to terminate your employment at any time
and for any reason, with or without cause; provided that during the first year
of employment you shall only be terminated for "cause" (which shall mean gross
negligence or willful misconduct). Any contrary representations which may
have been made to you are superseded by this offer. This is the full and
complete agreement between you and the Company on this term.
Outside Activities - While you render services to the Company, you will
not engage any other gainful employment, business or activity without the
written consent of the Company. While you render services to the Company, you
also will not assist any person or organization in competing with the Company,
in preparing to compete with the Company or in hiring any employees of the
Company. As part of this employment agreement you will be required to sign
the attached Non-Compete Agreement.
Withholding Taxes - All forms of compensation referred to in this letter
are subject to reduction to reflect applicable withholding and payroll taxes.
Entire Agreement - This letter and the Exhibit attached hereto contain
all of the terms of your employment with the Company and supersede any prior
understandings or agreements, whether oral or written, between you and the
Company.
Amendment and Governing Law - This letter agreement may not be amended or
modified except by an express written agreement signed by you and a duly
authorized officer of the Company. The term of this letter agreement and the
resolutions of any disputes will be governed by the laws of the State of Utah,
without regard to conflict of law principles.
We hope that you find the foregoing terms acceptable.
Please sign below to formally accept this employment agreement and indicate
you agreement with all of the terms contained herein. By signing this
agreement you accept, agree and are legally bound by all of the terms of the
NON-COMPETITION AGREEMENT, which continues on the following page, shown as
EXHIBIT A (CONTINUED).
Employee Accepted by IDI Global Inc.
/s/ Xxxx Xxxxxxx /s/ Xxxxx X. Xxxxxxxx
_____________________________ _____________________________
Xxxx Xxxxxxx Xxxxx X. Xxxxxxxx
CEO
Schedule of Exhibits
Non-competition Agreement
Schedule A - Company Business Activities
Schedule B - Company Customers
