EMPLOYMENT AGREEMENT
AGREEMENT made as of December 23, 1996 by and between Sagacity I,
Inc., a Delaware corporation, with executive offices at 000 Xxxxx Xxxxxxxxx
Xxxx, Xxxxxxxxx, Xxxxxxxx 00000 (the "Company"), and Xxxx X. Xxxxxx residing at
000 Xxxxx Xxxxxxxxx, Xxxxxxxx, Xxxxxxxx 00000 (the "Employee").
W I T N E S S E T H:
WHEREAS, the Company wishes to employ the Employee, and the Employee
wishes to remain in the employ of the Company, on the terms and conditions
hereinafter set forth,
NOW, THEREFORE, it is agreed as follows:
1. Employment.
(a) The Company hereby employs the Employee as its
President and chief operating officer, and the Employee hereby agrees to his
employment by the Company in such capacity on a full-time basis. The Employee
shall be responsible for the day-to-day operating control of the Company's
business, subject to the supervision and control of the Company's Board of
Directors and its chief executive officer. In addition, the Employee shall hold
such other positions in the Company or its subsidiaries, and shall perform such
other duties of a responsible nature for the Company or its subsidiaries as the
Company's Board of Directors or its chief executive officer may from time to
time reasonably determine. The Employee shall devote all of his business time,
attention and energy to his duties and to the business affairs of the Company,
and shall not engage, directly or indirectly, in any other business, employment
or occupation
(b) The Employee shall not be required to relocate
outside the greater Chicago metropolitan area, it being understood that nothing
herein contained shall prohibit the Company from requiring the Employee to
travel to suppliers and customers outside such area as and when necessary or
appropriate for business purposes.
2. Term. The term of this Agreement (the "Term") shall be for
a period of three (3) years, commencing on the date of this Agreement (the
"Commencement Date") and ending at the close of business immediately before the
third anniversary of the Commencement Date, unless the parties elect to renew
the Term for additional periods of one (1) year each.
3. Salary, Fringe Benefits and Allowances.
(a) The Employee shall receive a salary at the annual
rate of $105,000 during the term of this Agreement. The salary hereunder shall
be payable at such regular times and intervals as the Company customarily pays
its employees from time to time, but no less frequently than twice a month.
(b) The Employee shall participate on the same basis as
other employees of the Company participate in its existing or future employee
benefit programs, if any.
(c) The Employee shall be entitled to a paid vacation of
not less than fifteen (15) work days for each year of the term of this
Agreement; provided, however, all vacations shall be taken at a time or times
that minimize any interference with the proper performance of the Employee's
duties for the Company. The Employee shall be entitled to the benefits of the
Company's personnel policies involving sick leave and holidays.
(d) The Company shall provide payment for the rental
expense of an automobile to be used by the Employee in the business of the
Company, not to exceed $500 per month, and for other ordinary and necessary
expenses incurred by him on behalf of the Company, as promptly as practical
after his presentation to the Company of receipts or other reasonable proof of
disbursements.
4. Stock Bonus. Within ninety (90) days after the end of each
calendar year commencing during the Term, the Company shall pay to the Employee
the stock bonus shown in the table below in shares of common stock of U.S.
Opportunity Search Inc. ("USOS"), based upon the Company's net income before
federal income taxes for such calendar year, determined in accordance with
generally accepted accounting principles consistently applied:
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If the Company's Net Income Before Number of Shares of USOS that
Federal Taxes is will be Issuable to the Employee
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$400,000 or more during 1997 5,000 shares
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$400,000 or more during 1998 7,000 shares
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$800,000 or more during 1999 10,000 shares
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For the purpose of calculating the Company's net income, its revenue shall be
charged with state and local income or franchise taxes and the Company's pro
rata share of all overhead and indirect expenses borne by USOS for the Company's
account or for its benefit.
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5. Termination of Employment.
(a) If the Employee dies, becomes "permanently
disabled", resigns or is dismissed for "cause", his rights to salary, fringe
benefits and allowances as set forth in paragraph 3 hereof, and his rights to
the stock bonus in paragraph 4 hereof, shall automatically cease, except that
the Employee shall not forfeit the salary and fringe benefits accrued prior
thereto.
(b) As used herein, the term "cause" shall mean the
Employee's commission of a material act of fraud or dishonesty or a crime
involving money or other property of the Company, the Employee's conviction of a
felony involving moral turpitude or a plea of guilty or nolo contendere to a
felony indictment, the Employee's unauthorized or illegal use of narcotics,
illegal drugs or other controlled substances, a material breach by the Employee
of this Agreement and/or an additional act of insubordination by the Employee
following his receipt of notice that he has been insubordinate. As used herein,
the terms "permanently disabled" or "permanent disability" shall mean and refer
to the inability of the Employee to perform substantially all of the duties
required of him by this Agreement by reason of his physical or mental incapacity
for a period of one hundred eighty (180) or more days.
(c) If the Company dismisses the Employee for cause, it
shall give the Employee written notice of such dismissal and of the facts
constituting such cause. The Employee shall have the right to challenge such
dismissal by instituting a proceeding in arbitration before the American
Arbitration Association ("AAA") in New York City to determine the Company's
dismissal of the Employee for cause was warranted under the terms of this
Agreement. If the Company institutes the arbitration proceeding, it shall be
conducted before the AAA in Chicago. If the arbitrator determines that the
Employee was dismissed without cause, as defined in this Agreement, the Employee
shall be entitled to recover from the Company all salary and fringe benefits (if
any) and the stock bonus which would have been payable to him under this
Agreement, but were not paid to him following his dismissal, plus his legal fees
and the costs of the arbitration proceeding. If the arbitrator determines that
the Employee was dismissed for cause, as defined in the Agreement, the Employee
shall pay to the Company such damages as the Company incurred because of the
Employee's actions, plus its legal fees and the costs of the arbitration
proceeding.
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6. Company Property. Any written material, mailing list,
program, discovery, process, design, invention or improvement which the Employee
composes, compiles, makes or develops during his employment by the Company shall
belong to the Company and shall be promptly disclosed to the Company. During the
Employee's employment and thereafter, the Employee shall, without additional
compensation, execute and deliver to the Company any instruments of transfer and
take such other action as the Company may reasonably request to carry out the
provisions hereof, including filing, at the Company's expense, patent or
copyright applications for any invention or writing covered hereby and assigning
the applications to the Company.
7. Confidential Information. The Employee shall not, either
during the term of employment by the Company or thereafter, disclose to anyone
(except in the regular course of the Company's business), or use in competition
with the Company or its subsidiaries, any information acquired by the Employee
during the period of his employment by the Company, with respect to any
confidential, proprietary or secret aspect of the affairs of the Company or any
subsidiary of the Company, including but not limited to the requirements of and
terms of dealings with existing or potential suppliers, dealers and customers
and the methods of doing business, all of which the Employee acknowledges are
confidential and proprietary to the Company or its subsidiaries, as the case may
be.
8. Competition; Recruitment.
(a) The Employee shall not, at any time during his
employment or, to the extent described below, after the termination of his
employment,
(i) engage or become interested (as owner, stockholder,
partner, director, officer, employee, consultant or otherwise) in
any business which is competitive with the business conducted by the
Company or any of its divisions or subsidiaries at the time of the
termination of his employment, or
(ii) recruit, solicit for employment, hire or engage any
employee or consultant of the Company or any person who was an
employee or consultant of the Company within six (6) months prior to
the termination of the Employee's employment.
If the Employee's employment is terminated by the Company without cause, the
prohibitions herein contained shall continue as long as the Company continues to
pay his salary and fringe benefits hereunder. If the Employee's employment
terminates because the Company declined to renew the term of this Agreement, the
prohibitions herein contained shall continue for six (6) months after such
termination. If the Employee declined to renew the term of this Agreement or if
the Employee's employment is terminated for cause, the prohibitions herein
contained shall continue for one (1) year after such termination.
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(b) The Employee acknowledges that these provisions are
necessary for the Company's protection and are not unreasonable, since he would
be able to obtain employment with companies whose businesses are not competitive
with those of the Company, its divisions and its subsidiaries and he would be
able to recruit and hire personnel other than employees of the Company. The
duration and the scope of these restrictions on the Employee's activities are
divisible, so that if any provision of this paragraph is held or deemed to be
invalid, that provision shall be automatically modified to the extent necessary
to make it valid. Neither the ownership of less than 2% of the stock of a
publicly owned company nor the ownership of less than 25% of a privately owned
small business concern, as defined by the regulations of the Small Business
Administration shall be considered a violation of the provisions hereof;
provided such company or concern does not compete with the Company.
9. Notices. Any notice or other communication to a party under
this Agreement shall be in writing and shall be considered given when mailed by
certified mail, return receipt requested, to such party at his or its address
first above written (or at such other address as such party may specify by
written notice to the other party).
10. Binding Nature of Agreement. The Company may assign this
Agreement in connection with a sale or other transfer of its assets or business.
This Agreement shall, as a matter of law, become the obligation of any successor
of the Company by merger, consolidation or other corporate reorganization. In
any such case, this Agreement shall be binding on the successors and assigns of
the Company. A change in control of the Company shall not affect the obligations
of the Company hereunder. This Agreement shall also bind the heirs and personal
representatives of the Employee.
11. Miscellaneous.
(a) Since a breach of the provisions of this Agreement
would injure the Company irreparably, the Company may, in addition to its other
remedies, obtain an injunction or other comparable relief restraining any
violation or further violation of this Agreement, and no bond, security or other
undertaking shall be required of the Company in connection therewith.
(b) The provisions of this Agreement are separable, and
if any provision of this Agreement is invalid or unenforceable, the remaining
provisions shall continue in full force and effect.
(c) This Agreement constitutes the entire understanding
and agreement between the parties, supersedes all existing agreements between
them and cannot be changed or terminated orally.
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(d) This Agreement shall be governed by and construed in
accordance with the laws of the State of Illinois, where it has been entered and
where it is to be performed. The headings in this Agreement are solely for
convenience of reference and shall not affect its interpretation.
(e) The failure of either party to insist on strict
adherence to any term of this Agreement on any occasion shall not be considered
a waiver or deprive that party of the right thereafter to insist upon strict
adherence to that term or any other term of this Agreement. For any waiver of a
provision of this Agreement to be effective, it must be in writing and signed by
the party against whom the waiver is claimed.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be signed as of the date first above written.
SAGACITY I, INC.
By: /S/ Xxxxxxx Xxxxx
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Xxxxxxx Xxxxx,
Chairman of the Board and Chief Executive Officer
/S/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx
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