THE TERMS AND CONDITIONS OF THIS AGREEMENT ARE SUBJECT TO THE APPROVAL OF THE
BOARD OF DIRECTORS, THE BY-LAWS OF THE CORPORATION AND ANY AMENDMENTS THERETO,
AND SHALL NOT BE EFFECTIVE AS AGAINST ANY PARTY HERETO UNTIL APPROVED.
AGREEMENT dated July 7, 1999, between Re-Track USA, Inc. (the "Company"), and
Xxxxxx Xxxx (the "Chairman") and Xxxxxx Xxxxx (the "Shareholder").
RECITALS
The Company is currently in the process of an Initial Public Offering (IPO) and
requires certain knowledge and experience to guide it through the IPO.
Xx. Xxxxxx Xxxx has the knowledge and extensive experience the Company requires.
The Company and Shareholder desire to have Xx. Xxxx assume the role of Chairman
of the Board of Directors to assist and guide the Company through the IPO
process and shall continue thereafter for a maximum period of three years.
The Shareholder agrees to vote his shares annually to effect Xx. Xxxx'x election
to the Board of Directors.
Xx. Xxxx, for certain consideration hereinafter defined, accepts the position of
Chairman of the Board of Directors.
The Company also desires to have Xx. Xxxx assume the position of Executive Vice
President of Strategic Planning.
Xx. Xxxx, for certain consideration hereinafter defined, accepts the position of
Executive Vice President of Strategic Planning subject to execution of an
employment agreement currently being drafted and ratification of the Board of
Directors.
NOW THEREFORE subject to ratification by the Board of Directors, and any
amendments to the by-laws that may be required, the parties hereto agree as
follows.
1. POSITION.
Xx. Xxxx shall assume the role of Chairman of the Board of Directors. So long as
the Shareholder is the majority shareholder of the Company, the shareholder
hereby agrees to vote his shares to effectuate Xx. Xxxx as Chairman. However,
the shareholder shall not be required to vote such shares in favor of Xx. Xxxx
in the event of termination without cause.
Xx. Xxxx, for no additional compensation, shall also act as an officer of the
Company with the title of Executive Vice President, Strategic Planning.
2. TERM.
The term of this Agreement shall begin on July 1, 1999, the effective date, and
shall terminate on June 30, 2002.
3. COMPENSATION.
A. Chairman.
The Chairman shall receive no consideration for his service as Chairman of the
Board of Directors.
B. Executive Vice President of Strategic Planning.
Xx. Xxxx shall receive $8500.00 per month for his services as Executive Vice
President of Strategic Planning--an executive officer of the Company. Such
compensation shall accrue from the effective date of this agreement until
termination as defined above. The accrued compensation is contingent upon and
shall be paid at the successful completion of the IPO and not before. In the
event the Company does not complete the IPO, the Xx. Xxxx agrees that he shall
make no claim for said accrued compensation. Upon successful completion of the
IPO, compensation shall no longer accrue and the Company shall pay the
compensation monthly in arrears on the last day of the each month. It is
understood by all parties that this agreement only defines the basic terms of
compensation and all other terms and conditions of employment are subject to
further negotiation.
4. DUTIES.
The Chairman shall devote a sufficient amount of his time and attention to the
Company's business and shall be available to the management of the Company to
assist and guide the Company through the IPO process.
5. EXPENSES.
The Chairman may incur reasonable expenses for promoting the Company's business,
including expenses for entertainment, travel, and similar items. The Company
will reimburse the Chairman for all such expenses upon periodic presentation of
an itemized account of such expenditures.
6. TERMINATION WITHOUT CAUSE.
The Company may, without cause, terminate this Agreement at any time by giving
30 days' written notice to the Chairman. In that event, the Chairman, if
requested by the Company, shall continue to render his services and shall be
paid his regular compensation up to the date of termination and shall be paid a
severance pay of one year compensation.
The Chairman may, without cause, terminate this Agreement by giving 60 days'
written notice to the Company. In such event, the Chairman shall continue to
render his services and shall be paid his regular compensation up to the date of
termination but the Chairman shall not be entitled to any severance pay.
7. DEATH DURING EMPLOYMENT.
If the Chairman dies during the term of employment, the Company shall pay to the
Chairman's estate the compensation that would otherwise be payable to the
Chairman up to the end of the month in which his death occurs.
8. STOCK.
With ten days from execution of this agreement the Company shall issue, or cause
to be issued, 500,000 shares of its common stock to the Chairman or his
designee. Such stock is a one time consideration as inducement for signing this
agreement and is separate and apart from any other stock issued, or to be
issued, the Chairman under any other agreement.
The Chairman understands and agrees that during the period prior to the IPO, the
Shareholder shall have the right to vote the shares issued hereunder.
In the event the Chairman, without cause, terminates this agreement as provided
for in paragraph 6 supra within the three year period beginning from the
effective date hereunder, said 500,000 shares issued in accordance with this
paragraph 8 shall be canceled and returned to the Company, and the Chairman
shall have no further claim to such shares.
9. COMPANY BENEFITS.
The Chairman hereby waives any right to participate in any benefit plans
established. Such plans may include health insurance, life insurance, auto
lease, pension, etc.
10. INDEMNITY.
The Company hereby agrees to hold the Chairman harmless for any and all
liabilities that may arise from the actions of the Company prior to July 1,
1999.
Within 45 days after the completion of its initial public offering, the Company
shall provide the Chairman with "errors and omissions" insurance in an amount
not less than $1,000,000.00.
11. NOTICES.
Any notice required or desired to be given under this Agreement shall be deemed
given if in writing and sent by certified mail, return receipt requested, to:
The Chairman at
________________
________________
The Company's at
00 Xxxxx Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Xxxxxx Xxxxx at
c/o Re-Track USA, Inc. 00 Xxxxx Xxxx Xxxxxx Xxx Xxxx, XX 00000
12. WAIVER OF BREACH.
The Company's waiver of a breach of any provision of this Agreement by the
Chairman shall not operate or be construed as a waiver of any subsequent breach
by the Chairman. No waiver shall be valid unless in writing and signed by an
authorized officer of the Company.
13. ASSIGNMENT.
The Chairman acknowledges that his services are unique and personal.
Accordingly, the Chairman may not assign his rights or delegate his duties or
obligations under this Agreement. The Company's rights and obligations under
this Agreement shall inure to the benefit of, and shall be binding upon, the
Company's successors and assigns.
14. ENTIRE AGREEMENT.
This Agreement contains the entire understanding of the parties. It may not be
changed orally but only by an agreement in writing signed by the party against
whom enforcement of any waiver, change, modification, extension, or discharge is
sought.
15. HEADINGS.
Headings in this Agreement are for convenience only and shall not be used to
interpret or construe its provisions.
16. COUNTERPARTS.
This Agreement may be executed in two or more counterparts, each of which shall
be deemed an original but all of which together shall constitute one and the
same instrument.
In witness whereof the parties have executed this Agreement on the 7th day of
July, 1999.
The Chairman The Shareholder
/s/ Xxxxxx Xxxx /s/ Xxxxxx Xxxxx
------------------------------ ------------------------------
Xxxxxx Xxxx Xxxxxx Xxxxx
Re-Track USA, Inc.
/s/ Xxxxxx Xxxxx
------------------------------
Xxxxxx Xxxxx, President
RESTRICTION ON TRANSFER OF STOCK
The Shares to be issued in accordance with this agreement will not have been
registered under the Securities Act of 1933, as amended, or registered or
qualified under any state securities laws, and as such, the Shares are and will
be restricted securities as such term is defined under the Securities Act of
1933, and the Shares will be issued in a transaction exempt from the
registration requirements of the 1933 Act and the registration or qualification
requirements of applicable state securities laws. The Shares will be and will
have been acquired by Xxxxxx Xxxx for investment purposes only and not with a
view to distribution or resale and may not be made subject to a security
interest, pledge, hypothecated, sold or otherwise transferred unless such Shares
are subsequently registered in accordance with the 1933 Act and qualified or
registered under applicable state securities laws or an exemption from
registration and qualification is available, and that, except as otherwise
provided in this Agreement, the Company is under no obligation to register or
qualify the Shares. The Company may require an opinion of counsel to Xxxxxx Xxxx
prior to authorizing the registration of any transfer of the Shares in reliance
on an exemption from registration or qualification to the effect that the
transfer is exempt from such registration or qualification. Certificates
evidencing the Shares shall bear a standard form Securities and Exchange
Commission restrictive legend and any such other legends as required by
applicable federal and state laws, and the transfer agent for the Company's
class of Common Shares shall be instructed to place a stop transfer order on the
stock books of the Company restricting the transfer of the Shares.
Xxxxxx Xxxx represents and warrants that he agrees to execute such other
documents and instruments as counsel for the Company reasonably deems necessary
to effect the compliance of the issuance of the Shares with federal and state
laws and the enforcement of this agreement.
Dated:
/s/ Xxxxxx Xxxx
-------------------------------
Xxxxxx Xxxx
