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EXHIBIT 10.16
EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment agreement (Agreement) is made and effective this 23rd
Day of December 22, 2000 by and between Infotopia Inc. (Company) and Xxxxxx
Xxxxxx (Executive).
NOW, THEREFORE, the parties hereto agree as follows:
1. EMPLOYMENT
The Company hereby agrees to employ the Executive, for a term beginning on
January 2, 2001 and ending January 1, 2002 as its Vice President of Investor
Relations or at a higher responsible management position with the Company and
the Executive hereby accepts such employment in accordance with the terms of
this Agreement.
Not withstanding the aforesaid, if this Agreement shall not have been terminated
in accordance with the provisions herein on or before December 22, 2001, the
remaining term of the Agreement shall be extended such that each and every
moment of time thereafter, the remaining term shall be one year unless (a) the
Agreement is terminated earlier in accordance with the provisions herein or (b)
on or after July 26, 2001, 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.
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.
2. DUTIES OF THE EXECUTIVE
As the Vice-President of Investor Relations, all public correspondence will be
either answered immediately (phone calls) or responded to within 48 hours
(emails). All of the above will be handled in a professional and courteous
manner. Any correspondence between the public and Investor Relations,
referencing Body by Jake, Modern Media or any other private company associated
with IFTP will be approved by IFTP, Body by Jake, Modern Media or any other
private company associated with IFTP.
Scheduling of press releases and its contents will be structured based on
information provided by the CEO of IFTP and Xxxxxx Xxxxxx.
On or before January 14th a list of qualified PR firms with pros and cons and
opinions of each will be submitted to IFTP. Once a PR firm is retained Xxxxxx
Xxxxxx will act as a liaison to the firm and coordinate all functions in a joint
effort to keep IFTP in the public spotlight.
Handling of all stock promotions and liaison for any websites that list
information in regards to IFTP. Any future promotions will be handled and
maintained by Xxxxxx Xxxxxx.
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As a PR firm is being selected, a composite of annual reports from outside
companies for comparison purposes will be gathered. Once one is selected a joint
effort between all parties will be required to produce a finished report.
A promotional slick report approximately 2 pages front and back will be
compiled. This will be a brief and informative report providing the structure of
IFTP. Printing company will be selected and all information coordinated with
this company. This report will be updated on an as needed basis.
3. COMPENSATION
The Executive will be paid compensation during this Agreement as follows:
A.) A base salary, commencing January 2, 2001 of not less than $75,000 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 c+onsistent with recommendations of the Executive Committee of
the Board. At least annually the Executive Committee shall review the
Executive's base salary for competitiveness and appropriateness in the
industry. In no event shall the Executive's base salary be less than
$75,000 on an annual basis.
B.) The Company agrees to pay a Quarterly Bonus of not less than $2,500 per
calendar quarter to the Executive. During the term of this Agreement
said bonus shall be paid in cash no later than the 1st day of each
calendar quarter. The effective date of the quarterly bonus for this
Agreement shall be March 1, 2001, with the first payment due (prorated
for 4th Quarter Fiscal Year 2001) and payable to the Executive on or
before April 1, 2001 and continuing thereafter until the first day of
January 2002. From time to time during the term of this Agreement, the
Executive may receive a greater quarterly bonus if approved by the
Executive Committee; however, the quarterly bonus shall never be less
than $2,500.
C.) In addition to the other payments referred to in this Agreement, the
Executive shall be entitled to receive and participate in an annual
incentive bonus plan. The amount of the Executive's participation and
the benefits paid under the incentive bonus plan shall be based upon
goals recommended by the Executive and approved by the Executive
Committee. The annual incentive bonus plan payments will be paid in cash
and the payment will be made not later than 30 days following the close
of the fiscal year for each year this Agreement is in effect.
D.) In addition to other payments referred to in this Agreement, the
Executive will be granted 500,000 shares of stock of the Company upon
execution of this Agreement and 500,000 additional shares each four
months for each of the succeeding years of the initial term of the
agreement. Such shares will be made available at 75% of the initial
price of each offering. The initial shares shall vest upon execution and
be delivered not later than April 1, 2001. The additional shares shall
vest and at the end of each quarter. Prior to vesting, the Executive
shall be entitled to receive dividends
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on and vote the unvested shares. Should this Agreement be terminated
prior to January 1, 2002 such shares shall be delivered and vested to
the Executive as stated above. If the Company, or its assets is acquired
by another entity all stock in the agreement shall be consider due and
vested.
E.) The Executive may choose once each year of this Agreement to convert
one-third of his annual salary to stock or stock options, the purchase
price shall be the lower of the average price of the IFTP stock during
the last twelve months or the current market price as of the date the
Executive chooses to exercise such option.
F.) 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."
G.) All shares included in this agreement shall carry piggyback registration
rights.
4. BENEFITS
A.) Holidays: The Executive will be entitled to at least 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 four (4) weeks or
thirty-five (35) paid vacation days per year effective as of the date of
the Agreement.
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.) 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 April 1, 2002
E.) 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.
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F.) In addition to any other compensation, an automobile allowance in the
amount of $475 per month to be paid to the Executive each month during
the term of this Agreement.
G.) 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 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 computer/modem installation.
H.) Cell phone: Executive shall be entitled to reimbursement for cell phone
and nation wide pager service or the Company may at its expense provide
the Executive with such service.
I.) 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.
iv. Anytime during the first ninety days of the agreement, at the sole
discretion of the Board of Directors. If termination happens during
this ninety days only vested on signing will be considered due and
earned.
v. In the event of bankruptcy or insolvency the Company may terminate
this agreement with no additional liabilities other than that due on
the date of termination. No future wages or benefits will be owed.
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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 4 (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 4 (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.
6. TERMINATION BY EXECUTIVE
The Executive shall have the right to terminate this Agreement with
thirty (30) days written notice the Company given within sixty (60)
days of the occurrence of any of the following events:
A. The Company acts to materially reduce the Executive's position, title,
duties, authority or responsibilities.
B. 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 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. The parties believe that because of the limitations of Section 5 the
above payments do not constitute "Excess Parachute Payments" under
section 280G of the Internal Revenue Code of 1954, as amended (the
Code). Notwithstanding such belief, if any benefit is determined to be
an "Excess Parachute Payment" the Company shall pay
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the Executive an additional amount (Tax Payment) such that (x) the
excess of all Excess Parachute Payments (including payment under this
sentence) over the sum of the excise tax thereon under section 4999 of
the Code and under applicable state law is equal to (y) the excess of
all Excess Parachute Payments (excluding payments under this sentence)
over income tax thereon under subtitle A of the Code and under
applicable state law provided that the Company shall not be obligated to
make tax payment in excess of the value of 6.6667 Compensation Years.
For the purposes hereof, the value of a Compensation Year, including
stock options and bonus entitlements, is defined as equal two (2) times
the base salary set forth in this Agreement.
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
annual incentive bonuses during the preceding 1 year period. In the event that a
Change of Control Termination occurs before the Executive completes one (1)
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
(1) year 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,
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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 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.
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
000 Xxxxxxx Xxxx
Xxxxxxx, Xx 00000
Attn.: Xxxxxx Xxxxx, CEO
If to the Executive:
Xxxxxx Xxxxxx
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, XX 00000
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11. FINAL AGREEMENT
This Agreement terminates and supersedes all prior understandings or agreements
on the subject matter hereof. Only a further writing that is duly executed by
both parties may modify this Agreement.
12. GOVERNING LAW
This Agreement shall be construed and enforced in accordance with the laws of
the Commonwealth of Massachusetts.
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 a court of competent jurisdiction to be invalid or unenforceable, then this
Agreement, holds any term of 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
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.
17. 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.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
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Xxxxxx Xxxxxx
Executive's Signature and Acceptance
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Xxxxxx X. Xxxxx
Chairman and CEO, Infotopia, Inc
