EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of the 1st day of September, 1999 (the
"AGREEMENT"), by and between Infinite Technology Group, Inc., a New York
corporation having its principal office at 00 Xxxxxxx Xxxxxxxx, Xxxxxxx, XX
00000 (the "COMPANY") and Xxxx Xxxxxxxx, with an address at 0000 00xx Xxxxxx,
X.X., Xxxxxxxxxx, X.X. 00000 (the "EXECUTIVE").
R E C I T A L S:
The Company desires to employ the Executive, and the Executive desires to
accept such employment by the Company, upon the terms and conditions hereinafter
set forth.
In consideration of the mutual covenants and agreements set forth herein,
the parties agree as follows:
1. Employment and Duties. The Company agrees to employ the Executive as the
Executive Vice President, Director of Internet Operations of the Company and the
Executive accepts such employment and agrees to perform all duties and services
consistent with the Executive's position. The Executive shall be the highest
ranking executive of the Company's Internet services division and, should the
Company create a separate subsidiary through which to conduct such operations,
Executive shall be appointed the highest ranking officer of such subsidiary.
Executive shall report only to Xxxx Xxxxxxx, the Chairman of the Board of the
Company and Xxxxx XxXxxxx, the President and Chief Executive Officer of the
Company. The Executive agrees to devote substantially all of the Executive's
business time, attention and energy to perform the Executive's duties and
services hereunder. The Executive shall not be required to perform his duties
hereunder at a location other than at the Company's corporate headquarters,
which shall be located in the Counties of Nassau or Suffolk, in the State of New
York, except for reasonable travel which may be required of the Executive;
provided, however, that the Executive may spend up to fifty (50%) percent of his
business time working from the Washington, D.C. metropolitan area.
The Company agrees that it shall nominate the Executive to be a director of
the Company at each election of directors of the Company to be held during the
Employment Period (as defined below), and to recommend to the shareholders of
the Company to vote their shares in favor of the election of the Executive as a
director of the Company at all such meetings. The Executive agrees to serve as a
director of the Company for no additional consideration, except as may be
provided to all directors generally.
2. Term of Employment. This Agreement shall commence on the date hereof
(the "COMMENCEMENT DATE") and end on the fifth anniversary of the date hereof,
unless sooner terminated as provided in Section 5 hereof, and subject to
extension as hereinafter provided (the "EMPLOYMENT PERIOD"). At the expiration
of the initial five year Employment Period, and any extensions thereof, the
Employment Period shall automatically be extended, without any action on the
part of the Company or the Executive for an additional period of one year,
unless the Company or the Executive shall have submitted a written notice on
non-extension to the other party not less than six (6) months prior to the
expiration of the then scheduled Employment Period.
3. Compensation and Benefits.
3.1 Base Salary. The Company, or a Subsidiary of the Company, shall pay
the Executive a base salary of Two Hundred and Fifty Thousand ($250,000) Dollars
per annum (the "BASE SALARY"). The Base Salary for each year after the first
year may be increased from time to time in the sole discretion of the Board and
in any event will be increased annually to reflect corresponding increases in
the United States Department of Labor, Bureau of Labor Statistics, Consumer
Price Index, All Urban Consumers, United States City Average. Base Salary shall
be payable at such intervals as salaries are paid by the Company to its other
executive employees.
3.2 Stock Options. The Company shall grant the Executive Non-Qualified
Stock Options to purchase "restricted" shares of Common Stock of the Company,
$.01 par value per share, as follows:
(a) On the Commencement Date, Non-Qualified Stock Options, of ten
(10) years duration, to purchase Three Hundred Thousand (300,000) "restricted"
shares of Common Stock of the Company at an exercise price of $8.50 per share,
in the Form of Option attached hereto as "Exhibit A". Such options shall vest,
in accordance with the following schedule (conditioned only on the Executive's
continued employment by the Company or a Subsidiary of the Company):
(i) Twenty-Five Thousand (25,000) on the Commencement Date;
(ii) Thirty-Five Thousand (35,000) on the first anniversary of
the Commencement Date;
(iii) Forty-Five Thousand (45,000) on the second anniversary of
the Commencement Date;
(iv) Fifty-Five Thousand (55,000) on the third anniversary of the
Commencement Date;
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(v) Sixty-Five Thousand (65,000) on the fourth anniversary of
the Commencement Date; and
(vi) Seventy-Five Thousand (75,000) on the fifth anniversary of
the Commencement Date.
(b) Non-Qualified Stock Options, of ten (10) years duration, to
purchase up to an additional One Hundred Thousand (100,000) "restricted" shares
of Common Stock of the Company, at an exercise price of $8.50 per share, vesting
Ten Thousand (10,000) shares for each $1 million of net income (as determined by
the Company's independent certified public accountants) generated by the
Company's Internet division, conditioned only on the Executive's continued
employment by the Company or a Subsidiary of the Company.
3.3 Bonus. In addition to the Base Salary, with respect to each fiscal\
year during the Employment Period, the Company or Subsidiary shall pay the
Executive additional bonus compensation, as follows:
(a) A cash bonus based upon net income generated by the Company's
Internet division each year during the Term at the following rates:
(i) 3% of the first $1,000,000 of net income;
(ii) 2% of the next $1,000,000 of net income; and
(iii) 1% of net income in excess of $2,000,000, but less than
$15,000,000; and
(b) A discretionary bonus in an amount to be determined by the Board
of Directors (excluding the Executive if he is a director), in its sole
discretion.
3.4 Automobile. The Company shall lease a luxury automobile for the
exclusive use and benefit of the Executive. The automobile shall be of a type
similar to the automobile currently leased by the Company for the benefit of
other executives. The lease shall contain a clause allowing the Executive to
purchase the automobile at the termination of the term of the lease.
3.5 Benefit Plans; Business Expenses. During the Employment Period, the
Executive shall be entitled to participate in all plans adopted for the general
benefit of the Company's and any subsidiaries' employees or executive employees,
such as pension plans, medical plans, investment plans and group or other
insurance plans and benefits, to the extent that the Executive is and remains
eligible to participate therein and subject to the eligibility provisions of
such plans in effect from time to time. The Executive shall be reimbursed for
his reasonable
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out-of-pocket expenses incurred in the performance of his duties upon submission
of appropriate evidence thereof in conformity with normal Company policy.
3.6 Indemnification. The Company hereby agrees to indemnify and hold
harmless the Executive to the full extent permitted by the New York Business
Corporation Law and other relevant statutes. The Company agrees to advance to
the Executive, as and when incurred by the Executive, all costs and expenses
arising from any claim as to which the Company is providing indemnification
hereunder.
4. Vacation. For each year during the Employment Agreement, the Executive
shall be entitled to paid vacation in accordance with the Company's standard
policy, but in no event shall the Executive be entitled to less than four (4)
weeks vacation per annum.
5. Termination.
5.1 Death. This Agreement shall automatically terminate upon the death
of the Executive, whereupon the Company shall be obligated to pay to the
Executive's estate any unpaid Base Salary through the date of death and Bonus,
if any, as determined by the Board of Directors. Amounts payable under this
Section 5.1 shall be payable at the times and intervals set forth in Sections
3.1 and 3.3 hereof.
5.2 Disability. The Company shall have the right to terminate this
Agreement during the continuance of any Disability of the Executive, as
hereafter defined, upon fifteen (15) days' prior notice to the Executive during
the continuance of the Disability. "Disability" for purposes of this Section 5.2
shall mean an inability by the Executive to perform a substantial portion of the
Executive's duties hereunder by reason of physical or mental incapacity or
disability for a total of one hundred eighty (180) days or more in any
consecutive period of three hundred and sixty-five (365) days, as determined by
the Board of Directors in its good faith judgment. In the event of a termination
by reason of the Executive's Disability, the Company shall be obligated to pay
the Executive any unpaid Base Salary through the date of termination, and Bonus,
if any, as determined by the Board of Directors. Amounts payable under this
Section 5.2 shall be payable at the times and intervals set forth in Sections
3.1 and 3.3 hereof.
5.3 Termination by the Company for Due Cause. Nothing herein shall
prevent the Company from terminating Executive's employment for Due Cause.
Executive shall continue to receive his Base Salary for the period ending with
the date of such termination as provided in this Section 5.3. Any rights and
benefits he may have in respect of any other compensation or employee benefit
plans or programs of the Company shall be determined in accordance with the
terms of such other compensation arrangements or such other plans or programs.
The term "Due Cause", as used herein, shall mean that (a) the Executive
has committed a willful, serious act, such as embezzlement, against the Company
or Subsidiary
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intending to enrich himself at the expense of the Company or Subsidiary, or (b)
the Executive, in carrying out his duties hereunder, has been guilty of willful,
gross negligence resulting in either case in material harm to the Company or
Subsidiary (this provision shall not apply to any particular instance which is
merely the result of any good faith error in judgment), (c) the willful and
continued failure by Executive to substantially perform his duties with the
Company or any subsidiary (other than any such failure resulting from
Executive's incapacity due to physical or mental illness), after a demand for
substantial performance is delivered to Executive by the Board which
specifically identifies the manner in which the Board believes that Executive
has not substantially performed his duties, or (d) the willful engaging by
Executive in gross misconduct materially and demonstrably injurious to the
Company or any subsidiary. For purposes of this paragraph, no act, or failure to
act, on Executive's part shall be considered "willful" unless done, or omitted
to be done, by Executive, not in good faith and without reasonable belief that
Executive's action or omission was in the best interest of the Company or any
subsidiary.
Notwithstanding the foregoing, Executive shall not be deemed to have
been terminated for Due Cause unless and until there shall have been delivered
to him a copy of a resolution duly adopted by the affirmative vote of not less
than two-thirds (2/3) of the entire membership of the Board (excluding
Executive, if he is a member of the Board) at a meeting of the Board called and
held for the purpose (after reasonable notice to Executive and an opportunity
for Executive, together with his counsel, to be heard before the Board), finding
that in the good faith opinion of the Board Executive was guilty of conduct set
forth above and specifying the particulars thereof in detail.
5.4 Termination by the Executive for Good Reason. Executive may
terminate his employment under this Agreement for Good Reason in which event the
Executive will continue to receive his Base Salary as provided in Section 3 for
a period of twelve (12) months from the date of such termination. During the
period of salary continuation hereunder, the Executive will be entitled to
continued benefit coverage and benefit credits as provided in Section 3 hereof
or the economic equivalent. Any such benefit coverage, or economic equivalent
thereto, will be offset by comparable coverage provided to the Executive in
connection with any subsequent employment.
(a) "Good Reason" shall mean:
(i) Without Executive's express written consent, the assignment
to Executive of any duties inconsistent with his positions,
duties, responsibilities and status with the Company or a
change in his reporting responsibilities, title or offices,
or any removal of Executive from or any failure to re-elect
him to any of such positions, except in connection with the
termination of his employment for Due Cause, Disability or
Retirement or as a result of his death, or by Executive
other than for Good Reason;
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(ii) A reduction in Executive's Base Salary or benefits or a
breach of the Company's obligations undertaken in this
Agreement;
(iii) In the event of the occurrence of a Change in Control, this
Agreement may be terminated by Executive upon the occurrence
thereafter of one or more of the following events (in
addition to those enumerated above):
(A) Any failure to elect or re-elect Executive, or removal
of Executive, as a director of the Company (or any
successor thereto), if Executive shall have been a
director of the Company immediately prior to the Change
in Control, or the office of the Company which
Executive held immediately prior to a Change in
Control;
(B) A significant adverse change in the nature or scope of
the authorities, powers, functions, responsibilities or
duties attached to the position with the Company or any
subsidiary which Executive had immediately prior to the
Change in Control, or the termination of Executive's
rights to any Benefits to which he was entitled
immediately prior to the Change in Control or a
reduction in scope or value thereof without the prior
written consent of Executive, any of which is not
remedied with ten (10) calendar days after receipt by
the Company of written notice from Executive of such
change, reduction or termination, as the case may be;
(C) A determination by Executive made in good faith that as
a result of a Change in Control and a change in
circumstances thereafter significantly affecting his
position, he has been rendered substantially unable to
carry out, or has been substantially hindered in the
performance of, any of the authorities, powers,
functions, responsibilities or duties attached to his
position immediately prior to the Change in Control,
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which situation is not remedied within ten (10)
calendar days after receipt by the Company of written
notice from Executive of such determination; or
(D) The liquidation, dissolution, merger, consolidation or
reorganization of the Company or transfer of all or a
significant portion of its business and/or assets
unless the successor or successors (by liquidation,
merger, consolidation, reorganization or otherwise) to
which all or a significant portion of its business
and/or assets have been transferred (directly or by
operation of law) shall have assumed all duties and
obligations of the Company under this Agreement hereof.
(b) Change in Control. For purposes of this Agreement, a "Change in
Control" shall have occurred if at any time during the term (as that term is
hereafter defined), any of the following events shall occur:
(i) The Company is merged, or consolidated, or reorganized into
or with another corporation or other legal person, and as a
result of such merger, consolidation or reorganization less
than 51% of the combined voting power of the
then-outstanding securities of such corporation or person
immediately after such transaction are held in the aggregate
by the holders of voting securities of the Company
immediately prior to such transaction;
(ii) The Company sells all or substantially all of its assets to
any other corporation or other legal person and thereafter,
less than 51% of the combined voting power of the
then-outstanding voting securities of the acquiring or
consolidated entity, which are held in the aggregate by the
holders of voting securities of the Company immediately
prior to such sale;
(iii) There is a report filed after the date of this Agreement on
Schedule 13D or Schedule 14D-1 (or any successor schedule,
form or report), each as promulgated pursuant to the
Securities Exchange Act of 1934 (the "EXCHANGE
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ACT") disclosing that any person (as the term "person" is
used in Section 13(d)(3) or Section 14(d)(2) of the Exchange
Act) has become the beneficial owner (as the term
"beneficial owner" is defined under Rule 13 d-3 or any
successor rule or regulation promulgated under the Exchange
Act) representing 25% or more of the combined voting power
of the then-outstanding voting securities of the Company;
(iv) The Company shall file a report or proxy statement with the
Securities and Exchange Commission pursuant to the Exchange
Act disclosing in response to Item 1 of Form 8-K thereunder
or Item 5(f) of Schedule 14A thereunder (or any successor
schedule, form or report or item therein) that the change in
control of the Company has or may have occurred or will or
may occur in the future pursuant to any then-existing
contract or transaction; or
(v) During any period of two consecutive years, individuals who
at the beginning of any such period constitute the directors
of the Company cease for any reason to constitute at least a
majority thereof, unless the election or the nomination for
election by the Company's shareholders of each director of
the Company first elected during such period was approved by
a vote of at least two-thirds of the directors of the
Company then still in office who were directors of the
Company at the beginning of such period.
5.5 Termination by Company or Executive Related to the Company's Initial
Public Offering. The Company or the Executive shall have the right to terminate
this Agreement, upon thirty (30) days written notice to the other party, if the
Company's proposed initial public offering of Common Stock is not consummated on
or prior to January 1, 2000. In the event of termination by either party
pursuant to this Section 5.5, the Executive will enter into a Consulting
Agreement with the Company, pursuant to which the Executive will provide
consulting services to the Company for a term of one (1) year and at a rate of
Two Hundred and Fifty Thousand ($250,000) Dollars per annum.
5.6 Termination other than for Death, Disability, Due Cause, Good Reason
or Related to the Company's Initial Public Offering. The foregoing
notwithstanding, following the third anniversary of this Agreement, either the
Company or the Executive may terminate the Executive's employment for whatever
reason they deem appropriate, upon six (6) months written
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notice to the other party, or such other notice period as mutually agreed to by
the parties (the "NOTICE PERIOD"). In the event of such termination, the Company
shall be obligated to pay to the Executive his Base Salary throughout the Notice
Period, and unpaid bonus, if any, as determined by the Board of Directors.
Amounts payable under this Section 5.6 shall be payable at the times and
intervals set forth in Sections 3.1 and 3.3 hereof.
5.7 Notice of Termination. Any Notice of Termination pursuant to this
Agreement shall be communicated by written Notice of Termination to the other
party hereof. For purposes of this Agreement, a "Notice of Termination" shall
mean a notice which shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of Executive's
employment under the provision so indicated.
5.8 Date of Termination. "Date of Termination" shall mean:
(a) If Executive's employment is terminated pursuant to Section
5.4, the date specified in the Notice of Termination, and
(b) If Executive's employment is terminated for any other reason,
the date on which a Notice of Termination is given; provided that if within
thirty (30) days after any Notice of Termination is given, one party notifies
the other party that a dispute exists concerning the termination, the Date of
Termination shall be the date on which the dispute is finally determined, either
by mutual written agreement of the parties, by a binding and final arbitration
award or by a final judgment, order or decree of a court of competent
jurisdiction (the time for appeal thereof having expired and no appeal having
been perfected).
6. Restrictions.
6.1 Confidentiality.
(a) The Executive recognizes that the Executive's position with the
Company is one of trust and confidence. The Executive acknowledges that, during
the course of the Executive's employment with the Company, the Executive will
necessarily become acquainted with confidential information relating to the
customers (including names, addresses and telephone numbers) of the Company, and
trade secrets, processes, methods of operation and other information, which the
Company regards as confidential and in the nature of trade secrets (collectively
"CONFIDENTIAL INFORMATION"). The Executive acknowledges and agrees that the
Confidential Information is of incalculable value to the Company and that the
Company would suffer damage if any of the Confidential Information was
improperly disclosed.
(b) The Executive covenants and agrees that the Executive will not,
at any time during or after the termination of the Executive's relationship with
the Company, reveal, divulge, or make known to any person, firm or corporation,
any Confidential Information made
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known to the Executive or of which the Executive has become aware, regardless of
whether developed, prepared, devised or otherwise created in whole or in part by
the efforts of the Executive, except and to the extent that such disclosure is
necessary to carry out the Executive's duties for the Company. The Executive
further covenants and agrees that the Executive shall retain all Confidential
Information in trust for the sole benefit of the Company, and will not divulge
or deliver or show any Confidential Information to any unauthorized person
including, without limitation, any other employer of the Executive, and the
Executive will not make use thereof in an independent business related to the
business of the Company.
(c) The Executive agrees that, upon termination of the Executive's
employment with the Company, for any reason whatsoever, or for no reason, and at
any time, the Executive shall return to the Company all papers, documents and
other property of the Company placed in the Executive's custody or obtained by
the Executive during the course of the Executive's employment which relate to
Confidential Information, and the Executive will not retain copies of any such
papers, documents or other property for any purpose whatsoever.
6.2 Non-Competition. The Company is in the business of developing,
marketing, licensing and supporting network software and hardware products and
also provide consulting and services in network security, network design,
Internet solutions, troubleshooting and integration (the "BUSINESS"). Executive
acknowledges and recognizes that the Business has been conducted, and sales of
its products have been made, throughout the United States, and Executive further
acknowledges and recognizes the highly competitive nature of the industry in
which the Business is involved. Accordingly, in consideration of the premises
contained herein, the consideration to be received hereunder, stock options to
be granted Executive, Executive shall not, during the Non-Competition Period (as
defined below): (i) directly or indirectly engage, whether or not such
engagement shall be as a partner, stockholder, affiliate or other participant,
in any Competitive Business (as defined below), or represent in any way any
Competitive Business, whether or not such engagement or representation shall be
for profit providing services to customers of the Company or its affiliates;
(ii) interfere with, disrupt or attempt to disrupt the relationship, contractual
or otherwise, between the Company and any other person or entity, including,
without limitation, any customer, supplier, employee or consultant of the
Company; (iii) induce any employee of the Company to terminate his employment
with the Company or to engage in any Competitive Business in any manner
described in the foregoing clause (i) (as well as an officer or director of any
Competitive Business); or (iv) affirmatively assist or induce any other person
or entity to engage in any Competitive Business in any manner described in the
foregoing clause (i) (as well as an officer or director of any Competitive
Business). Anything contained in this Section 6.2 to the contrary
notwithstanding, an investment by Executive in any publicly- traded company in
which Executive and his affiliates exercise no operational or strategic control
and which constitutes less than 5% of the capital of such entity shall not
constitute a breach of this Section 6.2.
As used herein, "Non-Competition Period" shall mean the period
commencing on the date hereof and terminating on the Termination Date; provided,
however, that if the Term
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of Employment shall have been terminated pursuant to Section 5.3, then
"Non-Competition Period" shall mean the period commencing on the date hereof and
ending on the first anniversary of the Termination Date. "Competitive Business"
shall mean any business in any State of the United States in any line of
business in which the Company or Subsidiary was engaged or had a formal plan to
enter as of the Termination Date.
Executive understands that the foregoing restrictions may limit his
ability to earn a livelihood in a business similar to the business of the
Company, but he nevertheless believes that he has received and will receive
sufficient consideration and other benefits as an employee of the Company and as
otherwise provided hereunder and pursuant to other agreements between the
Company and Executive to justify clearly such restrictions which, in any event
(given his education, skills and ability), Executive does not believe would
prevent him from earning a living.
If at any time the provisions of this Section 6 shall be determined to
be invalid or unenforceable, by reason of being vague or unreasonable as to
area, duration or scope of activity, this Section 6 shall be considered
divisible and shall become and be immediately amended to only such area,
duration and scope of activity as shall be determined to be reasonable and
enforceable by the court or other body having jurisdiction over the matter; and
the Executive agrees that this Section 6 as so amended shall be valid and
binding as though any invalid or unenforceable provision had not been included
herein.
7. Work Product. The Executive agrees that all innovations, inventions,
improvements, developments, methods, designs, analyses, drawings, reports, and
all similar or related information which relates to the Company's actual
business or product lines or any business or product lines which the Company has
taken significant action to pursue, and which are conceived, developed or made
by the Executive while employed by the Company (any of the foregoing,
hereinafter "WORK PRODUCT"), belong to the Company. The Executive will promptly
disclose all such Work Product to the Board of Directors and perform all actions
reasonably requested by the Board (whether during or after the Employment
Period) to establish and confirm such ownership (including, without limitation,
assignments, consents, powers of attorney and other instruments).
8. Enforcement. The Executive acknowledges that the Company will suffer
substantial and irreparable damages not readily ascertainable or compensable in
terms of money in the event of the breach of any of the Executive's obligations
under Sections 6 and 7 hereof. The Executive therefore agrees that the
provisions of Sections 6 and 7 shall be construed as an agreement independent of
the other provisions of this Agreement and any other agreement and that the
Company, in addition to any other remedies (including damages) provided by law,
shall have the right and remedy to have such provisions specifically enforced by
any court having equity jurisdiction thereof. The rights and remedies set forth
in this Section 8 shall be in addition to, and not in lieu of, any other rights
and remedies available to the Company under law or equity.
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9. Miscellaneous Provisions.
9.1 Entire Agreement. This Agreement sets forth the entire agreement and
understanding between the parties with respect to the subject matter hereof and
supersedes all prior agreements, arrangements, and understandings between the
parties with respect to the subject matter hereof.
9.2 Modification. This Agreement may be amended, modified, superseded,
canceled, renewed or extended, and the terms or covenants hereof may be waived,
only by a written instrument executed by both of the parties or in the case of a
waiver, by the party waiving compliance.
9.3 Waiver. The failure of either party at any time or times to require
performance of any provision hereof in no manner shall affect the right at a
later time to enforce the same. No waiver by either party of a breach of any
term or covenant contained in this Agreement, whether by conduct or otherwise,
in any one or more instances, shall be deemed to be or construed as a further or
continuing waiver of any such breach or a waiver of any other term or covenant
contained in this Agreement.
9.4 Notices. All notices, demands, consents or other communications
hereunder shall be in writing and shall be given (and shall be deemed to have
been duly given) upon the earlier of receipt, one business day after being sent
by telecopier or three business days after being sent by registered or certified
mail to the parties at the addresses set forth above or to such other address as
either party shall hereafter specify by notice to the other party. Irrespective
of the foregoing, notice of change of address shall be effective only upon
receipt.
9.5 Governing Law. This Agreement shall be construed in accordance with
and governed by the laws of the State of New York applicable to contracts made
and to be performed wholly within such state.
9.6 Arbitration. Any controversy or claim arising out of or relating to
this Agreement, the making, interpretation or the breach thereof, other than a
claim solely for injunctive relief for any alleged breach of the provisions of
Sections 6 or 7 as to which the parties shall have the right to apply for
specific performance to any court having equity jurisdiction, shall be resolved
by arbitration in New York, New York in accordance with the Commercial
Arbitration Rules of the American Arbitration Association and judgment upon the
award rendered by the arbitrators may be entered in any court having
jurisdiction thereof and any party to the arbitration may, if such party so
elects, institute proceedings in any court having jurisdiction for the specific
performance of any such award. The powers for the arbitrator or arbitrators
shall include, but not be limited to, the awarding of injunctive relief. The
arbitrator shall include in any award in the prevailing party's favor the amount
of his or its reasonable attorney's fees and expenses and all other reasonable
costs and expenses of the arbitration. In the event the arbitrator
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does not rule in favor of the prevailing party in respect of all the claims
alleged by such party, the arbitrator shall include in any award in favor of the
prevailing party the amount of his or its reasonable costs and expenses of the
arbitration as he deems just and equitable under the circumstances. Except as
provided above, each party shall bear his or its own attorney's fees and
expenses and the parties shall bear equally all other costs and expenses of the
arbitration.
9.7 Assignability. This Agreement, and the Executive's rights and
obligations hereunder, may not be assigned by the Executive. The Company may
assign its rights, together with its obligations hereunder, only to a successor
by merger or by the purchase of all or substantially all of the assets and
business of the Company and such rights and obligations shall inure to, and be
binding upon, any such successor.
9.8 Binding Effect. This Agreement shall be binding upon and shall inure
to the benefit of the parties and their respective legal representatives, heirs,
permitted successors and permitted assigns.
9.9 Headings and Word Meanings. Headings and titles in this Agreement
are for convenience of reference only and shall not control the construction or
interpretation of any provisions hereof. The words "herein," "hereof,"
"hereunder" and words of similar import, when used anywhere in this Agreement,
refer to this Agreement as a whole and not merely to a subdivision in which such
words appear, unless the context otherwise requires. The singular shall include
the plural unless the context otherwise requires.
9.10 Separability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first above written.
INFINITE TECHNOLOGY GROUP, INC.
By: /s/ Xxxxx XxXxxxx
---------------------------
Name: Xxxxx XxXxxxx
Title: President and Chief Executive Officer
/s/ Xxxx Xxxxxxxx
------------------------------
Xxxx Xxxxxxxx
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EXHIBIT A
(FORM OF OPTION)
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NEITHER THE OPTION REPRESENTED BY THIS CERTIFICATE
NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR UNDER ANY STATE SECURITIES LAW AND MAY
NOT BE TRANSFERRED IN VIOLATION OF SUCH ACT OR LAWS,
THE RULES AND REGULATIONS THEREUNDER OR THE
PROVISIONS OF THIS OPTION CERTIFICATE
INFINITE TECHNOLOGY GROUP LTD.
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OPTION TO PURCHASE
SHARES OF COMMON STOCK
AS HEREIN DESCRIBED
DATED: AS OF SEPTEMBER 1, 1999
THIS CERTIFIES THAT, FOR VALUE RECEIVED
NAME: Xxxx Xxxxxxxx ("Optionee")
ADDRESS: 0000 00xx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
or permitted assigns (the "Holder") are entitled, subject to the terms set forth
herein, to purchase from Infinite Technology Group Ltd. (the "Company"), a New
York corporation, having its offices at 00 Xxxxxxx Xxxxxxxx, Xxxxxxx, Xxx Xxxx
00000, Three Hundred Thousand (300,000) shares of the Company's common stock
subject to adjustment as set forth herein.
1. As used herein:
(a) "Common Stock" or "Common Shares" shall initially refer to the
Company's common stock including Underlying Securities, as more fully set forth
in Section 5 hereof.
(b) "Option Price" or "Common Share Price" shall be Eight and 50/100
Dollars ($8.50) per share.
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(c) "Underlying Securities" or "Underlying Shares"or "Underlying Stock"
shall refer to the Common Shares or other securities or property issuable or
issued upon exercise of this Option.
2. (a) The purchase rights represented by this Option may be exercised by
the Holder hereof, in whole or in part (but not as to less than a whole Common
Share), as to the vested portion (as defined below) of this Option only, at any
time, and from time to time, during the period commencing this date, until
September 1, 2009 (the "Expiration Date"), by the presentation of this Option,
with the purchase form attached duly executed, at the Company's office (or such
office or agency of the Company as it may designate in writing to the Holder
hereof by notice pursuant to Section 13 hereof), specifying the number of Common
Shares as to which the Option is being exercised, and upon payment by the Holder
to the Company in cash or by certified check or bank draft, in an amount equal
to the Option Price times the number of Common Shares then being purchased
hereunder. This Option shall vest as follows (conditioned only on the Optionee's
continued employment by the Company or a subsidiary of the Company):
(i) As to Twenty-Five Thousand (25,000) of the Underlying Shares, on the
date hereof;
(ii) As to Thirty-Five Thousand (35,000) of the Underlying Shares, on the
first anniversary of the date hereof;
(iii) As to Forty-Five Thousand (45,000) of the Underlying Shares, on the
second anniversary of the date hereof;
(iv) As to Fifty-Five Thousand (55,000) of the Underlying Shares, on the
third anniversary of the date hereof;
(v) As to Sixty-Five Thousand (65,000) of the Underlying Shares, on the
fourth anniversary of the date hereof; and
(vi) As to Seventy-Five Thousand (75,000) of the Underlying Shares, on the
fifth anniversary of the date hereof.
The portion of this Option which has vested pursuant to (i) to (vi) above
shall be referred to as the "vested portion".
(b) The Company agrees that the Holder hereof shall be deemed the record
owner of such Underlying Securities as of the close of business on the date on
which this Option shall have been presented and payment made for such Underlying
Securities as aforesaid. Certificates for the Underlying Securities so obtained
shall be delivered to the Holder hereof within a reasonable time, not exceeding
seven (7) days, after the rights represented by this Option shall have been so
exercised. If this Option shall be exercised in part only or transferred in part
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subject to the provisions herein, the Company shall, upon surrender of this
Option for cancellation or partial transfer, deliver a new Option evidencing the
rights of the Holder hereof to purchase the balance of the Underlying Shares
which such Holder is entitled to purchase hereunder.
3. Subject to the provisions of Section 8 hereof, (i) this Option is
exchangeable at the option of the Holder at the aforesaid office of the Company
for other Options of different denominations entitling the Holder thereof to
purchase in the aggregate the same number of Common Shares as are purchasable
hereunder; and (ii) this Option may be divided or combined with other Options
which carry the same rights, in either case, upon presentation hereof at the
aforesaid office of the Company together with a written notice, signed by the
Holder hereof, specifying the names and denominations in which new Options are
to be issued, and the payment of any transfer tax due in connection therewith.
4. Subject and pursuant to the provisions of this Section 4, the Option
Price and number of Common Shares subject to this Option shall be subject to
adjustment from time to time as set forth hereinafter in this Section 4.
(a) If the Company shall at any time subdivide its outstanding Common
Shares by recapitalization, reclassification, stock dividend, or split-up
thereof or other means, the number of Common Shares subject to this Option
immediately prior to such subdivision shall be proportionately increased and the
Option Price shall be proportionately decreased, and if the Company shall at any
time combine the outstanding Common Shares by recapitalization, reclassification
or combination thereof or other means, the number of Common Shares subject to
this Option immediately prior to such combination shall be proportionately
decreased and the Option Price shall be proportionately increased. Any such
adjustment to the Option Price shall become effective at the close of business
on the record date for such subdivision or combination.
(b) If the Company after the date hereof shall distribute to all of the
holders of its Common Shares any securities including, but not limited to Common
Shares, or other assets (other than a cash distribution made as a dividend
payable out of earnings or out of any earned surplus legally available for
dividends under the laws of the jurisdiction of incorporation of the Company),
the Board of Directors shall be required to make such equitable adjustment in
the Option Price and the type and/or number of Underlying Securities in effect
immediately prior to the record date of such distribution as may be necessary to
preserve to the Holder of this Option rights substantially proportionate to and
economically equivalent to those enjoyed hereunder by such Holder immediately
prior to the happening of such distribution. Any such adjustment made reasonably
and in good faith by the Board of Directors shall be final and binding upon the
Holders and shall become effective as of the record date for such distribution.
(c) No adjustment in the number of Common Shares subject to this Option
or the Option Price shall be required under this Section 4 unless such
adjustment would require an increase or decrease in such number of shares of at
least 1% of the then adjusted number of Common Shares issuable upon exercise of
the Option, provided, however, that any adjustments
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which by reason of the foregoing are not required at the time to be made shall
be carried forward and taken into account and included in determining the amount
of any subsequent adjustment. If the Company shall make a record of the Holders
of its Common Shares for the purpose of entitling them to receive any dividend
or distribution and legally abandon its plan to pay or deliver such dividend or
distribution then no adjustment in the number of Common Shares subject to the
Option shall be required by reason of the making of such record.
(d) In case of any capital reorganization or reclassification or change
of the outstanding Common Shares (exclusive of a change covered by Section 4(a)
hereof or which solely affects the par value of such Common Shares) or in the
case of any merger or consolidation of the Company with or into another
corporation (other than a consolidation or merger in which the Company is the
continuing corporation and which does not result in any reclassification,
change, capital reorganization or change in the ownership of the outstanding
Common Shares), or in the case of any sale or conveyance or transfer of all or
substantially all of the assets of the Company and in connection with which the
Company is dissolved, the Holder of this Option shall have the right thereafter
(until the expiration of the right of exercise of this Option) to receive upon
the exercise hereof, for the same aggregate Option Price payable hereunder
immediately prior to such event, the kind and amount of shares of stock or other
securities or property receivable upon such reclassification, change, capital
reorganization, merger or consolidation, or upon the dissolution following any
sale or other transfer, by a holder of the number of Common Shares of the
Company equal to the number of common shares obtainable upon exercise of this
Option immediately prior to such event; and if any reorganization,
reclassification, change, merger, consolidation, sale or transfer also results
in a change in Common Shares covered by Section 4(a), then such adjustment shall
be made pursuant to both this Section 4(d) and Section 4(a). The provisions of
this Section 4(d) shall similarly apply to successive reclassification, or
capital reorganizations, mergers or consolidations, changes, sales or other
transfers.
(e) The Company shall not be required to issue fractional Common Shares
upon any exercise of this Option. As to any final fraction of a Common Share
which the Holder of this Option would otherwise be entitled to purchase upon
such exercise, the Company shall pay a cash adjustment in respect of such final
fraction in an amount equal to the same fraction of the "current market price"
(as defined in Section 4(f) below) of a share of such stock on the business day
preceding the day of exercise. The Holder of this Option, by his acceptance
hereof, expressly waives any right to receive any fractional shares of stock
upon exercise of this Option.
(f) As used herein, the "current market price" per share of Common Stock
on any date shall be: (i) if the Common Stock is listed or admitted for trading
on any national securities exchange, the last reported sales price as reported
on such national securities exchange; (ii) if the Common Stock is not listed or
admitted for trading on any national securities exchange, the average of the
last reported closing bid and asked quotation for the Common Stock as reported
on the Automated Quotation System of NASDAQ or a similar service if NASDAQ is
not reporting such information; (iii) if the Common Stock is not listed or
admitted for trading on
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any national securities exchange or quoted by NASDAQ or a similar service, the
average of the last reported bid and asked quotation for the Common Stock as
quoted by a market maker in the Common Stock (or if there is more than one
market maker, the bid and asked quotation shall be obtained from two market
makers and the average of the lowest bid and highest asked quotation shall be
the "current market price"); or (iv) if the Common Stock is not listed or
admitted for trading on any national securities exchange or quoted by NASDAQ and
there is no market maker in the Common Stock, the fair market value of such
shares as determined by the Board of Directors.
(g) Irrespective of any adjustments pursuant to this Section 4 in the
Option Price or in the number, or kind, or class of shares or other securities
or other property obtainable upon exercise of this Option, and without impairing
any such adjustment the certificate representing this Option may continue to
express the Option Price and the number of Common Shares obtainable upon
exercise at the same price and number of Common Shares as are stated herein.
(h) Until this Option is exercised, the Underlying Shares, and the
Option Price shall be determined exclusively pursuant to the provisions hereof.
(i) Upon any adjustment of this Option the Company shall give written
notice thereof to the Holder which notice shall include the number of Underlying
Securities purchasable and the price per share upon exercise of this Option and
shall set forth in reasonable detail the events which resulted in such
adjustment
5. For the purposes of this Option, the terms "Common Shares" or "Common
Stock" shall mean (i) the class of stock designated as the common stock of the
Company on the date set forth on the first page hereof or (ii) any other class
of stock resulting from successive changes or reclassification of such Common
Stock consisting solely of changes from par value to no par value, or from no
par value to par value or changes in par value. If at any time, as a result of
an adjustment made pursuant to Section 4, the securities or other property
obtainable upon exercise of this Option shall include shares or other securities
of another corporation or other property, then thereafter, the number of such
other shares or other securities or property so obtainable shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Common Shares contained in
Section 4, and all other provisions of this Option with respect to Common Shares
shall apply on like terms to any such other shares or other securities or
property. Subject to the foregoing, and unless the context requires otherwise,
all references herein to Common Shares shall, in the event of an adjustment
pursuant to Section 4, be deemed to refer also to any other shares or other
securities or property when obtainable as a result of such adjustments.
6. The Company covenants and agrees that:
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(a) During the period within which the rights represented by this Option
may be exercised, the Company shall, at all times, reserve and keep available
out of its authorized capital stock, solely for the purposes of issuance upon
exercise of this Option, such number of its Common Shares as shall be issuable
upon the exercise of this Option and at its expense will obtain the listing
thereof on all quotation systems or national securities exchanges on which the
Common Shares are then listed; and if at any time the number of authorized
Common Shares shall not be sufficient to effect the exercise of this Option, the
Company will take such corporate action as may be necessary to increase its
authorized but unissued Common Shares to such number of shares as shall be
sufficient for such purpose; the Company shall have analogous obligations with
respect to any other securities or property issuable upon exercise of this
Option;
(b) All Common Shares which may be issued upon exercise of the rights
represented by this Option will, upon issuance, be validly issued, fully paid,
non-assessable and free from all taxes, liens and charges with respect to the
issuance thereof; and
(c) All original issue taxes payable in respect of the issuance of
Common Shares upon the exercise of the rights represented by this Option shall
be borne by the Company, but in no event shall the Company be responsible or
liable for income taxes or transfer taxes upon the transfer of any Options.
7. Until exercised, this Option shall not entitle the Holder hereof to any
voting rights or other rights as a shareholder of the Company.
8. This Option may not be transferred, sold or assigned except to, in whole
or in part (i) any entity controlled by, or under common control with, the
Optionee, (ii) the spouse, lineal descendants, estate or a trust for the benefit
of any of the foregoing, or (iii) by operation of law. No transfer of all or a
portion of the Option (as permitted hereby) or the Underlying Securities shall
be made at any time unless the Company shall have been supplied with evidence
reasonably satisfactory to it that such transfer is not in violation of the
Securities Act of 1933, as amended (the "Act"). Subject to the satisfaction of
the aforesaid condition and upon surrender of this Option or certificates for
any Underlying Securities at the office of the Company, the Company shall
deliver a new Option or Options or new certificate or certificates for
Underlying Securities to and in the name of the permitted assignee or assignees
named therein. Any such certificate may bear a legend reflecting the
restrictions on transfer set forth herein.
9. If this Option is lost, stolen, mutilated or destroyed, the Company
shall, on such terms as to indemnity or otherwise as the Company may reasonably
impose, issue a new Option of like denomination, tenor and date. Any such new
Option shall constitute an original contractual obligation of the Company,
whether or not the allegedly lost, stolen, mutilated or destroyed Option shall
be at any time enforceable by anyone.
10. Any Option issued pursuant to the provisions of Section 9 hereof, or
upon transfer, exchange, division or partial exercise of this Option or
combination thereof with another Option
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or Options, shall set forth each provision set forth in Sections 1 through 15,
inclusive, of this Option as each such provision is set forth herein, and shall
be duly executed on behalf of the Company by a duly authorized officer.
11. Upon surrender of this Option for transfer or exchange or upon the
exercise hereof, this Option shall be canceled by the Company, and shall not be
reissued by the Company and, except as provided in Section 2 in case of a
partial exercise, Section 3 in case of an exchange or Section 8 in case of a
transfer, or Section 9 in case of mutilation. Any new Option certificate shall
be issued promptly but not later than fifteen (15) days after receipt of the old
Option certificate.
12. This Option shall inure to the benefit of and be binding upon the
Holder hereof, the Company and their respective successors, heirs, executors,
legal representatives and assigns.
13. All notices required hereunder shall be in writing and shall be deemed
given when telegraphed, delivered personally or within two (2) days after
mailing when mailed by certified or registered mail, return receipt requested,
to the party to whom such notice is intended, at the address of such other party
as set forth on the first page hereof, or at such other address of which the
Company or Holder has been advised by the notice hereunder.
14. In the event that any one or more of the provisions contained herein,
or the application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be in any way impaired thereby, it being
intended that all of the rights and privileges of the Holders shall be
enforceable to the fullest extent permitted by law.
15. The validity, interpretation and performance of this Option and of the
terms and provisions hereof shall be governed by the laws of the State of New
York applicable to agreements entered into and performed entirely in such state.
IN WITNESS WHEREOF, the parties have caused this Option to be executed
as of September 1, 1999.
INFINITE TECHNOLOGY GROUP LTD.
By:
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Name: Xxxxx XxXxxxx
Title: President and Chief Executive Officer
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Xxxx Xxxxxxxx
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PURCHASE FORM
TO BE EXECUTED UPON EXERCISE OF OPTION
The undersigned record holder of the within Option hereby irrevocably
elects to exercise the right to purchase _________ Common Shares of Infinite
Technology Group Ltd., evidenced by the within Option, according to the terms
and conditions thereof, and herewith makes payment of the purchase price
in full.
The undersigned requests that certificates for such shares shall be
issued in the name set forth below.
Dated: ___________, _____
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Signature
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Print Name of Signatory
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Name to whom certificates are
to be issued if different from above
------------------------------------------
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Address
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Social Security No. or other identifying
number
If said number of shares shall not be all the shares purchasable under the
within Option, the undersigned requests that a new Option for the unexercised
portion shall be registered in the name of:
------------------------------------------
(Please Print)
------------------------------------------
------------------------------------------
Address
------------------------------------------
Social Security No. or other identifying
number
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Signature
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Print Name of Signatory
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FORM OF ASSIGNMENT
FOR VALUE RECEIVED, __________ hereby sells, assigns and transfers to
__________ (Social Security or I.D. No. __________) the within Option, or that
portion of this Option purchasable for _______ common shares together with all
rights, title and interest therein, and does hereby irrevocably constitute and
appoint _____________ attorney to transfer such Option on the register of the
within named Company, with full power of substitution.
--------------------------------
(Signature)
Dated: __________, _____
Signature Guaranteed:
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