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Exhibit (10)(ii)(12)
EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement (Agreement) is made and effective this 29th
Day of June 2001 by and between Infotopia, Inc. (Company) and Xxxxxxx Xxxxx
(Executive).
NOW, THEREFORE, the parties hereto agree as follows:
1. EMPLOYMENT
The Company hereby agrees to employ the Executive for a term beginning on the
date of this Agreement and ending June 29, 2004 as its General Counsel and the
Executive hereby accepts such employment in accordance with the terms of this
Agreement.
Notwithstanding the aforesaid, if this Agreement shall not have been terminated
in accordance with the provisions herein on or before June 29, 2004, the
Agreement shall automatically be extended from year to year unless (a) the
Agreement is terminated earlier in accordance with the provisions herein or (b)
on or after June 29, 2004, 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.
2. DUTIES OF THE EXECUTIVE
The Executive shall devote full-time attention and energy to the affairs of the
Company and/or its subsidiaries during the term of this Agreement and shall have
such duties, responsibilities and authority as shall be of the character
and dignity appropriate and consistent with the position and title of General
Counsel or such responsibility or authority as from time to time additionally
authorized by the Board of Directors. The Executive may engage in other
activities, such as activities including serving on the Board of Directors of
other corporations/organizations, and/or advising other
corporations/organizations in each case to the extent that such activities do
not materially detract from or limit the performance of the Executive's duties
under this Agreement, or inhibit in any material way the business of the Company
and its subsidiaries. The Executive will engage in no activity, paid or
otherwise, for a competitor of the Company so long as this Agreement is in
effect. The Executive shall perform all duties in a professional, ethical and
businesslike manner.
3. COMPENSATION
The Executive will be paid compensation during this Agreement as follows:
A.) A base salary, commencing June 29, 2001 of not less than $250,000.00
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 consistent 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.
B.) This Executive will be able to participate in an executive stock
options plan during the term of his Employment Agreement. Effective
June 29, 2001 the Executive will be entitled to purchase 1,250,000
shares of common stock at $1.04 per share; effective June 29, 2002 the
Executive will be entitled to purchase 625,000 shares of common stock
at $1.04 per share and effective June 29, 2003 the Executive will be
entitled to purchase 625,000 shares of common stock at $1.04 per share.
Shares for 2001 are considered vested upon signing of this Agreement.
The remaining shares will be considered vested provided the Company has
increased its Net Income by a minimum of 10% from the previous year.
These numbers are based on the Annual 10k which will be filed no later
than March 31, 2002 and each March thereafter. These options are
subject to any forward or reverse split by Infotopia, Inc.
C.) A bonus of 1% of the Total Net Income of Infotopia and all its
subsidiaries net income before taxes will be awarded each quarter to
the executive. This
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bonus is payable within seven business days from the filing of the 10Q
or 10K.
D.) This Agreement shall be binding upon and inure to the benefit of the
successors by merger or consolidation of Infotopia, Inc. (Ohio) and/or
Infotopia, Inc. (Nevada), or the sale of all or substantially all of
the assets of each or both of those companies, the permitted assigns of
the respective parties hereto, and Executive's estate, heirs,
executors, administrators, personal and legal representatives,
distributes and legatees. This Agreement and the rights and obligations
hereunder are personal to the Company, on the one hand, and the
Executive, on the other, except as contemplated hereby; provided,
however, that, in the event of the merger or consolidation of
Infotopia, Inc. (Ohio) and/or Infotopia, Inc. (Nevada), whether or not
either is the surviving or resulting corporation, or in the event of
the sale of all or substantially all of the assets of Infotopia, Inc.
(Ohio) and/or Infotopia, Inc. (Nevada) the surviving or resulting
corporation in the case of a merger or consolidation or the acquirer of
such assets in the case of such a sale of asses shall not constitute or
be deemed to be a termination of Executive's employment hereunder by
the Company. This Agreement shall not confer benefits on any person or
entity not referred to hereinabove in this Section 3.D.).
In the event that the acquiring company is not publicly traded on the
OTCBB, American Stock Exchange, New York Stock Exchange, NASDAQ
National or Small Cap Market then the options in this contract are
required to be bought out at $5,04 per share per option. The options in
this contract that are carried forward in the event of an acquisition
by a publicly traded company, are subject to any forward or reverse
splits.
4. BENEFITS
A.) Holidays: The Executive will be entitled to 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 five (5) weeks or
Twenty-five (25) paid vacation days per year effective as of the date
of the Agreement. Any unused vacation time will be carried to the
following year. Upon termination of this agreement all vacation time
shall be paid to the Executive.
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.) Medical and Group Life Insurance: Company agrees to include Executive
and his family members in the group medical and hospital plan of the
Company and provide group life insurance at no charge to the Executive,
in the amount of $2,000,000 payable to the Executive's estate.
Executive shall be responsible for any state or federal tax imposed
upon these benefits. If the Company does not provide Medical and Group
Life insurance the Executive may be reimbursed for his own coverage.
E.) The Company shall provide at its expense disability insurance for the
Executive for the term of this Agreement. If the Company does not
provide disability insurance the Executive may be reimbursed for his
own coverage.
F.) 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 June 29, 2001.
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G.) 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.
H.) In addition to any other compensation, the Executive is entitled to
$800 per month car allowance or the Executive may opt to lease a
company car up to $800 per month and be reimbursed for all expenses
including insurance, maintenance, repair and gas.
I.) 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
telephone/computer/modem installation and telephone/internet charges .
J.) Cell phone Reimbursement: The Executive shall be entitled to
reimbursement for cell phone service or the Company may at its expense
provide the Executive with such service.
K.) 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.
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 5 (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 5 (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.
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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 Executive is not elected or retained as General Counsel of the
Company.
B. The Company acts to materially reduce the Executive's position, title,
duties, authority or responsibilities.
C. 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 (A-I or ii)
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. 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."
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 3 year period. In the event that a
Change of Control Termination occurs before the Executive completes three (3)
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
three (3) years 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
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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,
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 not 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.
0000 Xxxxxxxx Xxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Attn.: Xxxxxx Xxxxx, CEO
If to the Executive:
Mr. Xxxxxxx Xxxxx
0000 Xxxxxxxx Xxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Attn.: Xxxxxxx Xxxxx, General Counsel
11. FINAL AGREEMENT
This Agreement terminates and supersedes all prior understandings or agreements
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on the subject matter hereof. This Agreement may be modified only by a further
writing that is duly executed by both parties.
12. GOVERNING LAW
This Agreement shall be construed and enforced in accordance with the internal
laws of the State of Ohio.
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 any term of this Agreement is held by a court of competent jurisdiction to be
invalid or unenforceable, then 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.
16. 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.
17. INTERPRETATION
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.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
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Xxxxxxx Xxxxx
Executive's Signature and Acceptance
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Xxxxxx Xxxxxxx Xxxxxx Xxxxx
President CEO
Infotopia, Inc. Infotopia, Inc.
