Exhibit 10.1
EMPLOYMENT AGREEMENT
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This Employment Agreement ("Agreement") made as of the "Effective Date" (defined
below), by and between Corporate Sports Incentives, Inc. d/b/a Utix Corporation,
Inc. ("Utix" or the "Company"), and Xxxx X. Xxxxx (the "Executive").
In consideration of the mutual covenants and promises contained herein, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged by the parties hereto, the parties agree as follows:
I. Title
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The Executive's title will be Chief Financial Officer.
II. Term of Employment
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The Company hereby agrees to employ the Executive and the Executive
hereby accepts employment with the Company for a period of one (1) year
commencing on the Effective Date. At the end of the initial term, or
any additional term, this Agreement shall automatically be extended for
an additional one (1) year, unless either Executive or Company gives
written notice to the other of its desire to terminate this Agreement
at least six (6) months prior to the scheduled end of the term.
III. Responsibilities of the Executive
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The Executive agrees to undertake the duties and responsibilities
inherent in the position described above, those described in the
Company's By-Laws and such other duties and responsibilities as the
Company shall from time to time reasonably assign. Executive shall
report directly to the Chief Executive Officer. Executive shall devote
his full time and best efforts to the Company. Any outside activities
must be cleared with CEO in advance. Current outside activities must be
approved and listed as part of this agreement.
IV. Expense Reimbursement
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The Company will advance and/or reimburse the Executive for all
reasonable travel and other business expenses incurred in furthering
the business of the Company and in accordance with the Company's travel
and business expense policy. This will include reimbursement of cell
phone expenses per company policy and professional fees and licenses,
subject to CEO approval.
V. Annual Base Salary
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The Executive shall receive an annual base salary of $192,000. This
salary shall be reviewed periodically by the Compensation Committee of
the Board; and the Board in its sole discretion, may increase the
Annual Base Salary for part or all of the remaining term.
VI. Bonuses
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Company Initial: AGR
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Executive Initial: MLP
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Executive shall receive a fast start bonus of $8,000 for business
planning, modeling and efficient transition of the finance function six
months from the anniversary date of this agreement, per review and
approval by CEO.
Executive shall also participate in the Executive Bonus Program with a
targeted Annual Bonus of 30% of the then Annual Base Salary. The Annual
Bonus for Executive shall be payable in cash and will be due the month
following the delivery of the Company's annual operating results to the
Board of Directors.
Such bonus is subject to performance evaluation and achievement of the
following:
o Budget variance and general operating performance.
o Cost savings measures implemented.
o P&L performance versus plan with capitalization assumptions
fulfilled.
o Public company filings for accuracy, timeliness and
assistance with elevating the Company's listing.
o Execution of merger and/or acquisition transactions as
directed by the Board.
VII. Stock Options
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Executive is granted options pursuant to the Company's Stock Options
Plan ("Plan") to purchase 1.5% issued and outstanding shares
outstanding at time of employment. The exercise price shall be equal to
the initial price established in the private offering of Company common
stock made as of the Effective Date. Such options shall expire ten
years from the date of issue. The options shall vest at the rate of 25%
on the first anniversary of the grant and at a rate of 2.10% per month
for the next 36 months thereafter, subject to Articles IX and XI below.
Executive agrees to enter into a stock option agreement with Company
containing the above terms and provisions of the options together with
such other terms and conditions as counsel for the Company may
reasonably require to assure compliance with applicable state and
federal law and stock exchange requirements in connection with the
issuance of Company common stock upon exercise of options to be granted
as provided herein, or as may be required to comply with the Plan.
VIII. Benefits
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Executive shall be entitled to receive all benefits generally made
available to senior executives of the Company ("Benefits"). Executive
shall receive four weeks of vacation annually upon completion of first
six month period of employment.
IX. Termination by Company
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Company shall have the right to terminate this Agreement under the
following circumstances:
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Company Initial: AGR
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Executive Initial: MLP
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A. For cause upon notice from the Company Board of Directors.
For purposes hereof, "cause" for termination shall include
(a) embezzlement, theft, larceny, material fraud, or other
acts of dishonesty; (b) conviction of or entrance of a plea
of guilty or nolo contendere to a felony or other crime
which has or may have a material adverse effect on the
Executive's ability to carry out his duties under this
Agreement or upon the reputation of the Company; (c) conduct
involving moral turpitude; and (d) upon a good faith finding
by the Board of Directors of gross insubordination or
misconduct during the term hereof which materially xxxxx or
damages the Company.
B. Upon the death or disability of the Executive. As used in
this Agreement, the term "disability" shall mean the
inability of the Executive, due to a physical and/or mental
disability, to perform the essential functions of his/her
job for a period of six (6) consecutive months.
C. For poor performance of Executive as determined by the Board
of Directors, after (i) such performance issues have been
communicated in writing to the Executive and (ii) the
Executive has failed to cure deficiencies communicated
within a reasonable time period.
X. Rights Following Termination by Company
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Upon termination of Executive by Company, the following shall apply:
Upon termination pursuant to Paragraph A ("for cause") of Section IX,
the Company shall have no further responsibility to Executive except to
pay the portion of (i) the Annual Base Salary, and (ii) Annual Bonus
earned and pro-rated to and including the last day of employment shall
be paid to Executive in accordance with bonus payment schedules of
other Executives. All stock options not yet vested as of the last day
of employment are canceled.
Upon termination pursuant to Paragraph B ("death or disability") of
Section IX, the Company shall continue to pay to the Executive, his
surviving spouse, if living, otherwise to his estate, the Annual Base
Salary plus his any accrued bonus which shall be computed at a rate of
110% of the previous years bonus prorated for the partial year or an
amount as negotiated between the parties and provide full benefits
(pursuant to Article VIII) for nine (9) months following the last day
of employment in the event of Executive's death or from the date the
Executive is deemed disabled (as defined in Section IX B).
Upon termination of this agreement or termination pursuant to Paragraph
C ("poor performance") of Section IX, the Company shall provide
Executive with the following severance package:
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Company Initial: AGR
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Executive Initial: MLP
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o Base Salary and Benefits and Annual Bonus for a period of
nine (9) months following the date of termination. Base
Salary continuation payments shall be payable either in a
lump sum within 10 days from the date of termination or as
otherwise scheduled as negotiated by the parties. Benefits
will continue to be paid by the Company in full for the nine
(9) month period following termination. Bonuses shall be
paid to Executive in a lump sum within 10 days from the date
of termination and shall be computed at a rate of 110% of
the previous years bonus prorated for the partial year or an
amount as negotiated between the parties.
o All stock options, warrants, restricted stock and other
equity arrangements vested as of the date of termination,
pursuant to the terms of Section X and Paragraph C of
Section IX hereof, remain with Executive and 50% of the
then-remaining unvested portion of the restricted stock
shall automatically become vested and granted, all remaining
unvested restricted stock grants shall be canceled
XI Termination by Executive
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Executive shall have the right to terminate his employment under this
Agreement upon thirty (30) days' prior written notice to Board provided
said notice is delivered to the Chairman of the Board within 60 days
following the occurrence of either A below or resigns in accordance
with B below.
A. Company materially reduces Executive's title, scope of authority,
duties or responsibilities hereunder or modifies this agreement
without Executive's written consent. Executive's principal
workplace is relocated such that Executives commute is increased
by more than 20 miles. Executive's scope of authority, duties or
responsibilities shall not be deemed materially reduced for
purposes hereof solely by virtue of the fact that Company is (or
substantially all of its assets are) sold to, or is combined
with, another entity provided that following such an event (i)
Executive shall continue to have the same scope of authority,
duties and responsibilities with respect to Company's Universal
Ticket products, sales and marketing operations, and retail
distribution business and (ii) Executive shall report directly to
the then Chief Executive Officer or Board of Directors of the
entity that acquires the Company or substantially all of its
assets; or
B. Executive announces the termination of his employment agreement
in writing to the Board of Directors as a "voluntary
resignation."
XII Rights Following Termination by Executive
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If this Agreement is terminated pursuant to Sections A of Article XI,
the Company shall pay Executive within 30 days of the date of
termination the following severance package:
o Base Salary and Benefits and Annual Bonus for a period of
nine (9) months following the date of termination. Base
Salary continuation payments shall be payable either in a
lump sum within 10 days from the date of termination or as
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Company Initial: AGR
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Executive Initial: MLP
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otherwise scheduled as negotiated by the parties. Benefits
will continue to be paid by the Company in full for the nine
(9) month period following termination. Bonuses shall be
paid to Executive in a lump sum within 10 days from the date
of termination and shall be computed at a rate of 150% of
the previous years bonus prorated for the partial year or an
amount as negotiated between the parties.
o All stock options, warrants, restricted stock and other
equity arrangements vested as of the date of termination
remain with Executive and 100% of the then-remaining
unvested portion of the restricted stock shall automatically
become vested and granted. .
If this Agreement is terminated pursuant to Section B of Article XI
(voluntary resignation), the Company shall have no further
responsibility to Executive except to pay the portion of (i) Annual
Base Salary, and (ii) Annual Bonus earned to and including the last day
of employment and any statutory benefits. Further, all stock options
not yet vested as of the last day of employment are canceled. All stock
options, warrants and other equity arrangements vested as of the date
of termination remain with Executive and Executive has 90 days from the
date of termination to exercise all such options, warrants or other
equity arrangements. As of the 91st day following the date of
termination, all unexercised options, warrants and other equity
arrangements shall be canceled.
XIII. Change of Control Termination
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If within twelve months following a Change of Control, as hereinafter
defined, the Executive's employment is terminated for a reason (or no
reason) other than for disability, death or for cause, the termination
shall be deemed a "Change of Control Termination" and this Article
shall determine Executive's severance package in lieu of provisions
described under Articles X and XII above. In the event of a Change of
Control Termination, the Company shall pay to the Executive; (i) Base
Salary and Benefits (pursuant to Article VIII) and Annual Bonus for a
period of twelve (12) months following the date of termination. Base
Salary continuation payments shall be payable either in a lump sum
within 10 days from the date of termination or as otherwise scheduled
as negotiated by the parties. Benefits will continue to be paid by the
Company in full for the twelve (12) month period following termination.
Bonuses shall be paid to Executive in a lump sum within 10 days from
the date of termination and shall be computed at a rate of 150% of the
previous year's bonus or an amount as negotiated between the parties
but in no event shall such amount be less than 60% of the Executive's
then current Base Salary, and (ii) All stock options, warrants,
restricted stock and other equity arrangements vested as of the date of
termination remain with Executive and 100% of the then-remaining
unvested portion of all stock options, warrants, restricted stock and
any other equity arrangements shall automatically become vested,
exercisable and/or granted as the case may be.
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Company Initial: AGR
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Executive Initial: MLP
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"Change of Control" shall be deemed to have occurred if at any time
after the Effective Date of this Agreement any person or group
(excluding the shareholders of the Company the date before the Public
Merger), directly or indirectly, controls more than 50% of the combined
voting power of the voting securities of the Company.
XIV. Binding Agreement
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This Agreement shall be binding upon and inure to the benefit of
Executive, his heirs, distributes and assigns and the Company, its
successors (e.g. Public Company via Public Merger), and assigns.
Executive may not, without the express written permission of the
Company, assign or pledge any rights or obligations hereunder to any
person, firm or corporation. No amendment or modification of this
Agreement shall be valid unless evidenced by a written instrument
executed by both parties hereto.
XV. Governing Law
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This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware.
All notices which a party is required or may desire to give to the
other party under or in connection with this Agreement shall be given
in writing via either overnight service or U.S. Mail certified return
receipt requested, by addressing the same to the other party as
follows:
If to Executive to:
Xxxx X. Xxxxx
0 Xxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
If to Company to:
Xxxxxxx X. Xxxx, CEO
Utix Corporation
0 Xxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Or such other place as may be designated in writing by like
notice.
XVI Confidential Information of Utix and its Clients
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In the course of my employment by the company, I may become aware of
confidential information relating to the business of Utix or its
clients. I will never use or disclose any confidential information of
Utix or any of its customers, including, without limitation, customer
lists, market research, strategic plans or other information or
discoveries, inventions, improvements, know-how, methods or other trade
secrets, whether developed by me or others. I will comply with the
Company's policies and procedures for the protection of confidential
information.
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Company Initial: AGR
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Executive Initial: MLP
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Further, my obligation not to disclose or use such confidential
information will continue for a period of five years after the
termination of my employment.
XVII Intellectual Property
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The term "intellectual property," as used in this paragraph, includes
all inventions, discoveries, concepts, ideas, systems, methods,
processes, works, computer programs, and computer software (whether or
not patentable or copyrightable or constituting trade secrets). I will
promptly disclose to the Company, and hereby agree to assign to the
Company all of my full right, title and interest in all "intellectual
property" conceived of or created by other employees of Utix or by
clients of Utix during the period of my employment by the Company. I
understand that I will have no rights to any royalties or other
compensation for the use of any intellectual property covered by this
Agreement, unless expressly agreed to in writing by the Company.
However, this paragraph 3 shall not apply to "intellectual property"
that meets all of the following requirements: (i) it does not relate to
the actual business (or business under consideration that is known to
me) or research and development of Utix, (ii) it is made or conceived
of by me during the times of not working as an employee of the Company
(whether or not during the normal business hours or on Company
premises), and (iii) it is not derived from, and is made without the
use of, any intellectual property or confidential information of Utix.
XVIII Patents
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If so requested by the Company, I will cooperate with the Company in
doing whatever is appropriate to apply for, obtain and enforce patents
(U.S. or foreign or both) for the Company or its clients, on any
inventions which are made by me (either alone or jointly with other)
during the period of employment. This obligation will continue after
termination of my employment, provided that (a) all expenses required
to apply for, obtain and enforce any patents will be paid by the
Company, and (b) if I am required to spend any substantial amount of
time to carry out my obligations, I will be entitled to reasonable
compensation from the Company for that time. I understand that the
Company will have no obligation to me to apply for or obtain any such
patents.
XIX Writings
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Any written, printed materials or software while I prepare during the
course of my employment and solely related to the direct business of
the Company will be the property of the Company, and if so requested by
the Company, I will do whatever is appropriate to obtain copyright
protection for such materials for the benefit of the Company. I will
not publish or cause the publication of any written or printed
materials relating to my work for Utix or its clients without the prior
written approval of the Company. All copyrightable works that I create
during the term of the agreement and for the sole benefit of the
Company shall be considered "works made for hire."
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Company Initial: AGR
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Executive Initial: MLP
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XX Company Property
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Upon the termination of my employment (or during my employment, if so
requested by the Company), I will deliver to the authorized
representative of the Company (a) all credit cards, identification
cards, badges, keys and other items which have been provided to me by
the Company, (b) all tools, equipment, and software provided to me by
the Company and (c) all the written and printed materials, records,
tapes and other media which relate to the business of the Company. I
will not retain any copies of duplicates of the items described above,
except that I may retain copies of my own records relating to my
compensation from the Company, a copy of this Employee Agreement (and
any related amendments), documents related to Executive's equity
ownership, and my personal copies of any papers or correspondence which
have been written by me and have been published without restriction. In
the event that I fail to return any company property upon termination
of my employment or as otherwise directed, I authorize the Company to
offset the replacement cost of such property from my wages.
XXI Non-Compete
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In recognition of the sensitivity of the confidential and proprietary
information of Utix to which I have access during my employment with
the Company, and the degree of competition in the fields in which Utix
has chosen to engage, I agree that, for a period of one year after the
date of termination of my employment with the Company for any reason
(the "Restricted Period") , I will not engage in any business, whether
as an employee, consultant or otherwise that is competitive with any
business activity of Utix with which I was directly involved during the
past six months of employment with Utix. Further, I will not accept
employment or a consulting position with any business which is, or at
any time within one year prior to my termination, was a customer of
Utix without the prior written consent of the CEO or other authorized
executive of Utix. I may, however, own 5% or less of the securities of
any publicly traded company.
XXII Soliciting Employees and Clients
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I agree that while the Company's employ, and thereafter during the
Restricted Period, I will not, and will not assist anyone else to,
directly or indirectly, solicit or induce any of Utix's employees to
terminate their employment with Utix or divert or take away from Utix
any person, company or entity which on the date hereof is, or hereafter
during the term of my employment by the Company becomes a customer,
client, supplier or independent contractor of Utix.
XXIII Effective Date
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This Agreement shall become effective and all terms and conditions in
full force as of January 23, 2006. . Executive shall have a start date
of March 1, 2006 and shall use the time between the effective date and
the start date to transaction his other activities. During the
transition period, Executive shall use his best efforts to make himself
available to the Company on an as needed basis. All terms and
conditions of this agreement shall be in full force as of the effective
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Company Initial: AGR
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Executive Initial: MLP
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date of this agreement, however during the transition period, executive
shall receive compensation in accordance with Section XXV, Transition
Compensation.
XXIV Attorney Fees
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In the event a dispute arises as to the interpretation, enforcement
and/or breach of this Agreement, the prevailing party shall be entitled
to reasonable attorney's fees and all cost incurred.
XXV Transition Compensation
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The Company has requested that the Executive be available to the
Company in the period as of the effective date and prior to the
executives start date, ("Transition Period"). All of the terms and
conditions of this agreement shall remain in full force as of the
effective date of this agreement, however during this Transition
Period, Executive shall be compensated at a rate of $125 per hour plus
expenses, for his services provided to the Company.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
23rd day of January, 2006.
EXECUTIVE: Utix Group, Inc.
/s/ Xxxx X. Xxxxx /s/ Xxxxxxx X. Xxxx
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Xxxx X. Xxxxx Date Xxxxxxx X. Xxxx Date
President & CEO
Exhibit A
Executive's Outside Activities approved in accordance with Section III.
Board and/or Advisor:
Emergent Game Technologies, Inc.
G2G Entertainment, Inc.
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Company Initial: AGR
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Executive Initial: MLP
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