EXHIBIT 10.4
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement"] made as of the "Effective Date" (defined
below), by and between Corporate Sports Incentives, Inc. d/b/u UTIX Corporation,
Inc. (" UTIX" or the "Company"), and Xxxxxxx X. Xxxx (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
The Executive's title will be President & Chief Executive Officer.
II. TERM OF EMPLOYMENT
The Company hereby agrees to employ the Executive and the Executive
hereby accepts employment with the Company for a period of four (4)
years commencing on the Effective Date.
III RESPONSIBILITIES OF THE EXECUTIVE
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 Chairman of the Board.
Executive shall devote his full time and best efforts to the Company.
Company agrees to appoint Executive to the Board as of the Effective
Date and nominate Executive as a Board candidate on the management
proposed slate throughout the tenure of his employment hereunder. Should
Executive elect to resign from Board, such resignation shall not, of
itself, effect a termination or breach of this Agreement.
IV EXPENSE REIMBURSEMENT
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.
V ANNUAL BASE SALARY
The Executive shall receive an annual base salary of $150,000. This
salary will be reviewed at least annually 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
A. Executive shall receive a one time Signing Bonus of $25,000
payable upon the Effective Date of this Agreement.
B. Executive shall also participate in the Executive Bonus Program
with an Annual Bonus not to exceed 75% 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.
VII STOCK OPTIONS
Executive is granted options pursuant to the Company's Stock Options
Plan ("Plan") to purchase the greater of (i) 750,000 shares or (ii) 25%
of the stock option pool of Company common stock allocated for the Board
and Company employees. The exercise price shall be equal to the initial
price established it. the private offering of Company common stock made
as of the Effective Date, Such options shall vest expire ten year's from
the date of issue, The options shall vest at the rate of 25% per year on
each of the first four anniversary dates of the Effective Date of this
Agreement, subject Articles IX and XI below.
Executive agrees to enter into a stock option agreement with Company
containing the above terms and provision 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 option to be granted
as provided herein, or as may be required to comply with the Plan.
V1l BENEFITS
Executive shall be entitled to receive all benefits generally made
available to senior executives of the Company ("Benefits").
TERMINATION BY COMPANY
Company shall have xxxx right to terminate this Agreement under the
following circumstances:
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 can the Executive's ability to carry
out his duties under this Agreement or upon the reputation =~x
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" :hall mean the inability of the
Executive, due to a physical and/or mental disability, L 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.
RIGHTS FOLLOWING TERMINATION BY COMPANY
Upon termination pursuant by Company, the following shall apply:
Upon termination pursuant to Paragraph A ("for cause(degree)) 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 prorated 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 by the Executive, his
surviving spouse, if living, otherwise to his estate, the Annual Base
Salary aid provide full Benefits (pursuant to Article VIII) for six (6)
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 pursuant to Paragraph C ("poor performance") of Section IX, the
Company shall provide Executive with the following severance package:
o Annual Base Salary and Annual Bonus. Bonus shall be paid to Executive in
accordance with bonus payment schedules of other Executives. Salary,
(based upon annualizing portion of ; gar employed) will be payable in
equal monthly installments over 12 months or a single lump sum payment
equal to the present value of said installment payments discounted ::r
the then prime rate published in the Wall Street Journal as of the date
of termination.
o Benefits as per Section VIII for 12 months from the date of termination;
o All stock option, warrants and other equity arrangements vested as of
the date of termination remain with Executive and Executive has 180 days
from the date of termination to exercise all such options, warrants or
other equity arrangements. As of the 7.811` day following the date of
termination, all unexercised options, warrants and other equity
arrangements shall be canceled.
TERMINATION BY EXECUTIVE
Executive shall have the right to terminate his employment under the 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 or B below or resigns in accordance with C below.
A. Executive is not appointed, slated, elected or retained as a voting
member of the Board of Director of the Company;
B. Company materially reduces Executive's scope OF authority, duties and
responsibilities hereunder. Executive's scope OF authority, duties and
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 to the following such an event (i) Executive shall continue to
have the same scope of ai.4odty, 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
C. Executive announces the termination of his employment agreement in
writing to the Board of Directors as a "voluntary resignation."
RIGHTS FOLLOWING A TERMINATION BY EXECUTIVE
If this Agreement is germinated pursuant to Sections A or B of Article XI, the
Company shall pay Executive within 30 days of the date of termination the
following severance package:
o One year Annual Base Salary and Annual Bonus (based upon annualizing
portion of year employed) payable upon termination in a single lump
sum payment;
o One year of Benefits continuation per Article VIII;
o All. stock options, warrants and other equity arrangements granted
by the Company to executive under the Plan or otherwise prior to the
date of termination shall be deemed 100% vested as of the date of
termination.
If this Agreement is terminated pursuant to Section C of Article X
(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. 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 180 days from the date of termination to exercise all
such options, warrants or other equity arrangements. As of the 1811 day
following the date of termination, all unexercised option;; warrants and
other equity arrangements shall be canceled.
XIII CHANGE OF CONTROL TERMINATION
If within twenty-four 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 Executives 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 a
single lump sum payment equal to two years of the Executive's then
Annual Base Salary and Annual Bonus (based upon a; initializing current
year), and a continuation of Benefits (per Section VIII) for two years.
Additionally, any stock options, warrants, or other equity arrangements
granted to the Executive shall become 100% vested as of the date of the
Change of Control Termination.
"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 day before the Public
Merger), directly or indirectly, controls more than 50% of the combined
voting power of the young securities of the Company.
XIV BINDING AGREEMENT
This Agreement shall be binding upon arid inure to the benefit of
Executive, his heirs, distributees and assigns and the Company, its
successors (e,g. Public Company via Public Merger), and
assigns. Executive r nay not, without the express written permission of
the Company, assign or pledge any rights c: 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
This Agreement shill be governed by and construed in accordance with the
laws of the State of Delaware
All notices which a ,:arty 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:
Xxxxxxx X. Xxxx
0 Xx Xxxx Xxxx Xxxx
Xxxxxxx, XX 00000
If to Company to:
Chairman of Board of Directors
UTIX Corporation
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Or such other place as may be designated in writing by like notice.
XVI EFFECTIVE DATE
This Agreement shall become effective as of Chic, closing date of the
Public Merger (defined below) and said merger is a condition precede; rt
to the commencement of the term hereunder.
XVII PUBLIC MERGER
The Company is in the process of competing a Public Merger with a public
company, Equicap, Inc. ("Public Merger").
XVIII ATTORNEY FEES
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 costs Incurred.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
18th day of September, 2003.
EXECUTIVE: UTIX CORPORATION, INC.
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Xxxxxxx X. Xxxx Xxxxxxxx Xxxxx Date
Co-Chairman
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Xxxxxxx X. Xxxxxx Date
Co-Chairman
If to Executive to:
Xxxxxxx X. Xxxx
0 Xx Xxxx Xxxx Xxxx
Xxxxxxx, XX 00000
If to Company to:
Chairman an of Board of Directors
UTIX Corporation
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Or such other place as may be designated in writing by like notice.
VI EFFECTIVE DATE
This Agreement shall become effective as of the closing date of the
Public Merger (defined below) and said merger is a condition precedent
to the commencement of the term hereunder.
:VII PUBLIC MERGER
The Company is in the process of completing a Public Merger with a
public company, Equicap, Inc: ("Public Merger").
YIII ATTORNEY FEES
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 costs incurred.
IN WITNESS WHEREOF, the parties hereto have:, executed this Agreement as of the
18th day of September, 2003.
EXECUTIVE: UTIX CORPORATION, INC.
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Xxxxxxx X. Xxxx Date Xxxxxxxx Xxxxx Date
Co-Chairman
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Xxxxxxx X. Xxxxxx Date
Co-Chairman
