January 1, 1998
Xx. Xxxxxxx X. Xxxxxxx
000 Xxxx Xxxxx Xxxx
Xxxxxxx, XX 00000
Dear Xxxxxxx:
The Board of Directors of InfoNow Corporation (hereafter
referred to as "the
Company") is pleased to offer you the opportunity to
continue in the position of
President and Chief Executive Officer of InfoNow
Corporation. This letter
embodies the terms of our offer of employment to you:
TERM
The term of this agreement shall be 18 months.
BASE SALARY
Your base annual compensation will be $110,000 to be paid in
24 equal semi-
monthly installments. At the end of 12 months, you will be
granted a minimum
raise of not less than 10 percent of your base annual
compensation.
PERFORMANCE BONUS
Effective January 1, 1998, you will continue to be included
in the Company's
executive compensation program which will pay you a bonus
based on defined
financial performance targets as set forth in this
agreement. The bonus will be
based on the Company's earnings before interest, taxes,
depreciation,
amortization, and any other non-cash or non-operating
extraordinary charges
(hereafter referred to as "modified EBITDA"), and Net Income
(excluding
extraordinary charges), unless changed by mutual consent.
Bonus will be earned quarterly and paid in the month
following the quarter close
subject to available cash, as follows:
$15,000 for achieving positive, quarterly modified EBITDA
$25,000 for achieving positive, quarterly Net Income
$40,000 for achieving quarterly Net Income of $200,000 or
greater
$50,000 for achieving quarterly Net Income of $400,000 or
greater
EQUITY
You shall be eligible to receive options to purchase common
stock of the
Company as authorized from time to time by the Board of
Directors. All equity
options shall be based on the incentive stock option plan of
the Company in
effect on March 1, 1996, or as subsequently modified.
All options granted to you during your employment and any
performance based
options not yet granted shall vest immediately upon a change
in control of the
Company. A change of control includes, but is not limited
to, the sale of assets or
other reorganization, acquisition by an independent third-
party of a controlling
interest of the Company's stock, or a merger or
consolidation in which the
Company is not the surviving or controlling entity.
In the event of a conflict between this document and your
specific option
agreements, such option agreements will take precedence.
BENEFITS
The standard InfoNow benefits package will be extended to
you.
LIFE INSURANCE
The Company will pay for a $500,000 term life policy payable
to your estate in
the event of your death during the term of this agreement,
the premium of which
is not to exceed $500.00 per year.
VACATION
The maximum allowed under current Company policy as amended
from time to
time following CEO recommendation and Board approval.
TERMINATION
The Company may terminate your employment for cause. The
term "cause" in
this agreement means your conviction of a felony or acts of
fraud or flagrant
dishonesty. In the event that the Company terminates you
without cause, you
will receive a one-time severance payment on the date of
your termination equal
to 75 percent of your annual base compensation under this
Agreement and the
Company will immediately vest 50 percent of all unvested
options granted to you.
Should the Company choose to not continue your employment on
a basis
acceptable to you beyond 18 months from the date of this
Agreement, (1) you
will be given notice of the Company's intent to not continue
your employment at
least 3 months prior to the end of this Agreement, and (2)
you will be given a
one-time severance payment equal to 50 percent of your
annual base compensation
under this Agreement.
BOARD POSITION
You shall maintain your position as a Director of the
Company through the term
of this Agreement, unless terminated for cause.
For the Board of Directors,
/s/ Xxxx Xxxxxxxxx
Xxxx Xxxxxxxxx, Chairman of
Compensation Committee
I have read and accept the terms and conditions of
employment contained
herein.
/s/ Xxxxxxx X. Xxxxxxx January 1, 1998
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Xxxxxxx X. Xxxxxxx Date
