EMPLOYMENT AGREEMENT
AGREEMENT
made as
of the 1st day of January 2007 between 247MGI, Inc. ("Company"), a Florida
corporation having an office located at 0000 X. Xxxxxxx Xxx, X-0, Xxxx
Xxxxxxxxxx, XX 00000, and Xxxxxxx X. Xxxxx ("Employee”), residing at 0000
Xxxxxxxx Xx, #0000, Xxxx Xxxxxxxxxx, XX 00000.
WHEREAS,
Employee
will be employed as Chief Executive Officer (“CEO”), President and
COB;
WHEREAS,
Company
and Employee, wish to enter into an Employment Agreement pursuant to which
Employee will continue as Chief Executive Officer (CEO), President and Chairman
of the Board (COB) of the Company; and
WHEREAS,
this
Agreement is intended to constitute an “employee benefit plan” within the
meaning of Rule 405 of Regulation C under the Securities Act of 1933, as
amended.
NOW,
THEREFORE,
in
consideration of the respective agreements hereinafter set forth, the parties
agree as follows:
1. Employment
1.01
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Scope
of Agreement.
Company hereby employees Employee, and Employee hereby accepts
employment
with Company in the position and with the duties set forth below.
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1.02
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Term.
The term of this Agreement shall commence as of January 1, 2007
and
terminate on December 31, 2012; subject, however, to earlier termination
in accordance with the provisions of this
Agreement.
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2.
Duties
2.01
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General.
Employee shall serve as CEO, President and COB of Company and shall
perform such executive duties as may from time to time be assigned
to him
by Company’s Board of Directors; consistent with the duties associated
with the position. Employee shall be subject to the supervision
and
direction of the Board of Directors.
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2.02
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Performance.
During the term of his employment, Employee shall devote 100% of
his
business time, best efforts and attention to the business, operations
and
affairs of Company.
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2.03
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Representations.
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(a)
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Employee
represents and warrants to and agrees with Company
that:
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(i) Neither
the execution nor performance by Employee of this Agreement is prohibited
by or
constitutes or will constitute, directly or indirectly, a breach or violation
of, or will be adversely affected by, any written or other agreement to which
Employee is a party or by which he is bound.
(ii) Neither
Employee nor any business or entity in which he has any interest or from
which
he receives any payments has, directly or indirectly, any interest of any
kind
in or is entitled to receive, and neither Employee nor any such business
or
entity shall accept, from any person, firm, corporation or other entity which
competes with Company, any payments of any kind on account of any services
performed by Employee during the term of his employment.
(b)
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Company
represents and warrants to Employee that this Agreement has been
authorized by all necessary action on the part of Company and constitutes
a valid and binding obligation of Employee enforceable against
Company in
accordance with the terms hereof.
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3. Compensation
and Related Matters
3.01
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Fixed
Salary.
As partial compensation for Employee's services, Company shall
pay
Employee a salary (the "Fixed Salary") at the following rates in
equal
monthly (or more frequent, consistent with Company’s payroll practices)
installments, less appropriate payroll deductions as required by
law:
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January
1, 2007 - December 31, 2007 $200,000
January
1, 2008 - December 31, 2008 $250,000
January
1, 2009 - December 31, 2009 $300,000
January
1, 2010 - December 31, 2010 $350,000
January
1, 2011 - December 31, 2011 $400,000
January
1, 2012 - December 31, 2012 $450,000
3.02 Additional
Compensation.
(a)
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Stock
Options.
As additional compensation for Employee's services, the Employee
is hereby
granted options to purchase an aggregate of 12 million shares over
the
term of this Agreement, which options shall vest at the rate of
500,000
options on the first day of each calendar quarter beginning January
1,
2007. The options shall have an exercise price of $.07, and may
be
exercised for a period of five years from the date the options
vest. The
number of shares subject to the options and the exercise price
of the
options shall be proportionately adjusted to give effect to any
forward or
reverse stock split, recapitalization or similar corporate event
completed
by the Company. In the event of the death of Employee, all unvested
options shall immediately vest and the estate of Employee shall
have the
right to exercise any unexercised options for a period of six months
from
the date of Employee’s death, at which time any unexercised options shall
terminate. In the event of the disability resulting in termination
of this
Agreement under Section 4.03, all unvested options shall immediately
vest
and Employee or his personal representative shall have the right
to
exercise any unexercised options for a period of six months from
the date
of Employee’s disability, at which time any unexercised options shall
terminate. In the event this Agreement is terminated for cause
under
Section 4.01, all unexercised and/or unvested options shall immediately
terminate and cease to be of any further force or
effect.
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(b)
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Bonuses
and Other Incentive Compensation.
Company shall pay Employee such cash bonuses, stock bonuses and/or
incentives as may be determined from time-to-time by the Board
of
Directors.
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3.03
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Vacation.
Employee will be entitled to six weeks paid vacation during the
first
twelve months of this Agreement and one additional week per year
for the
remaining term of this Agreement.
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3.04
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Expenses.
Company will reimburse Employee for Employee’s reasonable out-of-pocket
expenses incurred in connection with Company’s business, including travel
expense, food and lodging while away from home, subject to such
policies
as Company may from time-to-time reasonably establish for its
employees.
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3.05
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Cellular
Telephone.
Company shall pay or reimburse Employee for his use of a cellular
telephone, and related expenses, to the extent such telephone
is used for
business purposes.
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3.06
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Vehicle.
Company shall pay the costs of, or reimburse Employee for, the
use of an
automobile in an amount not to exceed $1,500.00 per month for the
life of
this Agreement.
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3.07
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Benefits.
Employee shall be entitled to participate in all general pension,
profit-sharing, life, medical, dental, optical, disability and
other
insurance and employee benefit plans and programs at any time in
effect
for executive employees of company, provided, however, that nothing
herein
shall obligate Company to establish or maintain any employee benefit
plan
or program, whether of the type referred to in this clause or
otherwise.
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4. Termination
for Cause; Disability; Death; Change in Control
4.01
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For
Cause.
Company shall have the right to terminate the employment of Employee
hereunder at any time for Cause (as hereinafter defined). For
purposes of
this Agreement "Cause" shall mean the occurrence of any of the
following
acts or events by or relating to Employee: (a) any material
misrepresentation by Employee in this Agreement; (b) any material
breach
of any obligations of Employee under this Agreement which remains
uncured
for more than thirty (30) days after written notice thereof by
the Board
of Directors to Employee; (c) habitual insobriety or use of illegal
drugs
by Employee while performing his duties hereunder or which adversely
affects Employee’s performance of his duties hereunder, (d) any gross
negligence of intentional misconduct with respect to the performance
of
Employee’s duties under this Agreement, and/or (e) Employee’s theft or
embezzlement, from the Company, willful dishonesty towards, fraud
upon, or
deliberate injury or attempted injury to, the Company; provided,
however,
if during the term of this Agreement, there shall occur a Change
of
Control (as hereinafter defined), Company may not terminate the
employment
of employee for Cause if Employee's conduct subsequent to such
Change of
Control is consistent with his conduct prior to such Change of
Control, or
for any act or omission which was known to Company and which
occurred
prior to such Change of Control, and the term "cause" shall be
deemed
amended so as to delete therefrom the occurrence of the acts
or events by
or relation to Employee set forth above. In the event of termination
for
cause, Employee's Fixed Salary shall terminate as of the effective
date of
termination of
employment, and, except as otherwise set forth in this Agreement,
Employee
shall not be entitled to any other compensation hereunder for
any period
subsequent to the effective date of
termination.
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4.02
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Without
Cause.
Company may not terminate the employment of Employee except for
Cause.
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4.03
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Disability.
If
Employee, by reason of mental illness or physical incapacity or
other
disability, is unable to perform his regular duties hereunder (as
may be
determined by the Board of Directors), Company shall (a) continue
to pay
employee’s Fixed Salary at a rate equal to fifty percent of the Fixed
Salary in effect immediately prior to the date of disability for
the
balance of the term of this Agreement and (b) continue to pay Employee’s
other compensation pursuant to this Agreement, for the balance
of the term
of this Agreement, except that options granted to Employee under
this
Agreement shall be treated as set forth in Section 302(a), above;
provided, however, in the event Employee recovers from any such
illness,
mental or physical incapacity or other disability (as may be determined
an
independent physician to which Employee shall make himself available
for
examination at the reasonable request of the Board of Directors),
Employee
shall immediately resume his regular duties hereunder at full pay.
Any
payments to Employee under any disability insurance or plan maintained
by
Company shall be applied against and shall reduce the amount of
the salary
payable by Company under this Agreement. Any determination by the
Board
with respect to Employee’s disability must be based on a determination of
competent medical authority or authorities, a copy of which determination
must be delivered to the Employee at the time it is delivered to
the
Board. In the event the Employee disagrees with the determination
of the
Board described in this paragraph, Employee will have the right
to submit
to the Board a determination by a competent medical authority or
authorities of Employee’s own choosing to the effect that the aforesaid
determination is incorrect and that Employee is capable of performing
Employee’s duties under this Agreement. Any continuing dispute as to
Employee’s disability shall be resolved by binding arbitration before one
arbitrator in accordance with the Rules of Commercial Arbitration
of the
American Arbitration Association in Palm Beach County, Florida,
or as
closely in proximity thereto as the American Arbitration Association
can
accommodate. The decision of the arbitrator shall be final and
binding on
the parties. If upon receipt of such determination, the Board wishes
to
continue to seek arbitration of this issue, it may do so in accordance
with the provisions of the American Arbitration
Association.
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4.05
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Death.
In the event of Employee's death, Company shall (a) pay all compensation
accrued up to the date of death, and (b) continue to pay Employee's
Fixed
Salary for the balance of the term of this Agreement (Employee’s estate
shall not be entitled to any other compensation accruing after
Employee’s
date of death, except that, options granted to Employee under this
Agreement shall be treated as set forth in Section 302(a), above);
provided, however, that, if Company is the beneficiary of life
insurance
on Employee's life, it shall use the proceeds of such insurance
promptly
upon receipt thereof to prepay (in inverse order of maturity),
the Fixed
Salary remaining it be paid discounted to present value using an
assumed
interest rate of 8% per annum. Company shall have the right (but
not the
obligation) to obtain a life insurance policy on Employee's life.
The
proceeds of any such life insurance policy shall be payable to
Company.
Employee shall cooperate with Company and use his best efforts
in all
respects in regard to obtaining a life insurance policy, including,
without limitation, undergoing a physical examination upon reasonable
request.
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4.06
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Change
of Control.
If
during the term of this Agreement, there shall occur a Change of
Control,
Employee may terminate his employment hereunder for Good Reason
(as
hereinafter defined), whereupon Employee shall be entitled to receive
a
payment equal to 2.99 times Employee's average annual compensation
paid by
Company (including bonuses, if any) during the three years preceding
the
date of termination; provided, however, that such payment shall
be reduced
if and only to the extent necessary to avoid the imposition of
an exercise
tax on such payment under Section 4999 of the Internal Revenue
Code of
1986, as amended.
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For
purposes of this Agreement, a ("Change of Control") shall be deemed
to
have occurred on the first day on which Employee, other than by
reason of
termination of Employee’s employment “for cause” (as defined above), or
employee’s death, disability or volitional act, ceases to serve as a
member of Company’s Board of Directors. For the purposes of this
Agreement, ("Good Reason") shall mean any of the following (without
Employee's express prior written
consent):
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(a)
The
assignment to Employee by Company of duties inconsistent with Employee's
then
positions, duties, responsibilities, titles, or offices of any reduction
in his
duties or responsibilities, or any removal of Employee from or any failure
to
re-elect Employee to any such positions, except in connection with the
termination of Employee's employment for Cause, or disability (as described
above) or as a result of Employee's death or by termination of employment
by
Employee other than for Good Reason;
(b)
A
relocation of Company's principal executive offices to a location outside
of
South Florida or Company's requiring Employee to be based anywhere other
than
within 50 miles of the location at which Employee on the date hereof performs
Employee's duties, except for required travel on Company's business to an
extent
substantially consistent with Employee's business travel obligations on the
date
hereof;
(c)
A
failure
by Company to continue in effect any benefit or compensation plan (including
any
pension, profit-sharing, bonus, life, medical, disability and other insurance
and employee benefit plans and programs) in which Employee participates,
or a
failure to provide Employee with substantially similar benefits, or the taking
of any actions by Company which would materially and adversely affect Employee's
participation in or reduce Employee's benefits under any such
plans;
(d) The
taking of any action by Company which would deprive Employee of any material
fringe benefit enjoyed by Employee on the date hereof; or
(e) The
failure by Company to obtain the specific assumption of this Agreement by
any
successor or assignee of Company or any person acquiring substantially all
of
Company's assets.
5. Confidential
Information: Non-Competition
5.01
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Confidential
Information.
Employee shall not, at any time during or following termination
or
expiration of the term of this Agreement, directly or indirectly,
disclose, publish or appropriate, use or cause permit or induce
any person
to appropriate or use, any proprietary secret or confidential information
of Company not in the public domain including, without limitation,
knowledge or information relating to its trade secrets, business
methods,
the names or requirements of its customers all of which Employee
agrees
are and will be of great value to Company and shall at all times
be kept
confidential. Upon termination or expiration of this Agreement,
Employee
shall promptly deliver or return to Company all materials of a
proprietary, secret or confidential nature relating to Company
together
with any other property of Company which may have theretofore been
delivered to or may then be in possession of
Employee.
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5.02
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Non-Competition
During the term of this Agreement, Employee shall not, within
North
America without the prior written consent of Company in each
instance,
directly or indirectly, in any manner or capacity, whether for
himself or
any other person and whether as proprietor, principal owner shareholder,
partner, investor, director, officer, employee representative,
distributor, consultant, independent contractor or otherwise
engage or
have any interest in any entity which competes in any business
or activity
then conducted or engaged in by Company, provided, however, that
the
foregoing shall not be deemed to prohibit Employee from engaging
in the
practice of financial consulting, or on any other business permitted
under
this Agreement. Notwithstanding the foregoing, however Employee
may at any
time own, in the aggregate, as a passive but not active investment,
less
than 10% of the stock or other equity interests of any publicly
traded
entity which engages in a business in direct competition with
the Company.
After the termination of the Employee’s employment, Employee will not,
directly or indirectly, use such Confidential Information to
compete with
the business of the Company, as the business of the Company may
then be
constituted, within any state or province. Such non-competition
shall
continue for two years from the date of termination. Further,
Employee
shall not induce or attempt to induce any employee of the Company
to
discontinue his or her employment with the Company for the purpose
of
becoming employed by any competitor of the Company, nor will
Employee
initiate discussions, negotiations or contacts with persons known
to be
clients or prospective clients of the Company at the time of
the
termination.
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5.03
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Assignment
of Intellectual Property.
All processes, concepts, data bases, software developments, hardware
developments, clients lists, brokers’ list, trade secrets, inventions,
patents, copyrights, trademarks, service marks, and other intangible
rights (collectively “Intellectual Property”) that may be conceived or
developed by Employee, either alone or with others, during the
term of
this Agreement, shall be the property of the Company.
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5.04
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Reasonableness.
Employee agrees that each of the provisions of this Section 5
is
reasonable and necessary for the protection of Company; that
each such
provision is and is intended to be divisible; that if any such
provision
(including any sentence, clause or part) shall be contrary to
law or
invalid or unenforceable in any respect in any jurisdiction,
or as to any
one or more period of time, areas of business activities, or
any part
thereof, the remaining provisions shall not be affected but shall
remain
in full force and effect as to the other remaining parts; and
that any
invalid or unenforceable provision shall be deemed without further
action
on the part of the parties hereto, modified, amended and limited
to the
extent necessary to render the same valid and enforceable in
such
jurisdiction. Employee further recognizes and agrees that any
violation of
any of his agreements in this Section 5 would cause such damage
or injury
to company as would be irreparable and the exact amount of which
would be
impossible to ascertain and that, for such reason, among others,
Company
shall be entitled, as a matter of course, to injunctive relief
from any
court of competent jurisdiction restraining any further violation.
Such
right to injunctive relief shall be cumulative and in addition
to, and not
in limitation of, all other rights and remedies which Company
may
possess.
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5.05
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Survival.
The provisions if this Section 5 shall survive the expiration
or
termination of this Agreement for any
reason.
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6.
Miscellaneous
6.01
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Notices.
All notices under this Agreement shall be in writing and shall
be deemed
to have been dully given if personally delivered against receipt
or if
mailed by first class registered or certified mail; return receipt
requested, addressed to Company and to Employee at their respective
addresses set forth in the first page of this Agreement, or to
such other
person or address as may be designated by like notice hereunder.
Any such
notice shall be deemed to have been given on the day delivered,
if
personally delivered, or on the third day after the date or mailing
if
mailed.
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6.02
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Parties
in Interest.
This Agreement shall be binding upon and insure to the benefit
of and be
enforceable by the parties hereto and their respective heirs, legal
representatives, successors and, in the case of Company, assigns,
but no
other person shall acquire or have any rights under or by virtue
of this
Agreement, and the obligations of Employee under this Agreement
may not be
assigned or delegated.
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6.03
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Governing
Law; Jurisdiction. This
Agreement shall be governed by and construed and enforced in accordance
with the laws and decisions of the State of Florida applicable
to
contracts made and to be performed therein without giving effect
to the
principals of conflict of laws.
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6.04
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Severability.
In the event any provision of this Agreement is determined by a
court or
other tribunal of competent jurisdiction to be invalid or unenforceable,
such provision shall be eliminated form this Agreement and the
balance of
this Agreement shall remain in full force and
effect.
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6.05
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Entire
Agreements: Modification; Interpretation.
This Agreement contains the entire agreement and understanding
between the
parties with respect to the subject matter hereof and supersedes
all prior
negotiations and oral understandings, if any. Neither this Agreement
nor
any of its provisions may be modified, amended waived, discharged
or
terminated, in whole or in part, except in writing signed by the
party to
be charged. No waiver of any such provisions, or any breach of
or default
under this Agreement shall be deemed or shall constitute a waiver
of any
other provision breach or default. All pronouns and words used
in this
Agreement shall be read in the appropriate number and gender, the
masculine, feminine and neuter shall be interchangeably and the
singular
shall include the plural and vice versa, as the circumstances may
require.
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6.06
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Indemnification.
Employee shall indemnify and hold Company free and harmless from
and
against and shall reimburse it for any and all claims, liabilities,
damages, losses, judgments, costs and expenses (including reasonable
counsel fees and other reasonable out-of-pocket expenses) arising
out of
or resulting from any breach or default of any of his representations,
warranties and agreements in this Agreement. Company shall indemnify
and
hold Employee free and harmless from and against and shall reimburse
him
for any and all claims, liabilities, damages, losses, judgments,
costs and
expenses (including reasonable counsel fees and other reasonable
out-of-pocket expenses) arising out of or resulting from any breach
or
default of any of its representations, warranties and agreements
in this
Agreement.
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6.07
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Survival
of Obligations. The
parties shall be obligated to perform the terms of this Agreement
after
the Employee has terminated with the
Company.
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6.08
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Enforcement.
If
any portion of this Agreement is determined to be invalid or
unenforceable, that portion of this Agreement will be adjusted,
rather
than voided, to achieve the intent of the parties. In the event
that
either party requires the use of an attorney to enforce the terms
of this
Agreement then the prevailing party shall be entitled to recover
a
reasonable attorney’s fee and
costs.
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6.09
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Waiver.
The waiver of any breach of any provisions of this Agreement
will not
operate or be construed as a waiver of any subsequent breach
of the same
or other provision of this Agreement.
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IN
WITNESS WHEREOF,
the
parties have duly executed this Agreement of February 14, 2007, to be effective
as of the date first above written.
/s/:
Xxxxxxx X. Xxxxx
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||||||
Xxxxxxx
X. Xxxxx
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247MGI,
INC.
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By:
/s/: Xxxxxxx X. Xxxxx
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Xxxxxxx
X. Xxxxx,
President
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