Exhibit 10.6
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") made as of the "Effective Date" (defined
below), by and between Utix Group, Inc. ("Utix" or the "Company"), and Xxxxxx
Xxxxxx (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 Executive Vice President/Managing
Director.
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 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
---------------------------------
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. The Executive shall
be responsible for building and managing all day-to-day business
development, marketing, payment network alliances in respect to the
Company's product and platform development in a manner to achieve
revenue and profitability goals. Executive shall lead all marketing and
sales operations staff and work closely with the President and CFO
regarding budgeting and capitalization planning with a focus on building
clear and effective measurements for strategic relationship management,
distribution / revenue forecasting and product milestones and
venue/customer satisfaction. Executive shall report directly to the
Chief Executive Officer and to the CFO regarding financial and general
operational matters. Executive shall devote his full time and best
efforts to the Company. Any outside activities must be cleared with CEO
or CFO in advance.
Summary of Responsibilities:
o Daily supervision of Utix business activities and aligned staff.
o Develop and oversee major revenue opportunities through reseller
and licensee channels and work with partners to develop
strategic accounts.
Page 1 of 9
Company Initial: _______
Executive Initial: _______
o Build effective measurements that clearly show revenue
milestones are being met and manage Senior Vice President of
Sales & Marketing in order to accurately forecast revenue
opportunities.
o Actively participate in new product development and ensure all
new product, venue, platform and sales & marketing partnerships
support the strategic objectives of the company.
o Be directly responsible for the day-to-day execution of relevant
business terms and for contract negotiations with senior
executives from target partner and customer companies.
o Oversee all marketing personnel, content and messaging for sales
collateral, marketing and advertising use.
o Administrate monthly reports along with CEO and CFO to Board of
Directors, quarterly public filings and all financial community
efforts involving Investor Relations & Public Relations,
capitalization and industry speaking engagements.
o and, other responsibilities as may be reasonable assigned.
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. This will include reimbursement of cell phone
expenses per company policy and other customary professional expenses,
subject to CEO or CFO approval.
V. Annual Base Salary
------------------
The Executive shall receive an annual base salary of $200,000. This
salary shall be reviewed no less than 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
-------
Executive shall receive a $20,000 bonus upon the signing of this
agreement which shall be paid in accordance with the Company next
scheduled payroll disbursement following the execution of this
agreement.
Executive shall also participate in the Executive Bonus Program with a
targeted Discretionary Annual Bonus of up to 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 and shall be awarded at the
discretion of the Board of Directors.
VII. Stock Options
-------------
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 set by the Board of
Directors on the date
Page 2 of 9
Company Initial: _______
Executive Initial: _______
of grant. Such options shall expire ten years from the date of issue.
The options shall vest over a four year period, with 25% vesting on the
first anniversary of the grant and in equal amount quarterly thereafter
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
--------
Executive shall be entitled to receive all benefits generally made
available to senior executives of the Company ("Benefits"). Executive
shall receive three weeks of vacation annually upon completion of first
six month period of employment. Upon completion of one year of
employment, Executive shall receive vacation per Company policy.
IX. Termination by Company
----------------------
Company shall have the 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 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.
Page 3 of 9
Company Initial: _______
Executive Initial: _______
X. Rights Following Termination by Company
---------------------------------------
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 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:
o Base Salary and Benefits 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.
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 options shall automatically become vested and
exercisable, all remaining unvested options shall be canceled.
XI Termination by Executive
------------------------
Executive shall have the right to terminate his employment under this
Agreement upon thirty (30) days' prior written notice to the CEO
provided said notice is delivered to the CEO within 10 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 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
Page 4 of 9
Company Initial: _______
Executive Initial: _______
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 products, sales and marketing
operations, and retail distribution business and (ii) Executive shall
report directly to the then Chief Executive Officer or Divisional
Executive or President 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
-----------------------------------------
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 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 100% 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
options shall automatically become vested, granted and/or
exercisable as the case may be.
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 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
-----------------------------
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
Page 5 of 9
Company Initial: _______
Executive Initial: _______
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.
"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
-----------------
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
-------------
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:
Page 6 of 9
Company Initial: _______
Executive Initial: _______
If to Company to:
Xxxxxxx X. Xxxx, CEO
or
Xxxx X. Xxxxx, CFO
Utix Group, Inc.
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
--------------------------------------------------
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. 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
---------------------
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
-------
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
Page 7 of 9
Company Initial: _______
Executive Initial: _______
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
--------
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."
XX Company Property
----------------
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
-----------
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
Page 8 of 9
Company Initial: _______
Executive Initial: _______
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
--------------------------------
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
--------------
This Agreement shall become effective and all terms and conditions in
full force as of December 13, 2006. Executive shall have a start date of
December 13, 2006. All terms and conditions of this agreement shall be
in full force as of the effective date of this agreement.
XXIV 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 cost incurred.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
13th day of December, 2006.
EXECUTIVE: UTIX GROUP, INC.
/s/ Xxxxxx Xxxxxx 12-14-06 /s/ Xxxxxxx X. Xxxx 12-14-06
------------------------------------ ------------------------------------
Xxxxxx Xxxxxx Date Xxxxxxx X. Xxxx Date
President & CEO
Page 9 of 9
Company Initial: _______
Executive Initial: _______