Exhibit 6(c)
Employment Contract with
Xxxxxx Xxxxxxx dated 1/22/99
EMPLOYMENT AGREEMENT
This Agreement is effective as of the ___ day of ____________, 1999
("Agreement") and is made by and between ALOTTAFUN, INC., a Delaware corporation
("Company") , and XXXXXX XXXXXXX, a resident of the State of Florida
("Executive").
WITNESSETH:
WHEREAS, the Company desires to employ Executive in accordance with the
terms and conditions contained in this Agreement and to ensure the availability
of the Executive's services to the Company;
WHEREAS, the Executive desires to accept such employment and render his
services in accordance with the terms and conditions contained in this
Agreement;
WHEREAS, the Executive and the Company desire to enter into this
Agreement which will fully recognize the contributions of the Executive and
assure harmonious management of the Company's affairs.
NOW, THEREFORE, in consideration of the promises and the mutual
covenants set forth in this Agreement, and intending to be legally bound, the
Company and the Executive agree as follows:
1. Term of Employment
(a) Offer/Acceptance/Effective Date. The Company hereby offers
employment to the Executive and the Executive hereby accepts employment subject
to the terms and conditions set forth in this Agreement.
(b) Term. The term of this Agreement shall commence on the
date first indicated above and shall remain in effect until May 31, 2004
("Term").
2. Duties.
(a) Best Efforts. The Executive covenants to use his best
efforts to perform his duties and discharge his responsibilities pursuant to
this Agreement in a competent, diligent and faithful manner.
(b) Devotion of Time. The Executive shall devote 480 hours per
year to the Company's affairs (exclusive of periods of sickness and disability
and of such normal holiday and vacation periods as have been established by the
Company). It is understood that the Executive will devote the remainder of his
time to his other businesses.
3. Compensation and Expenses.
(a) Base Salary. For the services of the Executive to be
rendered by him under this Agreement, the Company will pay the Executive for
each of the periods indicated below an annual base salary (the "Base Salary") as
follows:
(i) From January 1, 1999 to May 31, 2004, the amount
of $ 60,000;
The Base Salary shall be prorated over the time period that the
Executive performs services under this Agreement in any year during which this
Agreement shall terminate before December 31st thereof.
The Company shall pay the Executive his Base Salary in equal
installments no less than semi-monthly.
The Executive shall have the right, at his election, to receive
compensation in the form of the Company's restricted common stock. Such stock
shall be valued at fifty percent (50%) of the closing bid price of the Company's
common stock as quoted on NASDAQ (or other established exchange) as of the date
of Executive's election. Such election may be for all or part of the Executive's
compensation. At the beginning of each quarter, Executive shall give the Company
notice of his election to exercise his option to receive restricted common stock
in lieu of cash compensation.
(b) Base Salary Adjustment. The Base Salary may not be
decreased hereunder during the term of this Agreement, but may be increased upon
review by, and at the sole discretion of, the Company's Board of Directors.
(c) Bonus. Executive shall be entitled to receive bonus
compensation in an amount as approved by the Company's Board of Directors based
upon the performance criteria as may be established by the Compensation
Committee from time to time. Such bonuses may be paid in cash or issued in
shares of the Company's common stock on such terms as recommended by the
Compensation Committee and approved by the Board of Directors.
(d) Expenses. In addition to any compensation received
pursuant to Section 3, the Company will reimburse the Executive for all
reasonable, ordinary and necessary travel, educational, seminar, trade shows,
entertainment and miscellaneous expenses incurred in connection with the
performance of his duties under this Agreement, provided that the Executive
properly accounts for such expenses to the Company in accordance with the
Company's practices. Such reimbursement shall include travel, lodging and food
costs for Executive's immediate family to the extent they accompany Executive on
business related travel.
(e) Subsidiary and Affiliate Payments. In recognition of the
fact that in the course of the performance of his duties hereunder, the
Executive may provide substantial benefits to the Company's subsidiaries or
affiliated companies, the Executive and the Company may at any time and from
time to time agree that all or any portion of the compensation due the Executive
hereunder may be paid directly to the Executive by one or more of the Company's
subsidiaries or affiliated companies.
(f) Stock Options. Upon execution of this Agreement, Executive
shall receive a nonqualified stock option to purchase 500,000 shares of the
common stock of Company with an exercise price of $.15 per share, which is the
fair market value of such shares as of the date of this Agreement. The options
granted hereunder will be immediately exercisable upon issuance. The options
shall have an exercise period of ten (10) years from the date of this Agreement.
The Executive shall have a cashless exercise right.
(g) Additional Equity Based Incentive Compensation. Executive
shall be entitled to additional annual equity-based incentive compensation as
set forth in the Company's Management Incentive Compensation Plan as established
by the Compensation Committee of the Board of Directors.
4. Benefits.
(a) Vacation. For each calendar year during the Term during
which the Executive is employed, the Executive shall be entitled to 4 weeks
vacation (which shall accrue and vest, except as may be hereafter provided to
the contrary, on each January 1st thereof) without loss of compensation or other
benefits to which he is entitled under this Agreement
If the Executive is unable to take all of his vacation days during a
year for which he becomes vested therein, then the Executive, at his sole
option, may elect to (x) carry over any unused vacation to the next calendar
year to be used solely in that next year or (y) receive an appropriate pro rata
portion of his Base Salary corresponding to the year in which the vacation days
vested.
The Executive shall take his vacation at such times as the Executive
may select and the affairs of the Company or any of its subsidiaries or
affiliates may permit.
(b) Employee Benefit Programs. In addition to the compensation
to which the Executive is entitled pursuant to the provisions of Section 3
hereof, during the Term, the Executive will be entitled to participate in any
stock option plan, stock purchase plan, pension or retirement plan, and
insurance or other employee benefit plan that is maintained at that time by the
Company for its employees, including programs of life, disability, basic medical
and dental, and supplemental medical and dental insurance.
5. Termination.
(a) Termination for Cause. The Company may terminate the
Executive's employment pursuant to this Agreement at any time for cause upon
written notice. Such termination will become effective upon the giving of such
notice. Upon any such termination for cause, the Executive shall have no right
to compensation, bonus or reimbursement under Section 3 or to participate in any
employee benefit programs or other benefits to which he may be entitled under
Section 4 for any period subsequent to the effective date of termination. For
purposes of this Agreement, the term "cause" shall mean only:
(i) the Executive's conviction of a felony and all appeals with
respect thereto have been extinguished or abandoned by the
Executive;
(ii) the Executive's conviction of misappropriating assets or
otherwise defrauding the Company or any of its subsidiaries or
affiliates;
(iii) material breach by the Executive of any provision of this
Agreement.
(b) Death or Disability. This Agreement and the Company's
obligations hereunder will terminate upon the death or disability of the
Executive. For purposes of this Section 5(b), "disability" shall mean that for a
period of six (6) months in any twelve-month period, the Executive is incapable
of substantially fulfilling the duties set forth in this Agreement because of
physical, mental or emotional incapacity resulting from injury, sickness or
disease as determined by an independent physician mutually acceptable to the
Company and the Executive. Upon any termination of this Agreement due to death
or disability, the Company will pay the Executive or his legal representative,
as the case may be, his Base Salary (which may include any accrued but unused
vacation time) at such time pursuant to Section 3(a) through the date of such
termination of employment (or, if terminated as a result of a disability, until
the date upon which the disability policy maintained pursuant to Section 4 (b)
(ii) begins payment of benefits) plus any other compensation that may be due and
unpaid. In the event of death or disability of the Executive, any obligations
that the Executive may owe the Company for repayment of loans or other amounts
shall be forgiven.
(c) Voluntary Termination. Prior to any other termination of
this Agreement, the Executive may, on sixty (60) day's prior written notice to
the Company given at any time, terminate his employment with the Company. Upon
any such termination, the Company shall pay the Executive his Base Salary at
such time pursuant to Section 3(a) through the date of such termination of
employment (which shall include any vested and accrued but unused vacation
time).
6. Restrictive Covenants.
(a) Competition with the Company. The Executive covenants and
agrees that, during the Term of this Agreement, the Executive will not, without
the prior written consent of the Company, directly or indirectly (whether as a
sole proprietor, partner, stockholder, director, officer, employee or in any
other capacity as principal or agent), compete with the Company in the "Capsule
Toy" segment of toy industry. Notwithstanding this restriction, Executive shall
be entitled to invest in stock of other competing public companies so long as
his ownership is less than 5% of such company's outstanding shares.
(b) Disclosure of Confidential Information. The Executive
acknowledges that during his employment he will gain and have access to
confidential information regarding the Company and its subsidiaries and
affiliates. The Executive acknowledges that such confidential information as
acquired and used by the Company or any of its subsidiaries or affiliates
constitutes a special, valuable and unique asset in which the Company or any of
its subsidiaries or affiliates, as the case may be, holds a legitimate business
interest. All records, files, materials and confidential information (the
"Confidential Information") obtained by the Executive in the course of his
employment with the Company shall be deemed confidential and proprietary and
shall remain the exclusive property of the Company or any of its subsidiaries or
affiliates, as the case may be. The Executive will not, except in connection
with and as required by his performance of his duties under this Agreement, for
any reason use for his own benefit or the benefit of any person or entity with
which he may be associated, disclose any Confidential Information to any person,
firm, corporation, association or other entity for any reason or purpose
whatsoever without the prior written consent of the Board of Directors of the
Company, unless such information previously shall have become public knowledge
through no action by or omission of the Executive.
(c) Subversion, Disruption or Interference. At no time during
the term of this Agreement shall the Executive, directly or indirectly,
interfere, induce, influence, combine or conspire with, or attempt to induce,
influence, combine or conspire with, any of the employees of, or consultants to,
the Company to terminate their relationship with or compete with or ally against
the Company or any of its subsidiaries or affiliates in the business in which
the Company or any of its subsidiaries or affiliates is then engaged in.
(d) Enforcement of Restrictions. The parties hereby agree that
any violation by Executive of the covenants contained in this Section 6 will
likely cause irreparable damage to the Company or its subsidiaries and
affiliates and may, as a matter of course, be restrained by process issued out
of a court of competent jurisdiction, in addition to any other remedies provided
by law.
7. Change of Control.
(a) For the purposes of this Agreement, a "Change of Control"
shall be deemed to have taken place if any person other than Xx. Xxxxxx and Xx.
Xxxxxxx, collectively or immediately, including a "group" as defined in Section
13(d)(3) of the Securities Exchange Act of 1934, as amended, becomes the owner
or beneficial owner of the Company's securities, after the date of this
Agreement, having more than 50% of the combined voting power of the then
outstanding securities of the Company that may be cast for the election of
directors of the Company (other than as a result of an issuance of securities
specifically approved by Executive and specifically excluded from the provisions
of this Section 8 by subsequent written agreement of the Executive); provided,
however, that a Change of Control shall not be deemed to have occurred if the
person who becomes the owner of more that 50% of the combined voting power of
the Company is the Executive or an entity (or entities) controlled by the
Executive.
(b) The Company and Executive hereby agree that if Executive
is in the employ of the Company on the date on which a Change of Control occurs
(the "Change of Control Date"), the Company will continue to employ the
Executive and the Executive will remain in the employ of the Company for the
period commencing on the Change of Control Date and ending on the expiration of
the Term, to exercise such authority and perform such executive duties as are
commensurate with the authority being exercised and duties being performed by
the Executive immediately prior to the Change of Control Date. If after a Change
of Control, the Executive is requested, and, in his sole and absolute
discretion, consents to change his principal business location, the Company will
reimburse the Executive for his relocation expenses, including without
limitation, moving expenses, temporary living and travel expenses for a time
while arranging to move his residence to the changed location, closing costs, if
any, associated with the sale of his existing residence and the purchase of a
replacement residence at the changed location, plus an additional amount
representing a gross-up of any state or federal taxes payable by Executive as a
result of any such reimbursements. If the Executive shall not consent to change
his business location, the Executive may continue to provide the services
required of him hereunder in his current location, and the Company shall
continue to maintain an office for the Executive at that location commensurate
with the Company's office prior to the Change of Control Date.
(c) During the remaining Term after the Change of Control
Date, the Company will (i) continue to honor the terms of this Agreement,
including Base Salary and other compensation set forth in Section 3 hereof, and
(ii) continue employee benefits as set forth in Section 4 hereof at levels in
effect on the Change of Control Date (but subject to such reductions as may be
required to maintain such plans in compliance with applicable federal law
regulating employee benefits).
(d) If during the remaining Term on or after the Change of
Control Date (i) the Executive's employment is terminated by the Company other
than for cause (as defined in Section 5 hereof), or (ii) there shall have
occurred a material reduction in Executive's compensation or employment related
benefits, or a material change in Executive's status, working conditions or
management responsibilities, or a material change in the business objectives or
policies of the Company and the Executive voluntarily terminates employment
within sixty (60) days of any such occurrence, or the last in a series of
occurrences, then the Executive shall be entitled to receive, subject to the
provisions of subparagraphs (e) and (f) below, a lump-sum payment equal to 299%
of Executive's current Base Salary in addition to any other compensation that
may be due and owing to the Executive under Section 3 hereof.
(e) The amounts payable to the Executive under any other
compensation arrangement maintained by the Company which became payable after
payment of the lump-sum provided for in paragraph (d), upon or as a result of
the exercise by Executive of rights which are contingent on a Change of Control
(and would be considered a "parachute payment" under Internal Revenue Code 280G
and regulations thereunder), shall be reduced to the extent necessary so that
such amounts, when added to such lump-sum, do not exceed 299% of the Executive's
Base Salary (as computed in accordance with provisions of the Internal Revenue
Code of 1986, as amended and any regulations promulgated thereunder) for
determining whether the Executive has received an excess parachute payment. Any
such excess amount shall be deferred and paid in the next tax year.
(f) In the event of a proposed Change in Control, the Company
will allow the Executive to participate in all meetings and negotiations related
thereto.
8. Assignability. The rights and obligations of the Company under this
Agreement shall inure to the benefit of and be binding upon the successors and
assigns of the Company, provided that such successor or assign shall acquire all
or substantially all of the assets and business of the Company. The Executive's
rights and obligations hereunder may not be assigned or alienated and any
attempt to do so by the Executive will be void.
9. Severability. If any provision of this Agreement is deemed to be
invalid or unenforceable or is prohibited by the laws of the state or
jurisdiction where it is to be performed, this Agreement shall be considered
divisible as to such provision and such provision shall be inoperative in such
state or jurisdiction and shall not be part of the consideration moving from
either of the parties to the other. The remaining provisions of this Agreement
shall be valid and binding.
10. Notice. Notices given pursuant to the provisions of this Agreement
shall be sent by certified mail, postage prepaid, or by overnight courier, or
telecopier to the following addresses:
To the Company: Alottafun, Inc.
000 X. Xxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, XX 00000
To the Executive: XXXXXX XXXXXXX
000 Xxxxxxxx Xxxxxx, Xxxxx X
Xxxxxxxxxx, Xxxxxxx 00000
Either party may, from time to time, designate any other
address to which any such notice to it or him shall be sent. Any such notice
shall be deemed to have been delivered upon the earlier of actual receipt or
four days after deposit in the mail, if by certified mail.
11. Miscellaneous.
(a) Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the internal, substantive laws of the
State of Delaware without giving effect to the conflict of laws rules thereof.
(b) Waiver/Amendment. The waiver by any party to this
Agreement of a breach of any provision hereof by any other party shall not be
construed as a waiver of any subsequent breach by any party. No provision of
this Agreement may be terminated, amended, supplemented, waived or modified
other than by an instrument in writing signed by the party against whom the
enforcement of the termination, amendment, supplement, waiver or modification is
sought.
(c) Attorney's Fees. In the event any action is commenced, the
prevailing party shall be entitled to reasonable attorneys' fee, costs
and expenses.
(d) Entire Agreement. This Agreement represents the entire
agreement between the parties with respect to the subject matter hereof and
replaces and supersedes any prior agreements or understandings.
(e) Counterparts. This Agreement may be executed in
counterparts, all of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Company and the Executive have executed this
Agreement as of the day and year first above written.
COMPANY:
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By:
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Its:
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EXECUTIVE:
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Typed or Printed Name
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Signature
