EXHIBIT 10.41
EMPLOYMENT AGREEMENT dated as of March 12, 2004, between SMARTSERV ONLINE,
INC., a Delaware corporation with its principal office located at 0000 Xxxxxx
Xxxx, Xxxxx 000, Xxxxxxxx Xxxxxxx, Xxxxxxxxxxxx 00000 (the "Company"), and
XXXXXXX X. XXXXXXX residing at 0000 Xxxx Xxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
(the "Executive").
The Company desires to enter into this Agreement in order to assure itself
of the service of Executive, and Executive desires to accept employment with the
Company, upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and obligations
hereinafter set forth, the parties agree as follows:
SECTION 1. Employment. The Company hereby employs Executive, and Executive
hereby accepts employment by the Company, upon the terms and conditions
hereinafter set forth.
SECTION 2. Term. The employment of Executive hereunder shall be for a
period commencing on the date hereof (the "Commencement Date") and ending on the
fourth anniversary of the Commencement Date (the "Term") or such earlier date
upon which the employment of the Executive shall terminate in accordance with
the provisions hereof. The period commencing on the Commencement Date and ending
on the date of termination of the Executive's employment hereunder shall be
called the "Term of Employment" for Executive, and the date on which the
Executive's employment hereunder shall terminate shall be called the
"Termination Date."
SECTION 3. Duties. During the Term of Employment, Executive shall be
employed as Chief Operating Officer of the Company and will act in accordance
with, and be subject to the policies and procedures as may be duly adopted by
the Board of Directors (the "Board") from time to time. Executive shall perform
such duties as are consistent therewith as the Board or Chief Executive Officer
shall designate, and shall report to the Chief Executive Officer of the Company.
Executive will be responsible for the operations of the Company's business,
including technology development, engineering, sales, marketing, and
administration. Executive shall use his best efforts to perform well and
faithfully the foregoing duties and responsibilities. In addition, if requested,
Executive shall serve as a member of the Board during the Term of Employment
(subject to election by the stockholders of the Company). On the Termination
Date, if Executive serves on the Board at such time, he agrees to submit his
resignation as a Board member. For purposes of this Agreement, so long as
Executive shall serve as a member of the Board, any references herein to
decisions or determinations to be made by the Board with respect to Executive
(including, without limitation, matters relating to compensation and
termination) shall be made by a majority of the then members of the Board
excluding Executive, who shall recuse himself and abstain from voting with
respect to any such matters.
SECTION 4. Time to be Devoted to Employment. During the Term of Employment,
Executive shall devote all of his business time, attention and energies to the
business of the Company (except the Company acknowledges and consents to
Executive's right to engage in charitable activities and for vacations to which
he is entitled pursuant to Section 7(b) and periods of illness or incapacity).
During the Term of Employment, Executive shall not engage in any business
activity which, in the reasonable judgment of the Board, conflicts with the
duties of Executive hereunder, whether or not such activity is pursued for gain,
profit or other pecuniary advantage.
SECTION 5. Compensation.
(a) The Company shall pay to Executive an initial annual base salary
of $170,000 per annum (the "Base Salary") during the first year of the Term of
Employment, payable in such installments (but not less often than monthly) as is
generally the policy of the Company with respect to its executive officers. The
Base Salary shall be eligible for annual increases, such increases to be
determined by the Board as part of the Board's annual performance review of
Executive.
(b) In addition, to the Base Salary set forth in paragraph 5(a) above,
during the Term of Employment, Executive shall receive incentive compensation
and bonuses ("Bonus Compensation") per annum of up to his then Base Salary, upon
the Company's attainment of the goals set forth on Exhibit A hereto.
SECTION 6. Equity.
(a) The Company recognizes that equity participation in the Company
through the grant of options is essential to induce Executive to agree to
provide the services pursuant to this Agreement. Accordingly, on the
Commencement Date the Company shall grant to Executive stock options (the
"Options") for the purchase of an aggregate of 700,000 shares of the Company's
Common Stock. The Options shall be outside of the Company's Stock Option Plan
("Non-Plan Options"). The exercise price of the Non-Plan Options shall equal to
$1.50 per share. The form of Option is attached hereto as Exhibit B. The Options
shall vest as follows: (i) 300,000 Shares on the date of grant and (ii) the
balance of 400,000 Shares in equal amounts as of the last day of each calendar
quarter beginning with the quarter ending March 31, 2004 and ending with the
quarter ending December 31, 2007; provided, however, that the Options shall
immediately vest in their entirety upon a Change of Control and certain other
events as defined in the form of Option attached hereto as Exhibit B.
(b) The Company may grant additional Options to Executive, subject to
the discretion of the Compensation Committee of the Board.
(c) If the shares underlying such plan have not been registered on a
Form S-8, the Company agrees to file and maintain a Registration Statement on
Form S-8 within one hundred twenty (120) days of the Commencement Date to
register the Shares.
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SECTION 7. Business Expenses; Benefits.
(a) The Company shall reimburse Executive from time to time, in
accordance with the practice of the Company for executive officers, for all
reasonable and necessary expenses and other disbursements incurred by Executive
for or on behalf of the Company in the performance of Executive's duties
hereunder. Executive shall provide such appropriate documentation of expenses
and disbursements as may from time to time be required by the Company.
(b) During the Term of Employment, Executive shall be entitled to four
(4) weeks vacation per year. Executive shall also be entitled to all paid
holidays given by the Company to its employees generally.
(c) During the Term of Employment, Executive shall be entitled to
participate in the group health, life, dental and disability insurance benefits,
and retirement plan benefits made available from time to time for its executive
officers and other employees.
SECTION 8. Involuntary Termination.
(a) If Executive is incapacitated or disabled (such condition being
hereinafter referred to as a "Disability"), the Term of Employment and
employment of Executive under this Agreement shall cease (such termination, as
well as a termination under Section 8(b), being hereinafter referred to as an
"Involuntary Termination") and Executive shall be entitled to receive the
benefits payable under any disability policy maintained by the Company and in
accordance with Section 11(b) hereof. For purposes of this Agreement, Executive
shall be deemed to have a Disability in the event Executive shall, by reason of
his physical or mental disability as determined by Executive's physician, fail
to substantially perform his usual and regular duties for the Company for a
period of 120 consecutive days or for an aggregate of 120 days in any six month
period.
(b) If Executive dies during the Term of Employment, the Term of
Employment and Executive's employment hereunder shall cease as of the date of
Executive's death and Executive shall be entitled to receive the benefits
payable in accordance with Section 11(b) hereof.
SECTION 9. Termination by the Company.
(a) Termination For Cause. The Company may terminate the Term of
Employment and the employment of Executive hereunder at any time for Cause (as
hereinafter defined) (such termination being referred to herein as a
"Termination For Cause") by giving Executive written notice of such termination,
effective immediately upon the giving of such notice to Executive. As used in
this Agreement, "Cause" means Executive's (i) indictment for or conviction of,
or the entering of a plea of nolo contender with respect to, an act constituting
a felony, (ii) commission of an act involving fraud, theft or dishonesty which
materially adversely affects the Company or could reasonably be expected to
materially adversely affect the Company, (iii) willful and repeated failure to
be reasonably available to perform his duties (other than as a result of illness
or incapacity), which, if curable, shall not have been cured within 30 days of
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written notice thereof from the Company, (iv) repeated failure to follow the
reasonable and lawful directions of the Board, which, if curable, shall not have
been cured within 30 days of written notice thereof from the Company, or (v)
material breach of the terms and provisions of this Agreement or any agreement
with the Company which, if curable, shall not have been cured within 30 days of
written notice thereof from the Company.
(b) Termination Other Than for Cause. The Company may terminate the
Term of Employment and the employment of Executive hereunder at any time other
than for cause as defined in Section 9(a) above (such termination shall be
defined as a "Termination Other Than for Cause") by giving Executive written
notice of such termination, which notice shall be effective thirty (30) days
after the giving of such notice or such later date set forth therein.
SECTION 10. Termination by Executive. If at any time during the Term of
Employment, Executive elects to terminate his employment with the Company (other
than for "Good Reason", as defined below), then the Company's obligations to
Executive under this Agreement shall be as set forth in Section 11(e) hereof and
such termination by Executive shall constitute a breach of this Agreement. If
Executive elects to terminate Executive's employment with the Company for Good
Reason, then the Company shall pay Executive the amounts set forth in Section
11(d) hereof. For the purpose of this Section, "Good Reason" means (i) any
material diminution of duties inconsistent with Executive's title, authority,
duties and responsibilities as Chief Executive Officer; (ii) any reduction of or
failure to pay Executive compensation provided for herein, except to the extent
Executive consents in writing to any reduction, deferral or waiver of
compensation, which non-payment continues for a period of thirty (30) days
following written notice to the Company by Executive of such non-payment; (iii)
any relocation of the principal location of Executive's employment more than 25
miles from the Company's current headquarters in Plymouth Meeting, Pennsylvania
without Executive's prior written consent; or (iv) any material violation by the
Company of its obligations under this Agreement that is not cured (if curable)
within thirty (30) days after receipt of notice thereof.
SECTION 11. Effect of Termination.
(a) Upon the termination of Executive's employment hereunder due to
Termination for Cause (as defined in Section 9(a) above), Executive shall not
have any further rights or claims against the Company under this Agreement,
except the right to receive (i) the unpaid portion, if any, of (A) the Base
Salary provided for in Section 5(a), computed on a pro rata basis through the
Termination Date and (B) Bonus Compensation provided for in Section 5(b) earned
prior to the Termination Date, (ii) any unpaid accrued benefits of Executive,
(iii) reimbursement for any expenses for which Executive shall not have been
reimbursed as provided in Section 7(a), and (iv) Executive's rights under the
vested portion of any options issued to Executive by the Company, including the
Options issued to Executive in accordance with Section 6 hereof.
(b) Upon the termination of Executive's employment hereunder due to an
Involuntary Termination (as defined in Section 8(a) above), neither Executive
nor his beneficiary or estate shall have any further rights or claims against
the Company under this Agreement,
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except the right to receive (i) the amounts set forth in Section 11(a), and (ii)
the vesting of all of the options issued to Executive by the Company that
Executive had a right to purchase as of the Involuntary Termination, including
the Options issued to Executive in accordance with Section 6 hereof, plus all
options that would have vested twelve (12) months from the date of Involuntary
Termination.
(c) Upon the termination of Executive's employment upon a Termination
Other Than for Cause (as defined in Section 9(b) above), neither Executive nor
his beneficiary nor his estate shall have any rights or claims against the
Company under this Agreement, except to receive (i) the amounts set forth in
11(a), (ii) the accelerated vesting of 100% of the options issued to Executive
by the Company, including all Options issued to Executive in accordance with
Section 6 hereof, that would have vested during the balance of the Term of this
Agreement and (iii) twelve (12) months Base Salary as in effect at the time of
the Termination Other Than for Cause, such sum to be paid in a lump sum payment
upon termination.
(d) Upon the termination of Executive's employment by Executive for
Good Reason (as defined in Section 10 above), neither Executive nor his
beneficiary or estate shall have any further rights or claims against the
Company under this Agreement, except the right to receive the amounts set forth
in Section 11(c).
(e) Upon the termination of Executive's employment by Executive (other
than for Good Reason), neither Executive nor his beneficiary or estate shall
have any further rights or claims against the Company under this Agreement,
except the right to receive the amounts set forth in Section 11(a).
(f) The Company acknowledges that it would be very difficult and
generally impracticable to determine Executive's ability to, or the extent to
which he may, mitigate any damages or injuries that he may incur by reason of
termination of his employment upon a Termination Other Than for Cause or
termination for Good Reason. The Company has taken this into account in entering
into this Agreement and, accordingly, the Company acknowledges and agrees that
Executive shall have no duty to mitigate any such damages and that he shall be
entitled to receive the amount provided in Sections 11(c) and 11(d) regardless
of any income that he may receive from other sources following the date he
becomes entitled to receive such amount.
(g) Notwithstanding any provisions of this Agreement to the contrary,
to the extent that the Executive's total parachute payments, as defined in
Section 280G of the Internal Revenue Code of 1986, as amended (the "Code")
pursuant to this Agreement, either alone or together with payments or benefits
under other agreements or arrangements, would cause the Executive to be liable
for an excise tax under Section 4999 of the Code, the Company shall reduce any
payment or benefit pursuant to this Section 11 to the extent necessary to
eliminate such excise tax liability, but only if the Executive's net after-tax
benefit attributable to such parachute payments would be greater as a result of
such reduction than such after-tax benefit without the reduction.
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SECTION 12. Insurance. The Company may, for its own benefit, in its sole
discretion and at its sole cost and expense, maintain "key-man" life and
disability insurance policies covering Executive. Executive will cooperate with
the Company and provide such information or other assistance as the Company may
reasonably request in connection with the Company's obtaining and maintaining
such policies.
SECTION 13. Disclosure of Information. Executive will not, either during
the Term of Employment or at any time thereafter, divulge, publish, communicate,
furnish or make accessible to anyone (other than in furtherance of the purposes
of the Company) any knowledge or information with respect to the Company's
confidential, secret or proprietary products, technology, methods, plans,
materials and processes, or with respect to any other confidential, secret or
proprietary aspects of the business, activities or products of the Company
including, without limitation, (a) software programs, source code, object code,
product development information, research and development projects or other
technical data pertaining to the Company's products (whether or not subject to
patent, trademark or copyright protection) or (b) any customer or client lists,
telephone leads, prospects lists, sales figures and forecasts, purchase costs,
financial projections, advertising and marketing plans and business strategies
and plans; except as such items set forth in clauses (a) and (b) above may
already be in the public domain through no fault of Employee (all of the
foregoing items set forth in clauses (a) and (b) being referred to herein
collectively as "Confidential Property") or except as otherwise required by law.
In the event that Executive becomes legally compelled to disclose any
Confidential Property, Executive shall advise the Company as soon as practicable
so that the Company may seek a protective order or other appropriate remedy. In
addition, Executive agrees to cooperate in the Company's effort, at the
Company's expense, to obtain a protective order or other appropriate remedy.
Upon the termination of the Term of Employment, Executive shall return to the
Company all property (including Confidential Property) of the Company (or any
subsidiary or affiliate thereof) then in the possession of Executive and all
books, records, computer tapes or discs and all other material containing
non-public information concerning the business, clients or affairs of the
Company or any subsidiary or affiliate thereof.
SECTION 14. Right to Inventions.
(a) Executive shall promptly disclose, grant and assign to the Company
for its sole use and benefit any and all marks, designs, logos, inventions,
improvements, technical information and suggestions relating in any way to the
business conducted by the Company, which he may develop or which may be acquired
by Executive during the Term of Employment (whether or not during usual working
hours), together with all trademarks, patent applications, letters, patent,
copyrights and reissues thereof that may at any time be granted for or upon any
such xxxx, design, logo, invention, improvement or technical information
(collectively, "Inventions"). In connection therewith, Executive shall (at the
Company's sole cost and expense) take all actions reasonably necessary or
desirable to assign and/or confirm the assignment of any Invention to the
Company.
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(b) To the extent any of the rights, title and interest in and to
Inventions cannot be assigned by Executive to the Company, Executive hereby
grants to the Company an exclusive, royalty-free, transferable, irrevocable,
worldwide license (with rights to sublicense through multiple tiers of
sublicensees) to practice such non-assignable rights, title and interest. To the
extent any of the rights, title and interest in and to Inventions can neither be
assigned nor licensed by Executive to the Company, Executive hereby irrevocably
waives and agrees never to assert such non-assignable and non-licensable rights,
title and interest against the Company or any of the Company's successors in
interest to such non-assignable and non-licensable rights. Executive hereby
grants to the Company or the Company's designees a royalty free, irrevocable,
worldwide license (with rights to sublicense through multiple tiers of
sublicensees) to practice all applicable patent, copyright, moral right, mask
work, trade secret and other intellectual property rights relating to any prior
inventions which Executive incorporates, or permits to be incorporated, in any
Inventions. Notwithstanding the foregoing, Executive agrees that he will not
incorporate, or permit to be incorporated, any prior inventions of Executive in
any Inventions without the Company's prior written consent.
SECTION 15. Future Innovations. Executive recognizes that Inventions or
Confidential Property relating to his activities while working for the Company
and conceived, reduced to practice, created, derived, developed, or made by
Executive, alone or with others, within three (3) months after termination of
his employment may have been conceived, reduced to practice, created, derived,
developed, or made, as applicable, in significant part while employed by the
Company. Accordingly, Executive agrees that such Inventions or Confidential
Property shall be presumed to have been conceived, reduced to practice, created,
derived, developed, or made, as applicable, during his employment with the
Company and are to be promptly assigned to the Company unless and until
Executive has established the contrary by written evidence satisfying the clear
and convincing standard of proof.
SECTION 16. Cooperation in Perfecting Rights to Proprietary Information and
Innovations.
(a) Executive agrees to perform, during and after his employment, all
acts deemed necessary or desirable by the Company to permit and assist the
Company (subject to Executive's obligations to his then employer, if any), at
the Company's expense, in obtaining and enforcing the full benefits, enjoyment,
rights and title throughout the world in the Inventions or Confidential Property
assigned or licensed to, or whose rights are irrevocably waived and shall not be
asserted against, the Company under this Agreement. Such acts may include, but
are not limited to, execution of documents and assistance or cooperation (i) in
the filing, prosecution, registration, and memorialization of assignment of any
applicable patents, copyrights, mask work, or other applications, (ii) in the
enforcement of any applicable patents, copyrights, mask work, moral rights,
trade secrets, or other proprietary rights, and (iii) in other legal proceedings
related to the Inventions or Confidential Property.
(b) In the event that the Company is unable (after reasonable efforts)
to secure Executive's signature to any document required to file, prosecute,
register, or memorialize the assignment of any patent,
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copyright, mask work or other applications or to enforce any patent, copyright,
mask work, moral right, trade secret or other proprietary right under any
Inventions (including derivative works, improvements, renewals, extensions,
continuations, divisionals, continuations in part, continuing patent
applications, reissues, and reexaminations thereof), Executive hereby
irrevocably designates and appoints the Company and the Company's duly
authorized officers and agents as his agents and attorneys-in-fact to act for
and on his behalf and instead of him, (i) to execute, file, prosecute, register
and memorialize the assignment of any such application, (ii) to execute and file
any documentation required for such enforcement, and (iii) to do all other
lawfully permitted acts to further the filing, prosecution, registration,
memorialization of assignment, issuance, and enforcement of patents, copyrights,
mask works, moral rights, trade secrets or other rights under Inventions, all
with the same legal force and effect as if executed by Executive.
SECTION 17. Consulting Agreement. The Company and Executive entered into a
Consulting Agreement, dated August 4, 2003 (the "Consulting Agreement"). The
Company acknowledges and agrees in accordance with Section 4 of the Consulting
Agreement that Executive is due and owing the following compensation by the
Company for consulting services rendered by Executive: (i) a five (5) year
Common Stock Purchase Warrant to purchase up to 50,000 shares of Common Stock of
the Company (fully vested on the date of issuance) at an exercise price of $.34
per share (the "Warrant"); and (ii) accrued salary in the amount of $_________
through February 2004 (the "Accrued Salary"). The Warrant shall be issued to
Executive upon the date of this Agreement and the form of Warrant shall provide
for registration rights with respect to the shares underlying the Warrant to the
same extent as provided in accordance with Section 6(c) with respect to the
Shares underlying the Options. In addition, the Accrued Salary shall be paid to
Executive upon the signing of this Agreement.
SECTION 18. Enforcement; Severability; Etc. It is the desire and intent of
the parties that the provisions of this Agreement shall be enforced to the
fullest extent permissible under the laws and public policies applied in each
jurisdiction in which enforcement is sought. Accordingly, if any particular
provision of this Agreement shall be adjudicated to be invalid or unenforceable,
such provision shall be deemed amended to (a) delete therefrom the portion thus
adjudicated to be invalid or unenforceable, such deletion to apply only with
respect to the operation of such provision in the particular jurisdiction in
which such adjudication is made or (b) otherwise to render it enforceable in
such jurisdiction.
SECTION 19. Remedies. Executive acknowledges and understands that the
provisions of this Agreement are of a special and unique nature, the loss of
which cannot be adequately compensated for in damages by an action at law, and
that the breach or threatened breach of the provisions of this Agreement would
cause the Company irreparable harm. In the event of a breach or threatened
breach by Executive of the provisions of this Agreement, the Company shall be
entitled to an injunction restraining him from such breach. Nothing contained in
this Agreement shall be construed as prohibiting the Company from or limiting
the Company in pursuing any other remedies available for any breach or
threatened breach of this Agreement.
SECTION 20. Notices. All notices, claims, certificates, requests, demands
and other communications hereunder shall be in writing and shall be deemed to
have been duly given and
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delivered if personally delivered or if sent by a nationally-recognized
overnight courier, by telecopy, or by registered or certified mail, return
receipt requested and postage prepaid, addressed as follows:
if to the Company, to: SmartServ Online, Inc.
0000 Xxxxxx Xxxx, Xxxxx 000,
Xxxxxxxx Xxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxx, Chief Executive Officer
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
with copies (which shall
not constitute notice) to: Xxxxxxxx Ronon Xxxxxxx & Xxxxx
0000 Xxx Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxx, Esq.
if to Executive, to: Xxxxxxx X. Xxxxxxx
0000 Xxxx Xxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
or to such other address as the party to whom notice is to be given may have
furnished to the other party or parties in writing in accordance herewith. Any
such notice or communication shall be deemed to have been received (a) in the
case of personal delivery, on the date of such delivery, (b) in the case of
nationally-recognized overnight courier, on the next business day after the date
when sent, (c) in the case of telecopy transmission, when received, and (d) in
the case of mailing, on the third business day following that on which the piece
of mail containing such communication is posted.
SECTION 21. Binding Agreement; Benefit. The provisions of this Agreement
will be binding upon, and will inure to the benefit of, the respective heirs,
legal representatives, successors and assigns of the parties.
SECTION 22. Governing Law. This Agreement will be governed by, construed
and enforced in accordance with, the laws of the State of Pennsylvania without
giving effect to principles of conflicts of laws.
SECTION 23. Waiver of Breach. The waiver by either party of a breach of any
provision of this Agreement must be in writing and shall not operate or be
construed as a waiver of any other breach.
SECTION 24. Entire Agreement. This Agreement contains the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
prior agreements
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or understandings, whether written or oral, between the parties with respect
thereto except for the obligations of the parties to each other in accordance
with the Consulting Agreement, dated, August 4, 2003, between the Company and
Executive.
SECTION 25. Survival of Provisions. Neither the termination of this
Agreement, nor of Executive's employment hereunder, shall terminate or affect in
any manner any provision of this Agreement that is intended by its terms to
survive such termination, including without limitation, the provisions of
Sections 11, 13, 14 and 15.
SECTION 26. Amendments. This Agreement may be amended only by an agreement
in writing signed by the parties.
SECTION 27. Headings. The section headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 28. Assignment. This Agreement is personal in its nature and the
parties shall not, without the consent of the other, assign or transfer this
Agreement or any rights or obligations hereunder.
SECTION 29. Gender. Any reference to the masculine gender shall be deemed
to include the feminine and neuter genders unless the context otherwise
requires.
SECTION 30. Counterparts. This Agreement may be executed in counterparts,
and each such counterpart shall be deemed to be an original instrument, but all
such counterparts together shall constitute but one agreement.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Employment Agreement as of the date first written above.
SMARTSERV ONLINE, INC.
By: /s/ Xxxxxx X. Xxxx
-------------------------------------
Name: Xxxxxx X. Xxxx
Title: Chief Executive Officer
/s/ Xxxxxxx X. Xxxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxxx
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EXHIBIT A
---------
Annual Bonus Goals
1. 30% of Executive's then Base Salary upon the Company achieving either (i)
$4.0 million in revenue in any calendar year during the Term or (ii) the
Company's completion of an equity financing of at least $5,000,000
excluding the Company's current private financing in accordance with the
Private Placement Memorandum dated January 30, 2004.
2. 30% of Executive's then Base Salary based upon mutually acceptable goals to
be established by the Company and Executive no later than April 1, 2004. If
the Company and Executive fail to agree upon mutually acceptable goals by
April 1, 2004, 60% of Executive's then Base Salary shall be paid to
Executive on an annual basis upon achieving either (i) or (ii) set forth in
paragraph 1 above.
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