EMPLOYMENT AGREEMENT
This Employment Agreement dated as of April 23, 2001 (hereinafter
referred to as "Agreement") is entered into by and between Xxxxxxxxxxxxxx.xxx,
Inc. (hereinafter referred to as the "Company") and Xxxxx Xxxxxxxx (hereinafter
referred to as "Executive").
WHEREAS, the Company employs Executive in the capacity of Chief
Executive Officer and desires to enter into an employment arrangement; and
WHEREAS, the Company and Executive desire to set forth in this
Agreement all of the terms and conditions of said employment, and to establish a
mechanism to resolve disputes relating to said employment;
NOW, THEREFORE, in consideration of the mutual promises and obligations
contained in this Agreement, the Company and Executive agree as follows:
1. Term of Employment. This Agreement is effective April 23, 2001
(the "Effective Date"), and will automatically terminate without further notice
at 5:00 p.m. on April 23, 2004.
2. Duties and Responsibilities. The Company hereby employs Executive
as President and Chief Executive Officer with such powers and duties in that
capacity as may be established from time to time by the Company in its
discretion. Executive will devote substantially his time, attention and energies
to the Company's business.
3. Compensation.
(a) Base Salary. The Company promises to pay Executive an annualized
base salary of $125,000 (the "Base Salary"), less applicable deductions, payable
in bi-monthly installments according to the Company's normal payroll practices.
The parties acknowledge that the Base Salary has been reduced lower than the
amount that the Company and Executive agree is a fair rate due to the cash
position of the Company on the date of the agreement. The Base Salary shall be
reviewed in at least every six months by the Compensation Committee of MOL's
Board of Directors. At the first review in September 2001, the Base Salary shall
be adjusted upward at least to the amount set forth in the Agreement if MOL is
properly funded and is meeting revenue expectations set forth in the business
plan.
(b) Bonuses: During the term of this Agreement, the Executive shall
receive a bonus from the Company, in such amount as shall, from time to time, be
determined by the Board of Directors of the Company, in its good faith
discretion for job performance. In addition, the Executive shall receive a bonus
from the Company for a successful restructuring as described in Exhibit A .
(c) Vacation. Executive shall be entitled to four weeks of vacation
during each full year of the Term to be pro-rated over the actual Term.
(d) Stock Options. On the date of this Agreement, the Company shall
grant to Executive stock options to purchase an aggregate of 500,000 shares of
common stock at an exercise price equal to $.11, which is the fair market value
on the date of this agreement as reported by the OTC Bulletin Board on that
date. The options shall vest immediately. In addition, for each month in which
Executive is an employee of the Company, Executive shall be granted 44,000
options at an exercise price of $.11, which shall vest immediately. In the event
of a reverse stock split, all granted but unexercised options will be replaced
with options having an exercise price equal to the fair market value of one
share of common stock as reported by the OTC bulletin board on the effective
date of the corporate action. Executive will have five years to exercise all
options. The Option Agreement is attached as Exhibit B hereto.
(e) Expenses. The Company shall pay or reimburse the Executive for all
business expenses, including, but not limited to travel between Executive's
residence and Company facilities, cell phone, etc., which are actually incurred
or paid by him in the performance of his service hereunder.
(f) Other Benefits. Executive will be entitled to participate in any
group health, life or disability plan and is entitled to any other benefits that
the Company may maintain from time to time for all employees, provided that
Executive meets the respective eligibility requirements.
4. Inability to Perform Job Duties. In the event of Executive's
death, this Agreement and the Executive's salary and compensation shall
automatically end. If Executive becomes unable to perform his employment duties
during the term of this Agreement for any reason, his compensation under this
Agreement shall automatically end until such time as Executive becomes able to
resume his job duties for the Company. In the event that Executive becomes
unable to perform his employment duties for a cumulative period of greater than
twelve (12) weeks within any span of twelve (12) months, this Agreement and
Executive's employment will be automatically terminated.
5. Termination By Company For Cause. The Company may terminate this
Agreement, and Executive's employment "for cause" at any time. As used herein,
"for cause" shall mean any one of the following:
o The habitual neglect by Executive of his job duties and
responsibilities; or
o Conviction of any felony; or
o Commission of a serious violation of any of the Company's
personnel policies set forth in the Employee Handbook as in effect
on the date of this Agreement, including but not limited to
violations of the Company's policies against any form of
harassment; or
o Any act or omission deemed as grounds for termination of employees
as set forth in the Company's personnel policies in existence at
the time; or
o A material breach of this Agreement.
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In the event the Company terminates Executive's employment for cause,
Executive's salary and other compensation shall automatically terminate and be
forfeited.
6. Termination Of Agreement By Company Without Cause or By Executive
For Good Reason. The Company may terminate this Agreement and Executive's
employment without Cause at any time upon thirty (30) days prior written notice
to Executive. The Executive may terminate this Agreement and Executive's
employment with Good Reason at any time upon thirty (30) days prior written
notice to the Company. "Good Reason" shall mean any of the following if the same
shall occur without Executive's express prior written consent: (i) the failure
by the Company to obtain the assumption by operation of law or otherwise of this
Agreement by any entity which is the surviving entity in any merger or other
form of reorganization involving the Company or by any entity which acquires all
or substantially all of the Company's assets, (ii) a material change by the
Company in Executive's functions, duties and responsibilities such that he no
longer effectively acts as President and Chief Executive Officer of the Company
or (iii) any other material breach of this Agreement by the Company, which
breach shall not be cured within fifteen (15) days after written notice thereof
to the Company. If the Company terminates Executive's Employment without Cause
or Executive terminates his employment with the Company for Good Reason, the
Company will pay to Executive a severance payment of an amount equal his
then-current Base Salary. (For purposes of this Section, the Base Salary shall
be $200,000, which would be Executive's Base Salary had a salary reduction plan
not been in place) In addition, all unvested stock options owned by the
Executive shall become fully vested and exercisable at the date Executive's
employment terminates, and Executive shall have the right to exercise all
vested, unexercised stock options outstanding at the termination date (including
the accelerated options) in accordance with the terms of the plans and
agreements pursuant to which such options were issued. Executive shall also
immediately be entitled to all accrued and unpaid payments and benefits under
Section 3.
7. Termination Of Agreement By Executive. Executive may terminate
this Agreement and his employment with the Company without cause upon thirty
(30) days prior written notice to the Company. Executive may be required to
perform his job duties and will be paid his regular salary up to the date of the
termination. At the option of the Company, the Company may require Executive to
terminate employment upon receiving said thirty (30) days' notice from Executive
of the termination of this Agreement. In such event, the Company will pay to
Executive an amount equal to thirty (30) calendar days of his base salary.
Executive will not be entitled to receive any other compensation or severance
allowance under this Agreement.
8. Change of Control. (a) For the purposes of this Agreement, a
"Change of Control" shall be deemed to have taken place if: (i) any person,
including a "group" as defined in Section 13(d)(3) of the Securities Exchange
Act of 1934, as amended (but excluding Executive and members of his family),
becomes the owner or beneficial owner of Company securities, after the date of
this Agreement, having 50% or more 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
initiated by the Company, or open market purchases approved by the Board, as
long as the majority of the Board approving the purchases is the majority at the
time the purchases are made), or (ii) the persons who were directors of the
Company before such transactions shall cease to constitute a majority of the
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Board, or any successor to the Company, as the direct or indirect result of or
in connection with, any cash tender or exchange offer, merger or other business
combination, sale of assets or contested election, or any combination of the
foregoing transactions.
(b) During the remaining term hereof after the Change of Control Date,
the Company (or subsidiary) will (i) continue to pay Executive at not less than
the Base Salary on the Change of Control Date (for purposes of this Section, the
Base Salary shall be $200,000, which would be Executive's Base Salary had a
salary reduction plan not been in place), (ii) pay Executive bonuses in amounts
not less in amount than those paid during the 12 month period preceding the
Change of Control Date, and (iii) continue employee benefit programs as to
Executive 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 benefit programs).
(c) If during the remaining term hereof after the Change of Control
Date (i) Executive's employment is terminated by the Company (or subsidiary), 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, management responsibilities or titles, and Executive
voluntarily terminates his relationship with the Company within 60 days of any
such occurrence, or the last in a series of occurrences, then Executive shall be
entitled to receive, a lump sum payment equal to Executive's Base Salary. Such
amount will be paid to Executive within 15 business days after his termination
of affiliation with the Company.
9. Cooperation. Upon the termination of this Agreement for any
reason, Executive agrees to cooperate with the Company in effecting a smooth
transition of the management of the Company with respect to the duties and
responsibilities which Executive performed for the Company. Further, after
termination of this Agreement, Executive will furnish such information and
proper assistance to the Company as it may reasonably require in connection with
any prior business arrangements in which Executive was involved, and any
litigation to which the Company is or may become party.
10. Covenant Not to Compete. During the term of this Agreement, and
for two (2) years after its termination, Executive promises and agrees that
she/he will not enter into any employment or business relationship (whether as a
principal, agent, partner, employee, investor, owner, consultant, board member
or otherwise) with any company, business organization or individual that
directly competes with the Company. This Section 10 is effective regardless of
the reason for the termination of the Agreement and regardless of whether the
Agreement is terminated by the Executive or the Company. This restrictive
covenant may be assigned to and enforced by any of the Company's assignees or
successors.
11. Agreement Not to Use or Disclose Trade Secrets. During the term of
this Agreement and a period of two (2) years thereafter, Executive promises and
agrees that he/she will not disclose or utilize any trade secrets acquired
during the course of service with the Company and/or its related business
entities. As used herein, "trade secret" refers to the whole or any portion or
phase of any formula, pattern, device, combination of devices, or compilation of
information which is for use, or is used, in the operation of the Company's
business and which provides the Company an advantage, or an opportunity to
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obtain an advantage, over those who do not know or use it. "Trade secret" also
includes any scientific, technical, or commercial information, including any
design, list of suppliers, list of customers, as well as pricing information or
methodology, contractual arrangements with vendors or suppliers, business
development plans or activities, or Company financial information. This Section
11 is effective regardless of the reason for the termination of the Agreement
and regardless of whether the Agreement is terminated by the Executive, the
Company or by its own terms. This restrictive covenant may be assigned to and
enforced by any of the Company's assignees or successors. This covenant does not
prohibit gainful employment to the extent that such employment does not violate
Section 10.
12. Agreement Not to Use or Disclose Confidential or Proprietary
Information. During the term of this Agreement and a period of two (2) years
thereafter, Executive promises and agrees that he/she will not disclose or
utilize any confidential or proprietary information acquired during the course
of service with the Company and/or its related business entities, Executive
shall not divulge, communicate, use to the detriment of the Company or for the
benefit of any other person or persons, or misuse in any way, any confidential
or proprietary information pertaining to the business of the Company. Any
confidential or proprietary information or data now or hereafter acquired by
Executive with respect to the business of the Company (which shall include, but
not be limited to, information concerning the Company's financial condition,
prospects, technology, customers, suppliers, methods of doing business and
promotion of the Company's products and services) shall be deemed a valuable,
special and unique asset of the Company that is received by Executive in
confidence and as a fiduciary. For purposes of this Agreement "confidential and
proprietary information" means information disclosed to Executive as a
consequence of or through his employment by the Company (including information
conceived, originated, discovered or developed by Executive) prior to or after
the date hereof and not generally known or in the public domain, about the
Company or its business. This Section 12 is effective regardless of the reason
for the termination of the Agreement and regardless of whether the Agreement is
terminated by the Executive, the Company or by its own terms. This restrictive
covenant may be assigned to and enforced by any of the Company's assignees or
successors.
13. Agreement Not To Hire Company Executives. If Executive leaves the
employ of the Company or terminates this Agreement, Executive promises and
agrees that, during the two (2) years following his departure from the Company,
Executive will not knowingly recruit, any person who is employed as a consultant
or employee of the Company at the time of Executive's termination, or any person
who was an employee or consultant of the Company during the six months preceding
Executive's termination. This Section 13 is effective regardless of the reason
for the termination of the Agreement and regardless of whether the Agreement is
terminated by the Executive, the Company or by its own terms. This restrictive
covenant may be assigned to and enforced by any of the Company's assignees or
successors.
14. Injunctive Relief. In recognition of the unique services to be
performed by Executive and the possibility that any violation by Executive of
Section 10, Section 11, Section 12 or Section 13 of this Agreement may cause
irreparable or indeterminate damage or injury to Company, Executive expressly
stipulates and agrees that the Company shall be entitled, upon ten (10) days
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written notice to Executive, to obtain an injunction from any court of competent
jurisdiction restraining any violation or threatened violation of these Sections
of this Agreement. Such right to an injunction shall be in addition to, and not
in limitation of, any other rights or remedies the Company may have for damages.
15. Judicial Modification of Agreement. The Company and Executive
specifically agree that a court of competent jurisdiction (or an arbitrator, as
appropriate) may modify or amend Section 10, Section 11, Section 12 or Section
13 of this Agreement if absolutely necessary to conform with relevant law or
binding judicial decisions in effect at the time the Company seeks to enforce
any or all of said provisions.
16. Resolution of Disputes by Arbitration. Any claim or controversy
that arises out of or relates to Executive's employment, this Agreement, or the
breach of this Agreement, will be resolved by arbitration in Palm Beach County
in accordance with the rules of the American Arbitration Association. Judgment
upon the award rendered by the arbitrator may be entered in any court possessing
jurisdiction over arbitration awards. This Section shall not limit or restrict
the Company's right to obtain injunctive relief for violations of Section 10,
Section 11, Section 12 or Section 13 of this Agreement directly from a court
under Section 14 of this Agreement. Each party shall be required to bear its own
costs and attorney's fees incurred in any arbitration arising out of Executive's
employment, this Agreement, or the breach of this Agreement.
17. Adequate Consideration. Executive expressly agrees that the
Company has provided adequate, reasonable consideration for the obligations
imposed upon him in this Agreement.
18. Entire Agreement. This Agreement sets forth the entire agreement
between the parties, and supersedes any prior agreements or understanding
between the Company and Executive. This Agreement may be amended only in
writing, signed by both parties.
19. Limited Effect of Waiver By Company. If the Company waives a
breach of any provision of this Agreement by Executive, that waiver will not
operate or be construed as a waiver of later breaches by Executive.
20. Severability. If any provision of this Agreement is held invalid
for any reason, such invalidity shall not affect the enforceability of the
remainder of this Agreement.
21. Assumption of Agreement by Company's Successors and Assigns. At
the Company's sole option, the Company's rights and obligations under this
Agreement will inure to the benefit and be binding upon the Company's successors
and assigns. Executive may not assign his rights and obligations under this
Agreement.
22. Applicable Law. Executive and the Company agree that this
Agreement shall be subject to, and enforceable under, the laws of the State of
Florida.
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IN WITNESS WHEREOF, the parties have executed this Employment Agreement
as of March 9, 2001.
Company Executive
By: By:
------------------------------ ------------------------------
---------------------------------- ----------------------------------
Witness Witness
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Exhibit A
Successful Restructuring Bonus
The Executive shall receive a bonus in the event of a successful restructuring
of the Company. A successful restructuring of the Company will have occurred if
the Company's operating revenues less operating expenses are greater than or
equal to $0 during any three month period while Executive is Chief Executive
Officer of the Company or any three month period occurring within six months of
the date the executive is no longer an officer or director of the Company.
The bonus will be a grant of stock options to purchase shares of common stock at
an exercise price equal to $.11, which is the fair market value on the date of
this Agreement as reported by the OTC Bulletin Board on that date. The actual
number of stock options will be determined by multiplying the number of full
months the Executive is employed by the Company and 200,000, not to exceed a
total of 2,500,000.
The stock options will be vested and exercisable according to the schedule
below:
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Percentage of Shares
Vesting Date Becoming Vested Cumulative Percentage Vested
---------------------------------------------------------------------------------------------------
Immediately upon grant 20% 20%
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First Anniversary of date of grant 20% 40%
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Second Anniversary of date of grant 20% 60%
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Third Anniversary of date of grant 20% 80%
---------------------------------------------------------------------------------------------------
Fourth Anniversary of date of grant 20% 100%
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The options shall otherwise be in the form of Exhibit B hereof.
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