EMPLOYMENT
AGREEMENT
This Employment Agreement (the “
Agreement ”), effective as of October 1, 2008 (the
“ Effective Date ”), is by and between R.
LaDuane Clifton (the “ Executive ”) and a21,
Inc., a corporation formed under the laws of the State of Delaware
(the “ Company ” or “ a21
”).
W I T N E S S E T
H :
WHEREAS , the Company desires to employ the Executive,
and the Executive is willing to render services to the Company, on
the terms and subject to the conditions hereinafter set
forth.
NOW, THEREFORE , in consideration of the premises and the
mutual covenants, agreements and promises hereinafter set forth,
the parties hereto covenant and agree as follows:
1.
EMPLOYMENT
. The Company shall
employ the Executive as its Chief Financial Officer and Vice
President, and the Executive hereby accepts such employment upon
the terms and subject to the conditions hereinafter set forth,
commencing on the Effective Date and continuing until terminated
pursuant to Paragraph 4 hereof (the “ Employment
Period ”).
(a) The Executive
shall report to a21’s Board of Directors (the “ a21
Board ”) through its Chief Executive
Officer. The Executive shall perform and discharge
diligently and faithfully such duties as may be assigned to him
from time to time by the a21 Board and its Chief Executive Officer
as are customary for the position of Chief Financial
Officer. The Executive shall be based in the
Jacksonville, Florida, metropolitan area, but his position will
require reasonable travel outside of such area.
(b) The Executive
shall devote his full business time, attention, skills and energies
to the performance of his duties hereunder and to the promotion of
the business of the Company. The Executive may not,
during the Employment Period, be employed or engaged in any other
business activity, whether or not such activity is pursued for
gain, profit or other pecuniary advantage, which would not allow
him to contribute his full business time, attention, skills and
energies to the performance of his duties hereunder and to the
promotion of the business of the Company without the written
consent of the Chief Executive Officer of the
Company. Nothing in this paragraph will be construed as
preventing the Executive from investing his personal assets in
businesses which do not compete with the Company and engaging in
not-for-profit and civic activities that do not interfere with the
Executive’s duties hereunder.
(a) Salary
. For services rendered by the Executive hereunder
during the Employment Period, the Company shall pay Executive a
base salary (the “ Salary ”) at the annual gross
rate of One Hundred Fifty Thousand Dollars ($150,000) in accordance
with the Company’s ordinary payroll practices. An
employment review will take place on an annual
basis. Any increases in the Salary shall be determined
on an annual basis by the Board in its sole discretion.
(b) Benefits
. During the Employment Period, the Company shall pay
Nine Hundred Dollars ($900) per month (the “ Benefit
Amount ”) of medical, dental, life insurance, pension or
other employee benefits for the Executive, each as determined by
the Executive, whether the Executive elects to use the benefit
plans provided by the Company from time to time or
otherwise. The Company will permit the Executive to make
contributions to the Company’s 401(k) plan, subject to the
terms and conditions of such plan. The Executive is
entitled to such amount of paid time off (“PTO”) as is
in the best interests of the Company after coordination with the
Chief Executive Officer of the Company, which in no event shall be
less than four (4) calendar weeks.
(c) Expense
Reimbursement . The Executive is authorized to incur reasonable
expenses related to the performance of his duties under this
Agreement in accordance with budgets and guidelines established by
the Company from time to time or otherwise approved by the Chief
Executive Officer of the Company. The Company shall
promptly reimburse the Executive for all such documented expenses
in accordance with its expense reimbursement policy in effect from
time to time.
(d) Special
Bonus . If both a Change in Control and a greater
than $9,000,000 reduction in the amount of the Company’s
outstanding promissory notes occur after the Effective Date
(collectively, the “ Conditions ”), then the
Company shall pay the Executive a special bonus (the “
Special Bonus ”). The Special Bonus shall
be equal to the lesser of (i)(a) 1.5% multiplied by the amount the
Company’s outstanding promissory notes are reduced below the
amount of such notes in existence at the Effective Date, plus (b)
1.5% multiplied by the amount of capital (whether in the form of
equity and/or debt) received by the Company within ninety (90) days
after the Effective Date, unless such capital is used to reduce the
amount of the Company’s outstanding promissory notes in
existence at the Effective Date, and (ii) Fifty Thousand Dollars
($50,000). The Company shall pay the Special Bonus
within ten (10) days after satisfaction of both of the Conditions
in accordance with its ordinary payroll practices. The
Special Bonus shall only be paid once. Debt forgiveness,
conversion or exchange of outstanding promissory notes into or for
the Company’s equity securities shall satisfy the
Conditions.
(e) Taxes
. All payments and benefits provided to the Executive
hereunder shall be reported as taxable income to the extent
required by law and shall be subject to applicable income and
payroll withholding taxes.
4.
TERM AND
TERMINATION .
(a) The term of this
Agreement (the “ Employment Period ”) shall
commence on October 1, 2008, and continue unless terminated earlier
in accordance with this Paragraph 4.
(b) Termination
Without Cause . Either party hereto may terminate
this Agreement and the Executive’s employment for any reason
at any time during the Employment Period, effective upon ten (10)
days prior written notice to the other party. In the
event the Company terminates this Agreement and the
Executive’s employment without Cause (as hereinafter
defined), the Company shall, subject to Executive’s
compliance with Sections 5, 6 and 7 hereof, the Executive’s
resignation from all positions (including any directorships) with
the Company or its Affiliates (as defined below) and the execution
and delivery by the Executive of a separation agreement and general
release, in a form reasonably acceptable to the Company, of all
claims related to his employment or termination thereof through and
including the date Executive signs such release, pay to the
Executive (i) any unpaid Salary accrued as of the date of
termination, (ii) any earned but unused PTO prorated through the
last full calendar month of service, (iii) Salary at the annual
rate in effect on the date of termination for a period of six (6)
months in installments in accordance with the Company’s
ordinary payroll practices, (iv) benefits at a monthly rate not to
exceed Nine Hundred Dollars ($900) for a period of six (6) months,
and (v) reimbursement of any outstanding business expenses for
which Executive is entitled to be reimbursed in accordance with
this Agreement up to and including the date of
termination. The Executive shall not be entitled to any
further payments or benefits from the Company or any of its
Affiliates, except as required by any federal or state law
requiring continuation of benefits and except as may be provided in
any other written agreement with the Company.
(c) Termination for
Cause . The Company may terminate this Agreement and
the Executive’s employment for Cause (as hereinafter defined)
at any time, effective immediately upon giving the Executive
written notice of such termination. As used herein, the
term “ Cause ” shall mean any of the following
events:
(i) the
Executive’s conviction of or plea of guilty, nolo contendere,
or no contest to a misdemeanor involving moral turpitude or a
felony which may result in a term of imprisonment;
(ii) the
Executive’s material breach of this Agreement or willful
failure to carry out the lawful directives of the Board consistent
with Paragraph 2(a) hereof (provided the Company has given the
Employee advance written notice specifying the nature of such
breach or failure to carry out the lawful directives of the Board
and the Executive has not cured such breach within thirty (30) days
of having received such notice); or
(iii) the
Executive’s (A) willful gross misconduct, including, without
limitation, dishonesty, fraud or theft, or (B) willful bad faith
act or failure to act that is in the sole discretion of the Board
injurious to the business or reputation of the Company.
In the event of termination for Cause, the
Company shall pay to the Executive (i) any unpaid Salary
accrued as of the date of termination, and (ii) reimbursement of
any outstanding business expenses for which Executive is entitled
to be reimbursed in accordance with this Agreement up to and
including the date of termination. The Executive shall
not be entitled to any further payments or benefits except as
required by any federal or state law requiring continuation of
benefits and except as may be provided in any other written
agreement with the Company.
(d) Death
. If the Executive dies during the Employment Period,
this Agreement and the Executive’s employment shall terminate
as of the date of his death. The Company shall pay to
the Executive’s estate any unpaid Salary and the
Executive’s estate shall not be entitled to any further
payments or benefits from the Company or any of its Affiliates
except as required by any federal or state law requiring
continuation of benefits and except as may be provided in any other
agreement with the Company.
(e) Disability
. If the Executive is incapacitated by accident,
sickness or otherwise so as to render him mentally or physically
incapable of performing the services required of him under this
Agreement (referred to herein as a “ Disability
”) for (i) a period of ninety (90) consecutive days or (ii)
for an aggregate of one hundred twenty (120) business days during
any twelve (12) month period, the Company may terminate this
Agreement and the Executive’s employment effective
immediately after the expiration of either of such periods, upon
giving the Executive written notice of such
termination. Notwithstanding the foregoing provision, if
it is determined by the Company that the Executive has a
“disability” as defined under the Americans with
Disabilities Act, the Executive’s employment shall not be
terminated on the basis