AMENDED AND RE-STATED EMPLOYMENT AGREEMEN T
EFFECTIVE: March 29,
2007
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PAGES
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1.
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EMPLOYMENT
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1
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1.1
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General Duties
and Title
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1
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2.
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TERM
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2
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3.
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REMUNERATION
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2
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4.
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WITHHOLDING
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3
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5.
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INSURANCE AND
OTHER BENEFIT PLANS
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3
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6.
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VACATIONS,
ILLNESS AND HOLIDAYS
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3
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7.
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BUSINESS
EXPENSES
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4
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8.
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INDEMNIFICATION
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4
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9.
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TERMINATION OF
EMPLOYMENT
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5
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9.1
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Termination by
the Company for Cause
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5
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9.2
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Definition of
Cause
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5
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9.3
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Determination
of For Cause Termination
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6
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9.4
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Termination by
the Company Without Cause and for Good Reason
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6
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9.5
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Voluntary
Termination by the Executive
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7
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9.6
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Disability
Termination
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7
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9.7
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Termination Due
to Executive’s Death
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7
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10.
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RESTRICTIVE
CONVENANTS; CONFIDENTIALITY; OWNERSHIP OF PROCEEDS OF
EMPLOYMENT
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8
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10.1
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Solicitation of
Employees; Customers; Agents or Representatives etc
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8
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10.2
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Confidential
Records
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8
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10.3
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Ownership of
Proceeds of Employment
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9
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10.4
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Survival
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9
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10.5
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Enforceability;
Remedies
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9
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11.
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MISCELLANEOUS
PROVISIONS
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9
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11.1
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Severability
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9
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11.2
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Execution in
Counterparts
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10
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11.3
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Notices
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10
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11.4
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Entire
Agreement and Subsequent Amendments
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11
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11.5
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Applicable
Law
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11
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i
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PAGES
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11.6
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Headings
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11
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11.7
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Binding Effect;
Successors and Assigns
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11
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11.8
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Waiver
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11
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11.9
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Warranty and
Capacity to Contract
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11
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11.10
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Arbitration
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12
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11.11
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Remedies
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12
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11.12
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Survival
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12
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11.13
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Deferred
Compensation
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13
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ii
THIS EMPLOYMENT
AGREEMENT (the “Agreement”) originally entered into
January 20, 2006 (the “Effective Date”) and
amended and re-stated, effective March 29, 2007 by and between
HARTVILLE GROUP, INC. (the “Company”) a Nevada
corporation, and CHRISTOPHER EDGAR
(“Executive”).
WHEREAS , the Company desires to employ Executive in
accordance with the terms of this Agreement and Executive desires
to be so employed by the Company; and
WHEREAS , the parties desire to set forth the employment
understanding and terms and conditions of employment in a written
agreement; and Executive wishes to accept such employment upon the
terms and subject to the conditions hereinafter set
forth;
NOW
THEREFORE , in
consideration of the mutual promises contained herein, the parties
hereto hereby agree as follows:
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1.1
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General Duties and
Title
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On
the Effective Date, the Company hereby employs Executive with the
title/s designated in Exhibit A (the “Position
Description”) attached hereto and forming a part of this
Agreement.
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Executive’s primary
responsibilities and duties are as described in Exhibit A. The
primary responsibilities and duties of the Executive may be altered
or amended by either (i) the mutual agreement of the Company
and the Executive; or (ii) the establishment of new or
modified duties, as determined by the Chief Executive Officer (the
“CEO”) after consultation with the Board of Directors
of the Company (the “Board”). Any modifications or
alterations to the duties assigned to the Executive will be
consistent with the customary duties of a Chief Marketing Officer
and the education, background and experience of the Executive.
Executive shall faithfully and substantially perform for the
Company all such duties. Executive shall report to and take
direction primarily from the CEO. With consent, the Executive
agrees to act in the capacity of a board member or officer of such
subsidiaries as he may be appointed without remuneration other than
the remuneration to which Executive is otherwise entitled under
this Agreement.
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Services rendered by Executive shall
be rendered in accordance with recognized insurance and financial
industry standards and recognized codes of conduct or ethics.
Executive shall further promote and enhance the business purposes
of the Company by entertainment and other means, including
participation in professional organizations and activities,
attendance at insurance, financial, or industry conventions and
seminars, and membership in insurance or financial industry
societies. Any expenses associated with the foregoing shall be paid
directly, or reimbursed to the Executive, by the
Company.
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1
The employment
of Executive hereunder shall commence on the Effective Date (the
date coinciding with each one (1) year anniversary of the
Effective Date shall be referred to as an “Anniversary
Date”) and shall, unless this Agreement is sooner terminated
as provided in Section 9 hereof, continue for two
(2) years from the Effective Date (the “Initial
Term”) and thereafter for additional one (1) year terms,
provided however, that if written notice of termination of this
Agreement is given by either party to the other party at least
ninety (90) days prior to an Anniversary Date (the first of
which shall be the last day of the Initial Term), then this
Agreement shall terminate no later than the Anniversary Date next
following the date of such notice.
The Company
will pay, or provide, to Executive as compensation for services to
be rendered under Section 1 hereof, the following
amounts:
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(a)
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Grant of Restricted
Stock
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On the
Effective Date, the Company shall grant to Executive 2,000,000
shares of its Restricted Common Stock pursuant to a Restricted
Stock Agreement, a copy of which is attached as Exhibit B and
incorporated herein and on January 2, 2007, the Company will
grant to Executive an additional 1,000,000 shares of the
Company’s Restricted Common Stock pursuant to a restricted
stock agreement with terms and conditions substantially similar to
the agreement attached as Exhibit B and shall provide that
250,000 shares shall vest on each of March 31, June 30,
September 30 and December 31, 2007.
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(b)
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Non-Statutory Stock Option
Plan
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On the
Effective Date, the Company shall grant to Executive options to
purchase 500,000 shares of the Company’s Common Stock under
the Company’s 2003 Non-Qualified Stock Option Plan and the
grant shall be as set forth on Exhibit C attached hereto and
incorporated herein. In addition, on January 2, 2007, the
Company shall grant an additional 500,000 options to purchase
shares of the Company’s Common Stock. The grant of such
options shall be as set forth in the Company’s 2003
Non-Qualified Stock Option Plan and the grant shall be as set forth
in an agreement substantially similar to Exhibit C and shall
provide that 125,000 shares shall vest on each of March 31,
June 30, September 30 and December 31,
2007.
Notwithstanding
the foregoing, in the event that a proposed “Change of
Control” (as defined herein) occurs prior to January 2,
2007, the grant of restricted stock and options that are scheduled
to be made on January 2, 2007 shall instead by made prior to
the execution of an agreement which would result in a Change of
Control, if the transactions contemplated by such agreement were
consummated.
The period of
time within which any Options granted under any Stock Option
Agreement may be exercised in the event of termination after a
‘Change in
2
Control,’
shall be extended by not less than twelve (12) months after
the Termination Date, but in any event, no later than the
expiration date of all Options.
For the
purposes of this Agreement, “Change of Control” means
(i) any “person” (as defined in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934 (“Act”)
(other than a current 10% beneficial owner (as defined in
Rule 13d-3 under the Act) of the Company’s securities)
becomes the beneficial owner, directly or indirectly, of more than
fifty percent (50%) of the combined voting power of the then issued
and outstanding securities of the Company or (ii) the sale,
transfer or other disposition of all or substantially all of the
assets of the Company, whether by sale of assets, merger or
otherwise.
In addition, if
approved by the Board of Directors the Executive may be eligible to
participate in any bonus plan of the Company upon the same terms
and conditions as other senior executives of the
Company.
Executive
agrees that the Company shall withhold from any and all payments
required to be made to Executive pursuant to this Agreement all
actual or potential Federal, State, local and/or other taxes the
Company determines are required or potentially will be required, to
be withheld in accordance with applicable statutes and/or
regulations from time to time in effect.
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5.
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INSURANCE AND OTHER BENEFIT
PLANS
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Executive shall
be entitled, during the period of employment with the Company, to
participate in (i) the life insurance and disability insurance
plans available to executives of the Company, including such
accidental death or other benefits as may be provided under such
plans, and (ii) the health and dental and vision plans
available to officers (and their immediate families) of the
Company, and (iii) such other employee benefit plans,
including all employee welfare benefit plans and employee pension
benefit plans, that currently are or will be made generally
available to executives and salaried employees of the Company.
Participation by or inclusion of the Executive in any benefit plan
maintained by the Company shall be provided only to the extent that
the Executive is eligible under the terms and conditions of the
applicable plan and, if required pursuant to the plan, the employee
meets any insurance underwriting or other conditions validly
required by the provider or carrier of the plan or the contracts,
policies, or other terms of eligibility or participation issued in
connection with the plan.
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6.
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VACATIONS, ILLNESS AND
HOLIDAYS
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Without any
loss or reduction of remuneration, Executive shall be entitled to
be absent from Executive’s duties with the Company by reason
of vacation or illness for four (4) weeks for each twelve
(12) month period during the term of this Agreement. In
addition, the Executive shall be entitled to such national and
religious holidays as
3
generally
approved by the Company. The Executive shall not be entitled to
carry forward any unused sickness, vacation or holiday time accrued
during a year to successive years of this Agreement.
The Company
recognizes that, in connection with Executive’s performance
of his duties, functions and responsibilities hereunder, Executive
will incur certain reasonable and necessary business expenses,
including, but not limited to, travel to and from New York and Ohio
and lodging costs in Ohio. The Company agrees to pay or promptly
reimburse Executive, but not less frequently than monthly, for all
such reasonable business expenses, which are incurred in connection
with the Company’s business, upon the presentation of
statements setting forth the nature and amount of such expenses in
reasonable detail, in accordance with the Company’s generally
applicable guidelines and procedures from time to time; provided,
that, with respect to the travel and lodging costs described in
this Section 7, the Company shall pay such expenses
directly.
In addition,
the Company shall reimburse the Executive for 100% of his legal
fees (up to a maximum of $6000) associated with the preparation and
negotiation of this Agreement and the agreements set forth in
Exhibits B and C immediately upon presentation of the billing
statements for such legal fees.
The Company
shall indemnify, defend and hold harmless Executive, and shall
cause each applicable entity controlled by the Company (defined for
purposes of this Section 8 as a “Subsidiary”) to
indemnify, defend and hold harmless Executive for general directors
and/or officers liability in the normal course of Executive’s
services on Company business or Subsidiary business, to the fullest
extent allowed by Nevada law and the bylaws of the Company. To the
extent that a Subsidiary does not fully indemnify the Executive,
the Company shall be responsible for such
indemnification.
To secure its
indemnification obligations the Company has and shall maintain in
full force and effect through the term of this Agreement directors
and officers insurance coverage as determined by the Company, but
in no event in an amount less than $2 million. The use of the
Company’s insurance coverage or policy to secure its or any
Subsidiary’s indemnification obligation shall not, however,
limit the obligation of the Company or any Subsidiary to indemnify
the Executive for claims or expenses either below the annual or
periodic deductible limit in the policy or in excess of the policy
limits or for items or events not covered by the policy.
To the extent
provided in the Company’s bylaws, the Company shall be
obligated, and shall cause each applicable Subsidiary, to pay the
claims or expenses of the Executive required under this
Section 8, including defense cost, directly to the third party
to whom payment is due and owing, without the necessity of the
Executive making such payment and seeking reimbursement from the
Company or the Subsidiary.
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To
the extent that the Executive is successful on the merits or
otherwise in defense of any action, suit, or proceeding, or in
defence of any claim, issue or matter brought against the
Executive, the Executive shall be indemnified by the Company, and
the Company shall cause each applicable Subsidiary to indemnify the
Company, against all expenses, including defense and legal fees,
incurred by the Executive.
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The
provisions of this Section 8 shall survive the termination or
expiration of Executive’s employment under this Agreement
irrespective of the reason for such termination, provided that
nothing herein shall be construed to provide Executive with any
greater coverage or coverage for any period longer than Executive
would have been entitled to receive under the terms of such
insurance policy referred to herein (other than deductible and
policy dollar limits).
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9.
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TERMINATION OF
EMPLOYMENT
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9.1
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Termination by the Company for
Cause
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In
the event that Executive is removed from office by the Company for
Cause (as hereinafter defined), the employment of Executive under
this Agreement shall terminate and Executive shall be entitled to
receive all remuneration and benefits accrued hereunder to the date
of such termination except for unvested Restricted Stock and
Options granted hereunder and insurance which would by its terms
lapse.
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No
other or further payment of benefits under this Agreement will be
due upon termination for Cause, except as required by law, or under
the Company’s insurance and other employee benefit plans and
the procedures referred to in Sections 5 and 7.
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9.2
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Definition of
Cause
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For
purposes of this Agreement, the term “Cause” shall mean
(i) any wilful material neglect by Executive, or material
failure by Executive to substantially perform the duties and
responsibilities of the Executive’s office or offices
(oth
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