Exhibit
10.1
AMENDED & RESTATED
EMPLOYMENT AGREEMENT
This
Amended & Restated Employment Agreement (the “
Agreement
”), effective as of July 10, 2008 (the “
Effective
Date ”), is by and between John Z. Ferguson (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 Executive Officer, and the Executive hereby
accepts such employment upon the terms and subject to the
conditions hereinafter set forth, commencing on October 9, 2006 and
continuing until terminated pursuant to Paragraph 4 hereof (the
“ Employment
Period ”).
2.
DUTIES .
(a)
The
Executive shall act as the Chief Executive Officer of the Company
and shall report to the Company’s Board of Directors (the
“ Board
”). The Executive will be responsible for managing
and directing the Company’s operations and for such duties as
may be assigned to him from time to time by the Board, and the
Executive shall perform and discharge such duties diligently and
faithfully, provided that such duties are consistent with the
Executive’s position at the Company. Except when
on vacation or for special circumstances, the Executive shall use
his best efforts to, on a full-time basis, be (i) physically
present (a) at the Company’s headquarters or (b) at another
of the Company’s offices, or (ii) traveling on behalf of the
Company. The Executive acknowledges that his position
will require extensive travel.
(b)
If
the Board in writing directs the Executive to move his primary
residence to the vicinity of the Company’s Jacksonville
headquarters within nine months of October 9, 2006, the Executive
shall move his primary residence to the vicinity of the
Company’s Jacksonville headquarters within one year after
October 9, 2006; provided the Company and Executive have in good
faith negotiated a mutually acceptable relocation package for
Executive. If the Board in writing directs the Executive
to move his primary residence to the vicinity of the
Company’s Jacksonville headquarters later than nine months
after October 9, 2006, but not later than two years after October
9, 2006, the Executive shall move his primary residence to the
vicinity of the Company’s Jacksonville headquarters within
three months of the Board’s request; provided the Company and
Executive have in good faith negotiated a mutually acceptable
relocation package for Executive. Notwithstanding the
foregoing, if the Executive moves his primary residence at the
direction of the Board, the Company shall pay directly or reimburse
Executive for the reasonable costs and expenses of relocating,
including without
limitation,
(i) travel, transportation, meals, temporary lodging and
similar related moving expenses, and (ii) closing costs, real
estate commissions, attorney’s fees and other similar
costs reasonably incurred by Executive in the
relocation. All expenses subject to income tax
shall be grossed up such that the state and federal tax effect
to Executive is zero. The Company and the Executive
agree to work in good faith to minimize the potential gross-up
to the extent consistent with applicable laws and
regulations. Executive shall not be required to
relocate to the vicinity of the Company’s Jacksonville
headquarters until his home in Chicago, Illinois is sold. If
the Board in writing directs the Executive to move his primary
residence in accordance with the foregoing provisions, the
Executive covenants and agrees to use his best efforts to sell
such primary residence.
(c)
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 Chairman 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.
3.
COMPENSATION .
(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 Two Hundred Fifty Thousand Dollars ($250,000)
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)
Signing Bonus . Within ten (10) days after the
beginning of the Employment Period, the Company shall pay the
Executive a signing bonus of Twenty Five Thousand Dollars ($25,000)
in accordance with its ordinary payroll practices.
(c)
Bonus . During the Employment Period, the
Executive will be eligible to receive a cash bonus (the “
Bonus
”) based on an EBITDA target for the Company (30% of total
Bonus), a revenue target for the Company (30% of total Bonus) and
other management objectives (40% of total Bonus) (the (“
Targets
”)). Within sixty (60) days after the beginning of
each fiscal year beginning with the fiscal year ending December 31,
2007, the Board shall establish the Targets such that (i) upon
achieving the first threshold for all of the Targets, the Company
will pay the Executive a Bonus equal to thirty percent (30%) of the
Salary; (ii) upon achieving the second threshold (which includes
meeting the annual plan for all of the Targets) for all of the
Targets, the Company will pay the Executive a Bonus equal to sixty
percent (60%) of the Salary; and (iii) upon achieving the third
threshold for all of the Targets, the Company will pay the
Executive a Bonus equal to eighty percent (80%) of the
Salary. All Targets and Bonus threshold levels will be
determined by the Board in good faith after consultation with the
Executive. Additional Bonuses, if any, shall be
determined on an annual basis or otherwise as determined by the
Board in its sole discretion. All Bonuses are subject to
the Company’s ordinary payroll practices and payable within
sixty (60) days after the end of each fiscal
year. Notwithstanding the foregoing, for the fourth
quarter of 2006, the Company shall pay the Executive a Bonus equal
to (i) no less than Thirty Seven Thousand Five Hundred
Dollars
($37,500),
multiplied by (ii) the quotient of the number of working days
the Executive is employed by the Company in the fourth quarter
of 2006 divided by the number of working days in the fourth
quarter of 2006.
(d)
Stock Options . Executive shall be entitled to
receive, as soon as practicable following October 9, 2006,
nonqualified stock options in accordance with the terms of the a21
stock incentive plan (the “ Plan ”) and the
standard stock option agreement thereunder; provided, however, that
such options shall provide the Executive with the right to purchase
500,000 shares of a21 common stock (the “ Stock ”) at a
purchase price equal to the greater of (i) the mean of the highest
and lowest bid prices per share of the Stock on October 9, 2006,
and (ii) the average closing price of the Stock for the ten trading
days prior to and including October 9, 2006. Options to
purchase 62,500 shares of Stock shall vest on the six month
anniversary of October 9, 2006 and the remainder shall vest in
forty-two (42) equal monthly shares on the first day of each month
thereafter such that all of such options will be vested by the
forty-eighth (48 th
) month anniversary of October 9, 2006. The options
shall be exercisable for a period of five (5) years from the
October 9, 2006. All unvested options shall immediately
vest (i) upon a change in control, as defined in the stock option
agreement entered into pursuant to the Plan (a “ Change in Control
”), (ii) in the event that the Company and the Executive
negotiating in good faith are unable to reach an agreement, by no
later than the three year anniversary of October 9,
2006, regarding an extension of this Agreement or a new employment
agreement and this Agreement is not earlier terminated pursuant to
Sections 4(b)-(f) of this Agreement, or (iii) upon the
Executive’s death or Disability.
(e)
Restricted Stock . Executive shall be entitled to
receive, as soon as practicable following October 9, 2006, 500,000
shares of restricted Stock in accordance with a restricted stock
agreement provided by the Company. 62,500 shares of such
restricted Stock shall vest on the six month anniversary of October
9, 2006 and the remainder shall vest in forty-two (42) equal
monthly shares on the first day of each month thereafter such that
all of such shares shall be vested by the forty-eighth (48
th
) month anniversary of October 9, 2006. All unvested
shares of restricted Stock shall immediately vest (i) upon a change
in control, as defined in the restricted stock agreement, (ii) in
the event that the Company and the Executive negotiating in good
faith are unable to reach an agreement, by no later than the three
year anniversary of October 9, 2006, regarding an
extension of this Agreement or a new employment agreement and this
Agreement is not earlier terminated pursuant to Sections 4(b)-(f)
of this Agreement, or (iii) upon the Executive’s death or
Disability.
(f)
Benefits . During the Employment Period, the
Company shall pay One Thousand Four Hundred Dollars ($1,400) 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 increase the Benefit Amount by 5% in January of each year
beginning with January 2008. 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 vacation as is in the
best interests of the Company after coordination with the Chairman
of the Board, which in no event shall be less than three (3)
calendar weeks.
(g)
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 Board. 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.
(h)
Residence/Moving Expenses . From October 9, 2006
until the date that the Executive moves his primary residence to
the vicinity of the Company’s then headquarters in accordance
with Section 2(a) of this Agreement, the Company shall make
available to the Executive a reasonably appropriate apartment in
the vicinity of the Company’s headquarters. The
Company agrees that it will reimburse the Executive’s
reasonable moving expenses to move from his current home to a
location referenced in Section 2(b) of this Agreement upon
submission of such reasonable evidence thereof as the Company shall
request. The Executive covenants and agrees to minimize
the aggregate amount of the moving expenses to the extent
reasonably practicable.
(i)
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) One Hundred Twenty Five
Thousand Dollars ($125,000). 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.
(j)
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 9, 2006 and continue for
thirty-six (36) months 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 thirty (30) 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) Salary at the annual
rate in effect on the date of termination for a period of six (6)
months (twelve (12) months if, following a Change in Control, the
Company terminates this Agreement or the Executive’s
employment without Cause after the Effec
|
