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EMPLOYMENT AGREEMENT
This Employment Agreement (this "
Agreement "), effective as of
January 8 2006 (the " Effective Date
"), is by and between Bruce Slywka (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 Executive Vice President, Sales
and Marketing, 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 ").
2. DUTIES
.
(a) The Executive
shall report to the Company’s Chief Executive Officer,
Chairman and Board of Directors (the "
Board "). The Executive will be
responsible for global sales and marketing for the Company and its
subsidiaries and for such other duties as may be assigned to him
from time to time by the Chief Executive Officer, the Chairman or
the Board. The Executive shall perform and discharge all such
duties diligently and faithfully, provided that such duties are
consistent with the Executive’s position at the Company. The
Executive will be based out of his home office in Bothell,
Washington, but the Executive acknowledges that his position will
require extensive domestic and international travel.
(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 prior 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 One Hundred Eighty-Five Thousand Dollars ($185,000)
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.
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(b) Signing
Bonus . Within thirty (30) days after the beginning of the
Employment Period, the Company shall pay the Executive a signing
bonus of Fifteen Thousand Dollars ($15,000) 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
twenty percent (20%) 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 forty percent (40%) 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 sixty percent (60%) of the
Salary. All Targets and Bonus threshold levels will be determined
by the Board in its sole discretion. Additional Bonuses, if any,
shall be determined on an annual basis or otherwise as determined
by the Board in its sole discretion. Notwithstanding the foregoing,
for the year ended December 31, 2007, the Company shall pay the
Executive a minimum bonus of Twenty-Five Thousand Dollars
($25,000).
In addition, and only with respect to the fiscal
year ending December 31, 2007, the Company will pay the Executive
an additional bonus equal to (i) 0.02 multiplied by (ii) (a) the
Company’s net sales for the fiscal year ending December 31,
2007 minus (b) the Net Sales Threshold. The " Net
Sales Threshold " will be the net sales
target of the Company, as determined by the Board in its sole
discretion, for the year ended December 31, 2007. The Net Sales
Threshold will be determined by the Board within sixty (60) days
after the beginning of the fiscal year ending December 31,
2007.
All Bonuses are subject to the Company’s
ordinary payroll practices and payable within sixty (60) days after
the end of each fiscal year. Additional Bonuses, if any, shall be
determined on an annual basis or otherwise as determined by the
Board in its sole discretion.
(d) Restricted
Stock . Executive shall be entitled to receive, as soon as
practicable following the Effective Date, 350,000 shares of the
Company’s restricted common stock in accordance with a
restricted stock agreement provided by the Company. 43,750 shares
of such restricted Stock shall vest on the six month anniversary of
the Effective Date and the remainder shall vest in forty-two (42)
equal monthly installments 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 the Effective Date. In
addition, all unvested shares of restricted Stock shall vest upon a
change of control, as defined in the restricted stock agreement
provided to the Executive by the Company.
(e) Benefits . During the Employment Period, the Company
shall pay Eight Hundred Dollars ($800) 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 vacation as is in the best
interests of the Company after coordination with the Chairman of
the Board and the Chief Executive Officer, which in no event shall
be less than fifteen (15) business days.
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(f) 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.
(g) 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 the Effective Date and continue
until terminated 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 four (4)
months in installments in accordance with the Company’s
ordinary payroll practices, (iii) a pro rata portion of any Bonus
payable in respect of the fiscal year in which the date of
termination occurs, and (iv) 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
notice 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
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(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, 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) an amount equal
to two (2) months of the Salary, paid over a period of six (6)
months in installments in accordance with the Company’s
ordinary payroll practices, and (iii) 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 no
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