EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of May 1,
1999 by and between iChargeit, Inc., a Texas corporation (the "Company"), and
Xxxxx Xxxxxxx, an individual (the "Employee").
1. EMPLOYMENT. The Company hereby agrees to employ the Employee as the
Chief Financial Officer of the Company reporting to the Chief Executive
Officer, and the Employee accepts such employment, and agrees to perform
faithfully and diligently all duties and responsibilities required of such
position or assigned by the Company from time to time, in such locations in
and around the greater New York City, New York area as determined by the
Company in its sole discretion.
2. TERM. This Agreement and Employee's employment shall be for a term of
six months commencing on May 1, 1999 (the "Effective Date"), and expiring on
October 31, 1999, but may be terminated earlier at any time in accordance
with Section 4 of this Agreement. Following the expiration of Employee's
employment on October 31, 1999, and commencing on November 1, 1999, the
parties agree that the Company will retain Employee as an independent
consultant according to the terms and conditions contained in the parties'
Consulting Agreement attached hereto as EXHIBIT A.
3. COMPENSATION. In consideration for all services to be performed under
this Agreement, Employee shall receive the following compensation:
3.1 SALARY. Employee shall be paid base salary at the rate
of Twenty Five Thousand Dollars ($25,000) for the six month term of this
Agreement ("Base Salary").
3.2 SALARY IN ARREARS. The Company shall pay Employee Ten
Thousand Dollars ($10,000) as compensation for work performed prior to the
commencement of his employment with the Company.
3.3 STOCK OPTION PROGRAM. Employee shall be granted options
under the Company's 1999 Stock Incentive Plan (the "Plan") to purchase one
hundred thousand (100,000) shares of common stock of the Company, as set
forth in the Incentive Stock Option Agreement attached hereto as EXHIBIT B,
which options shall vest in full six months from the date of grant.
3.4 GRANT OF COMMON STOCK. Employee shall be granted two
hundred fifty thousand (250,000) shares of common stock of the Company as of
March 11, 1999. In connection with such grant, Employee shall execute a Stock
Issuance Agreement in substantially the form of EXHIBIT C attached hereto,
which shall contain, without limitation, legend requirements for the stock
certificate representing such shares, and provisions restricting transfer of
the granted shares and subjecting such shares to forfeiture to the Company
upon termination of employment, all as set forth in such agreement.
3.5 EXPENSE REIMBURSEMENT. The Company shall reimburse
Employee for all reasonable and properly documented business expenses
incurred in connection with Employee's performance of his duties under this
Agreement.
3.7 STOREFRONT. The Company shall provide Employee with a
storefront on the Company's internet site located at www.ichargeit for
purposes of engaging in electronic commerce for the sale of fabrics. The
Company shall receive a percentage of all sales generated through such
storefront, according to the terms and provisions set forth in a sales agency
agreement to be entered into between the Company and Employee.
4. TERMINATION. This Agreement and Employee's employment are subject to
immediate termination at any time as follows:
4.1 DEATH OR DISABILITY. This Agreement shall terminate
immediately upon Employee's death or total disability, in which event the
Company's only obligation shall be to pay all compensation owing for services
rendered by Employee prior to the date of his death. For purposes of this
Agreement, the term "total disability" means an inability of Employee, due to
a physical or mental illness, injury or impairment, to perform a substantial
portion of his duties for a period of sixty (60) or more consecutive days, as
determined by a competent physician selected by the Board of Directors and
reasonably agreed to by the Employee, following such sixty (60) day period.
4.2 TERMINATION BY THE COMPANY FOR CAUSE. Any of the
following acts or omissions shall constitute grounds for the Company to
terminate the Employee's employment pursuant to this Agreement for "cause":
(a) Willful misconduct by Employee causing material harm to
the Company but only if Employee shall not have discontinued such misconduct
within 30 days after receiving written notice from the Company describing the
misconduct and stating that the Company will consider the continuation of
such misconduct as cause for termination of this Agreement.
(b) Any material act or omission by the Employee involving
gross negligence in the performance of the Employee's duties to, or material
deviation from any of the policies or directives of, the Company, other than
a deviation taken in good faith by the Employee for the benefit of the
Company;
(c) Any illegal act by the Employee which materially and
adversely affects the business of the Company or any felony committed by
Employee, as evidenced by conviction thereof, provided that the Company may
suspend the Employee with pay while any allegation of such illegal or
felonious act is investigated.
Termination by the Company for cause shall be accomplished
by written notice to the Employee and shall be preceded by a written notice
providing a reasonable opportunity for the Employee to correct his conduct.
4.3 TERMINATION FOR GOOD REASON. Employee's employment
pursuant to this Agreement may be terminated by the Employee for "good
reason" if the Employee voluntarily terminates his employment as a result of
any of the following:
(a) Without the Employee's prior written consent,
a reduction in his then current Base Salary;
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(b) Without Employee's prior written consent, a
relocation of the Employee's place of employment outside of the New York area;
(c) Resignation as a result of unlawful
discrimination, as evidenced by a final court order;
(d) A reduction in duties and responsibilities
which results in the Employee no longer having duties customary for the Chief
Financial Officer; or
(e) The Company materially breaches any provision
of this Agreement.
4.4 TERMINATION WITHOUT CAUSE. The Company may terminate
this Agreement, and the employment of the Employee under this Agreement,
without cause at any time upon at least thirty (30) days prior written notice
to the Employee.
4.5 PAYMENTS UPON REMOVAL OR TERMINATION. If during the
term of this Agreement, the Employee resigns for one of the reasons stated in
Section 4.3, or the Company terminates the Employee's service, except as
provided in Sections 4.1 or 4.2 hereof, the Employee shall be entitled to the
following compensation: (i) the portion of his then current Base Salary which
has accrued through his date of termination, (ii) any payments for unused
vacation and reimbursement expenses, which are due, accrued or payable at the
date of Employee's termination, (iii) severance payment in an amount (the
"Severance Amount") equal to Employee's then-current Base Salary, payable for
the remainder of the Term; and (iv) all of Employee's options to purchase
shares of the Company's common stock and restricted stock shall accelerate
and automatically vest by one additional year, and such options shall
otherwise be exercisable in accordance with their terms.
All payments required to be made by the Company to
the Employee pursuant to this Section 4.5 shall be paid on a regular basis in
accordance with the Company's normal payroll procedures and policies,
including, without limitation, the Severance Amount which shall be paid at
such times and in such amounts consistent with the Company's normal payroll
procedures and policies over the number of months immediately succeeding the
date of termination that is equal to the number of months of Base Salary
payable as the Severance Amount. If the Company terminates the Employee's
employment pursuant to Sections 4.1 or 4.2, or if the Employee voluntarily
resigns (except as provided in Section 4.3), then the Employee shall be
entitled to only the compensation set forth in items (i) and (ii) or the
first paragraph of this Section 4.5.
4.6 RETURN OF COMPANY PROPERTY. Upon termination of
employment for any reason, Employee immediately shall return to the Company
without condition all files, records, keys, and other property of the Company.
5. CONFIDENTIALITY. Employee acknowledges and agrees that Employee will be
entrusted with trade secrets and proprietary information regarding products,
processes, technical data, formulas, know-how, methods, designs, work in
progress, business plans, videos, electronic mail, inventions, vendor lists
and information, contacts and information, prices, costs, personnel and
payroll information and records, mailing lists, financial and accounting
records, contracts, leases, research and development, computer software and
data bases, copyrights, trademarks, patents, marketing techniques, and future
business plans, as well as customer lists and information concerning the
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identity, needs, and desires of actual and potential customers of the Company
and its subsidiaries, joint ventures, partners, and other affiliated persons
and entities ("Confidential Information"), all of which derive significant
economic value from not being generally known to others outside the Company.
5.1 NON-DISCLOSURE. During the entire term of Employee's
employment with the Company, and at all times thereafter, Employee shall not
disclose or exploit any Confidential Information except as necessary in the
performance of Employee's duties under this Agreement or with the Company's
express written consent.
5.2 SOLICITATION. During the term of this Agreement and for
one year thereafter, Employee shall not (i) induce or solicit any employee,
agent, consultant, or independent contractor of the Company to quit his/her
employment or other business relationship with the Company or to work for any
person or entity other than the Company; or (ii) call on, solicit, or take
away, or attempt to call on, solicit or take away, any past or present
customer of the Company with respect to the same or similar business services
now or in the future provided by the Company.
5.3 VIOLATION OF CONFIDENTIALITY. Employee acknowledges and
agrees that any violation of this Section 5 would cause immediate irreparable
damage to the Company, and that it would be extremely difficult or impossible
to determine the amount of damage caused to the Company. Employee therefore
consents to the issuance of a temporary restraining order, preliminary and
permanent injunction, and other appropriate relief to restrain any actual or
threatened violation of this Section, without limiting any other remedies the
Company may have.
5.4 OTHER AGREEMENTS. Employee represents that he is not
subject to any confidentiality, non-competition, or other agreement with any
other party that would conflict with this Agreement or prevent Employee from
performing all of his assigned duties as an employee of the Company.
6. CONFLICT OF INTERESTS. During the term of this Agreement, Employee shall
devote Employee's full working time, ability, and attention to the business
of the Company, and shall not accept other employment or engage in any other
outside business activity which interferes with the performance of Employee's
duties and responsibilities under this Agreement or which involves actual or
potential competition with the business of the Company, except with the
express written consent of the Chief Executive Officer.
7. ARBITRATION. Any dispute whatsoever relating to or arising out of this
Agreement or its construction, validity or enforcement shall be submitted to
final and binding arbitration in Orange County, California, by and pursuant
to the Employment Dispute Resolution Rules of the American Arbitration
Association. The arbitrator shall be entitled to award any relief which might
be available at law or in equity, including that of a provisional, permanent
or injunctive nature.
8. ASSIGNMENT. This Agreement shall not be assignable, in whole or in part,
by either party without the written consent of the other party, except that
the Company may, without the consent of the Employee, assign its rights and
obligations under this Agreement to an Affiliate or to any corporation, firm
or other business entity (i) with or into which the Company may merge or
consolidate, or (ii) to which the Company may sell or transfer all or
substantially all of its assets.
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9. SUCCESSORS. This Agreement shall inure to the benefit of and be
enforceable by the Employee's personal and legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If
the Employee should die while any amounts are still payable to him hereunder,
all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the Employee's devisee,
legatee, or other designee or, if there be no such designee, to the
Employee's estate.
10. NOTICES. All notices required by this Agreement may be delivered by
first class mail at the following addresses:
To the Company: iChargeit, Inc.
000 Xxxxxxx Xxxxx Xxxxxxx
Xxxxx 000
Xxxxxxxxxx Xxxxx, XX 00000
ATTN: Chief Executive Officer
To Employee: Xxxxx Xxxxxxx
0000 Xxxxxxxxx Xxxxxx
Xxxxxxxx, X.X. 00000
11. AMENDMENT. This Agreement may be modified only by written agreement
signed by the party against whom any amendment is to be enforced.
12. CHOICE OF LAW. This Agreement shall be governed by the laws of the
State of California.
13. PARTIAL INVALIDITY. In the event any provision of this Agreement is void or
unenforceable, the remaining provisions shall continue in full force and effect.
14. COMPLETE AGREEMENT. This Agreement, including the Consulting Agreement
attached hereto as EXHIBIT A, the Incentive Stock Option Agreement attached
hereto as EXHIBIT B, and the Stock Issuance Agreement attached as EXHIBIT C
hereto, as well as a sales agency agreement to be entered into between the
Company and Employee with respect to the matter set forth in Section 3.5 of
this Agreement, contains the entire agreement between the parties, and
supersedes any and all prior and contemporaneous oral and written agreements,
including Employee's previous employment contracts, which shall have no
further force and effect.
15. WITHHOLDING TAXES. The Company may withhold from any salary and benefits
payable under this Agreement all federal, state, city or other taxes or
amounts as shall be required to be withheld pursuant to any law or
governmental regulation or ruling.
16. NO WAIVER. No term or condition of this Agreement shall be deemed to
have been waived nor shall there be any estoppel to enforce any provisions of
this Agreement, except by a statement in writing signed by the party against
whom enforcement of the waiver or estoppel is sought. Any written waiver
shall not be deemed a continuing waiver unless specifically stated, shall
operate only as to the specific term or condition waived and shall not
constitute a waiver of such term or condition for the future or as to any act
other than that specifically waived.
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17. SEVERABILITY. To the extent any provision of this Agreement shall be
invalid or unenforceable, it shall be considered deleted herefrom and the
remainder of such provision and of this Agreement shall be unaffected and
shall continue in full force and effect.
18. COUNTERPART EXECUTION. This Agreement may be executed by facsimile and
in counterparts, each of which shall be deemed an original and all of which
when taken together shall constitute but one and the same instrument.
19. ATTORNEYS FEES. Should any legal action or arbitration be required to
resolve any dispute over the meaning or enforceability of this Agreement or
to enforce the terms of this Agreement, the prevailing party shall be
entitled to recover its or his reasonable attorneys fees and costs incurred
in such action, in addition to any other relief to which that party may be
entitled.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year set forth above.
"COMPANY"
iCHARGEIT, INC.,
a Texas corporation
By: /s/ Xxxxx Xxxxx
-----------------------------
Its: President
----------------------------
"EMPLOYEE"
/s/ Xxxxx X. Xxxxxxx
--------------------------------
Xxxxx Xxxxxxx
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EXHIBIT A
CONSULTING AGREEMENT
EXHIBIT B
INCENTIVE STOCK OPTION AGREEMENT
EXHIBIT C
STOCK ISSUANCE AGREEMENT
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