EMPLOYMENT AGREEMENT
BETWEEN iTURF INC.
AND
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
DATED AS OF APRIL 5, 1999
iTurf Inc. (the "Company"), a Delaware corporation, and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
(the "Executive") agree as follows:
1. Employment and Duties
(a) The Company shall employ the Executive, and the Executive shall
serve the Company, as the Chief Operating Officer of the Company for the
Employment Period (as defined below) as the Company's board of directors (the
"Board") may from time to time direct. The Executive shall use his best efforts
to promote the interests of the Company, and shall perform his duties faithfully
and diligently, consistent with sound business practices.
(b) The Executive shall devote substantially his full business time to
the performance of his duties for the Company.
(c) For purposes of this Agreement, "Affiliate" shall mean any
corporation or other entity of which the Company (or any corporation or entity
controlling the Company) has at least a 49% equity or voting interest.
2. Compensation
(a) As compensation for all services to be rendered by the Executive
during his employment under this agreement, the Executive shall be entitled to a
base salary at the rate of $125,000 a year (payable in equal installments at
least twice a month), subject to increases as provided in section 2(b).
(b) The Company may, in the sole and absolute discretion of the board
of directors, from time to time increase the Executive's base salary and award
the Executive such bonuses as it considers appropriate.
3. Term. (a) The "Employment Period" shall commence on the date of the
completion of the Company's initial public offering and continue until the third
anniversary thereof; provided that the Employment Period shall terminate
earlier: (i) upon Executive's resignation, death or permanent disability or
incapacity (if in the good faith determination of the Company's board of
directors, such disability or incapacity has prevented the Executive from
substantially performing his duties and obligations under this Agreement during
any period of nine consecutive calendar months and the Company gives notice to
the Executive not earlier than 30 days and not later than 90 days after the
expiration of the nine months (in which case the Executive's employment under
this Agreement shall terminate when that notice is given) ("Disability"); (ii)
in accordance with subparagraph (c) below; or (iii) upon written notice to
Executive, at any time, for Cause, as defined in subparagraph (b) below.
(b) For purposes of this Agreement, "Cause" shall mean (i) a
material breach of this Agreement by Executive that, if capable of being
remedied, Executive fails to remedy within 30 days after written notice, (ii)
any breach of Executive's duty of loyalty to the Company or any of its
affiliates or act of fraud or intentional dishonesty with respect to the Company
or any of its Affiliates, which, with respect to any of the foregoing, causes
material harm to the Company's business, (iii) the commission by Executive of a
felony or crime involving moral turpitude or other wrongful act or omission
causing material harm to the standing and reputation of the Company and its
Affiliates, (iv) failure by the Executive to report for work for ten (10)
consecutive business days other than for reasonable personal excuses, which
failure Executive fails to cure after written notice, or (vi) willful misconduct
or gross negligence in the performance of Executive's duties to the Company,
which conduct is material and demonstrably injurious to the Company and, if
capable of being remedied, is not remedied within 30 days.
(c) Executive may, at any time during the Employment Period by
written notice to the Company, terminate the Employment Period for "Good Reason"
effective upon such notice. "Good Reason" means (i) a material breach by the
Company of any material provision of this Agreement that the Company fails to
remedy or cease within 30 days after written notice thereof to the Company; or
(ii) a relocation by the Company of the Executive's offices to a geographic
location outside the metropolitan New York area.
4. Separation Payments.
(a) In the event of termination of the Employment Period upon
Executive's resignation (other than for Good Reason), death or Disability, the
Company shall promptly pay to Executive all sums accrued and unpaid to the date
of termination (including unused vacation in accordance with the policies of the
Company with respect to its executive officers then in effect) and Executive
shall not be entitled to receive his Base Salary, any severance pay or any
fringe benefits or bonuses for periods after such termination of the Employment
Period.
(b) If the Employment Period is terminated by the Company
without Cause or by the Executive for Good Reason in accordance with Section
3(c), the Company (i) shall continue to pay the Executive the Base Salary
(determined pursuant to Section 3) in effect at the time of termination for the
remainder of the Employment Period had it not been so terminated, and (ii) shall
pay to Executive within ten days thereof all sums accrued and unpaid to the date
of termination. The provisions of this Section 4(b) shall constitute Executive's
sole and exclusive remedy in connection with termination of the Employment
Period by the Company without Cause or by the Executive for Good Reason in
accordance with Section 3(c).
5. Expenses; Fringe Benefits
During the Employment Period:
(a) The Company shall reimburse Executive for all reasonable expenses
incurred by him in the course of performing his duties under this Agreement
which are consistent with the Company's policies in effect from time to time
with respect to travel, entertainment and other business expenses, subject to
the Company's requirements with respect to reporting and documentation of such
expenses.
(b) The Executive shall be entitled to three weeks vacation each year.
(c) Except to the extent ▇▇▇▇▇*s Inc. ("▇▇▇▇▇*s") provides comparable
benefits to the Executive, the Company shall provide the Executive with medical
insurance, disability insurance and life insurance under policies no less
favorable to the Executive than the ones (i) currently in effect and (ii)
offered from time to time to the Company's other executive officers. In
addition, the Company may obtain key-man term life insurance on the life of the
Executive, and the Company shall be the beneficiary under such policy.
6. Non-Competition
(a) Executive agrees that during the Employment Period and for
a period of two years from the termination thereof (the "Non-Competition
Period"), he will not directly, either for his own account or for the benefit of
any person, firm or corporation, engage in any business activity directly
competitive with the Company (a "Competing Business Activity"), provided,
however, that a business activity shall not be deemed to be a Competing Business
Activity if Executive did not have direct or indirect involvement in the
particular competing activity engaged in by the Company.
(b) Executive agrees that during the Non-Competition Period,
Executive shall not discuss or accept any relationship, whether as a consultant,
representative, employee, executive, officer, director, manager or otherwise,
with any person, firm or corporation which is engaged in a Competing Business
Activity.
(c) During the Non-Competition Period, Executive shall not
directly or indirectly own or be a stockholder, partner of, or otherwise
participate in any company that is engaged in a Competing Business Activity.
Notwithstanding the above, Executive may hold up to a one percent (1%) interest
in any publicly held or traded company and shall have an unlimited right to
invest in any mutual fund which is publicly traded or managed by a major
financial institution.
(d) During the Non-Competition Period, Executive shall not
directly or indirectly through another person or entity (i) induce or attempt to
induce any employee of the Company or any Affiliate to leave the employ of the
Company or such Affiliate, or in any way interfere with the relationship between
the Company or any Affiliate and any employee thereof, (ii) hire any person who
was an employee of the Company or any Affiliate at any time during the
Employment Period or (iii) induce or attempt to induce any customer, supplier,
licensee, licensor, franchisee, consultant or other business relation of the
Company or Affiliate to cease doing business with the Company or such Affiliate,
or in any way interfere with the relationship between any such customer,
supplier, licensee, consultant or business relation and the Company or any
Affiliate (including, without limitation, making any negative statements or
communications about the Company or its Affiliates). Notwithstanding anything to
the contrary contained herein, Executive's obligation under clause (ii) of the
preceding sentence shall terminate six months after an acquisition of the
Company by an unrelated third party.
(e) During the Non-Competition Period, Executive shall inform
any prospective new employer or associate prior to accepting any employment or
any business relationship of the existence of this Agreement and provide such
employer or associate with a copy of this Agreement.
(f) In the event any covenant made in this Agreement shall be
more restrictive than permitted by applicable law, it shall be limited to the
extent which is so permitted. Nothing in this Agreement shall be construed as to
prevent the Company from pursuing any and all remedies available to it for the
breach or threatened breach of covenants made in this Agreement, including
recovery of money damages or temporary or permanent injunctive relief.
Accordingly, Executive acknowledges that the remedy at law for breach of the
provisions of this Agreement may be inadequate and that, in addition to any
other remedy the Company may have, it shall be entitled to an injunction
restraining any breach or threatened breach, without any bond or other security
being required and without the necessity of showing actual damages.
(g) Notwithstanding anything to the contrary contained in this
Section 6, (i) nothing contained in this Section 6 shall be construed so as to
prohibit the Executive from being employed by a company or entity that engages
in a Competing Business Activity so long as Executive is not responsible for,
does not report to or have any involvement, whether direct or indirect, with any
division or unit of said company engaged in such Competing Business Activity,
and (ii) this Section 6 shall be of no force or effect in the event the
Employment Period is terminated by the Company without Cause.
7. Confidentiality
Executive acknowledges that the information, trade secrets,
observations, confidential knowledge and data obtained by him while employed by
the Company concerning the business, new, planned or existing products and
services, or affairs of the Company, its customers or any affiliate of the
Company ("Confidential Information") are the property of the Company or such
affiliate. Therefore, the Executive agrees that he shall not, at any time during
or after his employment under this Agreement, disclose to any third party except
in the performance of his duties hereunder or as may be required by law, any
Confidential Information except for such information which has become publicly
available other than by an act or omission of the Executive. Executive shall
deliver to the Company at the termination of the Employment Period, or at any
other time the Company may request, all memoranda, notes, plans, records,
reports, computer files, printouts and software and other documents and data
(and all copies thereof) relating to the Confidential Information, work product
or the business of the Company or any affiliate which he may then possess or
have under his control.
8. Relationship with ▇▇▇▇▇*s.
The parties acknowledge that the Executive is an officer of ▇▇▇▇▇*s and
that he will allocate his time and efforts between the Company and ▇▇▇▇▇*s as he
sees fit in his good faith business judgment. Subject to the foregoing, during
the term, and excluding any periods of vacation and sick leave to which the
Executive is entitled, the Executive agrees to devote reasonable attention and
time during normal business hours to the business and affairs of the Company
and, to the extent necessary to discharge the responsibilities assigned to the
Executive hereunder, to use the Executive's reasonable best efforts to perform
faithfully and efficiently such responsibilities. During the term it shall not
be a violation of this Agreement for the Executive to serve as an officer of
▇▇▇▇▇*s (and in any other positions with ▇▇▇▇▇*s and its affiliates as Executive
deems appropriate) so long as such activities do not significantly interfere
with the performance of the Executive's responsibilities as an employee of the
Company in accordance with this Agreement.
9. Executive's Representations. Executive hereby represents and
warrants to the Company that (i) the execution, delivery and performance of this
Agreement by Executive do not and shall not conflict with, breach, violate or
cause a default under any contract, agreement, instrument, order, judgment or
decree to which Executive is a party or by which Executive is bound, (ii)
Executive is not a party to or bound by any employment agreement, noncompete
agreement or confidentiality agreement with any other person or entity, and
(iii) upon the execution and delivery of this Agreement by the Company, this
Agreement shall be the valid and binding obligation of Executive, enforceable in
accordance with its terms. Executive hereby acknowledges and represents that he
has been given the opportunity to consult with independent legal counsel
regarding his rights and obligations under this Agreement and that he fully
understands the terms and conditions contained herein.
10. Miscellaneous
(a) The failure of a party to this agreement to insist on any occasion
upon strict adherence to any term of this agreement shall not be considered a
waiver or deprive that party of the right thereafter to insist upon strict
adherence to that term or any other term of this agreement. Any waiver must be
in writing. No waiver of any term or condition of this Agreement shall be deemed
to be a waiver of any subsequent breach of that term or condition or any breach
of any other term or condition of this Agreement.
(b) All notices and other communications under this agreement shall be
in writing and shall be deemed given when delivered personally or mailed by
registered mail, return receipt requested, to a party at his or its address as
follows (or at such other address as a party may designate in any notice under
this agreement):
If to the Executive:
If to the Company:
iTurf Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Legal Department
(c) This agreement shall be assigned to and shall inure to the benefit
of any successor to substantially all the assets and business of the Company as
a going concern, whether by merger, consolidation, liquidation or sale of
substantially all the assets of the Company or otherwise, and the Company shall
cause any such successor to assume the Company's obligations under this
agreement (but no such assignment shall relieve the Company of its obligations
under this agreement).
(d) This agreement constitutes the entire understanding of the parties
with respect to the subject matter of this agreement, cannot be changed or
terminated except by a written agreement executed by the parties and shall be
governed by the law of the State of New York applicable to agreements made and
to be performed therein.
(e) This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but all of which shall be considered one and
the same Agreement.
(f) At the election of either party, any controversy or claim arising
out of or relating to this contract, or the breach thereof, shall be settled by
arbitration administered by the American Arbitration Association under its
National Rules for the Resolution of Employment Disputes, and judgment upon the
award rendered by the arbitrator(s) may be entered by any court having
jurisdiction thereof.
[SIGNATURE PAGE FOLLOWS]
[SIGNATURE PAGE TO EMPLOYMENT AGREEMENT]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first written above.
ITURF INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------
Its Authorized Signatory
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------
