EMPLOYMENT AGREEMENT
AGREEMENT made as of the 15th day of February, 2000, by and between Vizacom
Inc., a Delaware corporation (the "Company") and Xxxxxx Xxxxxxx, an individual
residing at 000 Xxxxx Xxx Xxxxxx, Xxx. 00X, Xxx Xxxx, Xxx Xxxx 00000
(hereinafter called the "Employee").
W I T N E S S E T H:
WHEREAS, this Agreement is intended to supersede and replace all prior
agreements, understandings and arrangements between or among the Company and the
Employee relating to the employment of the Employee.
NOW, THEREFORE, it is agreed as follows:
1. Retention of Services. The Company hereby retains the services of
Employee, and Employee agrees to furnish such services, upon the terms and
conditions hereinafter set forth.
2. Term. Subject to earlier termination on the terms and conditions
hereinafter provided, and further subject to certain provisions hereof which
survive the term hereof, the term of this Agreement shall be comprised of a
three (3) year period of employment commencing on the date hereof, and shall be
extended thereafter for additional one-year periods unless or until the Company
or the Employee provides sixty (60) days' notice to the other party of the
termination of this Agreement.
3. Duties and Extent of Services During Period of Employment.
(a) During the term of employment, Employee shall be employed as Vice
President of the Company and as President of the Company's wholly owned
subsidiary, Renaissance Computer Art Center, Inc. d/b/a Renaissance Multimedia
("Renaissance") or in such other equivalent executive positions with the
Company, Renaissance and their affiliates, as may be determined by the Board of
Directors of the Company. In such capacity, Employee agrees that he shall devote
his full time business efforts to serving the Company, Renaissance and their
affiliates under the direction of the Board of Directors of the Company shall
perform all duties incident to his position on behalf of the Company to the best
of his ability and shall perform such other duties as may from time to time be
assigned to him by the Board of Directors of the Company.
(b) The Company and Employee agree that Employee shall perform his
basic responsibilities and duties hereunder at the office of Renaissance in the
New York Metropolitan Area; subject, however, to the travel requirements of his
position.
4. Remuneration. During the period of employment, Employee shall be
entitled to receive the following compensation for his services:
(a) The Company shall pay to Employee a salary at an initial rate of
$175,000 per annum, payable in equal bi-weekly installments, or in such other
manner as shall be consistent with the Company's payroll practices. This salary
shall be increased five percent (5%) annually or in such other increased amounts
as shall be determined by the Board of Directors of the Company or the
Compensation Committee thereof.
(b) (i) In addition to the salary provided in clause (a) above, not
later than one hundred twenty (120) days after the end of each fiscal year of
the Company, the Company shall pay to Employee, as incentive compensation, with
respect to each fiscal year during the Term of this Agreement, a bonus of
$12,500 which shall be payable so long as the Employee remains employed by the
Company. An additional bonus shall be payable as set forth below if the Base
Business (as defined below) has achieved gross profit margins of at least 40%
and, subject to paragraph (iv) below, has achieved the following Net Revenues in
the fiscal years set forth below:
(A) With respect to the fiscal year ended December 31, 2000:
Net Revenues Amount to be Paid
$2,200,000 $7,500
$2,200,001-$2,700,000 1% of such Net Revenues
$2,700,001-$3,200,000 2.5% of such Net Revenues
over $3,200,000 2% of such Net Revenues
(B) With respect to the fiscal year ended December 31, 2001:
Net Revenues Amount to be Paid
$2,970,000 $7,500
$2,970,001-$3,645,000 1% of such Net Revenues
$3,645,001-$4,725,000 2% of such Net Revenues
over $4,725,000 2.5% of such Net Revenues
(C) With respect to the fiscal year ended December 31, 2002:
Net Revenues Amount to be Paid
$4,009,500 $7,500
$4,009,501-$4,920,750 1% of such Net Revenues
$4,920,751-$6,378,750 2% of such Net Revenues
over $6,378,750 2.5% of such Net Revenues
Notwithstanding the forgoing, if during the term of this Agreement the Base
Business has achieved gross profit margins of (y) at least 35% but less than
40%, the Company shall pay to Employee 75% of the amount that it would have paid
to Employee under (A), (B) or (C) above if the Base Business
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had achieved gross profit margins of 40% or (z) at least 30% but less than
35%, the Company shall pay to Employee 50% of the amount that it would have paid
to Employee under (A), (B) or (C) above if the Base Business had achieved gross
profit margins of 40%.
(ii) For purposes of this Paragraph 4(b),
(A) "Base Business" shall mean the business conducted
by Renaissance, including any company, entity or
other business acquired by or merged or combined
with Renaissance;
(B) "Net Revenues" shall mean the net revenues of the
Base Business, net of returns, discounts and
allowances, as computed in accordance with
generally accepted accounting principles in the
United States consistently applied with the
accounting principles of the Company ("GAAP"), but
not including any amortization of goodwill;
(C) gross profit margins shall be computed as follows:
(I) The following items shall be included in the
cost of goods sold or cost of sales:
(1) all salaries, consulting fees and other
compensation paid to website development
and other employees and consultants
which provide the services or produce
the products of the Base Business; and
(2) all direct expenses which are properly
considered part of cost of goods sold or
cost of sales under GAAP.
(II) The following items shall be excluded from
cost of goods sold or cost of sales:
(1) any management fee payable by Renaissance
to the Company;
(2) any allocation of corporate overhead of
the Company to Renaissance;
(3) any extraordinary items.
(D) The Company shall have sole authority and control
over the conduct of the Base Business, including
without limitation, all
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decisions relating to customers and accounts to
be solicited, pricing and marketing programs. In
addition, the Company, in its sole discretion, may
determine:
(1) to merge Renaissance into the Company or
another subsidiary of the Company, to acquire
the stock or assets or any other businesses
or to otherwise enter new businesses or to
consolidate operations with the Company or
other subsidiaries of the Company in common
facilities, or
(2) to terminate or sell the Base Business or any
other business of Renaissance.
(E) The Company shall maintain separate accounting
records for the Base Business sufficient to
compute the bonus set forth above.
(iii) The Company agrees to furnish to Employee a copy of the
Base Business' financial statements not later than one hundred twenty (120) days
after the end of each fiscal year of the Company during the term of this
Agreement, together with a notice containing the computation of the bonus set
forth above (the "Bonus Notice"). If the Employee does not agree in good faith
with the calculation of the bonus set forth in the Bonus Notice, the Employee
shall deliver a notice to the Company setting forth in detail the nature and
extent of such disagreement within 30 days after the date of the Bonus Notice.
If the Company and the Employee fail to agree with respect thereto within 30
days after receipt by the Company of the Bonus Notice, the dispute shall be
referred to a nationally firm of independent certified public accountants to be
designated by the Company (which shall not be the Company's regular certified
public accountant), subject to being reasonably acceptable to the Employee (the
"Independent Accountants"), for resolution within 30 days after the referral of
such dispute to the Independent Accountants. Each of the Company and the
Employee shall bear their own expenses with respect to any such dispute, and
each of the Company and the Employee shall bear one-half of the expenses of the
Independent Accountants in connection therewith.
(iv) In the event that any company, entity or business is
acquired by or merged or combined with Renaissance at any time during the term
of this Agreement, the percentages set forth in paragraph (i) above shall be
reduced by multiplying such percentages by a fraction the numerator of which
shall be the Net Revenues of Renaissance for the fiscal year immediately
preceding such event, and the denominator of which shall be an amount equal to
the sum of the numerator and the net revenues (computed on the same basis as is
set forth in paragraph (ii) above) for any such company, entity or business that
is acquired by or merged or combined with Renaissance.
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In the event that this Agreement is terminated other than
pursuant to Section 9(a), the Employee shall be entitled to receive the amount
which would be payable under this clause (b) for each fiscal quarter of any
fiscal year prior to the date of such termination.
5. Employee Benefits; Expenses.
(a) During the term of this Agreement, the Company shall provide to
the Employee the right to participate in the Company's then existing medical and
dental insurance and other employee benefit plans and policies on the same terms
as are then generally available to the Company's executive and managerial
employees. The Employee generally shall be eligible to be granted stock options
under the Company's 1994 Long Term Incentive Plan.
(b) Employee shall be entitled to paid vacation each year during the
term of this Agreement at the rate of four (4) weeks per annum. Vacation shall
be taken each year and, if not taken, shall be carried over for one (1) year
and, if not taken during such carry-over period, shall be forfeited.
(c) The Corporation shall reimburse Employee, in accordance with the
practice followed from time to time for other executive and managerial officers
of the Company, for all reasonable and necessary business and traveling
expenses, and other disbursements incurred by Employee for or on behalf of the
Corporation in the performance of Employee's duties hereunder, upon presentation
by Employee to the Company of an appropriate accounting or documentation of
such.
6. Disability. If Employee, during the period of employment, becomes unable
for any 90 consecutive days in any twelve-month period due to ill health or
other physical or mental incapacity, to perform his services hereunder, the
Company may thereafter, upon at least 60 days' written notice to Employee, place
Employee on disability status. After such action by the Company, Employee shall
no longer be entitled to receive any compensation hereunder until the Employee
returns to full-time status.
7. Confidential Information.
(a) In the course of Employee's employment by the Company, Employee
will have access to and possession of valuable and important confidential or
proprietary data or information of the Company and its operations. Employee will
not during Employee's employment by the Company or at any time for a period of
five (5) years thereafter divulge or communicate to any person nor shall
Employee direct any employee, representative or agent of the Company or its
affiliates to divulge or communicate to any person or entity (other than to a
person or entity bound by confidentiality obligations similar to those contained
herein and other than as necessary in performing Employee's duties hereunder) or
use to the detriment of the Company or for the benefit of any other person or
entity, including without limitation any competitor, supplier, licensor,
licensee or customer of the Company , any of such confidential or proprietary
data or information or make or remove any copies thereof, whether or not marked
or otherwise identified as "confidential" or
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"secret." Employee shall take all reasonable precautions in handling the
confidential or proprietary data or information within the Company to a strict
need-to-know basis and shall comply with any and all security systems and
measures adopted from time to time by the Company to protect the confidentiality
of confidential or proprietary data or information.
(b) The term "confidential or proprietary data or information" as used
in this Agreement shall mean information not generally available to the public,
including, without limitation, all database information, personnel information,
financial information, customer lists, account lists or other account
information, names, telephone numbers or addresses, supplier lists, trade
secrets, patented or proprietary information, forms, information regarding
products, operations, systems, methods, financing, services, know how, computer
and any other processed or collated data, computer programs, pricing, marketing,
media and advertising data.
(c) Employee will at all times promptly disclose to the Company in
such form and manner as the Company may reasonably require, any inventions,
improvements or procedural or methodological innovations, including without
limitation relating to programs, methods, forms, systems, services, designs,
marketing ideas, products or processes (whether or not capable of being
trademarked, copyrighted or patented) conceived or developed or created by
Employee during or in connection with Employee's employment hereunder and which
relate to the business of the Company ("Intellectual Property"). Employee agrees
that all such Intellectual Property shall be the sole property of the Company.
Employee further agrees that Employee will execute such instruments and perform
such acts as may reasonably be requested by the Company to transfer to and
perfect in the Company all legally protectable rights in such Intellectual
Property.
(d) All written materials, books, records and documents made by
Employee or coming into Employee's possession during Employee's employment by
the Company concerning any products, processes or equipment manufactured, used,
developed, investigated, purchased, sold or considered by the Company or
otherwise concerning the business or affairs of the Company, including without
limitation any files, customer records such as names, telephone numbers and
addresses, lists, firm records, brochures and literature, shall be the sole
property of the Company, shall not be removed from the Company's premises by the
Employee, and upon termination of Employee's employment by the Company, or upon
request of the Company during Employee's employment by the Company, Employee
shall promptly deliver the same to the Company. In addition, upon termination of
Employee's employment by the Company, Employee will deliver to the Company all
other Company property in Employee's possession or under Employee's control,
including, but not limited to, financial statements, marketing and sales data,
customer and supplier lists, account lists and other account information,
database information and other documents, and any Company credit cards.
(e) The Employee acknowledges that the covenants contained in this
Section 7 are fair and reasonable in order to protect the Company's business and
were a material and necessary inducement for the Company to agree to the terms
of this Agreement. The Employee further acknowledges that any remedy at law for
any breach or threatened or attempted breach of the covenants contained in this
Section 7 may be inadequate and that the violation of any of the covenants
contained in this Section 7 will cause irreparable and continuing damage to the
Company.
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Accordingly, the Company shall be entitled to specific performance or any
other mode of injunctive and/or other equitable relief to enforce its rights
hereunder, including without limitation an order restraining any further
violation of such covenants, or any other relief a court might award, without
the necessity of showing any actual damage or irreparable harm or the posting of
any bond or furnishing of other security, and that such injunctive relief shall
be cumulative and in addition to any other rights or remedies to which the
Company may be entitled. The covenants in this Section 7 shall run in favor of
the Company and its successors and assigns. In addition, the Employee agrees to
pay the Company the costs it incurs, including reasonable attorneys' fees and
expenses, in bringing and prosecuting any proceeding to enforce the terms of
this Agreement.
(f) The provisions of this Section 7 shall survive the termination of
this Employment Agreement.
8. Non-Competition.
(a) During the term of this Agreement and, other than with respect to
clause (i) below, for one year thereafter (the "Restricted Period"), the
Employee shall not, without the written consent of the Company, directly or
indirectly,
(i) become associated with, render services to, invest in,
represent, advise or otherwise participate in as an officer, employee, director,
stockholder, partner, promoter, agent of, consultant for or otherwise, any
business which is conducted in any of the jurisdictions in which Renaissance or
the Company's other businesses is conducted and which is competitive with the
business conducted by Renaissance or the Company in connection with which
Employee materially participated, including without limitation the design,
development or implementation of Internet web sites, applications, strategies,
integration, intranets, extranets or customer service; provided, that this
Section 8(a)(i) shall not prohibit the Employee from purchasing or owning as a
passive investment up to three percent (3%) of the outstanding capital stock of
a company which is listed or authorized for trading on any national securities
exchange, Nasdaq or the OTC Electronic Bulletin Board or is a company with a
class of securities registered under Section 12 of the Securities Act of 1934,
as amended;
(ii) for the Employee's own account or for the account of any other
person or entity (A) interfere with the Company's relationship with any of its
suppliers, customers, accounts, brokers, representatives or agents or (B)
contact, telephone, meet, solicit or transact any business with any material
customer, account or supplier of the Company who or which transacts or has
transacted business with the Company at any time during the term of this
Agreement; or
(iii) employ or otherwise engage, or solicit, entice or induce on
behalf of the Employee or any other person or entity, the services, retention or
employment of any person who has been an employee, principal, partner,
stockholder, sales representative, trainee, consultant to or agent of the
Company within one year of the date of such offer or solicitation.
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(b) Nothing herein contained shall be construed as prohibiting the
Company from pursuing any other remedies available to it for such violation,
including but not limited to any injunctive or other equitable relief or the
recovery of damages from the Employee.
(c) The Employee acknowledges that the covenants contained in this
Section 8 are fair and reasonable in order to protect the Company's business and
were a material and necessary inducement for the Company to agree to the terms
of this Agreement. The Employee further acknowledges that any remedy at law for
any breach or threatened or attempted breach of the covenants contained in this
Section 8 may be inadequate and that the violation of any of the covenants
contained in this Section 8 will cause irreparable and continuing damage to the
Company. Accordingly, the Company shall be entitled to specific performance or
any other mode of injunctive and/or other equitable relief to enforce its rights
hereunder, including without limitation an order restraining any further
violation of such covenants, or any other relief a court might award, without
the necessity of showing any actual damage or irreparable harm or the posting of
any bond or furnishing of other security, and that such injunctive relief shall
be cumulative and in addition to any other rights or remedies to which the
Company may be entitled. The covenants in this Section 8 shall run in favor of
the Company and its successors and assigns. In addition, the Employee agrees to
pay the Company the costs it incurs, including reasonable attorneys' fees and
expenses, in bringing and prosecuting any proceeding to enforce the terms of
this Agreement.
(d) In case any one or more of the terms or provisions contained in
this Section 8 shall for any reason be held invalid, illegal or unenforceable,
such invalidity, illegality or unenforceability shall not affect any other terms
or provisions hereof, but such term or provision shall be deemed modified or
deleted as or to the extent required by applicable law, and such modification or
deletion shall not affect the validity of the other terms or provisions of this
Section 8. In addition, if any one or more of the restrictions contained in this
Section 8 shall for any reason be held to be unreasonable with regard to time,
duration, geographic scope or activity, the parties contemplate and hereby agree
that such restriction shall be modified and shall be enforced to the full extent
compatible with applicable law. The parties hereto intend that the covenants
contained in this Section 8 shall be deemed a series of separate covenants for
each country, state, county and city. If, in any judicial proceeding, a court
shall refuse to enforce all the separate covenants deemed included in this
Section 8 because, taken together, they cover too extensive a geographic area,
the parties intend that those of such covenants (taken in order of the cities,
counties, states and countries therein which are lease populous) which if
eliminated would permit the remaining separate covenants to be enforced in such
proceeding shall, for the purpose of such proceeding, be deemed eliminated from
the provisions of this Section 8.
(e) The provisions of this Section 8 shall survive the termination of
this Employment Agreement.
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9. Termination.
(a) The Company may terminate the Employee's services hereunder "for
cause" by delivering to Employee not less than ten (10) days prior to the date
on which the termination is to be effective, a written notice of termination for
cause specifying the act, acts or failure to act that constitute the cause. For
the purposes of this agreement, "for cause" shall mean; (i) any act of
dishonesty, fraud or embezzlement materially adversely affecting the financial,
market, reputation or other interests of the Company, or any affiliate thereof,
(ii) in the event that the Company places Employee on disability status pursuant
to Section 6 hereof more than once during the term hereof, (iii) in the event of
a conviction of the Employee for any felony or other serious crime materially
adversely affecting the Company, or any knowing violation of any federal or
state securities law or regulation, (iv) repeated failure to perform Employee's
duties hereunder after notice and thirty (30) days to cure such failure, (v) any
material breach by the Employee of this Agreement after notice and thirty (30)
days to cure such failure, or (vi) the death of the Employee.
(b) If the Company terminates Employee's employment hereunder for any
reason other than "for cause" as set forth in Section 9(a) hereof, (i) the
Company shall pay to the Employee compensation pursuant to Sections 4(a) and
4(b) (assuming for these purposes that the Net Revenues of the Base Business
with respect to each remaining fiscal year during the term of this Agreement
equals 120% of such Net Revenues for each immediately preceding fiscal year)
hereof at the time and in the manner provided for herein and (ii) the
obligations of the Employee pursuant to Section 8 of this Agreement shall
terminate, and no other compensation payable hereunder shall be payable to the
Employee. If the Company terminates Employee's employment hereunder "for cause"
as set forth in Section 9(a) hereof, Employee shall not be entitled to receive
any further compensation hereunder. Employee and the Company acknowledge that
the foregoing provisions of this paragraph 9(b) are reasonable and are based
upon the facts and circumstances of the parties at the time of entering into
this Agreement, and with due regard to future expectations.
10. Notices. Any notice to be given to the Company hereunder shall be
deemed sufficient if addressed to the Company in writing and delivered or mailed
by certified or registered mail to it at Glenpointe Center East, 300 Xxxxx X.
Xxxx Boulevard, Box 18, 7th Floor, Teaneck, New Jersey 07666, Attention:
President, or to such other address as the Company may hereafter designate, and
a copy to Xxxx X. Xxxxxxx, Esq., Xxxxxxx & Xxxxxxxx, LLC, 00 Xxxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxx 000, Xxxxxxx Xxxxx, Xxx Xxxx 00000. Any notice to be given to
Employee hereunder shall be delivered or mailed by certified or registered mail
to Employee at the address set forth at the head of this Agreement or such other
address as he may hereafter designate.
11. Successors and Assigns; Third Party Beneficiaries. This Agreement shall
be binding upon and inure to the benefit of the successors and assigns of the
Company, and unless clearly inapplicable, all references herein to the Company
shall be deemed to include any such successor. In addition, this Agreement shall
be binding upon and inure to the benefit of the Employee and his heirs,
executors, legal representatives and assigns; provided, however, that the
obligations of Employee hereunder may not be delegated without the prior written
approval of the Board of Directors of the Company. In the event of any
consolidation or merger of the Company into or with any other corporation during
the term of this Agreement, or the sale of all or substantially all of the
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assets of the Company to another corporation, person or entity during the term
of this Agreement, such successor corporation shall assume this Agreement and
become obligated to perform all of the terms and provisions hereof applicable to
the Company, and Employee's obligations hereunder shall continue in favor of
such successor corporation.
12. Amendments. This Agreement may not be altered, modified, amended or
terminated except by a written instrument signed by each of the parties hereto.
13. Prior Agreements Superseded. This Agreement contains the entire
agreement of the parties relating to the subject matter hereof and supersedes
any other agreements, oral or written, entered into between Employee and the
Company prior to the date of this Agreement relating thereto.
14. Applicable Law. This Agreement shall be governed by, construed and
enforced in accordance with the laws of the State of New York, without regard to
conflicts of laws.
15. Severability. If any provision of this Agreement shall be held by a
court of competent jurisdiction to be contrary to law or public policy, the
remaining provisions shall remain in full force and effect.
16. Waiver. No term or provision hereof shall be deemed waived and no
breach consented to or excused, unless such waiver, consent or excuse shall be
in writing and signed by the party claimed to have waived, consented or excused.
A consent, waiver or excuse of any breach shall not constitute a consent to,
waiver or, or excuse of any other or subsequent breach whether or not of the
same kind of the original breach.
17. Counterparts. This Agreement may be executed in two or more
counterparts, all of which taken together shall constitute one and the same
agreement.
18. Acknowledgment. Employee acknowledges that he has carefully read this
Agreement, has had an opportunity to consult counsel regarding this Agreement
and hereby represents and warrants to the Company that Employee's entering into
this Agreement, and the obligations and duties undertaken by Employee hereunder,
will not conflict with, constitute a breach of or otherwise violate the terms of
any other agreement to which Employee is a party and that Employee is not
required to obtain the consent of any person, firm, corporation or other entity
in order to enter into and perform his obligations under this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
VIZACOM INC.
By: /s/ Xxxx X. Xxxxxxxxx
Name: Xxxx X. Xxxxxxxxx
Title: President & CEO
/s/ Xxxxxx Xxxxxxx
Xxxxxx Xxxxxxx
