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EXHIBIT 10.10
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of November 30, 1999 (the
"Agreement"), by and between, Xxxxxxx.xxx, Inc., a Delaware corporation, with an
address at 00 Xxxx 00xx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the
"Company"), and Xxxxxxx X. Xxxx, an individual with an address at 000 Xxxxxxxxx
Xxxxxxx, Xxxx Xxxxxx, Xxx Xxxxxx, 00000 (the "Executive").
W I T N E S S E T H:
WHEREAS, the Executive desires to be employed by the Company
and Company desires to employ Executive as the Executive Vice President of the
Company's Commerce Division;
WHEREAS, the Company and the Executive desire to express the
terms and conditions of the employment by the Company of the Executive.
NOW THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged by the parties hereto, the parties hereto hereby
agree as follows:
1. Employment. The Company hereby agrees to employ the Executive, and
the Executive hereby accepts and agrees to such employment, commencing as of the
date hereof, upon the terms and conditions hereinafter set forth.
2. Term. The term of the Executive's employment under this Agreement
shall commence as of the date hereof and shall continue for a period of five (5)
years from the date hereof, unless sooner terminated as provided elsewhere in
this Agreement (the "Initial Term"). The Initial Term hereof will be
automatically renewed for additional terms (each a "Renewal Term," and,
together, with the Initial Term, collectively the "Term") of one (1) year unless
either party hereto provides the other party hereto written notice of its
election not to renew this Agreement ninety (90) days prior to the expiration of
the Initial Term, or, if applicable, ninety (90) days prior to the expiration of
any Renewal Term.
3. Duties and Services.
(a) The Executive agrees, from and after the date hereof, to
serve the Company faithfully, diligently and to the best of his ability, as
Executive Vice President of the Company's Commerce Division. The Executive shall
devote his entire business time, energy and skill to such activities on behalf
of the Company.
(b) The Executive agrees to perform such other services
consistent with his position as the Executive Vice President of Company's
Commerce division as the Company shall reasonably request, and to act in such
capacities for the Company and its Affiliates (as hereinafter defined), as may
be designated by the Chief Executive Officer of the Company, without further
compensation
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other than that for which provision is made in this Agreement. For purposes of
this Agreement, the term "Affiliate" shall refer to any entity which controls,
is controlled by, or is under common control with the Company.
(c) Nothing contained herein shall limit the right of
Executive, solely as an investor, to hold and make investments in securities of
any corporation or limited partnership, provided that Executive's aggregate
interest therein does not exceed 5% of the outstanding shares or interests in
such corporation or partnership.
4. The Company's Assistance to the Executive. The Company shall supply
the Executive with all materials, data and technical assistance which shall be
reasonably necessary to assist the Executive. Such materials and the contents
thereof and all intellectual property referenced or represented therein shall
remain the property of the Company.
5. Compensation.
(a) During the Term, the Company agrees to pay to the
Executive, and the Executive agrees to accept, a salary for all his services
(the "Salary") of $175,000 per year, payable in accordance with the Company's
standard payroll policies (the "Base Compensation") and subject to standard cost
of living and other increases as appropriate as determined by the Company's
Board of Directors.
(b) During the Term, the Executive shall be eligible to
receive a discretionary annual bonus, payable in stock or cash, as determined by
the Company's Board of Directors.
(c) The Executive agrees that the Company shall withhold from
any and all payments required to be made to the Executive pursuant to this
Agreement (including the travel allowance) all federal, state, local and/or
other taxes which are required to be withheld in accordance with applicable
statutes and/or regulations from time to time in effect.
(d) Stock Option. The Company shall grant Executive an option
(the "Option") to purchase 200,000 shares of the Company's Common Stock
effective on the date Executive begins employment (the "Employment Date"). The
per share exercise price for the Option shall be equal to $5.50 per share. The
term of the Option shall be ten (10) years. The Option shall vest as to twenty
percent (20%) of the shares subject to the Option on each anniversary of the
Employment Date. Except as otherwise provided herein, the Option shall be
granted pursuant to, and shall be governed by, the Company's Stock Option Plan
and conform to the Company's standard policies with respect to options, except
to the extent inconsistent with this Agreement in its entirety.
(e) Board of Directors Meetings. During the Term, the
Executive shall be entitled to notice of and an opportunity to attend meetings
of the Company's Board of Directors.
6. Employee Benefits.
(a) In accordance with the policies of the Company, the
Company shall reimburse the Executive for reasonable business expenses incurred
by him for or on behalf of the Company in furtherance of the performance of his
duties hereunder. Such reimbursement shall be subject to
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receipt by the Company from the Executive of an itemized accounting therefor,
together with such vouchers and other reasonable verifications as the Company
shall require to satisfactorily evidence such expenses, and such policies as the
Company shall establish from time to time.
(b) The Executive shall be entitled to participate, in
accordance with the terms thereof, in employee benefit plans maintained for the
Executives of the Company including, without limitation, any health,
hospitalization and medical insurance programs and in any pension or retirement
or other similar plans or policies. The foregoing shall not be construed to
require the Company to establish any such plans, or to prevent the Company from
modifying or terminating any such plans once established. The Executive shall be
entitled to the vacation, benefits and sick days set forth on Table A hereto.
7. Termination.
(a) Notwithstanding anything to the contrary contained herein,
the Company's employment of the Executive under this Agreement and the
Executive's right to any and all compensation to which the Executive would
otherwise be entitled hereunder, shall terminate upon the earliest to occur of
the following events:
(i) The death of the Executive.
(ii) The permanent disability (as hereinafter
defined) of the Executive.
(iii) The non-renewal and expiration of the Term
of employment hereunder pursuant to Section
2 hereof.
(iv) Upon written notice to the Executive from
the Company for Cause (as hereinafter
defined).
(v) Upon written notice to the Company from the
Executive for "Good Reason" (as hereinafter
defined).
(vi) Upon 30 days' written notice to the
Executive from the Company without Cause.
(vii) Upon 30 days' written notice to the Company
from the Executive.
(b) "Cause" for purposes hereof shall mean: (i) the commission
by the Executive of theft, embezzlement, fraud, obtaining funds or property
under false pretenses, or similar acts of material misconduct with respect to
the property of the Company or any of its Affiliates or their respective
employees or the Company's customers or suppliers, or the Company's reasonable
determination that any oral or written representations made to the Company by
the Executive shall prove false and shall result in damage to the Company; (ii)
the commission by the Executive of a material act of malfeasance, dishonesty or
breach of trust against the Company or any of its Affiliates or their respective
employees or the Company's franchisees, customers or suppliers, including a
material breach by the Executive of his covenants or obligations under Section 9
of this Agreement; (iii) the conviction of the Executive of a felony or of a
misdemeanor involving moral
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turpitude; or (iv) the Executive's repeated and continued failure to
successfully fulfill his duties or obligations of employment or the Executive's
breach of any of his material obligations and covenants hereunder, which
breaches or failures are not cured within thirty (30) days prior written notice
to Executive.
(c) "Good Reason" for purposes hereof shall mean: (i) the
failure by Company to timely pay to Executive the amounts or provide to
Executive the benefits and prerequisites described in Sections 5 and 6 of this
Agreement; or (ii) any other breach by Company of the terms of this Agreement,
which breach is not cured within thirty (30) days following written notice to
Company of such breach.
(d) No waiver by the Company of any default by the Executive
or any breach by him of any of his covenants or obligations under any provision
of this Agreement shall be deemed a waiver of any future breach or default,
whether or not such breach or default is of the same nature.
(e) The Executive shall be deemed to be permanently disabled
for purposes hereof, at the option of the Company, in the event that the
Executive shall fail to render and perform the services required of the
Executive under this Agreement because of physical or mental incapacity or
disability for a continuous period of four (4) consecutive months, or for
shorter periods aggregating one hundred and twenty (120) days or more during any
period of six (6) successive months.
(f) If the Executive's employment is terminated by the Company
or by the Executive, as applicable, for reasons stated in Sections 7(a)(i),
7(a)(ii), 7(a)(iii), 7(a)(iv) or 7(a)(vii) above, then the Executive or his
heirs, as applicable, shall receive from the Company, Salary, together with any
bonuses, benefits and perquisites up to the date of termination.
(g) If the Executive's employment is terminated without Cause
as stated in Section 7(a)(vi) above or Executive terminates his employment for
"Good Reason" as stated in Section 7(a)(v) above, then the Executive shall
continue to receive from the Company, as severance hereunder and subject to
Executive's compliance with the terms of Section 9 below, the Salary for a
period equal to two (2) years from the date of termination, payable in
accordance with the Company's normal payroll practices. In addition, subject to
Executive's compliance with the terms of Section 9 below, Executive shall
continue to vest in the unvested shares subject to the Option, granted pursuant
to Section 5(d) above, for a period of two years following termination and in
accordance with the terms of the applicable option agreements, and Executive
shall have the right to exercise, for two years following termination, all
vested shares subject to such Option. In the event that Executive does not
comply with the provisions of Section 9 following his termination, then upon
such non-compliance the Option granted to Executive pursuant to Section 5(d)
above shall automatically terminate and the Salary payments shall automatically
cease.
(h) In the event (i) the Company decides not to renew this
Agreement pursuant to Section 2 hereof, and (ii) the Company wishes to subject
the Executive to the non-competition and restrictive covenants set forth in
Section 9(a) below beyond the date of termination, then the Company shall
continue the Executive's Salary for the duration of the non-competition and
restrictive covenants; provided, however, for purposes of this subsection 7(h),
such non-competition and restrictive covenants shall not extend beyond the two
(2) year period following the termination
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of Executive's employment with the Company.
8. Effect of Termination. Upon the termination of this Agreement, for
any reason, or upon the termination of the Executive's employment hereunder, for
any reason, the Executive (i) shall immediately discontinue the use of any and
all trade names, trademarks, trade secrets, copyrights or copyrighted materials,
and customer lists, offering circulars and materials and advertising media
belonging to or supplied to the Executive by the Company, and (ii) shall, at the
Executive's expense, return to the Company all such materials.
9. Non-Competition, Restrictive Covenants, Confidentiality and
Injunctive Relief.
(a) The Executive agrees that commencing as of the date hereof
and continuing until the later of (i) five (5) years from the date hereof or
(ii) two (2) years following the termination of the Executive's employment with
the Company, the Executive shall not, without the prior written approval of the
Board of Directors of the Company, directly or indirectly, through any other
person, firm or corporation, whether for himself or as agent on behalf of any
other person or entity, and whether as employee, consultant, agent, principal,
lender, partner, officer, director, stockholder or otherwise, with or without
compensation:
(i) sell products or provide services which are
competitive with the businesses, products or services of the Company or any of
its Affiliates or the business, products or services of the Company contemplated
or under development (the "Businesses"), or promote, market, sell, become or
acquire an interest in, or associate in a business relationship with, or aid or
assist any other person, corporation, firm, partnership or other entity
whatsoever who is engaged in any line of business competitive with the
Businesses;
(ii) become an employee, consultant, agent,
principal, lender, partner, officer, director, stockholder or otherwise provide
services to or on behalf of any entity (A) which the Board reasonably determines
is or could become a competitor of the Company or any of its Affiliates or
constitutes one of the Businesses or (B) which as of the date of this Agreement
is a business partner or contractual party with the Company or any of its
Affiliates;
(iii) solicit or refer, directly or indirectly, any
clients or prospective clients of any services and/or products offered by the
Company or any of its Affiliates (or which are competitive with those offered by
the Company or any of its Affiliates) to any other provider of such services;
(iv) promote, market, assist or participate in the
development, sale, lease or licensing of any services and/or products
competitive with those provided by the Company or any of its Affiliates to, for
or with any person, corporation, firm, partnership or other entity whatsoever;
or
(v) solicit, raid, entice, induce or assist any
person who presently is, or any time during the Executive's employment with the
Company shall be or shall have been, an employee of the Company or any of its
Affiliates with compensation of more than $30,000 annually,
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during the twelve (12) months preceding such solicitation, raid, enticement,
inducement or assistance, to become employed or retained by any other person or
entity.
(b) Nothing in the Section 9 shall prevent Executive from
engaging in the activities listed in 9(a)(i) through 9(a)(v) above to the extent
such activities relate to businesses, products or services of the Company or any
of its Affiliates for which Executive does not possess any material non-public
information.
(c) Section 9(a) shall supersede and replace Section 16.1 of
the non-qualified stock option agreement and Section 17.1 of the incentive stock
option agreement, which shall be provided to Executive in connection with the
Option granted pursuant to Section 5(d) above.
(d) Recognizing that the Executive's knowledge, information
and relationship with existing or prospective clients, licensees, customers,
suppliers, accounts, agents, brokers and representatives of the Company and its
Affiliates, and the knowledge of the business, methods, systems, plans and
policies of the Company and its Affiliates which the Executive has heretofore
and shall hereafter establish, receive or obtain as an employee of the Company
or in connection with services performed for the Company or any such Affiliates,
are valuable and unique assets of the Company and such Affiliates, the Executive
agrees that, at all times during and after the Executive's employment by the
Company, the Executive shall not (otherwise than pursuant to his duties
hereunder), directly or indirectly, use, divulge, furnish or make accessible to
anyone, without the prior written consent of the Board of Directors of the
Company, any such knowledge or information pertaining to the Company or any of
its Affiliates, or the business, shareholders, personnel, methods, systems,
plans or policies thereof, to any person, firm or corporation or other entity,
for any reason or purpose whatsoever, unless such knowledge or information is in
the public domain or Executive is required to divulge such information by
operation of law.
(e) The Company shall be deemed and entitled to own all of the
results and proceeds of the Executive's services, including all right, title and
interest in and to any and all franchises, products, processes, concepts,
methods, ideas, creations, designs and/or systems (including, without
limitation, all those of an advertising, marketing or promotional nature), and
any improvement thereon, which may be developed, created or devised by the
Executive during the term of his employment by the Company. The Executive will,
at the request of the Company and at its expense, and without further
compensation other than that for which provision is made in this Agreement,
execute such assignments, certificates or other instruments as the Company may
from time to time deem necessary or desirable to evidence, establish, maintain,
perfect, protect, enforce or defend its right, title and interest in or to any
of the foregoing. Without limiting the generality of the previous sentences, the
Executive acknowledges and agrees that all memoranda, notes, records, customer
lists and other documents made or compiled by the Executive or made available to
the Executive during the term of his employment by the Company concerning the
business of the Company and/or any of its Affiliates shall be the Company's
property and shall be delivered by the Executive to the Company upon termination
of his employment by the Company or at any other time on the Company's request.
(f) The Executive shall execute and deliver to and for the
benefit of the Company an agreement substantially in the form of Exhibit 9(d)
hereto, pertaining, among other matters, to
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Proprietary Information and Inventions (as such terms are defined in said
Exhibit 9(d)) and confidentiality obligations, the provisions of which shall be
deemed incorporated herein by reference as if set forth herein (the "Proprietary
Rights Agreement").
(g) The provisions of this Section 9 shall survive the
termination or expiration of this Agreement, irrespective of the reason
therefore, including under circumstances in which the Executive continues
thereafter in the employ of the Company.
(h) The Executive acknowledges that the services to be
rendered by him are of a special, unique and extraordinary character and, in
connection with such services, the Executive will have access to confidential
information vital to the business of the Company. By reason of the foregoing,
the Executive consents and agrees that, if he violates any of the provisions of
this Section 9, the Company would sustain irreparable harm and, therefore, in
addition to any other remedies which the Company may have under this Agreement
or otherwise, the Company shall be entitled to apply (without the necessity of
posting any bond) to any court of competent jurisdiction for an injunction
restraining the Executive or any other party from committing or continuing any
such violation (or participating therein) of this Agreement.
10. Warranty. The Executive warrants and represents that he is not a
party to any agreement, contract or understanding, whether of employment or
otherwise, which would in any way restrict or prohibit the Executive from
undertaking his position as an Executive of the Company and complying with his
obligations in accordance with the terms and conditions of this Agreement.
11. Notices. All notices shall be in writing and shall be deemed to
have been duly given to a party hereto on the date of such delivery, if
delivered personally, or on the third day after being deposited in the mail if
mailed via registered or certified mail, return receipt requested, postage
prepaid, or on the next business day after being sent by recognized national
overnight courier services, at the addresses of the parties as set forth the
first paragraph of this Agreement, or such other address as the parties may
specify in writing from time to time in accordance herewith.
12. Severability. In the event that any provisions of this Agreement
would be held to be invalid, prohibited or unenforceable in any jurisdiction for
any reason (including, but not limited to, any provisions which would be held to
be unenforceable because of the scope, duration or area of its applicability),
unless narrowed by construction, this Agreement shall, as to such jurisdiction
only, be construed as if such invalid, prohibited or unenforceable provision had
been more narrowly drawn so as not to be invalid, prohibited or unenforceable
(or if such Language cannot be drawn narrowly enough, the court making any such
determination shall have the power to modify such scope, duration or area or all
of them, but only to the extent necessary to make such provision or provisions
enforceable in such jurisdiction, and such provision shall then be applicable in
such modified form in such jurisdiction only). If, notwithstanding the
foregoing, any provision of this Agreement would be held to be invalid,
prohibited or unenforceable in any jurisdiction, such provision shall be
ineffective to the extent of such invalidity, prohibition or unenforceability,
without invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction.
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13. Assignment. Nothing in this Agreement shall be construed to permit
the assignment by Executive of any of the rights or obligations hereunder, and
such assignment is expressly prohibited without the prior written consent of the
Company.
14. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York, without regard to
principles of conflict of laws and regardless of where actually executed,
delivered or performed.
15. Forum Selection. The parties agree that the exclusive remedy for
resolving any disputes arising under this Agreement shall be by submitting them
to the American Arbitration Association ("AAA") for adjudication in New York,
New York pursuant to the AAA's National Rules for the Resolution of Employment
Disputes, except to the extent there is no adequate remedy at law and injunctive
relief only is sought in which case the parties select state court in New York,
New York as the exclusive forum to resolve their disputes and both parties
submit to personal jurisdiction and consent to service of process at the
addresses contained in the first paragraph of this Agreement.
16. Waiver. No waiver by either party hereto at any time of any breach
by the other party hereto of, or compliance, with, any condition or provision of
this Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.
17. Complete Understanding; Drafting; Counterparts. This Agreement
constitutes the complete understanding and supersedes any and all prior
agreements and understandings between the parties with respect to its subject
matter and no statement, representation, warranty or covenant has been made by
either party with respect thereto except as expressly set forth herein. This
Agreement shall not be altered, modified, amended or terminated except by
written instrument signed by each of the parties hereto. The language used in
this Agreement will be deemed to be the language chosen by both of the parties
to express their mutual intent, and no rule of strict construction shall be
applied against either party. The Section and paragraph headings contained
herein are for convenience only, and are not part of and are not intended to
define or limit the contents of said Sections and paragraphs. This Agreement may
be executed in counterparts, each of which shall be deemed an original and all
of which, when taken together, shall constitute one and the same agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
THE COMPANY:
XXXXXXX.XXX, INC.
By: /s/ XXXXXXX X. XXXXX
------------------------------
Name: XXXXXXX X. XXXXX
Title: CHIEF FINANCIAL OFFICER
THE EXECUTIVE:
By: /s/ XXXXXXX X. XXXX
------------------------------
Name:
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TABLE A
VACATION DAYS:
20 Days
FLOATING HOLIDAYS:
5 Days
SICK DAYS
5 Days
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