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EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into, effective as of the 1st day
of December, 1996, by and among DynamicWeb Enterprises, Inc. a NJ Corporation
with its principal office and place of business in Clifton, NJ ("Employer") and
Xxx Xxxxxxxxxx, currently a resident of Towaca, NJ ("Executive").
W I T N E S S E T H :
WHEREAS, Employer desires to retain the services of Executive on the
terms hereinafter set forth;
WHEREAS, Executive desires to accept employment by Employer on such
terms; and
WHEREAS, Employer and Executive are willing to enter into this
Employment Agreement ("Agreement") reflecting such terms;
NOW THEREFORE, in consideration of the promises and the mutual
covenants herein contained, the parties hereto, intending to be legally bound,
do hereby mutually covenant and agree as follows:
1. DEFINITIONS. For purposes of this Agreement, the following
terms shall have the following meanings:
(a) "Term" shall mean the period commencing on the date
hereof and ending on Nov. 30, 2001, subject to any extension of such period as
may hereafter be mutually agreed to by Employer and Executive, and subject
further to termination of the Term as provided in Paragraph 7 of this
Agreement.
(b) "Cause" shall mean:
(i) Executive's conviction of, or plea of nolo
contendere to, a felony or crime involving moral turpitude;
(ii) Executive's commission of an act of personal
dishonesty or breach of fiduciary duty involving personal profit in connection
with Executive's employment by Employer.
(iii) Executive's commission of an act which the
Board of Directors by a vote of at least three-fourths (3/4) of all the
Directors shall have found to have involved willful misconduct on the part of
Executive, in the conduct of his duties hereunder; or
(iv) habitual absenteeism, chronic alcoholism or any
other form of addiction, as determined by three-fourths (3/4) of all the
Directors, on the part of Executive which prevents him from performing the
essential functions of his position with or without reasonable accommodation.
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(c) "Good Reason" shall mean the occurrence of any action
by Employer which (i) significantly reduces Executive's job responsibilities;
(ii) results in a significant worsening of Executive's work conditions; (iii)
moves Executive's place of employment more than fifty (50) miles from
Executive's place of employment; (iv) involves non-payment of salary, bonus or
any other material benefit hereunder; or (v) otherwise constitutes a material
breach of Employer's obligations under this Agreement.
(d) "Disability" shall mean the incapacity of Executive
by illness or any other cause which prevents Executive from performing the
essential functions of his position with or without reasonable accommodation
for a period in excess of two hundred forty (240) days (whether or not
consecutive), or one hundred eighty (180) days consecutively, as the case may
be, during any twelve (12) month period.
(e) "Material Breach" by Executive shall mean a
determination by vote of at least three-fourths (3/4) of all the Directors that
Executive shall have failed to comply in any material respect with his
obligations under Paragraph 3 of this Agreement following written notice to
Executive of the alleged deficiencies thereunder and a fair opportunity to cure
such deficiencies (the existence of which shall be confirmed by the foregoing
required vote). Any determination in accordance with the preceding sentence
shall be conclusive and binding for all purposes of this Agreement.
2. EMPLOYMENT. Employer hereby agrees to employ Executive as
Executive Vice President and Director, and Executive accepts such employment
and agrees to serve in such capacities, for the Term upon the terms and
conditions hereinafter set forth. Should Executive remain in the employ of
Employer after the Term, Executive's status shall thereupon be that of an
employee at will.
3. DUTIES OF EMPLOYMENT.
(a) Throughout the Term, Executive will serve as
Executive Vice President and Director, subject to the direction of the Chief
Operating Officer. Executive shall perform all duties assigned or delegated to
him consistent with his position as Executive Vice President of Employer, and
shall perform all acts and services customarily associated with such position,
devoting his full time, best efforts and attention to the advancement of the
interests and business of Employer. During the Term, Executive will serve
Employer faithfully, diligently and competently and to the best of his ability
and will devote full-time to his employment.
(b) Throughout the Term, Executive shall not engage in or
be concerned with any other duties or pursuits which are competitive or
inconsistent with the interests and business of Employer. Nothing in this
Agreement shall preclude Executive, however, with the prior approval of
Employer, which approval
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shall not be unreasonably withheld, from devoting reasonable periods of time
required for (i) serving as a director or member of a committee of any
organization involving no conflict of interest with Employer, and (ii) engaging
in charitable, religious and community activities, provided, that such
directorships, memberships or activities do not materially interfere with the
performance of his duties hereunder.
4. COMPENSATION. During the Term, Employer shall pay to
Executive as compensation for the services to be rendered by him to Employer
hereunder the following:
(a) A base salary at the rate of $135,600 per year, or
such larger sum as the Employer may from time to time determine in connection
with annual performance reviews pursuant to Employer's policies and practices.
Such compensation shall be payable in accordance with normal payroll practices
of Employer.
(b) In addition, Executive shall be eligible to earn
annual bonus payments during the Term. Employer shall develop, in consultation
with Executive, and establish an incentive bonus plan for key management
employees of Employer. Such plan may describe one or more individual or
corporate goals for a year or other bonus period, the achievement of which may
be made a condition to the payment of bonuses thereunder. Such goals for
Executive shall be communicated to Executive and shall be stated to be a
condition to payment of said bonus
5. BENEFITS. During the Term, Executive shall be entitled to the
following benefits:
(a) Executive will be provided with use of an automobile
with a purchase price not to exceed $600/month, or an equivalent leased
automobile, replaceable every three (3) years.
(b) Comprehensive health insurance and major medical
coverage comparable to such coverage provided for executive employees of
Employer generally.
(c) Participation in Employer's pension plan, in
accordance with the terms thereof, as may be in effect from time to time.
(d) Life Insurance on the life of Executive in an amount
$500,000 payable to a beneficiary selected by Executive.
(e) Executive shall be entitled each year to a vacation
of 4 weeks during which time his compensation shall be paid in full, but the
period selected each year shall be with the approval of Employer.
(f) Reimbursement of all reasonable travel and other
business expenses incident to the rendering of services by Executive hereunder
and receipts in accordance with Employer's
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policy from time to time in effect and subject to the submission of appropriate
vouchers in accordance therewith.
(g) Long-term disability insurance covering 50% of
salary.
6. STOCK OPTIONS. Executive shall be entitled to participate in
Employer's Restricted Stock Program and any other Employee participation equity
programs offered by Employer.
7. TERMINATION. Employer shall have the right during the Term to
terminate the employment of Executive for Cause, Disability, or Material
Breach. Executive shall have the right to terminate his employment hereunder
for Good Reason. In the event of the death of Executive during the Term, or in
the event Employer or Executive shall terminate Executive's employment as
specified in the preceding sentence, the Term shall automatically end upon such
death or upon the effective date of such termination.
8. PAYMENT UPON TERMINATION.
(a) If Executive's employment is terminated by Employer
for Cause, Disability, or Material Breach, or by Executive other than for Good
Reason, or by the death of Executive, Employer's obligations under this
Agreement shall cease and Executive shall forfeit all right to receive
prospective compensation or other benefits under this Agreement. Salary and
reimbursable expenses accrued through the date of such termination; vested
pension contributions; qualified bonus; accrued vacation and any other "earned"
compensation shall be payable. No bonus shall be payable to Executive under
such circumstances unless Executive's entitlement thereto and the amount
thereof under the plan in effect at the time of his termination shall have been
determined and communicated to Executive prior to the effective date of such
termination.
(b) If Executive's employment is terminated by Employer
during the Term other than as provided in (a) above, or if Executive shall
voluntarily terminate his employment during the Term for Good Reason, Executive
shall be entitled to receive, and Employer shall be obligated to pay and
provide Executive, the following amounts:
(i) In a lump sum, an amount equal to the commuted
value of the base salary of Executive in effect or authorized at the time of
termination for the period remaining in the Term (determined by discounting all
payments at a rate equal to the bond equivalent yield of the latest two-year
Treasury Xxxx auction) to be paid in cash in the month next following
Executive's termination of employment and to be treated as a supplemental wage
payment under applicable Treasury Regulations subject to federal tax
withholding at the flat percentage rate applicable thereto, said amount to be
in lieu of any amount otherwise payable to Executive under any then effective
severance
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pay plan of Employer applicable to all or any class of employees of Employer.
(ii) To the extent that any form of compensation
previously granted to Executive, including stock options granted as provided in
Paragraph 6 above, shall not be fully vested or shall require additional
service as an employee at the time of the termination of Executive's
employment, Executive shall be credited with additional service through the end
of the Term for such purpose.
(iii) During the balance of Executive's Term,
Executive shall continue to receive such perquisites as he was receiving at the
time of termination of his employment and shall also continue to participate in
all life, health, disability and similar insurance plans and programs of
Employer to the extent that such continued participation is possible under the
general terms and provisions of such plans and programs, with Employer and
Executive paying the same portion of cost of each such plan or program as
existed at the time of Executive's termination. In the event that Executive's
continued participation in any group plans or programs is not permitted, then
in lieu thereof, Employer shall acquire, with the same cost sharing, individual
insurance policies providing comparable coverage for Executive; provided that
Employer shall not be obligated to pay for any such individual coverage more
than Employer's cost of such group coverage; and provided further, if any such
individual coverage is unavailable at such cost, then Employer shall pay to
Executive annually for such remaining Term an amount equal to the amount of the
annual contributions, payments, credits, or allocations made by Employer for
such insurance on Executive's behalf in the year immediately preceding the
termination of Executive's employment (or an annualized amount based on any
shorter period of employment).
9. CONFIDENTIAL INFORMATION. Executive understands that in the
course of his employment by Employer, Executive will receive certain trade
secrets, lists of customers and other confidential information concerning the
business or purposes of Employer, and which Employer desires to protect.
Executive understands that, among other things, [the management, method,
operating techniques, procedures and methods, forms, customer lists,
prospective acquisitions, employee lists, training manuals and procedures,
hardware systems, software programs, etc.] are confidential and are not at any
time during or after the period of Executive's employment by Employer to be
revealed to anyone outside Employer without specific written authorization by
Employer. Executive further agrees that he will not divulge to anyone outside
Employer any of the aforementioned confidential information or trade secrets so
long as the confidential or secret nature of such information shall continue.
Executive further agrees not to use any such confidential information or trade
secrets in competing with Employer at any time during or after his employment
by Employer.
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[10. CUSTOMER SOLICITATION. The executive recognizes and
acknowledges that during employment the Executive will have access to, learn,
be provided with and, in some cases, will prepare and create certain
confidential and proprietary business information, including, but not limited
to, client and customer information and customer lists, all of which are of
substantial value to the Employer's business. The Employee agrees that in
addition to any other limitation, for a period of one year after the
termination of employment hereunder, the Employee will not, on his or her
behalf or on behalf of any other person, firm, corporation, call on any of the
Employer's customers, or any of its affiliates or subsidiaries for the purpose
of soliciting and/or providing to any of these customers any customer
information relating to Employer's services, nor will the Employee in any way,
directly or indirectly, for himself or herself, or on behalf of any other
person, firm, or corporation, solicit, divert, or take away any customer of the
Employer, its affiliates, or its subsidiaries.
11. Employee Solicitation. The Executive agrees that during his
employment with Employer and for one year after termination of employment, the
Executive will not, on behalf of himself or herself or on behalf of any other
person, firm, or corporation, solicit any of the employees of Employer nor will
the Executive in any way, directly, or indirectly, for himself or herself, or
on behalf of any other person, firm or corporation, solicit, divert, or take
away any employees of the Employer.
12. Inventions. Ideas, inventions, and other developments or
improvements conceived by the Executive, alone or with others, during
employment, whether or not during working hours, that are within Employer's
business operations's scope or that relate to any of the Employer's work or
projects, are the Employer's exclusive property. The Executive shall assist
the Employer at its expense to obtain patents for any patentable ideas,
inventions, or other developments, and shall execute all documents necessary to
obtain these patents in the Employer's name.
13. COVENANTS BY EXECUTIVE NOT TO COMPETE WITH EMPLOYER.
(a) Upon termination of Executive's employment by
Employer for any reason, Employee covenants and agrees as follows:
(i) That he will not at any time during the period
of 1 year(s) from and after such termination directly or indirectly or in any
manner or under any circumstances or conditions whatsoever be or become
interested, as an individual, partner, principal, agent, clerk, employee,
stockholder, officer, director, trustee, or in any other capacity whatsoever
(except as owner of stock of a public corporation in a nominal amount) in any
other business similar to the business of Employer, or in any way in
competition with the business of Employer within the United States, nor will
Employee engage or participate in,
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directly or indirectly (whether as an officer, director, employee, partner,
consultant, holder or an equity or debt investment, lender or in any other
manner or capacity), or lend his name (or any part or variant thereof) to, any
business which is, or as a result of the Executive's engagement or
participation would become, competitive with any aspect of the business of
Employer in the Area or solicit any officer, director, employee or agent of
Employer to become an officer, director, employee or agent of Executive, his
respective affiliates or anyone else. Ownership, in the aggregate, of less
than one percent (1%) of the outstanding shares of capital stock of any
corporation with one or more classes of its capital stock listed on a national
securities exchange or publicly traded in the over-the-counter market shall not
constitute a violation of the foregoing provision. For purposes of this
Paragraph 13(a), "Employer" shall be limited to Employer, and any successor
thereto, and the "business of Employer" shall be limited to its business as an
electronic commerce company, and any other lines of business developed or
entered into by it during the Term.
(ii) Executive hereby acknowledges that his services
are unique and extraordinary, and are not readily replaceable, and hereby
expressly agrees that Employer, in enforcing the covenants contained in
Paragraphs 9 through 13 herein, in addition to any other remedies provided for
herein or otherwise available at law, shall be entitled in any court of equity
having jurisdiction to an injunction restraining him in the event of a breach,
actual or threatened, of the agreements and covenants contained in these
Paragraphs.
(iii) The parties hereto believe that the restrictive
covenants of this Paragraph 13 are reasonable. However, if at any time it
shall be determined by any court of competent jurisdiction that this Paragraph
13 or any portion of them as written, are unenforceable because the
restrictions are unreasonable, the parties hereto agree that such portions as
shall have been determined to be unreasonably restrictive shall thereupon be
deemed so amended as to make such restrictions reasonable in the determination
of such court, and the said covenants, as so modified, shall be enforceable
between the parties to the same extent as if such amendments had been made
prior to the date of any alleged breach of said covenants.
(iv) This entire Paragraph 13 will be deemed null
and void in the event termination occurs pursuant to Material Breach as defined
in Paragraph 1.e.
(b) Executive hereby acknowledges the reasonableness of
the covenant not to compete, including the reasonableness of it's scope,
duration and geographic area. Executive further acknowledges that the Employer
is a national company that does business and competes for business with other
entities throughout the entire United States.
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14. RESIGNATION. In the event that Executive's services hereunder
are terminated under any of the provisions of this Agreement (except by death),
Executive agrees that he will deliver his written resignation as Executive Vice
President, such resignation to become effective immediately.
15. INSURANCE. Employer shall have the right at is own cost and
expense to apply for and to secure in its own name, or otherwise, life, health
or accident insurance or any or all medical examination and otherwise to obtain
Executive's cooperation in connection with the procurement of any such
insurance, and any claims thereunder.
16. RELEASE. As a condition of receiving payments or benefits
provided for in Paragraph 8(a) of this Agreement, at the request of Employer,
Executive shall execute and deliver for the benefit of Employer, a general
release in the form set forth in Attachment A, and such release shall become
effective in accordance with its terms. The failure or refusal of Executive to
sign such a release or the revocation of such a release shall cause the
termination of any and all obligations of Employer to make payments or provide
benefits hereunder, and the forfeiture of the right of Executive to receive any
such payments and benefits. Executive acknowledges that Employer has advised
him to consult with an attorney prior to signing this Agreement and that he
has, in fact, consulted with an attorney.
17. NOTICES. All notices under this Agreement shall be in writing
and shall be deemed effective when delivered in person to Executive, or if
mailed, postage prepaid, registered or certified mail, addressed, in the case
of Executive, to his last known address as carried on the personnel records of
Employer, and, in the case of Employer, to the corporate headquarters or to
such other address as the party to be notified may specify by notice to the
other party. Executive hereby agrees to give Employer not less than thirty
(30) days' advance notice of his intended resignation or other termination from
Employer, whether or not at the end of the Term. Employer hereby agrees to
give Executive not less than 30 days advance notice if it should decide not to
extend the Term of this Agreement beyond December 1, 2001.
18. SUCCESSORS AND ASSIGNS. The rights and obligations of
Employer under this Agreement shall inure to the benefit of and shall be
binding upon the successors and assigns of Employer, including, without
limitation, any corporation, individual or other person or entity which may
acquire all or substantially all the assets and business of Employer, or of any
division of Employer for which Executive has primary management responsibility,
or with or into which Employer may be consolidated or merged or any surviving
corporation in any merger involving Employer. All references in this Agreement
to Employer shall be deemed to include all such successors and assigns. This
Agreement shall inure to the benefit of and be enforceable by Executive's
personal or legal representatives, executors, administrators, successors,
heirs, distributes, devisees and
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legatees. If Executive should die following termination of his employment and
prior to the receipt of all amounts due to him, if any, under this Agreement,
then all such amounts not previously paid to Executive shall, unless otherwise
provided herein, be paid in accordance with the terms of this Agreement to
Executive's devisee, legatee or other designee or, if there be no such
designee, to Executive's estate.
19. ARBITRATION. Any dispute under this Agreement which may arise
between the parties hereto shall be submitted to binding arbitration in New
Jersey in accordance with the Rules of the American Arbitration Association.
Said Arbitrator must be mutually acceptable to the parties.
20. SEVERABILITY. If any of the terms or conditions of this
Agreement shall be declared void or unenforceable by any court or
administrative body of competent jurisdiction, such term or condition shall be
deemed severable from the remainder of this Agreement, and the other terms and
conditions of this Agreement shall continue to be valid and enforceable.
21. AMENDMENT. This Agreement may be modified or amended only by
an instrument in writing executed by the parties hereto.
22. CONSTRUCTION. This Agreement shall supersede and replace all
prior agreements and understandings between the parties hereto on the subject
matter covered hereby. This Agreement shall be governed and construed under
the laws of the State of New Jersey. Words of the masculine gender mean and
include correlative words of the feminine gender. Paragraph headings are for
convenience only and shall not be considered a part of the terms and provisions
of the Agreement.
/s/ Xxxxx Xxxxxxxxxx, Xx. /s/ Xxxxxxx Xxxxxxxxxx
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Xxxxx Xxxxxxxxxx, Xx. Xxxxxxx Xxxxxxxxxx
President Executive
Date: 11/30/96 Date: 11/30/96
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RELEASE
We advise you to consult an attorney before you sign this Release.
You have until the date which is seven (7) days after the Release is signed and
returned to __________ to change your mind and revoke your Release. Your
Release shall not become effective or enforceable until after that date.
In consideration for the benefits provided under your Employment
Agreement with _________, by your signature below you agree not to make any
claims of any kind against __________, its past and present and future parent
corporations, subsidiaries, divisions, subdivisions, affiliates and related
companies or their successors and assigns, any and all past, present and future
Directors, officers, fiduciaries or employees (all parties referred to in the
foregoing are hereinafter referred to as the "Releasees") before any agency,
court or other forum, and you agree to release the Releasees from all claims,
known or unknown, arising in any way from any actions taken by the Releasees up
to the date of this Release, including, without limiting the foregoing, any
claim for wrongful discharge or breach of contract or any claims arising under
the Age Discrimination in Employment Act of 1967, Title VII of the Civil Rights
Act of 1964, the Americans with Disabilities Act of 1990, the Employee
Retirement Income Security Act of 194, or any other federal, state or local
statute or regulation and any claim for attorneys' fees, expenses or costs of
litigation, except that this Release is not intended, and shall not be
construed, to release __________ from any vested obligations it may have under
its employee pension benefits plans.
THE PRECEDING PARAGRAPH MEANS THAT BY SIGNING THIS RELEASE YOU WILL
HAVE WAIVED ANY RIGHT YOU MAY HAVE TO BRING A LAWSUIT OR MAKE ANY LEGAL CLAIM
AGAINST THE RELEASEES BASED ON ANY ACTIONS TAKEN BY THE RELEASEES UP TO THE
DATE OF THIS RELEASE.
By signing this Release, you further agree as follows:
10. You have read this Release carefully and fully understand its
terms;
11. You have had at least twenty-one (21) days to consider the
terms of the Release;
12. You have seven (7) days from the date you sign this Release to
revoke it by written notification to __________. After this seven (7) day
period, this Release is final and binding and may not be revoked;
13. You have been advised to seek legal counsel and have had an
opportunity to do so;
14. You would not otherwise be entitled to the benefits provided
under your Employment Agreement with __________ had you
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not agreed to waive any right you have to bring a lawsuit or legal claim
against the Releasees; and
15. Your agreement to the terms set forth above is voluntary.
Name:
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Signature: Date:
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Received by: Date:
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