Exhibit 10.18
EMPLOYMENT AGREEMENT
AGREEMENT ("Agreement") made as of this 7th day of February, 2000 (the
"Effective Date"), by and between XxxxxXxxx.xxx, a Delaware corporation
(hereinafter "Employer"), and Xxxxx X. Xxxxxx (hereinafter "Executive").
W I T N E S S E T H:
WHEREAS, Employer wishes Executive to serve as an officer and executive
of Employer; and
WHEREAS, Executive wishes to be so employed;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth, the parties hereto agree as follows:
1. Effective Date and Duties. Commencing as of the Effective Date,
Employer employs Executive as President to perform the duties normally incident
to such positions. Without limiting the foregoing Executive's functions shall
include investment banking, legal, strategic planning and finance. Executive
shall at all times report to the Chairman of the Board President and Chief
Executive Officer of Employer.
2. Responsibilities. Executive agrees to devote all of Executive's
business time, efforts, skills and attention to fulfill Executive's duties and
responsibilities hereunder faithfully, diligently and competently.
3. Term. The term of this Agreement shall commence on the Effective
Date and shall terminate two (2) years thereafter, unless sooner terminated as
hereinafter provided. Notwithstanding the foregoing, this Agreement may be
terminated by either party on 120 days prior written notice provided that the
earliest effective time of termination shall be six months from the Effective
Date.
4. Compensation. Employer shall pay to Executive as compensation for
all services to be rendered by Executive hereunder the following:
(a) A salary at the rate of Seventy- Five thousand ($75,000)
Dollars per annum. Such salary is hereinafter referred to as the Base
Salary.
(b) Executive shall be eligible for bonuses, at such time and
in such amounts as shall be determined at the discretion of Employer's
Board of Directors (the "Board) based on its assessment of Executive's
performance of Executive's duties and on the financial performance of
Employer.
(c) Employer will reimburse Executive for all reasonable
travel and business expenses incurred by Executive in connection with
Executive's services hereunder in accordance with the usual practices
and policies of Employer in effect from time to time, upon presentation
of vouchers. The Company will reimburse car travel expenses as
submitted of up to a maximum of $700 per month.
(d) Employer will provide an apartment for the use of
Executive through ________________, 2000.
(e) Employer will make available to Executive health
benefits as currently in effect or as modified during the term of this
Agreement consistent with the health benefits offered to other
executives of Employer. In addition, Executive will be eligible for and
will be offered participation in any and all group insurance, hospital,
dental, major medical and disability benefits and stock option plans or
other similar fringe benefits which are currently offered or may
hereafter be offered to other executives of Employer during the term of
this Agreement. Under current policies the single health plan requires
a co-pay by Executive of $104 per pay period and the dental plan is
optional and requires a co-pay by Executive.
5. Stock Options. Executive shall be granted on the date hereof an
option (the "Option") to purchase 500,000 shares of Employer's common stock,
$.001 par value per share (the "Common stock") at an exercise price of $5.06 per
share said price being equal to the fair market value as determined under the
Company's 1998 Stock Option Plan on the date of grant. The Option shall vest and
be exercisable as follows: (i) 167,000 vest after 6 months (ii) Balance vest
1/18 every month over 18 months. The Options shall be non-qualified stock
options, shall expire five (5) years from the date of grant and shall otherwise
be governed by the Plan, as well as the applicable option agreement to be
entered into pursuant to the terms of the Plan. Vesting of the Options shall be
accelerated so that all Options become immediately vested upon the occurrence of
a change of control of the Company, the termination of the
employment of Executive without cause or the raising of equity by the Company of
an aggregate of $10,000,000 after the date hereof. A "change in control" shall
be deemed to occur when, a corporation, partnership, association or entity,
directly or indirectly (through a subsidiary or otherwise), (i) acquires or is
granted the right to acquire, directly or though merger or similar transaction,
a majority of the Company's outstanding voting securities or shares, or (ii)
acquires all or substantially all of the Company's assets.
6. Termination on Death. In the event of Executive's death during the
term of this Agreement, this Agreement shall terminate immediately, provided,
however, that Executive's legal representatives shall be entitled to receive the
Base Salary which would otherwise have been due Executive had he worked through
the end of the month in which Executive died.
7. Termination on Disability. If during the term of this Agreement,
Executive is unable to perform Executive's duties hereunder on account of
illness or other incapacity, and such illness or other incapacity shall continue
for a period of more than three (3) consecutive months during any twelve (12)
month period Employer shall have the right, on thirty (30) days' notice to
Executive, given after such three (3) month period, to terminate this Agreement.
In the event of any such termination Employer shall be obligated to pay to
Executive the Base Salary which would otherwise be due Executive until the
expiration of the month of employment during which the termination occurred plus
three (3) additional months of the Base Salary for the year in which Executive
was terminated. If, prior to the date specified on such notice, Executive's
illness or incapacity shall have terminated and Executive shall have taken up
the performance of Executive's duties thereunder, Executive shall be entitled to
resume Executive's employment hereunder as though such notice had not been
given. The Board shall
determine in good faith, upon consideration of medical evidence satisfactory to
it, whether Executive by reason of physical or mental disability shall be unable
to perform the services required of Executive hereunder.
8. Termination for Cause. If Employer shall terminate Executive's
employment hereunder for Cause, or if Executive shall voluntarily leave
Executive's employment hereunder, this Agreement shall terminate immediately and
Employer shall pay to Executive an amount equal to the Base Salary hereunder
through the date of such termination. Cause shall mean (i) any conviction of any
crime (whether or not involving Employer) constituting a felony in the
jurisdiction involved, (ii) engaging in any substantiated act involving moral
turpitude, (iii) engaging in any act which, in each case, subjects, or if
generally known would subject, Employer to public ridicule or embarrassment,
(iv) gross misconduct in the performance of Executive's duties hereunder, (v)
willful failure or refusal to perform such duties as may be relegated to
Executive commensurate with Executive's position, or (vi) material breach of any
provision of this Agreement by Executive.
9. Confidentiality. Executive covenants and agrees with Employer that
Executive will not, during the term of this Agreement and thereafter directly or
indirectly use, communicate, disclose or disseminate to anyone (except to the
extent reasonably necessary for Executive to perform Executive's duties
hereunder, except as required by law or except if generally available to the
public otherwise than through use, communication, disclosure or dissemination by
Executive) any Confidential Information (as hereinafter defined) concerning the
businesses or affairs of Employer or of any of its affiliates or subsidiaries
which Executive
may have acquired in the course of or as incident to Executive's employment or
prior dealings with Employer or with any of its affiliates or subsidiaries.
"Confidential Information" shall mean (a) all knowledge,
information and material concerning Employer or its business or the business of
any of its affiliates or subsidiaries that shall become known to Executive as a
consequence of Executive's relationship with Employer, (b) all information that
has been disclosed to Employer by any third party under an agreement or
circumstances requiring such information to be kept confidential, and (c) all
knowledge, information or material concerning Inventions that are, under this
Agreement, owned by Employer or assigned by Executive to Employer; provided,
that Confidential Information shall not include knowledge, information or
material that is or becomes generally known or available to others in businesses
engaged in by Employer or to the public (other than through unauthorized
disclosure). Confidential Information shall include without limitation (a)
information of a technical nature, such as information regarding past, present
and future research, financial data, product information, marketing plans,
computer programs (whether in source or object code form or other form and
whether contained on program listings, magnetic tape, magnetic disks, CD ROMs or
other media), logic, flow charts, specifications, documentation and ideas
relating to the activities of Employer, (b) information of a business nature,
such as information regarding past, present and future client development,
strategies, procurement specifications, cost and financial data, contracts,
quotations and names of actual and prospective clients or customers, and (c) all
documents, drawings, reports, client lists, and other physical embodiments of
all such information.
"Inventions" shall mean each of the following, but only to the
extent they relate to the business of commerce conducted over the Internet: all
inventions, discoveries, developments, ideas, works, improvements, enhancements,
works of authorship, products and computer software, whether or not patentable,
and anything else that is subject to or potentially subject to the patent,
copyright or trade secret laws of any jurisdiction.
10. Non-Competition. Executive acknowledges that Executive's services
and responsibilities are of particular significance to Employer and that
Executive's position with Employer has given and will give Executive close
knowledge of its policies and trade secrets.
Since Employer is in a creative and competitive business,
Executive's continued and exclusive service to Employer under this Agreement is
of a high degree of importance.
Executive covenants and agrees with Employer that Executive will
not, during the term of this Agreement and for a period of eighteen months after
the termination of Executive's employment hereunder, with respect to
subparagraph (i) and twelve months with respect to subparagraphs (ii) and (iii)
in any manner, directly or indirectly, (i) induce or attempt to influence any
present or future officer, employee, lessor, lessee, licensor or licensee of
Employer or its subsidiaries or its affiliates to leave its respective employ or
solicit or divert or service any of the customers or clients that Employer or
its subsidiaries or its affiliates has or had in the one (1) year previous to
the date of termination of this Agreement, (ii) engage, in North America or any
other territory in which Employer does or contemplates to do business, in any
businesses presently engaged in or to be engaged in by Employer or its
subsidiaries or affiliates during the term of this Agreement, and (iii) except
for ownership of no more than 1%
of the capital stock, be a stockholder of any corporation, or directly or
indirectly own, manage, operate, conduct, control or participate in the
ownership, management, operation, conduct, control of, accept employment with,
or be connected in any other manner with, any business which engages in any
direct competitive activity including, without limitation, any business which
engages in retail commerce conducted over the Internet in any such geographic
region.
11. Remedies. Executive acknowledges that the remedy at law for any
breach or threatened breach by Executive of the covenants contained in
paragraphs 9 and 10 would be wholly inadequate, and therefore Employer or its
subsidiaries or its affiliates shall be entitled to preliminary and permanent
injunctive relief and specific performance thereof. Paragraphs 9 and 10
constitute independent and separable covenants that shall be enforceable
notwithstanding rights or remedies that Employer or its subsidiaries or it
affiliates may have under any other provision of this Agreement, or otherwise.
If any or all of the foregoing provisions of paragraphs 9 and 10 are held to be
unenforceable for any reason whatsoever, it shall not in any way invalidate or
affect the remainder or this Agreement which shall remain in full force and
effect. If the period of time or geographical areas specified in paragraphs 9
and 10 are determined to be unreasonable in any judicial proceeding, the period
of time or areas of restriction shall be reduced so that this Agreement may be
enforced in such areas and during such period of time as shall be determined to
be reasonable.
12. Full Review. Executive has carefully read and considered the
provisions hereof, and having done so, agrees that restrictions and remedies set
forth in paragraphs 9, 10 and 11 (including, but not limited to, the time
periods of restrictions) are fair and reasonable and are reasonably required for
the protection of the interests of Employer.
13. Representation. Executive represents and warrants to Employer that
Executive is not now under any obligation of a contractual or other nature to
any person, firm or corporation which is inconsistent or in conflict with this
Agreement, or which would prevent, limit or impair in any way the execution of
this Agreement or the performance by Executive of Executive's obligations
hereunder and Executive will indemnify and hold harmless Employer, its
directors, officers and employees against and in respect of all liability, loss,
damage, expense or deficiency resulting from any misrepresentation, or breach of
any warranty or agreement made by Executive in connection with Executive's
employment hereunder.
14. Waiver. The waiver by either party of a breach of any provision of
this Agreement shall not operate as or be construed as a waiver of any
subsequent breach thereof.
15. Notices. Any and all notices referred to herein shall be sufficient
if furnished in writing and sent by certified mail, return receipt requested, to
the respective parties at the addresses set forth below, or such other address
as either party may from time to time designate in writing.
To Executive: To Employer:
Xxxxx X. Xxxxxx XxxxxXxxx.xxx, Inc.
000 Xxxxxx Xxxxxx
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: Chairman of the Board
With copy to:
Xxxxx & Xxxxxxx LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
16. Assignability. This Agreement shall be binding upon, and shall
inure to the benefit of, Employer and its successors and assigns, and Executive
and Executive's legal representatives, heirs, legatees and distributees, but
neither this Agreement nor any rights hereunder shall be assignable, encumbered
or pledged by Executive.
17. Entire Agreement. This Agreement supersedes any and all prior
written or oral agreements between Employer and Executive and constitutes the
entire agreement between the parties hereto with respect to the subject matter
hereof and no modification, amendment or waiver of any of the provisions of this
Agreement shall be effective unless in writing and signed by both parties
hereto.
18. Applicable Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of New Jersey.
19. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same agreement.
20. Severability. If any provision or part of any provision of this
Agreement is held for any reason to be unenforceable, the remainder of this
Agreement shall nevertheless remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
XXXXXXXXX.XXX, INC.
By:______________________________
Name: Xxxxxxx Xxxxxx
Title: Chairman of the Board
Date:
_________________________________
Xxxxx X. Xxxxxx
Date:
