EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT ("Agreement") dated as of October 1, 1999,
between Xxxxx Xxxxxxx, residing at _____________________ ("Employee"), and
DynamicWeb Enterprises, Inc., a corporation having its offices at 000 Xxxxx 00
Xxxx, Xxxxxxxx X, Xxxxx 000, Xxxxxxxxx, Xxx Xxxxxx ("the Company").
WHEREAS, the parties hereto desire to enter into this Agreement in
order to set forth the terms pursuant to which the Company will employ the
Employee and the Employee will serve as employee of the Company.
NOW THEREFORE, in consideration of the foregoing and the mutual
agreements set forth herein, the parties hereto, intending to be legally bound,
agree as follows:
1. CONDITIONS PRECEDENT
This Agreement shall be contingent upon and shall not take effect until
it and the terms contained herein are ratified and approved by the Company's
Board of Directors.
2. TERM
The employment of Employee shall commence on the date that the
Company's Board of Director approves and ratifies this fully-executed Agreement
and end on September 30, 2002 ("Employment Period"). Upon the expiration of the
Employment Period, the term shall be automatically renewed from year to year for
a period of one (1) year ("Renewal Period" or "Employment Period"), unless
either the Company or the Employee gives the other party ninety (90) days notice
before the expiration of the Employment Period or any Renewal Period that it
elects to terminate this Agreement.
3. POSITION AND DUTIES
Employee shall serve as President of the Company reporting to the Chief
Executive Officer. Employee shall fulfill such general management duties and
responsibilities as are consistent with the position of President, and as are
assigned to him from time to time by the Chief Executive Officer. In his
capacity as President, the Employee shall endeavor to, and shall be given all
necessary support (including financial and administrative support) by the
Company to: (1) provide strategic planning and direction for the Company; (2)
oversee all Company departments; (3) recruit personnel for all departments; (4)
actively promote securities offerings; and (5) outreach to network of contacts.
Employee shall use his best efforts to advance the best interests of the Company
and perform his duties hereunder diligently, faithfully and in accordance with
his highest professional standards and, more particularly, the standards as
outlined in the attached memorandum made part hereof as Exhibit A. The Employee
shall devote his entire working time, attention and energies to the business of
the
Company and shall assume and perform such further reasonable responsibilities
and duties as may be assigned from time to time.
4. AGREEMENT TO ABIDE BY POST-EMPLOYMENT TERMS OF STERLING COMMERCE
EMPLOYEE AGREEMENT
Employee agrees to abide by the surviving restrictions and limitations
contained in the Sterling Commerce Employee Agreement ("Sterling Agreement") and
acknowledges receipt of certain correspondence from the Company relating to
same, which was dated August 5, 1997 and which is attached hereto and made part
hereof as Exhibit B.
5. COMPENSATION AND BENEFITS
A. BASE SALARY
As compensation for the Employee's services hereunder during the
Employment Period, the Company shall pay the Employee a base salary at the
annual rate of One Hundred Eighty Thousand Dollars ($180,000) subject to an
automatic Twenty Thousand Dollar ($20,000) escalator following each completed
year of employment with the Company ("Base Salary") throughout the Employment
Period. Any Base Salary payable hereunder shall be paid in regular intervals in
accordance with the Company's payroll practices, but no less frequently than
twice each month.
B. INCENTIVE COMPENSATION
Employee shall be eligible to participate in any incentive compensation
plan that may hereafter be adopted by the Company for its executives and key
management employees.
C. STOCK OPTIONS
Employee may purchase the noted amount of common stock over the course
of the Employment Period in accordance with the following schedule: 100,000
shares over three (3) years (34,000 in Year 1; 33,000 in Year 2; and 33,000 in
Year 3) vesting at the end of each year at a price of $3.00 per share. Nothing
contained herein shall in any way alter, change, effect or modify any prior
agreement between the Company and Employee regarding the grant, purchase or
vesting of options to purchase shares of common stock of the Company.
D. MEDICAL BENEFITS AND INSURANCE
(a) Employee shall be eligible for sick leave, life, major
medical, hospitalization, dental and disability insurance on the same terms and
conditions as such benefits are provided for or made available to other
executive or key management personnel.
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(b) The Company shall pay the premiums on a term life
insurance policy written by an insurer which agrees to pay the principal amount
of $150,000 in the event of Employee's death during the Employment Period.
Selection of the insurer and the terms of the policy shall be at the sole
discretion of the Company. Employee shall have no ownership interest in the
policy, but shall have the right to assign the benefits under the policy. The
Company shall have no obligation beyond payment of premiums. Upon termination of
employment and providing the policy so permits, Employee may continue coverage
at Employee's expense.
F. COMMUTING EXPENSES
During the Employment Period, the Company agrees to reimburse Employee
for one weekly plane trip to Ohio/Michigan, provided that the airline ticket
must be purchased at least seven (7) days in advance and must include a Saturday
overnight stay.
G. HOUSING
During the Employment Period, the Employee shall be provided with use
of living accommodations in New Jersey in a rental home or apartment of the
Employee's choice at a monthly rent of up to One Thousand Dollars ($1000.00).
During the period of use of the housing and unless included within the cost of
the rent, the Employee shall be responsible to pay all utilities, including
heat, electricity and water.
H. AUTOMOBILE
During the Employment Period, the Employee shall be provided with the
use of a leased automobile with a leased value of up to Five Hundred Dollars
($500.00) per month.
I. EMPLOYEE PENSION PLAN
Employee shall be eligible to participate in any Employee Pension Plan
that may hereafter be adopted by the Company for its executives and key
management personnel.
6. TERMINATION
(a) The Company shall have the right during the Employment Period to
terminate the employment of Employee for Cause, which for purposes of this
Agreement shall mean:
(i) Employee's death;
(ii) Employee's legal incapacity if, as a result of the
Employee's incapacity due to physical or mental illness or injury, the Employee
shall have been unable to perform adequately his duties as herein provided for
one-hundred and eighty (180) consecutive days in any twelve (12) month period;
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(iii) Employee's conviction of, or plea of nolo contendere, to
a felony or crime involving moral turpitude;
(iv) Employee's commission of an act of personal dishonesty or
breach of fiduciary duty involving personal profit in connection with Employee's
employment by the Company;
(v) Employee's commission of an act which the Board of
Directors by a vote of at least two-thirds (2/3) of all the directors shall have
found in good faith to have involved willful misconduct or gross negligence on
the part of the Employee in the conduct of his duties hereunder;
(vi) Employee's breach of his material obligations under the
Agreement ("Material Breach");
(vii) Employee's failure to abide by the post-employment
limitations, restrictions and prohibitions contained in the Sterling Agreement;
or
(viii) Habitual absenteeism, chronic alcoholism or any other
form of addiction on the part of the Employee that prevents him from performing
the essential functions of his position with or without a reasonable
accommodation.
(b) If the employment of the Employee is terminated for Cause, all
rights of the Employee under this Agreement shall cease as of the effective date
of the termination, and except as expressly provided herein or as may be
provided under any employee benefit plan, Employee shall not be entitled to any
additional compensation, bonus, stock options, perquisites, or benefits, except
those required to be paid under federal or state laws or regulations.
(c) The Employee may terminate this Agreement at any time and for any
reason, including but not limited to Good Reason, upon ninety (90) days prior
written notice to the Company. For purposes of this Agreement, "Good Reason"
shall mean: (i) a material reduction in the Employee's duties or authority by
the Company; (ii) a breach by the Company of its material obligations under this
Agreement; or (iii) a material reduction in the Employee's compensation or
benefits. Employee agrees that, before terminating the Agreement for Good
Reason, he shall provide the Company with written notice of the basis of his
claim that Good Reason exists to terminate the Agreement and provide the Company
with a reasonable opportunity to cure.
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7. COMPENSATION UPON TERMINATION
(a) In the event of the termination of the Employee's employment by the
Company for Cause the Company shall pay to the Employee his Base Salary and
accrued incentive pay and options, if any, through the date of his termination,
and the Employee shall have no further entitlement to any other compensation,
bonuses, perquisites or benefits from the Company.
(b) In the event that the Employee's employment is terminated by the
Company during the Employment Period other than for Cause, except under a change
in control circumstance (see 7.c & 7.d which shall supercede this paragraph),
the Company shall continue to pay to the Employee his Base Salary, incentive
compensation and options for the balance of the Employment Period (as if such
termination had not occurred).
(c) In the event that the Employee voluntarily resigns his employment
during the Employment Period following a change in control of the Company
through merger or acquisition, the following provisions shall prevail: (1) all
stock options provided for in this Agreement, in addition to all grants of stock
options made to Employee pursuant to any other prior agreement between the
parties, will immediately vest; (2) the price of the stock options provided for
in Section 5(c) hereunder shall be adjusted from $3.00 per share to $1.00 per
share; and (3) the Company shall pay a severance benefit to Employee in the form
of continuation of Base Salary for the period of six (6) months if Employee's
resignation occurs within one (1) year of the date of the change in control of
the Company or twelve (12) months salary continuation in the event Employee's
resignation occurs after the one year anniversary of the change in control of
the Company.
(d) In the event that the Employee's employment is terminated by the
Company during the Employment Period other than for Cause, following a change in
control of the Company through merger or acquisition, the following provisions
shall prevail: (1) all stock options provided for in this Agreement, in addition
to all grants of stock options made to Employee pursuant to any other prior
agreement between the parties, will immediately vest; (2) the price of the stock
options provided for in Section 5(c) hereunder shall be adjusted from $3.00 per
share to $1.00 per share; and (3) the Company shall pay a severance benefit to
Employee in the form of continuation of Base Salary for the period of
twenty-four (24) months following such termination
8. NON-DISCLOSURE OF PROPRIETARY/CONFIDENTIAL INFORMATION
Employee acknowledges that during the Employment Period, he will have
access to information about the Company and that his employment with the Company
shall bring him into close contact with many confidential affairs of the
Company, and their respective customers, including without limitation,
information regarding the Company's management, methods, operating techniques,
procedures and methods, forms, sales methods, development and service methods
and business techniques, customer and
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product information, customer and prospective customer lists, employee lists,
information relating to the organizational structure of the Company and the
skills, duties and responsibilities of the employees, training manuals and
procedures, hardware systems, software programs, information relating to the
prior, current or contemplated products or services offered by the Company,
including without limitation, their specifications, the methods in which they
are offered or provided and their price or cost, or the prior, current or
contemplated systems, products, services and processes used or contemplated for
use by the Company; and information that Employee has a reasonable basis to know
was accepted by the Company from any third party under obligations of
confidentiality ("Confidential Information"). Such Confidential Information is
not readily available to the public and was developed at great effort and
expense.
In recognition of the foregoing, during and after the Employment Period
and until such time as the Confidential Information is generally published or is
available to the general public other than through Employee's unauthorized
disclosure, regardless of the reason for any termination of employment, the
Employee shall not, without the written consent of the Company, disclose or use
or make available for anyone to use (except in the course of his employment or
in furtherance of the business of the Company) any Confidential Information and
the Employee shall during the continuance of his employment by the Company use
his best efforts to prevent the unauthorized publication or misuse of any
Confidential Information, provided, however, that Confidential Information shall
not include any information (i) known generally to the public (other than as a
result of unauthorized disclosure by the Employee); or (ii) developed by the
Employee without violating any of the provisions of this Agreement.
9. RETURN OF CONFIDENTIAL INFORMATION
The Employee agrees that upon termination of his employment with the
Company for any reason, he will immediately return to the Company all
Confidential Information within his possession or under his control, and shall
not at any time thereafter reproduce or copy same.
10. ASSIGNMENT OF INVENTIONS
(a) The Employee agrees that all inventions, designs, improvements,
writings, and discoveries initiated, made or conceived during the Employment
Period, whether solely by the Employee or in conjunction with others, that
pertain to the business conducted by the Company, its affiliates and
subsidiaries shall be the exclusive property of, and he hereby assigns all of
his interest therein to, the Company or its designee. All rights and obligations
hereunder shall continue in full force and effect after the termination of
employment or the expiration of the Employment Period and shall be binding on
the Employee's personal representatives or assigns. The Employee shall promptly
disclose to the Company all such inventions, designs, improvements, writings and
discoveries and shall, at the sole expense of the Company, assist the Company or
its designee in obtaining patents and copyrights therefor that are deemed
suitable for United States or foreign letters patent or copyrights and shall
execute all documents and do all things necessary to obtain letters patent,
copyrights, trademarks and trade names or to
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otherwise vest the Company with full and exclusive title thereto, and protect
the same against infringements by others.
(b) The parties explicitly acknowledge and agree that notwithstanding
anything herein to the contrary, the Employee shall have and retain the right to
use, without payment of any royalty, ideas, concepts, expressions, techniques,
know-how, skills and experience possessed, developed or acquired by him prior to
or during the Employment Period, and the right to market, develop or otherwise
use any services or products, including without limitation any that may be
similar to or competitive with services or products of the Company, provided,
however, that the exercise of such rights shall not result in a disclosure or
incorporation in any end product by the Employee of any specific item of
Confidential Information.
11. NON-COMPETITION DURING THE EMPLOYMENT PERIOD
During the Employment Period, Employee shall not directly or
indirectly, individually or on behalf of persons not now parties to this
Agreement, or as a partner, stockholder, director, officer, principal, agent,
employee, or in any other capacity or relationship, engage in any business or
employment, or aid or endeavor to assist any business or legal entity, which
competes with the Company within or outside of the United States, including but
not limited to, entering into or engaging in any business that competes with the
Company; soliciting customers, business, patronage or orders for, or sell, any
products or services in competition with the Company; diverting or taking away
from the Company any customers, business, patronage or orders or attempting to
do so; or promoting, assisting, financially or otherwise, any person, firm,
association, partnership, corporation or other legal entity engaged in any
business that competes with the Company. Employee acknowledges the
reasonableness of this provision and the reasonableness of the geographic area
and duration which are a part of this provision. Provided that the Employee's
obligations under this Paragraph shall cease in the event: (1) Employee's
employment is terminated by the Company for other than Cause; or (2) Employee
resigns for Good Reason. In the event Employee is terminated for Cause or if he
resigns his employment for other than a Good Reason, the obligations of this
Paragraph shall continue in force for the remainder of the Employment Period.
12. NON-SOLICITATION OF CUSTOMERS
Employee agrees that during the Employment Period and for a period of
one (1) year following the expiration of the Employment Period or any Renewal
Period, the Employee will not, on his behalf or on behalf of any other person,
firm, corporation, partnership, association, or other legal entity, call on,
divert, take away, solicit or in any way assist in the solicitation of any of
the Employer's customers or prospective customers.
13. NON-SOLICITATION OF FORMER EMPLOYEES
Employee agrees that during the Employment Period and for a period of
one (1) year following the expiration of the Employment Period or any Renewal
Period, the
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Employee will not, on his behalf or on behalf of any other person, firm,
corporation, partnership, association, or other legal entity, divert, take away,
solicit or attempt to solicit any of the current employees of the Company.
14. SPECIFIC REMEDIES
(a) If during the course of the Employment Period or any Renewal Period
the Employee commits a breach of any of the provisions of this Agreement, such
violation shall be deemed to be grounds for termination for Cause and the
Company shall have the right to have such provisions specifically enforced by
any court having equity jurisdiction, it being acknowledged and agreed that any
such breach will cause irreparable injury to the Company and that money damages
will not provide an adequate remedy to the company, provided however that
nothing herein shall be construed as prohibiting the Company from pursuing any
other remedies available to the Company for such breach or threatened breach,
including the recovery of damages from the Employee.
(b) If following the Employment Period the Employee commits a breach of
any of the post-employment restrictions of this Agreement, the Company shall
have the right to have such provisions specifically enforced by any court having
equity jurisdiction, it being acknowledged and agreed that any such breach will
cause irreparable injury to the company and that money damages will not provide
an adequate remedy to the Company, provided however that nothing herein shall be
construed as prohibiting the Company from pursuing any other remedies available
to the Company for such breach of threatened breach, including the recovery of
damages from the Employee.
15. UNIQUE AND EXTRAORDINARY SERVICES
Employee hereby acknowledges that his services are unique and
extraordinary, and are not readily replaceable.
16. COOPERATION FOLLOWING TERMINATION
Employee agrees that, following notice of termination of his
employment, he shall cooperate fully with the Company in all matters relating to
the completion of his pending work on behalf of the Company and the orderly
transition of such work to such other employees as the Company may designate.
Employee further agrees that during and following the termination of his
employment he shall cooperate fully with the Company as to any and all claims,
controversies, disputes or complaints over which he has any knowledge or that
may relate to him or his employment relationship with the Company. Such
cooperation includes, but is not limited to, providing the Company with all
information known to him related to such claims, controversies, disputes or
complaints and appearing and giving testimony in any forum.
Following the conclusion of the Employment Period, the Company agrees
that it will pay Employee at a rate of $100.00 per hour plus expenses for any
services rendered on its behalf pursuant to this Paragraph.
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17. GOVERNING LAW
Except as otherwise explicitly noted, this Agreement shall be governed
by and construed in accordance with the laws of the State of New Jersey (without
giving effect to conflict of law).
18. INTEGRATION
This Agreement, including the Exhibits attached hereto and made part
hereof, constitutes the entire understanding between the parties hereto relating
to the subject matter hereof, superseding all negotiations, prior discussions,
preliminary agreements and agreements related to the subject matter hereof made
prior to the date hereof.
19. MODIFICATIONS AND AMENDMENTS
This Agreement may be modified or amended only by an instrument in
writing executed by the parties hereto and approved in writing by a majority of
the Board of Directors. Such modification or amendment will not become effective
until such approval has been given.
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. NOTICE
For the purpose of this Agreement, notices and all other communications
provided for in this Agreement shall be in writing and shall be deemed to have
been duly given as of the date delivered if delivered in person or by telecopy
or if mailed, by registered mail, return receipt requested, postage prepaid,
addressed to Employee as follows:
---------------------------------
---------------------------------
---------------------------------
If to the Company:
DynamicWeb Enterprises Inc.
000 Xxxxx 00 Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
ATTENTION: Xxxxxx Xxxxxxxxxx
or to such other address as any party may have furnished to the other in writing
in accordance herewith, except that notices of changes of address shall be
effective upon receipt.
22. WAIVER
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The observation or performance of any condition or obligation imposed
upon the Employee hereunder may be waived only upon the written consent of the
Board of Directors of the Company. Such waiver shall be limited to the terms
thereof and shall not constitute a waiver of any other condition or obligation
of the Employee under this Agreement.
23. ASSIGNMENT
Neither party shall have the right to assign any rights or obligations
under this Agreement without the prior written approval of the other party.
24. HEADINGS
The headings have been inserted for convenience only and are not to be
considered when construing the provisions of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first written upon.
DYNAMICWEB ENTERPRISES
By /s/ Xxxxxx X. Xxxxxxxxxx, Xx.
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Name: Xxxxxx X. Xxxxxxxxxx, Xx.
Title: Chief Executive Officer
/s/ Xxxxx Xxxxxxx
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XXXXX XXXXXXX
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