AGREEMENT
XXX XXXXX AND XXXXXXX.XXX, INC.
AGREEMENT, dated as of the 12th day of July, 1999, by and between
XxxXxxx.xxx, Inc., having a place of business at Xxx Xxxxxxxxx Xxxxx, Xxxxxxxxx,
Xxx Xxxx 00000 (hereinafter designated and referred to as "Company"), and Xxx
Xxxxx, residing at 000 Xxxxxxxxxx Xxxxx, Xxxxxxx, Xxx Xxxx 00000 (hereinafter
designated and referred to as "Executive", "his" or "him").
WHEREAS, the Company desires to employ Executive as Chief Technology
Officer in accordance with the provisions hereinafter set forth; and
WHEREAS, Executive is willing to be employed by the Company, all in
accordance with provisions hereinafter set forth.
NOW THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties hereto agree as follows:
1. Term. The term of this Agreement (the "Term") shall be for a
period of three (3) years commencing July 12, 1999 and automatically terminating
on July 12, 2002, subject to earlier termination as provided herein or unless
extended by mutual consent of both parties in writing sixty (60) days prior to
the end of the term of this Agreement or any extension thereof, but nothing
herein shall require the Company or Executive to agree to any specific term or
condition or to any continuation of Executive's employment beyond the end of the
term of this Agreement.
2. Employment. Subject to the terms and conditions and for the
compensation hereinafter set forth, the Company employs Executive for and during
the Term as Chief Technology Officer and Executive shall have such duties and
responsibilities as are typically assigned to chief technology officers of
internet-related companies including, without limitation, the responsibilities
listed on Schedule 1 hereto, and such other matters as shall be requested by the
Chief Operating Officer. Executive does hereby accept such employment and agrees
to use his best efforts and to devote all of his business time during the Term
to the performance of his responsibilities faithfully, diligently and to the
best of his abilities upon the conditions herein set forth; provided, however,
that nothing herein shall be deemed to prohibit Executive from continuing to
maintain the websites "xx-xxxxxxx.xxx", "xxxxxxxxxx.xxx" and "xxx-xxxx.xxx" so
long as Executive's efforts and commitment of time in connection therewith do
not interfere with the performance of his duties hereunder. Executive shall
report directly to the Chief Operating Officer of the Company or his designee.
3. Compensation. During the Term, the Company agrees to pay
Executive, and Executive agrees to accept a salary, at an annual rate as follows
(in each case payable at least every two weeks, less all applicable taxes, for
all services rendered by Executive hereunder): during the first six months of
the Term, $125,000 per annum; during the seventh through and including the
twelfth month of the Term, $150,000 per annum; during the second year of the
Term, $155,000 per annum; and during the third year of the Term, $160,000 per
annum. In addition, Executive may be entitled to receive additional bonuses from
time to time at the sole
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discretion of the Board of Directors of the Company. On July 12, 1999, Executive
will be granted pursuant to the Company's stock option plan and the Option
Contract attached as Exhibit A hereto stock options to purchase 240,000 shares
of the Company's common stock at a price equal to the closing asked price per
share on July 12, 1999, which options shall vest as follows: 40,000 on July 12,
1999 and an additional 20,000 quarterly upon the 12th day of each third month
following July 12, 1999 (the date of the first such additional vesting of 20,000
shares will be October 12, 1999) until all of such 240,000 shares have vested
during the Term hereof. Notwithstanding the foregoing, if there occurs during
the Term (a) a merger or consolidation to which the Company is a party in which
the Company is not the surviving corporation or (b) any other capital
reorganization in which more than fifty percent (50%) of the shares of the
Company entitled to vote are exchanged, then any stock options granted to
Executive pursuant to this Section which are unexpired at the time of such
occurrence shall become fully vested and immediately exercisable.
4. Expenses. The Company shall reimburse Executive, not less often
than monthly, for all actual and reasonable business expenses incurred in
connection with his service to the Company, upon submission of appropriate
vouchers and expense account reports. In this regard, the Company shall be
responsible and shall reimburse Executive for gasoline costs incurred in respect
of the service of the Company, Executive's business-related cell phone expenses,
business-related pager expenses and expenses incurred in connection with the
installment and maintenance of a fractional T1 connection service to Executive's
primary residence referenced in the preamble hereto (estimated at $700 per
month). All such expenses shall be reimbursable upon submission of reasonably
appropriate documentation therefor in accordance with Company policy.
5. Benefits. The Company shall provide medical insurance and such
other benefits, including, without limitation, participation in the Company's
stock option plan(s) in accordance with the applicable Company benefit plans, as
such plans may exist from time to time and are made available to other employees
of the Company with similar job responsibilities. Notwithstanding the foregoing,
Executive shall be entitled to term life insurance coverage during the Term in
the amount of $150,000, which insurance policy shall be acquired by the Company
within 40 days of the date hereof. Executive shall be entitled to annual
vacation in accordance with the Company's policy.
6. Restrictive Covenant. Executive acknowledges that he has entered
into that certain Noncompetition and Nondisclosure Agreement, dated of even date
herewith, between Executive and the Company (the "Noncompetition Agreement") a
copy of which is attached hereto as Exhibit B. Notwithstanding the terms and
conditions thereof, Executive agrees that the "Restricted Period" as defined
therein shall be extended, if applicable, through the first anniversary of the
end of Executive's employment, whether full-time or part-time, exclusive or
nonexclusive, and in any capacity, by the Company.
7. Proprietary Rights and Information. Concurrently with the
execution of this Agreement, Executive and the Company have entered into that
certain Proprietary Rights and Information Agreement (the "Proprietary Rights
and Information Agreement"), attached as Exhibit C hereto.
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8. Irreparable Harm. Executive agrees that any breach or threatened
breach by Executive of provisions set forth in Sections 6 and 7 of this
Agreement, would cause the Company irreparable harm and the Company may obtain
injunctive relief against such actual or threatened conduct and without the
necessity of a bond.
9. Return of Company Property. Executive agrees that following the
termination of his employment for any reason, he shall return all property of
the Company which is then in or thereafter comes into his possession, including,
but not limited to, documents, contracts, agreements, plans, photographs,
customer lists, books, notes, electronically stored data and all copies of the
foregoing as well as any other materials or equipment supplied by the Company to
Executive.
10. Termination.
(A) Death. In the event of Executive's death during the Term,
this Agreement shall automatically terminate on the date of death, and
Executive's estate shall be entitled to payment of Executive's salary accrued
hereunder through the date of death. All other benefits and compensation
described herein shall terminate on the date of death unless otherwise
stipulated in the applicable Company plan.
(B) Disability. In the event Executive, by reason of physical
or mental incapacity, shall be disabled for a period of at least two (2)
consecutive months or three (3) months in the aggregate in any twelve (12) month
period of this Agreement or any extension hereof, the Company shall have the
option to terminate Executive's employment and to terminate this Agreement. Upon
ten (10) days written notice of such termination to Executive, and all
obligations of the Company hereunder shall cease upon the date of such
termination unless Executive shall have returned to the performance of his
normal duties prior to the effective date of the notice. "Incapacity" as used
herein shall mean the inability of Executive to perform his normal duties.
Executive's salary as provided for hereunder shall continue to be paid during
any period of incapacity prior to and including the date on which Executive's
employment is terminated for disability.
(C) Company's Rights To Terminate This Agreement.
(a) The Company shall have the right, before the expiration of
the term of this Agreement, to terminate this Agreement and to discharge
Executive for cause (hereinafter "Cause"), and all compensation to Executive
shall cease to accrue upon discharge of Executive for Cause. For the purposes of
this Agreement, the term "Cause" shall mean (i) Executive's violation of the
Company's written policy or specific written directions of the Chief Operating
Officer or of the Board of Directors, which directions are consistent with
normally acceptable business practices, or the failure to observe, or the
failure or refusal to perform, any obligations required to be performed in
accordance with this Agreement, including, without limitation, the
responsibilities set forth on Schedule 1, (ii) if the Board of Directors
determines that Executive has committed a demonstrable act (or omission) of
malfeasance seriously detrimental to the Company or (iii) breach by Executive in
any material respect of any covenant or agreement contained herein, in the
Proprietary Rights and Information Agreement or in the Noncompetition Agreement.
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(b) If the Company elects to terminate Executive's employment
for Cause, if such Cause shall be capable of cure (it being understood and
agreed that a breach of fiduciary duty, including dishonesty, is not subject to
cure) the Company shall first give Executive written notice and a period of ten
(10) days to cure such Cause, and if such Cause is not cured in said ten (10)
days or if such Cause is not capable of cure, such termination shall be
effective ten (10) days after the Company gives written notice of such failure
to cure to Executive. In the event of a termination of Executive's employment
for Cause in accordance with the provisions of Section 11 (C) (b), the Company
shall have no further obligation to Executive, except for the payment of salary
and for any other compensation accrued and/or expenses incurred through the date
of such termination from employment.
11. Waiver. Any 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 other
breach or default hereof.
12. Governing Law. The validity of this Agreement or of any of the
provisions hereof shall be determined under and according to the laws of the
State of New York, and this Agreement and its provisions shall be construed
according to the laws of the State of New York, without reference to its choice
of law rules.
13. Notices. (a) Any notice or other communication required or
permitted hereunder shall be in writing and shall be delivered personally by
hand or by recognized overnight courier or mailed (by registered or certified
mail, postage prepaid) or telecopied, as follows:
(i) If to the Company, one copy to:
XxxXxxx.xxx, Inc.
Xxx Xxxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxx, President
Telecopier: (000) 000-0000
with simultaneous copy to:
Rosenman & Colin LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxx, Esq.
Telecopier: (000) 000-0000
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(ii) If to Executive, one copy to him at the address set
forth in the preamble hereto.
With a simultaneous copy to:
Xxxxxx & Xxxxx, P.C.
0000 Xxxxxx Xxxxxxxxx
Xxxxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxxx X. Xxxxx, Esq.
Telecopier: (000) 000-0000
(b) Each such notice or other communication shall be effective (i)
if given by telecopier, when such telecopy is transmitted to the telecopier
number specified in Section 13(a) (with confirmation of transmission), or (ii)
if given by other means, when delivered at the address specified in Section
13(a). Any party by notice given in accordance with this Section 13 to the other
party may designate another address or person for receipt of notices hereunder.
Notices by a party may be given by counsel to such party.
14. Assignment. The Executive's assignment of this Agreement or any
interest herein, or any monies due or to become due by reason of the terms
hereof, without the prior written consent of the Company shall be void. This
Agreement shall be assignable and binding to a corporation or other business
entity that succeeds to all or substantially all of the business of the Company
through merger, consolidation, corporate reorganization or by acquisition of all
or substantially all of the assets of the Company and which assumes Company's
obligations under this Agreement.
15. Miscellaneous. This Agreement contains the entire understanding
between the parties hereto and supersedes all other oral and written agreements
or understandings between them. No modification or addition hereto or waiver or
cancellation of any provision shall be valid except by a writing signed by the
party to be charged therewith.
16. Obligations of a Continuing Nature. It is expressly understood
and agreed that the covenants, agreements and restrictions undertaken by or
imposed on either party hereunder, which are stated to exist or continue after
termination of Executive's employment with the Company, shall exist and continue
on both parties irrespective of the method or circumstances of such termination
from employment or termination of this Agreement.
17. Severability. Executive agrees that if any of the covenants,
agreements or restrictions on the part of Executive are held to be invalid by
any court of competent jurisdiction, such holding will not invalidate any of the
other covenants, agreements and/or restrictions herein contained and such
invalid provisions shall be severable so that the invalidity of any such
provision shall not invalidate any others. Moreover, if any one or more of the
provisions contained in this Agreement shall be held to be excessively broad as
to duration, activity or subject, such provisions shall be construed by limiting
and reducing them so as to be enforceable to the maximum extent allowed by
applicable law.
18. Representation. Executive represents and warrants that he has
the legal right to enter into this Agreement and to perform all of the duties
and obligations on his part to be performed hereunder in accordance with its
terms and that he is not a party to any
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agreement or understanding, written or oral, which prevents Executive from
entering into this Agreement or performing all of his duties and obligations
hereunder. In the event of a breach of such representation or warranty on his
part or if there is any other legal impediment which prevents him from entering
into this Agreement or performing all of his duties and obligations hereunder,
the Company shall have the right to terminate this Agreement in accordance with
Section 11(C) (a); in which event the "Cause" shall not be deemed curable under
Section 11(C) (b). Without limiting the foregoing, Executive represents and
warrants that he is not a party to any agreement which prohibits or limits his
ability to fulfill his duties and responsibilities contemplated herein.
19. Descriptive Headings. The paragraph headings contained herein
are for reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the day and year first above written.
XXXXXXX.XXX, INC.
By: /s/ Xxxx X. Xxxxx
------------------------------------
Xxxx X. Xxxxx
President
/s/ XXX XXXXX
----------------------------------------
XXX XXXXX
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SCHEDULE 1
1. (a) Executive will be responsible for managing, directing and
coordinating all information systems and technology activities of the Company.
(b) Executive will have the overall responsibility for providing the
managerial leadership and direction required in defining the technical strategy
of the Company and directing and implementing projects requested from time to
time by the Chief Operating Officer.
2. (a) Executive will be responsible for planning and coordinating the
software functions of the Company in accordance with its strategy to establish a
significant online retail business in the optical products and other markets,
through acquisitions and otherwise.
(b) Executive will work closely with senior management to identify and
capitalize on next generation web technology.
(c) Executive will undertake to define and quantify project deliverables
and ensure that deliverables are met.
(d) Executive will coordinate projects with the Company's sales and
marketing teams including in connection with the launch of current and future
products.
(e) Executive will oversee the execution of on-line promotional campaigns
and follow-up customer support efforts at the request of the Chief Operating
Officer.
(f) Executive will lead a technology staff (currently consisting of five
people) at levels determined by the Board of Directors. Executive will at the
request of the Chief Operating Officer increase the size and capability of the
technical team, meeting the demands of current and new product offerings.
3. (a) Executive will be responsible to ensure that the Company continues
to embrace the latest proven technologies through strong research, analysis and
recommendation of cutting edge technology.
(b) Other required activities will include:
(i) achieving a technology lead in the strategic application of the
Company's technology in its coding standards and rapid application
development methodology.
(ii) providing mentorship and managing the career progression and
professional development of our senior developers and junior technical
staff.
(iii) providing final technical approval of all developer staff.
(iv) providing technical/technology lead (as required) for
customer/partner meetings.
(v) acting as the Company's advocate and contributing to the
continuous refinement and achievement of the Company's vision.
