EXHIBIT 10.21
July 12, 1999
Xx. Xxxxx Zucht
2009 Yacht Vigilant
Xxxxxxx Xxxxx, XX 00000
Dear Mr. Zucht:
This letter (the "Agreement") will confirm the agreement between PartMiner,
Inc., a New York corporation (the "Company"), and you relating to your
employment by the Company.
1. EMPLOYMENT. The Company hereby employs you, and you hereby agree
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to serve as the Executive Vice President of Business Development of the Company
during the Term of Employment (as hereinafter defined). In such capacity, you
shall be responsible for bringing to the Company and managing strategic
relationships with manufacturers, distributors, and other horizontal and
vertical organizations within the industry of the Company that might add value
to the business of the Company, including forming marketing alliances with such
organizations, managing relationships with such organizations, obtaining
franchises for products or services from such organizations, and managing the
sale of advertising space on the Partminer web site. In addition, your
responsibilities may include operational and strategic responsibilities
associated with the core business of the Company as it exists today. You shall
report directly to Xxxxxx Xxxxxxxxx, President of the Company. In the event
that any changes in your responsibilities are made by the Company, such changes
will be commensurate with your demonstrated abilities. Any changes made by the
Company in the foregoing reporting arrangements will be discussed with you prior
to implementing such changes. You agree also to perform such senior executive
services customary to such position as shall from time to time be assigned to
you and, in the absence of such assignment, such senior executive services
customary to such position as are necessary to the operations of the Company.
You agree to use your best efforts to promote the interests of the Company and
to devote all of your working time and energies to the business and affairs of
the Company during the Term of Employment (as hereinafter defined). Although you
may be associated with or invest in other companies, you will not allow such
activities to interfere with your services to the Company.
2. TERM OF EMPLOYMENT. The term of employment hereunder shall be for
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the period that commenced on April 5, 1999 and shall end on April 5, 2001 (the
"Term of Employment"), unless earlier terminated pursuant to the provisions of
Section 5 hereof.
3. COMPENSATION; EXPENSES; BENEFITS.
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(a) Base Salary. As compensation for the services hereunder during
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the Term of Employment, the Company shall pay you a base salary of $150,000 per
annum. Such salary shall be payable in appropriate bi-weekly installments to
conform with the regular payroll dates for salaried personnel of the Company and
will be considered for adjustment annually, in accordance with the Company
policy, based on the Company's evaluation of your performance for the preceding
fiscal year.
(b) Benefits. You will receive the benefits that the Company provides
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its senior executives generally, including employee health insurance benefits.
Your vacation will begin to accrue as of April 5, 1999, in accordance with the
Company's existing policy, up to a maximum of three (3) weeks per year.
(c) Expenses. During the Term of Employment, you shall be entitled to
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be reimbursed for all reasonable expenses incurred by you in performing services
hereunder in accordance with the policies and procedures established by the
Company from time to time.
(d) Stock Options. Subject to approval by the shareholders and
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directors of the Company of a proposed 1999 Stock Plan of the Company (the
"Plan"), the Company shall grant or cause to be granted to you options to
purchase approximately 2000 shares of common stock of the Company. The exercise
price of these options shall be determined based on a valuation of the Company
of $50,000,000. The options shall be granted pursuant to the Plan and will be
subject to the terms and conditions of the Plan and of a mutually agreeable
nonqualified stock option agreement to be entered into between you and the
Company. Subject to the foregoing, the total number of shares covered by these
options shall vest as follows: (i) one third of such options shall vest on the
date of the executed nonqualified stock option agreement (the "Grant Date"),
(ii) one third of such options shall vest on the first anniversary of the Grant
Date, and (iii) one third of such options shall vest on the second anniversary
of the Grant Date.
4. COVENANT NOT TO COMPETE; INTELLECTUAL PROPERTY; CONFIDENTIALITY;
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ENFORCEABILITY; BREACH.
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(a) Covenant Not To Compete. You acknowledge that you are expected to
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play a very important role in the on-going development of the Company, that you
will have detailed knowledge of the Company's business and its plans for the
future, that you will have a fiduciary relationship with the Company, and you
will be receiving substantial compensation and other benefits under this
Agreement. During the Term of Employment, you shall not, directly or indirectly,
advise, manage, control, operate, be employed by or participate in the
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ownership, management, operation or control of, or be connected in any manner
with any business which competes with any business of the Company. The decision
of the Board of Directors of the Company as to what constitutes a competing
business shall be final and binding upon you. For these purposes, your
ownership of one percent (1%) or less of any class of securities of a public
company shall not be considered to be competition with the Company.
Notwithstanding anything contained herein to the contrary, in the event that
following the Term of Employment, you directly or indirectly advise, manage,
control, operate, become employed by or participate in the ownership,
management, operation or control of, or become connected in any manner with any
business which competes with any business of the Company, any and all options
granted to you hereunder shall terminate whether or not exercisable.
(b) Intellectual Property. You agree that all ideas, inventions, trade
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secrets, marketing plans and business plans developed by you during the Term of
Employment which relate directly or indirectly to the business of the Company,
including without limitation, any process, operation, product or improvement
which may be patentable or copyrightable, will be the property of the Company
and that you will at the Company's request and cost do whatever is necessary to
secure the rights thereto by patent, copyright or otherwise to the Company.
(c) Confidentiality. You agree that you will not divulge to anyone
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(other than the Company or any persons employed or designated by the Company)
any knowledge or information of any type whatsoever of a confidential nature
relating to the business of the Company, including, without limitation, all
types of ideas, inventions, trade secrets, marketing plans, business plans, and
processes, operations, products or improvements which may be patentable or
copyrightable ("Confidential Information"). You further agree not to disclose,
publish or make use of any such Confidential Information without the prior
written consent of the Company. The term "Confidential Information" does not
include any information which (i) at the time of disclosure or thereafter is
generally available to and known to the public (other than as a result of
disclosure directly or indirectly by you), (ii) was available to you on a non-
confidential basis from a source other than the Company or its representatives
and advisors, provided that such source is not in breach of any obligations of
confidentiality to the Company, or (iii) has been independently acquired or
developed by you without violating any of your obligations pursuant to this
Agreement. The provisions set forth in this section shall survive the
termination or cancellation of this Agreement.
(d) Enforceability. You recognize and agree that the limitations
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placed on you by this Section 4 are reasonable and are required for the
protection of the Company. You agree that if any such limitation is determined
in arbitration or by a court of competent jurisdiction to be unenforceable, you
agree and submit to the reduction of such limitation as the court or
arbitrator(s) deem reasonable. The limitations placed on you by this Section 4
are of the essence of this Agreement and they shall be construed and enforced
independently. The existence of any claim or cause of action against the
Company by you shall not constitute a defense against the enforcement of these
limitations on you.
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(e) Breach. You acknowledge and agree that money damages would not
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adequately compensate the Company in the event of breach by you of any provision
of this Section 4. Consequently, you agree that the Company shall be entitled,
without the necessity of proving actual damages, to obtain damages for any
breach of this Section 4, to enforce specific performance by you of any
provision of this Section 4, or to obtain temporary and permanent injunctive
relief from any court of competent jurisdiction for enforcement of the
provisions of this Section 4.
5. Termination.
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(a) General. Your employment hereunder shall terminate as provided in
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Section 2 hereof and may be earlier terminated in accordance with the provisions
of this Section 5. Unless earlier terminated in accordance with the provisions
of this Section 5, the Company shall provide you with at least thirty (30) days
notice prior to the termination of your employment as provided in Section 2 if
the Company does not intend to renew this Agreement.
(b) Death and Disability. Your employment under this Agreement shall
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terminate upon (i) your death; or (ii) in the event you become disabled, at the
option of the Company, thirty (30) days after the date on which the Company
shall have given you written notice of the termination of your employment
because of your physical or mental incapacity on a permanent basis. You shall
be deemed to be physically or mentally incapacitated on a permanent basis if you
are unable, by reason of any physical or mental incapacity, for a period of
ninety (90) substantially consecutive days or for shorter periods aggregating
one hundred twenty (120) days or more during any twelve (12) month period, to
perform your duties as Executive Vice President of Business Development of the
Company in a reasonably satisfactory manner. In the event of any disagreement
between you and the Company as to whether you are physically or mentally
incapacitated on a permanent basis so as to permit the Company to terminate your
employment pursuant to this subparagraph (b), the question of such permanent
incapacity shall be submitted for decision to an impartial and reputable
physician in New York County, New York (the "Deciding Doctor") chosen by mutual
agreement of the Company and you or, failing such agreement, the Deciding Doctor
shall be chosen by two physicians from New York County, New York (one of whom
shall be selected by the Company and the other by you). The decision of the
Deciding Doctor regarding your capacity or incapacity shall be final and binding
on the Company and you. You shall submit to any medical examinations reasonably
necessary to enable the Deciding Doctor to make a decision regarding your
capacity or incapacity.
(c) Termination by the Company for "Cause". The Company may
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terminate your employment for "cause"; provided, however, the Company shall have
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given you written notice specifying in reasonable detail the reason therefor,
and ten (10) days after receipt of such notice in which to cure such "cause", if
capable of cure. For the purposes of this Agreement, an event or occurrence
constituting "cause" shall mean knowingly or
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recklessly causing material injury to the Company; willful misconduct in the
performance of, or a willful failure to perform, your duties; commission of
dishonest or fraudulent conduct, whether or not in connection with your
employment, or unlawful behavior involving moral turpitude, whether or not in
connection with your employment; or breach or violation of this Agreement. If
your employment is terminated under this Section 5(c), all compensation and
rights to benefits from the Company shall cease on the date of termination
(other than as may have already accrued as of the date of termination or as
expressly provided in plans in which you participated at the date of
termination); provided, however, that the restrictions on your activities
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contained in Section 4 hereof shall continue in effect as provided therein.
(d) Termination by the Company Other Than for "Cause". In the event
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that the Company terminates your employment other than for death or disability
in accordance with subparagraph (b) above, or other than for "cause" in
accordance with subparagraph (c) above, the Company shall pay you (or cause to
be paid for you) your employee health insurance and other benefits (not
including salary) for a period of not less than twelve (12) months from the date
of termination. If your employment is terminated under this Section 6(d), all
other compensation and rights to benefits from the Company shall cease (other
than as may have already accrued as of the date of termination or as expressly
provided in plans in which you participated at the date of termination);
provided, however, that the restrictions on your activities contained in Section
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4 hereof shall continue in effect as provided therein.
(e) Termination by you for "Good Reason". In the event that you
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voluntarily terminate your employment for Good Reason, the Company shall pay you
(or cause to be paid for you) your employee health insurance and other benefits
(not including salary) for a period of not less than twelve (12) months from the
date of termination. As used herein, "Good Reason" means (i) the assignment to
you of duties substantially inconsistent with your status as an executive
officer of the Company, or a substantial alteration in the nature or status of
your responsibilities from those as of the date hereof or as the same may be
changed from time to time; (ii) a reduction by the Company in your total
compensation in effect on the date hereof or as the same may be increased from
time to time, or (iii) a Change in Control (as defined in the Company's 1999
Stock Plan, which shall not be deemed to include a public offering of the
Company's securities); provided that, under either (i), (ii) or (iii) such
reason has not been cured by the Company within thirty (30) days after written
notice to the Company by you. If your employment is terminated under this
Section 6(e), all other compensation and rights to benefits from the Company
shall cease (other than as may have already accrued as of the date of
termination or as expressly provided in plans in which you participated at the
date of termination); provided, however, that the restrictions on your
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activities contained in Section 4 hereof shall continue in effect as provided
therein. To the extent there is any conflict between the terms of this Agreement
and the terms of the nonqualified stock option agreement between you and the
Company, the terms of the nonqualified stock option agreement shall control.
6. Assignment. This Agreement is a personal contract, and except as
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specifically set forth herein, your rights and interests herein may not be sold,
transferred,
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assigned, pledged or hypothecated. The Company may freely assign this Agreement
and any of its rights, obligations and interests hereunder. This Agreement shall
be binding upon and inure to the benefit of each party's successors and
permitted assigns.
7. ENTIRE AGREEMENT; GOVERNING LAW; CAPTIONS. This Agreement
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contains the entire agreement between the parties with respect to your
employment by the Company, and the validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of New
York. You hereby agree that any agreement or arrangement existing prior to the
date hereof regarding your employment by the Company is hereby terminated and
superseded by this Agreement. This Agreement may not be changed orally, but
only by agreement in writing signed by the party against whom enforcement of any
waiver, change, modification or discharge is sought. Section and paragraph
headings are for convenience of reference only and shall not be considered a
part of this Agreement.
8. NOTICES. Any notices or other communications required or
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permitted hereunder shall be in writing and shall be deemed given (a) on the
same day if given by hand, (b) on the third business day after mailing if given
by registered or certified mail, return receipt requested, postage prepaid, (c)
on the next business day after it was deposited with the courier service if sent
by reputable overnight courier, (d) or when sent if given by facsimile with
confirmation, addressed to you at 2009 Yacht Vigilant, Xxxxxxx Xxxxx, XX 00000
or to the Company at its offices at 000 Xxxx Xxxxxx Xxxxx, 00xx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: General Counsel (fax no. 000-000-0000), with a copy
to: Xxxxx & Xxxxxx LLP, One Chase Xxxxxxxxx Xxxxx, 00xx xxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Xxxx X. Xxxxx, Esq. (fax no.: 000-000-0000) or such other
address as shall have been specified in writing by either party to the other.
9. ARBITRATION. Except as provided by Section 4(e) of this
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Agreement, any dispute or controversy under or in connection with this Agreement
shall be settled exclusively by arbitration in New York, New York by one
arbitrator in accordance with the rules of the American Arbitration Association
then in effect. Judgment may be entered upon the arbitrator's award in any court
having jurisdiction. The costs and expenses (including reasonable attorneys'
fees and disbursements) of the prevailing party in any such dispute or
controversy shall be reimbursed by the other party.
10. RIGHT TO WITHHOLD. The Company shall have the right to make all
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appropriate withholdings from your salary and other compensation under federal,
state and local tax laws.
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If the foregoing accurately reflects the agreement between us, please
confirm your acceptance and agreement by signing the attached copy of this
Agreement and return the same to me.
Sincerely,
PartMiner, Inc.
/s/ Xxxxxx Xxxxxxxxx
By: _________________________
Name: Xxxxxx Xxxxxxxxx
Title: President
ACCEPTED AND AGREED:
/s/ Xxxxx Zucht
____________________________
Xxxxx Zucht
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