EMPLOYMENT AGREEMENT
This
EMPLOYMENT AGREEMENT (“Agreement”) dated as of May 21, 2007, between Xxxxx
Xxxxxxx, an individual residing at 000 Xxxx 00xx
Xxxxxx,
Xxx. #X, Xxx Xxxx, Xxx Xxxx 00000 and INCA Designs, Inc., a New York corporation
having a principal office at 00 Xxxx 00xx
Xxxxxx,
Xxxxx 000, Xxx Xxxx, Xxx Xxxx 00000 (the “Corporation”).
WHEREAS,
in connection with the Securities Exchange Agreement between INCA Designs,
Inc.
ad S2 New York Design Corp., the Corporation desires to employ the Employee,
and
the Employee is willing to be employed and serve the Corporation, on the terms
and conditions herein provided; and;
NOW,
THEREFORE, in consideration of the foregoing and the mutual agreements set
forth
herein, and other valuable consideration, the parties hereto, intending to
be
legally bound, hereby agree as follows:
| 1. |
EMPLOYMENT
PERIOD; REPRESENTATION
|
(a)
The
Corporation agrees to employ Employee, and Employee hereby agrees to such
employment, subject to the terms and conditions set forth in this
Agreement.
(b)
The
parties hereto agree that this Agreement is made pursuant to the Securities
Exchange Agreement dated May 21, 2007 between the Corporation and S2 New York
Design Corp. This Agreement is subject to Employee’s status as an officer of the
Corporation, and nothing herein shall be deemed to affect or otherwise alter
Employee’s status as a shareholder of the Corporation.
| 2. |
TERM
|
The
employment of Employee by the Corporation pursuant to this Agreement shall
commence on May 21, 2007, and shall continue for a period of five years from
the
date hereof, provided however that the Corporation and the Employee, by mutual
written agreement, may extend the Agreement for additional five-years terms.
| 3. |
POSITION
AND DUTIES
|
Upon
the
commencement of the Employment Term, Employee shall hold the position and
perform the duties of Chief Executive Officer and Chief Financial Officer of
the
Corporation. Employee shall conduct the daily activities of the Corporation,
and
shall manage the sales and marketing of the Corporation’s products, its
day-to-day personnel needs, its day-to-day personal needs and financial
decisions, and its relationship between other entities with which the
Corporation has a relationship. Employee shall fulfill such duties and
responsibilities as are consistent with the positions of Chief Executive Officer
and Chief Financial Officer, and as are assigned to her from time to time by
the
Board of Directors, including, but not limited to, any activities necessary
to
run the day-to-day business of the Corporation and manage the assets of the
Corporation.
| 4. |
COMPENSATION
AND BENEFITS
|
(a)
Base
Salary.
As
compensation for the Employee’s services hereunder during the Employment Term,
the Corporation shall pay the Employee a base salary at the annual rate of
$65,000.00 (said amount, together with any increases thereunder as may be
determined from time to time by the Corporation in its sole discretion, being
hereinafter referred to as the “Base Salary”). Any Base Salary payable hereunder
shall be paid in regular intervals in accordance with the Corporation’s payroll
practices, but no less frequently than once each month.
(b)
Bonus
Compensation.
In
addition to her Base Salary, Employee shall be eligible for an annual bonus
payment. The amount of any bonus shall be in the sole discretion of the
Corporation and shall be determined based upon the Corporation’s performance and
productivity. Bonus compensation may be paid to Employee in the form of cash
or
stock options, or a combination thereof, at the Corporation’s discretion. Unless
otherwise specified herein, Employee shall be eligible to receive such bonus
compensation only if she is actively employed by the Corporation at the end
of
the fiscal year.
(c)
Benefits.
Employee
shall be eligible for sick leave, major medical, hospitalization, dental and
disability insurance on the same terms and conditions as such benefits are
provided for or made available to other employees of the
Corporation.
(d)
Expense
Reimbursement.
The
Corporation shall promptly pay the reasonable expenses incurred by the Employee
in the performance of her duties hereunder, including, without limitation,
those
incurred in connection with business related travel, telecommunications and
entertainment, or, if such expenses are paid directly by the Employee, shall
promptly reimburse the Employee for such payment, provided that Employee has
properly accounted therefore in accordance with the Corporation’s
policy.
(e)
Vacation.
Employee
shall be entitled to five (5) weeks paid vacation in each calendar at times
agreed upon in advance by the Corporation. Any unused vacation days shall not
carry-over to the next year. Employee shall also be entitled to all paid
holidays given by the Corporation to its employees.
| 5. |
TERMINATION
|
(a)
Death
or Disability.
Employee’s employment hereunder shall terminate upon her death or disability.
Disability shall be defined as the inability to perform a substantial portion
of
the Employee’s service to the Corporation as a result of a mental or physical
illness which has continued or can reasonably be expected to continue for a
period of not less than six (6) months or has continued or can reasonably be
expected to continue to for an aggregate of not less than 180 days in any 365
day period. In the event that there is a disagreement with regard to whether
a
disability exists sufficient to trigger this section, the determination shall
be
based on the determination of the disability insurance company which insures
the
Corporation’s officers, which determination will have been made in the usual and
customary manner employed by the insurance company to make such determination.
Under no circumstances shall the term disability be deemed to include an
incarceration or other legal impediment to performances.
(b)
For
Cause.
The
Corporation shall have the right to terminate the employment of Employee for
Cause upon written notice to Employee. For purposes of this Agreement, “Cause”
shall mean: (i) Employee’s conviction of, or plea of nolo contendere, to a
felony or any crime involving moral turpitude; (ii) Employee’s commission of an
act of personal dishonesty or breach of fiduciary duty involving personal profit
or benefit in connection with Employee’s employment by the Corporation, as
determined by an arbitrator in an arbitration commenced by the Corporation;
(iii) Employee’s breach of any provision of this Agreement, as determined by an
arbitrator in an arbitration commenced by the Corporation; (iv) Employee’s
willful misconduct or gross negligence in the conduct of her duties hereunder,
as determined by an arbitrator in an arbitration commenced by the Corporation;
or (v) Employee’s willful and repeated failure to comply with the lawful
directions of the Board of Directors as determined by an arbitrator in an
arbitration commenced by the Corporation.
(c)
Arbitration;
Legal Proceedings; Rights upon Termination.
Nothing
in the Agreement shall preclude the Corporation from seeking an interim order
of
relief from a court or a competent tribunal pending the resolution of issues
enumerated above by an arbitrator. In the event of the termination of Employee’s
employment by the Corporation for Cause, all rights of Employee under this
Agreement shall cease as of the effective date of the termination, and Employee
shall only be entitled to payment of any base salary earned but not yet paid
as
of the date of Employee’s termination and any outstanding reimbursable expenses.
Employee shall not be entitled to any additional compensation or bonus, whether
accrued or not, or any other perquisites or benefits, except those required
to
be paid under federal or state laws or regulations.
(d)
Resignation.
In the
event of the termination of Employee’s employment by the resignation of
Employee, all rights of Employee under this Agreement shall cease as of the
effective date of the termination, and Employee shall be entitled to receive
from the Corporation only payment of any base salary earned but not yet paid
as
of the date of Employee’s termination plus any earned but not yet paid incentive
compensation as of the date of Employee’s termination. Employee shall not be
entitled to any other bonus, perquisites or benefits except those required
to be
paid under federal or state laws or regulations.
(e)
In
the event that Employee’s employment is terminated as a result of death or
disability pursuant to Section 5(a), Employee (or her estate) shall be entitled
to (1) any base salary earned but not yet paid as of the date of Employee’s
termination, (2) any outstanding reimbursable expenses, (3) continuation of
medical benefits for the period of the lesser of one (1) month or the remainder
of the Employment Term, and (4) payment of all bonus compensation earned by
Employee but not yet paid as of the date of her death or
Incapacity.
| 6. |
NON-DISCLOSURE
OF PROPRIETARY/CONFIDENTIAL
INFORMATION
|
Employee
acknowledges that she will have access to information about the Corporation
and
her employment with the Corporation shall bring her into close contact with
many
confidential affairs of the Corporation, its subsidiaries and affiliates, and
their respective customers, including, without limitation, information
proprietary to the Corporation, trade secrets, and other confidential material,
which information is not readily available to the public and all of which is
highly confidential and proprietary and was developed at great effort and
expense (such material, “Confidential Information”). In recognition of the
foregoing, during the period of her employment and thereafter, regardless of
the
reason for any termination of employment (whether voluntary or involuntary
and
whether for Cause or otherwise), the Employee shall not, without the written
consent of the Board of Directors of the Corporation, disclose or use or make
available for anyone to use (except in the course of her employment hereunder,
in furtherance of the business of the Corporation, its subsidiaries or its
affiliates, or as required by law) any Confidential Information.
| 7. |
RETURN
OF CORPORATION
PROPERTY
|
Employee
agrees that upon termination of her employment with the Corporation for any
reason, voluntary or involuntary, with or without Cause, she will immediately
return to the Corporation all Confidential Information and any Corporation
property within her possession (or under her control), and shall not at any
time
thereafter copy or reproduce the same.
| 8. |
RETRICTIVE
COVENANTS
|
(a)
Employee acknowledges and recognizes the highly competitive nature of the
Corporation’s business, that access to the Corporation’s confidential records
and proprietary information renders her special and unique within the
Corporation’s industry, and that she will have the opportunity to develop
substantial relationships with existing and prospective customers of the
Corporation during the course of and as a result of her employment with the
Corporation. In light of the foregoing, during the course of Employee’s
employment with the Corporation and for a period of one (1) year after the
date
of the termination of her employment for any reason, Employee shall not,
directly or indirectly, individually or on behalf of any person, Corporation,
enterprise or entity not now parties to this Agreement, or as a sole proprietor,
partner, stockholder, director, officer, principal, agent, executive, or in
any
other capacity or relationship, engage in any business or employment, or aid
or
endeavor to assist any person, business, enterprise or legal entity, which
is
engaged or is seeking to engage in the Business within North America, Europe
or
Asia (a “Competitor”). For purposes of this Agreement, “Business” shall mean any
entity engaged in the manufacture of high fashion apparel. Employee, however,
may accept employment with a Competitor of the Corporation with a diversified
business provided that (i) Employee will not, directly or indirectly, render
services or assistance to any part of the Competitor that is in any way engaged
in the Business of the Corporation; and (ii) the Corporation shall receive,
prior to Employee rendering services to or assisting such Competitor, written
assurances deemed satisfactory by the Corporation from Employee and the
Competitor, that Employee will not, directly or indirectly, render services
or
assistance to any part of the Competitor that is in any way engaged in the
Business of the Corporation.
(b)
During the period of Employee’s employment with the Corporation and for a period
of one (1) year following the expiration or termination of Employee, whether
such termination is voluntary or involuntary, Employee shall not, without the
prior written consent of the Corporation, on behalf of herself or on behalf
of
any other person, business, enterprise or entity, (i) directly or indirectly
solicit, divert or encourage any of the employees, agents, consultants or
representatives to terminate his, her or its relationship with the Corporation,
or hire any such employee, consultant or representative so solicited or
encouraged; (ii) directly or indirectly solicit or encourage any of the
employees, agents, consultants or representatives of the Corporation to become
employees, agents, representatives or consultants of a Competitor; (iii)
directly or indirectly on behalf of a Competitor solicit, divert or appropriate
or attempt to solicit, divert or appropriate any customers, clients, vendors
or
distributors of the Corporation who were (x) customers, clients, vendors or
distributors of the Corporation at the time of the termination of her employment
from the Corporation or during the one (1) year period prior to the termination
of Employee’s employment with the Corporation and with whom Employee had contact
during her employment with the Corporation, or (y) any prospective customers,
clients, vendors or distributors at the time of Employee’s termination of
employment with respect to which the Corporation has developed or made a sales
presentation (or similar offering of services) within the one year period prior
to the termination of Employee’s employment with the Corporation and with whom
Employee had contact during the period of her employment with the
Corporation.
(c)
Employee recognizes and acknowledges that the restrictions and limitations
set
forth in this Agreement are legitimate and fair in light of her access to
Confidential Information, her substantial contacts with customers of the
Corporation and the Corporation’s need to develop and market its services and
products. Employee further acknowledges that the customers of the Corporation
are located throughout North American, Europe and Latin America and that a
business competitive with the Corporation may be carried on anywhere within
these areas as a result of the geographically diverse spread of the high fashion
apparel manufacturing industry. Therefore, Employee acknowledges that the
geographical application of the provisions and restrictions contained in the
Agreement are reasonable under the circumstances. Employee further acknowledges
that: (i) in the event her employment with the Corporation terminates for any
reason, she will be able to earn a livelihood without violating the foregoing
restrictions and (ii) her ability to earn a livelihood without violating such
restrictions is a material condition to her employment with the
Corporation.
| 9. |
INDEPENDENCE
AND SEVERABILITY
|
Each
of
the rights enumerated in Section 8 shall be independent of the others and shall
be in addition to and not in lieu of any other rights and remedies available
to
the Corporation at law or in equity. If any of the covenants contained in
Section 8 or any part of any of them is hereafter construed or adjudicated
to be
invalid or unenforceable, the same shall not affect the remainder of the
covenant or covenants, or rights or remedies that shall be given full effect
without regard to the invalid portions. If any of the covenants contained in
Section 8 is held to be invalid or unenforceable because of the duration of
such
provision or the area covered thereby, the parties agree that the court making
such determination shall have the power to reduce the duration and/or area
of
such provision and in its reduced form said provision shall then be
enforceable.
| 10. |
SPECIFIC
REMEDIES
|
(a)
If,
during the course of her employment with the Corporation, Employee commits
a
breach of any of the provisions of Sections 6, 7, or 8, the Corporation 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 Corporation and that money damages will not
provide an adequate remedy to the Corporation, provided, however, that nothing
herein shall be construed as prohibiting the Corporation from pursuing any
other
remedies available to the Corporation for such breach or threatened breach,
including the recovery of damages from Employee.
(b)
Employee acknowledges that the Corporation shall suffer irreparable injury
if
she breaches her obligations under Sections 6, 7, or 8. Accordingly, in the
event of such breach, Employee acknowledges that the Corporation will be
entitled to injunctive relief in any state or federal court of competent
jurisdiction within the State of New York. Employee further submits to the
personal jurisdiction of such courts for the purposes of any such
action.
| 11. |
ASSIGNMENT
OF INVENTIONS
|
(a)
Employee agrees that all inventions, designs, improvements, writings, and
discoveries initiated, made or conceived during the period of her employment,
whether solely by Employee or in conjunction with others, that pertain to the
business conducted by the Corporation, its affiliates and subsidiaries, shall
be
the exclusive property of, and she hereby assigns all of her interest therein
to, the Corporation or its designee. All rights and obligations hereunder shall
continue in full force and effect after the termination of employment and shall
be binding on the Employee’s personal representatives or assigns. Employee shall
promptly disclose to the Corporation all such inventions, designs, improvements,
writings and discoveries and shall, at the sole expense of the Corporation,
assist the Corporation or its designee in obtaining patents and copyrights
therefore that are deemed suitable for United States or foreign letters patent,
copyrights, trademarks and trade names or to otherwise vest the Corporation
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, 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 her prior to or during the
Employment Term, 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 Corporation, 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.
| 12. |
COOPERATION
FOLLOWING TERMINATION
|
Employee
agrees that, following notice of termination of her employment, she shall
cooperate fully with the Corporation in all matters relating to the completion
of her pending work on behalf of the Corporation and the orderly transition
of
such work to such other Employees as the Corporation may designate. Employee
further agrees that during and following the termination of her employment
she
shall cooperate fully with the Corporation as to any and all claims,
controversies, disputes or complaints over which she has any knowledge or that
may relate to her or her employment relationship with the Corporation; provided,
however, that Employee will be reimbursed by the Corporation for any out of
pocket expenses incurred pursuant to her duties under this Section 12 and
reasonably compensated for her time. Such cooperation includes, but is not
limited to, providing the Corporation with all information known to her related
to such claims, controversies, disputes or complaints and appearing and giving
testimony in any forum.
| 13. |
MEDIATION
|
Employee
acknowledges and understands that certain issues and/or decisions herein are
to
be made by the Corporation and that certain issues and/or decisions require
the
Corporation’s approval (including, but not limited to, salary, bonuses, vacation
time, assignment of new duties, and the ability to waive any of the terms of
this Agreement). In the event of an impasse resulting from a 50/50 deadlock
or
tie regarding such issues and/or decisions, the Corporation shall submit the
issue to neutral, non-binding mediation prior to the commencement of
arbitration, litigation or any other proceeding before a trier of fact.
Employee, as a member of the Board of Directors and executive officer of the
Corporation, agrees to act in good faith to participate in mediation, and will
attempt to identify a mediator that is mutually acceptable to both Employee
and
Xx. Xxxxxxx (collectively, “the parties”). If a mediator cannot be agreed upon
by the parties, each party shall designate a mediator and those mediators shall
select a third mediator who shall act as the neutral mediator, assisting the
parties in attempting to reach a resolution. The parties to the mediation shall
share equally in its cost. If the dispute is resolved successfully through
mediation, the resolution will be documented by a written agreement executed
by
the parties. If the mediation does not successfully resolve the dispute, the
mediator shall provide written notice to the parties reflecting same, and the
parties may then proceed to seek an alternative form of resolution of the
dispute in accordance with the remaining terms of this Agreement and other
rights and remedies afforded to them by law.
| 14. |
ARBITRATION
|
With
the
exception of those referenced in Paragraph 13, above, all disputes,
controversies and claims arising between the Corporation and the Employee out
of
or relating to this Agreement or any breach thereof, shall be submitted to
binding arbitration in New York, New York, pursuant to the rules of the American
Arbitration Association for expedited arbitration. Judgment upon the
determination or award rendered by the arbitrators may be entered in any court
having jurisdiction thereof; provided, however, that the provisions of this
Section 14 shall in no way limit or impair the rights of the parties to avail
themselves of the remedies provided for herein. The arbitrators may award to
the
winning party the costs (including reasonable attorney’s fees and expenses) of
any such arbitration.
| 15. |
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 York (without giving effect to
conflict of law).
| 16. |
INTEGRATION
|
This
Agreement 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.
| 17. |
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 the Board of Directors of
the
Corporation. Such modification or amendment will not become effective until
such
approval has been given.
| 18. |
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.
| 19. |
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 if delivered in person or by telecopy, on the next business
day,
if sent by a nationally recognized overnight courier service, and on the second
business day if mailed by registered mail, return receipt requested, postage
prepaid, in each case addressed as follows:
If
to
the Employee:
Xxxxx
Xxxxxxx
000
Xxxx
00xx
Xxxxxx
Xxx
#X
Xxx
Xxxx,
XX 00000
If
to
the Corporation:
INCA
Designs, Inc.
00
Xxxx
00xx
Xxxxxx,
Xxxxx 000
Xxx
Xxxx,
Xxx Xxxx 00000
With
a
copy to:
|
Xxxx
Xxxxxxxxx, Esq.
|
and
|
Xxxx
X. Xxxxxxxxxx, Esq.
|
|
Xxxxxx
& Xxxxxxxxx, LLP
|
Xxxxxxxxxx
& Xxxxxxx, LLP
|
|
|
000
Xxxxxxx Xxxxxx, Xxxxx 000
|
000
Xxxxxxxx, 0xx
Xxxxx
|
|
|
Xxxxxx
Xxxx, XX 00000
|
Xxx
Xxxx, Xxx Xxxx 00000
|
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.
| 20. |
WAIVER
|
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 Corporation. 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.
Dated
the
date first above written.
| INCA DESIGNS, INC. | ||
| |
|
|
| By: | /s/ Xxxxxxxxx Xxxxxx | |
|
Xxxxxxxxx Xxxxxx, President |
||
| /s/ Xxxxx Xxxxxxx | ||
|
Xxxxx
Xxxxxxx
|
||
