Exhibit 10.4
EMPLOYMENT AGREEMENT
AGREEMENT made this 28th day of April, 1999, by and between
XXXXXX.XXX LTD., a New York corporation (the "COMPANY"), and CHAN X. XXX (the
"EXECUTIVE").
W I T N E S S E T H:
WHEREAS, the Company wishes to employ the Executive and the
Executive wishes to accept such employment upon the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and other
good and valuable consideration, receipt of which is hereby acknowledged, the
parties hereto agree as follows:
1. EMPLOYMENT
The Company agrees to employ the Executive during the Term
specified in paragraph 2, and the Executive agrees to accept such employment,
upon the terms and conditions hereinafter set forth.
2. TERM
Subject to paragraphs 6 and 7 below and the other terms and
conditions of this Agreement, the Executive's employment by the Company shall be
for a term commencing on the date hereof and expiring on the close of business
on March 31, 2004 (the "INITIAL TERM"); provided, however, the term of the
Executive's employment by the Company shall continue for an indefinite period
thereafter unless and until either party shall give to the other one years
advance written notice of expiration of the term (a "NOTICE OF TERMINATION")
(the Initial Term and the period, if any, thereafter, during which the
Executive's employment shall continue are collectively referred to as the
"TERM"). Any Notice of Termination given under this paragraph 2(a), shall
specify the date of expiration (which may not be earlier than the close of
business on March 31, 2004) and may be given at any time on or after March 31,
2003 . The Company shall have the right at any time during such one year notice
period, to relieve the Executive of his offices, duties and responsibilities and
to place him on a paid leave-of-absence status, provided that during such notice
period the Executive shall remain a full-time employee of the Company and shall
continue to receive his salary compensation and other benefits as provided in
this Agreement. The effective date of the termination of the Executive's
employment with the Company, regardless of the reason therefor, is referred to
in this Agreement as the "DATE OF TERMINATION".
3. DUTIES AND RESPONSIBILITIES
(a) During the Term, the Executive shall have the position of
President and Chief Executive Officer of the Company. The Executive shall report
directly to the Board of Directors of the Company (the "BOARD"), at such times
and in such detail as it shall reasonably require.
(b) The Executive shall perform such executive and managerial
duties and responsibilities customary to his offices and as are reasonably
necessary to the operations of the Company and its subsidiaries and as may be
assigned to him from time to time by or under authority of the Board, consistent
with his positions as designated in paragraph 3(a) above. In furtherance of the
foregoing, the Executive shall have primary responsibility and authority
(subject to the terms of this Agreement and the authority of the Board) for the
general management, administration, day-to-day operations and long-term planning
of the Company and its subsidiaries, including without limitation (i) the
matters relating to the annual operating and financial plan; (ii) new business
efforts; and (iii) the hiring, evaluation and termination of senior management
personnel. The Executive shall have the authority to determine the reporting
responsibilities of all of the employees of the Company and its subsidiaries.
(c) The Executive (i) will use his best reasonable efforts to
ensure that the Company and its subsidiaries comply on a timely basis with all
budgetary and reporting requirements reasonably requested by the Board and (ii)
will not incur obligations on behalf of the Company or any subsidiary other than
in the ordinary course of business or enter into any transaction on behalf of
the Company or any subsidiary not in the ordinary course of business without the
approval of the Board.
(d) The Executive's employment by the Company shall be
full-time and exclusive, and during the Term, the Executive agrees that he will
(i) devote all of his business time and attention, his best efforts, and all of
his skill and ability to promote the interests of the Company and its
subsidiaries, (ii) carry out his duties in a competent and professional manner,
and (iii) work with other employees of the Company and its subsidiaries in a
competent and professional manner. Notwithstanding the foregoing, the Executive
shall be permitted (x) to engage in charitable and civic activities, and manage
his personal passive investments, provided that such passive investments are not
in a company which transacts business with the Company or one of its
subsidiaries or engages in business competitive with that conducted by the
Company or one of its subsidiaries (or, if such company does transact business
with the Company or a subsidiary or does engage in a competitive business, it is
a publicly held corporation of which the Executive owns less than 1/4 of 1% of
its outstanding shares), and (y) to continue his ownership interest in and
involvement with Urban Desires, an on-line magazine, on a basis consistent with
past practices; and (z) render assistance to companies which have an affiliation
with the Company if in the reasonable opinion of the Executive such assistance
can be lent without conflict of his duties to the Company
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(including without limitation any duties of loyalty he may have by virtue of his
position as a director of the Company); provided, that the activities
(individually or collectively) specified in clauses (x) and (y) and (z) do not
materially interfere with the performance of the Executive's duties and
responsibilities under this Agreement. The Executive further agrees that he will
not sell any portion of his interest in Urban Desires to any company which
either itself or through one or more subsidiaries provides marketing, branding,
advertising or other communications services.
(e) During the Term, the Executive's services hereunder shall
be performed at the offices of the Company in New York, New York, subject to
necessary travel requirements of his position and duties hereunder.
4. COMPENSATION
(a) As compensation for his services hereunder and in
consideration of his non-solicitation/non-servicing and non-disclosure covenants
as set forth in paragraph 8 below, during the Term the Company shall pay the
Executive in accordance with its normal payroll practices an annualized base
salary of $155,000. The Executive's base salary may be increased (but not
decreased) by or under the authority of the Board in accordance with the then
salary review policy of the Company and within the guidelines and budgetary
procedures of the Company.
(b) The Executive shall be eligible to participate in such
management incentive compensation plans and programs that the Company may from
time to time institute.
5. EXPENSES; FRINGE BENEFITS
(a) The Company agrees to pay or to reimburse the Executive
for all reasonable, ordinary and necessary documented business or entertainment
expenses incurred during the Term in the performance of his services hereunder
in accordance with the policy of the Company as from time to time in effect. The
Executive, as a condition precedent to obtaining such payment or reimbursement,
shall provide to the Company any and all statements, bills or receipts
evidencing the travel or out-of-pocket expenses for which the Executive seeks
payment or reimbursement, and any other information or materials, as the Company
may from time to time reasonably require.
(b) During the Term, the Executive and, to the extent
eligible, his dependents, shall be entitled to participate in and receive all
benefits under any welfare benefit plans and programs made available to the
Company's executives or to its employees generally (including without
limitation, medical, disability and life insurance programs, accidental death
and dismemberment protection and business travel insurance), subject, however,
to the generally applicable eligibility and other provisions of the various
plans and
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programs in effect from time to time.
(c) During the Term, the Executive shall be eligible to
participate in all retirement plans and programs (including without limitation
any profit sharing/401(k) plan) and stock option and restricted stock plans made
available generally to the Company's senior executives or to its employees
generally, subject, however, to the generally applicable eligibility and other
provisions of the various plans and programs in effect from time to time. In
addition, during the Term, the Executive shall be entitled to receive fringe
benefits and perquisites in accordance with the plans, practices, programs and
policies of the Company from time to time in effect which are made available
generally to the Company's senior executives or to its employees generally.
(d) The Executive shall be entitled to four weeks paid
vacation annually (on a non-cumulative basis, except as otherwise provided under
standard Company policy), to be taken at such time(s) as shall not, in the
reasonable judgment of the Board, materially interfere with the Executive's
fulfillment of his duties hereunder, and shall be entitled to as many holidays,
sick days and personal days as are in accordance with the Company's policy then
in effect generally for its employees.
6. TERMINATION
(a) The Company, by direction of the Board, shall be entitled
to terminate the Term and to discharge the Executive for "CAUSE" effective upon
the giving of written notice. The term "cause" shall be limited to the following
grounds:
(i) the Executive's repeated failure or refusal to
materially perform his duties and responsibilities as set
forth in paragraph 3 hereof other than by reason of his
disability (as defined in paragraph 7 below), or the failure
of the Executive to devote his attention exclusively to the
business and affairs of the Company and its subsidiaries in
accordance with the terms hereof (other than by reason of his
disability), in each case if such failure or refusal is not
cured within 30 days after written notice thereof to the
Executive by the Company;
(ii) the willful misappropriation of the funds or
property of the Company or any subsidiary;
(iii) use of alcohol or illegal drugs, materially
interfering with the performance of the Executive's
obligations under this Agreement, continuing after written
warning;
(iv) conviction in a court of law of, or entering a
plea of guilty or no contest to, any felony or any crime
involving moral turpitude, dishonesty or theft;
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(v) the material nonconformance with the Company's
standard business practices and policies, including without
limitation, policies against racial or sexual discrimination
or harassment, made known to the Executive, which
nonconformance is not cured (if curable) within 30 days after
written notice to the Executive by the Company;
(vi) the commission in bad faith by the Executive of
any act which injures or could reasonably be expected to
injure the reputation, business or business relationships of
the Company or any subsidiary;
(vii) any material breach (not covered by any of the
clauses (i) through (vi) above) of any term, provision or
condition of this Agreement, if such breach is not cured (if
curable) within 30 days after written notice thereof to the
Executive by the Company; and
(viii) a voluntary resignation by the Executive OTHER
THAN pursuant to a Notice of Termination given by the
Executive under paragraph 2 above or a termination by the
Executive for "Good Reason" (as defined in paragraph 6(b)
below).
Any notice required to be given by the Company pursuant to clause (i), (v) or
(vii) above shall specify the specific nature of the claimed breach and the
manner in which the Company requires such breach to be cured (if curable). In
the event that the Executive is purportedly terminated for cause and the
arbitrator appointed pursuant to paragraph 19 below determines that "cause" as
defined herein was not present, then such purported termination for cause shall
be deemed a termination by the Company "without cause" pursuant to paragraph
6(d) below and the Executive's rights and remedies will be governed by paragraph
6(d) below, in full satisfaction and in lieu of any and all other or further
remedies the Executive may have.
(b) Provided that the Executive is not then otherwise in
material breach of this Agreement, the Executive shall be entitled to terminate
this Agreement and the Term hereunder for "Good Reason" at any time during the
Term by written notice to the Company. "GOOD REASON" shall be limited to a
breach by the Company of a material term of this Agreement, which breach remains
uncured for a period of 30 days after written notice of such breach from the
Executive to the Company (such notice to specify the specific nature of the
claimed breach and the manner in which the Executive requires such breach to be
cured).
(c) In the event of the termination of the employment of the
Executive with the Company for any reason (including without limitation, a
termination pursuant to a Notice of Termination under paragraph 2 above) OTHER
THAN by virtue of a termination by the Company "without cause" or a termination
for "Good Reason" by the Executive, the Executive shall be entitled to the
following payments and benefits, subject to any appropriate
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offsets, as permitted by applicable law, for debts or money due to the Company
or an affiliate thereof (collectively, "OFFSETS"):
(i) unpaid salary compensation and any unused accrued
vacation only through, and any unpaid reimbursable expenses
outstanding as of, the Date of Termination;
(ii) all benefits, if any, that had accrued to the
Executive through the Date of Termination under the plans and
programs described in paragraphs 5(b) and (c) above, or any
other applicable plans and programs in which he participated
as an employee of the Company, and all amounts earned, accrued
or owing to the Executive through the Date of Termination
under any incentive compensation plan or program in which he
participated as an employee of the Company, in the manner and
in accordance with the terms of such plans and programs; and
(iii) the right to exercise any vested option and the
vesting of any unvested option shall be determined in
accordance with the terms of the plan under which such option
was granted.
In the event of the termination of the Employee's employment OTHER THAN by
virtue of a termination by the Company "without cause" or a termination by the
Executive for "Good Reason", except as provided in this paragraph 6(c), the
Company shall have no further liability to the Executive or the Executive's
heirs, beneficiaries or estate for damages, compensation, benefits, severance,
indemnities or other amounts of whatever nature, directly or indirectly, arising
out of or otherwise related to this Agreement and the Executive's employment or
cessation of employment with the Company.
(d) The Company shall have the right at any time during the
Term to terminate the employment of the Executive "without cause" by giving
written notice to the Executive indicating that the Company has terminated the
Agreement "without cause" under this paragraph 6(d) and setting forth the Date
of Termination. In the event of a termination by the Company "without cause" or
a termination by the Executive for "Good Reason", the Executive shall be
entitled to continue to receive from the Company, subject to any Offsets, the
following:
(i) as severance compensation, his then applicable
base salary when otherwise payable through (x) March 31, 2004
if the Date of Termination occurs on or prior to March 31,
2003 or (y) one year from the Date of Termination, if such
termination occurs after March 31, 2004;
(ii) any unpaid reimbursable expenses outstanding,
and any unused accrued vacation, as of the Date of
Termination;
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(iii) all benefits, if any, that had accrued to the
Executive through the Date of Termination under the plans and
programs described in paragraphs 5(b) and (c) above, or any
other applicable benefit plans and programs in which he
participated as an employee of the Company, and all amounts
earned, accrued or owing to the Executive through the Date of
Termination under any incentive compensation plan in which he
participated as an employee of the Company, in the manner and
in accordance with the terms of such plans and programs;
(iv) continued participation on the same basis
(including without limitation, cost contributions) as the
other senior executives of the Company in all, medical,
dental, disability and life insurance coverage (such benefits
collectively called the "CONTINUED Plans") in which he was
participating on the Date of Termination (as such Continued
Plans are from time to time in effect at the Company) until
the earlier of (x) the end of the period that he receives
severance compensation payments under clause (i) of this
paragraph 6(d) or (y) the date, or dates, he is entitled to
receive coverage and benefits under the same type of plan of a
subsequent employer; provided, however, if the Executive is
precluded from continuing his participation in any Continued
Plan, the after-tax economic equivalent of the benefits
provided under the Continued Plan in which he is unable to
participate, for the period specified above, it being
understood that the economic equivalent of a benefit foregone
shall be deemed the lowest cost that would be incurred by the
Executive in obtaining such benefit himself on an individual
basis, and payment of such after-tax economic benefit shall be
made quarterly in advance; and
(v) the right to exercise any vested option shall be
determined in accordance with the terms of the plan under
which such option was granted; provided, however, that the
vesting of those options theretofore granted to the Executive
and which would have vested during the period set forth in
Section 6(d)(i) shall be accelerated to precede the Date of
Termination.
In connection with a termination by the Company "without cause" or by the
Executive for "Good Reason", except as provided in this paragraph 6(d), (x) the
Company shall have no further liability to the Executive or the Executive's
heirs, beneficiaries or estate for damages, compensation, benefits, severance,
indemnities or other amounts of whatever nature, directly or indirectly, arising
out of or otherwise related to this Agreement and the Executive's employment or
cessation of employment with the Company, and (y) the Executive shall be under
no obligation to mitigate his damages or to seek other employment and if the
Executive obtains other employment, any compensation earned by the Executive
therefrom shall not reduce the Company's severance obligations under clause (i)
of this paragraph 6(d). The making of any severance payments and providing the
other benefits as provided in this
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paragraph 6(d) is conditioned upon the Executive signing a general release of
the Company and its subsidiaries and affiliates, and its and their respective
successors and assigns, officers directors, employees, agents, attorneys and
representatives, of any claims (including claims of discrimination) relating to
the Executive's employment with the Company or the termination thereof; except
such release shall preserve the Executive's rights with respect to the payments
and benefits to be received pursuant to this paragraph 6(d) and the Executive's
rights of indemnification under the Company's organizational documents and any
separate director indemnification agreement with the Company to which he may be
a party. Such release shall be in the form then being used by the Company in
connection with severance arrangements; it being understood, however that such
release shall not increase the Executive's non-solicitation/non-servicing and
protection of confidential information obligations to the Company beyond that
set forth in paragraph 8 of this Agreement. If the Executive breaches any
provisions of such release or the provisions of paragraph 8 of this Agreement,
in addition to any other remedies at law or in equity available to it, the
Company may cease making any further severance payments and providing the other
benefits provided for in this paragraph 6(d), without affecting its rights under
this Agreement or the release.
7. DISABILITY; DEATH
In the event the Executive shall be unable to perform his
duties hereunder by virtue of illness or physical or mental incapacity or
disability (from any cause or causes whatsoever) in substantially the manner and
to the extent required hereunder prior to the commencement of such disability
(all such causes being herein referred to as "DISABILITY") and the Executive
shall fail to perform such duties for periods aggregating 270 days, whether or
not continuous, in any continuous period of 360 days, the Company shall have the
right to terminate the Executive's employment hereunder as at the end of any
calendar month during the continuance of such disability upon at least 30 days'
prior written notice to him. In the event of the Executive's death, the Date of
Termination shall be the date of such death.
8. NON-SOLICITATION/NON-SERVICING AGREEMENT AND PROTECTION OF
CONFIDENTIAL INFORMATION
(a) The Executive acknowledges (i) the highly competitive
nature of the Company's business and the industry in which the Company competes;
(ii) that as a key executive of the Company he has participated in and will
continue to participate in the servicing of current clients of the Company
and/or the solicitation of prospective clients of the Company, through which,
among other things, the Executive has obtained and will continue to obtain
knowledge of the "know-how" and business practices of the Company, in which
matters the Company has a substantial proprietary interest; (iii) that his
employment hereunder requires the performance of services which are special,
unique, extraordinary and intellectual in character, and his position with the
Company placed and places him in a position of confidence and trust with the
clients and employees of the Company; and (iv) that his rendering of services to
the clients of the Company necessarily requires the disclosure to
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the Executive of confidential information (as defined in paragraph 8(b) below)
of the Company. In the course of the Executive's employment with the Company,
the Executive has and will continue to develop a personal relationship with the
clients of the Company and a knowledge of those clients' affairs and
requirements, and that the relationship of the Company with its established
clientele has been and will continue to be placed in the Executive's hands in
confidence and trust. The Executive consequently agrees that it is reasonable
and necessary for the protection of the confidential information, goodwill and
business of the Company that the Executive make the covenants contained herein
and that the Company would not have entered into this Agreement unless the
covenants set forth in this paragraph 8 were contained in this Agreement.
Accordingly, the Executive agrees that during the period that he is employed by
the Company and thereafter through the later of (x) March 31, 2004 and (y) two
years after the Date of Termination, he shall not, as an individual, consultant,
partner, shareholder, employee or in any other capacity whatsoever, or in
association with any other person, business or enterprise, except on behalf of
the Company, directly or indirectly, and regardless of the reason for his
ceasing to be employed by the Company:
(i) attempt in any manner to solicit or accept from
any client business of the type performed by the Company or to
persuade any client to cease to do business or to reduce the
amount of business which any such client has customarily done
or is reasonably expected to do with the Company, whether or
not the relationship between the Company and such client was
originally established in whole or in part through his
efforts; or
(ii) employ as an employee or retain as a consultant
any person who is then or at any time during the preceding
twelve months was an employee of or exclusive consultant to
the Company, or persuade or attempt to persuade any employee
of or exclusive consultant to the Company to leave the employ
of the Company or to become employed as an employee or
retained as a consultant by anyone other than the Company; or
(iii) render to or for any client any services of the
type rendered by the Company.
As used in this paragraph 8, the term "COMPANY" shall mean the Company and each
of its subsidiaries and the term "CLIENT" shall mean (1) anyone who is a client
of the Company on the Date of Termination or, if the Executive's employment
shall not have terminated, at the time of the alleged prohibited conduct (any
such applicable date being called the "DETERMINATION DATE"); (2) anyone who was
a client of the Company at any time during the eighteen month period immediately
preceding the Determination Date; (3) any prospective client to whom the Company
had made a new business presentation (or similar offering of services) at any
time during the one year period immediately preceding the Determination Date;
and (4) any prospective client to whom the Company made a new business
presentation
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(or similar offering of services) at any time within six months after the Date
of Termination (but only if the initial discussions between the Company and such
prospective client relating to the rendering of services occurred prior to the
Date of Termination, and only if the Executive participated in or supervised
such discussions). For purposes of this clause, it is agreed that a "new
business presentation or similar offering of services" or a "discussion" does
not include general mailings, telephone solicitations, unsolicited credentials
presentations not responding to requests for proposals or incidental contacts.
In addition, if the client is part of a group of companies which conducts
business through more than one entity, division or operating unit, whether or
not separately incorporated (a "CLIENT GROUP"), the term "CLIENT" as used herein
shall include each entity, division and operating unit of the Client Group where
the same management group of the Client Group has the decision making authority
with respect to contracting for services of the type rendered by the Company,
BUT shall not include any part of the Client Group where the management group is
not the same management group that has the decision making authority with
respect to contracting for services of the type rendered by the Company.
Notwithstanding anything to the contrary contained in this paragraph 8(a), if
the Company defaults in the payment to the Executive of any severance
compensation when due under the provisions of paragraph 6(d)(i) above, which
default is not cured within 30 days after written notice thereof to the Company
by the Executive, the restrictions set forth in this paragraph 8(a) shall
terminate unless the Company pays the Executive all amounts then due to the
Executive as determined by the arbitration panel, in which case such
restrictions shall remain in full force and effect. During the pendency of any
dispute as to whether the Company is justified in ceasing to make such severance
payments as permitted under the provisions of paragraph 6(d) above, the
restrictions set forth in this paragraph 8(a) shall remain in full force and
effect.
(b) In the course of the Executive's employment with the
Company he will acquire and have access to confidential or proprietary
information about the Company and/or its clients, including but not limited to,
trade secrets, methods, models, passwords, access to computer files, financial
information and records, computer software programs, agreements and/or contracts
between the Company and its clients, client contacts, the marketing and/or
creative policies and ideas, advertising campaigns, media plans and budgets,
practices, concepts, strategies, and methods of operations, financial or
business projections of the Company, and information about or received from
clients and other companies with which the Company does business. The foregoing
shall be collectively referred to as "CONFIDENTIAL INFORMATION". The Executive
is aware that the confidential information is not readily available to the
public and accordingly, the Executive also agrees that he will not at any time
(whether during the Term or after termination of this Agreement), disclose to
anyone any confidential information, or utilize such confidential information
for his own benefit, or for the benefit of third parties. The Executive agrees
that the foregoing restrictions shall apply whether or not any such information
is marked "confidential". The term "confidential information" does not include
information which (i) becomes generally available to the
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public other than by breach of this provision or (ii) the Executive learns from
a third party who is not under an obligation of confidence to the Company or a
client of the Company. In the event that the Executive becomes legally required
to disclose any confidential information, he will provide the Company with
prompt notice thereof so that the Company may seek a protective order or other
appropriate remedy and/or waive compliance with the provisions of this paragraph
8(b) to permit a particular disclosure. In the event that such protective order
or other remedy is not obtained, or that the Company waives compliance with the
provisions of this paragraph 8(b) to permit a particular disclosure, the
Executive will furnish only that portion of the confidential information which
he is legally required to disclose and, at the Company's expense, will cooperate
with the efforts of the Company to obtain a protective order or other reliable
assurance that confidential treatment will be accorded the confidential
information. The Executive further agrees that all memoranda, disks, files,
notes, records or other documents, whether in electronic form or hard copy
(collectively, the "MATERIAL") compiled by him or made available to him during
his employment with the Company (whether or not the material contains
confidential information) shall be the property of the Company and shall be
delivered to the Company on the termination of the Executive's employment with
the Company or at any other time upon request. Except in connection with the
Executive's employment with the Company, the Executive agrees that he will not
make or retain copies or excerpts of the material.
(c) If the Executive commits a breach or is about to commit a
breach, of any of the provisions of paragraphs 8(a) or (b) above, the Company
shall have the right to have the provisions of this Agreement specifically
enforced by the arbitrator appointed under paragraph 19 or by any court having
equity jurisdiction without being required to post bond or other security and
without having to prove the inadequacy of the available remedies at law, it
being acknowledged and agreed that any such breach or threatened breach will
cause irreparable injury to the Company and that money damages will not provide
an adequate remedy to the Company. In addition, the Company may take all such
other actions and remedies available to it under law or in equity and shall be
entitled to such damages as it can show they have sustained by reason of such
breach.
(d) The parties acknowledge that (i) the type and periods of
restriction imposed in the provisions of paragraphs 8(a) and (b) above are fair
and reasonable and are reasonably required in order to protect and maintain the
proprietary interests of the Company described above, other legitimate business
interests of the Company and the goodwill associated with the business of the
Company, (ii) that the business of the Company currently extends throughout the
United States and other areas of the world, and that the Executive will engage
in such business pursuant to the terms of this Agreement throughout the United
States and other areas of the world, and (iii) that the time, scope, geographic
area and other provisions of this paragraph 8 have been specifically negotiated
by sophisticated commercial parties. It is further understood and agreed that
the clients of the Company may be serviced from any location and accordingly it
is reasonable that the covenants set forth herein are not
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limited by narrow geographic area but generally by the location of such clients
and potential clients. The Executive specifically acknowledges that his being
restricted from soliciting and servicing clients and prospective clients as
contemplated by this Agreement will not prevent him from being employed or
earning a livelihood in the type of business conducted by the Company. If any of
the covenants contained in paragraphs 8(a) or (b), or any part thereof, is held
to be unenforceable by reason of its extending for too great a period of time or
over too great a geographic area or by reason of its being too extensive in any
other respect, the parties agree (x) such covenant shall be interpreted to
extend only over the maximum period of time for which it may be enforceable
and/or over the maximum geographic areas as to which it may be enforceable
and/or to the maximum extent in all other respects as to which it may be
enforceable, all as determined by the court or arbitration panel making such
determination and (y) in its reduced form, such covenant shall then be
enforceable, but such reduced form of agreement shall only apply with respect to
the operation of this paragraph 8 in the particular jurisdiction in which such
adjudication is made.
9. INTELLECTUAL PROPERTY
During the Term, the Executive will disclose to the Company
all ideas, inventions and business plans developed by him during such period
which relate directly or indirectly to the business of the Company and its
subsidiaries, including without limitation, any design, logo, slogan,
advertising campaign or any process, operation, product or improvement which may
be patentable or copyrightable. The Executive agrees that all patents, licenses,
copyrights, tradenames, trademarks, service marks, planning, marketing and/or
creative policies, advertising campaigns, media campaigns, and budgets,
practices, concepts, strategies, and methods of operations, financial or
business projections, designs, logos, slogans and business plans developed or
created by the Executive in the course of his employment hereunder, either
individually or in collaboration with others, will be deemed works for hire and
the sole and absolute property of the Company. The Executive agrees, that at the
Company's request and expense, he will take all steps necessary to secure the
rights thereto to the Company by patent, copyright or otherwise.
10. ENFORCEABILITY
The failure of any party at any time to require performance by
another party of any provision hereunder shall in no way affect the right of
that party thereafter to enforce the same, nor shall it affect any other party's
right to enforce the same, or to enforce any of the other provisions in this
Agreement; nor shall the waiver by any party of the breach of any provision
hereof be taken or held to be a waiver of any subsequent breach of such
provision or as a waiver of the provision itself.
11. ASSIGNMENT
This Agreement is a personal contract and the Executive's
rights and
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obligations hereunder may not be sold, transferred, assigned, pledged or
hypothecated by the Executive. The rights and obligations of the Company
hereunder shall be binding upon and run in favor of the successors and assigns
of the Company.
12. MODIFICATION
This Agreement may not be orally canceled, changed, modified
or amended, and no cancellation, change, modification or amendment shall be
effective or binding, unless in writing and signed by the parties to this
Agreement.
13. SEVERABILITY; SURVIVAL
In the event any provision or portion of this Agreement is
determined to be invalid or unenforceable for any reason, in whole or in part,
the remaining provisions of this Agreement shall nevertheless be binding upon
the parties with the same effect as though the invalid or unenforceable part had
been severed and deleted. The respective rights and obligations of the parties
hereunder shall survive the termination of the Executive's employment to the
extent necessary to the intended preservation of such rights and obligations.
14. LIFE INSURANCE
The Executive agrees that the Company shall have the right to
obtain life insurance on the Executive's life, at the sole expense of the
Company, as the case may be, and with the Company as the sole beneficiary
thereof. The Executive shall (a) cooperate fully in obtaining such life
insurance, (b) sign any necessary consents, applications and other related forms
or documents and (c) at the Company's expense, take any reasonably required
medical examinations.
15. NOTICE
Any notice, request, instruction or other document to be given
hereunder by any party hereto to another party shall be in writing and shall be
deemed effective (a) upon personal delivery, if delivered by hand, or (b) three
days after the date of deposit in the mails, postage prepaid if mailed by
certified or registered mail, or (c) on the next business day, if sent by
facsimile transmission (if electronically confirmed) or prepaid overnight
courier service, and in each case, addressed as follows:
IF TO THE EXECUTIVE:
Chan X. Xxx
Xxxxxx.Xxx Ltd.
000 Xxxxxxxx
00
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
IF TO THE COMPANY:
Xxxxxx.Xxx Ltd.
000 Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Chief Financial Officer
Fax: (000) 000-0000
with a copy to:
Xxxxx Xxxxxxx Xxxxxxx
0000 Xxxxxxxxxx Xxxx.
Xxxxxxx Xxxxxxxxx, XX 00000
Fax: (000) 000-0000
Any party may change the address to which notices are to be sent by giving
notice of such change of address to the other party in the manner herein
provided for giving notice.
16. APPLICABLE LAW
This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without application of
conflict of law provisions applicable therein.
17. NO CONFLICT
The Executive represents and warrants that he is not subject
to any agreement, instrument, order, judgment or decree of any kind, or any
other restrictive agreement of any character, which would prevent him from
entering into this Agreement or which would be breached by the Executive upon
his performance of his duties pursuant to this Agreement.
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18. ENTIRE AGREEMENT
This Agreement represents the entire agreement between the
Company and the Executive with respect to the subject matter hereof, and all
prior agreements, plans and arrangements relating to the employment of the
Executive by the Company, including without limitation, the employment agreement
dated September 12, 1996 by and between the Executive and the Company, are
nullified and superseded hereby .
19. ARBITRATION
(a) If any dispute arises between the Executive and the
Company that the parties cannot resolve themselves, including any dispute over
the application, validity, construction, or interpretation of this Agreement,
arbitration in accordance with the then-applicable rules of the American
Arbitration Association shall provide the exclusive remedy for resolving any
such dispute, regardless of its nature; provided, however, that the Company may
enforce the Executive's obligations under paragraphs 8 and 9 hereof by an action
for injunctive relief and damages in a court of competent jurisdiction at any
time prior or subsequent to the commencement of an arbitration proceeding as
herein provided.
(b) This paragraph 19 shall apply to claims arising under
state and federal statutes, local ordinances, and the common law. The arbitrator
shall apply the same substantive law that a court with jurisdiction over the
parties and their dispute would apply under the terms of this Agreement. The
arbitrator's remedial authority shall equal the remedial power that a court with
jurisdiction over the parties and their dispute would have. The arbitrator
shall, upon an appropriate motion, dismiss any claim brought in arbitration if
he or she determines that the claim could not properly have been pursued through
court litigation. If the then-applicable rules of the American Arbitration
Association conflict with the procedures of this paragraph 19, the latter shall
apply.
(c) If the parties cannot agree upon an arbitrator, the
parties shall select a single arbitrator from a list of seven arbitrators
provided by the New York, New York office of the American Arbitration
Association. All seven listed arbitrators shall be retired judges experienced in
employment law and/or persons actively involved in hearing private cases. If the
parties cannot agree on selecting an arbitrator from that list, then the parties
shall alternately strike names from the list, with the first party to strike
being determined by lot. After each party has used three strikes, the remaining
name on the list shall be the arbitrator.
(d) Each party may be represented by counsel or by another
representative of the party's choice, and each party shall pay the costs and
fees of its counsel or other representative and its own filing or administrative
fees. The non-prevailing party (as determined by the arbitrator) shall bear the
fees and costs of the arbitrator.
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(e) The arbitrator shall render an award and opinion in the
form typical of those rendered in labor arbitrations, and that award shall be
final and binding and non-appealable. To the extent that any part of this
paragraph 19 is found to be legally unenforceable for any reason, that part
shall be modified or deleted in such a manner as to render this paragraph 19 (or
the remainder of this paragraph) legally enforceable and as to ensure that
except as provided in clause (b) of this paragraph 19, all conflicts between the
Company and the Executive shall be resolved by neutral, binding arbitration. The
remainder of this paragraph 19 shall not be affected by any such modification or
deletion but shall be construed as severable and independent. If a court finds
that the arbitration procedures of this paragraph 19 are not absolutely binding,
then the parties intend any arbitration decision to be fully admissible in
evidence, given great weight by any finder of fact, and treated as determinative
to the maximum extent permitted by law.
(f) Unless the parties agree otherwise, any arbitration shall
take place in New York, New York in such location as agreed to by the Company
and the Executive. If the parties cannot agree upon a location for the
arbitration, the arbitrator shall determine the location within New York, New
York.
(G) THE EXECUTIVE HAS READ AND UNDERSTANDS THIS PARAGRAPH 19
WHICH DISCUSSES ARBITRATION. THE EXECUTIVE UNDERSTANDS THAT BY SIGNING THIS
AGREEMENT, THE EXECUTIVE AGREES TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING
TO, OR IN CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY,
CONSTRUCTION, PERFORMANCE, BREACH OR TERMINATION THEREOF, OR HIS EMPLOYMENT OR
THE TERMINATION THEREOF, TO BINDING ARBITRATION, AND THAT THIS ARBITRATION
PROVISION CONSTITUTES A WAIVER OF THE EXECUTIVE'S RIGHT TO A JURY TRIAL AND
RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE
EMPLOYER/EMPLOYEE RELATIONSHIP, INCLUDING BUT NOT LIMITED TO THE FOLLOWING:
(I) ANY AND ALL CLAIMS FOR WRONGFUL DISCHARGE OF
EMPLOYMENT, BREACH OF CONTRACT, BOTH EXPRESS AND IMPLIED;
BREACH OF THE COVENANT OF GOOD FAITH AND FAIR DEALING, BOTH
EXPRESS AND IMPLIED; NEGLIGENT OR INTENTIONAL INFLICTION OF
EMOTIONAL DISTRESS; NEGLIGENT OR INTENTIONAL
MISREPRESENTATION; NEGLIGENT OR INTENTIONAL INTERFERENCE WITH
CONTRACT OR PROSPECTIVE ECONOMIC ADVANTAGE; AND DEFAMATION;
(II) ANY AND ALL CLAIMS FOR VIOLATION OF ANY FEDERAL.
STATE OR MUNICIPAL STATUTE, INCLUDING, WITHOUT LIMITATION,
TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, AS AMENDED, THE
CIVIL RIGHTS ACT OF 1991, THE EQUAL PAY ACT, THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT, AS AMENDED, THE AGE
DISCRIMINATION IN EMPLOYMENT ACT OF 1967, THE AMERICANS WITH
DISABILITIES ACT OF 1990, THE FAMILY AND MEDICAL LEAVE ACT OF
1993, THE FAIR LABOR STANDARDS ACT AND THE NEW YORK HUMAN
RIGHTS LAW; AND
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(III) ANY AND ALL CLAIMS ARISING OUT OF ANY OTHER
FEDERAL, STATE OR LOCAL LAWS OR REGULATIONS RELATING TO
EMPLOYMENT OR EMPLOYMENT DISCRIMINATION.
20. HEADINGS
The headings contained in this Agreement are for reference
purposes only, and shall not affect the meaning or interpretation of this
Agreement.
21. MISCELLANEOUS
(a) The Company may withhold from any amounts payable under
this Agreement such federal, state or local taxes as shall be required to be
withheld pursuant to any applicable law or regulation.
(b) Following the date hereof and regardless of any dispute
that may arise in the future, the Executive will not disparage the Company; and
the Company will not disparage the Executive.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
XXXXXX.XXX LTD.
BY: /s/ Xxxxxxx Xxxxx
---------------------------------
NAME: Xxxxxxx Xxxxx
TITLE: CFO
/s/ Chan X. Xxx
------------------------------------
CHAN X. XXX
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