EXHIBIT 10.1
EMPLOYMENT AGREEMENT
AGREEMENT made as of the 1st day of May, 1999 between AMERICA'S SHOPPING
MALL, INC., a Nevada corporation (the "Company"), with offices at 000 Xxxxx 00,
Xxxxxxx 000, Xxxxxx, Xxx Xxxx and XXXXX XXXXXXXXXXX (the "Executive"), with a
residence at 00 Xxxxx Xxxx, Xxxxxxx, Xxx Xxxx 00000.
BACKGROUND
The Executive and the Company desire that Executive shall be employed
directly by the Company as President and Chief Executive Officer and that this
Agreement shall supersede and replace any and all pre-existing employment
agreements between the Executive and the Company.
In consideration of the mutual covenants and agreements herein contained
and for other good and valuable consideration, the receipt and sufficiency which
is hereby acknowledged, the parties hereby agree as follows:
1. Employment, Acceptance and Term.
1.1 Subject to the terms and conditions of this Agreement, the Company
hereby agrees to employ the Executive, and the Executive hereby agrees to
serve the Company, as President and Chief Executive Officer of the Company,
and, each additional direct or indirect subsidiary of the Company formed or
acquired hereafter (the Company together with any additional direct and
indirect subsidiaries shall collectively be referred to as the"Company").
The Company shall, during the term hereof, insure the election and
retention of the Executive as a member of the boards of directors, or other
governing bodies of any direct or individual subsidiary, is subject to the
Executive's approval.
1.2.1 The term of the Executive's employment under this Agreement
shall be five (5) years, and shall commence effective May 1, 1999 and shall
end at the close of business on April 30, 2004.
2. Duties and Authority. During the term of this Agreement:
2.1.1 the Executive shall use his best efforts, skill and abilities
(a) to promote and protect the interests of the Company; (b) to serve in
the positions set forth in Section 1.1 hereof and as a director of the
Company and (c) to diligently perform, to the best of his abilities, the
duties set forth in this Section 2, including such duties (consistent with
his titles as set forth in Section 1.1 hereof and the description of his
duties set forth in this Section 2) as may from time to time be assigned to
him by the boards of directors, or other governing bodies, of the Company.
2.1.2 (a) Subject to the exception noted in sub-paragraph (b) below,
the Executive shall devote substantially his full business time and
energies during normal business hours to the business and affairs of the
Company; and shall not accept any other employment outside the Company
(whether or not for compensation), nor shall he permit such personal
business interests as he may have, as permitted by sub-paragraph (b), to
interfere with the performance of his duties hereunder or conflict with the
interests of the Company; provided, however, that, so long as it does not
interfere with the proper performance of his duties and obligations under
the terms of this Agreement, nothing contained herein shall preclude the
Executive from engaging in charitable and community affairs (including
serving as a member of a board of directors or other governing body of a
not-for-profit organization); managing his personal investments; subject to
the approval of the board of directors of the Company, serving as a member
of the board of directors or other governing body of any other company or
organization; delivering lectures, fulfilling speaking engagements and any
writing or publication relating to his areas of expertise; and serving as a
consultant in his areas of expertise;
(b) Notwithstanding anything to the contrary in subparagraph (a)
above, it is expressly understood and agreed that Executive has outside
business interests from which he shall continue to profit separately, and
nothing in this Agreement shall be construed as precluding the Executive
from engaging in or profiting from such activity.
2.1.3 Subject to the bylaws of the Company and the respective bylaws
of those direct and indirect subsidiaries of the Company and to the
direction and control of the board of directors (or other governing body)
of the Company and the respective boards of directors, or other governing
bodies, of these direct and indirect subsidiaries of the Company, the
Executive shall have supervision and control over, and responsibility for,
among other things, the executive, business and financial operations of the
Company and shall have the customary powers, responsibilities and
authorities of those serving in the capacities set forth in Section 1.1
hereof for corporations of the size, type and nature of the Company. No
other officer of any of the Company will be appointed with authority
superior to that of the Executive; and
2.1.4 the Executive's principal place of business will be the
Company's executive offices currently located in Monsey, New York;
provided, however, that the Executive shall be available to travel at such
times and to such places as may from time to time be necessary or desirable
in performance of the Executive's duties and the furtherance of the
business of the Company. The Company's executive offices shall not be moved
without the Executive's consent and the Executive shall not be required to
move his present residence in order to perform the services contemplated
hereby.
3. Compensation.
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3.1.1 During the term of this Agreement, the Company shall pay to the
Executive in accordance with the Company's compensation payment policies:
(a) (i) a base salary at the annual rate of Two Hundred Fifty Thousand
Dollars ($250,000) plus (b) any additional incentive compensation ("Bonus")
which shall be paid solely in the discretion of the Company's Board of
Directors.
3.2.1 The compensation provided for in Section 3.1 hereof shall be
inclusive of any and all fees and other compensation to which the Executive
may at any time be entitled with respect to this Agreement for services
rendered as an officer or director of the Company or any of respective
subsidiaries or affiliated entities.
3.2.2 All references herein to compensation to be paid to the
Executive are to the gross amounts thereof which are due hereunder. The
Company shall have the right to deduct therefrom all sums which may be
required to be deducted or withheld under any provision of U.S. federal,
state or local law (including, but not limited to, social security
payments, income tax withholding, and any other deduction required by law)
now in effect or which may become effective at any time during the term of
this Agreement.
4. Expenses. In addition to the compensation payable to the Executive
pursuant to Section 3 hereof, the Company shall, upon submission of proper
vouchers in respect thereof, pay or reimburse the Executive in accordance with
the Company's policy for all business and entertainment expenses reasonable in
amount and necessarily incurred by him during the term of this Agreement, it
being understood that the Executive will need to incur substantial expenses of
this type in the proper performance of his duties, given the Company's
anticipated acquisitions and multiple business locations.
5. Additional Benefits. In addition to the compensation and expenses to be
paid or reimbursed to the Executive under Sections 3 and 4 hereof, and except as
otherwise expressly provided herein, during the term of the Agreement:
5.1.1 the Executive shall be entitled to participate (subject to
uniformly applicable requirements for participation), in any health,
disability, profit sharing or insurance plan now in force or hereafter
adopted by the Company for the benefit of its Executives generally at the
Executive's level;
5.1.2 the Executive shall be entitled to an annual vacation of four
(4) weeks each year in accordance with the Company's policies. Vacations
are to be taken at such time or times so as not to interfere with the
operation of the business;
5.1.3 the Executive shall be entitled to participate, subject to
uniformly applicable requirements to participation, in any stock option
plans or arrangements now in force for the benefit of senior executive
officers generally of the Company. In addition, if as a result of the
termination of the Executive's employment hereunder, the Executive is
unable to exercise any of his options, the Company shall cause the
Executive to be reimbursed for the amount paid by the Executive for such
options;
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5.1.4 to assist the Executive in carrying out his duties, to promote
the best interests of the Company, and in recognition of the fact that the
Executive frequently is called upon to pick up business associates in the
Executive's automobile, and to entertain such business associates, and
given the Company's anticipated acquisitions and multiple business
locations, the Company has deemed it to be in its best interest to make
available, and the Company shall make available, to the Executive the
exclusive use of an automobile (the cost of the lease or purchase financing
which shall not exceed One Thousand Dollars ($1000) per month) reasonably
selected by the Executive (which vehicle shall be replaced every three (3)
years); provided, however, that the Executive may elect to replace such
automobile prior to the end of any such three-year period, on the condition
that if the cost of acquiring, leasing, maintaining or insuring any
replacement automobile exceeds the cost of acquiring, leasing, maintaining
or insuring the automobile which was provided by the Company, the Executive
shall pay such incremental cost of such replacement automobile from his
personal funds until the end of the applicable three-year period);
6. Discharge. The Company shall have the right to discharge the Executive
at any time with "cause". For the purposes of this Agreement, "cause" shall
consist only of: (a) breach (whether by willful act or willful omission or
through gross and continuing neglect) by the Executive of any material term or
provision of this Agreement (it being understood that no act or failure to act
on the part of the Executive shall be considered 'willful' unless done, or
omitted to be done, by him in bad faith and without the reasonable belief that
his action or omission was in the best interest of the Company), (b) the
Executive's willful and continued failure (other than any such failure resulting
from his incapacity due to physical or mental illness) to act subject to and in
accordance with any proper and lawful specific direction of the Board of
Directors of the Company or the internal rules and policies established by the
Company (as published and delivered to the Executive from time to time) after a
written demand for substantial performance is delivered to the Executive by the
Board of Directors of the Company which specifically identifies the manner in
which the Board believes that he has not substantially performed his duties, (c)
fraud or dishonesty on the part of the Executive or the Executive's commission
of any act of moral turpitude materially adversely the Company, or (d) the
Executive's violation (except at the written direction of the Board of Directors
of the Company) of any material statute governing the business of the Company,
or of any material rules or regulations promulgated by any regulatory body
governing the business of the Company.
7. Termination of Employment. Notwithstanding the provisions of Section 1
hereof to the contrary, the Executive's employment under this Agreement shall
terminate as follows upon the happening of any of the following events,
whereupon the Company shall have no further obligations to the Executive
hereunder, other than to pay the Executive: (a) his Base Salary up to and
including his last day of employment; and (b) if applicable, amounts pursuant to
the applicable provision of this Section 7:
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7.1.1 automatically and without notice, if the Executive shall die
during the term hereof;
7.1.2 (a) upon not less than sixty (60) days prior written notice to
the Executive, if the Executive shall become "disabled" as defined in any
group disability policy maintained by the Company for the benefit of its
Executives, provided that in the event of such termination, the Executive
shall be entitled to receive all compensation and benefits payable to him
pursuant to Sections 3, 4 and 5 hereof until the date set forth in such
notice and (b) during the period that the Executive shall be receiving
compensation as provided in clause (a) above, he shall for all purposes
continue to be considered an employee of the Company;
7.1.3 automatically and without notice, if the Executive voluntarily
terminates his employment with the Company other than for "Good Reason" (as
defined in Section 7.4 below) without the written consent of the Company's
Board of Directors, in which event, notwithstanding anything to the
contrary herein, the Executive shall forfeit his unpaid Bonus;
7.1.4 upon termination of the Executive's employment with the Company
by mutual agreement between the Company's Board of Directors and the
Executive; and
7.1.5 upon written notice to the Executive of action taken by the
Board of Directors of the Company to discharge the Executive for cause
pursuant to Section 6 of this Agreement, in which case, notwithstanding
anything to the contrary herein, the Executive shall be paid his Base
Salary and reimbursable expenses up to and including his last day of
employment.
7.1.6 upon written notice from the Executive to the effect that he is
terminating his employment for "Good Reason", in which event, the Executive
shall be paid his Base Salary and reimbursable expenses up to and including
his last day of employment, in monthly installments, for the balance of the
term of this Agreement or, if longer, for one year. For the purposes of
this Agreement, "Good Reason" shall mean:
(a) without the express written consent of the Executive, the
assignment to him of any duties grossly inconsistent with his
positions, duties, responsibilities and status with the Company, or a
change in his reporting responsibilities, titles, or offices, or any
removal of him from or any failure to re-elect him to any of such
positions, except because of the termination of his employment for
Cause, Disability or Retirement or as a result of his death; or
(b) the breach by the Company of Section 2.1.3. or 2.1.4 hereof.
7.2 The right to receive the benefits as set forth in this Section 7
and in Section 17.2 below shall be the Executive's sole remedy with respect
to a breach or termination of this Agreement by the Company.
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8. Non-Competition. The Executive agrees that during his employment
hereunder, the Executive shall not, in any manner, directly or indirectly, as an
officer, director, stockholder, partner, associate, executive, consultant,
owner, agent, creditor, coventurer, or otherwise, be or become interested in or
be associated (whether or not for compensation) with any other corporation,
firm, business or person that is not a subsidiary or affiliate of the Company
engaged in a business competitive with that of the Company or any of the
subsidiaries or affiliates of the Company (to the extent that the Executive
shall have been involved therein or have become familiar therewith in his
capacity as President and Chief Executive of the Company) as conducted or
planned to be conducted by them, respectively, prior to the termination of the
Executive's employment hereunder. Nothing herein contained shall be deemed to
limit or prohibit the Executive from trading in stocks, securities, stock
options, commodities, commodities futures instruments or similar instruments for
his own account only on any exchange or over-the-counter market.
9. Confidential Information.
9.1 The Executive agrees that he shall not at any time (whether during
the period of his employment hereunder or at any time thereafter) use,
outside the scope of his employment hereunder or disclose to any person,
corporation, firm, partnership or other entity whatsoever, or to any
officer, director, stockholder, partner, associate, employee, agent or
representative of any thereof, any confidential information or trade
secrets of or relating to any of the Company. Notwithstanding anything to
the contrary contained in this Section 9.1: (a) the Company agrees that
information relating to the Company, its subsidiaries or affiliates, which
is generally available to the public other than due to disclosure by the
Executive, shall not be considered confidential information pursuant to
this Section 9.1 and (b) after prior written notice to the Company, the
Executive shall be permitted to disclose confidential information to the
extent he is compelled to do so by a court of relevant jurisdiction or
governmental body under applicable statute or regulation.
9.2 Upon leaving the employ of the Company, the Executive shall not
take with him, without the written consent of the then chief executive
officer of the Company, any confidential information of the Company.
10. Notices. All notices hereunder and other communications required or
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permitted to be given to either party hereto shall be in writing and delivered
by hand or sent by registered mail, postage prepaid, or by telegram, addressed
to such party at its address referred to above, or at such address as such party
may from time to time designate by written notice to the other party hereto,
given in accordance with the provisions of this Section 10. Any such notice or
other communication shall be deemed to have been given on the date delivered by
hand or on the fifth (5th) day after the mailing thereof.
11. Assignment. This is a personal services agreement and the Executive may
not assign this Agreement to any third party. The Company may assign this
Agreement and the benefits hereunder without the consent of the Executive and
without being relieved from any liability hereunder, to any of its direct or
indirect "affiliates" or "associates" (as such terms are defined in Rule 405 of
the Rules and Regulations promulgated under the Securities Act of 1933) and to
any entity with which or into which the Company may be merged or combined.
12. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York without giving effect to its
principles of conflicts of laws.
13. Captions. All captions and headings herein contained are inserted for
convenience of reference only and shall not affect the meaning or interpretation
of this Agreement.
14. Indemnification of the Executive.
14.1.1 The Company shall, at all times during the term of this
Agreement and thereafter, to the fullest extent permitted by the
Corporation Law of the State of Nevada (as amended from time to time),
defend, indemnify and hold the Executive harmless from and against any and
all judgments, fines, amounts paid in settlement, reasonable and necessary
out of-pocket expenses (including reasonable attorneys' fees), liabilities,
damages, costs and claims actually incurred by or asserted against him
arising out of, resulting from or relating to:
14.1.2 any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative, to
which the Executive is a party or is threatened to be made a party by
reason of his being or having been a director, officer, employee or agent
of the Company or by reason of his serving or having served at the request
of the Company as a director, officer, employee or agent of any other
corporation, partnership, joint venture, trust or other enterprise; or
14.1.3 any threatened, pending or completed action, suit or proceeding
instituted by or in the right of the Company to procure a judgment in its
favor and to which the Executive is a party or is threatened to be made a
party by reason of his being or having been a director, officer, employee
or agent of the Company, or by reason of his serving or having served at
the request of the Company as a director, officer, employee or agent of any
other corporation, partnership, joint venture, trust or other enterprise.
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14.2 The Executive agrees to immediately notify the Company of any
claim or proceeding which might result in any liability of the Company
under this Section 14 and agrees to fully cooperate with the Company in
resolving such claim or proceeding. The Company shall have the right to
retain counsel for the Executive in connection with any such claim or
proceeding.
14.3 All expenses incurred by the Executive which, are indemnifiable
by the Company under this Section 14 shall be paid by the Company or
reimbursed to the Executive as and when statements therefor are rendered.
14.4 The Company shall use its best efforts to obtain and maintain in
full force and effect during the term of this Agreement, directors' and
officers' liability insurance policies providing full and adequate
protection to the Executive for his capacities, provided that the Board of
Directors of the Company shall have no obligation to purchase such
insurance if, it its opinion, coverage as available only on unreasonable
terms [such as would have a materially adverse effect on the financial
condition of the Company.].
15. Right to Sell Shares.
15.2 The Executive shall do whatever is reasonably necessary in order
to enable the Company to maintain key man life insurance on his life with
all benefits payable to the Company. Upon termination of this Agreement,
the Executive shall have the right to require the Company to terminate such
insurance or to assume the obligation to pay the premiums for such
insurance and to require the Company to name designees of the Executive as
beneficiaries thereof
17. Legal Costs.
17.1 Upon presentation of a proper invoice therefor, the Company
agrees to reimburse the Executive for all of the attorney's fees and costs,
up to One Thousand Dollars ($1,000), incurred by the Executive in
connection with the negotiation and preparation of this Agreement.
17.2 In the event that there is legal action between the Company and
the Executive for an alleged breach of any provision of this Agreement, and
in the event the Executive's action is finally adjudicated or arbitrated
primarily in his favor, all reasonably necessary legal fees and expenses
incurred by the Executive pursuant to such legal action will be reimbursed
to the Executive by the Company within ten (10) days after the Executive
has presented an invoice therefor to the Company. The provisions of this
Section 16.2 shall survive any termination of this Agreement.
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IN WITNESS WHEREOF, the parties here executed this Agreement as of the day
and year first above written.
AMERICA'S SHOPPING MALL
By: /s/ Xxxxxx Xxxxxx
----------------------------
Xxxxxx Xxxxxx, Director
/s/ Xxxxx Xxxxxxxxxxx
---------------------------
Xxxxx Xxxxxxxxxxx
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