1
Exhibit 10.15
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement"), dated as of June 25, 1999,
between XXXxxx.xxx LLC, an Ohio limited liability company (together with its
successors and assigns permitted under this Agreement the "Company"), and Xxxx
Xxxxx (the "Employee").
RECITALS
A. In connection with the Contribution Agreement by and among KB Online
Holdings LLC, XxxxxXxxx.xxx, Inc., and XXXxxx.xxx LLC, dated as of May 18, 1999
(the "Contribution Agreement"), the Employee will become an employee of the
Company;
B. The Company and the Employee desire to enter into an employment
arrangement;
C. The Company has determined that it is in the best interests of the
Company and its equityholders to enter into this Agreement setting forth the
obligations and duties of both the Company and the Employee; and
D. The Company wishes to assure itself of the services of the Employee
for the period hereinafter provided, and the Employee is willing to be employed
by the Company for said period, upon the terms and conditions provided in this
Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the receipt of
which is mutually acknowledged, the Company and the Employee (individually, a
"Party" and together, the "Parties") agree as follows:
1. EMPLOYMENT. The Company hereby agrees to employ the Employee, and
the Employee hereby agrees to serve the Company, on the terms and conditions set
forth herein.
2. TERM. The term of this Employment Agreement shall begin on the date
hereof and shall continue until terminated as hereinafter provided (the "Term of
Employment").
3. POSITION AND DUTIES.
(a) The Employee shall serve as Vice President - Operations
and Customer Care of the Company, and in such other capacity or
capacities as the Chief Executive Officer ("CEO") or Board of Managers
(the "Board") of the Company shall reasonably determine, without
additional compensation therefor.
(b) The Employee shall devote his full time and best efforts
to his employment and perform diligently such duties as the CEO or the
Board shall reasonably determine. The Employee shall devote his entire
working time and attention to the performance of his responsibilities
hereunder.
2
4. BASE SALARY. The Employee shall receive from the Company an annual
base salary, payable in accordance with the regular payroll practices of the
Company, of One Hundred Twenty-Five Thousand Dollars ($125,000). During the Term
of Employment, the Board shall review the base salary no less often than
annually for possible increase, any such increase to be based on the performance
of the Employee.
5. BONUS. The Employee shall be eligible for an annual bonus based on
the achievement of certain objectives as set forth on Exhibit A. Any upward
adjustment of the bonus amount or reduction or waiver with respect to the
established objectives during the Term of Employment shall be at the sole
discretion of the Board.
6. EXPENSE REIMBURSEMENT. During the Term of Employment, the Employee
shall be entitled to prompt reimbursement by the Company for all reasonable
out-of-pocket expenses incurred by him in performing services under this
Agreement, upon submission of such accounts and records as may be required under
Company policy.
7. EFFECT OF AGREEMENT ON OTHER BENEFITS. During the Term of
Employment, the Employee will be entitled to such medical, dental, life
insurance, 401(k), option plan and such other similar employment privileges and
benefits as are afforded generally from time to time by the Company and two (2)
weeks paid vacation time per year to be taken at times mutually acceptable to
the Company and the Employee. The Employee shall be awarded options to acquire
the number of Units in the Company set forth on Exhibit B pursuant to a grant
under the Company's 1999 Option Plan on terms and conditions to be approved by
the Board.
8. TERMINATION OF EMPLOYMENT. The Employee's employment may be
terminated under the following circumstances:
(a) DEATH. The Employee's employment is terminated upon his
death.
(b) DISABILITY. The Employee's employment may be terminated by
the Company, due to illness or other physical or mental disability of
the Employee, resulting in his inability to perform substantially his
duties under this Agreement for a period of one hundred eighty (180) or
more consecutive days or for two hundred seventy (270) days in the
aggregate during any consecutive twelve (12) month period
("Disability").
(c) NOTICE. The Employee's employment may be terminated by
either Party upon thirty (30) days written notice to the other Party.
(d) OTHER POSITIONS. Upon termination of this Agreement by the
Employee, the Employee shall be deemed to have resigned from all
offices and directorships, if applicable, held by the Employee with the
Company or any of its affiliates or subsidiaries.
-2-
3
9. COMPENSATION UPON TERMINATION.
(a) If the Employee's employment is terminated as a result of
the Employee's death or Disability, the Employee, or his estate, shall
be entitled to:
(i) any base salary earned but not yet paid, payable
in accordance with the regular payroll practices of the
Company;
(ii) any bonus awarded pursuant to Section 5 of this
Agreement but not yet paid, payable in accordance with the
regular payroll practices of the Company;
(iii) reimbursement in accordance with this Agreement
of any business expense incurred by the Employee but not yet
paid; and
(iv) other benefits accrued and earned by the
Employee through the date of his death or Disability in
accordance with the applicable plans and programs of the
Company.
(b) If the Employee's employment is terminated by the Company
or by the Employee upon thirty (30) days written notice, the Employee
shall be entitled to:
(i) his base salary, at the rate in effect on the
date of his termination of employment, until the earlier of
(A) the first anniversary of the date of termination or (B)
the date he begins working for a subsequent employer not in
violation of Section 10 of this Agreement (the "Severance
Period"), payable in accordance with the regular payroll
practices of the Company;
(ii) any bonus awarded pursuant to Section 5 of this
Agreement but not yet paid and all or a portion of any bonus
that he would have received pursuant to Section 5 for the year
in which the termination occurred (pro rata, according to the
number of days the Employee was employed by the Company during
such year), in each case payable in accordance with the
regular payroll practices of the Company;
(iii) continued participation in all employee benefit
plans or programs in which he was participating on the date of
his termination of employment, until the end of the Severance
Period;
(iv) reimbursement in accordance with this Agreement
of any business expenses incurred by the Employee but not yet
paid to him on the date of his termination of employment; and
-3-
4
(v) other benefits accrued and earned by the Employee
through the date of his termination in accordance with the
applicable plans and programs of the Company.
(c) Any amounts due under this Section 9 are in the nature of
severance payments or liquidated damages or both, and shall fully
compensate the Employee and his dependents or beneficiaries, as the
case maybe, for any and all direct damages and consequential damages
that any of them may suffer as a result of termination of the
Employee's employment, and they are not in the nature of a penalty.
10. COVENANTS AND CONFIDENTIAL INFORMATION.
(a) period of The Employee agrees that so long as he is employed by the
Company and for of one (1) year thereafter and, as to subsection 10(a)(v) below,
at any time after the Term of Employment he will not, directly or indirectly, do
or suffer any of the following:
(i) Own, manage, control or participate in the ownership,
management or control of, or be employed or engaged by or otherwise
affiliated or associated as a consultant, independent contractor or
otherwise with, any other corporation, partnership, proprietorship,
firm, association or other business entity or otherwise engage in any
business that is engaged in any manner in, or otherwise competes with,
the business of the Company or any of the Company's affiliates or
subsidiaries (as conducted on the date the Employee ceases to be
employed by the Company in any capacity, including as a consultant) in
any state in the United States or any foreign country in which the
Company or such affiliates or subsidiaries arc then doing business and
then only with respect to the business of the Company, its affiliates
or subsidiaries then being conducted in such states or countries;
provided, however, that the ownership of not more than 1% of the stock
of any publicly traded corporation shall not be deemed a violation of
this covenant.
(ii) Employ, assist in employing, or otherwise associate in
business with any present or former or future employee, officer or
agent of the Company or any of the Company's affiliates or
subsidiaries.
(iii) Induce any person who is an employee, officer, agent,
customer or supplier of the Company or any of the Company's affiliates
or subsidiaries to terminate relationship.
(iv) Solicit or direct business of any current or prospective
customers of the Company, its affiliates or subsidiaries, who are
current or prospective customers during the Term of Employment, either
for himself or for any other individual or entity or advise any person
or entity with respect thereto. As used herein, "customer" means any
customer of the Company or its affiliates or subsidiaries whose
identity the
-4-
5
Employee learned through his employment with the Company or with whom
the Employee and/or the Company had business contact during the twelve
(12) month period immediately before the Employee's employment with the
Company terminated.
(v) Disclose, divulge, discuss, copy or otherwise use or
suffer to be used in any manner in competition with, or contrary to the
interests of, the Company or any of the Company's affiliates or
subsidiaries, the customer lists, product research or engineering data,
requirements, prices or other trade secrets of the Company or any of
the Company's affiliates or subsidiaries, it being acknowledged by die
Employee that all such information regarding the business of the
Company and the Company's affiliates or subsidiaries, compiled or
obtained by, or furnished to, the Employee while the Employee shall
have been employed by or associated with the Company is confidential
information and the Company's exclusive property; provided, however,
that this prohibition will not apply to any item of confidential
information which is otherwise publicly available or becomes so other
than as a result of the Employee's violation of this Agreement. Upon
termination of this Agreement, Employee shall promptly return to the
Company all books, manuals, reports, client and customer lists, keys
and other materials referred to above and any other materials that
belong to the Company.
(b) All business ideas, concepts, inventions, improvements and
developments made or conceived by the Employee during the Term of Employment and
relating to the business of the Company or to any business or product the
Company is considering entering or developing, shall become and remain the
exclusive property of the Company, its successors and assigns. The Employee will
promptly disclose in writing to the Company all such ideas, concepts,
inventions, improvements and developments, and will cooperate fully in
confirming, protecting and obtaining legal protection of the Company's ownership
rights.
(c) The Employee expressly agrees and understands that the remedy at
law for any breach by him of this Section 10 will be inadequate and that the
damages flowing from such breach are not readily susceptible of being measured
in monetary terms. Accordingly, it is acknowledged that upon adequate proof of
the Employee's violation of any legally enforceable provision of this Section
10, the Company shall be entitled to seek immediate injunctive relief and may
obtain a temporary order restraining any threatened or further breach. Nothing
in this Section 10 shall be deemed to limit the Company's remedies at law or in
equity for any breach by the Employee of any of the provisions of this Section
10 that may be pursued or availed of by the Company.
(d) In the event that the Employee shall violate any legally
enforceable provision of this Section 10 as to which there is a specific time
period during which he is prohibited from taking certain actions or from
engaging in certain activities, as set forth in such provision, then such
violation shall toll the running of that time period from the date of its
commencement until the date of its cessation.
-5-
6
(e) The Employee has carefully considered the nature and extent of the
restrictions upon him and the rights and remedies conferred upon the Company
under this Section 10, and hereby acknowledges and agrees that the same are
reasonable in time and territory, are designed to eliminate competition that
would otherwise be unfair to the Company, do not stifle the inherent skill and
experience of the Employee, would not operate as a bar to the Employee's sole
means of support, are fully required to protect the legitimate interests of the
Company and do not confer a benefit upon the Company disproportionate to the
detriment to the Employee.
11. WITHHOLDING TAXES. All payments to the Employee or his beneficiary
shall be subject to withholding on account of federal, state and local taxes as
required by law. If any payment hereunder is insufficient to provide the amount
of such taxes required to be withheld, the Company may withhold such taxes from
any other payment due the Employee or his beneficiary. In the event all cash
payments due the Employee are insufficient to provide the required amount of
such withholding taxes, the Employee or his beneficiary, within five days after
written notice from the Company, shall pay to the Company the amount of such
withholding taxes in excess of all cash payments due the Employee or his
beneficiary.
12. ASSIGNABILITY; BINDING NATURE. This Agreement shall be binding upon
and inure to the benefit of the Parties and their respective successors, heirs
(in the case of the Employee) and assigns. No rights or obligations of the
Company under this Agreement may be assigned or transferred by the Company
except that such rights or obligations may be assigned or transferred pursuant
to (a) a merger or consolidation in which the Company is not the continuing
entity or (b) a sale or liquidation of all or substantially all of the assets of
the Company, provided that the assignee or transferee is the successor to all or
substantially all of the assets of the Company and such assignee or transferee
assumes the liabilities, obligations and duties of the Company, as contained in
this Agreement, either contractually or as a matter of law. The Company further
agrees that, in the event of a sale of assets or liquidation as described in the
preceding sentence, it will use its best efforts to cause such assignee
or transferee expressly to assume the liabilities, obligations and duties of the
Company hereunder. No obligations of the Employee under this Agreement may be
assigned or transferred by the Employee.
13. ENTIRE AGREEMENT. Except to the extent otherwise provided herein,
this Agreement contains the entire understanding and agreement between the
Parties concerning the subject matter hereof and supersedes any prior
agreements, whether written or oral, between the Parties concerning the subject
matter hereof.
14. AMENDMENT OR WAIVER. No provision in this Agreement may be amended
unless such amendment is agreed to in writing and signed by both the Employee
and an authorized officer of the Company. No waiver by either Party of any
breach by the other Party of any condition or provision contained in this
Agreement to be performed by such other Party shall be deemed a waiver of a
similar or dissimilar condition or provision at the same or any prior or
subsequent time. Any waiver
-6-
7
must be in writing and signed by the Employee or an authorized officer of the
Company, as the case may be.
15. SEVERABILITY. In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any reason, in
whole or in part, the remaining provisions of this Agreement shall be unaffected
thereby and shall remain in full force and effect to the fullest extent
permitted by law.
16. SURVIVORSHIP. The respective rights and obligations of the Parties
hereunder shall survive any termination of the Employee's employment with the
Company to the extent necessary to the intended preservation of such rights and
obligation as described in this Agreement.
17. GOVERNING LAW. This Agreement shall be governed by and construed
and interpreted in accordance with the laws of the state of Colorado, without
reference to principals of conflict of laws.
18. NOTICES. Any notice given to either Party shall be in writing and
shall be deemed to have been given when delivered personally or one (1) day
after having been sent by overnight courier service or three (3) days
after having been sent by certified or registered mail, postage prepaid, return
receipt requested, duly addressed to the Party concerned at the address
indicated below or to such changed address as such Party may subsequently give
such notice of:
If to the Company or the Board XXXxxx.xxx LLC
000 Xxxxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attn: Chief Executive Officer
If to the Employee Xxxx Xxxxx
000 Xxxxxx Xx.
Xxxxxxxxxx, XX 00000
19. HEADINGS. The headings of the sections contained in this Agreement
are for convenience only and shall not be deemed to control or affect the
meaning or construction of any provision of this Agreement.
-7-
8
20. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date and year first above written.
XXXXXX.XXX LLC
By: /s/ Xxxxxxx Xxxxxxxxxx
----------------------------
Xxxxxxx Xxxxxxxxxx
Chief Executive Officer
EMPLOYEE
/s/ Xxxx Xxxxx
--------------------------------
Xxxx Xxxxx
Vice President - Operations and
Customer Care
9
EXHIBIT A
The Employee's annual bonus shall be an amount equal to $35,000 based on the
achievement of objectives to be mutually determined by the Company and the
Employee. The annual bonus shall be awarded by the Company within thirty (30)
days of the determination by the Company of whether such objectives were
achieved for the applicable fiscal year.
-9-
10
EXHIBIT B
The Employee shall be awarded options to acquire 75,000 Units in the Company.
-10-
