EMPLOYMENT AGREEMENT
XXXXXX XXXXXXX AND XXXXXXX.XXX, INC.
AGREEMENT, dated as of the 28th day of September, 1999 by and
between XXXXXXX.XXX, INC., having a place of business at Xxx Xxxxxxxxx Xxxxx,
Xxxxxxxxx, Xxx Xxxx 00000 (hereinafter designated and referred to as "Company"),
and Xxxxxx Xxxxxxx, residing at 00 Xxxxxxxx Xxxxx, Xxxx Xxxxxx, Xxx Xxxxxx 00000
(hereinafter designated and referred to as "Employee", "his" or "him").
WHEREAS, the Company desires to employ the Employee as Vice
President of Merchandising and Purchasing in accordance with the provisions
hereinafter set forth;
WHEREAS, the Employee is willing to be employed by the Company, all
in accordance with provisions hereinafter set forth; and
NOW THEREFORE, in consideration of the promises and mutual covenants
herein contained, the parties hereto agree as follows:
1. Term: The term of this Agreement shall be for a period of three
(3) years commencing September 28, 1999 and automatically terminating on
September 27, 2002 (the "Termination Date") subject to earlier termination as
provided herein or unless extended by mutual consent of both parties in writing
prior to the end of the term of this Agreement or any extension thereof, but
nothing herein shall require the Company or Employee to agree to any specific
term or condition or to any continuation of Employee's employment beyond the end
of the term of this Agreement.
2. Employment: Subject to the terms and conditions and for the
compensation hereinafter set forth, the Company employs the Employee for and
during the term of this Agreement as Vice President of Merchandising and
Purchasing. The Employee does hereby accept such employment and agrees to use
his best efforts and to devote all business time, during the term of this
Agreement, exclusively to the performance of his duties faithfully, diligently
and to the best of his abilities upon the conditions hereinafter set forth.
Employee shall report to the Chief Executive Officer and Chief Operating Officer
of the Company.
3. Compensation: During the term of this Agreement, the Company
agrees to pay Employee, and Employee agrees to accept a salary at an annual rate
of (i) One Hundred Thirty Thousand ($130,000) Dollars from the date hereof until
September 27, 2000, (ii) One Hundred and Sixty Thousand ($160,000) Dollars from
September 28, 2000 through September 27, 2001 and (iii) One Hundred and Eighty
Thousand ($180,000) Dollars from September 28, 2001 through September 27, 2002,
in each case payable at least every two weeks in accordance with the Company's
normal payroll policies, less all applicable taxes, for all services rendered by
Employee hereunder. Employee's annual salary and other benefits provided for
hereunder are subject to periodic increases (but not decreases) at the
discretion of the Board of Directors. As additional compensation, the Company
may pay the Employee periodic bonuses as determined by, and in the sole
discretion of, the Board of Directors.
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4. Expenses: The Company shall reimburse Employee, not less often
than monthly, for all actual and reasonable business expenses incurred in
connection with his service to the Company, upon submission of appropriate
vouchers and expense account reports in accordance with normal Company policy.
5. Benefits: The Company shall provide medical insurance and such
other benefits, including, without limitation, participation in Company stock
option, bonus and benefit plans, (which may be conditioned upon the achievement
of such milestones or events as the Employee and the Company may agree), as such
plans may exist from time to time and which are made generally available to the
Company's employees. The Company agrees that it shall grant to the Employee
options to purchase 22,500 shares of the Company's common stock (subject to the
terms of the Company's applicable stock option plan) at the beginning of each
three-month period during the term hereof commencing on the date hereof through
September 27, 2002 (unless this Agreement is sooner terminated pursuant to
Section 10(A), (B) or (C) hereof), provided, that the exercise price for all
such options shall be permanently fixed on the date hereof. The Employee shall
be entitled to annual vacation in accordance with the Company's policy. The
Company shall also reimburse the Employee for the cost of an insurance policy,
reasonably acceptable to the Company and which shall be arranged for by the
Employee, with respect to the Employee's death or disability.
6. Restrictive Covenant: The Employee acknowledges that he has
entered into that certain Noncompetition and Nondisclosure Agreement, dated of
even date herewith, between the Employee and the Company (the "Noncompetition
Agreement") a copy of which is attached hereto as Exhibit A. Notwithstanding the
terms and conditions thereof, the Employee agrees that the "Restricted Period"
as defined therein shall be extended, if applicable, through the first
anniversary of the termination date of the Employee's employment, whether
full-time or part-time, exclusive or nonexclusive, and in any capacity, by the
Company.
7. Proprietary Rights and Information: Concurrently with the
execution of this Agreement, the Employee and the Company have entered into that
certain Proprietary Rights and Information Agreement (the "Proprietary Rights
and Information Agreement"), attached as Exhibit B hereto.
8. Irreparable Harm: Employee agrees that any breach or threatened
breach by Employee of the provisions of the Noncompetition Agreement, the
Proprietary Rights and Information Agreement or this Agreement would cause the
Company irreparable harm and the Company may obtain injunctive relief against
such actual or threatened conduct and without the necessity of a bond.
9. Return of Company Property: Employee agrees that following the
termination of his employment for any reason, he shall return all property of
the Company which is then in or thereafter comes into his possession, including,
but not limited to, documents, contracts, agreements, plans, photographs,
customer lists, books, notes, electronically stored data and all copies of the
foregoing as well as any other materials or equipment supplied by the Company to
the Employee.
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10. Termination:
(A) Death: In the event of the Employee's death during the term of
his employment, this Agreement shall automatically terminate on the date of
death, and Employee's estate shall be entitled to payment of Employee's salary
until date of death and three (3) months thereafter. All other benefits and
compensation described herein shall terminate on the date of death unless
otherwise stipulated in the applicable Company plan.
(B) Disability: In the event the Employee, by reason of physical or
mental incapacity, shall be disabled for a period of at least four (4)
consecutive months or six (6) months in the aggregate in any twelve (12) month
period of this Agreement or any extension hereof, the Company shall have the
option to terminate Employee's employment and to terminate this Agreement. Such
termination to be effective ten (10) days after the Company gives written notice
of such termination to the Employee, and all obligations of the Company
hereunder shall cease upon the date of such termination unless Employee shall
have returned to the performance of his duties prior to the effective date of
the notice. "Incapacity" as used herein shall mean the inability of the Employee
to substantially perform his normal duties. Employee's salary as provided for
hereunder shall continue to be paid during any period of incapacity prior to and
including the date on which Employee's employment is terminated for disability
and for three (3) months following the termination date.
(C) Company's Rights To Terminate This Agreement:
(a) The Company shall have the right, before the expiration of the
term of this Agreement, to terminate this Agreement and to discharge Employee
for cause (hereinafter "Cause"), and all compensation to Employee shall cease to
accrue upon discharge of the Employee for Cause. For the purposes of this
Agreement, the term "Cause" shall mean (i) the Employee's violation of the
Company's written policy or specific written directions of the Chief Executive
Officer, Chief Operating Officer or the Board of Directors, which directions are
consistent with normally acceptable business practices, or the failure to
observe, or the failure or refusal to perform, any obligations required to be
performed in accordance with this Agreement, (ii) if the Board of Directors
determines that Employee has committed a demonstrable act (or omission) of
malfeasance seriously detrimental to the Company (which shall not include any
exercise of business judgment in good faith) or (iii) breach by the Employee in
any material respect of any covenant or agreement contained herein, in the
Proprietary Rights and Information Agreement or in the Noncompetition Agreement
or any representation, warranty, covenant or agreement contained in that Asset
Purchase and Assignment Agreement, dated of even date herewith, among the
Company, the Employee and Impact Eyewear, LLC.
(b) If the Company elects to terminate Employee's employment for
Cause, if such Cause shall be capable of cure (it being understood and agreed
that a breach of fiduciary duty, including dishonesty, or the circumstances
described in Section 10C(a)(ii) hereof, is not subject to cure) the Company
shall first give Employee written notice and a period of twenty (20) days to
cure such Cause, and if such Cause is not cured in said twenty (20) days or if
such Cause is not capable of cure, such termination shall be effective on the
date the Company gave written notice of such termination for cause to the
Employee. In the event of a termination of the Employee's employment for Cause
in accordance with the provisions of Section 10 (C)
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(b), the Company shall have no further obligation to the Employee, except for
the payment of salary and for any other compensation and/or expenses through the
date of such termination from employment.
(D) Employee's Right to Terminate this Agreement: Employee shall
have the right, before the expiration of the term of this Agreement, to
terminate resign and this Agreement, in which case the Company shall be
completely discharged from any further obligations to the Employee (including,
without limitation, any obligation to pay to or on behalf of the Employee any
further compensation or benefits). Such termination shall in no way limit or
diminish Employee's obligations under the Noncompetition Agreement or the
Proprietary Rights Agreement.
11. Waiver: Any waiver by either party of a breach of any provision
of this Agreement shall not operate as or be construed as a waiver of any other
breach or default hereof.
12. Governing Law: The validity of this Agreement or of any of the
provisions hereof shall be determined under and according to the laws of the
State of New York, and this Agreement and its provisions shall be construed
according to the laws of the State of New York, without reference to its choice
of law rules.
13. Notices: Any notice required to be given pursuant to the
provisions of this Agreement shall be in writing and shall be delivered in
person or by registered or certified mail to the respective parties at their
addresses set forth on the first page of this Agreement (or such other address
as the party to receive notices has given by notice hereunder to the other
party). Any such notice by personal delivery shall become effective upon receipt
and any notice by registered or certified mail shall become effective five
business days after mailed.
14. Assignment: The Employee's assignment of this Agreement or any
interest herein, or any monies due or to become due by reason of the terms
hereof, without the prior written consent of the Company shall be void. This
Agreement shall be assignable and binding to a corporation or other business
entity that succeeds to all or substantially all of the business of the Company
through merger, consolidation, corporate reorganization or by acquisition of all
or substantially all of the assets of the Company and which assumes Company's
obligations under this Agreement.
15. Miscellaneous: This Agreement contains the entire understanding
between the parties hereto and supersedes all other oral and written agreements
or understandings between them. No modification or addition hereto or waiver or
cancellation of any provision shall be valid except by a writing signed by the
party to be charged therewith.
16. Obligations of a Continuing Nature: It is expressly understood
and agreed that the covenants, agreements and restrictions undertaken by or
imposed on either party hereunder, which are stated to exist or continue after
termination of Employee's employment with the Company, shall exist and continue
on both parties irrespective of the method or circumstances of such termination
from employment or termination of this Agreement.
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17. Severability: Employee agrees that if any of the covenants,
agreements or restrictions on the part of Employee are held to be invalid by any
court of competent jurisdiction, such holding will not invalidate any of the
other covenants, agreements and/or restrictions herein contained and such
invalid provisions shall be severable so that the invalidity of any such
provision shall not invalidate any others. Moreover, if any one or more of the
provisions contained in this Agreement shall be held to be excessively broad as
to duration, activity or subject, such provisions shall be construed by limiting
and reducing them so as to be enforceable to the maximum extent allowed by
applicable law.
18. Representation: Employee represents and warrants that he has the
legal right to enter into this Agreement and to perform all of the duties and
obligations on his part to be performed hereunder in accordance with its terms
and that he is not a party to any agreement or understanding, written or oral,
which prevents Employee from entering into this Agreement or performing all of
his duties and obligations hereunder. In the event of a breach of such
representation or warranty on his part or if there is any other legal impediment
which prevents him from entering into this Agreement or performing all of his
duties and obligations hereunder, the Company shall have the right to terminate
this Agreement in accordance with Section 10(C) (a); in which event the "Cause"
shall not be deemed curable under Section 10(C) (b). Without limiting the
foregoing, Employee represents and warrants that he is not a party to any
agreement which prohibits or limits his ability to fulfill his duties and
responsibilities contemplated herein.
19. Descriptive Headings: The paragraph headings contained herein
are for reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the day and year first above written.
XXXXXXX.XXX, INC.
By: /s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx
Chief Executive Officer
/s/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx
Employee
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