EMPLOYMENT AGREEMENT
Exhibit
10.41
This
EMPLOYMENT AGREEMENT is entered into as of October 20, 2009, by and between
Bluefly, Inc., a Delaware corporation (the “Company”), and Xxxxxx X. Xxxxx III
(“Xxxxx”).
RECITALS
1. Xxxxx
currently serves as Senior Vice President of E-Commerce of the
Company.
2. The
parties desire that Xxxxx continue to serve in such capacity in accordance with
the terms and conditions of this Agreement.
NOW,
THEREFORE, in consideration of the mutual covenants contained in this Agreement,
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Company and Xxxxx agree as follows:
1.
TERM
The
Company hereby agrees to employ Xxxxx as Senior Vice President of E-Commerce of
the Company, and Xxxxx hereby agrees to serve in such capacity, for a term
ending on September 30, 2012 (as the same may be earlier terminated pursuant to
the terms of this Agreement, the “Employment Term”), upon the terms and subject
to the conditions contained in this Agreement.
2.
DUTIES
During
the Employment Term, Xxxxx shall serve as Senior Vice President of E-Commerce of
the Company, and shall be responsible for the duties attendant to such office
and such other managerial duties and responsibilities with the Company
consistent with such office as may be reasonably assigned from time to time by
the Chief Executive Officer, President and/or Chief Operating Officer of the
Company.
The
principal location of Xxxxx’x employment shall be in the New York City vicinity
(i.e., within a 20 mile radius), although Xxxxx understands and agrees that he
will be required to travel from time to time for business
reasons. Xxxxx shall diligently and faithfully perform his
obligations under the Agreement and shall devote his full professional and
business time to the performance of his duties as Senior Vice President of
E-Commerce of the Company during the Employment Term. Xxxxx shall
not, directly or indirectly, render business services to any other person or
entity, without the consent of the Company's Chief Executive
Officer.
3.
BASE
SALARY
For
services rendered by Xxxxx to the Company during the Employment Term,
the
Company shall pay him a base salary of $245,000 per year, payable in accordance
with the standard payroll practices of the Company, subject to annual increases
in the sole discretion of the Chief Executive Officer and the Company's Board of
Directors, taking into account the financial and operating performance of the
Company's business and divisions and a qualitative assessment of Xxxxx’x
performance during such year.
4.
BONUS
During
the Employment Term, Xxxxx shall be eligible to receive a bonus set by the
Company’s Board of Directors in its sole discretion and based on such factors as
the Board of Directors deems appropriate. All bonuses shall be paid
in accordance with the Company’s standard payroll practices, net of any
applicable withholding. No bonus will be payable under this Section
unless Xxxxx is employed as of the date such bonus is awarded.
5.
EXPENSE REIMBURSEMENT
AND PERQUISITES
a. During
the Term of this Agreement, Xxxxx shall be entitled to reimbursement of all
reasonable and actual out-of-pocket expenses incurred by him in the
performance of him services to the Company consistent with corporate policies,
if any, provided that the expenses are properly accounted for. Any
such reimbursement will be made to Xxxxx as soon as administratively feasible
following submission of such documentation of such expense, but shall be made no
later than the calendar year following the calendar year in which such expense
is incurred by Xxxxx.
b. During
each calendar year of the Employment Term, Xxxxx shall be entitled to reasonable
vacation with full pay in accordance with the Company’s then-current vacation
policies; provided, however, that Xxxxx
shall schedule such vacations at times convenient to the Company.
x. Xxxxx
shall be entitled to participate in all health insurance (National Oxford),
dental insurance, long-term disability insurance and other employee benefit
plans instituted by the Company from time to time on the same terms and
conditions as other similarly situated employees of the Company, to the extent
permitted by law. In addition, Xxxxx shall be a covered officer under
the Company’s now existing and any future Directors and Officers liability
policy.
6.
NON-COMPETITION;
NON-SOLICITATION
a. In
consideration of the offer of employment, severance benefits and Options to be
granted to Xxxxx hereunder, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, during the
Non-Competition Term, Xxxxx shall not, without the prior written consent of the
Company, anywhere in the world,
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directly
or indirectly, (i) enter into the employ of or render any services to any
Competitive Business; (ii) engage in any Competitive Business for his own
account; (iii) become associated with or interested in any Competitive Business
as an individual, partner, shareholder, creditor, director, officer, principal,
agent, employee, trustee, consultant, advisor or in any other relationship or
capacity; (iv) employ or retain, or have or cause any other person or entity to
employ or retain, any person who was employed or retained by the Company while
Xxxxx was employed by the Company; or (v) solicit, interfere with, or endeavor
to entice away from the Company, for the benefit of a Competitive Business, any
of its customers or other persons with whom the Company has a contractual
relationship. For purposes of this Agreement, a “Competitive
Business” shall mean any person, corporation, partnership, firm or other entity
which sells or has plans to sell ten (10) or more brands of luxury or high-end
designer apparel and/or fashion accessories at prices that are consistently
discounted to manufacturer’s suggested retail prices. However,
nothing in this Agreement shall preclude Xxxxx from investing his personal
assets in the securities of any corporation or other business entity which is
engaged in a Competitive Business if such securities are traded on a national
stock exchange or in the over-the-counter market and if such investment does not
result in him beneficially owning, at any time, more than three percent (3%) of
the publicly-traded equity securities of such Competitive
Business. For purposes of this agreement, the “Non-Competition Term”
shall mean a period beginning upon the commencement of the Employment Term and
ending on the two (2) year anniversary of the end of the Employment
Term.
x. Xxxxx
and the Company agree that the covenants of non-competition and non-solicitation
contained in this paragraph 6 are reasonable covenants under the circumstances,
and further agree that if, in the opinion of any court of competent
jurisdiction, such covenants are not reasonable in any respect, such court shall
have the right, power and authority to excise or modify such provision or
provisions of these covenants as to the court shall appear not reasonable and to
enforce the remainder of these covenants as so amended. Xxxxx agrees
that any breach of the covenants contained in this paragraph 6 would irreparably
injure the Company. Accordingly, Xxxxx agrees that the Company, in
addition to pursuing any other remedies it may have in law or in equity, may
obtain an injunction against Xxxxx from any court having jurisdiction over the
matter, restraining any further violation of this paragraph 6.
7.
TERMINATION
a. This
Agreement, the employment of Xxxxx, and Xxxxx’x position as Senior Vice
President of E-Commerce of the Company shall terminate upon the first to occur
of:
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(i)
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his
death;
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(ii)
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his
"permanent disability," due to injury or sickness for a continuous period
of four (4) months, or a total of eight months in a twenty-four month
period (vacation time excluded), during which time Xxxxx is unable in
substantial part to attend to his ordinary and regular duties,
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provided
that the Company shall give Xxxxx thirty (30) days’ written notice prior
to any such termination;
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(iii)
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a
"Constructive Termination" by the Company during the Employment Term,
which, for purposes of this Agreement, shall be deemed to have occurred
upon (A) the removal of Xxxxx without his consent from his position as
Senior Vice President of E-Commerce of the Company, or (B) the material
breach by the Company of this Agreement; provided that a
Constructive Termination shall not be deemed to have occurred unless: (1)
Xxxxx gives the Company notice within ninety (90) days after an event or
occurrence which Xxxxx believes constitutes a Constructive Termination,
specifying the event or occurrence which Xxxxx believes constitutes a
Constructive Termination; and (2) the Company fails to cure such act or
failure to act within thirty (30) days after receipt of such
notice.
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(iv)
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the
termination of this Agreement at any time without cause by the
Company;
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(v)
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the
termination of this Agreement for cause, which, for purposes of this
Agreement, shall mean that (1) Xxxxx has been convicted of a felony or any
serious crime involving moral turpitude, or engaged in materially
fraudulent or materially dishonest actions in connection with the
performance of his duties hereunder, or (2) Xxxxx has willfully and
materially failed to perform his duties hereunder, or (3) Xxxxx has
willfully or negligently breached the terms and provisions of this
Agreement in any material respect, or (4) Xxxxx has failed to comply in
any material respect with the Company's policies of conduct that have been
communicated to him, including with respect to trading in securities,
provided that the Company shall provide Xxxxx with at least five (5)
business days’ prior written notice of any such failure to comply and an
opportunity to cure such failure, to the extent curable;
or
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(vi)
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the
termination of this Agreement by Xxxxx, which shall occur on not less than
30 days prior written notice from
Xxxxx.
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b. In
the event that this Agreement is terminated during the Employment Term pursuant
to paragraphs 7(a)(i), 7(a)(ii), 7(a)(v) or 7(a)(vi), the Company shall pay
Xxxxx his base salary only through the date of termination. In the
event that this Agreement is terminated during the Employment Term pursuant to
paragraphs 7(a)(iii) or 7(a)(iv), the Company shall pay Xxxxx, contingent upon
his continued performance of his obligations under Section 6, the then-current
base salary for a period of one-hundred eighty (180) days (the “Severance
Payments”). The Severance Payments shall be payable in periodic
installments in accordance with the Company's standard payroll practices and
will be subject to any applicable
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withholding,
and shall be conditioned upon Xxxxx executing an effective release of any claims
against the Company, in a form reasonably satisfactory to the
Company. Except as provided in this paragraph, upon any termination
of employment, all other rights Xxxxx may have to base salary, perquisites or
other compensation as set forth in paragraphs 3, 4, and/or 5, including, without
limitation, bonus payments and unvested option grants, but excluding any vested
option, shall be forfeited.
c. Notwithstanding
anything herein to the contrary, if any payments due under this Agreement would
subject Xxxxx to any tax imposed under Section 409A of the Code if such payments
were made at the time otherwise provided herein, then the payments that cause
such taxation shall be payable in a single lump sum on the first day which is at
least six (6) months after the date of Xxxxx’x "separation from service" as set
forth in Code Section 409A(2)(A)(i) and the official guidance issued
thereunder.
8.
CONFIDENTIALITY
x. Xxxxx
recognizes that the services to be performed by him are special, unique and
extraordinary in that, by reason of his employment under this Agreement, he may
acquire or has acquired confidential information and trade secrets concerning
the operation of the Company, its predecessors, and/or its
affiliates, the use or disclosure of which could cause the Company, or its
affiliates substantial loss and damages which could not be readily calculated
and for which no remedy at law would be
adequate. Accordingly, Xxxxx covenants and agrees with the Company
that he will not at any time during the Term of this Agreement or thereafter,
except in the performance of his obligations to the Company or with the prior
written consent of the Board of Directors or as otherwise required by court
order, subpoena or other government process, directly or indirectly, disclose
any secret or confidential information that he may learn or has learned by
reason of his association with the Company. If Xxxxx shall be
required to make such disclosure pursuant to court order, subpoena or other
government process, he shall notify the Company of the same, by personal
delivery or electronic means, confirmed by mail, within twenty-four (24) hours
of learning of such court order, subpoena or other government process and, at
the Company's expense (such expenses to be advanced by the Company as reasonably
required by Xxxxx), shall (i) take all necessary and lawful steps reasonably
required by the Company to defend against the enforcement of such subpoena,
court order or government process, and (ii) permit the Company to intervene and
participate with counsel of its choice in any proceeding relating to the
enforcement thereof. The term "confidential information"
includes, without limitation, information not in the public domain and not
previously disclosed to the public or to the trade by the Company's management
with respect to the Company's or its affiliates' facilities and methods, trade
secrets and other intellectual property, designs, manuals, confidential reports,
supplier names and pricing, customer names and prices paid, financial
information or business plans.
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x. Xxxxx
confirms that all confidential information is and shall remain the exclusive
property of the Company. All memoranda, notes, reports, software,
sketches, photographs, drawings, plans, business records, papers or other
documents or computer-stored or disk-stored information kept or made by Xxxxx
relating to the business of the Company shall be and will remain the sole and
exclusive property of the Company and all such materials containing confidential
information shall be promptly delivered and returned to the Company immediately
upon the termination of his employment with the Company.
x. Xxxxx
shall make full and prompt disclosure to the Company of all inventions,
improvements, ideas, concepts, discoveries, methods, developments, software and
works of authorship, whether or not copyrightable, trademarkable or licensable,
which are created, made, conceived or reduced to practice by Xxxxx while
performing his services hereunder to the Company, whether or not during normal
working hours or on the premises of the Company and which relate in any manner
to the business of the Company (all of which are collectively referred to in
this Agreement as "Developments"). All Developments shall be the sole
property of the Company, and Xxxxx hereby assigns to the Company, without
further compensation, all of his rights, title and interests in and to the
Developments and any and all related patents, patent applications, copyrights,
copyright applications, trademarks and trade names in the United States and
elsewhere.
x. Xxxxx
shall assist the Company in obtaining, maintaining and enforcing patent,
copyright and other forms of legal protection for intellectual property in any
country. Upon the request of the Company, Xxxxx shall sign all applications,
assignments, instruments and papers and perform all acts necessary or desired by
the Company in order to protect its rights and interests in any
Developments.
x. Xxxxx
agrees that any breach of this paragraph 8 will cause irreparable damage to the
Company and that, in the event of such breach, the Company will have, in
addition to any and all remedies of law, including rights which the Company may
have to damages, the right to equitable relief including, as appropriate, all
injunctive relief or specific performance or other equitable
relief. Xxxxx understands and agrees that the rights and obligations
set forth in paragraph 8 shall survive the termination or expiration of this
Agreement.
9.
REPRESENTATIONS AND
WARRANTIES
x. Xxxxx
represents and warrants to the Company that he was advised to consult with an
attorney of Xxxxx'x own choosing concerning this Agreement.
x. Xxxxx
represents and warrants to the Company that, to the best of his knowledge, the
execution, delivery and performance of this Agreement by Xxxxx complies with all
laws applicable to Xxxxx or to which his properties are subject and does not
violate, breach or conflict with any agreement by which he or his assets are
bound or affected.
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10.
INDEMNIFICATION
The Company shall indemnify and hold
Xxxxx harmless to the fullest extent permitted by law from and against any and
all claims, losses, liabilities, damages and expenses including, but not limited
to, reasonable attorneys’ fees incurred by, imposed upon or asserted against
Xxxxx as a result of or arising out of any acts or omission by Xxxxx in his
capacity as an officer, director, employee or consultant of the
Company.
11.
GOVERNING LAW; CHOICE OF
FORUM
This
Agreement shall be deemed a contract made under, and for all purposes shall be
construed in accordance with, the internal laws of the State of New York,
without giving effect to its conflict of law provisions. Any dispute
arising hereunder shall be subject to the exclusive jurisdiction of the federal
and State courts located in New York, New York, and each of the parties hereto
hereby irrevocably submits to such jurisdiction and waives any objection to such
venue.
12.
ENTIRE
AGREEMENT
This
Agreement contains all of the understandings between Xxxxx and the Company
pertaining to Xxxxx’x employment with the Company, and it supersedes all
undertakings and agreements, whether oral or in writing, previously entered into
between them.
13.
AMENDMENT OR
MODIFICATION; WAIVER
No
provision of this Agreement may be amended or modified unless such amendment or
modification is agreed to in writing, signed by Xxxxx and by an officer of the
Company duly authorized to do so. Except as otherwise specifically
provided in this Agreement, no waiver by either party of any breach by the other
party of any condition or provision of this Agreement to be performed by such
other party shall be deemed a waiver of a similar or dissimilar provision or
condition at the same or any prior or subsequent time.
14. NOTICES
Any
notice to be given hereunder shall be in writing and delivered personally or
sent by overnight delivery or certified mail, postage prepaid, return receipt
requested, addressed to the party concerned at the address indicated below or to
such other address as such party may subsequently designate by like
notice:
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If to the
Company, to:
Bluefly,
Inc.
00 Xxxx
00xx Xxxxxx
Xxx Xxxx,
XX 00000
Attn:
Chief Executive Officer
If to
Xxxxx, to:
at the
address then on file in the Company’s payroll system
Any such
notice shall be deemed given upon receipt.
16. SEVERABILITY
In the
event that any provision or portion of this Agreement shall be determined to be
invalid or unenforceable for any reason, the remaining provisions or portions of
this Agreement shall be unaffected thereby and shall remain in full force and
effect to the fullest extent permitted by law.
17. TITLES
Titles of
the paragraphs of this Agreement are intended solely for convenience of
reference and no provision of this Agreement is to be construed by reference to
the title of any paragraphs.
18. COUNTERPARTS
This
Agreement may be executed in counterparts, each of which shall be deemed an
original, and all of which together shall constitute one and the same
instrument.
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IN
WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
first above written.
| BLUEFLY, INC. | |||
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By:
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/s/ Xxxxxxx Xxxxxx-Xxxxxx | |
| Xxxxxxx Xxxxxx-Xxxxxx | |||
| Chief Executive Officer | |||
| EMPLOYEE | |||
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/s/ Xxxxxx X. Xxxxx III | |
| Xxxxxx X. Xxxxx III | |||
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