EXHIBIT 10.1
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This AMENDED AND RESTATED EMPLOYMENT AGREEMENT is entered into as of
April 10, 2008, by and between Bluefly, Inc., a Delaware corporation (the
"Company"), and Xxxxxxxx Xxxxxx ("Xxxxxx").
RECITALS
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1. Xxxxxx currently serves as Chief Marketing Officer of the Company in
accordance with the terms and conditions of an Employment Agreement dated as of
September 19, 2005 for a term set to expire on September 30, 2008 (the "Original
Agreement").
2. The Company and Xxxxxx desire to amend and restate the Original
Agreement in its entirety to, among other things extend the term of Xxxxxx'x
employment and amend certain provisions related to his compensation 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 Xxxxxx agree as
follows:
1. TERM
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The Company hereby agrees to employ Xxxxxx as Chief Marketing Officer of
the Company, and Xxxxxx hereby agrees to serve in such capacity, for a term
ending on March 31, 2011 (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
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During the Employment Term, Xxxxxx shall serve as Chief Marketing
Officer 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 and/or President of the Company.
The principal location of Xxxxxx'x employment shall be in the New York
City vicinity (i.e., within a 20 mile radius), although Xxxxxx understands and
agrees that he will be required to travel from time to time for business
reasons. Xxxxxx shall diligently and faithfully perform his obligations under
the Agreement and shall devote his full professional and business time to the
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performance of his duties as Chief Marketing Officer of the Company during the
Employment Term. Xxxxxx 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
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For services rendered by Xxxxxx to the Company during the Employment
Term, the Company shall pay him a base salary of $350,000 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 Xxxxxx'x performance during such year.
4. BONUS
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During the Employment Term, Xxxxxx shall be eligible to receive a bonus
set by the Compensation Committee of the Company's Board of Directors (the
"Compensation Committee") in its sole discretion and based on such factors as
the Compensation Committee deems appropriate. In the event that, prior to
December 31, 2008, Xxxxxx opts to terminate his employment by providing the
Company with 30 days' written notice of termination and an effective termination
date occurring after December 31, 2008, he shall receive a bonus of $116,555 as
part of the first regularly scheduled payroll of 2009 in lieu of any other
bonuses that would have been paid to him for the 2008 year. In the event that
Xxxxxx does not so terminate his employment he will be eligible to receive a
bonus for the 2008 year as determined by the Compensation Committee. All
bonuses shall be paid in accordance with the Company's standard payroll
practices, net of any applicable withholding.
5. EXPENSE REIMBURSEMENT AND PERQUISITES
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a. During the Term of this Agreement, Xxxxxx 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.
b. During each calendar year of the Employment Term, Xxxxxx shall
be entitled to reasonable vacation with full pay in accordance with they
Company's then-current vacation policies; provided, however, that Xxxxxx shall
schedule such vacations at times convenient to the Company.
x. Xxxxxx 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
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situated employees of the Company, to the extent permitted by law. In addition,
Xxxxxx shall be a covered officer under the Company's now existing and any
future Directors and Officers liability policy.
d. During the term of this Agreement, for the months from May 2008
through December 2008, the Company will pay for appropriate monthly temporary
housing (up to a maximum of $9,500 per month). It is essential that Xxxxxx
submit receipts directly to the Company on a monthly basis to be reimbursed. In
addition, on a monthly basis, the Company will pay Xxxxxx a "gross-up" bonus
such that the net amount retained by Xxxxxx after the payment of any federal,
state or local income taxes (collectively, "Taxes") on such bonus will be
sufficient to pay any Taxes due with respect to the Company's reimbursement of
housing expenses pursuant to this Section 5(d).
6. NON-COMPETITION; NON-SOLICITATION
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a. In consideration of the offer of employment, severance benefits and
Options to be granted to Xxxxxx hereunder, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, during the Non-Competition Term, Xxxxxx shall not,
without the prior written consent of the Company, anywhere in the
world, 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 Xxxxxx 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 Xxxxxx 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.
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x. Xxxxxx 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. Xxxxxx agrees that any
breach of the covenants contained in this paragraph 6 would irreparably
injure the Company. Accordingly, Xxxxxx agrees that the Company, in
addition to pursuing any other remedies it may have in law or in
equity, may obtain an injunction against Xxxxxx from any court having
jurisdiction over the matter, restraining any further violation of this
paragraph 6.
7. TERMINATION
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a. This Agreement, the employment of Xxxxxx, and Matson's
position as Chief Marketing Officer of the Company shall terminate upon
the first to occur of:
(i) his death;
(ii) 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 Xxxxxx is unable in substantial
part to attend to his ordinary and regular duties, provided
that the Company shall give Xxxxxx thirty (30) days' written
notice prior to any such termination;
(iii) 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
Xxxxxx without his consent from his position as Chief
Marketing Officer of the Company, or (B) the material breach
by the Company of this Agreement; provided that no such
breach shall be considered a Constructive Termination unless
Xxxxxx has provided the Company with at least thirty (30)
days' prior written notice of such breach and the Company
has failed to cure such breach within such thirty (30) day
period;
(iv) the termination of this Agreement at any time without cause
by the Company;
(v) the termination of this Agreement for cause, which, for
purposes of this Agreement, shall mean that (1) Xxxxxx 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
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performance of his duties hereunder, or (2) Xxxxxx has
willfully and materially failed to perform his duties
hereunder, or (3) Xxxxxx has willfully or negligently
breached the terms and provisions of this Agreement in any
material respect, or (4) Xxxxxx has failed to comply in any
material respect with the Company's policies of conduct that
have been communicated to her, including with respect to
trading in securities, provided that the Company shall
provide Xxxxxx 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
(vi) the termination of this Agreement by Xxxxxx, which shall
occur on not less than 30 days prior written notice from
Xxxxxx.
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 Xxxxxx 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 Xxxxxx, in lieu of all salary, compensation payments and perquisites set
forth in paragraphs 3, 4 and 5 (including bonus payments and unvested option
grants, but excluding vested option grants) and contingent upon his continued
performance of his obligations under Section 6, severance payments (the
"Severance Payments") equal to the then-current base salary for a period of
one-hundred eighty (180) days.
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 withholding, and shall be conditioned upon Xxxxxx executing a full
release of any claims against the Company, in a form reasonably satisfactory to
the Company.
8. CONFIDENTIALITY
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x. Xxxxxx 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, Xxxxxx 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
Xxxxxx 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,
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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 Xxxxxx), 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.
x. Xxxxxx 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
Xxxxxx 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. Xxxxxx 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 Xxxxxx 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 Xxxxxx 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. Xxxxxx 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, Xxxxxx 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. Xxxxxx 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
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performance or other equitable relief. Xxxxxx 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
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x. Xxxxxx represents and warrants to the Company that he was
advised to consult with an attorney of Xxxxxx'x own choosing concerning this
Agreement.
x. Xxxxxx represents and warrants to the Company that, to the best
of his knowledge, the execution, delivery and performance of this Agreement by
Xxxxxx complies with all laws applicable to Xxxxxx 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.
10. INDEMNIFICATION
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The Company shall indemnify and hold Xxxxxx 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 Xxxxxx as a result
of or arising out of any acts or omission by Xxxxxx in his capacity as an
officer, director, employee or consultant of the Company.
11. GOVERNING LAW; ARBITRATION
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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. Except as
set forth below, any controversy or claim arising out of or relating to this
Agreement, or the breach thereof, shall be resolved by arbitration in accordance
with the rules of the American Arbitration Association (the "AAA") then
pertaining in the City of New York, New York, by a single arbitrator to be
mutual agreed upon by the parties or, if they are unable to so agree, by an
arbitrator selected by the AAA. The parties shall be entitled to a minimal
level of discovery as determined by the arbitrator. The arbitrator shall be
empowered to award attorney's fees and costs if he or he deems such award
appropriate. Judgment upon any award rendered by the arbitrator may be entered
in any court having jurisdiction thereof. Nothing contained in this paragraph
11 or the remainder of this Agreement shall be construed so as to deny the
Company the right and power to seek and obtain injunctive relief in a court of
equity for any breach or threatened breach by Xxxxxx of the covenants contained
in paragraphs 6 and 8 of this Agreement.
12. ENTIRE AGREEMENT
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This Agreement contains all of the understandings between Xxxxxx and the
Company pertaining to Xxxxxx'x employment with the Company, and it supersedes
all undertakings and
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agreements, whether oral or in writing, previously entered into between them,
including (without limitation) the Original Agreement.
13. AMENDMENT OR MODIFICATION; WAIVER
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No provision of this Agreement may be amended or modified unless such
amendment or modification is agreed to in writing, signed by Xxxxxx 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
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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:
If to the Company, to:
Bluefly, Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Chief Executive Officer
If to Xxxxxx, to:
at the address then on file in the Company's payroll system
Any such notice shall be deemed given upon receipt.
15. SEVERABILITY
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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.
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16. TITLES
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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.
17. COUNTERPARTS
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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.
By: /s/ Xxxxx Xxxxx
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Xxxxx Xxxxx
President
EMPLOYEE
/s/ Xxxxxxxx Xxxxxx
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Xxxxxxxx Xxxxxx
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