Exhibit 10.8
YOUNETWORK CORPORATION
XXXXXX XXXXXXXXXX
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated as of November 1, 1999 (the "Agreement")
between YouNetwork Corporation, a New York corporation with an office at 000
Xxxx 00xx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx (the "Company"), and Xxxxxx X.
Xxxxxxxxxx residing at 000 Xxxx 00xx Xxxxxx, Xxx. 00X, Xxx Xxxx, Xxx Xxxx 00000
(the "Executive").
WHEREAS, the Company has recently launched an on-line e commerce consumer
network and desires to employ the Executive as its Chief Executive Officer.
WHEREAS, the Executive has substantial executive and managerial
experiences in retail marketing.
NOW, THEREFORE, in consideration of the covenants and agreements
hereinafter set forth, the parties hereto agree as follows:
1. EMPLOYMENT AND DUTIES
1.1. General. The Company hereby employs the Executive, and the
Executive agrees to serve, as Chief Executive Officer of the Company and upon
the Board of Directors of the Company (the "Board") upon the terms and
conditions herein contained, and in such capacities the Executive agrees to
serve the Company faithfully and to the best of his ability under the reasonable
direction of the Board. The Executive's offices shall be in New York City.
1.2. Exclusive Services. For so long as the Executive is employed by
the Company, he shall devote his fulltime working hours to his duties hereunder.
The Executive shall not, directly or indirectly engage in any other activities
which would interfere significantly with his faithful performance of his duties
hereunder.
1.3. Term of Employment. The Executive's employment under this
Agreement shall commence on November 1, 1999 (the "Effective Date") and shall
terminate on the earliest of (i) October 31, 2001, (ii) the death of the
Executive or (iii) the termination of the Executive's employment pursuant to
this Agreement (the ATerm@). Within six months prior to the end of the Term, the
Executive and the Company shall negotiate in good faith with regard to an
extended term of employment.
2. SALARY
2.1. Base Salary, First Nine Months. For the first nine months
following the Effective Date, the Executive shall be entitled to receive a base
salary at a rate of $120,000 per annum, payable in arrears in equal installments
in accordance with the Company's payroll practices.
2.2. Base Salary, Year Two. Commencing August 1, 2000 and through
the end of the Term, the Executive shall be entitled to receive a base salary at
a rate of $400,000 per annum, payable in arrears in equal installments in
accordance with the Company's payroll practices.
3. EMPLOYEE BENEFITS
3.1. General Benefits. The Executive will be eligible to participate
in benefit programs of the Company consistent with those benefit programs
provided to other senior executives of the Company;
3.2. Reimbursement of Expenses. The Company will reimburse the
Executive for reasonable, ordinary and necessary business expenses incurred by
him in the fulfillment of his duties hereunder upon presentation by the
Executive of an itemized account of such expenditures, in accordance with
Company practices consistently applied.
4. TERMINATION OF EMPLOYMENT
4.1. Termination for Cause; Resignation.
(1) If, prior to the expiration of the Employment Term, the Executive's
employment is terminated by the Company for Cause, the Executive shall be
entitled only to payment of his Base Salary as then in effect through and
including the date of termination.
(2) If the Executive resigns from his employment hereunder in the first
six months of the Term, the Executive shall be entitled only to payment of his
Base Salary as then in effect through and including the date of resignation.
Upon such resignation the Executive shall surrender to the Company and the
Company shall cancel any and all employee stock options or common stock purchase
warrants which have been previously issued to the Executive as of the date of
such resignation.
(3) If the Executive resigns from his employment hereunder after the first
six months of the Term, the Executive shall be entitled only to (i) payment of
his base salary then in effect through and including the date of his
resignation; and (ii) a severance payment which shall be the amount of the
severance payment to which the Executive would have been entitled pursuant to
Section 4.3, had he been terminated without cause. Upon such resignation the
Executive shall surrender to the Company and the Company shall cancel one half
of all employee stock options or common stock purchase warrants which have been
previously issued to the Executive as of the date of such resignation.
Notwithstanding the foregoing, if the Executive resigns from his employment
hereunder after the first year of the Term, the Executive shall not be required
to surrender to the Company any employee stock options
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or common stock purchase warrants which have been previously issued to the
Executive as of the date of such resignation;
(4) The Executive following a termination for cause and/or resignation
shall have no further right to receive any other compensation, or to participate
in any other plan, arrangement, or benefit, after such termination or
resignation of employment.
4.2. Cause. Termination for "Cause" shall mean termination of the
Executive's employment because the Executive (a) has engaged in fraudulent or
criminal conduct in connection with the performance of his duties hereunder,
which conduct materially and adversely affects the Company; (b) admits to or has
been convicted of a crime punishable by imprisonment for more than one year; or
(c) has failed to perform in all material respects (following a detailed written
warning specifying the nature of such deficiency and an opportunity to cure such
conduct) the normal and customary duties required of his position of employment.
4.3. Termination Without Cause.
(1) If prior to the expiration of the Term the Executive shall be
terminated without cause or due to a disability as defined herein, the Company
shall pay to the Executive a severance payment (ASeverance Payment@). In the
event the Executive is so terminated in the first nine months of the Term, the
Severance Payment shall equal the amount of $20,000 multiplied by the number of
months of employment completed prior to termination . In the event the Executive
is terminated without cause at any time after the first nine months of the Term,
or the Term is not extended for an additional term pursuant to mutual agreement
between the Executive and the Company, the Severance Payment shall be $180,000.
The failure to timely pay the Executive's salary shall be deemed to be a
termination without cause.
(2) Other than the payments referred to in Section 4.3(a), the Executive
shall be entitled to no further compensation under this Agreement following
termination without cause, with the exception of termination without cause
following a secondary public offering of the Company's securities, in which
event the Executive shall also be paid his salary for the remainder of the Term.
5. DISABILITY. For purposes of this agreement, disability shall mean
the failure of the Executive to render the services provided in this Agreement
because of illness, physical or mental disability or other incapacity, for a
period of 90 days , or for shorter periods aggregating 90 days during any
twelve-month period of the Executive to render the services provided for by this
Agreement.
6. NONCOMPETITION NONSOLICITATION AND CONFIDENTIALITY
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6.1. Noncompetition/Nonsolicitation. The Executive shall not,
directly or indirectly, as a sole proprietor, member of a partnership,
stockholder or investor, officer or director of a corporation, or as an
employee, associate, consultant or agent of any person, partnership, corporation
or other business organization or entity other than the Company: (a) engage in
an e commerce business utilizing a business model that is substantially similar
to the business model of the Company; (b) solicit or endeavor to entice away
from the Company or any of its subsidiaries any person who is, or was during the
then most recent 12-month period, employed by or associated with the Company or
any of its subsidiaries; or (c) solicit or endeavor to entice away from the
Company or any of its subsidiaries any person or entity who is, or was within
the then most recent 12-month period, a customer, client or prospect of the
Company or any of its subsidiaries. The obligations of this Section 6.1 shall
apply for 6 months after, (i) termination of employment of the Executive for
cause; (ii) the Executive's resignation; or (iii) the end of the Term (where no
termination has occurred during the Term) as well as during employment and shall
be extended by a period of time equal to any period during which the Executive
shall be in breach of such obligations. With the exception of Section 6.1(b)
(which shall be applicable for a period of six months), the provisions of this
paragraph shall have no application in the event of termination without cause.
6.2. Confidentiality. The Executive covenants and agrees with the
Company that he will not at any time, except in performance of his obligations
to the Company hereunder or with the prior written consent of the Company,
directly or indirectly, disclose any secret or confidential information that he
may learn or has learned by reason of his association with the Company or any of
its subsidiaries and affiliates. The term "confidential information" includes
information not commonly known within the Industry; information not previously
disclosed to the public or to the trade by the Company's management, or
otherwise in the public domain, with respect the Company's, or any of its
affiliates' or subsidiaries', products, services, facilities, applications and
methods, trade secrets and other intellectual property, systems, procedures,
manuals, confidential reports, product or service price lists, customer lists,
technical information, financial information (including the revenues, costs or
profits associated with any of the Company's products), business plans,
prospects or opportunities which are not commonly known within the Industry.
6.3. Exclusive Property. The Executive confirms that all
confidential information is and shall remain the exclusive property of the
Company. All business records, papers and documents kept or made by the
Executive relating to the business of the Company shall be and remain the
property of the Company.
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6.4. Injunctive Relief. Without intending to limit the remedies
available to the Company, the Executive acknowledges that a breach of any of the
covenants contained in this Section 6 may result in material and irreparable
injury to the Company or its affiliates or subsidiaries for which there is no
adequate remedy at law, that it will not be possible to measure damages for such
injuries precisely and that, in the event of such a breach or threat thereof,
the Company shall be entitled to seek a temporary restraining order and/or a
preliminary or permanent injunction restraining the Executive from engaging in
activities prohibited by this Section 6 or such other relief as may be required
specifically to enforce any of the covenants in this Section 6. If for any
reason a final decision of any court determines that the restrictions under this
Section 6 are not reasonable or that consideration therefor is inadequate, such
restrictions shall be interpreted, modified or rewritten by such court to
include as much of the duration and scope identified in this Section 6 as will
render such restrictions valid and enforceable.
7. EMPLOYEE STOCK OPTIONS.
7.1 Upon execution of this Agreement, the Company shall issue to the
Executive the following options under the Company's Employee Stock Option Plan:
(1) 1,000,000 Options exercisable at $1.10, vesting at a rate of 100,000
Options per month for each of the first 10 months of employment;
(2) 250,000 Options exercisable at $1.10, vesting following the first 4
months of employment;
(3) 250,000 Options exercisable at $1.10, vesting upon completion of the
first 12 months of employment;
(4) 500,000 Options exercisable at $8.00, vesting at the end of 18 months
of employment;
(5) The Options and the Shares underlying the Options will be subject to
the same piggyback or other registration rights which are afforded to any of the
Founding Shareholders of the Company.
8. MISCELLANEOUS
8.1. Notices. All notices or communications hereunder shall be in
writing, addressed as follows:
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To the Company:
YouNetwork Corporation
000 Xxxx 00xx Xxxxxx 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx
Attention: Xxxx X. Xxxxxx, President
With a copy to:
Xxxxxxxxx, Xxxxxxx & Xxxxxxx, P.C.
000 Xxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxxxxx
To the Executive:
Xxxxxx Xxxxxxxxxx
000 Xxxx 00xx Xxxxxx
Xxx. 00X
Xxx Xxxx, XX 00000
With a copy to:
Xxxxxx Xxxxxxxx Frome Xxxxxxxxxx & Xxxxxxx, LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxx, Esq.
Any such notice or communication shall be sent certified or registered
mail, return receipt requested, addressed as above (or to such other address as
such party may designate in writing from time to time), and the actual date of
receipt, as shown by the receipt therefor, shall determine the time at which
notice was given.
8.2. Severability. If a court of competent jurisdiction determines
that any term or provision hereof is invalid or unenforceable, (a) the remaining
terms and provisions hereof shall be unimpaired and (b) such court shall have
the authority to replace such invalid or unenforceable term or provision with a
term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision.
8.3. Assignment. This Agreement shall inure to the benefit of the
heirs and representatives of the Executive and the assigns and successors of the
Company, but neither this Agreement nor any rights hereunder shall be assignable
or otherwise subject to hypothecation by the Executive and/or the Company.
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8.4. Entire Agreement. This Agreement represents the entire
agreement of the parties and shall supersede any and all previous contracts,
arrangements or understandings between the Company and the Executive, including
the Prior Agreement. The Agreement may be amended at any time by mutual written
agreement of the parties hereto.
8.5. Withholding. The Company shall be entitled to withhold, or
cause to be withheld, from payment any amount of withholding taxes required by
law with respect to payments made to the Executive in connection with his
employment hereunder.
8.6. Governing Law. This Agreement shall be construed, interpreted,
and governed in accordance with the laws of New York without reference to rules
relating to conflict of law.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed and the Executive has hereunto set his hand, as of the day and year
first above written.
YOUNETWORK CORPORATION
By:______________________________________
Name:
Title:
XXXXXX X. XXXXXXXXXX
_________________________________________
Xxxxxx X. Xxxxxxxxxx
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