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EXHIBIT 10.17
INTERNATIONAL TRADING & MANUFACTURING CORPORATION
EXECUTIVE EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT between International Trading & Manufacturing Corporation,
a Nevada corporation ("ITM" or the "COMPANY") and Xxxxxx Xxxxxxx, ("EXECUTIVE")
dated as of January 1, 1999 (the "EFFECTIVE DATE") .
WHEREAS, ITM wishes to employ Executive and Executive wishes to be employed by
ITM, all on the terms and conditions set forth herein;
NOW THEREFORE, in consideration of the mutual covenants set forth below and for
other good and valuable consideration, the adequacy and sufficiency is hereby
acknowledged, the parties agree as follows:
1) POSITION AND TERM:
A) ITM hereby employs Executive for three (3) years from the Effective Date
(the "TERM") as Senior Vice President Sales & Marketing to provide
executive services in connection with the development of its Baby Genius
business and perform such other duties consistent with Executive's
office as may be directed by the CEO, President, CFO or the Board of
Directors.
b) As an officer of the Company Executive may contractually bind the
Company subject to prior written authorization from the CEO, President,
CFO or the Board of Directors.
2) EXECUTIVE TO DEVOTE FULL TIME TO COMPANY. Executive shall devote full time,
attention, and energies to the business of the Company, and, during this
employment, will not engage in any other business activity, regardless of
whether such activity is pursued for profit, gain, or other pecuniary
advantage. Executive is not prohibited from making personal investments in
any other businesses provided those investments do not require active
involvement in the operation of said companies.
3) COMPENSATION AND BENEFITS: ITM shall pay, provide and grant to Executive the
following salary and benefits:
a) Annual Salary: $110,000
b) Commissions:
i) Commissions of 4% on net sales (gross sales minus returns,
discount allowances, chargebacks and bad debt) by the Company to
accounts procured by Executive
ii) Commissions of 1% on net sales by the Company to all other
accounts other than (A) net sales under clause (i) above and (B)
net sales to Target, Shopko, RiverTown, Skandisk and Pamida.
Commissions shall be paid to Executive on a calendar quarterly basis
with respect to net sales made in such quarter not earlier than 30 days
after the Company receiving actual
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payments with respect to such net sales. Commission payments shall be
accompanied by a statement detailing net sales and payments received for
the period in question.
c) Grant of Options: A grant of options as provided in the Non-Qualified
Stock Option Agreement attached hereto as Exhibit A and subject to the
terms and conditions of the Company's Non-Qualified Stock Option Plan
attached hereto as Exhibit B.
d) Medical and Other Benefits: As determined by the Board in its sole
discretion, provided that all benefits are on terms no less favorable
than those provided to all other executives, including senior
executives, of the Company, including, to the extent applicable:
i) Medical and health insurance for Executive and dependants;
ii) Medical expense reimbursement plan;
iii) Retirement, pension and 401(k) plans; and
iv) Life, disability and key-man insurance.
e) Vacation: Three (3) weeks per year, any unused days of which may be
rolled-over into following year; and three (3) personal days.
4) Other Benefits/ Reimbursement: Reimbursement of reasonable out-of-pocket
expenses incurred on Company business and pre-approved in writing by the
CEO, President or CFO of the Company.
5) DEATH BENEFITS. Should Executive die during the term of employment, the
Company shall pay to Executive's estate any compensation and other benefits
due through the end of the month in which death occurred.
6) TERMINATION.
a) Termination by Company Without Cause; Termination by Executive for Good
Reason
i) Notwithstanding anything to the contrary herein and subject to
applicable law, the Company may terminate this Agreement without
cause at any time upon thirty (30) days' prior written notice to
Executive.
ii) Notwithstanding anything to the contrary herein, Executive may
terminate this Agreement for Good Reason at any time upon thirty
(30) days' prior written notice to the Company. "GOOD REASON"
means:
(1) the assignment to Executive of any duties inconsistent with his
duties described in Section 1) above or any removal of Executive
from or any failure to re-elect Executive to his office and
position described in Section 1) above, except in connection with
promotions to higher office;
(2) the failure by the Company to maintain and to continue
Executive's participation in the Company's benefit or
compensation plans as in effect immediately prior to
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the Change in Control (including but not limited to bonus and
incentive compensation plans, stock option, bonus, award and
purchase plans, life insurance, medical, health and accident, and
disability plans);
(3) the taking of any action by the Company which would adversely
affect Executive's participation in or reduce Executive's
benefits under any of the Company's benefit or compensation plans
(including but not limited to bonus and incentive compensation
plans, stock option, bonus, award and purchase plans, life
insurance, medical, health and accident, and disability plans);
(4) the failure by the Company to obtain the assumption of this
Agreement by any successor as required under Section 12) c)
below.
iii) If Executive is terminated without cause or resigns for Good
Reason, the Company shall continue to provide the compensation and
benefits set forth in Section 3) for the remainder of the Term,
except that medical and health insurance benefits shall only be
provided until the earlier of (1) the end of the Term and (2) the
date on which Executive and his dependants are fully covered under
the medical insurance plan of a new employer.
b) Termination by Executive. Executive may terminate this Agreement upon
thirty (30) days' prior written notice to the Company. Executive may at
his election and subject to the Company's consent, perform his duties
through to the termination date and the Company shall continue to pay
and provide Executive with all of the compensation and benefits set
forth in Section 3) through to the termination date, but Executive shall
not receive any severance allowance.
c) Termination by Company for Cause. Notwithstanding anything to the
contrary contained herein and subject to applicable law, the Company may
terminate the Executive's employment with immediate effect if the
Company shall determine in good faith that any of the following has
occurred: (i) acts or omissions by the Executive which constitute
material misconduct or a knowing violation of a material written policy
of the Company or any of its subsidiaries (provided Executive has been
provided with a copy of such material written policy), (ii) the
Executive or any affiliated or related person or entity receiving a
benefit in money, property or services from the Company or any of its
subsidiaries or from another person dealing with the Company or any of
its subsidiaries, in material violation of applicable law or Company
policy, (iii) an act of fraud, conversion, misappropriation, or
embezzlement by the Executive or his conviction of, or entering a guilty
plea or plea of no contest with respect to, a felony, or the equivalent
thereof, (iv) a material breach by the Executive of any provision of
Section 8 hereof, (v) the Executive's failure or refusal (whether
intentional, reckless or negligent) to perform his duties under this
Agreement or (vi) any other breach by the Executive of this Agreement in
any material respect. In no event shall the Executive's termination by
the Company be considered to have been for cause if such termination
took place as a result of (1) the Executive's bad judgment or negligence
or (2) any act or omission without intent of gaining a profit to which
the Executive was not legally entitled or (3) any act or omission
believed by the Executive in good faith to have been in, or not opposed
to, the interests of the Company. If Executive is terminated for cause,
he shall be entitled to the compensation and other benefits set forth in
Section 3) through the last date of
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Executive's employment. Upon payment of all obligations under this
Agreement that are then outstanding, this Agreement shall terminate.
Notice of such termination shall be given to Executive in writing,
specifying the reasons for such termination.
7) SEVERANCE UPON CHANGE IN CONTROL: As of the effective date of a Change of
Control as defined in the Employment Agreement set forth in Exhibit C
hereto, the Company and Executive shall enter into, and shall be deemed to
have entered into, an Employment Agreement substantially identical to the
agreement set forth in Exhibit C, unless such Employment Agreement has been
terminated as provided therein.
8) PROPRIETARY AND CONFIDENTIAL INFORMATION:
a) All information, data, materials, computer code, intellectual property
rights, customer lists, discoveries, inventions or processes or
improvement in procedures or made or discovered by Executive during the
term of this Agreement in connection with or in any way affecting or
relating to the business of the Company or capable of being used or
adapted for use therein or in connection therewith is and shall
forthwith be deemed to be "CONFIDENTIAL INFORMATION" and shall be
disclosed to the Company and shall belong to and be the absolute
property of the Company.
b) Executive shall, if and when required so to do, whether during or after
the termination of this Agreement, at Employer's expense apply or join
in applying for any patent or trademark registration or other similar
protection in the United States or in any other part of the world for
any such discovery, invention, process or improvement and shall execute
all instruments and do all things necessary to register the patent,
trademark or other similar protection when obtained and all right and
title to an interest in the same in the Company absolutely and as sole
beneficial owner.
c) Executive shall not at any time either during the term of this
Agreement or any extension thereof or after the termination of the
employment for any reason (i) divulge any Confidential Information or
other affairs or secrets of the Company to any other company, person or
persons without the previous consent in writing of the Company or (ii)
use or attempt to use any information which Executive may acquire in the
course of the employment in any manner which may injure or cause loss or
be calculated to injure or cause loss to the Company.
d) Upon the termination of this Agreement for any reason, Executive shall
resign without claim for compensation from as a director (if applicable)
of the Company and from all offices held by Executive in the Company,
and in the event of Executive failing to do so the Company is hereby
irrevocably authorized to appoint some person in Executive's name and on
Executive's behalf to execute any documents and to do all things
required to give effect to the provisions of this Section.
e) Upon the termination of this Agreement for any reason, Executive shall
deliver to the Company all documents used by Executive in the course of
the Company's business, including but without limiting the foregoing,
all price lists, mailing lists, customer, client or supplier lists,
sales information, catalogues, diaries, log books, computer software and
computer data.
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f) Should Executive reveal or threaten to reveal any Confidential
Information, the Company shall be entitled to an injunction restraining
the Executive from disclosing same, or from rendering any services to
any entity to whom such information has been or is threatened to be
disclosed. The right to secure an injunction is not exclusive, and the
Company may pursue any other remedies it has against the Executive for a
breach or threatened breach of this provision, including the recovery of
damages from the Executive.
9) RESTRICTIVE COVENANT: Executive expressly agrees that it shall not at any
time for one (1) year after the termination of the employment (i) undertake
or carry on or be employed or directly or indirectly be concerned or
interested either as employer, Executive, consultant, director or
shareholder or (ii) for one (1) year after the termination of the employment
attempt in any way whatsoever to obtain customers or clients of the Company,
in either case in or for any enterprise, person, firm or company, the
principal business of which involves (A) the production or development or
the retail or wholesale selling or distribution of goods and services that
are substantially similar to or in competition with those sold or provided
by the Company or (B) the sale of memberships in member programs the
benefits of which include the sale or provision of such goods or services.
Executive further agrees during and after the termination of the employment
for any reason, whether for Executive's own account or for any other person
or for any firm or company not to solicit, interfere with or endeavor to
entice away from the Company any employee of the Company or any person, firm
or company who at any time during the continuance of the employment shall
have been a customer or client of the Company.
10) INDEMNITY: Executive shall defend, save and hold harmless the Company from
and against any claims, damages, actions, proceedings or other losses
incurred or suffered by the Company arising out of a material breach by
Executive of the confidentiality provisions herein.
11) GOVERNING LAW; JURISDICTION; VENUE. The Agreement will be interpreted,
construed and enforced in all respects in accordance with the laws of the
State of California, without regard to its conflicts of laws principles.
Each party hereby irrevocably consents to the exclusive jurisdiction of the
state and federal courts San Diego County of the State of California in
connection with any action arising under this Agreement and waives all
defenses regarding the inconvenience of such forum. THE PARTIES IRREVOCABLY
WAIVE THEIR RIGHTS TO A TRIAL BY JURY IN CONNECTION WITH ANY CLAIM,
COUNTERCLAIM OR OTHER PROCEEDINGS ARISING UNDER OR IN CONNECTION WITH THIS
AGREEMENT.
12) MISCELLANEOUS.
a) Integration. This Agreement is the sole contract governing the
relationship between the Company or any predecessor of the Company and
Executive, and supersedes any and all prior agreements, letters of
intent, correspondence, negotiations, discussions or understandings
between the Company or any predecessor of the Company and the Executive.
b) Severability. If any provision of the Agreement is held invalid by a
court with jurisdiction over the parties to the Agreement, (i) such
provision will be deemed to be restated to reflect as nearly as possible
the original intentions of the parties in accordance with applicable law
and (ii) the remaining terms, provisions, covenants and restrictions of
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this Agreement will remain in full force and effect. If this Agreement
is held invalid or cannot be enforced, then to the full extent permitted
by law any prior agreement between the Company (or any predecessor
thereof) and the Executive shall be deemed reinstated as if this
Agreement had not been executed.
c) Successors. The Company's rights and obligations under this Agreement
will inure to the benefit and be binding upon the Company's successors
and assignees.
d) Amendments. This Agreement may be altered only by a written agreement
signed by the party against whom enforcement of any waiver, change,
modification, extension, or discharge is sought.
e) Notices. Any notice, approval, request, authorization, direction or
other communication under this Agreement will be given in writing and
will be deemed to have been delivered and given for all purposes (i) on
the delivery date if delivered personally to the party to whom the same
is directed; (iii) one business day after deposit with a commercial
overnight carrier, with written verification of receipt; or (iii) five
business days after the mailing date, whether or not actually received,
if sent by U.S. mail, return receipt requested, postage and charges
prepaid, or any other means of rapid mail delivery for which a receipt
is available. All notices to the Company will be effective if delivered
to ITM Corporation, 00000 Xx Xxxxxx Xxxx, Xxxxx 000, Xxx Xxxxx, XX
00000, attention: President, or such other address specified by the
Company in writing. All notices to Executive will be effective if
delivered to Executive's last residential address provided to the
Company by Executive.
f) Assignments. The Company will not assign this Agreement or any right,
interest or benefit under this Agreement without the prior written
consent of Executive.
g) Remedies. Except where otherwise specified herein, the rights and
remedies granted to a party under the Agreement are cumulative and in
addition to, and not in lieu of, any other rights or remedies which the
Party may possess at law or in equity.
h) Limited Effect of Waiver By Company. Should Company waive breach of any
provision of this Agreement by the Executive, such waiver will not
operate or be construed as a waiver of further breach by the Executive.
i) Counterparts. The Agreement may be executed in counterparts, each of
which will be deemed an original and all of which together will
constitute one and the same document.
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IN WITNESS WHEREOF, parties have signed this Employment Agreement as of the date
first above written.
INTERNATIONAL TRADING & MANUFACTURING CORPORATION
By: /s/ XXXXX XXXXXXX
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Name: Xxxxx Xxxxxxx
Chief Executive Officer
EXECUTIVE
By: /s/ XXXXXX XXXXXXX
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Name: Xxxxxx Xxxxxxx
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