EMPLOYMENT AGREEMENT
--------------------
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into this 1st
day of January 2000 by and between 5TH AVENUE CHANNEL CORP. (the "Company"), a
Florida corporation and Xxxx Xxxxxxxxx (the "Employee").
WITNESSETH:
-----------
WHEREAS, subject to the terms and conditions hereinafter set forth, the
Company desires to employ the Employee as Executive Vice President, and the
Employee desires to be so employed by the Company.
NOW, THEREFORE, in consideration of the mutual promises set forth herein,
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto hereby agree as follows:
1. RECITALS. The foregoing recitals are true and correct and are
incorporated herein by this reference. The Company's Employee Manual (as defined
below) is considered part of this Agreement.
2. EMPLOYMENT. In exchange for the "Compensation" (as hereinafter defined)
and subject to the other terms and conditions hereinafter set forth, the Company
hereby employs the Employee to render the "Employee Duties" (as described in
Section 3 below) as an employee of the Company, and the Employee hereby accepts
such employment.
3. EMPLOYEE DUTIES. For purposes of this Agreement, "Employee Duties"
shall mean serving the Company as Executive Vice President. In this capacity,
Employee will be responsible for such duties and responsibilities that are
customary for such a position as well as such other duties and responsibilities
assigned to Employee from time to time by the President of the Company.
4. TERM. This Agreement shall commence on the date hereof and shall
continue to be in effect for two (2) years from the date of this Agreement
("Term"), unless terminated prior to the end of the Term in accordance with
Section 7 of this Agreement. At the end of the Term, this Agreement shall be
automatically renewed for consecutive additional one-year periods ("Renewal
Terms") unless either party provides written notice of non-renewal to the other
not less than ninety (90) days prior to the end of the Term or any such renewal
term.
5. LOCATION. The Employee will be required to spend his principal time
at the facilities specified by the Company in the Miami area to achieve the
Employee Duties. The Company's activities will be first priority for Employee.
6. COMPENSATION. In exchange for the Employee's performance of the
Employee Duties hereunder, the Company hereby agrees to pay the Employee the
following compensation (collectively, the "Compensation"):
(a) BASE SALARY. The Company shall pay the Employee a gross annual
salary of one hundred and fifty thousand dollars ($140,000) per year (the
"Salary") together with an annual bonus to be based upon performance of the
Company's business operations. Salary shall be paid by the Company in accordance
with the Company's regular payroll practices which at this time are on the 15th
and 30th of each month.
(b) WITHHOLDING. The Company shall deduct or withhold from all
Compensation payable hereunder all amounts required to be deducted or withheld
from Compensation pursuant to state or federal law.
(c) STOCK OPTIONS. Employee shall be granted options to purchase
96,000 shares of the Company's Common Stock for employment for the year 2000 and
96,000 for the year 2001. Stock options for the year 2000 shall be granted at
the fair market value of the stock as of January 31, 2000 and for the year 2001
at the fair market value of the stock as of January 31, 2001. Such grant of
options shall be at no cost to the Employee and shall be otherwise governed by
the terms of the Company's Employee Stock Option Plan as modified from time to
time. Such options vest ratably each month throughout the years 2000 and 2001,
and have an expiration term of five years. All options granted to Employee are
non-dilutable based on the amount of outstanding shares of the Company's Common
Stock as of January 31, 2000. If the Company increases the number of outstanding
shares prior to either the exercise of any of the options by the Employee or the
sale by the Employee of the exercised shares, such amount of options or shares
shall be increased by the percentage increase in the number of outstanding
shares of the Company's Common Stock. The 96,000 options for the year 2000 shall
be registered in the Company's upcoming S-8 registration. In addition, the
Company grants to Employee, for each six months of employment commencing January
1, 2000 25,000 options at an exercise price of $10, 25,000 options at an
exercise price of $15, and 25,000 options at an exercise price of $20. Such
options shall have a three year term and vest ratably over a six month period
from date of grant. All options granted to Employee under this Agreement are
non-dilutable based on the amount of outstanding shares of the Company's Common
Stock as of January 31, 2000. If the Company increases the number of outstanding
shares prior to either the exercise of any of the options by the Employee or the
sale by the Employee of the exercised shares, such amount of options or shares
shall be increased by the percentage increase in the number of outstanding
shares of the Company's Common Stock.
(d) GRANT OF STOCK. In recognition of the Employee's work in 1999,
Company agrees to grant 15,000 shares of the Company's Common Stock. Such shares
will be registered in the SB-2 registration to be amended prior to going
effective with the SEC.
(e) OTHER BENEFITS. The monthly premiums for family health are paid by
the Company. Company will also provide a $1 million dollar life insurance policy
to the beneficiary specified by Employee. Company shall also provide the other
insurance that is the same provided to other senior executives of the Company.
Dental is available to the Employee at the Employee's expense from a plan the
company has negotiated. The company honors 9 holidays. Sick days are allowed at
the rate of 1 per month but are not accruable. The Employee is granted three
weeks of vacation per year. At the end of the year if Employee has not taken a
full three weeks of vacation, at the Employee's option, he may receive the cash
equivalent of such time or accrue the time to the following year. Employee shall
also receive a Company credit card and Company cellular phone. Employee shall
also be entitled to all salary continuation benefits that the Company provides
its senior executives, for any partial or total disability that Employee may
suffer.
(f) COMMISSIONS. The Company agrees that the Employee shall be
entitled to a commission for relationships Employee brings to Company that lead
to a substantive agreement for the Company. Such commission shall be negotiated
on a case by case basis.
2
(g) EXPENSE REIMBURSEMENT. It is contemplated that, in connection with
his employment hereunder, the Employee may incur business, entertainment and
travel expenses. The Company agrees to reimburse the Employee in full for all
preapproved reasonable, ordinary and necessary business, entertainment and other
related expenses, including travel expenses, incurred or expended by him
incident to the performance of his duties hereunder, and incurred or expended in
accordance with the Company's policies with respect to such expenses, upon
submission by the Employee to the Company of such vouchers or expense statements
satisfactorily evidencing such expenses as may be reasonably required by the
Company or its accountants. Such reimbursement shall include a mileage charge
for the use by the Employee of his personal automobile for business purposes
other than for transportation between home and work.
7. TERMINATION.
(a) BY COMPANY - FOR CAUSE. The Company shall have the right to
terminate the employment of the Employee for cause immediately upon providing
written notice to the Employee. For purposes of this Agreement, "cause" shall
mean only the occurrence of any of the following, each of which shall be deemed
a breach of this Agreement:
(i) Employee's failure (other than as a result of illness or
mental or physical disability), within seven (7) days after written notice from
the Company, to cure any material breach of the Employee Duties or the Employee
Manual (as defined below) or any of his other obligations under this Agreement;
(ii) Employee's habitual and material negligence in the
performance of the Employee Duties, Employee Manual or the Employee's negligence
otherwise, which in either event results in a material loss to the Company; In
no event shall the results of the Company's operations or any business judgment
made in good faith by the Executive constitute an independent basis for
termination for cause of the Executive's employment under this agreement.
(iii) Employee's commission of any act of corporate theft,
misappropriation of funds, breach of fiduciary duty as an officer of the Company
or other willful misconduct, act of dishonesty or intentional harm against or to
the Company;
(iv) Employee's conviction of or pleading nolo contendere to any
felony;
(v) Employee's failure to abide by the Company's policies or
procedures, including, but not limited to the Company's policy against
disclosure of "Confidential Information" (as hereinafter defined), sexual
harassment and discrimination, use of corporate resources or property for
personal gain and other policies described in writing by the Company in the
Company's employee manual as modified from time to time ("Employee Manual").
(vi) The Employee's employment under this shall terminate upon
his death. In such event, his estate shall be entitled to receive the Employee's
base salary and other benefits to which the Employee is entitled under this
agreement up to the effective date of such termination.
3
In the event the Company elects to terminate the Employee's
employment hereunder as set forth above, the Company shall give written notice
to such effect to the Employee, which notice shall describe in reasonable detail
the actions of the Employee constituting cause.
(b). SEVERANCE PAY. If this Agreement is terminated by the Company with
or without cause then (without limiting any other rights or claims which
employee may have in respect of the Company's breach of contract or otherwise),
the Employee shall be entitled to receive from the Company the full salary,
stock options and other benefits (including family health insurance or
reimbursement for the cost of COBRA insurance) described in Par. 6 from the date
of such termination through the end of the Term. If the Company elects not to
renew this Agreement at the end of the Term or if this Agreement is terminated
less than one year from the end of the Term, then Employee shall be entitled to
receive from the Company a one year termination bonus of all compensation
described in Par. 6. Such severance shall be paid monthly beginning at
termination or the non-renewal of this Agreement. If this Agreement is
terminated by the Employee without cause, then Employee shall have the right to
retain and receive all options, stock grants and other benefits earned through
the date of termination, but will not be due any severance pay as described in
this paragraph. If this Agreement is terminated by the Employee without cause,
then Employee shall have the right to retain and receive all options, stock
grants and other benefits earned through the date of termination, but will not
be due any severance pay as described in this paragraph.
8. CONFIDENTIAL INFORMATION AND COMPETITION.
(a) CONFIDENTIAL INFORMATION. The Employee hereby acknowledges that he
will or may be making use of, acquiring and adding to confidential information
of a special and unique nature and value affecting and relating to the Company
and its operations, including, but not limited to, its businesses, the
identities of its customers and suppliers, its data base information, prices
paid by the Company for inventory, its business practices, marketing strategies,
expansion plans, contracts, business records and other records, trade secrets,
inventions, techniques, know-how and technologies, whether or not patentable,
and other similar information relating to the Company (all the foregoing
regardless of whether same was known to the Employee prior to the date hereof is
hereinafter referred to collectively as "Confidential Information"). The
Employee further recognizes and acknowledges that all Confidential Information
is the exclusive property of the Company, is material and confidential, and
greatly affects the legitimate business interests, goodwill and effective and
successful conduct of the Company's businesses. Accordingly, the Employee hereby
covenants and agrees that he will use the Confidential Information only for the
benefit of the Company and shall not at any time, directly or indirectly, either
during the Term of this Agreement or afterward, divulge, reveal or communicate
any Confidential Information to any person, firm, corporation or entity
whatsoever, or use any Confidential Information for his own benefit or for the
benefit of others.
(b) COMPETITION. The Employee hereby acknowledges and agrees that the
Company would suffer irreparable injury if the Employee competes with the
Company. As a material inducement to the Company to enter into this Agreement,
the Employee hereby covenants and agrees that, unless the Company and its
successors and assigns shall cease to engage in its businesses, or unless the
Employee's engagement hereunder is terminated by the Company in violation of
this Agreement or by the Employee in accordance with Section 6(b) hereof, during
the period beginning on the date hereof and continuing until one year following
the date of the expiration or sooner termination of this Agreement, he shall
not:
4
(i) directly or indirectly, divert business from the Company or
its successors or assigns; or
(ii) directly or indirectly, solicit for employment, employ or
otherwise engage the services of, any employees of the Company or its successors
or assigns.
(c) INJUNCTION AND ATTORNEY'S FEES. In view of the irreparable injury
to the Company that would result from a breach or threatened breach of Employee
of the covenants or agreements under Sections 7 (a) or (b) hereof, and because
there is not an adequate remedy at law to protect the Company from the ongoing
breach of those covenants, the Employee acknowledges that a permanent injunction
is an appropriate remedy for such a breach or threatened breach. These remedies
shall be in addition to and not in limitation of any other rights or remedies to
which the Company is or may be entitled at law or in equity under this
Agreement. With respect to any such litigation, the provisions of Section 9(m)
hereof shall apply, regardless of whether this Agreement had earlier expired or
been terminated.
(d) REASONABLENESS OF RESTRICTIONS. The Employee has carefully read
and considered the provisions of Sections 7 (a), (b) and (c) hereof and, having
done so, agrees that the covenants set forth in those Sections are fair and
reasonable and are reasonably required to protect the legitimate business
interests of the Company. The Employee agrees that the covenants set forth in
Sections 7 (a), (b) and (c) hereof do not unreasonably impair the ability of the
Employee to conduct any unrelated business or to find gainful work in his field.
The parties hereto agree that if a court of competent jurisdiction holds any of
the covenants set forth in Sections 7 (a) or (b) unenforceable, the court shall
substitute an enforceable covenant that preserves, to the maximum lawful extent,
the scope, duration and all other aspects of the covenants deemed unenforceable,
and that the covenant substituted by the court shall be immediately enforceable
against the Employee. The foregoing shall not be deemed to affect the right of
the parties hereto to appeal any decision by a court concerning this Agreement.
(e) SURVIVAL. This Section 7 shall survive the termination of this
Agreement and the Employee's employment hereunder. The Employee acknowledges and
agrees that the provisions of this Section 7 are specifically intended by both
the Company and the Employee to benefit, and be enforceable by, not only the
Company, but also the Company's successors and assigns.
9. RIGHTS TO INVENTIONS, PATENTS AND COPYRIGHTS.
(a) The Employee shall promptly disclose in writing to the Company:
all ideas, inventions, discoveries, devices, machines, apparatus, methods,
compositions, know-how, works, processes and improvements to any thereof,
whether or not patentable or copyrightable, that he may conceive, make, develop,
invent, reduce-to-practice, author or discover, whether solely or jointly or
commonly with others, during his employment with the Company, or within one
calendar year following the termination of his employment with the Company,
which relate to the business of the Company at the time of termination (the
items specified in this Section 8(a) are hereinafter collectively referred to as
"Inventions"). All Inventions are the sole and exclusive property of the
Company.
(b) The Employee shall promptly assign, transfer and set over unto the
Company, its successors and assigns, all of his rights, title and interest in
and to all Inventions, all applications for letters patent or copyrights,
foreign and domestic, which have or may be filed on such Inventions, all
copyrights, all letters patent of the United States and its territorial
5
possessions and all letters patent of foreign countries which may be granted
therefor, and all reexaminations and reissues of said letters patent, including
the subject matter of any and all claims which may be obtained in every such
domestic and foreign patent, the same to be held and enjoyed by the Company for
its own and exclusive use and advantage, and for the exclusive use and advantage
of its successors, assigns and other legal representatives, to the full end of
the term or terms for which said copyrights and letters patent of the United
States, territories and foreign countries are or may be granted, reexamined or
reissued, as fully and entirely as the same would have been held and enjoyed by
the Employee, if the assignment had not been made.
(c) The Employee further covenants and agrees that he will, during and
subsequent to the Term hereof, without demanding any other consideration
therefor, at any time, upon request, execute, or cause to be executed, and
deliver any and all papers that may be necessary or desirable to perfect the
title to any Invention and to such letters patent and copyrights as may be
granted therefor, in the Company, its successors, assigns or other legal
representatives, and that if the Company, its successors, assigns, or other
legal representatives shall desire to file any subsequent or derivative
application, or to secure a reissue or reexamination of such letters patent, or
to file a disclaimer relating thereto, the Employee will upon request, sign, or
cause to be signed, all papers, make or cause to be made all rightful oaths, and
do all lawful acts requisite for such action.
(d) The Employee does further covenant and agree, that he will, at any
time during and subsequent to the Term hereof, upon request, communicate to the
Company, its successors, assigns, or other legal representatives, such facts
relating to the Inventions, letters patent and copyrights or to the history
thereof, as may be known to her, and testify, at the Company's expense, as to
the same in any interference or other litigation or proceeding in which the
Employee is not a party and does not have an interest, when requested to do so.
10. INDEMNIFICATION.
(a) The Company shall defend, indemnify and hold Employee harmless if
Employee was or is a party or is threatened to be made a party to any action,
claim, suite or proceeding, whether civil, criminal, administrative or
investigative (including any action by or in the right of the Company by reason
of the fact that he is or was a director, officer, committee chairman, General
Counsel or member, employee, or agent of the Company., including the fact that
he was performing requested services of the Company, or is or was serving at the
request of the Company as a director, officer, employee or agent of another
business, foreign or domestic, profit or nonprofit corporation, partnership,
joint venture or other enterprise. This indemnification shall cover and include
expenses (including attorneys' fees, judgments, fines and amounts paid in
settlement) actually and reasonably incurred by him in connection with such
action, claim, suit or proceeding, regardless of whether such expenses and
liabilities are otherwise covered by insurance in favor of Employee.
(b) If the Company's indemnity obligations under this Section are not
otherwise insured, the Corporation shall be self-insured to the extent necessary
to provide such indemnity protection.
(c) The indemnification and advancement of expenses provided for
herein shall not be deemed exclusive of any other rights to which Employee may
be entitled, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall continue as to Employee
and Employee has ceased to be a director, officer, committee
6
chairman, or member, employee, or agent and after Employee ceases serving at the
request of the Company as a director, officer, employee or agent of another
business, foreign or domestic, profit or nonprofit corporation, partnership,
joint venture or other enterprises, and shall inure to the benefit of his heirs
and legal representatives.
(d) The Company shall procure insurance on Employee in his positions
as director, officer, committee chairman, or member, employee, or agent of the
Company, or if Employee was serving at the request of the Company as a director,
officer, employee or agent of another business, foreign or domestic, profit or
nonprofit corporation, partnership, joint venture or other enterprise against
any liability asserted against or incurred by him in any such capacity, or
arising out of his status as such, whether or not the Company would have the
power to indemnify him against such liability under the business corporation law
of Florida or professional laws of Florida.
(e) To the extent that any portion of this Section is found to be
illegal or beyond the permissible limits of indemnification for any reason, such
portion shall be deemed to be modified or amended, or if necessary deleted, to
the extent required to comply with applicable law, it being the intent of this
Section to afford indemnification of Employee to the full extent provided for
herein.
11. DISABILITY.
(a) If Employee becomes partially disabled and unable to effectively
perform the work or totally disabled, he shall continue to be an employee of the
Company and shall be entitled to compensation under this Employment Agreement
for a period of twelve (12) months.
(b) At the end of the twelve month (12) period following the onset of
the disability, the disabled Employee shall cease to be an employee of the
Company. If Employee thereafter ceases to be disabled, he may, upon such terms
and conditions as may be agreed upon between him and the Company, resume a full
or part-time position with the Company.
(c) If Employee dies after becoming disabled, his estate shall be
entitled to the payments provided for by Section 6 for the length of the Term,
which Employee would have received if he had lived.
12. MISCELLANEOUS.
NOTICES. (a) All notices, demands or other communications given
hereunder shall be in writing and shall be deemed to have been duly given only
upon hand delivery thereof or upon the first business day after mailing by
United States registered or certified mail, return receipt requested, postage
prepaid, addressed as follows or to such other address or such other person as
any party shall designate, in writing, to the other for such purposes and in the
manner hereinabove set forth.
To Company: 5th Avenue Channel, Inc.
0000 X.X. 000xx Xxxxxx
Xxxxx Xxxxx Xxxxx, XX 00000
To Employee: Xxxx Xxxxxxxxx
7
(a) ENTIRE AGREEMENT. This Agreement sets forth all the promises,
covenants, agreements, conditions and understandings between the parties hereto
with respect to the subject matter contained herein, and supersedes all prior
and contemporaneous agreements, understandings, inducements or conditions with
respect to said subject matter, expressed or implied, oral or written, except as
herein contained.
(b) AMENDMENT. The parties hereby irrevocably agree that no attempted
amendment, modification, termination, discharge or change (collectively,
"Amendment") of this Agreement shall be valid and effective, unless the parties
shall unanimously agree in writing to such Amendment.
(c) NO WAIVER. No waiver of any provision of this Agreement shall be
effective unless it is in writing and signed by the party against whom it is
asserted, and any such written waiver shall only be applicable to the specific
instance to which it relates and shall not be deemed to be a continuing or
future waiver.
(d) GENDER AND USE OF SINGULAR AND PLURAL. All pronouns shall be
deemed to refer to the masculine, feminine, neuter, singular or plural, as the
identity of the party or parties, or their personal representatives, successors
and assigns may require.
(e) COUNTERPARTS. This Agreement and any amendments may be executed in
one or more counterparts, each of which shall be deemed an original, but all of
which together will constitute one and the same instrument.
(f) HEADINGS. The article and section headings contained in this
Agreement are inserted for convenience only and shall not affect in any way the
meaning or interpretation of the Agreement.
(g) GOVERNING LAW. This Agreement shall be construed in accordance
with the laws of the State of Florida and any proceeding arising between the
parties in any manner pertaining or related to this Agreement shall, to the
extent permitted by law, be held in Miami-Dade County, Florida.
(h) FURTHER ASSURANCES. The parties hereto will execute and deliver
such further instruments and do such further acts and things as may be
reasonably required to carry out the intent and purposes of this Agreement.
(i) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and shall be binding upon any of the Company's successors or assigns.
(j) PROVISIONS SEVERABLE. This Agreement is intended to be performed
in accordance with, and only to the extent permitted by, all applicable laws,
ordinances, rules, and regulations of the jurisdiction in which the parties do
business. If any provision of this Agreement, or the application thereof to any
person or circumstances shall, for any reason or to any extent, be invalid or
unenforceable, the remainder of this Agreement and the application of such
provision to other persons or circumstances shall not be affected thereby, but
rather shall be enforced to the greatest extent permitted by law.
(k) DISPUTE RESOLUTION AND ARBITRATION. The Parties shall be free to
bring all differences of interpretation and dispute arising in connection with
this Agreement to the attention of the other at any time without prejudicing
their harmonious relationship and
8
operations hereunder, and the good offices and facilities of all respective
parties shall be available at all times for the prompt and effective adjustment
of any and all such differences, either by mail, telephone, or personal meeting,
under friendly and courteous circumstances. In the even that any controversy or
claim arising out of the Agreement cannot be settled by the parties hereto, such
controversy or claim will be settled by binding arbitration in accordance with
the then current rules of the American Arbitration Association, in the State of
Florida, United States of America, and judgment upon the award may be entered in
any court having jurisdiction thereof. Each respective party hereby appoints, as
its agent for service for process in connection with any action brought by any
other party, hereunder, the Secretary of State of the state of their respective
addresses of record.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date above written.
EMPLOYEE: 5TH AVENUE CHANNEL CORP.,
/s/ Xxxx Xxxxxxxxxxx By: /s/ Xxx Xxxxx
------------------------------ ---------------------------------
Xxxx Xxxxxxxxx Xxx Xxxxx
President
9
