Exhibit 10.1
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is made as of April 19,
2001, by and among STONEPATH GROUP, INC., a Delaware corporation (the
"Employer"), and XXXXXX X. XXXXX, an individual resident in the Commonwealth of
Pennsylvania (the "Executive").
RECITALS
WHEREAS, Executive is and has been employed by the Employer and is
currently Chief Executive Officer of the Employer;
WHEREAS, Employer and Executive have heretofore entered into and
executed an Employment Agreement dated as of June 1, 1999 (the "Employment
Agreement");
WHEREAS, Employer and Executive desire to amend and restate the
Employment Agreement on the terms and conditions hereafter expressed;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto, intending to be legally bound, hereby
agree as follows:
The parties, intending to be legally bound, agree as follows:
1. DEFINITIONS
For the purposes of this Agreement, the following terms have the
meanings specified or referred to in this Section 1:
"Agreement" means this Employment Agreement, as amended from time
to time.
"Basic Compensation" shall include all items of base and bonus
compensation and benefits provided for in Section 3.1 of this Agreement.
"Benefits" is defined in Section 3.1(b).
"Board of Directors" means the board of directors of Employer.
"Change of Control" shall be deemed to have occurred if (A) any
"Person" (as the term "Person" is used in ss.13(d) and ss.14(d) of the
Securities Exchange Act of 1934), except for Executive, becomes, after the date
hereof, the beneficial owner, directly or indirectly, of securities of Employer
representing 50% or more of the combined voting power of Employer's then
outstanding securities; (B) there occurs a contested proxy solicitation of
Employer's shareholders that results in the contesting party obtaining the
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ability to vote securities representing 50% or more of the combined voting power
of Employer's then outstanding securities; (C) there occurs a sale, exchange,
transfer or other disposition of 50% or more in value of the assets of Employer
to another Person or entity, except to an entity controlled directly or
indirectly by Employer; (D) there occurs a merger, consolidation or other
reorganization of Employer in which Employer is not the surviving entity and in
which the historic shareholders of Employer continue to own less than 50% of the
outstanding securities of the acquiror immediately following the transaction, or
a plan of liquidation or dissolution of Employer other than pursuant to
bankruptcy or insolvency laws is adopted; or (E) during any period of twelve
consecutive months, individuals who at the beginning of such period constituted
the Board cease for any reason to constitute at least a majority thereof unless
the election, or the nomination for election by Employer shareholders, of each
new director was approved by a vote of at least a majority of the directors then
still in office who were directors at the beginning of the period.
Notwithstanding the foregoing, a "change of control" shall not be deemed to have
occurred for purposes of this Agreement (i) in the event of a sale, exchange,
transfer or other disposition of substantially all of the assets of Employer to,
or a merger, consolidation or other reorganization involving Employer and
Executive, alone or with other officers of Employer, or any entity in which
Executive (alone or with other officers) has, directly or indirectly, at least a
25% equity or ownership interest; or (ii) in a transaction otherwise commonly
referred to as a "management leveraged buy-out".
"Code" means the Internal Revenue Code of 1986, as amended.
"Disability" shall mean once the Executive is unable to perform the
essential functions of the Executive's duties with reasonable accommodation for
180 consecutive days, or 180 days during any twelve-month period. The disability
of the Executive will be determined by a medical doctor selected by written
agreement of the Employer and the Executive upon the request of either party by
notice to the other. If the Employer and the Executive cannot agree on the
selection of a medical doctor, each of them will select a medical doctor and the
two medical doctors will attempt to make a determination of disability. If they
cannot agree, they will select a third medical doctor who will determine whether
the Executive has a disability. The determination of the third medical doctor
selected under this provision will be binding on both parties. The Executive
must submit to a reasonable number of examinations by the medical doctor making
the determination of disability under this provision, and the Executive hereby
authorizes the disclosure and release to the Employer of such determination and
all supporting medical records. If the Executive is not legally competent, the
Executive's legal guardian or duly authorized attorney-in-fact will act in the
Executive's stead for the purposes of submitting the Executive to the
examinations, and providing the authorization of disclosure, required under this
provision.
"Effective Date" means April 19, 2001.
"Employment Period" means the term of the Executive's employment
under this Agreement as defined in Section 2.2.
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"For Cause" shall mean: (a) the Executive's material breach of this
Agreement; (b) a judicial finding in a civil context, or a conviction or entry
of a guilty plea or plea of no contest in a criminal context, with respect to
theft, fraud, or misappropriation (or attempted misappropriation) by Executive
of any of the Employer's funds or property; or (c) a conviction or entry of a
guilty plea or plea of no contest with respect to a felony or other crime
involving moral turpitude for which imprisonment is a possible punishment;
provided, however, that in order to terminate Executive for cause, Employer must
first provide Executive with written notice of the particular for cause events
alleged by Employer, and provide Executive with thirty (30) days in which to
cure the alleged for cause event or events.
"Good Reason" shall mean, unless Executive shall have consented in
writing thereto, any of the following: (i) a reduction in Executive's title,
duties, responsibilities or status which are inconsistent with Executive's
position with Employer; (ii) the assignment to Executive of duties inconsistent
with the duties normally assigned to Persons in offices of similar position to
that of Executive; (iii) a reduction by Employer in Executive's Base Salary;
(iv) a requirement that Executive relocate outside the metropolitan Philadelphia
area (defined as the 00 xxxx xxxxxx xxxxxxxxxxx xxx Xxxxxx Xxxx Xxxxxxxxxxxx
xxxx) not acceptable to Executive or the imposition on Executive of business
travel obligations requiring travel away from the Executive's office on a
regular basis for more than 25% of regular business hours; (v) the taking of any
action by the Employer which would adversely affect Executive's Basic
Compensation or participation in or materially reduce his benefits under any of
Employer's benefit plans or deprive him of any material fringe benefit enjoyed
by him; or (vi) the breach by Employer of any agreement or obligation under this
Agreement after notice and a thirty day right to cure.
"Person" means any individual, corporation (including any
non-profit corporation), general or limited partnership, limited liability
company, joint venture, estate, trust, association, organization, or
governmental body.
2. EMPLOYMENT TERMS AND DUTIES
2.1 EMPLOYMENT
The Employer agrees to, and hereby does, continue to employ
the Executive for the term of this Agreement upon the terms and conditions set
forth in this Agreement.
2.2 TERM
Subject to the provisions of Section 6, the Employment Period
for the Executive's employment under this Agreement will be three (3) years,
beginning on the Effective Date, and shall be automatically renewed for
consecutive one-year renewal terms thereafter, unless, not less than sixty (60)
days prior to the end of the original term or any renewal term, either party
gives the other party written notice of termination of employment which
termination shall be effective as of the end of such original term or renewal
term. In the event of a Change of Control during the original term or any
renewal term, the Employment Period for the Executive's employment under this
Agreement will be automatically extended to a three (3) year term.
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2.3 DUTIES
The Executive will continue to have such duties as are
assigned or delegated to the Executive by the Board of Directors, and will serve
as the Chief Executive Officer of Employer. The Executive agrees to perform in
good faith and to the best of his ability all services which may be required of
him hereunder and will devote such efforts and business time, skill, attention
and energies as are reasonably necessary to perform his duties and
responsibilities under this Agreement and to promote the success of the
Employer's business. The Executive shall be employed on a full-time basis by
Employer and shall be located at Employer's office within the metropolitan
Philadelphia area. Executive may continue to engage in the following activities:
(a) attending board of directors' or like meetings of other companies in which
Executive or an affiliate has invested or in which Executive has been elected to
serve, and (b) managing his personal investments, provided that such activities
set forth in (a) and (b) (individually or collectively) do not materially and
adversely interfere or conflict with the performance of Executive's duties or
responsibilities under this Agreement.
3. COMPENSATION
3.1 BASIC COMPENSATION
(a) Base Salary. The Executive will be paid an annual base
salary of $210,000, subject to adjustment as provided below (the "Salary"),
which will be payable in equal periodic installments according to the Employer's
customary payroll practices, but no less frequently than monthly. The
Executive's Salary will be reviewed by Employer's Board of Directors not less
frequently than annually, and may be adjusted upward or downward by Employer,
but in no event will the Base Salary be less than $210,000 per year.
(b) Bonus. Executive shall be eligible to receive annual bonus
compensation at the discretion of Employer's Board of Directors and in
accordance with Employer's executive bonus or incentive compensation plan that
may be in effect from time to time. In addition, Executive will be eligible to
participate in an annual incentive plan which will provide an incentive payment
based upon achievement of agreed upon performance goals. The Compensation
Committee of Employer will determine the goals to be measured against as well as
the target incentive (the "Target Incentive"), expressed as a percentage of base
salary, to be initially set at 50% of Base Salary, subject to adjustment from
time to time.
(c) Benefits.
(i) The Executive will, during the Employment Period, be
permitted to participate in such pension, profit sharing, bonus (subject to the
provisions of Section 3.1(b), life insurance, hospitalization, major medical,
and other employee benefit plans of the Employer that may be in effect from time
to time, to the extent the Executive is eligible under the terms of those plans
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(collectively, the "Benefits"). The Executive shall also be entitled to such
other fringe benefits as are now or may become available to any of Employer's
other executive officers.
(ii) During the term of this Agreement, the Employer shall
pay the annual premium on a term or other life insurance policy or policies on
the life of Executive in the face amount of Two Million Dollars ($2,000,000),
payable to such beneficiaries as Executive may designate; with the Employer's
responsibility not to exceed an annual payment of $5,000.
(iii) A yearly expense allowance of $12,000 (paid monthly
or quarterly at the discretion of Executive) will be paid by Employer to
Executive to pay for an auto allowance for the cost of maintaining and operating
one automobile for business purposes, dues, assessments and expenses incurred by
the Executive relating to membership or participation in professional or social
groups or organizations which the Executive determines are useful or necessary
for the purpose of promoting and maintaining the business of the Company or for
other travel and entertainment expenses incurred by Executive which he believes
are useful or necessary for the purpose of promoting and maintaining the
business of the Company.
3.2 OPTIONS
(a) Employer has previously granted to Executive options to
purchase 1,200,000 shares of its common stock at an exercise price of $1.00 per
share (the "June 1999 Options"). The June 1999 Options were granted and remain
subject to the terms of a Stand-Alone Option Agreement dated August 31, 2000
which each party hereto confirms remains in full force and effect.
(b) In addition, Employer hereby grants to Executive options
to purchase an additional 250,000 shares of its common stock at an exercise
price of $.60 per share (the "April 2001 Options"). The April 2001 Options shall
be granted under and subject to the Employer's Amended and Restated 2000 Stock
Incentive Plan, and shall be subject to the terms and conditions of the Stock
Option Agreement dated April 19, 2001. The June 1999 Options and the April 2001
Options shall hereinafter be referred to in the aggregate as the "Options."
The Options shall be covered by a Registration Statement on Form S-8 to
be filed with the Securities and Exchange Commission as promptly following the
Effective Date as is practicable.
Executive shall be entitled to registration rights with respect to the
shares of Employer's common stock issuable upon exercise of the Options in the
following manner: (i) Employer shall be obligated at its sole cost and expense
to include resale of the shares issuable upon exercise of the Options in any
registration statement filed with the Securities and Exchange Commission
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following the date hereof to the extent that the registration statement includes
the resale of shares of common stock on behalf of any other executive officer of
Employer; and (ii) in the event registration pursuant to subparagraph (i) has
not occurred on or before the second anniversary of the Effective Date, the
Employer shall be obligated to include resale of the shares issuable upon the
exercise of the Options in a registration statement to be filed with the
Securities and Exchange Commission and declared effective by no later than the
second anniversary of the Effective Date at the Employer's sole cost and
expense.
4. EXPENSE REIMBURSEMENT
The Employer will pay reasonable expenses incurred by the Executive
in the performance of the Executive's duties pursuant to this Agreement,
including without limitation reasonable expenses incurred by the Executive in
attending conventions, seminars, other business meetings and for promotional
expenses, provided that any such activities must be related to Employer's
business and all individual expenses (or those aggregated for a single
convention, seminar or other business trip) greater than $5,000 must be approved
by either Employer's Chief Financial Officer or Employer's Compensation
Committee (or if Employer has no Compensation Committee, its Board of
Directors). The Executive must file expense reports with respect to such
expenses in accordance with the Employer's policies.
5. VACATIONS AND HOLIDAYS
The Executive will be entitled to three (3) weeks' paid vacation
each calendar year in accordance with the vacation policies of the Employer in
effect for its executive officers from time to time. The Executive will also be
entitled to the paid holidays and other paid leave set forth in the Employer's
policies. Vacation days during any calendar year that are not used by the
Executive during such calendar year may be used in any subsequent calendar year;
provided, however, that no more than six (6) weeks' paid vacation may be accrued
or carried forward. Accrued but unused vacation days will be paid for by
Employer in certain instances upon the termination of this Agreement as provided
for in Section 6.2 hereafter.
6. TERMINATION
6.1 EVENTS OF TERMINATION
The Executive's employment pursuant to this Agreement may be
terminated by Employer only on the following grounds:
(a) upon the death of the Executive;
(b) upon the disability of the Executive immediately upon
notice from either party to the other;
(c) For Cause (following the expiration of any applicable
Notice Period from Employer to Executive); and
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(d) at the discretion of Employer other than For Cause.
The Executive may terminate his employment on the following
grounds:
(e) without Good Reason, provided that Executive gives
Employer at least sixty (60) days prior written notice of his termination of
employment; or
(f) for Good Reason (following the expiration of any
applicable Notice Period from Executive to Employer.)
6.2 TERMINATION PAY
Effective upon the termination of this Agreement, the Employer
will be obligated to pay the Executive (or, in the event of his death, his
designated beneficiary as defined below) the compensation provided in this
Section 6.2:
(a) Termination by the Employer For Cause or Termination by
Executive Without Good Reason. If the Employer terminates this Agreement for
cause or Executive resigns or terminates his employment for other than good
reason, the Executive will be entitled to receive his Basic Compensation only
through the date such termination is effective, but will not be entitled to any
accrued bonus compensation for the calendar year during which such termination
occurs, however, will be entitled to retain any bonus compensation paid prior to
such termination.
(b) Termination upon Disability. If this Agreement is
terminated by either party as a result of the Executive's disability, the
Employer will pay the Executive his Basic Compensation through the remainder of
the calendar quarter during which such termination is effective and for the
lesser of (i) six consecutive months thereafter, or (ii) the period until
disability insurance benefits commence under any disability insurance coverage
furnished by the Employer to the Executive. Executive shall also be entitled to
receive that part of the Executive's accrued bonus compensation, if any, for the
calendar year during which his disability occurs, prorated through the end of
the calendar quarter during which his termination is effective. If this
Agreement is terminated as a result of the Executive's disability, Executive
shall fully vest at the time of such termination in and to that number of
Options as if Executive had remained employed by the Employer for a period of
one year following his disability and Executive shall have the full term of such
Options in which to exercise any or all of them, notwithstanding any accelerated
exercise period contained in any such Option.
(c) Termination upon Death. If this Agreement is terminated
because of the Executive's death, the Executive's estate will be entitled to
receive his Basic Compensation through the end of the calendar month in which
his death occurs, and that part of the Executive's accrued bonus compensation,
if any, for the calendar year during which his death occurs, prorated through
the end of the calendar month during which his death occurs. If this Agreement
is terminated as a result of the Executive's death, Executive shall fully vest
at the time of such termination in and to that number of Options as if Executive
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had remained employed by the Employer for a period of one year following his
death and Executive shall have the full term of such Options in which to
exercise any or all of them, notwithstanding any accelerated exercise period
contained in any such Option.
(d) Termination by Executive For Good Reason or Termination by
Employer Without Cause Prior to a Change of Control. If prior to a Change of
Control this Agreement is terminated by Executive for Good Reason, or if this
Agreement is terminated by Employer other than For Cause then (i) Employer shall
continue to pay to Executive his Basic Compensation (including for this purpose
the greater of Executive's most recent annual bonus or his Target Incentive
bonus), for the remaining term under this Employment Agreement; and (ii) the
Options plus all other stock, options or other equity rights in Employer which
Executive received in connection with his employment by Employer shall become
immediately 100% vested and Executive shall have the full term of such Options
in which to exercise any or all of them, notwithstanding any accelerated
exercise period contained in any such Option.
(e) Termination by Executive For Good Reason or Termination by
Employer Without Cause Following a Change of Control. If following a Change of
Control this Agreement is terminated by Executive for Good Reason or by Employer
other than For Cause, then Employer shall within ten (10) days after the date of
termination pay to Executive in cash: (i) an amount equal to 2.99 times
Executive's Basic Compensation calculated at the rate in effect on the date of
termination; (ii) current and carried-over unused vacation days; and (iii) all
other amounts to which Executive is entitled, including (A) any bonus to which
Executive would have been entitled had he remained employed by Employer for a
period of three (3) years following the date of termination (calculated on an
annual basis as the greater of Executive's most recent annual bonus or the
Target Incentive bonus) , (B) any expense reimbursement amounts accrued to the
effective date of termination, and (C) any amounts under any other benefit plan
of the Employer, in each case at the time such payments are due. Also, for three
years following the date of termination, the Employer shall continue to provide
Executive with all fringe benefits or the economic equivalent thereof he was
receiving as of the date of termination, including, without limitation, all
health, life and disability insurance he was receiving immediately prior to the
date of termination, or the economic equivalent thereof, as if he were actually
employed for that period. . Moreover, any Options held by Executive which were
not fully exercisable on the date of Executive's termination pursuant to this
Section 6 shall vest and immediately become fully exercisable by Executive upon
the date of termination, and Executive shall have the following term of such
Options in which to exercise any or all of them, notwithstanding any accelerated
exercise period contained in any such Option.
Executive shall have the right to elect with respect to the payment to
him of 2.99 times his annual Compensation pursuant to Section 6.2(e) above to
take such payment in the form of either (x) a single sum payment in cash or (y)
securities of the Employer equal in value to the amount of such payment, with
such securities valued for purposes hereof at 75% of the average closing price
for the last 20 trading days on the principal exchange on which the securities
were listed. The Employer further agrees to include the shares acquired
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hereunder by Executive, at its sole cost and expense, in a Registration
Statement to be filed with the Securities and Exchange Commission providing for
the resale of such shares in an open market or private transaction, within sixty
(60) days after the date of the distribution of such shares.
7. TAX INDEMNITY PAYMENTS
(a) Anything in this Agreement to the contrary notwithstanding, in
the event it shall be determined that any payment or distribution by Employer or
any affiliates to or for the benefit of Executive, whether paid or payable or
distributed or distributable pursuant to the terms of the Agreement or otherwise
but determined without regard to any additional payments required under this
Section 7 (a "Payment"), would be subject to the excise tax imposed by Section
4999 of the Code or any successor provision (collectively, "Section 4999"), or
any interest or penalties are incurred by Executive with respect to such excise
tax (such excise tax, together with any such interest and penalties, are
hereinafter collectively referred to as the "Excise Tax"), then Executive shall
be entitled to receive an additional payment (a "Gross-Up Payment") in an amount
such that after payment by Executive of all taxes (including any interest or
penalties imposed with respect to such taxes), including, without limitation,
any Federal, state or local income and employment taxes and Excise Tax (and any
interest and penalties imposed with respect to any such taxes) imposed upon the
Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to
the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 7(b), all determinations
required to be made under this Section 7, including whether and when a Gross-Up
Payment is required and the amount of such Gross-Up Payment and the assumption
to be utilized in arriving at such determination, shall be made by Employer's
public accounting firm (the "Accounting Firm") which shall provide detailed
supporting calculations both to Employer and Executive within fifteen (15)
business days of the receipt of notice from Executive that there has been a
Payment, or such earlier time as is requested by Employer. In the event that the
Accounting Firm is serving as accountant or auditor for the individual, entity
or group affecting the Change of Control, Executive may appoint another
nationally recognized public accounting firm to make the determinations required
hereunder (which accounting firm shall then be referred to as the Accounting
Firm hereunder). All fees and expenses of the Accounting Firm shall be borne
solely by the Employer. Any Gross-Up Payment, as determined pursuant to this
Section 7, shall be paid by Employer to Executive within five (5) days of the
receipt of the Accounting Firm's determination. If the Accounting Firm
determines that no Excise Tax is payable by Executive, it shall furnish
Executive with a written opinion that failure to report the Excise Tax on
Executive's applicable federal income tax return would not result in the
imposition of a negligence or similar penalty. Any determination by the
Accounting Firm shall be binding upon Employer and Executive.
(c) Executive shall notify Employer in writing of any claim by the
Internal Revenue Service that, if successful, would require a payment by
Employer, or a change in the amount of the payment by Employer, of the Gross-Up
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Payment and Employer shall be responsible to make such payment to Employer. Such
notification shall be given as soon as practicable after Executive is informed
in writing of such claim and shall apprise Employer of the nature of such claim
and the date on which such claim is required to be paid; provided that the
failure to give any notice pursuant to this Section 7(c) shall not impair
Executive's rights under this Section 7 except to the extent Employer is
materially prejudiced thereby. Executive shall not pay such claim prior to the
expiration of the 30-day period following the date on which Employee gives such
notice to Employer (or such shorter period ending on the date that any payment
of taxes with respect to such claim is due). If Employer notifies Executive in
writing prior to the expiration of such period that it desires to contest such
claim, Executive shall:
(1) give Employer any information reasonably requested by
Employer;
(2) take such action in connection with contesting such claim
as Employer shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with
respect to such claim by an attorney reasonably selected by
Employer;
(3) cooperate with Employer in good faith in order to
effectively contest such claim; and
(4) permit Employer to participate in any proceedings relating
to such claim;
provided, however, that Employer shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold Executive harmless, on an
after-tax-basis, for any Excise Tax or income, employment or other tax
(including interest and penalties with respect thereto) imposed as a result of
such representation and payment of costs and expenses. Without limitation on the
foregoing provisions of this Section 7(c), Employer shall control all
proceedings taken in connection with such contest and, at its sole option, may
pursue or forgo any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect to such claim and may, at its
sole option, either direct Executive to pay the tax claimed and xxx for a refund
or contest the claim in any permissible manner, and Executive agrees to
prosecute such contest to a determination before any administrative tribunal, in
a court of initial jurisdiction and in one or more appellate courts, as Employer
shall determine; provided further, that if Employer directs Executive to pay
such claim and xxx for a refund, Employer shall advance the amount of such
payment to Executive on an interest-free basis and shall indemnify and hold
Executive harmless, on an after-tax basis, from any Excise Tax or income,
employment or other tax (including interest or penalties with respect to any
such taxes) imposed with respect to such advance or with respect to any imputed
income with respect to such advance; and provided further, that any extension of
the statute of limitations relating to payment of taxes for the taxable year of
Executive with respect to which such contested amount is claimed to be due is
limited solely to such contested amount. Furthermore, Employer's control of the
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contest shall be limited to issues with respect to which a Gross-Up Payment
would be payable hereunder and Executive shall be entitled to settle or contest,
as the case may be, any other issue raised by the Internal Revenue Service or
any other taxing authority.
(d) If, after the receipt by Executive of an amount advanced by
Employer pursuant to Section 7(c), Executive becomes entitled to receive, and
receives, any refund with respect to such claim, Executive shall (subject to
Employer's complying with the requirements of Section 7(c)) promptly pay to
Employer the amount of such refund (together with any interest paid or credited
thereon after taxes applicable thereto). If, after the receipt by Executive of
an amount advanced by Employer pursuant to Section 7(c), a determination is made
that Executive shall not be entitled to any refund with respect to such claim
and Employer does not notify Executive in writing of its intent to contest such
denial of refund prior to the expiration of thirty (30) days after such
determination, then such advance shall be forgiven and shall not be required to
be repaid and the amount of such advance shall offset, to the extent thereof,
the amount of Gross-Up Payment required to be paid.
8. CHARACTER OF TERMINATION PAYMENTS; MITIGATION
The amounts payable to Executive upon any termination of this
Agreement shall be considered severance pay in consideration of past services
rendered on behalf of the Employer and his continued service from the date
hereof to the date he becomes entitled to such payments. Executive shall have no
duty to mitigate his damages by seeking other employment and, should Executive
actually receive compensation from any such other employment, the payments
required hereunder shall not be reduced or offset by any such other
compensation.
9. NON-DISCLOSURE COVENANT
Employer and the Executive acknowledge that the services to be
performed by the Executive under this Agreement are unique and valuable and
that, as a result of the Executive's employment, the Executive will be in a
relationship of confidence and trust with Employer and will come into possession
of "Confidential Information" (i) owned or controlled by Employer and its
subsidiaries and affiliates; (ii) in the possession of Employer and its
subsidiaries and affiliates and belonging to third parties; or (iii) conceived,
originated, discovered or developed, in whole or in part, by the Executive. As
used herein "Confidential Information" means trade secrets and other
confidential or proprietary business, technical, personnel or financial
information of Employer, whether or not the Executive's work product, in
written, graphic, oral or other tangible or intangible forms, including but not
limited to specifications, samples, records, data, computer programs, drawings,
diagrams, models, consumer names, ID's or e-mail addresses, business or
marketing plans, studies, analyses, projections and reports, communications by
or to attorneys (including attorney-client privileged communications), memos and
other materials prepared by attorneys or under their direction (including
attorney work product), and software systems and processes that are not readily
available to the public, even it is not specifically marked as a trade secret or
confidential, unless Employer advises the Executive otherwise in writing or
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unless the information has been shared by Employer with entities not bound by
non-disclosure agreements. In consideration of the compensation and benefits to
be paid or provided to the Executive by the Employer under this Agreement, the
Executive agrees not to directly or indirectly use or disclose to anyone, either
during the Employment Period or after the termination of this Agreement, except
in the performance of his duties of his employment with Employer or with
Employer's prior written consent, any Confidential Information of Employer. This
non-disclosure covenant does not apply to information that is disclosed or
becomes public through another source that is not bound by a confidentiality
agreement with Employer; which Executive is required to disclose pursuant to
court order, subpoena or applicable law (provided that Executive will use
reasonable efforts to provide Employer with prompt notice of any such requests
or requirement so that Employer may seek an appropriate protective order); or
which is disclosed in any proceeding to enforce or interpret this Agreement. The
Executive agrees that in the event of the termination of the Executive's
employment for any reason, the Executive will deliver to Employer, upon request,
all property belonging to Employer, including all documents and materials of any
nature pertaining to the Executive's work with Employer and will not take with
him any documents or materials of any description, or any reproduction thereof
of any description, containing or pertaining to any Confidential Information.
10. NON-COMPETITION
During the term of this Agreement the Executive agrees that he
shall not work for or be interested in any business which provides services or
products which are directly competitive with "primary" services or products
offered by the Employer or a subsidiary or affiliate of Employer at the
Executive's termination date (the "Non-Compete Period"). In the event the
Executive is terminated for cause or Executive terminates for other than good
reason, the Non-Compete Period shall be extended until the earlier of (i) one
year; or (ii) the then scheduled expiration of the term of the Agreement. In the
event the Executive is terminated in a manner in which his Basic Compensation is
continued, or he is paid a lump-sum as though his employment had continued, the
Non-Compete Period shall be extended through the period of such compensation
continuation For the purpose of this Agreement, a product or service shall be
deemed "primary" only if such service or product constitutes a primary component
of the core business of Employer on Executive's termination date. For the
further purposes of this Agreement, the term "work for or be interested in any
business" means that the Executive is a stockholder, director, officer,
employee, partner, individual proprietor, lender or consultant with that
business, but not if (i) his interest is limited solely to the passive ownership
of five percent (5%) or less of any class of the equity or debt securities of a
corporation whose shares are listed for trading on a national securities
exchange or traded in the over-the-counter market. In the event that any part of
this Section 10 is adjudged invalid or unenforceable by any court of record,
board of arbitration or judicial or quasi judicial entity having jurisdiction
thereof by reason of length of time, geographical coverage, activities covered,
or for any other reason, then the invalid or unenforceable provisions of this
covenant shall be deemed reformed and amended to the maximum extent permissible
under applicable law and shall be enforced and enforceable as so amended in
accordance with the intention of the parties as expressed herein.
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11. GENERAL PROVISIONS
11.1 INJUNCTIVE RELIEF AND ADDITIONAL REMEDY
The Executive acknowledges that the injury that would be
suffered by the Employer as a result of a breach of the provisions of any
provision of Sections 9 and 10 of this Agreement would be irreparable and that
an award of monetary damages to the Employer for such a breach would be an
inadequate remedy. Consequently Employer will have the right, in addition to any
other rights it may have, to obtain injunctive relief to restrain any breach or
threatened breach or otherwise to specifically enforce any provisions of
Sections 9 and 10 of this Agreement, and the Employer will not be obligated to
post bond or other security in seeking such relief.
11.2 WAIVER
The rights and remedies of the parties to this Agreement are
cumulative and not alternative. Neither the failure nor any delay by either
party in exercising any right, power, or privilege under this Agreement will
operate as a waiver of such right, power, or privilege, and no single or partial
exercise of any such right, power, or privilege will preclude any other or
further exercise of such right, power, or privilege or the exercise of any other
right, power, or privilege.
11.3 NOTICES
All notices, consents, waivers, and other communications
under this Agreement must be in writing and will be deemed to have been duly
given when (a) delivered by hand, (b) sent by facsimile (with written
confirmation of receipt), provided that a copy is mailed by registered mail,
return receipt requested, or (c) when received by the addressee, if sent by a
nationally recognized overnight delivery service (receipt requested), in each
case to the appropriate addresses and facsimile numbers set forth below (or to
such other addresses and facsimile numbers as a party may designate by notice to
the other parties):
If to Employer: Stonepath Group, Inc.
Xxx Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxxxx, XX 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
If to Executive: Xxxxxx X. Xxxxx
0 Xxxxxxxxx Xxxx
Xxxxx, XX 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
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11.4 ENTIRE AGREEMENT; AMENDMENTS
This Agreement and the documents referenced herein, contain
the entire agreement between the parties with respect to the subject matter
hereof and supersede all prior agreements and understandings, oral or written,
between the parties hereto with respect to the subject matter hereof. This
Agreement may not be amended orally, but only by an agreement in writing signed
by the parties hereto.
11.5 GOVERNING LAW
This Agreement will be governed by the laws of the
Commonwealth of Pennsylvania without regard to conflicts of laws principles.
11.6 JURISDICTION
Any action or proceeding seeking to enforce any provision of,
or based on any right arising out of, this Agreement may be brought against
either of the parties in the courts of the Commonwealth of Pennsylvania, City of
Philadelphia, or, if it has or can acquire jurisdiction, in the United States
District Court for the Third Circuit, and each of the parties consents to the
jurisdiction of such courts (and of the appropriate appellate courts) in any
such action or proceeding and waives any objection to venue laid therein.
Process in any action or proceeding referred to in the preceding sentence may be
served on either party anywhere in the world.
11.7 ARBITRATION, OTHER DISPUTES.
In the event of any dispute or controversy arising under or
in connection with this Agreement, the parties shall first promptly try in good
faith to settle such dispute or controversy by mediation under the applicable
rules of the American Arbitration Association before resorting to arbitration.
In the event such dispute or controversy remains unresolved in whole or in part
for a period of thirty (30) days after it arises, the parties will settle any
remaining dispute or controversy exclusively by arbitration in Philadelphia,
Pennsylvania in accordance with the commercial arbitration rules of the American
Arbitration Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction. All administration fees and
arbitration fees shall be paid solely by Employer. Notwithstanding the above,
Employer shall be entitled to seek a restraining order or injunction in any
court of competent jurisdiction to prevent any continuation of any violation of
section 9 or 10 hereof. The prevailing party may recover attorneys' fees in any
dispute or controversy arising under or in connection with this Agreement
11.8 ASSIGNABILITY, BINDING NATURE
This Agreement shall be binding upon and inure to the benefit
of the parties and their respective successors, heirs (in the case of the
Executive) and assigns. No rights or obligations of the Executive under this
Agreement may be assigned or transferred by the Executive other than his rights
to compensation and benefits, which may be transferred only by will or operation
of law.
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11.9 SURVIVAL
The respective rights and obligations of the parties
hereunder shall survive any termination of the Executive's employment to the
extent necessary to the intended preservation of such rights and obligations.
11.10 PRIOR AGREEMENTS
The Executive represents and warrants to Employer that his
execution and performance of this Agreement shall not constitute a breach of any
contract, agreement or understanding, whether oral or written, to which he is a
party or by which he is bound.
11.11 ACKNOWLEDGMENT
The Executive hereby acknowledges and certifies that he has
read the terms of this Agreement, that he has been informed by Employer that he
should discuss it with an attorney of his choice, and that he understands its
terms and effects. The Executive further acknowledges that based on his training
and experience, he has the capacity to earn a livelihood by performing services
as an employee or otherwise in a business that does not violate the provisions
of Section 10. Employer acknowledges that the terms of this Agreement have been
reviewed and approved by its Board of Directors.
11.12 SECTION HEADINGS, CONSTRUCTION
The headings of Sections in this Agreement are provided for
convenience only and will not affect its construction or interpretation. All
references to "Section" or "Sections" refer to the corresponding Section or
Sections of this Agreement unless otherwise specified. All words used in this
Agreement will be construed to be of such gender or number as the circumstances
require. Unless otherwise expressly provided, the word "including" does not
limit the preceding words or terms.
11.13 SEVERABILITY
If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.
11.14 COUNTERPARTS
This Agreement may be executed in one or more counterparts,
each of which will be deemed to be an original copy of this Agreement and all of
which, when taken together, will be deemed to constitute one and the same
agreement. This Agreement (and all other agreements, documents, instruments and
certificates executed and/or delivered in connection herewith) may be executed
by facsimile signatures, each of which shall be deemed an original copy of this
Agreement (or other such agreement, document, instrument and certificate).
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IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first written above.
WITNESS: EMPLOYER:
STONEPATH GROUP INC.
_________________________________
Signature
By:____________________________
_________________________________ Authorized Executive Officer
Print Name
_________________________________
Address
_________________________________
Address
EMPLOYEE:
_______________________________
Xxxxxx X. Xxxxx
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