EMPLOYMENT AGREEMENT
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This Agreement effective this 11th of August, 1999, by and between
Xxxxxxxxx Xxxx, hereinafter called the "Employee", and Xxxxxxxxxx.Xxx, Inc. a
Nevada corporation, hereinafter called the "Employer";
WITNESSETH:
WHEREAS, the Employer is a Nevada corporation engaged in the sale of
consumer goods over the Internet; and
WHEREAS, the Employee has substantial business experience and contacts,
and related business skills which can be utilized in Employer's business; and
WHEREAS, Employer desires to employ Employee and Employee desires to be
employed by the Employer, upon such terms and conditions as set forth herein.
NOW, THEREFORE, in consideration of the premises and of the mutual
promises herein contained, the parties covenant and agree as follows:
1. TERM OF EMPLOYMENT
The term of this Agreement shall be for five (5) years from the date
hereof (the "Term") and shall be automatically renewable for additional terms of
two (2) years without any action on the part of the Employer or Employee,
except, however, that Employer may terminate this Agreement (i) upon not less
than sixty (60) days written notice to Employee and/or (ii) as provided in
Paragraph 5 herein. The Term and any renewals or extensions thereof will
hereafter be collectively referred to as the "Term".
2. COMPENSATION.
During the Term, the Employer agrees to pay the Employee, as
compensation for the services of the Employee, as set forth herein, as follows:
(a) Annual Salary. For all services rendered by the Employee during the
term of this Agreement, Employer shall pay Employee as salary or compensation,
the sum of $75,000 per annum payable bi-weekly or on such basis as Employer
shall pay other executives of the Employer, and continuing until termination of
Employer's employment as set forth herein. Said annual salary shall be increased
by 10% on each one year anniversary of the date of this Agreement. Additional
salary increases, if any, shall be in the discretion of the Employer's Board of
Directors.
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(b) Employee will be reimbursed for all business expenses he reasonably
incurs on behalf and in furtherance of the Employer's business in accordance
with such rules, regulations and procedures as Employer may establish from time
to time.
(c) The Employer may make appropriate deductions from the payments
described in "(a)", "(e)" and "(f)" in this Section 2 to Employee to comply with
all governmental withholding requirements.
(d) Upon execution of this Agreement, Employee shall be granted an
option to purchase 200,000 shares of the Employer's common stock at an exercise
price equal to the fair market value per share of the common stock on the date
of this Agreement. Said option shall be exercisable in whole or in part at any
time by Employee during the Term and any extensions or renewals thereof but only
as long as Employee is employed by Employer. Notwithstanding the foregoing, the
exercise period shall expire ten years from the date of this Agreement.
(e) Bonus. Employee may receive such incentive or performance based
bonus compensation, if any, as the Employer shall deem appropriate.
(f) Fringe Benefits. Employee shall provide Employer with normal fringe
benefits provided to its management personnel including health insurance,
automobile expenses and such other fringe benefits as Employer may determine
from time to time.
(g) Vacation. During the Term, Employee shall be entitled to four (4)
weeks of annual vacation.
3. DUTIES
(a) The Employee accepts employment with the Employer on the terms and
conditions herein set forth and agrees that during the Term, he will devote his
full business time and attention to the rendition of services on behalf of the
Employer and to the furtherance of the Employer's best interests. During said
Term, Employee shall use his best efforts, skills and abilities in the
performance of his services hereunder and to promote the interests of the
Employer. Employee shall not, during the Term hereof, be engaged in any other
business activity, whether such business activity is pursued for gain, profit or
other pecuniary advantage, but this shall not be construed as preventing
Employee from investing his assets in such form or manner as will not require
any services on the part of the Employee in the operation of the affairs of the
companies in which such investments are made, except as may be provided for
herein. Employer acknowledges, however, that Employee is winding down his former
company, Z Michaels, Inc. and agrees that Employee will be permitted to continue
his duties with Z Michaels, Inc. until such time Z Michaels ceases its business.
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(b) The Employee agrees that in the rendition of his such services
under this Agreement, and in all aspects of his employment, he will comply with
such reasonable policies, standards and regulations of the Employer as are from
time to time established.
4. FEES AND INVENTIONS
All fees, compensation, monies and other things of value received or
realized as a result of the rendition of services by the Employee shall belong
to or be paid and delivered to the Employer. Employee agrees that any
inventions, patents, or copyrights related to the Employer's business which are
conceptualized, realized, or otherwise developed by Employee during the Term
shall be deemed to be the property of the Employer and the Employee shall
deliver and otherwise turn over such property to the Employer.
5. TERMINATION OF EMPLOYMENT
(a) This Agreement may be terminated by the Employer at any time
without prior notice for cause upon the occurrence of one or more of the
following events:
(i) In the event the Employee shall be adjudicated guilty of
fraud, dishonesty or other acts of misconduct in the rendering of services on
behalf of the Employer by a court of competent jurisdiction;
(ii) In the event the Employee shall fail or refuse to
faithfully or diligently perform the provisions of this Agreement or the usual
and customary duties of his employment;
(iii) In the event the Employer determines to sell or reduce
to cash substantially all of the assets of Employer, or to distribute the
Employer's assets to its stockholders in liquidation, or to discontinue the
business of the Employer;
(iv) In the event the Employee accepts (without having
obtained the prior written consent of Employer) employment with any other
company;
(v) In the event the Employee shall become (without having
obtained the prior written consent of the Employer) a holder of five (5%) of the
issued and outstanding voting securities of a competitor of the Employer, a
director of a competitor of Employer, or an officer, agent or employee of
another company;
(vi) In the event the Employee fails to render the services
and perform his duties as provided hereunder;
(vii) In the event of any wilful or repeated failure to comply
with any of the rules and policies established by Employer;
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(b) In the event of illness or other incapacity which such illness or
other incapacity shall continue for a period of more than one hundred eighty
(180) days, the Employer shall have the right, on forty five (45) days notice to
Employee, to terminate this Agreement. In such event, the Employer shall be
obligated to pay to Employee his compensation up to the date of termination.
However, if prior to the date specified in such notice, Employee's illness or
incapacity shall have terminated, and he shall have taken up and performed his
duties as required hereunder, Employee shall be entitled to resume his
employment hereunder as though such notice had not been given.
(c) In the event Employer does exercise its right of termination, other
than for cause, all obligations of the parties to this Agreement shall cease,
except for Employer's obligation to pay to Employee the lesser of (i) his
current base salary for one year from the date of termination plus the cash
value of any accrued benefits or (ii) the aggregate amount of his current base
salary plus the cash value if any benefits during the remaining Term, exclusive
of any renewal or extension. In the event of termination for cause, Employer
shall pay Employee any unpaid portion of his annual salary for the period up to
the date of termination and any accrued benefits up to the date of termination.
In the event of any termination of this Agreement for any reason, Employee's
obligations set forth in Sections 7, 8 and 9 herein shall survive such
termination.
6. COVENANT NOT TO COMPETE DURING EMPLOYMENT
During the Term thereafter, while acting as an officer,
director, employee or consultant of the Employer, the Employee shall not,
directly or indirectly, own, manage, operate, join, control or participate in
the ownership management, operation or control of, or be connected as an
officer, employee, partner, licensor, shareholder or in any capacity whatsoever,
with any business under any name similar to the Employer's name or the name of
any other operation which is a parent or subsidiary of or is affiliated with the
Employer.
7. COVENANT NOT TO SOLICIT
(a) During the Term and for one (1) year thereafter, the Employer shall
not, directly or indirectly, induce, influence, combine or conspire with, or
attempt to induce, influence, combine or conspire with any of the officers,
directors or employees of the Employer to terminate their employment with or
compete against (i) the Employer, or (ii) any of its present or future
subsidiaries or affiliates, (iii) or any of the customers of the Employer to
terminate their relationship with Employer, or (iv) any of its present or future
subsidiaries or affiliates. During the Term and at all times thereafter, the
Employee shall not, directly or indirectly, divert or attempt to divert any or
all of such customers' business with the Employer or with any of its present or
future subsidiaries or affiliates from the Employer or from any of its present
or future subsidiaries or affiliates.
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(b) The term "employees" of the Employer as used in this Agreement
shall include any full time or part time employee of the Employer, its
subsidiaries or affiliates.
(c) The term "customers" of the Employer as used in this Agreement
shall be defined and construed to mean any and all persons, firms, corporations,
partnerships, associations or other entities with which the Employer has dealt
in the usual course of its business, notwithstanding that such persons, firms,
corporations, partnerships, associations or other entities may have been induced
to become customers and give their patronage to the Employer by the efforts and
solicitations of Employee, or someone on his behalf, either during the usual
hours of employment of Employee or otherwise.
8. COVENANT NOT TO COMPETE FOLLOWING EMPLOYMENT
The Employee acknowledges that the Employer is in a
competitive business with a national and international market, and that the
public perception of Employee's continued and exclusive association with the
Employer under this Agreement is of a high degree of importance to the Employer.
Therefore, during the Term and for a period of one (1) year immediately after
the termination hereof for any reason whatsoever, the Employee shall not,
directly or indirectly, either for himself or for any other person, firm,
corporation, partnership, association or other entity or in any other capacity
whatsoever, engage in or become interested in or become interested in or have
any connection with any business which is competitive with any of the business
activities of the Employer or any of its present or future subsidiaries or
affiliates, and which is located or doing business anywhere within the United
States of America.
9. CONFIDENTIALITY
(a) In the course of his employment, the Employer may disclose or make
known to Employee, and Employee may be given access to or become acquainted
with, certain information, trade secrets or both, including but not limited to
procedures, formulations, methods, systems, documentation, facilities, policies,
marketing, pricing, customer lists and leads, and other information and
know-how, all relating to, or useful in, the Employer's business and which
Employer considers proprietary and maintains confidential (collectively
"Confidential Information).
(b) During the Term and at all times thereafter, Employee shall not in
any manner, either directly or indirectly, divulge, disclose or use, except in
the course of performing his obligations to Employer under this Agreement, any
Confidential Information or proprietary data of the Employer which Employee
becomes aware of in the course of performing his obligations under this
Agreement without the prior written consent of Employer. Any breach of the terms
of this Section 9 is a material breach of this Agreement.
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(c) All equipment, documents, memoranda, reports, records, files,
materials, samples, books, correspondence, hard drives, disks, lists, other
written and graphic records, and the like (collectively, the "Materials",
affecting or relating to the business of the Employer or its subsidiaries and/or
affiliates, which Employee shall prepare, use, construct, observe, possess or
control shall be and remain the Employer's sole property or in the Employer's
exclusive custody and must not be removed from the premises of the Employer
except as directed by the Employer's Board of Directors in writing. Promptly
upon termination of employment for any reason whatsoever or otherwise upon
request of any officer of Employer, the Materials and all copies thereof in the
custody or control of Employee shall be immediately delivered to the Employer.
10. ENFORCEABILITY OF RESTRICTIVE COVENANTS
The parties intend that the covenants contained in Xxxxxxxx 0,
0, xxx 0 xxxxx xx construed as a series of identical (other than as to
geography) separate covenants as to each state, possession and territory of the
United States of America. If, in any judicial proceedings, a court shall refuse
to enforce any of the other separate covenants deemed included in that
paragraph, then such unenforceable covenant shall be amended to relate such
lesser period or geographical area as shall be enforceable or, if deemed
appropriate by such court, deemed eliminated from these provisions for the
purpose of those proceedings to the extent necessary to permit the remaining
separate covenants to be enforced. In the event Employer should bring any legal
action or other proceeding against Employee for enforcement of Sections 7, 8 or
9, the calculation of the one (1) year period shall not include the period of
time commencing with the filing of legal action or other proceeding to enforce
Sections 7, 8 or 9 through the date of final judgment or final resolution,
including all appeals, if any, or such legal action or other proceedings.
11. INJUNCTION
It is recognized and hereby acknowledged by the parties hereto that a
breach by the Employee of any of the covenants contained in Section 6,7,8 and 9
of this Agreement may cause irreparable harm and damage to the Employer, the
monetary amount of which may be virtually impossible to ascertain. As a result,
the Employee recognizes and hereby acknowledges that the Employer may be
entitled to an injunction from any court of competent jurisdiction enjoining and
restraining any violation of any or all of the covenants contained in Sections
6,7,8 and 9 of this Agreement by the Employee, his employees, associates,
partners or agents, either directly or indirectly, and that such right to
injunction may be cumulative and in addition to whatever other remedies the
Employer may possess.
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12. DAMAGES
Nothing contained herein shall be construed to prevent the Employer or
the Employee from seeking and recovering from the other damages sustained by
either or both of them as a result of its or his breach or violation of any term
or provision of this Agreement. In the event that either party hereto brings
suit for the collection of any damages resulting from, or the injunction of any
action constituting a breach or violation of any of the terms or provisions of
this Agreement, then the party found to have caused damage to the other shall
pay all reasonable court costs and attorneys' fees of the damaged party.
13. DEATH OF EMPLOYEE
In the event of Employee's death during the term of this Agreement,
this Agreement shall terminate immediately and Employee's legal representative
shall be entitled to receive the compensation due Employee, if any through the
last day of the two calendar months in which is death shall have occurred.
14. NOTICE
Unless otherwise specifically provided herein, notice required or
permitted to be given under this Agreement shall be sufficient if in writing and
if sent by certified mail, return receipt requested, to the residence of the
Employee, or if sent to the principal place of business of the Employer, as the
case may be and as the circumstances may require.
15. SUBSIDIARIES AND AFFILIATES
All references herein to the Employer shall include the Company's
subsidiaries and affiliates.
16. SURVIVAL
Notwithstanding anything to the contrary herein, the provisions of
Sections 4, 5, 6, 7, 8, 9, 10, 11, 12, 15, 16 and 17 shall survive and remain in
effect in accordance with their respective terms in the event this Agreement or
any portion hereof is terminated.
17. WAIVERS
The failure or delay of the Employer at any time to require performance
by the Employee of any provision of this Agreement, even if known, shall not
affect the right of the Employer to require performance of that provision or to
exercise any right, power or remedy hereunder, and any waiver by the Employer of
any breach of any provision of this Agreement should not be construed as a
waiver of any continuing or succeeding breach of such right, power or remedy
under this Agreement. No notice to or demand on the Employee in any case,
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shall, of itself, entitle such party to any other or further notice or demand in
similar or other circumstances.
18. SPECIFIC PERFORMANCE
The Employee acknowledges that damages at law would be an inadequate
remedy for any breach or threatened breach of this Agreement by the Employee or
any provision of this Agreement. Accordingly, the Employer shall be entitled, in
addition to all other rights or remedies, to injunctions restraining such
breach, without being required to show any actual damage or to post any bond or
other security.
19. REMEDIES CUMULATIVE
No remedy herein conferred upon any party is intended to be exclusive
of any other remedy, and each and every such remedy shall be cumulative and
shall be in addition to every other remedy given hereunder or now or hereafter
existing at law in equity or by statute or otherwise. No single or partial
exercise by any party of any right, power or remedy hereunder shall preclude any
other or further exercise hereof.
20. MISCELLANEOUS PROVISIONS
(a) Governing Law and Venue. This Agreement shall be governed
by and construed and enforced in accordance with the laws of the State of New
York. Venue of all proceedings in connection with this Agreement shall be in the
state and federal courts in New York County, New York.
(b) Headings. The section headings contained herein are for
reference purposes only and shall not in any way affect the meaning and
interpretation of this Agreement.
(c) Binding Effect. This Agreement shall be binding upon and
shall operate for the benefit of the parties hereto and their respective heirs,
legal representatives, successors and permitted assigns.
(d) Attorney's Fees. Should it become necessary for any party
to institute legal action to enforce the terms and conditions of this Agreement,
the prevailing party shall be awarded a reasonable attorneys' fee, which shall
include a reasonable attorneys' fee for any appellate proceedings, expenses,
including any accounting expenses, and costs, from the other party hereto if
such party was an adverse party to such litigation.
(e) Severability. The invalidity or unenforceability, in whole
or in part, of any covenant, promise or undertaking, or any section, subsection,
paragraph, sentence, clause, phrase or word of any provisions of this Agreement
shall not affect the validity or enforceability of the remaining portions
thereof.
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(f) Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year set forth in the first paragraph of this Agreement above.
WITNESSES: THE EMPLOYER:
Saleoutlet. Com,
________________________ a Nevada corporation
By: /s/ Xxxxxxx Xxxxxxxxx
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Xxxxxxx Xxxxxxxxx
THE EMPLOYEE:
/s/ Xxxxxxxxx Xxxx
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Xxxxxxxxx Xxxx
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