EMPLOYMENT AGREEMENT
AGREEMENT ("Agreement") made as of this 7th day of February 1999 (the
"Effective Date"), by and between CyberShop International, Inc., a Delaware
corporation (hereinafter "Employer"), and Xxxxxxx Xxxxx (hereinafter
"Executive").
W I T N E S S E T H:
WHEREAS, Employer wishes Executive to serve as an officer and executive of
Employer; and
WHEREAS, Executive wishes to be so employed;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth, the parties hereto agree as follows:
1. Effective Date and Duties. Commencing as of the Effective Date,
Employer employs Executive as Vice President, Chief Operating Officer and Chief
Financial Officer of Employer to perform the duties normally incident to such
positions. Without limiting the foregoing Executive's functions shall include
supervision and responsibility for areas of operations including management
information systems, customer service, logistics, strategic planning and
finance. Executive shall at all times report to the Chairman of the Board
President and Chief Executive Officer of Employer.
2. Responsibilities. Executive agrees to devote all of Executive's
business time, efforts, skills and attention to fulfill Executive's duties and
responsibilities hereunder faithfully, diligently and competently.
3. Term. The term of this Agreement shall commence on the Effective Date
and shall terminate two (2) years thereafter, unless sooner terminated as
hereinafter provided. Notwithstanding the foregoing, this Agreement may be
terminated by either party on 120 days prior written notice provided that the
earliest effective time of termination shall be one year from the Effective
Date.
4. Compensation. Employer shall pay to Executive as compensation for all
services to be rendered by Executive hereunder the following:
(a) A salary at the rate of Two Hundred Fifty Thousand ($250,000)
Dollars per annum. Such salary is hereinafter referred to as the Base
Salary.
(b) Executive shall be eligible for bonuses, at such time and in
such amounts as shall be determined at the discretion of Employer's Board
of Directors (the "Board) based on its assessment of Executive's
performance of Executive's duties and on the financial performance of
Employer.
(c) Employer will reimburse Executive for all reasonable travel and
business expenses incurred by Executive in connection with Executive's
services hereunder in accordance with the usual practices and policies of
Employer in effect from time to time, upon presentation of vouchers.
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(d) Employer will reimburse Executive for up to $30,000 of
documented relocation expenses. In addition, Employer will provide an
apartment for the use of Executive. The amount available for reimbursement
shall be reduced dollar for dollar by the cost of the apartment if it
continues to be used by Executive more than six months after the Effective
Date.
(e) Employer will make available to Executive health benefits as
currently in effect or as modified during the term of this Agreement
consistent with the health benefits offered to other executives of
Employer. In addition, Executive will be eligible for and will be offered
participation in any and all group insurance, hospital, dental, major
medical and disability benefits and stock option plans or other similar
fringe benefits which are currently offered or may hereafter be offered to
other executives of Employer during the term of this Agreement. Under
current policies the family health plan requires a co-pay by Executive of
$104 per pay period and the dental plan is optional and requires a co-pay
by Executive.
5. Stock Options. Executive shall be granted no later than 90 days after
the Effective Date an option (the "Option") to purchase 150,000 shares of
Employer's common stock, $.001 par value per share (the "Common stock") at an
exercise price equal to the fair market value as determined under the Company's
1998 Stock Option Plan on the date of grant. The Option shall vest and be
exercisable as follows: (i) with respect to 75,000 shares of Common Stock
subject to the Option on the first anniversary of the Effective Date plus, (ii)
the remaining 75,000 shares of Common Stock subject to the Option on the second
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anniversary of the Effective Date. The Options shall be incentive stock options,
shall expire five (5) years from the date of vesting and shall otherwise be
governed by the Plan, as well as the applicable option agreement to be entered
into pursuant to the terms of the Plan.
6. Termination on Death. In the event of Executive's death during the term
of this Agreement, this Agreement shall terminate immediately, provided,
however, that Executive's legal representatives shall be entitled to receive the
Base Salary which would otherwise have been due Executive had he worked through
the end of the month in which Executive died.
7. Termination on Disability. If during the term of this Agreement,
Executive is unable to perform Executive's duties hereunder on account of
illness or other incapacity, and such illness or other incapacity shall continue
for a period of more than three (3) consecutive months during any twelve (12)
month period Employer shall have the right, on thirty (30) days' notice to
Executive, given after such three (3) month period, to terminate this Agreement.
In the event of any such termination Employer shall be obligated to pay to
Executive the Base Salary which would otherwise be due Executive until the
expiration of the month of employment during which the termination occurred plus
three (3) additional months of the Base Salary for the year in which Executive
was terminated. If, prior to the date specified on such notice, Executive's
illness or incapacity shall have terminated and Executive shall have taken up
the performance of Executive's duties thereunder, Executive shall be entitled to
resume Executive's employment hereunder as though such notice had not been
given. The Board shall determine in good faith, upon consideration of medical
evidence
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satisfactory to it, whether Executive by reason of physical or mental disability
shall be unable to perform the services required of Executive hereunder.
8. Termination for Cause. If Employer shall terminate Executive's
employment hereunder for Cause, or if Executive shall voluntarily leave
Executive's employment hereunder, this Agreement shall terminate immediately and
Employer shall pay to Executive an amount equal to the Base Salary hereunder
through the date of such termination. Cause shall mean (i) any conviction of any
crime (whether or not involving Employer) constituting a felony in the
jurisdiction involved, (ii) engaging in any substantiated act involving moral
turpitude, (iii) engaging in any act which, in each case, subjects, or if
generally known would subject, Employer to public ridicule or embarrassment,
(iv) gross misconduct in the performance of Executive's duties hereunder, (v)
willful failure or refusal to perform such duties as may be relegated to
Executive commensurate with Executive's position, or (vi) material breach of any
provision of this Agreement by Executive.
9. Confidentiality. Executive covenants and agrees with Employer that
Executive will not, during the term of this Agreement and thereafter directly or
indirectly use, communicate, disclose or disseminate to anyone (except to the
extent reasonably necessary for Executive to perform Executive's duties
hereunder, except as required by law or except if generally available to the
public otherwise than through use, communication, disclosure or dissemination by
Executive) any Confidential Information (as hereinafter defined) concerning the
businesses or affairs of Employer or of any of its affiliates or subsidiaries
which Executive
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may have acquired in the course of or as incident to Executive's employment or
prior dealings with Employer or with any of its affiliates or subsidiaries.
"Confidential Information" shall mean (a) all knowledge, information
and material concerning Employer or its business or the business of any of its
affiliates or subsidiaries that shall become known to Executive as a consequence
of Executive's relationship with Employer, (b) all information that has been
disclosed to Employer by any third party under an agreement or circumstances
requiring such information to be kept confidential, and (c) all knowledge,
information or material concerning Inventions that are, under this Agreement,
owned by Employer or assigned by Executive to Employer; provided, that
Confidential Information shall not include knowledge, information or material
that is or becomes generally known or available to others in businesses engaged
in by Employer or to the public (other than through unauthorized disclosure).
Confidential Information shall include without limitation (a) information of a
technical nature, such as information regarding past, present and future
research, financial data, product information, marketing plans, computer
programs (whether in source or object code form or other form and whether
contained on program listings, magnetic tape, magnetic disks, CD ROMs or other
media), logic, flow charts, specifications, documentation and ideas relating to
the activities of Employer, (b) information of a business nature, such as
information regarding past, present and future client development, strategies,
procurement specifications, cost and financial data, contracts, quotations and
names of actual and prospective clients or customers, and (c) all
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documents, drawings, reports, client lists, and other physical embodiments of
all such information.
"Inventions" shall mean each of the following, but only to the
extent they relate to the business of commerce conducted over the Internet: all
inventions, discoveries, developments, ideas, works, improvements, enhancements,
works of authorship, products and computer software, whether or not patentable,
and anything else that is subject to or potentially subject to the patent,
copyright or trade secret laws of any jurisdiction.
10. Non-Competition. Executive acknowledges that Executive's services and
responsibilities are of particular significance to Employer and that Executive's
position with Employer has given and will give Executive close knowledge of its
policies and trade secrets.
Since Employer is in a creative and competitive business,
Executive's continued and exclusive service to Employer under this Agreement is
of a high degree of importance.
Executive covenants and agrees with Employer that Executive will
not, during the term of this Agreement and for a period of eighteen months after
the termination of Executive's employment hereunder, with respect to
subparagraph (i) and twelve months with respect to subparagraphs (ii) and (iii)
in any manner, directly or indirectly, (i) induce or attempt to influence any
present or future officer, employee, lessor, lessee, licensor or licensee of
Employer or its subsidiaries or its affiliates to leave its respective employ or
solicit or divert or service any of the customers or clients that Employer or
its subsidiaries or its affiliates has or had in the one (1) year previous to
the date of termination of this Agreement, (ii) engage, in
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Xxxxx Xxxxxxx or any other territory in which Employer does or contemplates to
do business, in any businesses presently engaged in or to be engaged in by
Employer or its subsidiaries or affiliates during the term of this Agreement,
and (iii) except for ownership of no more than 1% of the capital stock, be a
stockholder of any corporation, or directly or indirectly own, manage, operate,
conduct, control or participate in the ownership, management, operation,
conduct, control of, accept employment with, or be connected in any other manner
with, any business which engages in any direct competitive activity including,
without limitation, any business which engages in retail commerce conducted over
the Internet in any such geographic region.
11. Remedies. Executive acknowledges that the remedy at law for any breach
or threatened breach by Executive of the covenants contained in paragraphs 9 and
10 would be wholly inadequate, and therefore Employer or its subsidiaries or its
affiliates shall be entitled to preliminary and permanent injunctive relief and
specific performance thereof. Paragraphs 9 and 10 constitute independent and
separable covenants that shall be enforceable notwithstanding rights or remedies
that Employer or its subsidiaries or it affiliates may have under any other
provision of this Agreement, or otherwise. If any or all of the foregoing
provisions of paragraphs 9 and 10 are held to be unenforceable for any reason
whatsoever, it shall not in any way invalidate or affect the remainder or this
Agreement which shall remain in full force and effect. If the period of time or
geographical areas specified in paragraphs 9 and 10 are determined to be
unreasonable in any judicial proceeding, the period of time or
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areas of restriction shall be reduced so that this Agreement may be enforced in
such areas and during such period of time as shall be determined to be
reasonable.
12. Full Review. Executive has carefully read and considered the
provisions hereof, and having done so, agrees that restrictions and remedies set
forth in paragraphs 9, 10 and 11 (including, but not limited to, the time
periods of restrictions) are fair and reasonable and are reasonably required for
the protection of the interests of Employer.
13. Representation. Executive represents and warrants to Employer that
Executive is not now under any obligation of a contractual or other nature to
any person, firm or corporation which is inconsistent or in conflict with this
Agreement, or which would prevent, limit or impair in any way the execution of
this Agreement or the performance by Executive of Executive's obligations
hereunder and Executive will indemnify and hold harmless Employer, its
directors, officers and employees against and in respect of all liability, loss,
damage, expense or deficiency resulting from any misrepresentation, or breach of
any warranty or agreement made by Executive in connection with Executive's
employment hereunder.
14. Waiver. The waiver by either party of a breach of any provision of
this Agreement shall not operate as or be construed as a waiver of any
subsequent breach thereof.
15. Notices. Any and all notices referred to herein shall be sufficient if
furnished in writing and sent by certified mail, return receipt requested, to
the respective parties at the
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addresses set forth below, or such other address as either party may from time
to time designate in writing.
To Executive: To Employer:
Xxxxxxx Xxxxx CyberShop International, Inc.
00 Xxxxx Xxxx Xxxx 000 Xxxxxx Xxxxxx
Xxxxx Xxxxx, XX 00000 Xxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: Chairman of the Board
With copy to:
Xxxxx & Xxxxxxx LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
16. Assignability. This Agreement shall be binding upon, and shall inure
to the benefit of, Employer and its successors and assigns, and Executive and
Executive's legal representatives, heirs, legatees and distributees, but neither
this Agreement nor any rights hereunder shall be assignable, encumbered or
pledged by Executive.
17. Entire Agreement. This Agreement supersedes any and all prior written
or oral agreements between Employer and Executive and constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof
and no modification, amendment or waiver of any of the provisions of this
Agreement shall be effective unless in writing and signed by both parties
hereto.
18. Applicable Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of New Jersey.
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19. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same agreement.
20. Severability. If any provision or part of any provision of this
Agreement is held for any reason to be unenforceable, the remainder of this
Agreement shall nevertheless remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
CYBERSHOP INTERNATIONAL, INC.
By: /s/ Xxxxxxx Xxxxxx
-----------------------------
Name: Xxxxxxx Xxxxxx
Title: Chairman of the Board
Date:
/s/ Xxxxxxx Xxxxx
---------------------------------
Xxxxxxx Xxxxx
Date:
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