Exhibit 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement ("Employment Agreement") is made effective as of
the 21st day of August, 2000 (the "Effective Date") by and between PL Brands,
Inc., a Delaware corporation (the "Company"), and Xxxxxxx Xxxxxxx Xxxxxxx
("Employee").
WHEREAS, the Company is engaged in the business of providing an advanced
search engine on the worldwide web; and
WHEREAS, the Company wishes to employ and retain the services of the
Employee and Employee has agreed to the same; and
WHEREAS, both parties desire to enter into this Employment Agreement to
evidence the terms and conditions of such employment.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and promises in this Employment Agreement, the parties agree as follows:
1. Employment. The Company agrees to employ Employee and Employee agrees
to be employed by the Company upon the terms and conditions of this Employment
Agreement. Employee hereby represents and warrants that neither Employee's entry
into this Employment Agreement nor Employee's performance of Employee's
obligations hereunder will conflict with or result in a breach of the terms,
conditions or provisions of any other agreement or obligation of any nature to
which Employee is a party or by which Employee is bound, including, but not
limited to, any non-competition agreement or confidentiality agreement
previously entered into by Employee.
2. Term of Employment. The term of Employee's employment under this
Employment Agreement will commence on the Effective Date and will continue
through August 20, 2002 (the "Initial Employment Term"). After expiration of
the Initial Employment Term, Employee's employment with the Company shall be
extended through August 20, 2003 ("Renewal Employment Term") on the same terms
and conditions contained herein, unless not later than thirty (30) days prior to
the end of the Initial Employment Term either party shall give written notice to
the other party of its election to terminate this Employment Agreement. Upon
expiration of the Renewal Term, if any, Employee's employment with the Company
shall continue on the same terms and conditions contained herein until
terminated in accordance with Section 12 below. The term of Employee's
employment with the Company hereunder is hereinafter referred to as the
"Employment Term." Notwithstanding anything to the contrary contained herein,
this Employment Agreement is subject to termination pursuant to Section 12
below.
3. Position and Responsibilities. Employee will be employed as the Chief
Executive Officer and/or Chairman of the Board of Directors of the Company (the
"Board") and shall report to and be subject to the direction of the Board.
Employee shall be responsible for the creation, development and continued
operation of the Company's business, and shall perform and discharge such duties
and responsibilities for the Company as the Board may from time to time
reasonably assign to Employee, including, but not limited to, the following
duties: (a) selecting
and contracting for office space, (b) selecting a local bank to serve as the
corporate banking institution, (c) engaging and retaining for a minimum of one
(1) year the Minneapolis/St. Xxxx, MN office of Deloitte & Touche LLP, and (d)
with approval of the Board, selecting a corporate law firm.
4. Commitment. During the Employment Term, Employee shall devote
Employee's full business time, attention, skill and efforts to the faithful
performance of Employee's duties herein, and shall perform the duties and carry
out the responsibilities assigned to Employee, to the best of Employee's
ability, in a diligent, trustworthy, businesslike and efficient manner for the
purpose of advancing the Company. Employee acknowledges that Employee's duties
and responsibilities will require Employee's full-time business efforts and
agrees that during the Employment Term Employee will not engage in any outside
business activities except for activities that do not conflict with the
Company's interests or interfere with the performance of Employee's duties
hereunder.
5. Compensation.
(a) During the Employment Term, the Company shall pay to Employee a
base salary at the rate of $250,000 per year, subject to increase from time
to time at the sole discretion of the Board, payable at the Company's
regular employee payroll intervals. In no event shall Employee's salary be
decreased below $250,000 per year during the Employment Term.
(b) Employee shall be eligible to participate in a bonus plan for the
Company's key executive Employees if and when such plan shall be
established by the Company; provided, that the Company shall have the right
to modify or eliminate any such bonus plan at any time.
(c) Employee shall be eligible to receive options to purchase shares
of the Company's common stock, pursuant to and subject to the terms
(including without limitation vesting and buy-back provisions) of an equity
incentive plan if an when such plan shall be established by the Company;
provided, that, (i) in the event of a Change in Control (as defined in
Section 12(g)) any partially vested or unvested options held by Employee
shall become fully vested, (ii) all options held by Employee, whether fully
vested, partially vested or unvested, shall be automatically cancelled upon
termination of this Employment Agreement pursuant to Section 12(a) or if
Employee terminates his employment with the Company during the Initial
Employment Term, and (iii) upon termination of this Employment Agreement
by the Company other than pursuant to Section 12(a), any partially vested
and unvested options held by Employee shall become fully vested.
(d) All compensation payable to Employee hereunder is stated in gross
amount and shall be subject to all applicable withholding taxes, other
normal payroll and any other amounts required by law to be withheld.
(e) The Company will reimburse Employee for all reasonable expenses
incurred in connection with the performance of Employee's services,
including
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reasonable travel and entertainment expenses. These expenses must be
incurred in accordance with Company policies and must be sustained by
written statements and receipts before reimbursement will be made.
(f) The Company shall make available to Employee a Company automobile
for Employee's exclusive use.
(g) The Company will reimburse the Employee for monthly dues,
assessments and company-related expenses associated with the Employee's
membership at Southview Country Club, Inver Grove Heights, MN and the Pool
& Yacht Club, Lilydale, MN.
6. Benefit Plans. During the Employment Term, Employee will be entitled
to receive benefits comparable to those provided to the other employees of the
Company in similar positions and with similar responsibilities (subject to any
applicable waiting periods and other restrictions) if any when such benefits are
made available by the Company, including, but not limited to, health insurance,
dental insurance, life insurance, short and long-term disability insurance,
401(k) profit sharing plan and sick pay.
7. Vacation. Employee shall be entitled to paid vacation at the rate of
four (4) weeks per year in accordance with the Company's vacation policy.
Vacation time must be used during the applicable year and may not be carried
over to future years. Upon termination of Employee's employment, any unused
vacation will be forfeited.
8. Confidentiality and Inventions.
(a) Employee acknowledges that the Confidential Information (as
defined below) constitutes a protectible business interest of the Company,
and covenants and agrees that at all times during the period of Employee's
employment with the Company, and at all times after termination of such
employment, Employee will not, directly or indirectly, disclose, furnish,
make available, remove from the Company's premises or utilize any
Confidential Information without prior written authorization of the Board.
Employee will abide by Company policies and rules as may be established
from time to time by it for the protection of its Confidential Information.
Employee agrees that in the course of employment with the Company Employee
will not bring to the Company's offices nor use, disclose to the Company,
or induce the Company to use, any confidential information or documents
belonging to others. Employee's obligations under this Section 8(a) with
respect to Confidential Information will survive expiration or termination
of Employee's employment with the Company, and will terminate only at such
time (if any) as the Confidential Information in question becomes generally
known to the public other than through a breach of Employee's obligations
under this Agreement.
(b) As used in this Agreement, the term "Confidential Information"
means any and all confidential, proprietary or trade secret information,
whether disclosed, directly or indirectly, verbally, in writing or by any
other means in tangible or intangible form, including, but not limited to,
that which is conceived or developed by Employee, applicable to or in any
way related to: (i) the present or future business of the Company
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or any of its Affiliates (as defined below); (ii) the research and
development activities of the Company or any of its Affiliates; or (iii)
the business of any client or vendor of the Company or any of its
Affiliates. Such Confidential Information includes, but is not limited to,
the following property or information of the Company and its Affiliates:
trade secrets, all information relating to systems, methods and techniques
concerning development, operation, manufacturing and distribution of the
Company's products and services, processes, formulas, data, program
documentation, customer lists (including telephone numbers and any other
information pertaining to customers), designs, drawings, algorithms, source
codes, object codes, know-how, improvements, inventions, licenses,
techniques, plans or strategies for marketing, development and pricing,
business plans, financial statements, profit margins and all information
concerning existing or potential suppliers, customers or vendors.
Confidential Information of the Company also means all similar information
disclosed to the Company by third parties which is subject to
confidentiality obligations. The term "Affiliates" means (i) all
individuals or entities controlling, controlled by or under common control
with, the Company, (ii) all entities in which the Company owns an equity
interest and (iii) all predecessors, successors and assigns of those
Affiliates identified in (i) and (ii).
(c) Employee agrees that the Company will be the owner of and
immediately entitled to an assignment of all (i) improvements,
enhancements, developments, adaptations, processes or inventions relating
or arising out of the Company's existing or proposed processes, products,
invention or business activities, and (ii) any new process, technology,
design, product or other invention which is developed by Employee through
Confidential Information or which Employee develops through the use of the
Company's facilities (all of which are "New Developments"). Employee must
immediately disclose the existence of any New Development to the Company
and, when requested by the Company, immediately execute and deliver to the
Company an assignment of his right, title and interest thereto. Employee
will cooperate with the Company, without cost to Employee, in prosecuting
any claim for patent or copyright protection which the Company desires with
respect to any such New Development.
9. Non-Competition and Non-Solicitation.
(a) Employee acknowledges that: (i) the Company's business, by virtue
of the fact that it is Internet related, is and will be actively conducted
throughout the world; (ii) Employee is one of a limited number of persons
who will be developing the Company's business; (iii) Employee will occupy a
position of trust and confidence with the Company and during the Employment
Term will become familiar with the Company's trade secrets and other
proprietary and confidential information concerning the Company and its
business; (iv) the agreements and covenants contained in this Section 9 are
essential to protect the Company and the goodwill of its business and are a
condition precedent to the Company entering into this Employment Agreement;
(v) Employee's employment with the Company has special, unique and
extraordinary value to the Company and the Company would be irreparably
damaged if Employee were to provide services to any person or entity in
violation of the provisions of this Employment Agreement; and (vi) Employee
has means to support Employee and Employee's dependents other than by
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engaging in the Company's business, or a business similar to the Company's
business, and the provisions of this Section 9 will not impair such
ability.
(b) Employee shall not, during the Restricted Period (as defined
below), directly or indirectly (whether as an owner, partner, shareholder,
agent, officer, director, employee, independent contractor, consultant, or
otherwise):
(i) without the prior consent of the Board, own, operate, manage,
control, invest in, perform services for, or engage or participate in
any manner in, or render services (alone or in association with any
person or entity) or otherwise assist any person or entity that
engages in or owns, invests in, operates, manages or controls any
venture or enterprise that engages or proposes to engage in a business
competitive with the Company's business (A) if such venture or
enterprise engages or proposes to engage in such business within the
United States and/or Canada, or (B), since the Company's business is
Internet-related and, thus, worldwide, if such venture's or
enterprise's services or products are or can be made available in the
United States and/or Canada;
(ii) without the prior consent of the Board, except on behalf of
the Company, solicit, or participate as employee, agent, consultant,
stockholder, director, partner or in any other individual or
representative capacity, in any business which solicits business from
any person, firm, corporation or other entity which was a customer,
supplier or partner of the Company or any of its Affiliates during the
Employment Term or for whom the Company or any of its Affiliates has
negotiated to provide products or services during the Employment
Period, or from any successor in interest to any such person, firm,
corporation or other entity; or
(iii) without the prior written consent of the Board, solicit or
assist anyone else in the solicitation of any of the Company's then
current employees to terminate their employment with the Company and
become employed by any business enterprise with which Employee may
then be associated, affiliated, or otherwise connected.
(c) Restricted Period. The term "Restricted Period" means the period
of time commencing on the Effective Date and ending two (2) years after the
termination for any reason of Employee's employment relationship with the
Company or any successor thereto (whether pursuant to a written agreement
or otherwise). The Restricted Period shall be extended for a period equal
to any time period during which Employee is in violation of Section 9.
Nothing contained in Section 9(b) above shall be construed to prevent
Employee from investing in the stock of any competing corporation listed on
a national securities exchange or traded in the over-the-counter market,
but only if Employee is not involved in the business of said corporation
and if Employee and Employee's associates (as such term is defined in
Regulation 14(A) promulgated under the Securities Exchange Act of 1934, as
in effect on the date hereof), collectively, do not own more than an
aggregate of one percent (1%) of the stock of such corporation.
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(d) Scope/Severability. The parties acknowledge that the business of
the Company is and will be national and international in scope and thus the
covenants in this Section 9 would be particularly ineffective if the
covenants were to be limited to a particular geographic area of the United
States of America and Canada. If any court of competent jurisdiction at any
time deems the Restricted Period unreasonably lengthy, or any of the
covenants set forth in this Section 9 not fully enforceable, the other
provisions of this Section 9, and this Employment Agreement in general,
will nevertheless stand and to the full extent consistent with law
continue in full force and effect, and it is the intention and desire of
the parties that the court treat any provisions of this Employment
Agreement which are not fully enforceable as having been modified to the
extent deemed necessary by the court to render them reasonable and
enforceable and that the court enforce them to such extent (for example,
that the Restricted Period be deemed to be the longest period permissible
by law, but not in excess of the length provided for in Section 9(b)).
10. Return of Company Materials upon Termination. Employee acknowledges
that all records, documents, and Confidential Information prepared by Employee
or coming into Employee's possession by virtue of Employee's employment by the
Company are and will remain the property of the Company. Upon termination of
Employee's employment with the Company, Employee shall immediately return to the
Company all such items in Employee's possession and all copies of such items, as
well as any other property of the Company.
11. Equitable Remedies.
(a) Employee acknowledges and agrees that the agreements and covenants
set forth in Sections 8, 9 and 10 are reasonable and necessary for the
protection of the Company's business interests, that irreparable injury
will result to the Company if Employee breaches any of the terms of said
covenants, and that in the event of Employee's actual or threatened breach
of any such covenants, the Company will have no adequate remedy at law.
Employee accordingly agrees that, in the event of any actual or threatened
breach by Employee of any of said covenants, the Company will be entitled
to immediate injunctive and other equitable relief, without bond and
without the necessity of showing actual monetary damages. Nothing in this
Section 11 will be construed as prohibiting the Company from pursuing any
other remedies available to it for such breach or threatened breach,
including the recovery of any damages that it is able to prove.
(b) Each of the covenants in Sections 8, 9 and 10 will be construed as
independent of any other covenants or other provisions of this Employment
Agreement.
(c) In the event of any judicial determination that any of the
covenants in Sections 8, 9 and 10 are not fully enforceable, it is the
intention and desire of the parties that the court treat said covenants as
having been modified to the extent deemed necessary by the court to render
them reasonable and enforceable, and that the court enforce them to such
extent.
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12. Termination.
(a) This Employment Agreement may be terminated by either party as of
the end of the Initial Employment Term or the Renewal Employment Term, as
applicable, by giving notice as provided in Section 2. If this Employment
Agreement and Employee's employment are so terminated, the Company shall
have no further obligation hereunder or otherwise with respect to Employee
(except payment of Employee's base salary under Section 5(a) and benefits
under Section 6 accrued the date of Termination).
(b) The Company may terminate this Employment Agreement and Employee's
employment immediately upon written notice to Employee (i) for cause,
including, but not limited, to the following events: (A) a material breach
of this Employment Agreement by Employee which has not been cured promptly
after reasonable notice has been given, provided, that any breach by
Employee of any of Employee's obligations under Sections 8, 9 and 10 will
be deemed a material breach of this Employment Agreement; (B) Employee's
conviction of a crime punishable as a felony; or (C) Employee's commission
of fraud, theft or dishonesty; and (ii) upon the insolvency, bankruptcy or
dissolution of the Company. If this Employment Agreement and Employee's
employment are terminated by the Company pursuant to this Section 12(b),
the Company shall have no further obligation hereunder or otherwise with
respect to Employee (except payment of Employee's base salary under Section
5(a) and benefits under Section 6 accrued through the date of termination).
(c) This Employment Agreement and Employee's employment will terminate
upon the death or the Disability (as defined below) of Employee.
"Disability" of Employee will be deemed to have occurred upon receipt by
the Company of written determination from a physician of the Company's
choice that Employee has suffered physical or mental illness, injury, or
infirmity that prevents Employee from performing, with or without
reasonable accommodation, Employee's essential job functions under this
Employment Agreement. Employee agrees to cooperate with the Company in
arriving at a determination of Disability, including, but not limited to,
by submitting to a physical examination. In the event of termination due to
death or Disability, the Employee shall be deemed to have earned the pro
rata portion of any bonus for the then current year based on measuring the
performance standards to the date of death or onset of the applicable
illness, injury or infirmity and then annualizing the same, as determined
in the sole discretion of the Company. Except as set forth in the preceding
sentence, if this Employment Agreement is terminated pursuant to this
Section 12(c), the Company shall have no further obligation hereunder or
otherwise with respect to Employee (except payment of Employee's base
salary under Section 5(a) and benefits under Section 6, in each case to the
extent accrued through the date of termination).
(d) The Company may elect to terminate Employee's employment hereunder
without cause upon thirty (30) days' prior written notice; provided, that
if it does so elect to terminate Employee's employment during the Initial
Employment Term or during the Renewal Employment Term, if any, other than
pursuant to Section 2, subject to Section 12(g), the Company shall continue
to pay Employee's base salary in accordance with Section 5(a) and provide
the benefits to Employee in accordance with Section 6 until the
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last day of the Initial Employment Term or Renewal Employment Term, as the
case may be. Within a reasonable period following such termination without
cause, the Company shall also pay the pro rata portion of the bonus, if
any, earned by Employee for the then-current year in accordance with the
terms and conditions of the Company's bonus plan, as determined in the sole
discretion of the Company. Except as specifically set forth in this Section
12(d), if the Employment Term is terminated pursuant to this Section
12(d), the Company shall have no further obligation hereunder or otherwise
with respect to Employee.
(e) Employee may terminate Employee's employment with the Company
without cause at any time after the second anniversary of the Effective
Date by giving no less than thirty (30) days' prior written notice, in
which event the Company shall have no further obligation hereunder or
otherwise with respect to Employee (except payment of Employee's base
salary under Section 5(a) and benefits under Section 6 accrued through the
date of termination, and payment of the pro rata portion of the bonus, if
any, earned by Employee for the then-current year in accordance with the
terms and conditions of the Company's bonus plan, as determined in the sole
discretion of the Company).
(f) Termination of this Employment Agreement and Employee's employment
in accordance with Section 2 or this Section 12 will not affect the
provisions of this Employment Agreement that by their terms survive such
termination, including, the provisions in Sections 8, 9 and 10, and will
not limit either party's ability to pursue remedies at law or in equity.
(g) Notwithstanding anything to the contrary herein, no payments shall
be due under Section 12(d) above unless and until Employee shall have
executed a general release and waiver of claims of the Company, in form
reasonably satisfactory to the Company, and the execution of such general
release and waiver of claims shall be a condition to Employee's rights
under Section 12(d).
(h) In the event Employee's employment with the Company is terminated
in connection with the consummation of a Change in Control and Employee is
not offered employment with the surviving or resulting entity, the Employee
shall be entitled to a severance payment in an amount equal to one year's
base salary, less applicable deductions. A "Change in Control" shall mean a
merger, consolidation, sale or conveyance of all or substantially all of
the Company's assets or equity securities to any independent third party
pursuant to which the holders of the voting securities of the Company
immediately before the transaction own immediately after the transaction
less than a majority of the outstanding voting securities of the surviving
entity (or its parent) or the purchasing entity (or its parent), as the
case may be.
13. Effect of Prior Agreements. This Employment Agreement contains the
entire understanding between the Company and Employee relating to the subject
matter hereof and supersedes any prior employment agreement between Employee and
the Company or other agreement relating to the subject matter hereof between the
Company and Employee.
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14. Modification and Waiver. This Employment Agreement may not be modified
or amended except by an instrument in writing signed by the parties. No term or
condition of this Employment Agreement will be deemed to have been waived,
except by written instrument of the party charged with such waiver. No such
written waiver will be deemed to be a continuing waiver unless specifically
stated therein, and each such waiver will operate only as to the specific term
or condition waived and shall not constitute a waiver of such term or condition
for the future or as to any act other than that specifically waived.
15. Severability. If, for any reason, any provision of this Employment
Agreement is held invalid, such invalidity will not affect any other provision
of this Employment Agreement, and each provision will to the full extent
consistent with law continue in full force and effect. If any provision of this
Employment Agreement is held invalid in part, such invalidity will in no way
affect the rest of such provision, and the rest of such provision, together with
all other provisions of this Employment Agreement, will, to the full extent
consistent with law, continue in full force and effect.
16. Notices. Any notice, consent, waiver and other communications required
or permitted pursuant to the provisions of this Employment Agreement must be in
writing and will be deemed to have been properly given (a) when delivered by
hand; (b) when sent by telecopier (with acknowledgment of complete
transmission), provided that a copy is mailed by U.S. certified mail, return
receipt requested; (c) three (3) days after sent by certified mail, return
receipt requested; or (d) one (1) day after deposit with a nationally recognized
overnight delivery service, in each case to the appropriate addresses and
telecopier numbers set forth below:
If to the Company:
PL Brands, Inc.
0 Xxxxx Xxxxxxx
Xxxxx 000
Xxxx: Board of Directors
Telecopy No.: (000) 000-0000
If to Employee:
Xxxxxxx Xxxxxxx Xxxxxxx
___________________________________
___________________________________
Attn:______________________________
Telecopy No.: (__)___ -____________
Each party will be entitled to specify a different address for the receipt
of subsequent notices by giving written notice thereof to the other party in
accordance with this Section 16.
17. Headings. The headings and other captions in this Employment Agreement
are included solely for convenience of reference and will not control the
meaning and interpretation of any provision of this Employment Agreement.
18. Governing Law. This Employment Agreement has been executed in the
State of Delaware, and its validity, interpretation, performance, and
enforcement will be governed by the
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laws of such state, except with respect to conflicts of laws principles. The
parties hereby consent to the exclusive jurisdiction of the Federal or state
courts in Delaware in any action or claim arising out of, under or in connection
with this Employment Agreement, or the relationship between the parties hereto.
19. Waiver of Jury. The Company and the Employee knowingly and voluntarily
waive any and all right to a trial by jury in any action or proceeding arising
out of, under or in connection with this Employment Agreement, or the
relationship between the parties hereto.
20. Binding, Effect. This Employment Agreement will be binding upon and
inure to the benefit of Employee, the Company, and their respective successors
and permitted assigns. The Company will be entitled to assign its rights and
duties under this Employment Agreement provided that the Company will remain
liable to Employee should such assignee fail to perform its obligations under
this Employment Agreement.
21. No Strict Construction. The language used in this Employment Agreement
will be deemed to be the language chosen by the parties to express their mutual
intent, and no rule of strict construction will be applied against any person.
[Remainder of Page Intentionally Blank]
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IN WITNESS WHEREOF, the Company has caused this Employment Agreement to be
executed by its duly authorized officer and Employee has signed this Employment
Agreement, as of the date first above written.
PL BRANDS, INC.
By: /s/ Xxxxxx Xxxxx
------------------------------
Xxxxxx Xxxxx
EMPLOYEE:
/s/ Xxxxxxx Xxxxxxx
__________________________________
Xxxxxxx Xxxxxxx Xxxxxxx
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