Exhibit 10.35
EMPLOYMENT AGREEMENT
--------------------
AGREEMENT made and entered into as of this 17th day of December, 1999
between Urban Cool Network, Inc., a Delaware corporation (the "Corporation")
having an address at 0000 Xxx Xxxxxx, Xxxxxx, Xxxxx 00000 and Xxxxxx Xxxxxx (the
"Executive"), residing at 0 Xxxx Xxxx, Xxxxx Xxxxxx, Xxx Xxxx 00000.
W I T N E S S E T H:
WHEREAS, the Company and the Executive desire to set forth the terms of
Executive's employment with the Company, pursuant to the terms and conditions
hereof.
NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, the parties hereto agree with each other as follows:
1. Term of Employment. The Corporation agrees to and does hereby employ
Executive, and Executive agrees to and does hereby accept employment by the
Corporation, as the Vice President of Celebrity Relations and Merchandising of
the Corporation, subject to the supervision and direction of its Chief Executive
Officer and its Board of Directors, for the one (1) year period commencing on
the consummation of the initial public offering of the Corporation's securities
(the "Term").
2. Duties of Executive. Executive shall devote such time, attention and
energy to the affairs of Corporation as shall be reasonably required to perform
her duties hereunder, and, in pursuance of the policies and directions of the
CEO and Board of Directors, Executive shall use her best efforts to promote the
business and affairs of the Corporation.
3. Base Compensation.
(a) In consideration of the Executive's services pursuant to this
Agreement, Corporation shall pay to Executive, during the period of Executive's
employment under this Agreement (the "Base Compensation"), a salary at the rate
of Seventy Five Thousand Dollars ($75,000) per year. The Base Compensation shall
be payable in equal installments, in accordance with the Corporation's customary
procedures for executive employees, subject to applicable tax and payroll
deductions.
(b) Commission: The Corporation will pay Executive 10% of gross
sales less returns and discounts of merchandise related to co-developed and/or
managed by Executive. On a quarterly basis Corporation will provide Executive
with monthly certified sales reports of these activities.
4. Incentive Compensation.
(a) Provided Executive has duly performed her obligations pursuant
to this Agreement, Executive shall be eligible to receive, as additional
compensation for the services to be rendered by Executive under this Agreement,
incentive compensation. The amount of such incentive compensation, if any, shall
be determined by the Board of Directors in its sole discretion based on the
Executive's performance and contributions to the Corporation's success.
(b) Provided Executive's employment continues during the term hereof
and she is in good standing with the Company, Executive shall be eligible to
receive, as additional compensation pursuant to a separate option agreement for
the services to be rendered by Executive under this Agreement, 25,000 options to
purchase shares of the Company's common stock pursuant to the Company's 1999
Stock Option Plan. Such options shall vest immediately upon the consummation of
the IPO.
5. Other Benefits.
(a) During the term of this Agreement the Executive shall be
entitled to participate in any benefit plans adopted by the Corporation for the
general and overall benefit of all employees and/or for key executives of the
Corporation such as health care, life insurance, disability, stock option plans,
tax, legal and financial planning services, pension, profit sharing and savings.
(b) During the term of this agreement, Executive shall be entitled
to a monthly car allowance in the amount of $400.
-2-
6. Vacation. Executive shall be entitled to a fully paid vacation of three
(3) weeks per calendar year, which vacation shall be scheduled at such time or
times as the Corporation in consultation with Executive may reasonably
determine.
7. Expenses. The Corporation shall pay or reimburse Executive for all
reasonable and necessary expenses incurred by her in connection with her duties
hereunder, upon submission by Executive to the Corporation of such reasonable
evidence of such expenses as the Corporation may require.
8. Insurance. The Corporation may from time to time apply for policies of
life, health and accident insurance or disability insurance upon the Executive
in such amounts as the Corporation deems appropriate. The Executive agrees to
aid the Corporation in procuring such insurance, including submitting to a
physical examination, if required, and completing any and all forms required for
application for any insurance policy.
9. Disclosure of Information. The Executive shall, during her employment
under this Agreement and thereafter, keep confidential and refrain from
disclosing to any unauthorized persons all data and information relating to the
respective businesses of the Corporation or any of its subsidiaries.
10. Intellectual Property Rights.
(a) The Executive shall promptly disclose to the Corporation in
writing, any and all charts, layouts, maps, inventions, improvements,
techniques, markets, sales and advertising plans, processes, concepts and plans,
whether or not copyrightable or patentable, secret processes and "know-how,"
conceived by the Executive during the term of her employment by the Corporation
(the "Executive's Work Product"), whether alone or with others and
-3-
whether during regular working hours and through the use of facilities and
property of the Corporation or otherwise, which directly relates to the present
business of the Corporation. Upon the Corporation's request at any time or from
time to time during the Term of the Executive's employment, the Executive shall
(i) deliver to the Corporation copies of the Executive's Work Product that may
be in her possession or otherwise available to her, and (ii) execute and deliver
to the Corporation such applications, assignments and other documents as it may
reasonably require in order to apply for and obtain copyrights or patents in the
United States of America and other countries with respect to any Executive's
Work Product that it deems to be copyrightable or patentable, and/or otherwise
to vest in itself full title thereto.
(b) All documents that pertain to the Corporation, including but not
limited to the Executive's Work Product, shall be the sole and exclusive
property of the Corporation. Upon the termination of the Executive's employment,
all such documents that may be in her possession or otherwise available to her
or shall thereafter come into her possession or control shall be promptly
returned to the Corporation without the necessity of a request therefor.
11. Non-Competition Covenant.
(a) The Executive shall not, during her employment by the
Corporation, engage, directly or indirectly, in any business competitive with
the business of the Corporation without the consent of the Board of Directors.
(b) For a period of one (1) year after the termination of the
Executive's employment hereunder (the "Non-Competition Period"), for any reason
whatsoever, other than a termination by the Corporation without good cause, the
Executive shall not (i) engage, directly or indirectly, as an officer, director,
shareholder, owner, partner, joint venturer or in a managerial capacity, whether
as an employee, independent contractor, consultant or advisor, or as a sales
-4-
representative in any business related to Internet products and services, and
related activities throughout the United States (the "Territory"), without the
permission of the Board of Directors, which permission shall not be unreasonably
withheld or delayed or (ii) induce or actively attempt to influence any other
employee or consultant of the Corporation to terminate his or her employment or
consultancy with the Corporation. Nothing herein contained shall be deemed to
prevent ownership by Executive and her associates (as said term is defined in
regulation 14(A) promulgated under the Securities Exchange Act of 1934 as in
effect on the date hereof), collectively, of not more than 5% of the outstanding
capital stock of a corporation listed on a national securities exchange.
(c) (i) The parties to this Agreement consider the restrictions
contained herein reasonable as to the duration of the Non-Competition Period and
the extent of the Territory. However, if the duration of the Non-Competition
Period or the extent of the Territory herein specified should be judged
unreasonable by any Court or arbitration proceeding, the validity and effect of
the remaining provisions of this Agreement shall not be affected thereby and,
the duration of the Non-Competition Period shall be reduced by such number of
months and/or the area of the Territory shall be reduced such that, the
Territory and the Non-Competition Period shall be deemed reasonable so that the
foregoing covenant not to compete may be enforced.
(ii) Executive agrees and recognizes that in the event of a
breach or threatened breach by Executive of the provisions of the foregoing
covenants, the Corporation may suffer irreparable harm, and that money damages
may not be an adequate remedy. Therefore, the Corporation shall be entitled as a
matter of right to specific performance of the covenants of Executive contained
herein by way of temporary or permanent injunctive relief in a Court of
competent jurisdiction.
-5-
12. Termination. This Agreement and Executive's employment may be
terminated in any one of the followings ways:
(a) Death. The death of Executive shall immediately terminate this
Agreement with no severance compensation due to Executive's estate.
(b) Disability. If, as a result of incapacity due to physical or
mental illness or injury, Executive shall have been absent from her full-time
duties hereunder for three (3) consecutive months, then thirty (30) days after
receiving written notice (which notice may occur before or after the end of such
three (3) month period, but which shall not be effective earlier than the last
day of such three (3) month period), the Corporation may terminate Executive's
employment hereunder provided Executive is unable to resume her full-time duties
at the conclusion of such notice period. Also, Executive may terminate this
employment hereunder if her health should become impaired to an extent that
makes the continued performance of her duties hereunder hazardous to her
physical or mental health or her life, provided that Executive shall have
furnished the Corporation with a written statement from a qualified doctor to
such effect and provided, further, that, at the Corporation's request made
within thirty (30) days of the date of such written statement, Executive shall
submit to an examination by a doctor selected by the Corporation who is
reasonably acceptable to Executive or Executive's doctor and such doctor shall
have concurred in the conclusion of Executive's doctor. In the event this
Agreement is terminated as a result of Executive's disability, Executive shall
(i) receive from the Company, in a lump-sum payment due within thirty (30) days
of the effective date of termination, the base salary for the balance of the
Term and (ii) the Corporation shall make the insurance premium payments
contemplated by COBRA for a period of eighteen (18) months after such
termination.
-6-
(c) Good Cause. The Corporation may terminate this Agreement ten
(10) days after written notice to Executive for "Good Cause," which shall mean
any one or more of the following: (1) Executive's willful, material and
irreparable breach of this Agreement; (2) Executive's gross negligence in the
performance or intentional nonperformance (continuing for ten (10) days after
receipt of written notice of need to cure) of any of Executive's material duties
and responsibilities hereunder; (3) Executive's willful dishonesty, fraud or
misconduct with respect to the business or affairs of the Corporation which
materially and adversely affects the operations or reputation of the
Corporation; (4) Executive's conviction of a felony crime; or (5) confirmed
positive illegal drug test result. In the event of a termination for Good Cause,
as enumerated above, Executive shall have no right to any severance
compensation.
(d) Without Good Cause. At any time after the commencement of
employment, Executive may, without cause, terminate this Agreement and
Executive's employment, effective thirty (30) days after written notice is
provided to the Corporation. Executive may only be terminated without Good Cause
by the Corporation during the Term hereof if such termination is approved by a
majority of the members of the Board of Directors of the Corporation and
provided that the Executive receives at least one (1) month written notice. In
the event that Executive is terminated without Good Cause during the Term,
Executive shall receive from the Corporation, on such dates as would otherwise
be paid by the Corporation, the lesser of the base salary at the rate then in
effect for a period of one (1) year, or the base salary then in effect for the
balance of the Term. Further, if Executive is terminated without Good Cause, (a)
the Corporation shall make the insurance premium payments contemplated by COBRA
for a period of six (6) months after such termination, (b) the Executive shall
be entitled to receive a prorated portion of any annual
-7-
bonus and other incentive compensation to which the Executive would have been
entitled for the year during which the termination occurred had the Executive
not been terminated, (c) all options to purchase the Corporation's Common Stock
based upon the schedule set forth in paragraph 4(b) shall vest thereupon, and
(d) the Executive shall be entitled to receive all other unpaid benefits due and
owing through Executive's last day of employment. If Executive resigns or
otherwise terminates her employment, rather than the Corporation terminating her
employment pursuant to this paragraph 12, Executive shall receive no severance
compensation.
(e) Corporation's Failure to Consummate Initial Public Offering. In
the event that the Corporation does not complete an initial public offering of
the Corporation's securities which does not result in the gross proceeds of at
least $10,000,000 by April 15, 2000, the Corporation hereunder shall have the
right to terminate the employment agreement without any liability.
13. Indemnification. In the event Executive is made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by the
Corporation against Executive), by reason of the fact that she is or was
performing services under this Agreement, then the Corporation shall indemnify
Executive against all expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement, as actually and reasonably incurred by Executive in
connection therewith to the maximum extent permitted by applicable law. The
advancement of expenses shall be mandatory. In the event that both Executive and
the Corporation are made a party to the same third-party action, complaint, suit
or proceeding, the Corporation agrees to engage competent legal representation,
and Executive agrees to use the same representation, provided that if counsel
selected by the Corporation shall have a conflict of interest that prevents such
counsel from representing Executive, Executive may
-8-
engage separate counsel and the Corporation shall pay all attorneys' fees of
such separate counsel. Further, while Executive is expected at all times to use
her best efforts to faithfully discharge her duties under this Agreement,
Executive cannot be held liable to the Corporation for errors or omissions made
in good faith where Executive has not exhibited gross, willful and wanton
negligence and misconduct or performed criminal and fraudulent acts which
materially damage the business of the Corporation.
14. Effect of Waiver. The waiver by either party of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach thereof.
15. Notices. Any notice permitted, required, or given hereunder shall be
in writing and shall be personally delivered; or delivered by any prepaid
overnight courier delivery service then in general use; or mailed, registered or
certified mail, return receipt requested, to the addresses designated herein or
at such other address as may be designated by notice given hereunder:
If to: Xxxxxx Xxxxxx
0 Xxxx Xxxx
Xx. Xxxxxx, X.X. 00000
If to: Urban Cool Network, Inc.
0000 Xxx Xxxxxx
Xxxxxx, Xxxxx 00000
With a copy to: Xxxx X. Xxxxxxxxx, Esq.
Xxxxxxxxx, Xxxxxxx & Xxxxxxx, P.C.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Delivery shall be deemed made when actually delivered, or if mailed, three
days after delivery to a United States Post Office.
-9-
16. Assignment. Executive shall not be entitled to assign her rights,
duties or obligations under this Agreement.
17. Amendments. The terms and provisions of this Agreement may be amended
or modified only by mutual agreement and a written instrument executed by both
parties to be charged by such amendment or modification.
18. Governing Law. The terms and provisions herein contained and all the
disputes or claims relating to this Agreement shall be governed by, interpreted
and construed in accordance with the internal laws of the State of New York,
without reference to its conflict of laws principles.
19. Arbitration.
(a) In the event of a dispute between the parties arising out of or
relating to this Agreement, or the breach thereof, the parties shall make every
effort to amicably resolve, reconcile, and settle such dispute between them.
Should an amicable resolution not be possible, either party may invoke
arbitration.
(b) Subject to the provisions of Section 11(c)(ii) hereof, all
claims, disputes and other matters in controversy arising out of or related to
this Agreement or the performance or breach hereof, shall be decided by binding
arbitration in accordance with the Commercial Arbitration Rules of the American
Arbitration Association (the "AAA Rules"), by a panel of three (3) arbitrators,
in New York, New York. One (1) such arbitrator shall be appointed by each of the
parties within three (3) weeks after being requested by the other party to make
such appointment and the third arbitrator shall be appointed by the two (2)
arbitrators appointed by the parties. In the event that a party does not appoint
its arbitrator within such three (3) week period, or the two (2) arbitrators
appointed by the parties shall fail to agree on the third arbitrator, such
-10-
appointed arbitrator or arbitrators shall be appointed by the American
Arbitration Association in accordance with the AAA Rules. The award shall state
the facts and findings and shall be rendered with reasons in writing. The
arbitrators shall have no authority or power to alter or modify any express
condition or provision of this Agreement, or to render any award which by its
terms shall have the effect of altering or modifying any express conditions or
provisions of this Agreement. The award rendered by the arbitrators shall be
final and judgement may be entered upon it in any court having jurisdiction
thereof. The successful party to the arbitration shall be entitled to an award
for reasonable attorney's fees, as determined by the arbitrators.
20. Captions. The captions of the sections of this Agreement are for
convenience of reference only and in no way define, limit or affect the scope or
substance of any section of this Agreement.
21. Merger and Severability. This Agreement shall constitute the entire
Agreement between the Corporation and Executive with respect to the subject
matter hereof. The invalidity or unenforceability of any provision hereof shall
in no way affect the validity or enforceability of any other provision.
22. Counterparts; Facsimile. This Agreement may be executed by facsimile
and in two (2) or more counterparts, each of which shall be deemed an original
and all of which together shall constitute but one and the same instrument.
-11-
IN WITNESS WHEREOF, the parties hereto have affixed their signatures the
day and year first above written.
URBAN COOL NETWORK, INC.
By: /s/ Xxxxx X. Xxxxx, III
-------------------------
Name: Xxxxx X. Xxxxx, III
Title: CEO
/s/ Xxxxxx Xxxxxx
-----------------
XXXXXX XXXXXX
-12-
