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1
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Article IV — Compensation And Other
Benefits
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2
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Article V — Business
Expenses
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4
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4
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Article VII — Termination of
Employment
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Article VIII —
Resignation
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Article IX —
Non-Competition
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8
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Article XI — Construction of
Contract
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Article XII — Change in
Control
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Article XIII —
Miscellaneous
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THIS EMPLOYMENT
CONTRACT (“Contract”) is made and entered as of the
28th day of November, 2006 between BABYUNIVERSE, INC., a Florida
corporation (“Employer”), and Michael R. Hull
(“Employee”).
A. Employee
and Employer desire to enter into this Contract to memorialize the
employment relationship between Employer and Employee.
B. Subject to
the terms and conditions of this Contract, Employee is the Chief
Financial Officer of Employer.
NOW, THEREFORE, in
consideration of the mutual promises contained herein and for other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto mutually agree as
follows:
The above stated
Recitals are true and correct and are incorporated by reference
into this Contract.
The initial term
of this Contract shall be one (1) year commencing as of
December 11, 2006 (the “Commencement Date”) and
ending one (1) year thereafter unless terminated earlier as
provided herein (the “Initial Term”). The Initial Term
shall be extended for successive one (1) year periods unless
either party gives the other thirty (30) days prior written
notice of its intent not to renew prior to the expiration of the
then current term.
A. In
General. Upon the terms and subject to the conditions of this
Contract, Employer hereby employs Employee and Employee hereby
accepts such employment with Employer for the term of this Contract
as the Chief Financial Officer of Employer. Employee shall have the
powers and duties with respect to Employer’s business
interests (the “Businesses”) as set forth in the Bylaws
of Employer for its Chief Financial Officer and such other
executive and managerial duties as normally associated with such
positions, subject to the direction of the Chief Executive Officer
or the President of the Company in accordance with the reasonable
policies adopted from time to time by the Board of Directors and
communicated by written notice to Employee (the
“Duties”). During the term of this Contract and subject
to Article III.D below , Employee shall devote
substantially all of Employee’s business time, attention,
skill and efforts to the faithful performance of the
Duties.
B. Place of
Performance. The Duties shall be performed in Jupiter, Florida,
except for such travel in the ordinary course of Employer’s
business as may from time to time be reasonably required.
Employee’s principal place of business shall be at the
executive offices of Employer in Jupiter, Florida.
C. Delegation.
Notwithstanding anything to the contrary contained in this
Article III, Employee shall have the right and authority to
delegate responsibility to one or more personnel as Employee deems
appropriate, and is hereby authorized to hire on behalf of Employer
additional agents, employees and other representatives which in
Employee’s reasonable opinion, and subject to the prior
approval of the president of the Employer, are necessary to handle
the affairs of Employer, and to terminate the employment of any and
all agents, employees and other representatives of Employer, other
than appointed officers of Employer, the termination of whom shall
be subject to the prior approval by Employer’s Chief
Executive Officer or President.
D. Other
Activities. Employee shall use Employee’s best efforts for
the benefit of Employer by whatever activities Employee reasonably
deems appropriate to maintain and improve Employer’s standing
in the community generally and among other members of the
industries in which Employer is from time to time engaged,
including such entertaining for business purposes as Employee
reasonably considers appropriate. Employee shall not, without the
approval of the Chief Executive Officer or the President of
Employer, render services of a business nature to any other person
or entity, if such activities would interfere with the performance
of Employee’s Duties as required under this Contract or
otherwise prevent Employee from devoting substantially all of
Employee’s business time, attention, skill and efforts to the
performance of Employee’s Duties as required under this
Contract. Subject to the foregoing limitations, the following
activities shall be deemed to be permissible: (i) owning or
managing real or personal property owned by Employee or
Employee’s family members; (ii) owning any business
which does not compete, directly or indirectly, with Employer; and
(iii) holding directorships or similar positions in any
organization which is not competing with Employer and which is
approved by the Board of Directors of Employer.
Article IV —
Compensation And Other Benefits
A. Base
Salary, Signing Bonus, Annual Bonus and Employee Benefit Plans. For
all services rendered by Employee in any capacity during
Employee’s employment under this Contract (including any
renewals hereof), Employer shall pay to Employee as compensation
the sum of the amounts set forth in the following subparagraphs 1
through 4.
1.
Base Salary. Commencing upon the Commencement Date, Employee shall
be paid the sum One Hundred Thirty Five Thousand Dollars
($135,000.00) on an annualized basis (the “Base
Salary”), which amount shall be paid in accordance with
Employer’s customary payroll practices and shall be subject
to adjustment from time to time, as determined by the Compensation
Committee of the Board of Directors of Employer.
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2.
Annual Bonus. On or before one hundred twenty (120) days
subsequent to the completion of Employer’s preceding fiscal
year, Employee shall be eligible to receive a cash bonus, such
bonus to be within the sole discretion of the Compensation
Committee of the Board of Directors of Employer.
3.
Benefit Plans. During the term of Employee’s employment with
Employer, Employee shall be entitled to participate in all
incentive, savings and retirement plans, practices, policies and
programs applicable generally to other executives of Employer
(“Investment Plans”) and Employee shall be eligible for
participation in and shall receive all benefits under, welfare
benefit plans, practices, policies and programs applicable
generally to other executives of Employer, including but not
limited to comprehensive medical and dental coverage
(“Welfare Plans”).
4.
Dues. Employer shall pay the dues of such professional associations
and societies of which Employee is a member in furtherance of
Employee’s Duties, including without limitation CPE credits
and other professional certifications and continuing education
requirements associated with being a CPA.
B. Payments
Upon Termination.
1.
Termination by Employer for Cause; Voluntary Unilateral Decision by
Employee Without Cause; Death or Disability. If Employee’s
employment is terminated (i) by Employer for Cause (as
hereinafter defined at Article VII.B); (ii) by Employee
by a voluntary unilateral decision by Employee without Cause (as
defined at Article VII.A ) ; or (iii) as a result
of Employee’s death or Disability (as defined below), then
Employee shall be entitled to: (1) the base salary pursuant to
Article IV.A.1 earned through the date of termination;
(2) accrued vacation under Article VI hereof; and
(3) all applicable reimbursements from Employer due under
Article V hereof. As used in this Contract, the term
“Disability” means (A) Employee’s incapacity
due to a permanent mental or physical illness that prevents
Employee from performing Employee’s duties hereunder for 26
consecutive weeks or (B) a physical condition that renders the
performance by Employee of Employee’s duties hereunder a
serious threat to the health and well being of Employee. Disability
shall be determined by a physician selected by Employee (or
Employee’s legal representative) and reasonably acceptable to
Employer.
2.
Termination for Reasons Other than Termination by Employer for
Cause; Voluntary Unilateral Decision by Employee or Death or
Disability. If Employee’s employment is terminated for any
reason by either party, other than as a result of termination by
Employer for Cause (as defined at Article VII.B), a termination by
a voluntary unilateral decision by Employee without Cause (as
defined at Article VII.A ) or a termination as a result
of Employee’s death or Disability, Employee shall be entitled
to: (1) any applicable Severance, as such term is defined
below, (2) all amounts set forth in items (1), (2) and
(3) of Article IV.B.1 above. For purposes of this
Contract, clauses (1) and (2) of this Article IV.B.2
of this Contract shall collectively be referred to as the
“Termination Benefits.” Payment of the Termination
Benefits shall be conditioned upon the execution by Employee of a
valid release, to be prepared by Employer, in which Employee
releases Employer, to the maximum extent permitted by law, from any
and all
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claims Employee
may have against Employer that relate to or arise out of
Employee’s employment or termination of employment.
“Severance” shall be calculated initially as one
twelfth of the Base Salary, with an additional one twelfth of the
Base Salary for each full year that this Agreement and any
extension thereof shall be in effect. Notwithstanding anything to
the contrary in the foregoing, the Severance shall never exceed one
half of the Base Salary nor shall it be less than one twelfth of
the Base Salary.
Article V — Business
Expenses
A. Business
Expenses. Employee is authorized to incur reasonable expenses to
execute and/or promote the Businesses of Employer, including, but
not limited to, expenses related to maintenance of professional
licenses and expenses for reasonable entertainment, travel, and
similar items, in each case, in accordance with the policies,
practices and procedures of Employer. Employer will reimburse
Employee for all reasonable travel or other expenses incurred while
on business. Employer will not reimburse Employee for automobile
expense associated with traveling to Employer’s
offices.
Employee will be
entitled to fifteen (15) days of paid time off in accordance
with the Employer’s vacation policy annually or such other
time as authorized by the Board of Directors during which time
Employee’s compensation shall be paid in full. Days of paid
time off that are unused in any calendar year may not be
accumulated and carried forward and used in future
years.
Article VII —
Termination of Employment
A. Termination
by Employee. Employee may terminate Employee’s employment
with Employer at any time upon notice to Employer for
“Cause.” As used in this Paragraph A, the term
“Cause” shall mean:
1.
Employer’s material breach of this Contract; provided,
however, that in the event Employee believes that this Contract has
been materially breached, Employee shall provide Employer with
written notice of such breach and provide Employer with a thirty
(30) day period in which to cure or remedy such
breach;
2.
Assignment to Employee of regular duties inconsistent with
Employee’s position, or status with Employer; or
3.
The relocation of Employer’s principal executive offices to a
location more than forty (40) miles outside of Jupiter, Florida
without Employee’s prior consent.
B. Termination by
Employer. Employee’s employment may be terminated by Employer
at any time upon notice to Employee for “Cause.” As
used in this Paragraph B, the term “Cause”
shall
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mean:
(i) commission of any act of fraud or gross negligence by
Employee in the course of employment hereunder that, in the case of
gross negligence, has a material adverse effect on the business or
financial condition of Employer or any of its affiliates;
(ii) willful material misrepresentation at any time by you to
the President and Chief Executive Officer or the Board of Directors
of Employer; (iii) Employee’s willful failure or refusal
to comply with any of Employee’s material obligations
hereunder or to comply with a reasonable and lawful instruction of
the President and Chief Executive Officer or the Board of Directors
of Employer; (iv) engagement by Employee in any conduct or the
commission by Employee of any act that is, in the reasonable
opinion of the Board of Directors of Employer, materially injurious
or detrimental to the substantial interest of Employer or any of
its affiliates; (v) Employee’s indictment for any
felony, whether of the United States or any state thereof or any
similar foreign law to which Employee may be subject; (vi) any
failure substantially to comply with any written rules,
regulations, policies or procedures of Employer furnished to
Employee that, if not complied with, could reasonably be expected
to have a material adverse effect on the business of Employer or
any of its affiliates; (vii) the use by Employee of an illegal
substance, including, but not limited to, marijuana, cocaine,
heroin, and all other illegal substances, and/or the dependence by
Employee upon the use of alcohol, which, in any case, in the
opinion of both Employee’s family physician and a physician
chosen by Employer, materially impairs Employee’s ability to
perform Employee’s Duties hereunder, which dependence is not
cured or rehabilitated, as determined by Employee’s
physician, within three (3) months of receipt of written
notice from Employer to Employee; or (viii) any willful
failure to comply with Employer’s policies regarding insider
trading.
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