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EXHIBIT 10.6
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement"), made as of the 15th day of
November, 1996, is entered into by Exchange Applications, Inc., a Delaware
corporation with its principal place of business at 000 Xxxxxxxx Xxxxxx, Xxxxxx,
XX 00000 (the "Company"), and Xxxxxx X. Xxxxxxx, an individual residing at 00
Xxxx Xxxx, Xxxxxxx, XX 00000 (the "Employee").
The Company desires to employ the Employee, and the Employee desires to
be employed by the Company. In consideration of the mutual covenants and
promises contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by the parties hereto,
the parties agree as follows:
1. "AT WILL" EMPLOYMENT. The Company hereby agrees to employ the
Employee, and the Employee hereby accepts employment with the Company, on an "at
will" basis and upon the other terms set forth in this Agreement. The period of
time during which the Employee is employed by the Company hereunder is hereafter
referred to as the "Employment Period".
2. CAPACITY. The Employee shall serve as an executive of the Company,
subject to the general direction and control of the Company's Board of Directors
(the "Board") or its designee.
The Employee hereby accepts such employment and agrees to undertake
faithfully, diligently and to the best of his ability such executive duties and
responsibilities as the Board or its designee shall from time to time assign to
him. The Employee agrees to devote his entire business time, attention and
energies to the business and interests of the Company during the Employment
Period. The Employee agrees to abide by the rules, regulations, instructions,
personnel practices and policies of the Company and any changes therein which
may be adopted from time to time by the Company.
3. COMPENSATION AND BENEFITS.
3.1 SALARY. The Company shall pay the Employee, in bi-weekly
installments, an annual base salary of $200,000 during the Employment Period.
3.2 BONUSES. The Employee shall be entitled to a bonus in
respect of each calendar year during the Employment Period, commencing with
1996. The maximum amount of such annual bonus shall be $100,000, commencing with
1996. The actual amount of the bonus in respect of any calendar year will be
equal to X($50,000) + Y($50,000) where X represents the percentage associated
with the
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grade assigned to the Employee for his corporate citizenship performance for the
year by the Board, and where Y represents the percentage associated with the
profitability of the Company for the year. The Employee's corporate citizenship
performance will be benchmarked against an assessment model under which the
Employee will be given a grade of H, M or L corresponding to 100%, 65% and 35%,
respectively. The profitability of the Company will be benchmarked against the
Company's financial plan for the year as approved by the Board. If the Company's
profit for the year equals or exceeds 100% of the-profit goal set forth in the
plan (the "Profit Goal"), Y equals 100%; if the Company's profit for the year
equals or exceeds 85% of the Profit Goal but is less than 100% of the Profit
Goal, Y equals 65%; and if the Company's profit for the year is less than 85% of
the Profit Goal, Y equals 35%. The Company will provide the Employee with a
written six-month performance evaluation by July 15 of each year during the
Employment Period. A bonus due with respect to a given calendar year will be
paid by February 15 of the following year.
3.3 REIMBURSEMENT OF EXPENSES. The Company shall reimburse the
Employee for all reasonable travel, entertainment and other expenses incurred or
paid by the Employee in connection with, or related to, the performance of his
duties, responsibilities or services under this Agreement, upon presentation by
the Employee of documentation, expense statements, vouchers and/or such other
supporting information as the Company may request, provided that the amount
available for such travel, entertainment and other expenses may be fixed in
advance by the Board.
3.4 EQUITY. As additional consideration for his provision of
services hereunder, the Company will grant the Employee 848,800 shares of the
Company's common stock, $.001 par value per share, pursuant to a Restricted
Stock Agreement of even date herewith.
4. EMPLOYMENT TERMINATION. The Company shall have the right to terminate
the Employee's employment hereunder at any time with or without cause, subject
to the requirements of applicable law. Upon termination of this Agreement and
the Employee's employment by the Company, the Employee shall not be entitled to
any severance benefits other than as may be required by applicable law.
5. NONDISCLOSURE AND DEVELOPMENTS AGREEMENT; MUTUAL RELEASE.
Concurrently with the execution and delivery of this Agreement, the Employee
agrees to execute and deliver to the Company a Nondisclosure and Developments
Agreement in the form attached as EXHIBIT 1 hereto (the "Nondisclosure
Agreement") and the Mutual Release in the form of EXHIBIT 2 hereto (the
"Release"). The provisions of the Nondisclosure Agreement, the Release and
Section 6 of this Agreement shall survive the termination of this Agreement.
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6. NON-COMPETITION COVENANTS.
6.1 NON-COMPETITION COVENANTS. The Employee agrees that he
will not, during the Non-Competition Period, compete directly or indirectly with
the business of the Company. The phrase "compete directly or indirectly with the
business of the Company" shall be deemed to include, without limiting the
generality thereof, (1) engaging or having a material interest, directly or
indirectly, as owner, employee, officer, director, partner, sales
representative, stockholder, capital investor, lessor, renderer of consultation
services or advice, either alone or in association with others, in the operation
of any aspect of a business or enterprise which is competitive with the business
in which the Company was engaged during the course of the Employee's employment
by the Company; (2) soliciting any employee of the Company to leave the employ
of the Company; (3) soliciting any of the employees of the Company to become
employees of any other person or entity; or (4) soliciting any customer of the
Company with respect to the business of the Company. The phrase "compete
directly or indirectly with the business of the Company", as used in this
Agreement, shall be deemed not to include any ownership interest as an inactive
investor. The phrase "ownership interest as an inactive investor" for purposes
of this Agreement shall mean the beneficial ownership of less than two (2%)
percent of the outstanding shares of any series or class of securities of any
competitor of the business of the Company, which securities of such series or
class are publicly traded in the securities markets.
6.2 NON-COMPETITION PERIOD. For the purposes of this Section
6, "Non-Competition Period" shall mean (i) the period during which the Employee
is employed by the Company, and (ii) if the Non-Competition option (referred to
in Section 6.3 below) is exercised by the Company, the Post-Employment
Non-Competition Period.
6.3 NON-COMPETITION OPTION. Upon the termination of the
Employee's employment with the Company, for whatever reason, the Company shall
have the option (the "Non-Competition Option") to extend the non-competition
covenants set forth in subsection 6.1 above for up to two (2) years following
the date of such termination (the "Termination Date"). To exercise the
Non-Competition Option, the Company shall be required to give written notice to
the Employee of its intent to do so within thirty (30) days after the
Termination Date, such notice to specify the period following the Termination
Date during which the Employee shall continue to be bound by the non-competition
covenants set forth in subsection 6.1 above (the "Post-Employment
Non-Competition Period"). If the Company exercises the Non-Competition Option,
the Employee will continue to be bound by the provisions of subsection 6.1 for
the Post-Employment Non-Competition Period, provided that the Company pays the
Employee on or before the fifteenth day of each month during such period an
amount equal to 75% of the Employee's monthly base salary from the Company at
the time of his employment termination.
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7. INJUNCTIVE AND OTHER EQUITABLE RELIEF.
7.1 The Employee acknowledges that the services to be rendered
by him under the terms of this Agreement are of a special, unique and
extraordinary character, which gives them a peculiar value, the loss of which
cannot be reasonably or adequately compensated in damages in any action at law.
By reason of this, the Employee consents and agrees that if he violates any of
the provisions of Section 6 hereof, the Company shall be entitled, in addition
to any other remedies it may have at law, to the remedies of injunction,
specific performance and other equitable relief for a breach by the Employee of
Section 6 of this Agreement. This Section 7 shall not, however, be construed as
a waiver of any of the rights which the Company may have for damages or
otherwise.
7.2 Any waiver by the Company of a breach of any provision of
Section 6 hereof shall not operate or be construed as a waiver of any subsequent
breach of such provision or any other provision hereof.
7.3 The Employee agrees that each provision of Section 6 shall
be treated as a separate and independent clause, and the unenforceability of any
one clause shall in no way impair the enforceability of any of the other clauses
herein. Moreover, if one or more of the provisions contained in Section 6 shall
for any reason be held to be excessively broad as to scope, activity or subject
so as to be unenforceable at law, such provision or provisions shall be
construed by the appropriate judicial body by limiting and reducing it or them
so as to be enforceable to the maximum extent compatible with the applicable law
as it shall then appear.
8. OTHER AGREEMENTS. Employee hereby represents and warrants that he is
not bound by the terms of any agreement with any previous employer or other
party to refrain from using or disclosing any trade secret or confidential or
proprietary information in the course of his employment with the Company or to
refrain from competing, directly or indirectly, with the business of such
previous employer or any other party. Employee further represents and warrants
that his performance of all the terms of this Agreement and the Nondisclosure
Agreement does not and will not breach any agreement to keep in confidence
proprietary information, knowledge or data acquired by him in confidence or in
trust prior to his employment with the Company.
9. NOTICES. All notices required or permitted under this Agreement
shall be in writing and shall be deemed effective upon personal delivery or upon
deposit in the United States Post Office, by registered or certified mail,
postage prepaid, addressed to the other party at the address shown above, or at
such other address or addresses as either party shall designate to the other in
accordance with this Section 9.
10. PRONOUNS. Whenever the context may require, any pronouns used in
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this Agreement shall include the corresponding masculine, feminine or neuter
forms, and the singular forms of nouns and pronouns shall include the plural,
and vice versa.
11. INTEGRATION. This Agreement, the Restricted Stock Agreement
referred to in Section 3.4, the Stockholders' Agreement of even date herewith
among the Company, the Employee and certain other stockholders of the Company,
the Nondisclosure Agreement and the Release constitute the entire agreement
between the Employee, on the one hand, and the Company, Xxxx Xxxxx, Cyrk, Inc.,
the officers and directors of Cyrk, Inc., Grant & Partners Limited Partnership
and Grant & Partners, Inc., on the other, and supersedes all prior agreements
and understandings, whether written or oral, between such parties.
12. AMENDMENT. This Agreement may be amended or modified only by a
written instrument executed by both the Company and the Employee.
13. GOVERNING LAW. This Agreement shall be construed, interpreted and
enforced in accordance with the laws of the Commonwealth of Massachusetts.
14. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of both parties and their respective successors and
assigns, including any corporation with which or into which the Company may be
merged or which may succeed to its assets or business, provided, however, that
the obligations of the Employee are personal and shall not be assigned by him.
15. MISCELLANEOUS.
15.1 No delay or omission by the Company in exercising any
right under this Agreement shall operate as a waiver of that or any other right.
A waiver or consent given by the Company on any one occasion shall be effective
only in that instance and shall not be construed as a bar or waiver of any right
on any other occasion.
15.2 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.
15.3 In case any provision of this Agreement shall be invalid,
illegal or otherwise unenforceable, the validity, legality and enforceability of
the remaining provisions shall in no way be affected or impaired thereby.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year set forth above.
EXCHANGE APPLICATIONS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
Title: Vice President
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EMPLOYEE
/s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
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