EXHIBIT 10.7
EMPLOYMENT AGREEMENT
This Agreement, made as of this 7th day of July, 97 by and between Intralinks, a
Delaware Corporation (the "Company") and Xxxx Xxxxxxx (the "Executive"), an
individual residing at 0 Xxxxx Xxxxx, Xxxxx Xxxx, XX 00000.
1. Term. The Executive shall be employed by the Company for a period commencing
on July 7, 1997 and, except as provided herein, ending 3 years from such date.
At such time, this Agreement will automatically renew for a period of one year,
unless either party provides 90 days notice of its intention not to renew. A
failure not to renew this Agreement shall not constitute a termination of the
Executive's employment.
2. Position. The Executive shall serve as the Chief Executive Officer.
3. Compensation
(i) Base Salary. For all services rendered to the Company, the Company shall pay
the Executive a salary at the rate of $150,000 per year. Annually, commencing
one year from the date of this agreement, the Executive will be entitled to a
salary review by the Board of Directors, or a committee designated by the Board
of Directors. The Board shall increase, but not decrease said salary; provided
that the minimum increase is equal to the Consumer Price Index for All Urban
Consumers as published by the US Department of Labor for the twelve month period
immediately preceding the Salary Adjustment.
(ii) Bonus. The Executive shall be paid eligible for a bonus under the Company's
bonus plan as attached in Exhibit A.
4. Stock Options. The Executive is entitled to an annual review which, at the
Board of Directors determination, may include an incentive stock option grant.
5. Benefits. The Executive shall be eligible to participate in all benefit
plans, at the same terms, as those benefits granted to other Senior Executives
of the company. At a minimum such benefits shall include family health benefits.
The Executive shall be entitled to four (4) weeks vacation with full pay.
6. Termination of employment.
(a) Termination for Cause
Executive's employment under this Agreement may be terminated for cause at any
time, effective upon written notice after formal action by the Board of
Directors at a special meeting duly called for the purpose of considering the
termination of the Executive. Executive shall have the right to receive notice
of and appear at such meeting to respond to any allegations made against him.
"Cause" shall be deemed to mean one or more of the following: (i) Executive's
embezzlement or misappropriation of funds (ii) Executive's conviction of a
felony involving moral turpitude (iii) Executive's commission of material acts
of dishonesty, fraud, or deceit (iv) Executive's habitual or willful neglect of
duties. In the event that the Executive is terminated for cause, the Executive
shall be paid all compensation and other sums due to him through the date of
termination, but shall not be entitled to receive any compensation or benefits
thereafter.
(b) Termination without Cause.
The Company may, at any time, terminate this Agreement without cause on 90 days
prior written notice to the Executive. If the Executive's employment is
terminated without cause, for any reason other than Termination Following Change
of Control as defined in Section 6. (d), the Company shall pay to the Executive
as liquidated damages his Monthly Base Salary multiplied by the ratio of the
Executive's length of employment (as measured from June 15, 1996) divided by 2,
up to a maximum of the Annual Base Salary. If the Executive is terminated
subject to the conditions described in Section 6(d), he shall be entitled to 18
months Base Salary.
The Base Salary shall be paid in monthly installments or, at the option of the
Executive, in a lump sum. Payments will begin with the date of termination and
ending according to the above schedule (the "Severance Period"). Upon
termination without cause, the Executive shall be deemed to be an executive of
the Company for the Severance Period with respect to any health plans or other
benefits.
If the Executive's employment is by reason of a Change of Control as defined in
Section 6.(d) and if the Executive is a participant in a stock option, equity
vesting, or other equity participation plan, his unvested stock options or
equity (common stock) will be accelerated and, if applicable, exercisable, as
provided for in such plan. If Executive's employment is terminated without cause
absent a Change of Control, there will be no accelerated vesting.
If the Executive's employment is terminated without cause, the Company shall
release the Executive from all liability for any and all acts or omissions of
the Executive.
(c) Termination Upon Death or Disability.
If the Executive dies or becomes permanently disabled to the extent that he is
unable to perform his duties under this Agreement, he shall be deemed terminated
and he, his heirs, or assigns shall receive an amount equal to his Base Salary
plus any bonus compensation.
(d) Termination Following Change of Control.
If, within 12 months after a Change of Control of the Company (as hereinafter
defined), the Executive (i) is no longer Chief Financial Officer or, the
surviving entity of such transaction (without regard to any parent/subsidiary
relationship), (ii) the Executive's duties or responsibilities are changed (iii)
the Executive's current position in the chain of command of the Company or
surviving entity of such transaction (without regard to any parent/subsidiary
relationship) is materially changed or (iv) the Executive's benefits, access to
benefits, or compensation are decreased, the Executive shall be conclusively
deemed, in the sole discretion of the Executive, to have been terminated without
cause with the benefits set forth in section 6(b). The Executive shall give the
Board of Directors of the Company or surviving entity, written notice of his
exercise of his rights hereunder.
For purposes of this agreement, "Change of Control" shall be deemed to occur if
any of the following have occurred:
(i) the acquisition in one or more transactions by any person or entity or any
group or persons or entities who constitute a group (within the meaning of
Section 13(d)(3) of the Securities and Exchange Act of the 1934) of any
securities such that there is a change in the beneficial ownership of more than
50% of the fully-diluted outstanding equity of the Company; provided that, a
public offering of the Company's stock will not constitute a change of control;
(ii) the dissolution of the Company;
(iii) a sale or other disposition or the last sale or other disposition to occur
in a series of sales/and or dispositions within any 18 month period ("Serial
Sales") by the Company and/or one or more subsidiaries of the Company of assets
which, in the case of Serial Sales, account for more than 50% of the
consolidated revenues of the Company and its subsidiaries as determined by GAAP;
provided, however, that no sale or disposition of assets or stock shall be taken
into account to the extent that the proceeds of such sale or disposition are
reinvested or used in the ongoing conduct by the Company or one or more of its
subsidiaries of the business or the Company and/or such subsidiary or
subsidiaries, provided further that such a reinvestment shall not be deemed to
have occurred unless made within 18 months of such sale or disposition; or
(iv) a sale of the business or business unit or facility within which the
Executive is employed, as a result of which the Executive is no longer employed
by an entity which is directly or indirectly controlled by the Company.
7. Indemnification.
The Company will indemnify the Executive to the fullest extent permitted
(including payment of legal expenses as incurred) by law or the Company's
by-laws. The Executive shall be entitled to the protection of any insurance
policies the Company may elect to maintain generally for the benefit of its
directors and officers.
8. Miscellaneous
This Agreement shall be governed by and construed in accordance with the laws of
the State of New York. This agreement shall not be amended unless signed by the
Company and the Executive.
a) Any notices required shall be in writing and shall be deemed to be duly made
or given when mailed by registered or certified mail, return receipt requested
to
Xxxx Xxxxxxx Intralinks
9 Vliet Drive 0000 Xxxxxxxx. Xxxxx 00X
Xxxxx Xxxx, XX 00000 Xxx Xxxx, XX 000000
Attn: Xxxx Xxxxx
(b) This agreement shall not be amended except by a writing signed by both
parties hereof. This agreement may be executed in counterpart signature pages,
which when taken together with signature of all parties, shall constitute a
complete original.
(c) In the event of a Change of Control, the Company will require the successor
to the Company as the Executive's employer to expressly assume and agree to
perform this agreement in the same manner and to the same extent that the
Company would have been required to perform. This Agreement shall inure to the
benefit of the Executive's personal or legal representatives, executors,
administrators, heirs, and successors. This agreement shall not be assignable by
the Executive.
(d) Each party shall pay its own expenses in connection with the execution of
this agreement.
(e) Each party hereto represents and warrants that they are not party to any
other agreement which would conflict with or interfere with the terms and
conditions of this Agreement.
(f) No waiver of any breach of any terms hereof shall be effective unless made
in writing signed by the party against whom enforcement of the waiver is sought,
and such waiver shall not be construed as a waiver of any subsequent breach of
that term or of any other term of the same or different nature.
(g) The parties agree to submit all controversies, claims and matters of
difference in any way related to this Agreement or the performance or breach of
the whole or any part hereof, to arbitration in New York, NY, according to the
rules and practices of the American Arbitration Association. Any such dispute
shall be decided by three (3) arbitrators. Arbitration of any such controversy,
claim or matter of difference shall be a condition precedent to any legal action
thereon. Awards shall be final and binding on all parties to the extent and in
the manner provided by New York law.
In witness whereof, the undersigned have executed this agreement as of the first
date above written.
/s/ Xxxx Xxxxxxx
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Xxxx Xxxxxxx
Intralinks, Inc.
By: /s/ Xxxx Xxxxx
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Its: President & CEO
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Final Plan IntraLinks, Inc. 5/23/97
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Management Performance Incentives -- Cash Bonus Plan
In order to attract and retain the best available talent and to encourage the
highest level of performance to serve the best interests of IntraLinks and its
shareholders, the Board has approved an annual cash bonus plan for its employees
(the "Bonus Plan").
Administration
The Bonus Plan will be administered by a three-member Compensation Committee of
the Board of Directors. Subject to provisions of the IntraLinks Stockholders'
Agreement and consistent with the Company's primary mission and business goals,
the Committee in its discretion shall have plenary authority to:
o determine the total amount of cash bonus awards ("Bonus Pool") to be
granted to all employees on an annual basis;
o determine all the persons to whom, and the time or times at which,
individual awards shall be granted and paid ("Individual Awards"); and
o interpret the Bonus Plan and prescribe, amend and rescind all policy,
rules and regulations relating thereto.
Bonus Pool
The size of the annual Bonus Pool will be based upon the achievement of growth
in annual revenues and the annual growth in EBIT (Earnings Before Interest and
Taxes). In principle, the size of the Bonus Pool will be calculated based on the
formula:
o 5%-10% of the increase in annual revenues,
plus
o 5%-10% of the increase in EBIT profit(1).
The decision on whether to award as a Bonus Pool of 5% or 10% of the annual
increase in revenue and/or EBIT growth, or a percentage in between 5% and 10%,
will be made by the Committee based in part on subjective considerations,
including but not limited to the relationship between actual results and the
Company's business and financial plans, and the business outlook for the coming
year.
Bonus Pool amounts will be accrued annually but not paid out to individuals
until and unless the Company has positive annual EBIT profits. Accrued
Individual Awards will be carried forward and will be paid in cash only at such
time and to such extent as permitted by a positive EBIT result(s) for the prior
calendar year(s).
The total accrued Bonus Pool amount paid out in any one year will be limited to
a maximum of 40% of the Company's EBIT profit for that same year.
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1 A decrease in EBIT Loss as considered to be an increase in EBIT Profit.
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Final Plan IntraLinks, Inc. 5/23/97
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Individual Awards
Individual Awards in aggregate will not exceed the size of the Bonus Pool and
Preliminary Allocations will be determined by the Committee annually in advance
of the year to which they apply. The Bonus Plan will commence on January 1,
1998.
The allocation of the Bonus Pool to individual employees will change from year
to year, based upon the Committee's quantitative and qualitative assessment of
the past and prospective performance of each individual - in contributing to the
Company's success, and based upon the relative importance of each person's job
duties.
There is no requirement that the entire Bonus Pool must be awarded to
individuals.
Final determination of the size of the Bonus Pool and the Final Allocation of
the Bonus Pool to individuals will be made by the Committee in February of the
year following the calendar year to which the Bonus Pool applies. At the same
time, the Committee will make a Preliminary Allocation of the Bonus Pool to
individuals for the forthcoming year.
Individuals subject to the Preliminary Allocation of Individual Awards who are
no longer employed by the Company at the time of the Final Allocation - will
not receive a final Individual Award for that year, unless the Committee should
decide otherwise.
Once an Individual Award is Final, the accrued Individual Award vests
immediately and will be paid in cash, pro rata to other Individual Awards, at
the same time as other Individual Awards are paid in cash, whether or not the
recipient at that time still is employed by the Company.
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INTRALINKS, INC.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
December 15, 1997
Xxxx Xxxxxxx
0 Xxxxx Xxxxx
Xxxxx Xxxx, XX 00000
Dear Xxxx:
Reference is made to that certain Employment Agreement dated as of
July 7, 1997 (the "Agreement") by and between IntraLinks, Inc. (the "Company")
and you which is hereby amended as follows:
Section 3 (ii) of the Agreement is hereby eliminated and any references to such
subsection shall be without force and effect.
In all other respects, the Agreement remains unchanged and in full
force and effect. If the foregoing is acceptable to you, please sign as
indicated below. All other terms and conditions of the Agreement remain
unchanged and in full force and effect.
INTRALINKS, INC.
By: /s/ Xxxxxxx Xxxx
------------------------------------
Name: Xxxxxxx Xxxx, Xx.
Title: Chief Operating Officer
Agreed and Accepted by:
/s/ Xxxx Xxxxxxx
---------------------------------
Xxxx Xxxxxxx
