INTERCONTINENTALEXCHANGE, INC. AMENDED AND RESTATED EMPLOYMENT AGREEMENT FOR DAVID S. GOONE
Exhibit 10.3
This is an amended and restated Employment Agreement entered into between
IntercontinentalExchange, Inc., a Delaware corporation, or “ICE”, and Xxxxx X. Xxxxx, or
“Executive”, the terms and conditions of which are as follows:
§ 1. TERM OF EMPLOYMENT
1.1. Initial Term. Subject to the terms and conditions set forth in this Employment
Agreement, ICE agrees to employ Executive and Executive agrees to be employed by ICE for an initial
term of three (3) years, which initial term shall start on the date this Employment Agreement is
signed on behalf of ICE and shall end on the third anniversary of such date. ICE and Executive
further agree that such initial term shall be subject to extensions in accordance with the rules
set forth in § 1.2.
1.2. Extensions.
(a) General Rule. The initial term of this Employment Agreement as set forth in §1.1
shall be extended every six (6) months so that the remaining term of this Employment Agreement is
never more than three (3) years or less than two and one half (2 1/2) years unless ICE or Executive
delivers written notice to the other before the effective date of any such extension that there
will be no such extension, in which event there will be no extension and no further extensions of
such initial term.
(b) Effective Date for Extensions.
(1) First Effective Date. The first effective date for an extension
described in § 1.2(a) shall be the last day of the six (6) month period which starts
on the date ICE signs this Employment Agreement.
(2) Second Effective Date. The second effective date for an extension
described in § 1.2(a) shall be the first anniversary of the date ICE signs this
Employment Agreement.
(3) Subsequent Effective Dates. Starting with the second effective date
for an extension described in § 1.2(a) there shall be two effective dates for
extensions in each year, one of which shall be the second effective date for
extensions or an anniversary of such date and the other of which shall be an
anniversary of the first effective date for extensions.
(c) Extensions. If the initial term is extended on the effective date for an
extension under § 1.2(b), the extension shall be for a period required to extend the remaining term
of this Employment Agreement to three (3) years.
1.3. Term. The initial term described in § 1.1 plus any extension of such initial
term under § 1.2 shall be referred to in this Employment Agreement as the “Term”.
§ 2. TITLE, DUTIES AND RESPONSIBILITIES AND POWERS AND WORK SITE
2.1. Title. Executive’s title initially shall be Senior Vice President, Chief
Strategic Officer.
2.2. Duties and Responsibilities and Powers. Executive’s duties and responsibilities
and powers shall be those commensurate with Executive’s position that are set from time to time by
ICE’s Chief Executive Officer, and Executive shall report exclusively to and shall be accountable
exclusively to ICE’s Chief Executive Officer. Executive shall undertake to perform all Executive’s
duties and responsibilities and exercise all Executive’s powers in good faith and on a full-time
basis during ICE’s normal work week for senior executives and shall at all times act in the course
of Executive’s employment under this Employment Agreement in the best interest of ICE.
2.3. Primary Work Site. Executive’s primary work site for the Term shall be at ICE’s
office in Chicago, Illinois. However, Executive shall undertake such travel away from Executive’s
primary work site and shall work from such temporary work sites as necessary or appropriate to
fulfill Executive’s duties and responsibilities and exercise Executive’s powers under the terms of
this Employment Agreement.
2.4. Outside Activities. Executive shall have the right to continue to serve on the
board of directors of those business, civic and charitable organizations on which Executive is
serving on the date ICE signs this Employment Agreement as long as doing so has no significant and
adverse effect on the performance of Executive’s duties and responsibilities or the exercise of
Executive’s powers under this Employment Agreement. Executive shall not serve on any other boards
of directors and shall not provide services (whether as an employee or independent contractor) to
any for-profit organization on or after the date ICE signs this Employment Agreement absent the
written consent of the Chief Executive Officer or his or her delegate or the Chairman of the
Compensation Committee of ICE’s Board of Directors.
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§ 3. COMPENSATION AND BENEFITS
3.1. Base Salary. Executive’s initial base salary shall be $488,000 per year, which
base salary shall be payable in accordance with ICE’s standard payroll practices and policies for
senior executives and shall be subject to such withholdings as required by law or as otherwise
permissible under such practices or policies. Executive’s base salary shall be subject to annual
review and periodic increases as determined by the Compensation Committee of ICE’s Board of
Directors or at the direction of the Board of Directors as a whole.
3.2. Annual Bonus. Executive during the Term shall be eligible to receive an annual
bonus each year, and such bonus, if any, shall be determined in accordance with a plan adopted and
approved by the Compensation Committee of ICE’s Board of Directors, or at the direction of such
committee, ICE’s Chief Executive Officer or his or her delegate. Each such bonus shall be
reasonable in light of the contribution made by Executive for such year in relation to the
contributions made and bonuses paid to other senior ICE executives for such year. Such bonus shall
be paid in accordance with the terms of the applicable plan or program under which the bonus is
determined, provided that it shall be paid no later than two and one half (2 1/2) months after the
end of the taxable year in which Executive vests in the bonus.
3.3. Equity Compensation. Executive shall be eligible for grants of options to
purchase common stock of ICE and other forms of ICE equity or equity based grants in accordance
with ICE’s equity compensation plan. The number of shares subject to or related to each such grant
shall be reasonable in light of the contribution made, or expected to be made, by Executive for the
period for which such grant is made in relation to the number of shares subject to or related to
the grants made to other senior ICE executives based on the contributions made, or expected to be
made, by such other senior ICE executives for such period.
3.4. Employee Benefit Plans, Programs and Policies. Executive shall be eligible to
participate in the employee benefit plans, programs and policies maintained by ICE for similarly
situated senior executives in accordance with the terms and conditions to participate in such
plans, programs and policies as in effect from time to time.
3.5. Vacation and Other Similar Benefits. Executive shall accrue at least four (4)
weeks of vacation during each successive one year period in the Term, which vacation time shall be
taken subject to such terms and conditions as set forth in ICE’s executive vacation policy as in
effect from time to time. Executive in addition shall have such paid holidays, sick leave and
personal and other time off as called for under ICE’s standard policies and practices for
executives with respect to paid holidays, sick leave and personal and other time off.
3.6. Business Expenses. Executive shall have a right to be reimbursed for Executive’s
reasonable and appropriate business expenses which Executive actually incurs in connection with the
performance of Executive’s duties and responsibilities under this Employment Agreement in accordance with ICE’s expense reimbursement policies and
procedures for its senior executives.
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§ 4. TERMINATION OF EMPLOYMENT
4.1. General. ICE shall have the right to terminate Executive’s employment at any
time, and Executive shall have the right to resign at any time. However, any notice to the effect
that there will be no extension of this Employment Agreement pursuant to § 1.2 shall not constitute
a termination of Executive’s employment or a resignation by Executive under § 4 of this Employment
Agreement.
4.2. Termination By ICE Other Than For Cause Or Disability Or By Executive For Good
Reason.
(a) Before a Change in Control. If ICE terminates Executive’s employment other
than for Cause (as defined in § 4.2(c)) or a Disability (as defined in § 4.2(d)) before the
Effective Date (as defined in § 4.2(e)(1)) of a Change in Control (as defined in §
4.2(e)(2)) or Executive resigns for Good Reason (as defined in § 4.2(f)) before such an
Effective Date, ICE (in lieu of any severance pay under any severance pay plans, programs or
policies) shall (subject to applicable withholdings and subject to § 6.10):
(1) pay Executive a lump sum cash payment equal to the amount of Executive’s
base salary, as in effect on the date Executive’s employment terminates, that
Executive would have received as if Executive had remained employed for the
remainder of the Term in accordance with § 3.1,
(2) pay Executive a bonus in cash equal to three (3) times the greater of (i)
85% of Executive’s then current base salary or (ii) the last annual bonus received,
(3) with respect to options to purchase ICE common stock or other equity or
equity based grants made to Executive after May 9, 2003, (A) accelerate Executive’s
right to exercise 100% of such options and vest in 100% of such equity grants so
that Executive has the right to exercise 100% of such options and receive such
equity grants on the date Executive’s employment terminates and (B) treat Executive
as if Executive had remained employed by ICE until the end of the Term so that the
time period over which Executive has the right to exercise such options shall be the
same as if there had been no termination of Executive’s employment until the end of
the Term,
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(4) (A) continue to make available coverage under the plans, programs and
policies described in § 3.4 which provide health care, life insurance and accidental
death and dismemberment benefits under which Executive was covered immediately
before Executive’s employment terminated as if Executive had remained employed by
ICE for the Welfare
Benefit Continuation Period (as defined in § 4.2(a)(4)(B)). Health care
benefits under this §4.2(a)(4) shall be provided in the form of continued group
health coverage under COBRA for the first 18 months of the Welfare Benefit
Continuation Period, and thereafter for the remainder of the Welfare Benefit
Continuation Period, at ICE’s sole discretion, either (i) under a ICE health benefit
plan, (ii) as reimbursement (on an after tax basis) of the premium expense Executive
incurs to purchase comparable health to the extent that such premium cost exceeds
the premium then charged by ICE for the health care continuation coverage or (iii)
as payment (on an after tax basis) of an allowance, for the remainder of the Welfare
Benefit Continuation Period, in lieu of reimbursing Executive for purchasing
comparable coverage for such period if it is determined that purchasing comparable
coverage would be impractical or undesirable. Notwithstanding the foregoing, in the
event Executive becomes reemployed with another employer and becomes eligible to
receive health care benefits from such employer, the health care benefits described
herein shall be secondary to such benefits during the period of Executive’s
eligibility, but only to the extent that ICE reimburses Executive for any increased
cost and provides any additional benefits necessary to give Executive the benefits
provided hereunder, where
(B) the term “Welfare Benefit Continuation Period” means the two year period
which starts on the date Executive’s employment terminates under this Employment
Agreement or the period which starts on the date Executive’s employment terminates
under this Employment Agreement and ends on the last day of the Term, whichever
period is shorter, and
(5) make one, or if necessary, more than one Gross Up Payment (as described in
and paid in accordance with § 4.2(g)) to Executive.
(b) After a Change of Control. If Executive resigns for Good Reason after the
Effective Date of a Change in Control or ICE terminates Executive’s employment (other than
for Cause or a Disability) after the Effective Date of a Change of Control, ICE (in lieu of
any severance pay under any severance pay plans, programs or policies) shall (subject to
applicable withholdings and subject to § 6.10):
(1) pay Executive a lump sum cash payment equal to three (3) times Executive’s
base salary as in effect on the date Executive’s employment terminates,
(2) pay Executive a bonus in cash equal to three (3) times the greater of (i)
85% of Executive’s then current base salary or (ii) the last annual bonus received,
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(3) with respect to options to purchase ICE common stock or other equity or
equity based grants made to Executive after May 9, 2003, (A) accelerate Executive’s
right to exercise 100% of such options and vest in 100% of such equity grants so
that Executive has the right to exercise 100% of such options and receive such
equity grants on the date Executive’s employment terminates and (B) treat Executive
as if Executive had remained employed by ICE until the end of the three (3) year
period which starts on the date Executive’s employment terminates so that the time
period over which Executive has the right to exercise such options shall be the same
as if there had been no termination of Executive’s employment until the end of such
three (3) year period,
(4) continue to make available coverage under the plans, programs and policies
described in § 3.4 which provide health care, life insurance and accidental death
and dismemberment benefits under which Executive was covered immediately before
Executive’s employment terminated as if Executive had remained employed by ICE until
the end of the Welfare Benefit Continuation Period (as defined in § 4.2(a)(4)(B))
under the terms set forth in § 4.2(a)(4)(A),
(5) make one or, if necessary, more than one, Gross Up Payment (as described in
and paid in accordance with § 4.2(g)) to Executive; provided, however
(6) Executive shall have a right (in lieu of any payments and benefits called
for under § 4.2(a)) to all the payments and benefits called for under this § 4.2(b)
if Executive resigns for Good Reason or ICE terminates Executive’s employment (other
than for Cause or a Disability) during the ninety (90) day period ending on the
Effective Date of a Change of Control.
(c) Cause. The term “Cause” as used in this Employment Agreement shall
(subject to § 4.2(c)(5)) mean:
(1) Executive is convicted of, pleads guilty to, or confesses or otherwise
admits to any felony or any act of fraud, misappropriation or embezzlement;
(2) Executive knowingly engages in any act or course of conduct or knowingly
fails to engage in any act or course of conduct (a) which is reasonably likely to
adversely affect ICE’s right or qualification under applicable laws, rules or
regulations to serve as an exchange or other form of a marketplace for trading the
products defined in § 5.7 or (b) which violates the rules of any exchange or market
on which ICE effects trades (or at such time is actively contemplating effecting
trades) and which is reasonably likely to lead to a denial of ICE’s right or
qualification to effect trades on such exchange or market;
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(3) there is any act or omission by Executive involving malfeasance or gross
negligence in the performance of Executive’s duties and responsibilities under § 2
or the exercise of Executive’s powers under § 2 to the material detriment of ICE; or
(4) (A) Executive breaches any of the provisions of § 5 or (B) Executive
violates any provision of any code of conduct adopted by ICE which applies to
Executive and any other ICE employees if the consequence to such violation for any
employee subject to such code of conduct ordinarily would be a termination of his or
her employment by ICE; provided, however,
(5) no such act or omission or event shall be treated as “Cause” under this
Employment Agreement unless (a) Executive has been provided a detailed, written
statement of the basis for ICE’s belief such act or omission or event constitutes
“Cause” and an opportunity to meet with ICE’s Board of Directors (together with
Executive’s counsel if Executive chooses to have Executive’s counsel present at such
meeting) after Executive has had a reasonable period in which to review such
statement and, if the act or omission or event is one which can be cured by
Executive, Executive has had at least a thirty (30) day period to take corrective
action and (b) ICE’s Board of Directors after such meeting (if Executive exercises
Executive’s right to have a meeting) and after the end of such thirty (30) day
correction period (if applicable) determines reasonably and in good faith and by the
affirmative vote of at least a majority or, after the Effective Date of a Change in
Control, at least three fourths of the members of such Board of Directors then in
office at a meeting called and held for such purpose that “Cause” does exist under
this Employment Agreement; provided, however, if Executive is a member of such Board
of Directors, Executive shall have no right to participate in such vote, and the
number of members needed to constitute a majority of, or three fourths of, whichever
is applicable, the members of such Board of Directors shall be determined without
counting Executive as a member of such Board of Directors.
(d) Disability. The term “Disability” as used in this Employment Agreement
means any physical or mental condition which renders Executive unable even with reasonable
accommodation by ICE to perform the essential functions of Executive’s job for at least a
one hundred and eighty (180) consecutive day period and which makes Executive eligible to
receive benefits under ICE’s long term disability plan as of the date that Executive’s
employment terminates.
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(e) Effective Date and Change in Control.
(1) The term “Effective Date” as used in this Employment Agreement means either the
date which includes the “closing” (as such term is commonly understood in the United
States) of the transaction which makes a Change in Control effective if the Change
in Control is made effective through a transaction which has such a “closing” or the
earliest date a Change in Control is reported in accordance with any applicable law,
regulation, rule or common practice as effective to any government or any agency of
any government or to any exchange or market in which ICE effects any trades if the
Change in Control is made effective other than through a transaction which has such
a “closing”.
(2) The term “Change in Control” as used in this Employment Agreement means the
occurrence of any of the following events:
(A) any “person” (as that term is used in Sections 13(d) and 14(d)(2) of the
1934 Act), is or becomes the beneficial owner (as defined in Rule 13d-3
under the 1934 Act), directly or indirectly, of securities representing 30%
or more of the combined voting power of the then outstanding securities of
ICE eligible to vote for the election of the members of ICE’s Board of
Directors unless (1) such person is ICE or any subsidiary of ICE, (2) such
person is an employee benefit plan (or a trust which is a part of such a
plan) which provides benefits exclusively to, or on behalf of, employees or
former employees of ICE or a subsidiary of ICE, (3) such person is
Executive, an entity controlled by Executive or a group which includes
Executive or (4) such person acquired such securities in a Non-Qualifying
Transaction (as defined in § 4.2(e)(2)(C));
(B) any dissolution or liquidation of ICE or any sale or the disposition of
50% or more of the assets or business of ICE, or
(C) the consummation of any reorganization, merger, consolidation or share
exchange or similar form of corporate transaction involving ICE unless (1)
the persons who were the beneficial owners of the outstanding securities
eligible to vote for the election of the members of ICE’s Board of Directors
immediately before the consummation of such transaction hold more than 60%
of the voting power of the securities eligible to vote for the members of
the board of directors of the successor or survivor corporation in such
transaction immediately following the consummation of such transaction and
(2) the number of the securities of such successor or
survivor corporation representing the voting power described in §
4.2(e)(2)(C)(1) held by the persons described in § 4.2(e)(2)(C)(1)
immediately following the consummation of such transaction is beneficially
owned by each such person in substantially the same proportion that each such person had beneficially owned
the outstanding securities eligible to
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vote for the election of the members of ICE’s Board
of Directors immediately before the consummation of such transaction,
provided (3) the percentage described in § 4.2(e)(2)(C)(1) of the securities
of the successor or survivor corporation and the number described in §
4.2(e)(2)(C)(2) of the securities of the successor or survivor corporation
shall be determined exclusively by reference to the securities of the
successor or survivor corporation which result from the beneficial ownership
of shares of common stock of ICE by the persons described in §
4.2(e)(2)(C)(1) immediately before the consummation of such transaction (any
transaction which satisfies all of the criteria specified in (1), (2) and
(3) above shall be deemed to be a “Non-Qualifying Transaction”).
(f) Good Reason. The term “Good Reason” as used in this Employment Agreement shall
(subject to § 4.2(f)(6)) mean:
(1) there is a material reduction in Executive’s base salary under § 3.1 or there is a
material reduction in Executive’s opportunity to receive any annual bonus and equity grants
without Executive’s express written consent;
(2) there is a material reduction in the scope, importance or prestige of Executive’s
duties, responsibilities or powers at ICE or Executive’s reporting relationships with
respect to who reports to Executive and whom Executive reports to at ICE without Executive’s
express written consent;
(3) ICE transfers Executive’s primary work site from Executive’s primary work site on
the date ICE signs this Employment Agreement or, if Executive subsequently consents in
writing to such a transfer under this Employment Agreement, from the primary work site which
was the subject of such consent, to a new primary work site which is more than thirty (30)
miles (measured along a straight line) from Executive’s then current primary work site
unless such new primary work site is closer (measured along a straight line) to Executive’s
primary residence than Executive’s then current primary work site;
(4) ICE after the Effective Date of a Change in Control materially changes Executive’s
job title or fails to continue to make available to Executive the same or substantially
equivalent plans, programs and policies pursuant to § 3.4 as made available before such
Effective Date absent Executive’s express written consent;
(5) there is a material breach of this Employment Agreement by ICE; provided, however,
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(6) no such act or omission shall be treated as “Good Reason” under this Employment
Agreement unless
(A)(i) Executive delivers to the Chairman of ICE’s Board of Directors a
detailed, written statement of the basis for Executive’s belief that such act or
omission constitutes Good Reason,
(ii) Executive delivers such statement before the later of (i) the end of the
ninety (90) day period which starts on the date there is an act or omission which
forms the basis for Executive’s belief that Good Reason exists or (ii) the end of
the period mutually agreed upon for purposes of this § 4.2(f)(6) in writing by
Executive and the Chairman of ICE’s Board of Directors,
(iii) Executive gives such Board of Directors a thirty (30) day period after
the delivery of such statement to cure the basis for such belief and
(iv) Executive actually submits Executive’s written resignation to the Chairman
of ICE’s Board of Directors during the sixty (60) day period which begins
immediately after the end of such thirty (30) day period if Executive reasonably and
in good faith determines that Good Reason continues to exist after the end of such
thirty (30) day period; or
(B) ICE states in writing to Executive that Executive has the right to treat
any such act or omission as Good Reason under this Employment Agreement and
Executive resigns during the sixty (60) day period which starts on the date such
statement is actually delivered to Executive; and
(7) If Executive consents in writing to any reduction described in § 4.2(f)(1) or §
4.2(f)(2), to any transfer described in § 4.2(f)(3) or to any change or failure described in
§ 4.2(f)(4) in lieu of exercising Executive’s right to resign for Good Reason and delivers
such consent to the Chairman of ICE’s Board of Directors, the date such consent is so
delivered thereafter shall be treated under this definition as the Effective Date of a
Change in Control for purposes of determining whether Executive subsequently has Good Reason
under this Employment Agreement to resign as a result of any such subsequent reduction,
transfer or change or failure.
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(g) Gross Up Payment. The term “Gross Up Payment” as used in this Employment
Agreement shall mean a payment to or on behalf of Executive which shall be sufficient to pay (1)
100% of any excise tax described in this §4.2(g), (2) 100% of any federal, state and local income
tax and social security and other employment tax on the payment made to pay such excise tax as well
as any additional taxes on such payment and (3) 100% of any interest or penalties assessed by the
Internal Revenue Service on Executive which are related to the timely payment of such excise tax
(unless such interest or penalties are attributable to Executive’s willful misconduct or gross
negligence with respect to such timely payment). A Gross Up Payment shall be made
by ICE promptly (but no later than by the end of Executive’s taxable year next following
Executive’s taxable year in which the payment of such excise tax is remitted) after either ICE or
ICE’s independent accountants or attorneys determine that any payments and benefits called for
under this Employment Agreement together with any other payments and benefits made available to
Executive by ICE and any other person will result in Executive’s being subject to an excise tax
under § 4999 of the Internal Revenue Code of 1986, as amended (the “Code”) or such an excise tax is
assessed against Executive as a result of any such payments and other benefits if Executive takes
such action (other than waiving Executive’s right to any payments or benefits in excess of the
payments or benefits which Executive has expressly agreed to waive under this § 4.2(g)) as ICE
reasonably requests under the circumstances to mitigate or challenge such excise tax; provided,
however, if ICE or ICE’s independent accountants or attorneys make the determination described in
this § 4.2(g) and, further, determine that Executive will not be subject to any such excise tax if
Executive waives Executive’s right to receive a part of such payments or benefits and such part
does not exceed $25,000, Executive shall irrevocably waive Executive’s right to receive such part
if an independent accountant or lawyer retained by Executive and paid by ICE agrees with the
determination made by ICE or ICE’s independent accountants or attorneys with respect to the effect
of such reduction in payments or benefits. Any determinations under this §4.2(g) shall be made in
accordance with § 280G of the Code and any applicable related regulations (whether proposed,
temporary or final) and any related Internal Revenue Service rulings and any related case law and,
if ICE reasonably requests that Executive take action to mitigate or challenge, or to mitigate and
challenge, any such tax or assessment (other than waiving Executive’s right to any payments or
benefits in excess of the payments or benefits which Executive has expressly agreed to waive under
this §4.2(g)) and Executive complies with such request, ICE shall provide Executive with such
information and such expert advice and assistance from ICE’s independent accountants, lawyers and
other advisors as Executive may reasonably request and shall pay for all expenses incurred in
effecting such compliance and any related fines, penalties, interest and other assessments.
4.3. Termination By ICE For Cause or By Executive Other Than For Good Reason. If ICE
terminates Executive’s employment for Cause or Executive resigns other than for Good Reason, ICE’s
only obligation to Executive under this Employment Agreement shall (subject to applicable
withholdings) be to pay Executive’s base salary and annual bonus, if any, which were due and
payable on the date Executive’s employment terminated and to reimburse Executive for expenses
Executive had already incurred and which would have otherwise been reimbursed but for such
termination of employment.
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4.4. Termination for Disability or Death.
(a) General. ICE shall have the right to terminate Executive’s employment on
or after the date Executive has a Disability, and Executive’s employment shall terminate at
Executive’s death.
(b) Base Salary and Bonus. If Executive’s employment terminates under this §
4.4, ICE’s only obligation under this Employment Agreement shall (subject to applicable
withholdings) be (1) to pay Executive or, if Executive dies, Executive’s estate the base
salary and annual bonus, if any, which were due and payable on the date Executive’s
employment terminated and (2) to reimburse Executive or, if Executive dies, Executive’s
estate for any expenses which Executive had already incurred and which would have otherwise
been reimbursed but for such termination of employment.
4.5. Benefits at Termination of Employment. Executive upon Executive’s termination of
employment shall have the right to receive any benefits payable under ICE’s employee benefit plans,
programs and policies which Executive otherwise has a nonforfeitable right to receive under the
terms of such plans, programs and policies independent of Executive’s rights under this Employment
Agreement; however, if a payment is made to Executive under § 4.2(a) or § 4.2(b), such payment
shall be in lieu of any severance pay under any severance pay plan, program or policy.
§ 5. COVENANTS BY EXECUTIVE
5.1. ICE Property.
(a) General. Executive upon the termination of Executive’s employment for any
reason or, if earlier, upon ICE’s request shall promptly return all Property (as defined in
§ 5.1(b)) which had been entrusted or made available to Executive by ICE and, if any copy of
any such Property was made by, or for, Executive, each and every copy of such Property.
(b) Property. The term “Property” means records, files, memoranda, tapes,
computer disks, reports, price lists, customer lists, drawings, plans, sketches, keys,
computer hardware and software, cellular telephones, credit cards, access cards,
identification cards, personal data assistants and the like, company cars and other tangible
personal property of any kind or description.
5.2. Trade Secrets.
(a) General. Executive agrees that Executive will hold in a fiduciary capacity
for the benefit of ICE and each of its affiliates, and will not directly or indirectly use
or disclose to any person not authorized by ICE, any Trade Secret (as defined in § 5.2(b))
of ICE or its affiliates that Executive may have acquired (whether or not developed or
compiled by Executive and whether or not Executive is authorized to have access to such
information) during the term of, and in the course of, or as a result of Executive’s
employment by ICE or its affiliates for so long as such information remains a Trade Secret.
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(b) Trade Secret. The term “Trade Secret” for purposes of this Employment
Agreement means information, including, but not limited to, technical or nontechnical data,
a formula, a pattern, a compilation, a program, a device, a method, a technique, a drawing,
a process, financial data, financial
plans, product plans, or a list of actual or potential customers or suppliers that (a)
derives economic value, actual or potential, from not being generally known to, and not
being generally readily ascertainable by proper means by, other persons who can obtain
economic value from its disclosure or use and (b) is the subject of reasonable efforts by
ICE and its affiliates to maintain its secrecy.
(c) Additional Rights. This § 5.2 is intended to provide rights to ICE and
its affiliates which are in addition to, not in lieu of, those rights ICE and its affiliates
have under the common law or applicable statutes for the protection of trade secrets.
5.3. Confidential Information.
(a) General. Executive while employed under this Employment Agreement and
thereafter during the Restricted Period (as defined in § 5.4) shall hold in a fiduciary
capacity for the benefit of ICE and its affiliates, and shall not directly or indirectly use
or disclose to any person not authorized by ICE, any Confidential Information (as defined in
§ 5.3(b)) of ICE or its affiliates that Executive may have acquired (whether or not
developed or compiled by Executive and whether or not Executive is authorized to have access
to such information) during the term of, and in the course of, or as a result of Executive’s
employment by ICE or its affiliates.
(b) Confidential Information. The term “Confidential Information” for purposes
of this Employment Agreement means any secret, confidential or proprietary information
possessed by ICE or its affiliates relating to their businesses, including, without
limitation, customer lists, details of client or consultant contracts, current and
anticipated customer requirements, pricing policies, price lists, market studies, business
plans, operational methods, marketing plans or strategies, product development techniques or
flaws, computer software programs (including object codes and source codes), data and
documentation, database technologies, systems, structures and architectures, inventions and
ideas, past, current and planned research and development, compilations, devices, methods,
techniques, processes, future business plans, licensing strategies, advertising campaigns,
financial information and data, business acquisition plans and new personnel acquisition
plans (not otherwise included in the definition of a Trade Secret under this Employment
Agreement) that has not become generally available to the public by the act of one who has
the right to disclose such information without violating any right of ICE or its affiliates.
(c) Additional Rights. This § 5.3 is intended to provide rights to ICE and its
affiliates which are in addition to, not in lieu of, those rights ICE and its affiliates
have under the common law or applicable statutes for the protection of confidential
information.
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5.4. Restricted Period. The term “Restricted Period” for purposes of this Employment
Agreement shall mean the remainder of the Term without regard to the reason for Executive’s
termination of employment.
5.5. Nonsolicitation of Customers or Employees.
(a) Customers. Executive, while employed under this Employment Agreement and
thereafter during the Restricted Period, shall not, on Executive’s own behalf or on behalf
of any person, firm, partnership, association, corporation or business organization, entity
or enterprise, call on or solicit for the purpose of competing with ICE or its affiliates
any customers of ICE or its affiliates with whom Executive had contact at any time during
Executive’s employment with ICE or its affiliates, or with respect to the Restricted Period,
at any time during the twenty-four (24) month period immediately preceding the beginning of
the Restricted Period.
(b) Employees. Executive, while employed under this Employment Agreement and
thereafter during the Restricted Period, shall not, either directly or indirectly, call on,
solicit or attempt to induce any other officer, employee or independent contractor of ICE or
its affiliates with whom Executive had contact at any time during Executive’s employment
with ICE or its affiliates, or with respect to the Restricted Period, at any time during the
twelve (12) month period immediately preceding the beginning of the Restricted Period, to
terminate his or her employment or business relationship with ICE or its affiliates and
shall not assist any other person or entity in such a solicitation.
5.6. Intellectual Property Rights. Executive hereby unconditionally and irrevocably
assigns to ICE all of Executive’s right, title and interest in any ideas, inventions, trademarks,
copyrights, developments and improvements that Executive conceives, alone or with others, during
the Term, whether or not conceived during working hours, which are within the scope of ICE’s
business operations or relate to any of ICE’s work, projects or research activities, all of which
shall be referred to as “Intellectual Property”, and Executive shall assist ICE, at ICE’s expense,
in obtaining patents, copyright and trademark registrations for Intellectual Property, execute and
deliver all documents and do any and all things necessary and proper on Executive’s part to obtain
such patents and copyright and trademark registrations and execute specific assignments and other
documents for such Intellectual Property as may be considered necessary or appropriate by ICE at
any time during Executive’s employment. This § 5.6 shall not apply to any invention that Executive
develops entirely on Executive’s own time without using ICE’s equipment, supplies, facilities, or
trade secret information. Executive agrees not to place Intellectual Property in the public domain
or disclose any inventions to third parties without the prior written consent of ICE.
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5.7. Non-Compete. Executive and ICE agree that (a) ICE (which expressly includes for
purposes of this § 5.7, its successors and assigns, and the direct and indirect subsidiaries of
ICE) is engaged in operating global commodity and financial
products marketplaces for the trading of physical commodities, futures contracts, options
contracts, and other derivative instruments, providing risk management tools and clearing services
and providing market data relating to these services and operations (such business, together with
any other products or services that may in the future during the pendency of Employee’s employment
be offered or listed by ICE or any entity that is then an affiliate of ICE, herein being
collectively referred to as the “Business”), (b) ICE is one of a limited number of entities that
have developed such a Business, (c) while the Business can be and is available to any person or
entity who or which has access to the internet and desires to trade, or to monitor the trading of,
commodities, the Business is primarily conducted in, and ICE has offices in, the United States,
Canada, the United Kingdom and Singapore, (d) Executive is, and is expected to continue to be
during the Term, intimately involved in the Business wherever it operates, and Executive will have
access to certain confidential, proprietary information of ICE, (e) this § 5.7 is intended to
provide fair and reasonable protection to ICE in light of the unique circumstances of the Business
and (f) ICE would not have entered into this Employment Agreement but for the covenants and
agreements set forth in this § 5.7. Executive therefore agrees that Executive shall not during the
Term, or, if less, for the one (1) year period which starts on the date Executive’s employment
terminates under this Employment Agreement, assume or perform, directly or indirectly, whether as
an owner, partner, employee, agent, consultant, advisor, contractor, salesman, officer or
director, any managerial or supervisory responsibilities and duties that are substantially the same
as those Executive performs for ICE on the date Executive executes this Employment Agreement for or
on behalf of any other corporation, partnership, venture, or other business entity that engages in
the Business in the United States, Canada, the United Kingdom or Singapore; provided, however,
Executive may own up to five percent (5%) of the stock of a publicly traded company that engages in
such competitive business so long as Executive is only a passive investor and is not actively
involved in such company in any way.
5.8. Reasonable and Continuing Obligations. Executive agrees that Executive’s
obligations under this § 5 are obligations which will continue beyond the date Executive’s
employment terminates and that such obligations are reasonable and necessary to protect ICE’s
legitimate business interests. ICE in addition shall have the right to take such other action as
ICE deems necessary or appropriate to compel compliance with the provisions of this § 5.
5.9. Remedy for Breach. Executive agrees that the remedies at law for ICE for any
actual or threatened breach by Executive of the covenants in this § 5 would be inadequate and that
ICE shall be entitled to specific performance of the covenants in this § 5, including entry of an
ex parte, temporary restraining order in state or federal court, preliminary and permanent
injunctive relief against activities in violation of this § 5, or both, or other appropriate
judicial remedy, writ or order, in addition to any damages and legal expenses which ICE may be
legally entitled to recover. Executive acknowledges and agrees that the covenants in this § 5
shall be construed as agreements independent of any other provision of this or any other agreement
between ICE and Executive, and that the existence of any claim or cause of action by Executive
against ICE, whether predicated upon this Employment Agreement or any other agreement, shall not
constitute a defense to the enforcement by ICE of such covenants.
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§ 6. MISCELLANEOUS
6.1. Notices. Notices and all other communications shall be in writing and shall be
deemed to have been duly given when personally delivered or when mailed by United States registered
or certified mail. Notices to ICE shall be sent to 0000 XxxxxXxxx Xxxxxxx, Xxxxx Xxxxx, Xxxxxxx,
Xxxxxxx 00000, Attention: Corporate Secretary. Notices and communications to Executive shall be
sent to the address Executive most recently provided to ICE.
6.2. No Waiver. Except for the notice described in § 6.1, no failure by either ICE or
Executive at any time to give notice of any breach by the other of, or to require compliance with,
any condition or provision of this Employment Agreement shall be deemed a waiver of any provisions
or conditions of this Employment Agreement.
6.3. Choice of Law and Courts. This Employment Agreement shall be governed by
Illinois law (except to the extent that its choice of law provisions would call for the application
of the law of another jurisdiction), and (subject to § 6.8) any action that may be brought by
either ICE or Executive involving the enforcement of this Employment Agreement or any rights,
duties, or obligations under this Employment Agreement, shall be brought exclusively in the state
or federal courts sitting in Chicago, Illinois, and Executive consents and waives any objection to
personal jurisdiction and venue in these courts for any such action.
6.4. Assignment and Binding Effect. This Employment Agreement shall be binding upon
and inure to the benefit of ICE and any successor to all or substantially all of the business or
assets of ICE. ICE may assign this Employment Agreement to any affiliate or successor, and no such
assignment shall be treated as a termination of Executive’s employment under this Employment
Agreement. Executive’s rights and obligations under this Employment Agreement are personal and
shall not be assigned or transferred. Any such assignment or attempted assignment by Executive
shall be null, void, and of no legal effect.
6.5. Other Agreements. This Employment Agreement replaces and merges any and all
previous agreements and understandings regarding all the terms and conditions of Executive’s
employment relationship with ICE, and this Employment Agreement constitutes the entire agreement of
ICE and Executive with respect to such terms and conditions.
6.6. Amendment. Except as provided in § 6.7, no amendment or modification to this
Employment Agreement shall be effective unless it is in writing and signed by ICE and by Executive.
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6.7. Severability. If any provision of this Employment Agreement shall be found
invalid or unenforceable, in whole or in part, then such provision shall be deemed to be modified
or restricted to the extent and in the manner necessary to render such
provision valid and enforceable, or shall be deemed excised from this Employment Agreement, as may
be required under applicable law, and this Employment Agreement shall be construed and enforced to
the maximum extent permitted by applicable law, as if such provision had been originally
incorporated in this Employment Agreement as so modified or restricted, or as if such provision had
not been originally incorporated in this Employment Agreement, as the case may be.
6.8 Arbitration. ICE shall have the right to obtain an injunction or other equitable
relief arising out of Executive’s breach of the provisions of § 5 of this Employment Agreement.
However, any other controversy or claim arising out of or relating to this Employment Agreement or
any alleged breach of this Employment Agreement shall be settled by binding arbitration in Chicago,
Illinois in accordance with the rules of the American Arbitration Association then applicable to
employment-related disputes and any judgment upon any award, which may include an award of damages,
may be entered in the highest state or federal court having jurisdiction over such award. In the
event of the termination of Executive’s employment, Executive’s sole remedy shall be arbitration
under this § 6.8 and any award of damages shall be limited to recovery of lost compensation and
benefits provided for in this Employment Agreement. No punitive damages may be awarded to
Executive. ICE shall be responsible for paying all reasonable fees of the arbitrator.
6.9 Executive’s Legal Fees and Expenses.
(a) Claims Unrelated to a Change in Control. ICE shall have no obligation
under the terms of this Employment Agreement to reimburse Executive for any of Executive’s
legal fees and expenses for any claims under this Employment Agreement except (i) with
respect to his rights under § 4.2(a)(5) to one or, if necessary, more than one Gross Up
Payment (as described in and paid in accordance with § 4.2(g)), or (ii) as provided in §
6.9(b).
(b) Claims Related to a Change in Control. ICE shall reimburse Executive for
all Executive’s reasonable legal fees and expenses which Executive incurs in connection with
any claim made with respect to Executive’s rights under § 4.2(b), including his rights under
§ 4.2(b)(5) to one or, if necessary, more than one, Gross Up Payment (as described in and
paid in accordance with § 4.2(g)). Any such reimbursement shall be made subject to
applicable withholdings.
6.10 Release. As a condition to ICE’s making any payments to Executive after
Executive’s termination of employment under this Employment Agreement (other than the compensation
earned before such termination and the benefits due under ICE’s employee benefit plans without
regard to the terms of this Employment Agreement), Executive or, if Executive is deceased,
Executive’s estate shall execute and not revoke, within forty-eight (48) days following Executive’s
termination of employment, a release in the form of the release attached to this Employment
Agreement as Exhibit A, or in such other form as is acceptable to ICE and Executive, and ICE shall
provide such payments or benefits, if applicable, promptly after Executive (or Executive’s estate)
delivers such release to ICE, but no later than sixty (60) days after the date of Executive’s
termination of employment.
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6.11 Counterparts. This Employment Agreement may be executed in counterparts, each of
which will be deemed an original, but all of which together will constitute one and the same
Employment Agreement.
6.12 Headings; References. The headings and captions used in this Employment
Agreement are used for convenience only and are not to be considered in construing or interpreting
this Employment Agreement. Any reference to a section (§) shall be to a section (§) of this
Employment Agreement absent an express statement to the contrary in this Employment Agreement.
6.13 Section 409A of the Code. To the extent Executive would otherwise be entitled
to any payment under this Employment Agreement or any plan or arrangement of ICE or its affiliates,
that constitutes “deferred compensation” subject to Section 409A and that if paid during the six
months beginning on the date of termination of Executive’s employment would be subject to the
Section 409A additional tax because Executive is a “specified employee” (within the meaning of
Section 409A and as determined by ICE), the payment will be paid to Executive on the earlier of the
six-month anniversary of Executive’s date of termination, a change in ownership or effective
control of ICE (within the meaning of Section 409A) or Executive’s death. Similarly, to the extent
Executive would otherwise be entitled to any benefit (other than a payment) during the six months
beginning on termination of Executive’s employment that would be subject to the Section 409A
additional tax, the benefit will be delayed and will begin being provided on the earlier of the
six-month anniversary of Executive’s date of termination, a change in ownership or effective
control of ICE (within the meaning of Section 409A) or Executive’s death. In addition, any payment
or benefit due upon a termination of Executive’s employment that represents a “deferral of
compensation” within the meaning of Section 409A shall be paid or provided to Executive only upon a
“separation from service” as defined in Treas. Reg. § 1.409A-1(h). To the extent applicable, each
severance payment made under this Employment Agreement shall be deemed to be a separate payment,
amounts payable under Section 4 of this Employment Agreement shall be deemed not to be a “deferral
of compensation” subject to Section 409A to the extent provided in the exceptions in Treas. Reg.
Sections 1.409A-1(b)(4) (“short-term deferrals”) and (b)(9) (“separation pay plans,” including the
exception under subparagraph (iii)) and other applicable provisions of Treas. Reg. Section 1.409A-1
through 1.409A-6.
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Notwithstanding anything to the contrary in this Employment Agreement or elsewhere, any payment or
benefit under this Employment Agreement or otherwise that is exempt from Section 409A pursuant to
Treas. Reg. 1.409A-1(b)(9)(v)(A) or (C) shall be paid or provided to Executive only to the extent
that the expenses are not incurred, or the benefits are not provided, beyond the last day of
Executive’s second taxable year following Executive’s taxable year in which the “separation from
service” occurs; and provided further that such expenses shall be reimbursed no later than the last
day of Executive’s third taxable year following the taxable year in which Executive’s
“separation from service” occurs. Except as otherwise expressly provided herein, to the extent any
expense reimbursement or the provision of any in-kind benefit under this Employment Agreement is
determined to be subject to Section 409A of the Code, the amount of any such expenses eligible for
reimbursement, or the provision of any in-kind benefit, in one calendar year shall not affect the
expenses eligible for reimbursement in any other calendar year (except for any life-time or other
aggregate limitation applicable to medical expenses), in no event shall any expenses be reimbursed
after the last day of the calendar year following the calendar year in which Executive incurred
such expenses, and in no event shall any right to reimbursement or the provision of any in-kind
benefit be subject to liquidation or exchange for another benefit.
IN WITNESS WHEREOF, ICE and Executive have executed this Employment Agreement in multiple
originals to be effective on the date this Employment Agreement is signed by ICE.
|
INTERCONTINENTALEXCHANGE, INC. |
||||
| By: | /s/ Xxxxxxx X. Xxxxxxxx | |||
| Title: Chairman and Chief Executive Officer | ||||
| This 31st day of December, 2008 | ||||
| EXECUTIVE (Xxxxx X. Xxxxx) |
||||
| /s/ Xxxxx X. Xxxxx | ||||
| This 31st day of December, 2008 | ||||
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