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EXHIBIT 10.13
EMPLOYMENT AGREEMENT
This Employment Agreement (the "AGREEMENT"), is entered into as of July 1,
1998 (the "COMMENCEMENT DATE"), by Xxxxxxxxxxx.Xxx, LLC (the "COMPANY") and
Xxxxxxxx X. Xxxxxx (the "EXECUTIVE").
1. TERM OF EMPLOYMENT: The term of employment of Executive by the Company
hereunder shall commence on the Commencement Date and shall continue
thereafter on the same terms and conditions for a period of three years
unless earlier terminated pursuant to Sections 6 or 7 (such term being
hereinafter referred to as the "EMPLOYMENT PERIOD"). The Employment Period
shall be extended automatically without further action by either party as
of the third anniversary of the Commencement Date for a period of one year,
unless prior to such date the Company or the Executive shall notify the
other in writing of its or his intention not to renew the Agreement, in
which case the Agreement shall terminate at the end of the original term.
If the Employment Period is extended, it shall thereafter be referred to as
the Employment Period.
2. TITLE; DUTIES: The Executive shall serve as Chief Executive Officer of the
Company reporting to the Management Committee of the Company or similar
governing body of the Company (the "BOARD"). Executive shall perform those
duties and responsibilities inherent in such position including such duties
and responsibilities as the Board shall assign. The Executive agrees to
devote his full time and best efforts, attention and energies to the
business and interests of the Company. During the Employment Period, the
Company shall use its best efforts to continue to nominate and elect
Executive as a director, and Executive shall serve in such capacity without
additional consideration. Executive shall serve the Company faithfully and
to the best of his ability in such capacities, devoting his full business
time, attention, knowledge, energy and skills to such employment; provided,
however, the Company acknowledges that Executive may serve on the board of
directors of other companies with the prior approval of the Board.
Executive shall travel as reasonably required in connection with the
performance of his duties hereunder.
3. COMPENSATION: The Company shall pay and Executive shall accept as full
consideration for the his services hereunder, compensation consisting of
the following:
3.1 BASE SALARY. $210,000 per year base salary during the first year of
the term of this Agreement; $225,000 per year base salary during the
second year of the term of this Agreement; $240,000 per year base
salary during the third year of the term of this Agreement; and at
least $240,000 per year base salary (subject to increase by the Board)
during successive years of the term of this Agreement if the
Employment Period is extended past the original three-year term
pursuant to Section 1 hereof. "Base Salary" shall mean the base salary
provided for in this Section 3.1. Base Salary is payable in
installments in accordance with the Company's normal payroll
practices, less such deductions or withholdings as are required by
law.
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3.2 BONUS. Annual target bonus at the rate and in accordance with the
specifications on Exhibit A attached hereto.
3.3 EQUITY OPTION. (a) Executive received a grant of an option to purchase
a 2.0% Interest (as defined in the Limited Liability Company
Agreement, dated as of October 29, 1997, between CBS Inc. and Data
Broadcasting Corporation) on October 29, 1997 (the "OPTION"). Such
percentage is calculated based on the fully-diluted equity ownership
of the Company as constituted on October 29, 1997, taking into account
the issuance of options to purchase an aggregate of a ten percent
(10%) Interest in the Company to be issued to employees of the Company
or other personnel rendering substantial services to the Company
(which options include the Option).
4. BENEFITS: Subject to all applicable eligibility requirements, and legal
limitations, Executive will be able to participate in any and all 401(k),
vacation, medical, dental, life and long-term disability insurance and/or
other benefit plans which from time to time may be established for other
employees of the Company.
5. REIMBURSEMENT OF EXPENSES: The Company will reimburse Executive for all
reasonable travel, entertainment and other expenses incurred or paid by the
Executive in connection with, or related to, the performance of his duties,
responsibilities or services under this Agreement subject to review by the
Board or its compensation committee, if applicable.
6. BENEFIT UPON TERMINATION OF EMPLOYMENT PERIOD.
6.1 DISABILITY. In the event of the permanent disability (as hereinafter
defined) of Executive during the Employment Period, the Company shall
have the right, upon written notice to Executive, to terminate
Executive's employment hereunder, effective upon the 30th calendar day
following the giving of such notice (or such later day as shall be
specified in such notice). Upon the effectiveness of such termination,
(i) the Company shall have no further obligations hereunder, except to
pay and provide, subject to applicable withholding, (A) all amounts of
Base Salary accrued, but unpaid, at the effective date of termination,
(B) Executive's target bonus, and (C) all reasonable unreimbursed
business-related expenses, (ii) Executive's Option shall immediately
vest and become exercisable to the extent of one additional year of
vesting and shall remain exercisable for the periods specified in the
Option and (iii) Executive shall have no further obligations hereunder
other than those provided for in Sections 9 and 10 hereof. All amounts
payable to Executive pursuant to this Section 6.1 shall be payable
within 30 days following the effectiveness of the termination of
Executive's employment. For purposes of this Agreement, "PERMANENT
DISABILITY" shall be defined as any physical or mental disability or
incapacity which renders Executive incapable in any material respect
of performing the services required of him in accordance with his
obligations under Section 2 for a period of 180 consecutive days, or
for 180 days in any 360 day period.
6.2 DEATH. In the event of the death of Executive during the Employment
Period, this Agreement shall automatically terminate and the Company
shall have no further obligations hereunder, except to pay and provide
to Executive's beneficiary or other
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legal representative, subject to applicable withholding, (i) all
amounts of Base Salary and bonus accrued but unpaid, at the date of
death, and (ii) all reasonable unreimbursed business-related expenses.
All amounts payable to Executive pursuant to this Section 6.2 shall be
payable within 30 days following the date of death.
6.3 TERMINATION WITHOUT CAUSE. In the event of the termination of
Executive's employment by the Company without Cause (as defined below)
or upon the Executive's voluntary termination of his employment for
Good Reason (as defined below), (i) all amounts of Base Salary and
bonus accrued but unpaid on the date of termination shall be paid by
the Company within 30 days following the date of termination, (ii) an
amount equal to Executive's Base Salary on the date of termination for
a period of twelve months shall be paid by the Company in twelve equal
installments, and (iii) the Option shall immediately vest and become
exercisable to the extent of one additional year of vesting and shall
remain exercisable for the periods specified in the Option.
6.4 CIRCUMSTANCES UNDER WHICH TERMINATION BENEFITS WOULD NOT BE PAID. The
Company shall only be obligated to pay the amounts of Base Salary and
bonus accrued but unpaid on the date of termination, and shall not be
obligated to pay Executive the termination benefits or continue the
option vesting described in subparagraphs 6.1 through 6.3 above if the
Employment Period is terminated for Cause or if Executive voluntarily
terminates his employment other than for Good Reason (as defined
below). For purposes of this Agreement, "CAUSE" shall be limited to:
(A) Willful failure by Executive to substantially perform his duties
hereunder, other than a failure resulting from his complete or
partial incapacity due to physical or mental illness or
impairment;
(B) A material and willful violation of a federal or state law or
regulation applicable to the business of the company or that
adversely affects the image of the Company;
(C) Commission of a willful act by Executive which constitutes gross
misconduct and is injurious to the Company; or
(D) A willful breach of a material provision of this Agreement.
6.5 CONSTRUCTIVE TERMINATION. Notwithstanding anything in Section 3 or in
this Section 6 to the contrary, for purposes of this Agreement the
Employment Period will be deemed to have been terminated and Executive
will be deemed to have Good Reason for voluntary termination of the
Employment Period ("GOOD REASON"), if there should occur:
(A) A material adverse change in Executive's position causing it to
be of materially less stature or responsibility without
Executive's written consent; provided, that, such a materially
adverse change shall not be deemed to occur if Executive is
the chief executive of the Company (or of a division of any
acquiring company
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immediately following a Change in Control (as defined below));
provided, further, that, if the Company undergoes a business
combination with, voting control of the Company is acquired by or
substantially all of the Company's assets are acquired by, Data
Broadcasting Corporation ("DBC") or an affiliate of DBC, such a
materially adverse change shall not be deemed to occur if
Executive is an executive officer of DBC or an affiliate of DBC,
as applicable, with duties and responsibilities comparable to the
duties and responsibilities held by Executive with the Company;
provided, further, that, if the Company undergoes a business
combination with, voting control of the Company is acquired by or
substantially all of the Company's assets are acquired by, CBS
Broadcasting Inc. or CBS Corporation (collectively, "CBS") or an
affiliate of CBS, such a materially adverse change shall not be
deemed to occur if Executive is an executive officer of CBS or an
affiliate of CBS, as applicable, with duties and responsibilities
comparable to the duties and responsibilities held by Executive
with the Company;
(B) A material reduction, without Executive's written consent, in his
level of base compensation (including base salary and fringe
benefits) by more than ten percent (10%); or
(C) A relocation of Executive's principal place of employment outside
the Bay Area without Executive's consent.
7. CHANGE IN CONTROL BENEFITS:
Should there occur a Change in Control (as defined below), then
the following provisions shall become applicable:
(A) During the period (if any) following a Change in Control that
Executive shall continue to remain employed, then the terms and provisions of
this Agreement shall continue in full force and effect, and the Option shall
continue to vest and become and remain exercisable in accordance with the terms
of the Option; or
(B) In the event of (i) a termination of the Executive's employment by the
Company or its successor other than for Cause within six (6) months after a
Change in Control or (ii) Executive voluntarily terminates his employment for
Good Reason within six (6) months after a Change in Control:
(i) The Company shall pay to Executive an amount equal to (A)
all amounts of bonus accrued to the date of termination, (B) 100% of Executive's
Base Salary for a period of one year and (C) Executive's target bonus for a
period of one year, in one lump sum amount on or before the fifth business day
following the effective date of Executive's termination; and
(ii) The unvested portion of Option held by Executive on the date
of such Change in Control shall immediately vest and become exercisable to the
extent of one additional year of vesting and the vested portions of the Option
shall remain exercisable for the periods specified in the Option.
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For purposes of this Section 7, the term "CHANGE IN CONTROL" shall mean:
(x) The sale, lease, conveyance, liquidation or other disposition of
all or substantially all of the Company's assets as an entirety
or substantially as an entirety to any person, entity or group of
persons acting in concert other than (i) to DBC or its affiliates
or CBS or its affiliates, (ii) in the ordinary course of
business, or (iii) to a corporation formed for the purpose of
converting the Company into a corporation; or
(y) Any transaction or series of related transactions (as a result of
a tender offer, merger, consolidation or otherwise) that results
in any Person (as defined in Section 13(h)(8)(E) under the
Securities Exchange Act of 1934) becoming the beneficial owner
(as defined in Rule 13d-3 under the Securities Exchange Act of
1934), directly or indirectly, of more than 50% of the aggregate
voting power of all classes of common equity securities or
membership interests, as the case may be, of the Company, except
if such Person is (A) a subsidiary of the Company, (B) an
employee stock ownership plan for employees of the Company, (C) a
company formed to hold the Company's common equity securities or
membership interests, as the case may be, and whose shareholders
constituted, at the time such company became such holding
company, substantially all the equity owners or shareholders of
the Company, (D) either DBC, CBS and / or any of their
affiliates, or (E) a corporation formed for the purpose of
converting the Company into a corporation.
In the event that the severance and other benefits provided to Executive
pursuant to Section 6 of this Agreement (i) constitute "parachute payments"
within the meaning of Section 280G of the Internal Revenue Code of 1986, as
amended (the "CODE") and (ii) but for this Section 7, such severance and
benefits would be subject to the excise tax imposed by Section 4999 of the
Code, then Executive's severance benefits under this Section 7 shall be
payable either:
(a) in full, or
(b) as to such lesser amount which would result in no portion of such
severance and other benefits being subject to excise tax under
Section 4999 of the Code, whichever of the foregoing amounts,
taking into account the applicable federal, state and local
income taxes and the excise tax imposed by Section 4999, results
in the receipt by Executive on an after-tax basis, of the
greatest amount of severance benefits under this Agreement.
Unless the Company and Executive otherwise agree in writing, any
determination required under this Section 7 shall be made in writing by
independent public accountants agreed to by the Company and Executive (the
"ACCOUNTANTS"), whose determination shall be conclusive and binding upon
Executive and the Company for all purposes. For purposes of making the
calculations required by this Section 7, the Accountants may make
reasonable assumptions and approximations concerning applicable taxes and
may rely on reasonable, good faith interpretations concerning the
application of Sections 280G and 4999 of the Code. The
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Company and Executive shall furnish to the Accountants such information and
documents as the Accountants may reasonably request in order to make a
determination under this Section 7. The Company shall bear all costs the
Accountants may reasonably incur in connection with any calculations
contemplated by this Section 7.
8. DISPUTE RESOLUTION: The Company and Executive agree that any dispute
regarding the interpretation or enforcement of this Agreement shall be
decided by confidential, final and binding arbitration conducted by
Judicial Arbitration and Mediation Services ("JAMS") under the
then-existing JAMS rules, rather than by litigation in court, trial by
jury, administrative proceeding, or in any other forum.
9. COOPERATION WITH THE COMPANY AFTER TERMINATION OF THE EMPLOYMENT PERIOD:
Following termination of the Employment Period by Executive, Executive
shall fully cooperate with the Company in all matters relating to the
winding up of his pending work on behalf of the Company and the orderly
transfer of any such pending work to other employees of the Company as may
be designated by the Company.
10. CONFIDENTIALITY; RETURN OF PROPERTY; NONSOLICITATION:
(a) The Executive acknowledges that during the Employment Period he will
receive confidential information from the Company and subsidiaries of
the Company and the respective clients thereof (each a "RELEVANT
ENTITY"). Accordingly, the Executive agrees that during the Employment
Period (as it may be extended from time to time) and thereafter for a
period of two years, the Executive and his affiliates shall not,
except in the performance of his obligations to the Company hereunder
or as may otherwise be approved in advance by the Company, directly or
indirectly, disclose or use (except for the direct benefit of the
Company) any confidential information that he may learn or has learned
by reason of his association with any Relevant Entity. Upon
termination of this Agreement, the Executive shall promptly return to
the Company any and all properties, records or papers of any Relevant
Entity, that may have been in his possession at the time of
termination, whether prepared by the Executive or others, including,
but not limited to, confidential information and keys. For purposes of
this Agreement, "confidential information" includes all data,
analyses, reports, interpretations, forecasts, documents and
information concerning a Relevant Entity and its affairs, including,
without limitation with respect to clients, products, policies,
procedures, methodologies, trade secrets and other intellectual
property, systems, personnel, confidential reports, technical
information, financial information, business transactions, business
plans, prospects or opportunities, (i) that the Company reasonably
believes are confidential or (ii) the disclosure of which could be
injurious to a Relevant Entity or beneficial to competitors of a
Relevant Entity, but shall exclude any information that (x) the
Executive is required to disclose under any applicable laws,
regulations or directives of any government agency, tribunal or
authority having jurisdiction in the matter or under subpoena or other
process of law, (y) is or becomes publicly available prior to the
Executive's disclosure or use of the information in a manner violative
of the second sentence of this Section 10(a), or (z) is rightfully
received by Executive without restriction or disclosure from a third
party legally entitled to possess and to disclose such
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information without restriction (other than information that he may
learn or has learned by reason of his association with any Relevant
Entity). For purposes of this Agreement, "affiliate" means any entity
that, directly or indirectly, is controlled by, or under common
control with, the Executive. For purposes of this definition, the
terms "controlled" and "under common control with" means the
possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of such person, whether
through the ownership of voting stock, by contract or otherwise.
(b) For a period of one (1) year following the termination of Executive's
employment with the Company for any reason, he will not, without the
Company' express written consent, either on his own behalf or on
behalf of another, solicit employees of the Company or any subsidiary
of the Company for the purpose of hiring them. General employment
advertising shall not be deemed to be a solicitation.
11. GENERAL:
11.1 INDEMNIFICATION. In the event Executive is made, or threatened to
be made, a party to any legal action or proceeding, whether civil
or criminal, by reason of the fact that Executive is or was a
director or officer of the Company or serves or served any other
corporation fifty percent (50%) or more owned or controlled by
the Company in any capacity at the Company' request, Executive
shall be indemnified by the Company, and the Company shall pay
Executive's related expenses when and as incurred, all to the
fullest extent permitted by law.
11.2 WAIVER. Neither party shall, by mere lapse of time, without
giving notice or taking other action hereunder, be deemed to have
waived any breach by the other party of any of the provisions of
this Agreement. Further, the waiver by either party of a
particular breach of this Agreement by the other shall neither be
construed as, nor constitute a, continuing waiver of such breach
or of other breaches by the same or any other provision of this
Agreement.
11.3 SEVERABILITY. If for any reason a court of competent jurisdiction
or arbitrator finds any provision of this Agreement to be
unenforceable, the provision shall be deemed amended as necessary
to conform to applicable laws or regulations, or if it cannot be
so amended without materially altering the intention of the
parties, the remainder of the Agreement shall continue in full
force and effect as if the offending provision were not contained
herein.
11.4 NOTICES. All notices and other communications required or
permitted to be given under this Agreement shall be in writing
and shall be considered effective upon personal service or upon
transmission of a facsimile or the deposit with Federal Express
or in Express Mail and addressed to the Chairman of the Board of
the Company at its principal corporate address, and to Executive
at his most recent address shown on the Company's corporate
records, or at any other address which he may specify in any
appropriate notice to the Company.
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11.5 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all
of which taken together constitutes one and the same instrument
and in making proof hereof it shall not be necessary to produce
or account for more than one such counterpart.
11.6 ENTIRE AGREEMENT. The parties hereto acknowledge that each has
read this Agreement, understands it, and agrees to be bound by
its terms. The parties further agree that this Agreement shall
constitute the complete and exclusive statement of the agreement
between the parties and supersedes all proposals (oral or
written), understandings, representations, conditions, covenants,
and all other communications between the parties relating to the
subject matter hereof.
11.7 GOVERNING LAW. This Agreement shall be governed by the law of the
State of California.
11.8 ASSIGNMENT AND SUCCESSORS. The Company shall have the right to
assign its rights and obligations under this Agreement to an
entity which acquires substantially all of the assets of the
Company, whether by merger or otherwise including, without
limitation XxxxxxXxxxx.xxx, Inc. or other corporation formed for
the purpose of converting the Company from a limited liability
company into a corporation. The rights and obligations of the
Company under this Agreement shall inure to the benefit and shall
be binding upon the successors and assigns of the Company.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
XXXXXXXXXXX.XXX, LLC
/s/ Xxxxx Xxxxxxxxx
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Xxxxx Xxxxxxxxx,
Chairman of the Management Committee
EXECUTIVE
/s/ Xxxxxxxx X. Xxxxxx
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Xxxxxxxx X. Xxxxxx
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EXHIBIT A
TARGET BONUS AND SPECIFICATIONS
ANNUAL TARGET BONUS RATE: fifty percent (50%) of the then-applicable base salary
actually paid in a given year. For example, if the base salary actually paid in
the second year of the term of this Agreement is $200,000, the maximum target
bonus would be $100,000 ($200,000 multiplied by 50%) for that year.
SPECIFICATIONS: two components.
DISCRETIONARY COMPONENT: Board may decide when, and if to grant this
component. This component shall be 25% of the then-applicable base salary
actually paid in a given year.
ACHIEVEMENT OF FINANCIAL OBJECTIVES COMPONENT: Target Bonus, in the amount
payable shown below, is payable upon the Company's achievement of the
financial objectives set forth below:
% of Base Salary Actually
Paid for Such Year
Payable Upon
Achievement of
Financial Objectives Financial Objectives
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1st Year 25% To be determined annually by the Board
2nd Year 25% To be determined annually by the Board
3rd Year 25% To be determined annually by the Board
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