EMPLOYMENT AGREEMENT
AGREEMENT (this "Agreement"), dated as of January 22, 1997, by
and between Cognitive Communications, LLC, a Delaware limited liability company
("CCL"), and Xxxxx Xxxxxx ("Employee").
W I T N E S S E T H :
WHEREAS, CCL desires to employ Employee, and Employee desires
to accept such employment, upon the terms and subject to the conditions set
forth in this Agreement.
NOW THEREFORE, in consideration of the premises and mutual
covenants contained herein and for other good and valuable consideration, the
adequacy and receipt of which are hereby acknowledged, the parties hereto agree
as follows:
1. Employment. CCL hereby employs Employee, and Employee hereby
accepts employment with CCL, for the Term (as hereinafter defined), in the
position and with the duties and responsibilities set forth in Section 3 below,
and upon the other terms and subject to the conditions hereinafter set forth.
2. Term. Unless (i) sooner terminated as provided in Section 6 hereof
or (ii) extended as provided for in that certain Put Agreement dated as of the
date hereof between CCL and Employee (the "Put Agreement"), Employee's
employment hereunder shall be for a term commencing on the date hereof and
ending on July 31, 2002. The actual term of employment hereunder, giving effect
to any early termination, or extension, of employment under Section 6 hereof, or
the Put Agreement, respectively, is referred to herein as the "Term."
3. Position, Duties, Responsibilities and Services.
3.1 Position, Duties and Responsibilities. During the Term,
Employee shall serve as an Executive Vice President of CCL and shall be
responsible for the duties attendant to such office as specified in the Limited
Liability Company Operating Agreement of CCL, and such additional managerial
duties and responsibilities with CCL or its subsidiaries or divisions as may be
assigned by the Chief Executive Officer of International Post Limited, an
indirect parent of CCL ("IPL"), or by such other executive corporate officer of
IPL who is not the chief executive officer or chief operating officer of another
subsidiary or division of IPL as such CEO may designate (the "IPL Officer").
Employee shall also report directly to the IPL Officer. During the Term, CCL's
operations shall be located within New York City.
In addition, Employee shall abide by the policies of IPL relating
to the Powers Reserved/Delegated and to Corporate Conduct (Conflict of Interest)
as such policies are from time to time in effect. Copies of the policies
currently in effect are annexed as exhibits hereto.
3.2 Services to be Provided. During the Term, Employee shall (i)
devote all of his working time, attention and energies to the affairs of CCL and
its subsidiaries and divisions, (ii) use his best efforts to promote its and
their best interests, (iii) faithfully and diligently perform his duties and
responsibilities hereunder, and (iv) comply with and be bound by the operational
policies, procedures and practices of CCL from time to time in effect during the
Term; provided, however, that nothing in this Agreement shall preclude Employee
from (x) engaging in charitable and community affairs or (y) giving attention to
his passive personal investments, so long as such activities do not interfere
with the regular performance of his duties and responsibilities under this
Agreement.
3.3 Exclusive Agreement. Employee hereby represents and warrants
to CCL that (i) his execution of this Agreement and the performance of his
duties and responsibilities hereunder does not and will not violate or result in
the breach of, or in any manner be prohibited or restricted by, the terms of any
agreement, arrangement or understanding (whether written or oral), order or
decree to which he is a party or by which he is bound and (ii) he is not a party
to any agreement or arrangement, whether written or oral, which would prevent
Employee from rendering services to CCL during the Term or which would create
any conflict with or involve any business relationship with customers, suppliers
or competitors of CCL, IPL or their respective affiliates, subsidiaries or
divisions.
4. Compensation.
4.1 Base Salary. For all services rendered by Employee hereunder
and all covenants and conditions undertaken by him pursuant to this Agreement,
CCL shall pay Employee an annual base salary (the "Base Salary") during the Term
at the rate of one hundred fifty thousand dollars ($150,000), payable at such
intervals as the executive officers of IPL are paid, but in any event at least
on a semi-monthly basis. If the first or last month of the Term is not a full
calendar month, then any calculation of Base Salary for such period shall be
prorated for the number of days employed in such month.
4.2 Incentive Compensation.
(a) Employee shall receive a certain percentage of CCL's
earnings before interest, taxes, depreciation and amortization and certain
incentive stock options as provided for in that certain Incentive Compensation
Agreement, a copy of which is attached hereto.
(b) During the Term, Employee shall be entitled to
participate in all equity related incentive programs that CCL makes generally
available to officers and employees of CCL, subject to the terms and conditions
of such programs.
(c) Employee hereby acknowledges that, notwithstanding
anything contained herein to the contrary, IPL shall in no way be obligated to
cause Employee to participate in any stock option or other equity related
incentive programs that IPL makes
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generally available to officers and employees of IPL and its other subsidiaries,
affiliates or divisions.
4.3 Withholding. CCL shall withhold from any payments due to
Employee under this Agreement all Federal, state and local taxes, FICA and other
amounts required to be withheld pursuant to any applicable law.
5. Employee Benefits.
5.1 Benefit Programs. During the Term, Employee shall be entitled
to participate in such group life, health, accident, disability and
hospitalization insurance plans, pension plans and retirement plans that IPL
makes generally available to officers and employees of IPL and its subsidiaries.
5.2 Vacation. During each twelve month period of the Term,
Employee shall be entitled to four (4) weeks of vacation to be taken at times
determined by Employee which do not unreasonably interfere with the performance
of his duties hereunder; provided, however, that, other than up to one (1) week
of vacation not taken during a year which may be taken during the first quarter
of the following year, any such vacation time not taken during any year shall be
forfeited. Employee shall also be entitled to all paid holidays given by IPL to
its officers and employees.
5.3 Automobile. During the Term, CCL shall lease and provide the
Employee with an appropriate automobile, as determined by the CCL Board, and
shall pay all expenses relating to the insurance, maintenance and operation
thereof.
5.4 Insurance. Employee agrees that CCL may request Employee to
apply for and take out term life, health, accident, and/or other insurance
covering Employee, either independently or together with others, in an aggregate
amount determined by the CCL Board. CCL shall pay all premiums for such
insurance and shall determine the beneficiary of, and own all rights in, any
such insurance policies and proceeds thereof, and Employee shall not have any
right, title or interest therein or any obligation to pay any of the premiums
therefor. If requested, Employee shall submit to medical examinations and shall
otherwise cooperate in all respects to procure such insurance.
As soon as practical after the date hereof, CCL shall obtain
"directors and officers liability insurance" on behalf and for the benefit of
the Employee on substantially the same terms and subject to substantially the
same conditions as provided to directors and officers of other subsidiaries of
IPL.
5.5 Expenses. During the Term, Employee is authorized to incur
reasonable expenses in the performance of his duties hereunder, and, upon
presentation of a
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detailed itemization account thereof, CCL shall pay or reimburse Employee for
such reasonable expenses so incurred by Employee.
6. Termination of Employment.
6.1 Death; Disability. Employee's employment hereunder shall
terminate upon his death, or, at the election of CCL by written notice to
Employee, if, as a result of the occurrence of mental or physical disability
during the Term, Employee has been unable to perform his duties hereunder for a
period of three (3) consecutive months or ninety (90) days in any consecutive
three hundred sixty-five (365) day period, as determined in good faith by the
CCL Board. In the event of a termination of Employee's employment for death or
disability, CCL shall pay Employee (or his legal representatives, as the case
may be): (i) his unpaid Base Salary through the date of termination, (ii) the
value of his accrued and unpaid vacation days as of the date of termination
(calculated based on Employee's Base Salary computed on a 365-day year), and
(iii) all amounts due under Section 5.5 hereof. In addition, Employee shall be
entitled to any amounts due under the programs referred to in Section 5.1
hereof, as and to the extent set forth in such programs.
6.2 Termination for Cause.
(a) In addition to any other remedies available to it at law
or in equity, CCL shall have the right, upon written notice to Employee, to
terminate Employee's employment under this Agreement if Employee: (i) breaches
in any material respect any provision of this Agreement and such breach is not
remedied within thirty (30) days after written notice thereof from the CCL Board
setting forth in reasonable detail the matters constituting such breach; (ii)
fails or refuses to perform in any material respect such duties as may be
assigned to him from time to time by the IPL Officer or the CCL Board; (iii) has
been convicted of a felony; or (iv) has committed any act of fraud,
misappropriation of funds or embezzlement in connection with his employment
hereunder or has willfully disclosed any Confidential Information (as defined
below) (termination pursuant to the provisions of any of clauses (i) through
(iv) above is referred to herein as termination for "Cause").
(b) In the event Employee is terminated for Cause, CCL shall
pay Employee (i) his unpaid Base Salary through the date of termination, (ii)
the value of his accrued and unpaid vacation days as of the date of termination
(calculated based on Employee's Base Salary computed on a 365-day year), and
(iii) all amounts due under Section 5.5 hereof. In addition, Employee shall be
entitled to any amounts due under the programs referred to in Section 5.1
hereof, as and to the extent set forth in such programs.
(c) In the event Employee is terminated for Cause other than
pursuant to clause (ii) of subparagraph (a) above, Employee hereby agrees to
resign as a manager of CCL, effective as of the date of such termination, and
from any other positions he holds with CCL.
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6.3 Termination Other than for Cause, Death or Disability.
Notwithstanding any provision to the contrary herein, CCL may at any time upon
written notice to Employee, in its sole and absolute discretion and for any or
no reason, terminate the employment of Employee hereunder without Cause. If this
Agreement is terminated (i) by CCL, other than as a result of the death or
disability of Employee or for Cause, or (ii) as a result of a Constructive
Termination (as defined below), CCL shall pay Employee (A) his unpaid Base
Salary through the end of the Term (payable as provided in Section 4.1 hereof),
(B) the value of his accrued and unpaid vacation days as of the date of
termination (calculated based on Employee's Base Salary computed on a 365-day
year), and (C) all amounts due under Section 5.5 hereof. In addition, Employee
shall be entitled to any amounts due under the programs referred to in Section
5.1 hereof, as and to the extent set forth in such programs. For purposes of
this Agreement, "Constructive Termination" shall be deemed to have occurred upon
any material breach by CCL of the provisions of this Agreement which breach
shall continue for at least thirty (30) days after written notice is provided by
Employee to CCL setting forth in reasonable detail the matters constituting such
breach.
7. Inventions; Confidential Information; Non-Competition.
7.1 Inventions. All processes, technologies, improvements,
discoveries, trademarks, trade names, and inventions (collectively,
"Inventions") conceived, developed, invented, made or found by Employee, alone
or with others, during his employment with CCL or within six (6) months after
the termination of his employment, whether or not conceived, developed,
invented, made or found during Employee's employment with CCL or with the use of
the facilities or materials of CCL and which relate to the consulting business
in the area of communications and content strategy for, or research relating to
the implementation of, or the design and production of, intranets, extranets or
internets or any other business conducted by CCL or any of its subsidiaries or
divisions (the "CCL Companies"), whether or not patentable, shall be the
property of CCL and shall be promptly and fully disclosed by Employee to CCL.
Employee shall perform all necessary acts (including, without limitation,
executing and delivering any assignments, documents or instruments requested by
CCL) to vest title to any such Inventions in CCL and to entitle CCL, at its
expense, to secure and maintain domestic and/or foreign patents or any other
rights for such Inventions.
7.2 Confidential Information.
(a) Employee shall not, at any time during the Term and
thereafter, directly or indirectly, disclose or furnish to any other person,
firm, partnership, corporation or any other entity, except in the course of the
proper performance of his duties hereunder (including, without limitation,
during marketing and new business presentations, seminars and workshops
authorized by CCL), any Confidential Information (as defined below) pertaining
to the business of the CCL Companies, unless required to do so by a court of
competent jurisdiction, by any governmental agency having supervisory authority
over the business of the CCL Companies, or by any administrative body or
legislative body (including a
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committee thereof) with jurisdiction to order Employee to divulge, disclose or
make accessible such information; provided, however, that Employee shall provide
CCL with notice of the requirement of such disclosure promptly after Employee is
notified thereof and prior to his disclosure thereof so as to enable CCL to
challenge the order compelling such disclosure. In the event that Employee's
employment is terminated hereunder for any reason, Employee shall promptly
return to CCL all Confidential Information and all other documents, drawings,
work papers, lists, memoranda, notes, records and other data (including copies
thereof) constituting or pertaining to any of the Confidential Information.
(b) For purposes of this Agreement, "Confidential
Information" shall mean non-public information concerning any financial data,
statistical data, strategic business plans, product development (or other
proprietary product data), customer and supplier lists, customer and supplier
information, information relating to practices, processes, techniques,
procedures, methods, trade secrets, marketing plans and other non-public,
proprietary and confidential information of any of the CCL Companies, that, in
any case, (i) is not otherwise generally available to the public, (ii) is not
generally known in any industry in which any of the CCL Companies is or was
involved, and (iii) has not been disclosed by the CCL Companies to others not
subject to confidentiality agreements.
7.3 Non-Competition. Subject to the provisions of Section 3.2,
Employee agrees that during the Non-Competition Period (as hereinafter defined),
he will not in any manner, directly or indirectly, except as specifically
contemplated by the terms of his employment or expressly set forth in this
Agreement, (i) be employed by, engaged in or participate in the ownership,
management, operation or control of, or act in any advisory or other capacity
for, any entity which now or at any time during the Non-Competition Period
engages in any business activity competitive, directly or indirectly, with the
business of CCL or any of its subsidiaries or divisions within any greater
metropolitan area in which CCL or any of its subsidiaries or divisions are
currently engaged in business or, at the termination of Employee's employment,
within which there was a bona fide intention on the part of CCL or any of its
subsidiaries or divisions to engage in business in the future, except that
Employee may be retained in an "in-house" or similar position relating to the
area of communications and content strategy for, or research relating to the
implementation of, or the design and production of, intranets, extranets or
internets by an entity which is not engaged in the business of providing
services in such area to other unaffiliated entities, (ii) solicit or divert
from CCL or any of its subsidiaries or divisions any business or any customer,
or divert from CCL or any of its subsidiaries or divisions any supplier thereto,
in each case which customer or supplier was a customer or supplier of CCL or any
of its subsidiaries or divisions during the eighteen (18) months immediately
preceding such date of solicitation or diversion, or assist any person, firm or
corporation in doing so or attempting to do so, or (iii) on his own behalf or on
behalf of any person or entity, directly or indirectly, hire or solicit the
employment or other retention of any employee or consultant who was employed or
retained by CCL or any of its subsidiaries or divisions at any time during the
twelve (12) months immediately preceding such date of hiring or solicitation;
provided, however, that, notwithstanding the foregoing, nothing herein shall
preclude Employee from making solely
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passive investments in any class or series of equity securities of any entity
which is publicly traded so long as Employee shall not own or control, directly
or indirectly, either as principal, manager, partner, investor, lender or in any
other capacity, equity securities which constitute five percent (5%) or more of
the voting rights or equity ownership of such entity. For purposes of this
Section 7.3, a "bona fide intention" to engage in business in a certain
geographical area shall be deemed not to have existed at the time of termination
of Employee's employment if (i) within three (3) months after the termination of
Employee's employment, CCL or any of its subsidiaries or divisions shall not
have entered into a letter of intent or made a public announcement of intention
to engage in business in such geographical area or (ii) within one (1) year
after the termination of Employee's employment, CCL or any of its subsidiaries
or divisions shall not have consummated an agreement to engage, or otherwise
actually engaged, in business in such geographical area. The provisions of this
Section 7.3 shall extend for the Term and survive the Term for eighteen (18)
months after the end of the Term; provided, however, that in the case of a
termination of employment pursuant to the provisions of Section 6.1, the
provisions of this Section 7.3 shall extend until eighteen (18) months after the
last payment of Base Salary is made pursuant to Section 6.1(i); provided
further, however, that in the case of a termination of employment pursuant to
the provisions of Sections 6.3, the provisions of this Section 7.3 shall extend
until the last payment of Base Salary is made pursuant to Section 6.3(A) (the
period described in this sentence is referred to herein as the "Non-Competition
Period").
7.4 Breach of Provisions. Employee and CCL hereby agree that the
covenants contained in this Section 7 are reasonable and necessary covenants for
the protection of CCL and its business under the circumstances, and further
agree that if, in the opinion of any court of competent jurisdiction such
covenants are not reasonable in any respect, such court shall have the right,
power and authority to excise or modify such provision or provisions of these
covenants that such court deems unreasonable and to enforce the remainder of
these covenants as so amended. Employee agrees that any breach or threatened
breach of the covenants contained in this Section 7 would irreparably injure CCL
and that there is no adequate remedy at law for any such breach or threatened
breach. Accordingly, Employee agrees that CCL, in addition to pursuing any other
remedies it may have in law or in equity, may obtain injunctive relief in any
court, foreign or domestic, having the capacity to grant such relief, to
restrain any such breach or threatened breach by Employee and to enforce the
provisions of this Section 7.
8. Notices. Any notice, demand, request, waiver, or other
communication under this Agreement shall be in writing (including facsimile or
similar writing) and shall be deemed to have been duly given (i) on the date of
service if personally served, (ii) on the third day after mailing if mailed to
the party to whom notice is to be given, by first class mail, registered, return
receipt requested, postage prepaid, or (iii) on the date sent if sent by
facsimile, to the parties at the following addresses or facsimile numbers (or at
such other address or facsimile number for a party as shall be specified by like
notice):
If to CCL, to: International Post Limited
000 Xxxxx Xxxxxx
0
Xxx Xxxx, Xxx Xxxx 00000
Attention: President
Fax No.: (000) 000-0000
with a copy to: Shereff, Friedman, Xxxxxxx & Xxxxxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Fax No.: (000) 000-0000
If to Employee, to the address set forth beside his signature on the signature
page to this Agreement.
9. Entire Agreement. This Agreement and the agreements referenced
herein set forth the entire understanding and agreement of the parties with
respect to their subject matter and supersede any and all prior understandings,
negotiations or agreements among the parties hereto, both written and oral, with
respect to such subject matter.
10. Authority. The parties each represent and warrant that such party
has the power, authority and right to enter into this Agreement and to carry out
and perform the terms, covenants and conditions hereof.
11. Binding Effect; Assignment. This Agreement shall be binding upon
and inure to the benefit of CCL and its successors and assigns (including
purchasers of substantially all of CCL's assets) and Employee. Except as
otherwise expressly set forth in this Agreement, the rights and obligations of
Employee under this Agreement shall not be assignable or otherwise transferable.
12. Amendment or Modification; Waiver. This Agreement may be amended
or modified only by written agreement executed by all parties hereto. Any of the
parties hereto may extend the time for the performance of any of the obligations
or other acts of any other party hereto, waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto, or waive compliance with any of the covenants, agreements or
conditions contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in a written
instrument signed by the party granting such waiver. Such waiver or failure to
insist upon strict compliance with such obligation, covenant, agreement or
condition shall not operate as a waiver of, or estoppel with respect to, any
subsequent or future failure.
13. No Third Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any person other than the parties hereto and their
respective successors and permitted assigns.
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14. Governing Law; Consent to Jurisdiction. This Agreement shall be
construed in accordance with, and governed by, the internal laws of the State of
New York as applied to contracts made and to be performed entirely within the
State of New York. Any legal action, suit or proceeding arising out of or
relating to this Agreement may be instituted in any state or federal court
located within the County of New York, State of New York, and each party hereto
agrees not to assert, by way of motion, as a defense, or otherwise, in any such
action, suit or proceeding, any claim that it is not subject personally to the
jurisdiction of such court in an inconvenient forum, that the venue of the
action, suit or proceeding is improper or that this Agreement or the subject
matter hereof may not be enforced in or by such court. Each party hereto further
irrevocably submits to the jurisdiction of any such court in any such action,
suit or proceeding.
15. Headings. Section headings contained in this Agreement are
included for convenience only and shall not affect the interpretation of any
provisions of this Agreement.
16. Counterparts. This Agreement may be executed in one or more
counter parts, each of which shall be deemed to be an original, but all of
which, when taken together, shall constitute one and the same agreement.
17. Severability. Subject to Section 7.4 hereof, in the event that any
one or more of the provisions contained in this Agreement shall for any reason
be held to be invalid, illegal or unenforceable in any respect, in whole or in
part, the validity of the remaining provisions shall not be affected and the
remaining portion of any provision held to be invalid, illegal or unenforceable
shall in no way be affected, prejudiced or disturbed thereby.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first set forth above.
COGNITIVE COMMUNICATIONS, LLC
By:
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Xxxxxxx X. Xxxxxx
Vice President and Chief Financial Officer
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Xxxxx Xxxxxx
Address: 0000 Xxxxxxx Xxxxxx Xxxx
Xxxxxxxx Xxxxxxx, XX 00000
Phone No.: (000) 000-0000
Fax No.: (000) 000-0000
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