EXECUTIVE EMPLOYMENT AGREEMENT
AGREEMENT, dated as of December 1, 1996, between Heurisitic Development
Group, Inc. , a Delaware corporation (the "Company"), and Xxxxxx X. Xxxxxx (the
"Employee").
WHEREAS, the Company desires to obtain the services of the Employee, and
the Employee desires to provide such services to the Company, on the terms set
forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and obligations
hereinafter set forth, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. Employment and Duties.
(a) The Company hereby employs the Employee, and the Employee accepts
employment, to serve as Chief Executive Officer of the Company and to perform
such duties consistent with his position as may be assigned to him from time to
time by the Company's Board of Directors.
(b) The Employee hereby agrees to perform such duties, to fulfill such
responsibilities and to serve the Company faithfully, industriously and to the
best of his ability, subject to the direction and control of the Company's Board
of Directors, and to devote his best efforts and his full working time and
attention to advancing the interests of the Company.
2. Term; Termination.
Except in the case of earlier termination as hereinafter specifically
provided in Paragraph 4, this Agreement shall be effective as of the date hereof
and shall continue until December 31, 1999 (the "Term").
3. Compensation; Expenses; Benefits.
(a) As compensation for his services hereunder in whatever capacity
rendered, the Company shall pay the Employee a base salary, payable in equal
monthly or more frequent installments, at a rate of $150,000 per year, which
amount may be increased at the discretion of the Board commencing thirteen
months after the completion by the Company of an initial public offering of its
securities.
(b) The Company shall pay the Employee an annual bonus based upon the
attainment of performance objectives determined at the discretion of the Board.
The bonus amount shall be $25,000 during the first year of the Term if during
any fiscal quarter of 1997, the Company achieves break even (giving effect to
such bonus).
(c) The Company shall supply to the Employee the use of a corporate
vehicle and shall pay all costs, including insurance, associated therewith,
providing that Employee's personal use of such vehicle shall not exceed 20% of
the total vehicle usage.
(d) The Employee shall be entitled to medical benefits generally
available to executive officers of comparable companies having approximately the
same sales and profits as the Company, so long as such benefits comply with
applicable law and are available at commercially reasonable rates.
(e) The Employee shall be entitled to reimbursement for his ordinary
and necessary business expenses incurred in the performance of his duties
hereunder provided that his claims therefor are supported by documentation.
4. Termination of Employment. If any of the following events occur before
the expiration of the Term, the Employee's employment with the Company shall
terminate upon the occurrence of such event:
(a) The Employee's death, or any illness, disability or other
incapacity that renders the Employee physically unable regularly to perform his
duties hereunder for a period in excess of 120 consecutive days or an aggregate
of 150 days within any 12 month period. The determination regarding whether the
Employee is physically unable regularly to perform his duties hereunder shall be
made by the Company's Board of Directors in the reasonable, good faith exercise
of their judgment. In the event of termination pursuant to this Paragraph (a) or
in the event of Employee's death, the Company shall continue to pay to the
Employee the base salary set forth in Paragraph 3(a) for a period of six months
following the date of termination or death.
(b) Thirty (30) days after the Company gives the Employee written
notice of the termination of Employee's employment if said termination is for
cause. For purposes of this Paragraph 4(d), "cause" is defined as (i) Employee's
conviction of a crime constituting a felony or involving moral turpitude or (ii)
an act by Employee of material dishonesty or fraud in connection with Employee's
performance of his duties to the Company.
(c) Thirty (30) days after the Company gives the Employee written
notice of the termination of Employee's employment if said termination is other
than pursuant to (a) or (b) above. In such event, the Company shall continue to
pay to the Employee the base salary set forth in Paragraph 3(a) for a period of
four months following the date of termination.
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5. Noncompetition.
(a) At any time during the Term hereof and for an additional period of
five years thereafter, the Employee will not reveal, divulge or make known to
any individual, partnership, joint venture, corporation or other business entity
(other than the Company or its affiliates) or use for the Employee's own account
any customer lists, trade secrets or any confidential information of any kind
("Protected Information") used by the Company or any of its commonly controlled
affiliates in the conduct of the Company's business and made known to the
Employee by reason of the Employee's employment with the Company or any of its
affiliates (whether or not with the knowledge and permission of the Company and
whether or not developed, devised or otherwise created in whole or in part by
the efforts of the Employee); provided, that Protected Information shall not
include information that shall become known to the public or the trade without
violation of this Section 5(a); and provided, further, that the Employee shall
not violate this Section 5(a) if Protected Information is disclosed by the
Employee at the direction of the Company in connection with the performance of
the Employee's duties or if the Employee is required to provide Protected
Information in any legal proceeding or by order of any court.
(b) During the Term hereof and for an additional six months
thereafter, the Employee will not, directly or indirectly, engage in the
business of, or own or control an interest in (except as a passive investor
owning less than two percent (2%) of the equity securities of a publicly owned
company), or act as director, officer or employee of, or consultant to, any
individual, partnership, joint venture, corporation or other business entity
known to the Employee to be directly or indirectly engaged anywhere in the
actual or intended geographic location in which the Company conducts business,
in any business competing with any business then being carried on by the
Company.
(c) The Employee agrees that during the Term hereof and for an
additional period of two years thereafter, the Employee shall not knowingly
employ or solicit, encourage or induce any person (except Employee's spouse) who
at any time within one year prior to the Employee's termination of employment
shall have been an employee of the Company or any of its commonly controlled
affiliates, to become employed by or associated with any individual,
partnership, joint venture, corporation or other business entity other than the
Company, and the Employee shall not knowingly approach any such employee for
such purpose or authorize or knowingly approve the taking of such actions by any
other individual, partnership, joint venture, corporation or other business
entity or knowingly assist any such individual, partnership, joint venture,
corporation or other business entity in taking such action.
6. Acknowledgments.
(a) The Employee acknowledges that the provisions of Paragraph 5 above
are reasonable and necessary for the protection of the Company and that each
provision, and the period or periods of time, geographic areas and types and
scope of restrictions on the
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activities specified herein are, and are intended to be divisible. In the event
that anyprovision of this Agreement, including any sentence, clause or part
hereof, shall be deemed contrary to law or invalid or unenforceable in any
respect by a court of competent jurisdiction, the remaining provisions shall not
be affected, but shall, subject to the discretion of such court, remain in full
force and effect and any invalid and unenforceable provisions shall be deemed,
without further action on the part of the parties hereto, modified, amended and
limited to the extent necessary to render the same valid and enforceable.
(b) The Employee acknowledges that the Company will be irrevocably
damaged if the covenants contained herein are not specifically enforced.
Accordingly, the Employee agrees that, in addition to any other relief to which
the Company may be entitled, the Company shall be entitled to seek and obtain
injunctive relief from a court of competent jurisdiction for the purposes of
restraining the Employee from any actual or threatened breach of such covenants.
7. Representations, Warranties and Covenants of Employee. The Employee
represents, warrants and covenants to and with the Company that (a) he is not
and will not become a party to any agreement, contract or understanding, whether
employment or otherwise, and that he is not subject to any order, judgment or
decree of any court or governmental agency, which would, in any way, restrict or
prohibit him from undertaking or performing his employment in accordance with
the terms and conditions of this Agreement and (b)s he is of satisfactory
physical and mental health to fulfill his duties, obligations and
responsibilities under the terms of this Agreement.
8. Miscellaneous.
(a) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of California applicable to agreements
made and to be performed in that state.
(b) Notices. All notices, consents and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given when
(a) delivered by hand, (b) sent by telex or telecopier (with receipt confirmed),
provided that a copy is mailed by registered mail, return receipt requested, or
(c) when received by the addressee, if sent by Express Mail, Federal Express or
other express delivery service (receipt requested), in each case to the
appropriate addresses and telecopier numbers set forth below (or to such other
addresses and telecopier numbers as a party may designate as to itself by notice
to the other parties):
If to the Employee:
0000 Xxxxxx Xxxxxxxx
Xxxxxx, Xxxxxxxxxx 00000
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If to the Company:
00000 Xxxxxxx Xxxxx Xxxxxxx
Xxxxxxx Xxxxxxxxx, Xxxxxxxxxx 00000
(c) Entire Agreement; Amendment. This Agreement shall supersede all
existing agreements between the Employee and the Company relating to the terms
of his employment. It may not be amended except by a written agreement signed by
both parties.
IN WITNESS WHEREOF, the parties hereto have each executed this Agreement as
of the day and year first above written.
HEURISTIC DEVELOPMENT GROUP, INC.
By:/s/ Xxxxxxx X. Xxxx
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Xxxxxxx X. Xxxx, President
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx, Employee
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