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Exhibit 10.33
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (this "Agreement"), is made by and
between YELLOWBRIX, INC., a Delaware corporation, having its principal office at
00 Xxxxx Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000 (the "Company"),
and Xxxx Xxxxxx ("Executive").
The parties hereto agree as follows:
1. Employment, Duties and Acceptance.
(a) The Company hereby employs Executive for the Term (as defined below)
and Executive agrees to be employed by and render services to the Company for
the Term, as Senior Vice President of Engineering and to perform such duties
commensurate with such office as he shall reasonably be directed by his direct
supervisor to perform. Executive shall report directly to the Chief Executive
Officer of the Company, or, such other person as may be designated from time to
time by the Chief Executive Officer of the Company.
(b) Executive agrees to devote his entire working business time,
attention and energies to the performance of the business of the Company, and
Executive shall not, directly or indirectly, alone or as a member of any
partnership or other organization, or as an officer, director or employee of any
other corporation, partnership or other organization, be actively engaged in or
concerned with any other duties or pursuits which are contrary to the best
interests of the Company, except those duties or pursuits specifically
authorized by his direct supervisor and except those duties or pursuits on
behalf of organizations that are unrelated to the Company's business, including
without limitation organizations that are focused on charitable, educational,
scientific, literary, community or family related matters.
(c) The principal place of employment of Executive hereunder shall at
all times be in the greater Washington, D.C. metropolitan area, or other
locations mutually acceptable to Executive and the Company. Executive
understands and agrees that he may be required to travel from time to time from
the Company's current principal office in Alexandria, Virginia, to other
locations for business reasons.
(d) Executive hereby accepts such employment and agrees to render the
services described above and abide by the terms of this Agreement.
2. Term of Employment.
Subject to the terms and conditions of this Agreement, including Section
8 hereof, Executive's employment under this Agreement will be deemed to have
commenced on November 1, 2000 (the "Commencement Date") and shall continue until
his employment is terminated as set forth in Section 8 of this Agreement or
ending on the third anniversary of the Commencement Date. The period of
employment shall be referred to as the "Term." The Term shall automatically be
renewed for an additional one-year period commencing on the second
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anniversary of the Commencement Date, unless either the Company or the Executive
gives the other at least 60 days written notice prior to the expiration of the
Term of its desire to terminate this Agreement.
3. Compensation and Benefits.
(a) As compensation for services to be rendered under this Agreement,
Company agrees to pay Executive during the Term a base salary at an annual rate
of One Hundred and Fifty Thousand and 00/100 Dollars ($150,000.00) ("Base
Salary"), to be paid on a semi-monthly basis. From time to time, the Executive
Committee or the Board of Directors shall consider, in its sole and absolute
discretion, any appropriate adjustments to Executive's Base Salary. Effective
January 1, 2001, the Base Salary shall become One Hundred and Eighty Five
Thousand and 00/100 Dollars ($185,000.00).
(b) In addition to the Base Salary, Executive will be eligible to earn
incentive bonus compensation (commencing with the Company's fiscal year ending
December 31, 2000) of up to 75% of the Base Salary (the "Incentive Bonus"),
subject to the terms and conditions of this paragraph. Within 30 days after the
end of each fiscal year during the Term in which services are rendered
hereunder, the Company will grant and pay Executive any earned Incentive Bonus.
Each annual Incentive Bonus will be earned and payable based on the Company's
fiscal year-end. Therefore, if the Commencement Date or Termination Date (as
defined herein) of this Agreement occurs during the Company's fiscal year, the
earned Incentive Bonus for the first and last years of the Term of this
Agreement will be prorated based upon the number of days the Executive rendered
services during such year. Executive shall be deemed to have earned all or a
portion of his Incentive Bonus, if he achieves specific, written annual
performance objectives developed and agreed upon by Executive and his direct
supervisor after the Commencement Date and prior to the end of each fiscal year.
(c) From time to time, the Executive Committee of the Company shall
consider, in its sole and absolute discretion, the extent to which Executive
shall be entitled to receive any additional bonus payments from the Company for
services rendered under this Agreement, which bonus payments may consist of any
combination of cash, securities, stock options or other consideration in amounts
and subject to terms and conditions determined by the Executive Committee.
(d) The Company shall pay or reimburse Executive for all reasonable and
necessary travel, entertainment and other business expenses actually incurred or
paid by him in the performance of services for the Company under this Agreement,
upon presentation of expense statements or vouchers and such other supporting
information as the Company may reasonably require of Executive in accordance
with the expense reimbursement policy of the Company.
(e) Executive shall be eligible to participate in any medical, dental,
and vision insurance plans, short-term disability, long-term disability, and
group life/accidental death and disability insurance coverage, employee benefit
plans, and any other welfare benefit or "fringe" benefit plans currently offered
by the Company to its executives and employees. The Company
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reserves the right to revise the coverage and benefits at any time and/or
require employee contributions relating to such coverage or plans. The terms and
conditions of any insurance coverage and benefits provided to or on behalf of
the Company's employees shall be subject to terms and conditions and the
policies and procedures set forth in the Company's Employee Handbook
(incorporated herein by reference).
(f) Executive shall be entitled to three weeks paid vacation per year
(after six months of continuous employment), in accordance with the vacation
policy of the Company as set forth in the Company's Employee Handbook. In
addition, Executive shall be entitled to one week of sick leave per year, in
accordance with the sick leave policy of the Company as set forth in the
Company's Employee Handbook.
4. Stock Options; Parachute Payments.
(a) As additional compensation for services to be rendered under this
Agreement, Executive is entitled to participate in the Company's Amended 1998
Stock Option Plan, as amended ("1998 Plan"), pursuant to which the Company has
already granted Executive stock options to purchase 81,400 shares of common
stock of the Company, par value $.001 per share ("Common Stock") at an exercise
price of $.001. In addition, the Company has already granted Executive 424,014
stock options pursuant to the Company's 2000 Stock Option Plan, as amended (the
"2000 Plan) at an exercise price of $3.18 per share. The foregoing options shall
be subject to the terms and conditions of the 1998 Plan and 2000 Plan and stock
option agreements previously executed by Executive and the Company. In addition,
Executive will receive an additional grant of 250,000 stock options on January
2, 2001 at the then fair market value per share price with a vesting schedule to
be agreed upon in the future by and between Executive and Company.
(b) Notwithstanding any other provision of this Agreement or of any
other agreement, contract, or understanding heretofore or hereafter entered into
by Executive with the Company or any subsidiary or Affiliate thereof, except an
agreement, contract, or understanding hereafter entered into that expressly
modifies or excludes application of this paragraph (an "Other Agreement"), and
notwithstanding any formal or informal plan or other arrangement for the direct
or indirect provision of compensation to Executive (including groups or classes
of beneficiaries of which Executive is a member), whether or not such
compensation is deferred, is in cash, or is in the form of a benefit to or for
Executive (a "Benefit Arrangement"), if Executive is a "disqualified
individual," as defined in Section 280G(c) of the Internal Revenue Code of 1986,
as amended, any option held by Executive and any right to receive any other
option, payment, stock, stock appreciation right, or other benefit under this
Agreement, the 1998 Plan or any Other Agreement or Benefit Arrangement shall not
become exercisable or vested (i) to the extent that such right to exercise,
vesting, payment, or benefit, taking into account all other rights, payments, or
benefits to or for Executive under this Agreement, all Other Agreements, and all
Benefit Arrangements, would cause any payment or benefit to Executive under this
Agreement, the 1998 Plan or the 2000 Plan to be considered a "parachute payment"
within the meaning of Section 280G(b)(2) of the Code as then in effect (a
"Parachute Payment") and (ii) if, as a result of receiving a Parachute Payment,
the aggregate after-tax amounts received by Executive from the Company under
this Agreement, all
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Other Agreements, and all Benefit Arrangements would be less than the maximum
after-tax amount that could be received by the Grantee without causing any such
payment or benefit to be considered a Parachute Payment. In the event that the
receipt of any such right to exercise, vesting, payment, or benefit under this
Agreement, the 1998 Plan or the 2000 Plan, in conjunction with all other rights,
payments, or benefits to or for Executive under any Other Agreement or any
Benefit Arrangement would cause Executive to be considered to have received a
Parachute Payment under this Agreement, the 1998 Plan or the 2000 Plan that
would have the effect of decreasing the after-tax amount received by Executive
as described in clause (ii) of the preceding sentence, then Executive shall have
the right, in the Executive's sole discretion, to designate those rights,
payments, or benefits under this Agreement, any Other Agreements, and any
Benefit Arrangements that should be reduced or eliminated so as to avoid having
the payment or benefit to Executive under this Agreement, the 1998 Plan or the
2000 Plan be deemed to be a Parachute Payment.
5. Confidentiality.
(a) Executive shall not, while an employee of the Company, or for a
period of four (4) years following termination of this Agreement, directly or
indirectly, disclose or permit to be known, other than (i) as is reasonably
required in the regular course of his duties, including disclosures to the
Company's advisors and consultants, (ii) as required by law (in which case
Executive shall give the Company prior written notice of such required
disclosure) or (iii) with the prior written consent of the Company's Chief
Financial Officer or the Chief Executive Officer, to any person, firm or
corporation any confidential information relating to the Company's business or
activities, which information is not in the public domain, or generally known in
this industry, and, in either case, is a trade secret of the Company, in any
form acquired by Executive during the course of, or as an incident to, his
employment with the Company or any predecessor to the Company's business or the
rendering of services hereunder, and relating to the Company, any subsidiaries
or other Affiliates (as defined below) thereof, any client, investor, corporate
partner or joint venturer of the Company or any of its subsidiaries, or any
corporation, partnership or other entity owned or controlled, directly or
indirectly, by the Company, any subsidiaries or other Affiliates thereof or, to
the knowledge of Executive, any of the other persons or entities listed above,
or in which the Company, any subsidiaries or other Affiliates thereof or, to the
knowledge of Executive, any of the other persons or entities listed above, has a
beneficial interest. Such information may include, but shall not be limited to,
business or legal affairs, business plans, financial statements, projections or
forecasts, proprietary technology, research and development data, know-how,
internally developed market studies and forecasts, Company competitive analyses,
Company pricing policies, Company employee lists, Company personnel policies,
contracts or the substance of agreements with Company customers, suppliers and
others, Company customer lists and any other documents embodying such
confidential information. This confidentiality obligation shall not apply to any
information which becomes publicly available, was generally known in the
industry or was known to the recipient other than pursuant to a breach of this
Section 5 by Executive.
(b) All information and documents embodying trade secrets of the
Company and any subsidiaries or other Affiliates thereof as described above
shall be the exclusive property of the Company, and, upon termination of
Executive's employment with the Company, all
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documents, records, reports, writings and other similar documents containing
confidential information, including copies thereof in written form or in any
other for of media, then in Executive's possession or control shall be returned
to and left with the Company.
6. Noncompetition; Nonintervention
(a) Executive shall not during the Term and for a one-year period
after the Termination Date (the "Restricted Period"), directly or indirectly, as
owner, partner, joint venturer, stockholder, employee, broker, agent, principal,
trustee, corporate officer, director, licensor, or in any capacity whatsoever
engage in, become financially interested in, be employed by, render any
consultation or business advice with respect to, or have any connection with any
business which is in direct competition with the Company in the Company's Field
of Interest (as defined below) anywhere in the United States, so long as and to
the extent that the loyal and complete fulfillment of the duties Executive would
be required to undertake in such circumstances would call upon Executive to
reveal, to make judgments on or otherwise to use Confidential Information of the
Company to which Executive had access by reason of his employment by Company.
Without limiting the foregoing, Executive may own any securities of any
corporation which is engaged in such business and is publicly owned and traded
but in an amount not to exceed at any one time five percent (5%) of any class of
stock or securities of such company.
(b) For purposes hereof, "direct competition" shall mean any business
that is engaged in selling the same or substantially similar services or
products as the Company is selling or has plans to sell during the Term of this
Agreement.
(c) During the Restricted Period, Executive shall not, whether for his
own account or for the account of any other individual, partnership, firm,
corporation or other business organization other than the Company, directly or
indirectly solicit, endeavor to entice away from the Company or its Affiliates,
or otherwise directly interfere with the relationship of the Company or its
Affiliates, with any person who, to the actual knowledge of Executive, is
employed by the Company or its Affiliates or who is, or was within the then most
recent twelve-month period, a customer or client, of the Company, its
predecessors or any of its Affiliates. The placement of any general classified
or "help wanted" advertisements and/or general solicitations to the public at
large shall not constitute a violation of this Section 6 unless Executive's name
is contained in such advertisements or solicitations.
7. Injunction and Enforceability of Covenants.
(a) If Executive commits a breach, or threatens to commit a breach, of
any of the provisions of Sections 5, 6 or 9 hereof, the Company shall have the
right and remedy to have the provisions of this Agreement specifically enforced
by any court having equity jurisdiction, it being acknowledged and agreed that
any such breach or threatened breach will cause irreparable injury to the
Company and that money damages will not provide an adequate remedy to the
Company.
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(b) If any of the covenants contained in Section 5, 6 or 9 hereof, or
any part thereof, is hereafter construed to be invalid or unenforceable, the
same shall not affect the remainder of the covenant or covenants, which shall be
given full effect without regard to the invalid portions.
(c) If any of the covenants contained in Sections 5, 6 or 9 hereof, or
any part thereof, is held to be unenforceable because of the scope or duration
of such provision or the area covered thereby, the parties agree that the court
making such determination shall have the power to reduce the scope, duration
and/or area of such provision to the least extent possible to render them
enforceable and, in its reduced form, such provision shall then be enforceable.
(d) The parties hereto intend to and hereby confer jurisdiction to
enforce the covenants contained in Sections 5, 6 or 9 hereof upon the courts of
any state within the geographical scope of such covenants having appropriate
personal and subject matter jurisdiction over the parties. In the event that the
courts of any one or more of such states shall hold any such covenant wholly
unenforceable by reason of the breadth of such scope or otherwise, it is the
intention of the parties hereto that such determination not bar or in any way
affect the Company's right to the relief provided above in the courts of any
other states within the geographical scope of such other covenants having
appropriate personal and subject matter jurisdiction over the parties, as to
breaches of such covenants in such other respective jurisdictions, the above
covenants as they relate to each state being, for this purpose, severable into
diverse and independent covenants.
8. Termination of Employment.
(a) The Company may terminate this Agreement upon written notice to
Executive for any reason or if Executive acts, or fails to act, in a manner that
provides Cause for termination. For purposes of this Agreement, the term "Cause"
means: (i) the willful or continual neglect by Executive of his duties or
obligations hereunder (other than breaches of the covenants set forth in
Sections 5, 6 and 9 hereof which events are governed by clause (vi) below),
provided that such neg1ect remains uncured for a period of fifteen (15) days
after written notice describing the same is given to Executive, and provided
further that isolated or insubstantial failures shall not constitute Cause
hereunder; (ii) Executive's conviction (which is not subject to further appeal)
of any felony or crime of moral turpitude or any crime or offense involving
money or other property of the Company or any subsidiaries or other Affiliates
thereof; (iii) Executive's performance of any act or failure to act which, if
Executive were prosecuted and convicted therefore, would constitute a crime or
offense either involving money or property of the Company or any subsidiaries or
other Affiliates thereof or constituting a felony in the jurisdiction involved;
(iv) any attempt by Executive to improperly secure any personal profit in
connection with the business of the Company or any subsidiaries or other
Affiliates thereof; (v) chronic alcoholism or the use of illegal drugs; (vi) the
commission of an act that the Company in good faith belief believes constitutes
sexual harassment; or (vii) any breach by Executive of the terms of Sections 5,
6 or 9 hereof, provided such breach continues uncured for ten (10) days after
written notice of such breach is given by the Company to Executive. All
determinations of Cause under subparagraphs (i), (iii), (iv), (v), (vi) and
(vii) of this Section 8(a)(1) shall be made by either the Chief Executive
Officer or the Compensation Committee; or
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(b) Executive may terminate this Agreement upon written notice to the
Company for any reason or for Good Reason.
(1) For purposes of this Agreement, the term "Good Reason" means: (i)
Executive's resignation within thirty (30) days after his
discovery of any material breach of this Agreement by the Company
which is not cured within thirty (30) days after written notice
thereof from Executive; (ii) a material diminution of Executive's
responsibilities, title, authority or status not the result of the
conduct of Executive which is not cured within thirty (30) days
after written notice from Executive; (iii) Executive is required
to change his primary work location from the Washington, D.C.
metropolitan area; and (iv) the completion of a Change of Control
Transaction where Executive suffers a material diminution of his
responsibilities, title, authority and status not the result of
the conduct of Executive after such Transaction as compared with
the responsibilities, title, authority and status Executive had
with the Company before such Transaction. Notwithstanding the
foregoing, in no event shall Good Reason include the inability of
Executive and the Company to agree on the applicable Incentive
Bonus.
(2) For purposes of this Agreement, a "Change of Control Transaction"
shall be deemed to have occurred in the event any of the following
occurs with respect to the Company:
(A) the direct sale or exchange by the stockholders of the Company
of all or substantially all of the stock of the Company, where the
stockholders of the Company before such sale or exchange do not
retain, directly or indirectly, at least a majority of the
beneficial interests in the voting stock of the acquiring entity
after such sale or exchange;
(B) a merger or consolidation in which the Company is not the
surviving corporation, other than a merger or consolidation with a
wholly-owned subsidiary, reincorporation of the Company in a
different jurisdiction from its current state of incorporation or
other transaction in which there is no substantial change in the
stock ownership of the Company;
(C) a merger or consolidation in which the Company is the
surviving corporation, where the stockholders of the Company
before such merger or consolidation do not retain, directly or
indirectly, at least a majority of the voting stock of the
successor entity after such merger or consolidation;
(D) the sale, exchange, or transfer of all or substantially all of
the assets of the Company to an unrelated third party; or
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(E) a liquidation or dissolution of the Company, other than
pursuant to bankruptcy or insolvency of the Company.
(c) This Agreement shall immediately terminate upon the occurrence of
any of the following:
(1) Executive's death, provided, however, that Executive's legal
representatives shall be entitled to receive Executive's salary
through the last day of the month in which his death occurs; or
(2) Executive's Disability, provided, however, that notwithstanding
Executive's disability, the Company shall continue to pay Executive
his Base Salary through the date on which Disability is finally
determined. For purposes of this Agreement, "Disability" means a
physical or mental condition which, for a continuous period of at
least six (6) months has or will prevent Executive from performing
his duties on a full-time basis and in a professional and
consistent manner. Any dispute as to the Executive's Disability
shall be referred to and resolved by a licensed physician selected
and approved by the Company and the Executive.
(d) If this Agreement is terminated by Executive without Good Reason,
then the termination will be effective fourteen (14) days after the date of
delivery of written notice of termination. If this Agreement is terminated by
the Company without Cause or by Executive with Good Reason, then the termination
will be effective fourteen (14) days after the date of delivery of written
notice of termination. If this Agreement is terminated by the Company with
Cause, termination will be effective as of the date of notice of termination. If
this Agreement is terminated by the Company with Cause or by the Executive
without Good Reason, then the Executive shall be entitled to receive his Base
Salary and his fringe benefits and benefits hereunder only through the effective
date of termination. If this Agreement is terminated by the Company without
Cause or by Executive with Good Reason, then Executive shall be entitled to
receive (i) his Base Salary and his life insurance, medical insurance and
disability insurance benefits, if any, for the lesser of one year or the
remainder of the Term from the effective date of termination and (ii) his
prorated Incentive Bonus and any other bonuses granted by the Company for the
remainder of such calendar year (collectively, subsections (i) and (ii), the
"Severance Payment"), with such Severance Payment payable over time in
accordance with normal payroll and Company practices. If this Agreement is
terminated due to death, then the Severance Payment will be continued through
the next twelve month period following the month in which the Executive died. If
this Agreement is terminated due to Disability, then the Severance Payment will
be continued until the last day of the twelve month period following Disability;
provided, however, that the Base Salary shall be reduced by the amount of any
disability income payments made to Executive during such twelve month period
from any insurance or other policies provided by the Company.
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term "successors and assigns" as used herein shall mean a corporation or other
entity acquiring all or substantially all of the assets and business of the
Company (including the rights and obligations arising under this Agreement)
whether by operation of law or otherwise.
(b) This Agreement and all rights under this Agreement are personal to
Executive and shall not be assignable other than by will or the laws of
intestacy. All of Executive's rights under this Agreement shall inure to the
benefit of his heirs, personal representatives, designees or other legal
representatives, as the case may be.
16. General.
(a) This Agreement shall be governed by and construed and enforced in
accordance with the laws of the Commonwealth of Virginia, other than the choice
of law provisions thereof.
(b) This Agreement sets forth the entire agreement and understanding
of the parties relating to the subject matter hereof and supersedes all prior
agreements, arrangements and understandings, written or oral, relating to the
subject matter hereof; provided, however, that the terms and conditions of the
Stock Option Agreement shall continue to remain in full force and effect. No
representation, promise or inducement has been made by either party that is not
embodied in this Agreement or the Stock Option Agreement, and neither party
shall be bound by or liable for any alleged representation, promise or
inducement not so set forth.
(c) This Agreement may be amended, modified, superseded, canceled,
renewed or extended, and the terms or covenants hereof may be waived, only by a
written instrument executed by the parties hereto, or in the case of a waiver,
by the party waiving compliance. The failure or delay of a party at any time or
times to require performance of any provision hereof shall in no manner affect
the right at a later time to enforce the same. No waiver by a party of the
breach of any term or covenant contained in this Agreement, whether by conduct
or otherwise, or any one or more or continuing waivers of any such breach, shall
constitute a waiver of the breach of any other term or covenant contained in
this Agreement.
(d) Should any provision of this Agreement be held by an arbitration
tribunal or court to be invalid or unenforceable, such invalid or unenforceable
provision shall not render the entire Agreement invalid or unenforceable, and
this Agreement and each individual provision hereof shall be enforceable and
valid to the fullest extent permitted by law.
(e) The headings in this Agreement are for convenience of reference
only and shall not control or affect the meaning or construction of this
Agreement.
(f) This Agreement may be signed in any number of counterparts and by
facsimile, each of which shall be an original, with the same effect as if the
signatures were upon the same instrument. This Agreement shall become effective
when each party shall have received counterparts signed by the other party.
(g) Sections 5, 6, 7, 9, 12, 13 and 16 will survive the termination of
this Agreement.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
by its duly authorized officer, and Executive has executed this Agreement as of
the day and year first above written.
/s/ XXXX XXXXXX
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Executive Signature
Name: Xxxx Xxxxxx
YellowBrix, Inc.
By: /s/ XXXXX X. XXXXXXX
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Name: Xxxxx X. Xxxxxxx
Title: Vice President and General Counsel
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