EXHIBIT 10.22
EMPLOYMENT AGREEMENT
dated as of April 1, 1998
The parties to this agreement are Xxxxx X. Xxxxxxxxx, who resides at 0000
Xxxxxxxxxx Xxxxx, Xxxx Xxxx Xxxx, Xxxx 00000 (the "Executive"), and Xxxx-Xxxxx
Inc., a Delaware corporation, with its principal office at Xxx Xxxx Xxxxxx, Xxx
Xxxx, XX 00000 (the "Company").
The Executive has been employed by the Company or its subsidiaries since 1996
and the Company desires to continue to obtain the benefit of the Executive's
services with respect to its business. The Executive wishes to continue to be
employed by the Company.
It is therefore agreed as follows:
1. Employment. During the term of the Executive's employment under this
----------
agreement, the Company shall continue to employ the Executive, and the Executive
shall serve the Company as President, ZD Brand and Marketing with the duties and
responsibilities associated with that position or in such other high level
executive management position of the Company and with such duties and
responsibilities as she may be assigned. The Executive shall devote her full
business time and her best efforts to the performance of her duties under this
agreement and shall perform them faithfully, diligently and competently, and
shall comply with and be bound by the Company's operating policies, directives
and procedures in effect from time to time during the period of employment.
Nothing in the foregoing shall prevent the Executive from serving on the boards
of appropriate industry associations or other similar not for profit
organizations or from serving with the Company's consent on the board of one or
more affiliates of the Company.
2. Term of Employment. The term of the Executive's employment under this
------------------
agreement shall be for an initial period commencing on the date of this
agreement and ending March 31, 2001, subject to earlier termination as provided
in Section 5. The term shall continue after March 31, 2001 until terminated by
the Company or the Executive on not less than thirty (30) days notice.
3. Compensation. As full consideration for her services under this
------------
agreement, the Executive shall be entitled to the following compensation:
3.1 Base Salary. The Executive shall be entitled to an initial base
-----------
salary at the annual rate of $420,000, which shall be reviewed each year on the
anniversary date of her last increase in accordance with normal Company policies
and guidelines. The Executive's base salary shall be payable in equal
installments (but no less frequently than monthly) in accordance with the
Company's customary payroll practice for its senior employees (which currently
is semi-monthly).
3.2 Incentive Compensation. The Executive shall be entitled to an
----------------------
incentive bonus for each full calendar year of her employment under this
agreement equal to at least $150,000 at target with the targets and goals
reasonably set by the Company for such calendar year and with a higher or lower
amount payable if such targets and goals are exceeded or not met, as the case
may be.
Payment of the annual incentive for any calendar year shall be made promptly
after final determination of the financial results for the business units under
her management for such calendar year and in no event later than March 31 of the
following year.
3.3 Options. In addition to the foregoing, the Executive shall be
-------
eligible to receive stock options to purchase shares of the Company's common
stock in such amounts as may be
2
determined by the Company from time to time (the "Xxxx-Xxxxx Options"). The
first award of Xxxx-Xxxxx Options was made on February 13, 1998 in the amount of
135,000 shares. Nothing herein shall affect the options in SOFTBANK Corp.
granted to the Executive by SOFTBANK Holdings Inc. pursuant to the 1996 or 1997
SOFTBANK Executive Stock Option Plan (the "SOFTBANK Options").
3.4 Other Executive Plans. In addition to the grant of Xxxx-Xxxxx
---------------------
Options and SOFTBANK Options referred to in Section 3.3, the Company may
establish one or more executive compensation plans for the benefit of its
executives and key employees. Such plans may include a retirement restoration
plan, deferred compensation plans, long-term incentive plans, or other similar
plans (those special plans are hereafter referred to as the "Executive Plans").
4. Reimbursement of Expenses; Fringe Benefits, etc.
-----------------------------------------------
4.1 Expenses. The Company shall reimburse the Executive, in
--------
accordance with the Company's general policy in effect from time to time, for
all reasonable expenses incurred by the Executive in connection with the
performance of her duties under this agreement, upon presentation of appropriate
documentation covering the expenses.
4.2 Fringe Benefits. The Executive shall be entitled to participate,
---------------
to the extent eligible pursuant to the provisions of the respective plans, in
medical and dental insurance, disability insurance, life insurance and other
fringe benefits provided by the Company generally to its other employees and
those special executive benefits and option and incentive compensation plans
provided generally to other executives at her level.
3
5. Termination Upon Disability or Death; Other Early Termination.
-------------------------------------------------------------
5.1 Disability; Death.
-----------------
(a) If, as the result of any disability the Executive shall have
been unable to perform her material duties for a period of 180 consecutive days,
the Company may, by notice to the Executive, terminate her employment under this
agreement as of the date of the notice. If the Executive's employment is
terminated pursuant to this Section 5.1(a), the Executive shall be entitled to
receive, in full discharge of all obligations of the Company to the Executive
under this agreement, (i) the Executive's unpaid salary under Section 3.1
through the date of termination, (ii) payment as soon as such amount may be
determined of a pro rata part of her incentive compensation under Section 3.2
for the year of termination based on the number of months the Executive was
employed during that year, (iii) any amounts in the Executive Plans in which
Executive is vested at the date of termination, and (iv) any benefits to which
Executive is entitled or continues to be entitled pursuant to the policies,
programs or plans comprising the fringe benefits referenced to in Section 4.2.
(b) The Executive's employment shall automatically terminate
upon the date of her death. If the Executive's employment is terminated by
reason of her death, the Executive's estate shall be entitled to receive, in
full discharge of all obligations of the Company to the Executive under this
agreement, (i) the Executive's unpaid salary under Section 3.1 through the date
of termination, (ii) payment as soon as that amount may be determined of a pro
rata portion of her incentive compensation under Section 3.2 for the year of
termination based on the number of months the Executive was employed during that
4
year, and (iii) any amounts in the Executive Plans in which the Executive is
vested at the date of termination.
5.2 Termination for Cause. Notwithstanding anything to the contrary in
---------------------
this agreement, the Company may at any time terminate the Executive's employment
under this agreement for Cause upon notice to the Executive. For purposes of
this agreement, the term "Cause" shall mean: (i) gross misconduct of the
Executive relating to the Company's business or otherwise injurious to the
business or reputation of the Company as determined by the Company in good
faith; (ii) the Executive's commission of a crime involving financial
impropriety or that would otherwise interfere with her ability to perform her
duties or be injurious to the reputation or the business of the Company; (iii)
any willful breach by the Executive of her fiduciary duties as an executive and
employee of the Company; (iv) the failure of the Executive to perform in a
material respect her obligations under this agreement after written notice and,
to the extent such failure can be cured, a period of ten (10) days to cure; or
(v) the failure of the Executive to perform her obligations under Sections 6.1,
6.2 and 6.3 of this agreement. If the Executive's employment is terminated by
the Company pursuant to this Section 5.2, the Executive shall be entitled to
receive, in full discharge of all obligations of the Company to the Executive
under this agreement, her unpaid salary under Section 3.1 through the date of
termination and any amounts in the Executive Plans in which Executive is then
vested and which are not forfeited by such termination pursuant to the
provisions of those Plans.
5.3 Resignation. If the Executive's employment is terminated by her
-----------
resignation, the Executive shall be entitled to receive, in full discharge of
all obligations of the Company to the Executive under this agreement, her unpaid
salary under
5
Section 3.1 through the date of termination and any amounts in the
Executive Plans in which Executive is then vested and which are not forfeited by
such termination pursuant to the provisions of those Plans. In the event of a
resignation by the Executive, the Company shall also have the right by prompt
notice to the Executive to extend the thirty (30) day notice period specified in
Section 2 by an additional ninety (90) days if that resignation is prior to
March 31, 2001 or for an additional sixty (60) days if that resignation is after
March 31, 2001. During that extended period, the Executive shall be paid her
base pay and shall comply with the provisions of this agreement except she shall
not be required to perform any services to the Company except to assist in the
transition of her duties.
5.4 Other Termination. The Company may terminate the Executive's
-----------------
employment at any time without cause upon thirty days notice to Executive
including prior to the expiration of the initial period specified in Section 2
above. In such event, the Executive shall be entitled to receive, in full
discharge of all obligations of the Company to the Executive under this
agreement, (i) her unpaid salary under Section 3.1 through the date of
termination; plus (ii) a pro rata portion of the annual incentive bonus
compensation under Section 3.2 for the year of termination based on the number
of months the Executive was employed by the Company during that year, to be paid
promptly after such incentive amount is determined by the Company; (iii) any
amounts in the Executive Plans in which the Executive may then be vested; and
(iv) severance equal to one year's base salary, provided, however, if such
termination occurs prior to the expiration of the initial period specified in
Section 2, (that is, before March 31, 2001), such severance shall be equal to
the greater of (x) one year's base salary and (y) fifty percent (50%) of the sum
of her annual
6
base salary and her annual incentive compensation (using the amount of incentive
compensation earned for the most recently completed year) for the remaining part
of the initial period. (For example, if the Company terminated the Executive's
employment effective March 31, 1999, and the Executive then had a salary of
$500,000 and had earned annual incentive of $300,000 for the prior year, the
Executive would receive severance equal to 50% of that base salary and incentive
for the two years remaining in the initial period, that is, 50% of $1,600,000 or
$800,000. If that termination were effective on March 31, 2001, then the
severance would be one year's base salary or $500,000.) The severance shall be
paid in monthly installments and the Company's obligation to pay such severance
shall immediately end if the Executive breaches any of her obligations under
Section 6. In addition, the Company shall immediately vest that part of the
Executive's Xxxx-Xxxxx Options which would have vested had the Executive
remained employed throughout the remaining vesting period of those options,
provided, however, the Executive shall not be able to exercise such options
until the date such options would otherwise have vested and provided, further,
that at the time of any such exercise the Executive is not competing with the
business of the Company (whether or not that time is beyond the period of non-
compete specified in Section 6.2). In the event the Executive competes with the
Company or otherwise violates any provision of Section 6, then all vested Xxxx-
Xxxxx options shall be immediately terminated.
6. Confidentiality; Non-Competition.
--------------------------------
6.1 Confidentiality. The Executive shall not, directly or indirectly,
---------------
during the term of her employment under this agreement or at any time
thereafter, disclose to anyone or use in any manner any confidential or
proprietary information
7
related to the Company or any confidential or proprietary information of any
affiliate of the Company, including SOFTBANK, of which she may become aware or
have become aware pursuant to her employment other than as requested by the
Company pursuant to her duties under this agreement or, as may be required by
law, but then only after giving the Company prior notice. Nothing herein shall
cover information which becomes generally known to the public through the
actions of any third party unrelated to the Executive.
6.2 Non-Competition. The Executive acknowledges that because of her
---------------
position she has had and will have access to extremely confidential information
of the Company including trade secret, marketing plans, long term strategic
plans, and other information which would cause the Company irreparable harm if
it were available or her services were available after termination of her
employment with the Company to a competitor of the Company. Therefore, during
the period of the Executive's employment under this agreement (including the
term of any leave of absence) and for a period after termination of employment
equal to the greater of (x) six months and (y) the number of months of severance
for which the Executive shall be eligible (but not more than twelve months), the
Executive shall not, directly or indirectly, engage or be interested in any
business which engages in the United States, or in other geographic areas in
which the Company or its subsidiaries have done business, in a business directly
competitive with the business of the Company or any of its subsidiaries at such
date or as may be planned at such date. The Executive shall be deemed to be
directly or indirectly interested in a business if she is engaged or interested
in that business as a stockholder, director, officer, employee, salesman, sales
representative, agent, broker, partner, individual proprietor,
8
lender, licensor, consultant or otherwise, but not if her interest is limited
solely to ownership of 5% or less of the equity or debt securities of any class
of a corporation whose shares are listed for trading on a national securities
exchange or in the over-the-counter market. Nothing in this section shall
prohibit the Executive from working for a company in a non-competing area
although that Company may in another part of its business compete with the
business of the Company so long as the Executive shall not be involved or assist
in the competitive part of that business. (For example, the Executive may work
for Conde Nast in non-competitive areas but may not be involved in the
activities of Wired Magazine.)
6.3 No Solicitation. The Executive shall not during the term of this
---------------
agreement or for a period of twelve (12) months after the termination or
expiration of her employment, directly or indirectly, solicit for employment or
consulting, or employ or hire as an employee or as a consultant, on her own
behalf or on behalf of any other person or enterprise, or otherwise encourage
the resignation of, any individual who was an employee of or consultant to the
Company or any of its subsidiaries at any time subsequent to the date of this
agreement and within the twelve (12) months preceding the termination of the
Executive's employment.
6.4 Remedies. The Executive's covenants under this Section 6 are
--------
intended to extend beyond the termination or expiration of the Executive's
employment and shall apply whether the Executive's term of employment expires at
the end of its stated term or is terminated earlier for any reason. The
Executive acknowledges that the remedy at law for breach of the provisions of
this Section 6 will be inadequate and that, in addition to any other remedy the
Company may have, it shall be entitled to an
9
injunction restraining any breach or threatened breach, without any bond or
other security being required or without having to show irreparable harm. The
Executive and the Company recognize and agree that the duration and scope for
which the covenants not to compete and solicit set forth in this Section 6 are
to be effective are reasonable. In the event that any court determines that the
time period or the area, or both of them, are unreasonable and that such
covenants are to that extent unenforceable, the parties agree that the covenants
shall remain in full force and effect for the greatest time period and in the
greatest area that would not render them unenforceable.
7. Miscellaneous.
-------------
7.1 Headings. The section headings of this agreement are for reference
--------
purposes only and are to be given no effect in the construction or
interpretation of this agreement.
7.2 Notices. All notices and other communications under this agreement
-------
shall be in writing and shall be deemed given when delivered personally, mailed
by registered mail, return receipt requested, or sent by reputable overnight
delivery service to the parties at their respective addresses set forth above
(or to such other address as a party may have specified by notice given to the
other party pursuant to this provision). Any notice to the Company shall be sent
to the attention of the Chairman and Chief Executive Officer (with a copy to the
Company's Legal Department) at Xxxx-Xxxxx Inc., Xxx Xxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000.
7.3 Severability. The invalidity or unenforceability of any provision
------------
of this agreement shall not affect the validity or enforceability of any other
provision of this agreement, which shall remain in full force and effect.
10
7.4 Waiver. Either party may waive compliance by the other party with any
------
provision of this agreement. The failure of a party to insist on strict
adherence to any term of this agreement on any occasion shall not be considered
a waiver or deprive that party of the right thereafter to insist upon strict
adherence to that term or any other term of this agreement. No waiver of any
provision shall be construed as a waiver of any other provision. Any waiver
must be in writing.
7.5 No Third Party Beneficiaries; Assignment. Any affiliate of the
----------------------------------------
Company, including SOFTBANK, which discloses confidential information to the
Executive in connection with her employment hereunder shall be a third party
beneficiary of Sections 6.1 and 6.4 of this agreement, and each shall be
entitled to enforce such sections as if it were a party hereto. Except as
expressly set forth in the preceding sentence, nothing in this agreement shall
create or be deemed to create any third party beneficiary rights in any person
or entity. Neither party may assign any of its rights or delegate any of its
duties under this agreement without the written consent of the other party,
except that the Company may assign its rights and delegate its duties under this
agreement to an affiliate or to a corporation or other entity that has succeeded
to substantially all the business and assets of the Company, and assumed the
Company's obligations under this agreement; provided, however, that the Company
shall continue to guarantee the obligations assumed by any such assignee.
7.6 Entire Agreement. This agreement contains and is intended as, a
----------------
complete statement of all of the terms of the arrangements between the parties
with respect to the matters provided for, supersedes any previous agreements and
understandings between the parties with respect to those matters, and cannot be
changed or terminated orally.
11
7.7 Governing Law. This agreement shall be governed by and construed in
-------------
accordance with the internal laws of the State of New York applicable to
agreements made and to be performed in New York and the courts of New York, New
York shall have exclusive jurisdiction over any actions arising out of the
enforcement or any other dispute concerning the terms of this agreement. Each
party submits to the personal jurisdiction of the courts of New York and
acknowledges that service of process shall be deemed properly made by registered
or certified mail of a complaint or other similar document to the Executive's
address.
7.8 Counterparts. This agreement may be executed in counterparts, each of
------------
which shall be considered an original, but all of which together shall
constitute the same instrument.
XXXX-XXXXX INC.
/s/ Xxxx-Xxxxx Inc.
By: ____________________________
Name:
Title:
/s/ Xxxxx X. Xxxxxxxxx
__________________________
Xxxxx X. Xxxxxxxxx
12
