EXHIBIT 10.12
EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement (this "Agreement") dated as of November
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4, 1998, is by and between ROWECOM INC. (the "Company"), a Delaware corporation
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having its principal executive offices at 000 Xxxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxxxxxxx 00000, and XXXXX XXXXXXXXX, XX. (the "Executive"), an individual
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residing at 00 Xxxxxx Xxxx, Xxxxxxx, Xxxxxxxxxxxxx 00000.
The Company and the Executive agree as follows:
1. EMPLOYMENT OF EXECUTIVE.
(A) EMPLOYMENT. Subject to the terms and conditions of this Agreement,
the Company agrees to employ the Executive, and the Executive agrees to serve,
as the Company's Executive Vice President and Chief Financial Officer, reporting
to the Company's Chief Executive Officer and having such powers and duties
consistent with his positions as may be assigned to him from time to time by the
Company's Chief Executive Officer.
The Executive's employment hereunder will commence on the date hereof, and
unless earlier terminated in accordance with Section 3 hereof, will continue
through December 31, 2000, subject to extension by mutual consent of the
parties.
(B) COMMITMENT. The Executive represents that he is not currently party
to or bound by any commitments that might interfere with or impair his
performance of such duties and responsibilities or that are inconsistent with
his obligations hereunder. The Executive will devote such time and attention to
his duties and responsibilities hereunder as are reasonably required, and will
not undertake any commitments that would interfere with or impair his
performance of such duties and responsibilities.
2. COMPENSATION. During the term of the Executive's employment with the
Company hereunder, the Company will compensate the Executive as follows.
(A) SALARY. The Company will pay to the Executive a salary, payable
monthly, at the rate of $130,000 per annum or such higher rate as the Company's
Board of Directors may set from time to time, in its discretion.
(B) BONUSES. The Executive will be eligible to receive annual cash
bonuses of up to 50% of his salary, based on achievement of certain individual
and Company performance targets to be agreed on by the Executive and the
Company's Chief Executive Officer from time to time.
(C) BENEFITS. The Company will promptly reimburse all out-of-pocket
expenses reasonably incurred by the Executive in the course of performing his
employment duties and responsibilities hereunder, against appropriate
documentation. The Company will also provide the Executive with office space
and administrative support consistent with his position, with
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Company-paid health and life insurance, and with such other fringe benefits as
it from time to time may make generally available to its other senior executives
at the Executive's level.
3. TERMINATION.
(A) EVENTS CAUSING TERMINATION. The Executive's employment hereunder will
terminate upon the occurrence of any of the following events:
(1) The Executive's death, or a determination of his legal incapacity
by a court of competent jurisdiction; or
(2) The termination of the Executive's employment hereunder by the
Company, by written notice to the Executive, upon the Executive's inability
to perform his duties and responsibilities contemplated hereby for a period
of at least 60 consecutive days, or for an aggregate of at least 90 days in
any twelve-month period, because the Executive's physical or mental health
have become so impaired as to make it impossible or impracticable for him
to perform such duties and responsibilities; or
(3) The termination of the Executive's employment hereunder by the
Company, for Cause, by written notice to the Executive; or
(4) The termination of the Executive's employment hereunder by the
Company, without Cause, by written notice to the Executive; or
(5) The termination of the Executive's employment hereunder by the
Executive, for Good Reason, by written notice to the Company; or
(6) The termination of the Executive's employment hereunder by the
Executive, without Good Reason, by 30 days' written notice to the Company.
(B) "CAUSE" AND "GOOD REASON" DEFINED. For purposes of this Agreement:
"Cause" means (i) any act or acts by the Executive resulting directly or
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indirectly in, or intended to result directly or indirectly in, material unjust
gain or personal enrichment to the Executive or any third party at the expense
of the Company; (ii) the willful, wanton, or reckless failure by the Executive
to properly perform his duties with the Company (other than any such failure
resulting from incapacity due to mental or physical illness); (iii) the
Executive's conviction of or plea of nolo contendere to a felony; or (iv)
Executive's material breach of Section 4 of this Agreement; in each case,
provided, that the Executive's employment will in no event be considered to have
been terminated for Cause if the reason for such termination took place as a
result of bad judgment or ordinary negligence.
Notwithstanding any other provision of this Agreement, the Executive shall
not be terminated for Cause unless and until there shall have been delivered to
him a copy of a resolution duly adopted by the Board of Directors at a meeting
called and held for the purpose,
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finding that in the good faith opinion of the Board of Directors, the Executive
is guilty of the conduct which is the basis for termination with Cause as
defined in the Agreement.
"Good Reason" means any of the following occurring without the specific
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prior written consent of the Executive (i) assignment to the Executive of any
duties materially inconsistent with his positions, duties, responsibilities, and
status with the Company (other than promotions), or a material adverse change in
his reporting responsibilities, titles, or offices; (ii) requiring the Executive
to be permanently based more than 100 miles from his present office location in
Cambridge, Massachusetts (excluding business-related travel to an extent
reasonably consistent with past practice); or (iii) the Company's failure to
continue to provide to the Executive with the compensation called for by this
Agreement.
(C) ADJUSTMENTS UPON EARLY TERMINATION. Notwithstanding any other
provision of this Agreement:
(1) If the Executive's employment with the Company terminates pursuant
Section 3(a)(4) (by the Company, without Cause) or Section 3(a)(5) (by the
Executive, for Good Reason), then for a period of one year following the
date of such termination, the Company will continue to pay the Executive a
salary at a rate equal to that at which he was being paid at the time of
termination, and (subject to Section 3(d) below) will continue to provide
the Executive with the benefits that he was receiving at the time of
termination (or if the Company is unable to do so because such benefits may
only be provided to current employees, it will provide the Executive with
the cash value thereof). These will be the Executive's exclusive remedies
in respect of all rights of the Executive under this Agreement and/or any
loss or damages that he may incur by reason of such termination.
(2) If the Executive's employment with the Company terminates other
than pursuant to Section 3(a)(4) (by the Company, without Cause) or Section
3(a)(5) (by the Executive, for Good Reason), then the rights of the
Executive to receive compensation pursuant to Section 2 hereof, and all
other rights of the Executive hereunder, will cease as of the date of such
termination.
(D) NO DUTY TO MITIGATE; TERMINATION OF BENEFITS. The Executive shall not
be required to mitigate the amount of any compensation payable to him pursuant
to Section 3(c)(1) hereof, whether by seeking other employment or otherwise. If
during the period during which he is receiving such compensation, he obtains new
full-time employment providing him with benefits comparable to those he is
entitled to receive from the Company hereunder, then when he begins receiving
such benefits from his new employer, he will no longer be entitled to receive
such benefits from the Company; but he will continue to be entitled to receive
payment of his salary as provided for herein.
4. CERTAIN COVENANTS. The Executive hereby covenants as follows, which
covenants will be in addition to, and not exclusive of, any similar obligations
to which the Executive may be subject from time to time.
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(A) CONFIDENTIALITY. Both during and following the term of this Agreement
and the Executive's employment hereunder, the Executive will maintain the
confidentiality of all confidential or proprietary information of the Company or
any of its subsidiaries (including without limitation all such information
acquired by the Executive before the commencement of his employment hereunder
and all such information with respect to the Company's or any of its
subsidiaries' respective businesses, finances, and/or technology), all of which
will be and remain the exclusive property of the Company or its respective
subsidiaries, as the case may be, and except as previously authorized in writing
by the Company, and except with respect to information that has otherwise become
public through no action or omission on the part of the Executive, will not
disclose any such information to any third party, or use it for any purpose
other than in the discharge of his employment duties and responsibilities
hereunder.
Upon the termination of the Executive's employment with the Company, the
Executive will promptly return to the Company all documents and other tangible
media that contain or reflect any confidential or proprietary information of the
Company and/or its subsidiaries (including all copies, reproductions, digests,
abstracts, analyses, and notes) in his possession or control, and will destroy
any related files (whether stored electronically, magnetically, optically, or
otherwise) on any equipment not owned by the Company or its subsidiaries.
(B) NON-COMPETITION. During any period during which the Executive is
employed by the Company, and for a period of twelve months following the date of
termination of his employment with the Company (which latter period will
automatically be extended by a period of time equal to any period in which the
Executive is in breach of any obligations under this Section 4; including any
such extension, the "Restricted Period"), the Executive will not engage,
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directly or indirectly, as a proprietor, equityholder, investor (except as a
passive investor holding not more than 5% of the outstanding capital stock of a
publicly held company), lender, partner, director, officer, employee,
consultant, or representative, or in any other capacity, in any business
involving any business presently engaged in by the Company, or in which the
Company or any of its subsidiaries may engage at any time during the period of
the Executive's employment hereunder, or in which at the time of termination of
the Executive's employment hereunder, the Board of Directors of the Company or
any of its subsidiaries has formally resolved to engage, in any geographic area
in which the Company is presently doing business, or in which where the Company
or any its subsidiaries may be doing business at any time before the termination
of the Executive's employment hereunder, or in which at the time of termination
of the Executive's employment hereunder, the Board of Directors of the Company
or any of its subsidiaries has formally resolved to engage.
(C) NON-SOLICITATION OF EMPLOYEES, ETC. During the Restricted Period, the
Executive will not directly or indirectly recruit, solicit, induce, or attempt
to induce any of the employees or independent contractors of the Company or any
of its subsidiaries to terminate their employment or contractual relationship
with the Company or such subsidiary; and will not assist any other person or
entity to do so, or be a proprietor, equityholder, investor (except as a passive
investor holding not more than 5% of the capital stock of a publicly held
company), lender, partner,
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director, officer, employee, consultant, or representative of any person or
entity who does or attempts to do so.
(D) NON-SOLICITATION OF CUSTOMERS, SUPPLIERS, ETC. During the Restricted
Period, the Executive will not directly or indirectly solicit, divert, take
away, or attempt to divert or take away, from the Company or any of its
subsidiaries any of the business or patronage of any of their actual or
potential customers, clients, accounts, vendors, or suppliers, or induce or
attempt to induce any such person or entity to reduce the amount of business it
does with the Company or any of its Subsidiaries, and the Executive will not
assist any other person or entity to do so, or be a proprietor, equityholder,
investor (except as a passive investor holding not more than 5% of the capital
stock of a publicly held company), lender, partner, director, officer, employee,
consultant, or representative of any person or entity who does or attempts to do
so.
(E) INVENTIONS, ETC. The Executive will make full and prompt disclosure to
the Company of all inventions, improvements, discoveries, developments,
processes, software, mask works, and works of authorship, whether patentable or
copyrightable or not, that are created, made, conceived, or reduced to practice
by the Executive or under his direction or by him jointly with others before or
during his employment hereunder or during the one-year period following the
termination of his employment hereunder, excluding only such of these things as
both (i) do not relate in any way to any business in which the Company is now
engaged, or in which it or any of its subsidiaries may engage at any time during
the period of the Executive's employment hereunder, or in which before the
termination of the Executive's employment hereunder, the Board of Directors of
the Company or any of its subsidiaries may formally resolve to engage, and (ii)
the Executive demonstrates by clear and convincing evidence were done completely
outside normal working hours, off the Company's premises, and not using the
Company's tools, devices, equipment, property, or Confidential Information
(collectively, subject to such exclusions, all of the foregoing, "Inventions").
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The Executive agrees to assign, and hereby does assign, to the Company
without further consideration, all of his rights, titles, and interests in and
to all Inventions and all related intellectual property rights. If requested by
the Company, the Executive will assist it to apply for and obtain any patents or
copyright registrations relating to any Inventions, and will execute and deliver
to the Company all related applications and other documents, all at the
Company's expense. The Executive hereby appoints the Company (with power of
substitution) as his agent and attorney-in-fact to execute and deliver or file
any such document in his name and on his behalf. This power of attorney is
irrevocable and coupled with an interest on the part of the Company.
(F) EQUITABLE REMEDIES. The Executive hereby acknowledges that any breach
by him of his obligations under this Section 4 would cause substantial and
irreparable damage to the Company, and that money damages would be an inadequate
remedy therefor. Accordingly, the Executive acknowledges and agrees that the
Company will be entitled to an injunction, specific performance, and/or other
equitable relief to prevent the breach of such obligations (in addition to all
other rights and remedies to which the Company may be entitled in respect of any
such breach).
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(G) MODIFICATION. In the event that a court of competent jurisdiction
determines that any of the provisions of this Section 4 would be unenforceable
as written because they cover too extensive a geographic area, too broad a range
of activities, or too long a period of time, or otherwise, then such provisions
will automatically be modified to cover the maximum geographic area, range of
activities, and period of time as may be enforceable, and in addition, such
court is hereby expressly authorized so to modify this Agreement and to enforce
it as so modified. No invalidity or unenforceability of any section of this
Agreement or any portion thereof will affect the validity or enforceability of
any other section or of the remainder of such section.
5. MISCELLANEOUS.
(A) BENEFITS OF AGREEMENT; NO ASSIGNMENTS; NO THIRD-PARTY BENEFICIARIES.
(1) This Agreement will bind and inure to the benefit of the parties
hereto and their respective heirs, successors, and permitted assigns.
(2) Neither party will assign any rights or delegate any obligations
hereunder without the consent of the other party (except that the Company
may assign its rights and delegate its obligations hereunder to any
successor to its business, whether by merger or consolidation, sale of
stock or of all or substantially all of its assets, or otherwise), and any
attempt to do so will be void.
(3) Nothing in this Agreement is intended to or will confer any rights
or remedies on any person or entity other than the parties hereto, their
respective heirs, successors, and permitted assigns.
(B) NOTICES. All notices, requests, payments, instructions, or other
documents to be given hereunder will be in writing or by written
telecommunication, and will be deemed to have been duly given if (i) delivered
personally (effective upon delivery), (ii) mailed by registered or certified
mail, return receipt requested, postage prepaid (effective five business days
after dispatch), (iii) sent by a reputable, established courier service that
guarantees next business day delivery (effective the next business day), or (iv)
sent by telecopier followed within 24 hours by confirmation by one of the
foregoing methods (effective upon receipt of the telecopy in complete, readable
form), addressed to the recipient party at his or its address set forth in the
first paragraph hereof (or to such other address as the recipient party may have
furnished to the sending party for the purpose pursuant to this section).
(C) COUNTERPARTS. This Agreement may be executed by the parties in
separate counterparts, each of which when so executed and delivered will be an
original, but all of which together will constitute one and the same agreement.
In pleading or proving this Agreement, it will not be necessary to produce or
account for more than one such counterpart.
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(D) CAPTIONS. The captions of sections or subsections of this Agreement
are for reference only and will not affect the interpretation or construction of
this Agreement.
(E) CONSTRUCTION. The language used in this Agreement is the language
chosen by the parties to express their mutual intent, and no rule of strict
construction will be applied against either party.
(F) WAIVERS; AMENDMENTS. No waiver of any breach or default hereunder
will be valid unless in a writing signed by the waiving party. No failure or
other delay by any party exercising any right, power, or privilege hereunder
will be or operate as a waiver thereof, nor will any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power, or privilege. No amendment or modification of this Agreement
will be valid or binding unless in a writing signed by both the Executive and
the Company.
(G) ENTIRE AGREEMENT. This Agreement contains the entire understanding
and agreement between the parties, and supersedes any prior understandings or
agreements between them, with respect to the subject matter hereof, including
without limitation the Noncompetition Agreement dated as of May 4, 1998, between
the Executive and the Company; provided, that this Agreement does not affect any
agreement between the parties relating to stock options granted by the Company
to the Executive, which agreements will survive the execution and delivery of
this Agreement.
(H) GOVERNING LAW. This Agreement will be governed by and interpreted and
construed in accordance with the internal laws of the Commonwealth of
Massachusetts, without reference to principles of conflicts or choice of law.
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IN WITNESS WHEREOF, each of the Company and the Executive has executed and
delivered this Agreement as an agreement under seal as of the date first above
written.
The EXECUTIVE:
November 23, 1998
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Xxxxx Xxxxxxxxx, Xx. Date
The COMPANY: ROWECOM INC.
November 23, 1998
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Xxxxxxx X. Xxxx Date
President & CEO
