EXECUTIVE EMPLOYMENT AGREEMENT
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THIS EXECUTIVE EMPLOYMENT AGREEMENT (this "Agreement"), made and entered
into as of the 29th day of July, 1998 (the "Effective Date"), by and between
Xxxxxxx X. Xxxx (hereinafter referred to as "Employee"), and MegaMarketing
Corporation, a corporation organized under the laws of the State of Georgia
(hereinafter referred to as the "Company").
In consideration of the premises and the mutual promises and agreements
contained in this Agreement, the parties to this Agreement, intending to be
legally bound, hereby agree as follows:
ARTICLE 1
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SCOPE OF EMPLOYMENT
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Section 1.1 Employment. Subject to the terms of this Agreement, the Company
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hereby agrees to employ Employee, and Employee hereby accepts such employment.
Employee shall hold the title of Chief Financial Officer of the Company, and in
that capacity Employee shall have such authority and responsibilities as are
consistent with his position and which may be set forth in this Agreement, in
the Bylaws or assigned by the Board of Directors or the Company's Chief
Executive Officer from time to time (the "Services"). At the request and in the
discretion of the Company, Employee shall serve as an officer or director of any
subsidiary or affiliate of the Company, and shall perform services for any such
subsidiary or affiliate as are appropriate to and consistent with the Services
being performed by Employee for the Company. Employee shall devote substantially
all of Employee's productive business time, energy and skill (except on vacation
days and holidays) to performing his obligations under this Agreement and shall
perform his obligations under this Agreement diligently, faithfully and to the
best of Employee's abilities.
Section 1.2 Place of Performance. During the term of his employment under
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this Agreement (the "Term"), Employee shall be based at the offices of the
Company in Atlanta, Georgia except for reasonably required travel on business.
Section 1.3 Compliance with Policies. Subject to the terms of this
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Agreement, during the Term, Employee shall comply in all material respects with
all policies and procedures applicable to similarly situated employees of the
Company generally and to Employee specifically.
ARTICLE 2
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TERM
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The Term shall be for a period of three (3) years, from July 29, 1998
through July 28, 2001, subject, however, to prior termination as provided for in
this Agreement.
ARTICLE 3
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COMPENSATION; EXPENSES
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Section 3.1 Base Salary. Employee shall be paid a base salary (the "Base
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Salary") during the Term at the rate of One Hundred Thousand Dollars
($100,000.00) per annum. The Base Salary and all other payments made pursuant
to Section 3 shall be (a) payable on the schedule that the Company may implement
from time to time for such payments, and (b) subject to any withholdings and
deductions required by applicable law. Employee will be eligible to receive
annual raises in the Base Salary and participate in the bonus program offered by
the Company to the Company's senior executives, in each case as determined
by the Company's Board of Directors in its sole discretion.
Section 3.2 Stock Options.
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(a) Effective as of the Effective Date, Employee shall receive an
option to purchase one hundred fifty thousand (150,000) shares of Company's
Common Stock at an exercise price of $1.00/share. Of these options, 100,000
shall be immediately vested, and 50,000 shall vest upon the effective date of
the Company's initial public offering of the Company's Common Stock pursuant to
a registration statement to be filed under the Securities Act of 1933 (the
"IPO"). Such option shall have the additional terms and be governed by that
certain Stock Option Agreement between the Company and Employee dated the
Effective Date.
(b) During the Term, Employee shall also be eligible to be
considered for participation in other stock-based employee incentive or equity-
based award plans that the Company may implement from time to time. For purposes
of Employee's participation for possible grants of stock options under any such
plan, he will be reviewed and considered for a grant at the same time as, and on
a basis and subject to terms that are consistent with, the basis and terms that
govern grants to other officers of the Company, taking into account Employee's
position and responsibilities.
Section 3.3 Expense Reimbursement. The Company shall pay or reimburse
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Employee for all reasonable business expenses incurred or paid by Employee in
the course of performing his duties under this Agreement and in accordance with
Company policy. As a condition to such payment or reimbursement, however,
Employee shall maintain and provide to the Company, upon the Company's request,
reasonable documentation and receipts for such expenses.
ARTICLE 4
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EMPLOYEE BENEFITS
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Section 4.1 Benefit Plans. During the Term, Employee shall be entitled to
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participate in such of the Company's retirement, supplemental retirement, life,
health, disability and other insurance programs, as well as other benefit
programs, which are generally available to other similarly situated employees of
the Company, subject to the Company's policies with respect to all such benefits
or insurance programs or plans. The Company shall not, by virtue of this
provision, be under any obligation to Employee to continue to maintain any
particular plan or program or any particular benefit level under any plan or
program.
Section 4.2 Vacation. During the Term, Employee shall be entitled to four
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(4) weeks of vacation.
ARTICLE 5
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TERMINATION
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Section 5.1 Termination by the Company. Employee's employment may be
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terminated by the Company by giving notice during the term of this Agreement
upon the occurrence of one or more of the following events:
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(a) Employee's death, or disability that renders Employee incapable
of performing Employee's duties for more than one hundred twenty (120) calendar
days (termination under this Section 5.1(a) will be deemed termination without
Cause);
(b) for any reason following a determination by the Board to
terminate Employee's employment (termination under this Section 5.1(b) will be
deemed termination without Cause); or
(c) "for Cause," which for purposes of this Agreement will mean
that Employee will have:
(i) committed an intentional act of fraud, personal
dishonesty, breach of fiduciary duty, embezzlement or theft in connection with
Employee's duties or in the course of Employee's employment with the Company;
(ii) inflicted intentional, wrongful, material damage to
the Company or to any material asset of the Company;
(iii) intentionally and wrongfully violated Article 1 of
this Agreement;
(iv) been convicted of a felony or any similar crime
carrying a prison term of at least one year (regardless of whether imprisonment
is actually imposed);
(v) used alcohol or drugs in a habitual and debilitating
manner; or
(vi) failed to meet reasonable performance expectations, as
determined and articulated by the Board; provided, however, that in the event of
this subsection (vi) being the sole reason for a termination for Cause, Employee
will have the opportunity to cure and related rights set forth in Section 5.1(d)
of this Agreement;
and further provided, that single or occasional acts of poor business judgment
(unless such act or actions involve personal profit or have a Material Adverse
Effect on Purchaser), business conduct which is consistent with prior business
conduct known to and acquiesced in by the Board, or business conduct which is
consistent with a business plan or arrangement described in advance to the Board
and conducted with the acquiescence of the Board shall not be grounds for
dismissal under subsection (i) or subsection (ii).
(d) In the event of a determination by the Board that Employee
has failed to meet performance expectations, the Company will furnish to
Employee in writing a notice of proposed termination setting forth a specific
statement of the deficiencies in Employee's performance. Employee will then have
a period of ninety (90) days after the giving of such written notice by the
Company to effect a cure of the specified deficiencies. If, at the end of such
ninety (90) day period, no such cure has been effected to the reasonable
satisfaction of the Board, the Board may, in its sole discretion, terminate
Employee's employment as of the end of such ninety (90) day period. The Company
will be obligated to provide to Employee only one such notice of proposed
termination, and if subsequent to effecting a cure of specified deficiencies
Employee is determined by the Board to have again failed to meet the same
performance expectations, then Employee's employment may be terminated
immediately upon the Company's giving of notice of termination to Employee
specifying Employee's deficiencies in performance.
(e) Termination by Employee. Employee's employment may be terminated by
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Employee by giving notice during the term of this Agreement for "Good Reason" or
for any reason.
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For purposes of this Agreement, "Good Reason" will mean a material breach by the
Company of any material provision of this Agreement, or a material adverse
alteration in the nature or status of Employee's responsibilities (including,
without limitation, a change in title or compensation, or a material change in
benefits), in any such case without the express written consent of Employee,
unless such event is fully corrected within thirty (30) days following written
notification by Employee to the Company that Employee intends to terminate
Employee's employment under this Agreement because of such breach or alteration.
Section 5.2 Severance. For purposes of this Agreement, Employee's
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entitlement to any severance payments upon termination of Employee's employment
will be as set forth below:
(a) Termination Without Cause. If Employee is terminated
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without Cause or resigns for Good Reason, Employee will be entitled to severance
pay equal to one year's salary, to be paid in twelve (12) monthly installments
equal to Employee's then-current monthly salary. For purposes of this Agreement,
a demotion or a requirement of relocation from the Atlanta, Georgia area will be
deemed to be a termination without cause.
(b) Voluntary Termination. If prior to July 29, 1999 Employee
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voluntarily resigns for a reason other than Good Reason, Employee will not be
entitled to receive any severance pay. If after July 28, 1999 Employee
voluntarily resigns for a reason other than Good Reason, Employee will be
entitled to severance pay equal to six (6) months' salary at Employee's then
current rate, to be paid in six (6) monthly installments. Employee will provide
a minimum of thirty (30) days prior written notice of Employee's resignation to
the CEO or the Board, as appropriate. In the event Employee will provide thirty
(30) days prior written notice of Employee's intent to resign, the Company may
accept such resignation effective as of any date during such thirty (30) day
period as the Company deems appropriate, provided that Employee will receive
from the Company Employee's salary and be entitled to participate at the
Company's expense in any Company sponsored benefit programs in which Employee
was a participant as of the effective date of Employee's resignation for the
duration of such thirty (30) day period.
(c) Termination for Cause. Employee will not be entitled to any
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severance pay whatsoever if Employee's employment is terminated "for Cause"
pursuant to Section 3.1(c) of this Agreement, unless severance pay is approved
by the Board in its sole discretion; provided, however, that Employee will
receive such annual salary that is accrued but unpaid up to the date of such
termination for Cause. Notwithstanding the foregoing, if termination is for
Cause pursuant to Section 3.1(c)(vi), then Employee will be entitled to
severance pay equal to three (3) months' salary at Employee's then current rate,
to be paid in three (3) monthly installments.
ARTICLE 6
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REPRESENTATIONS
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Section 6.1 Of Employee. Employee represents and warrants to the Company
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that (a) his execution, delivery and performance of this Agreement do not and
will not conflict with, violate, or constitute a breach of or default under any
provision of law or regulation applicable to him or any provision of any
agreement, contract or other instrument to which he is a party or otherwise
bound; (b) this Agreement constitutes the legal, valid and binding obligation of
Employee, enforceable against Employee in accordance with its terms; and (c) he
has not received any legal advice contrary to his representations or warranties
set forth in this Section 6.1.
Section 6.2 Of the Company. The Company represents and warrants to Employee
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that (a) this Agreement has been duly executed and delivered by the Company; (b)
the execution, delivery and
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performance of this Agreement by the Company have been duly authorized by all
necessary corporate action; (c) this Agreement constitutes the legal, valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms; (d) the execution, delivery and performance of this Agreement by
the Company do not and will not conflict with, violate, or constitute a breach
of the Articles of Incorporation or Bylaws of the Company or any of its
subsidiaries or any law or regulation applicable to the Company or any of its
subsidiaries; and (e) the Company has not received any legal advice contrary to
the Company's representations and warranties set forth in this Section 6.2.
ARTICLE 7
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RIGHTS TO WORK PRODUCT
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Except as expressly provided in this Agreement, the Company alone shall be
entitled to all benefits, profits and results arising from or incidental to
Employee's performance of the Services. To the greatest extent possible, any
work product, property, data, documentation or information or materials
prepared, conceived, discovered, developed or created by Employee in connection
with performing the Services or any other of his employment responsibilities
during the Term ("Work Product") shall be deemed to be "work made for hire" as
defined in the Copyright Act, 17 U.S.C.A. (S) 101 et seq, as amended, and owned
exclusively and perpetually by the Company. Employee hereby unconditionally and
irrevocably transfers and assigns to the Company all intellectual property or
other rights, title and interest Employee may currently have (or in the future
may have) by operation of law or otherwise in or to any Work Product. Employee
agrees to execute and deliver to the Company any transfers, assignments,
documents or other instruments which the Company may deem necessary or
appropriate to vest complete and perpetual title and ownership of any Work
Product and all associated rights exclusively in the Company. The Company shall
have the right to adapt, change, revise, delete from, add to and/or rearrange
the Work Product or any part thereof written or created by Employee, and to
combine the same with other works to any extent, and to change or substitute the
title thereof, and in this connection Employee hereby waives the "moral rights"
of authors as that term is commonly understood throughout the world including,
without limitation, any similar rights or principles of law which Employee may
now or later have by virtue of the law of any locality, state, nation, treaty,
convention or other source. Unless otherwise specifically agreed, Employee
shall not be entitled to any compensation in addition to that provided for in
Section 3 of this Agreement for any exercise by the Company of its rights set
forth in the preceding sentence.
ARTICLE 8
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NONDISCLOSURE COVENANT
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Through exercise of his rights and performance of his obligations under
this Agreement, Employee will be exposed to "Trade Secrets" and "Confidential
Information" (as those terms are defined in the next sentences). "Trade Secrets"
shall mean information or data of or about the Company or any affiliated entity,
including, but not limited to, technical or nontechnical data, formulas,
patterns, compilations, programs, devices, methods, techniques, drawings,
processes, financial data, financial plans, product plans, or lists of actual or
potential customers, clients, distributors, or licensees, that: (i) derive
economic value, actual or potential, from not being generally known to, and not
being readily ascertainable by proper means by, other persons who can obtain
economic value from their disclosure or use; and (ii) are the subject of efforts
that are reasonable under the circumstances to maintain their secrecy. To the
extent that the foregoing definition is inconsistent with a definition of "trade
secret" mandated under applicable law, the latter definition shall govern for
purposes of interpreting Employee's obligations under this Agreement.
"Confidential Information" shall mean valuable, non-public, competitively
sensitive data and information relating to the business of the Company or any
affiliated entity, other than Trade Secrets Employee acknowledges and agrees
that any unauthorized disclosure or use of any of the Trade Secrets or
Confidential Information would be wrongful and would likely result in immediate
and irreparable injury to the Company.
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Except as required to perform his obligations under this Agreement or except
with Company's prior written permission, Employee shall not, without the express
prior written consent of the Company, redistribute, market, publish, disclose or
divulge to any other person or entity, or use or modify for use, directly or
indirectly in any way for any person or entity: (i) any Trade Secrets at any
time (during or after the Term) during which such information or data shall
continue to constitute a "trade secret" under applicable law; and (ii) any
Confidential Information during Employee's employment with the Company and for a
period of twelve (12) months after termination. Employee agrees to cooperate
with any reasonable confidentiality requirements of the Company. Employee shall
immediately notify the Company of any unauthorized disclosure or use of any
Trade Secrets or Confidential Information of which Employee becomes aware.
ARTICLE 9
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RETURN OF MATERIALS
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At any point during the Term at the specific request of the Company, or,
in any event, as promptly as practicable after Employee's employment under this
Agreement has been terminated, Employee will return to the Company all Work
Product (including any copies or reproductions thereof and any materials
constituting or containing Trade Secrets or Confidential Information of the
Company) that are in Employee's possession or control.
ARTICLE 10
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ACKNOWLEDGEMENT
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The parties acknowledge and agree that the covenants of Employee in
Sections 7, 8,and 9 (collectively, the "Protective Covenants") are reasonable as
to time, scope and territory given the Company's need to protect its substantial
investment in its Confidential Information, Trade Secrets and customer
relationships, and particularly given (a) the generous compensation and benefits
that are to be provided Employee, (b) the Company's investment of time, effort
and capital in enhancing Employee's business skills and opportunities, (c) the
complexity and competitive nature of the Company, and (d) that Employee has
sufficient skills to find alternative, commensurate employment or consulting
work in Employee's field of expertise that would not entail a violation of the
Protective Covenants. Notwithstanding Section 11 below, the parties further
acknowledge that any breach or threatened breach of a Protective Covenant by
Employee is likely to result in irreparable injury to the Company, and
therefore, in addition to all remedies provided at law or in equity (which
remedies shall be cumulative and not mutually exclusive), Employee agrees that
the Company shall be entitled to file suit in a court of competent jurisdiction
to seek a temporary restraining order and a permanent injunction to prevent a
breach or contemplated breach of the Protective Covenant.
ARTICLE 11
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ARBITRATION
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(a) Any controversy or claim against the Company or any of its officers,
directors, employees or agents arising from, out of or relating to this
Agreement, the breach thereof (other than controversies or claims arising from,
out of or relating to the provisions in Sections 7, 8, and 9, with respect to
which either party may seek injunctive and/or other equitable relief in a court
of competent jurisdiction as set forth in Section 12.2), or the employment or
termination thereof of Employee by the Company which would give rise to a claim
under federal, state or local law (including but not limited to claims based in
tort or contract, claims for discrimination under state or federal law, and/or
claims for violation of any federal, state or local law, statute or regulation)
("Claims"), shall be submitted to an impartial mediator ("Mediator") selected
jointly by the parties. Both parties shall attend a mediation conference and
attempt to resolve any and all Claims. If they are not able to resolve all
Claims, any unresolved Claims, including any dispute as to whether a matter
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constitutes a Claim which must be submitted to arbitration, shall be determined
by final and binding arbitration in Georgia in accordance with the Model
Employment Dispute Resolution Rules ("Rules") of the American Arbitration
Association, by an experienced employment arbitrator licensed to practice law in
the State of Georgia in accordance with the Rules, except as specified in this
Agreement. The arbitrator shall be selected by alternate striking from a list of
six arbitrators, half of which shall be supplied by the Company and half by
Employee. The party not initiating the arbitration shall strike first. The
process shall be repeated twice until an arbitrator is selected. If an
arbitrator is still not selected, the Mediator shall provide a list of three
names which will be alternately struck, with the party initiating the
arbitration striking first, until a selection is made.
(b) A demand for arbitration shall be made within a reasonable time
after the Claim has arisen. In no event shall the demand for arbitration be made
after the date when institution of legal and/or equitable proceedings based on
such Claim would be barred by the applicable statute of limitations. Each party
to the arbitration will be entitled to be represented by counsel and will have
the opportunity to take one deposition of an opposing party or witness before
the arbitration hearing. By mutual agreement of the parties, additional
depositions may be taken. The arbitrator shall have the authority to hear and
grant a motion to dismiss and/or for summary judgment, applying the standards
governing such motions under the Federal Rules of Civil Procedure. Each party
shall have the right to subpoena witnesses and documents for the arbitration
hearing. A court reporter shall record all arbitration proceedings.
(c) With respect to any Claim brought to arbitration under this Agreement,
either party may be entitled to recover whatever damages would otherwise be
available to that party in any legal proceeding based upon the federal and/or
state law applicable to the matter and as specified by Section 12.2. The
decision of the arbitrator may be entered and enforced in any court of competent
jurisdiction by either the Company or Employee. Each party shall pay the fees of
their respective attorneys (except as otherwise awarded by the arbitrator), the
expenses of their witnesses and any other expenses connected with presenting
their Claim or defense. Other costs of the arbitration, including the fees of
the Mediator, the arbitrator, the cost of any record or transcript of the
arbitration, administrative fees, and other fees and costs, shall be borne
equally by the parties, one-half by Employee, on the one hand, and one-half by
the Company, on the other hand. Should Employee or the Company pursue any
dispute or matter covered by this Section by any method other than said
arbitration, the responding party shall be entitled to recover from the other
party all damages, costs, expenses, and attorneys' fees incurred as a result of
such action. The provisions contained in this Section 12 shall survive the
termination and/or expiration of this Agreement.
The parties indicate their acceptance of the foregoing arbitration
requirement by initialing below:
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For the Company Employee
ARTICLE 12
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MISCELLANEOUS
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Section 12.1 Binding Effect. This Agreement shall inure to the benefit of
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and shall be binding upon Employee and his executor, administrator, heirs,
personal representative and assigns, and the Company and its successors and
assigns; provided, however, neither party to this Agreement shall be entitled to
assign any of its rights, or delegate any of its duties (except, in the case of
Employee, customary delegation of authority not inconsistent with this
Agreement; and except, in the case of the Company, to any person or entity
acquiring all or substantially all of the assets of the Company or to any entity
controlling, controlled by or under common control with the Company), under this
Agreement without the prior written consent of the other party.
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Section 12.2 Governing Law. This Agreement shall be deemed to be made in,
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and in all respects shall be interpreted, construed and governed by and in
accordance with, the laws of the State of Georgia. The parties to this
Agreement agree that the state or federal courts in the State of Georgia shall
have personal jurisdiction over them with respect to, and shall be the exclusive
forum for the resolution of, any matter or controversy arising from or with
respect to Sections 7, 8, or 9 of this Agreement. Service of a summons and
complaint concerning any such matter or controversy may, in addition to any
other lawful means, be effected by sending a copy of such summons and complaint
by certified mail to the party to be served as specified in Section 12.4 of this
Agreement.
Section 12.3 Headings. The section and subsection headings contained in
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this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
Section 12.4 Notices. Unless otherwise agreed to in writing by the
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parties to this Agreement, all communications provided for under this Agreement
shall be in writing and shall be deemed to be given when delivered if delivered
in person or by telecopy or five (5) business days after being sent by first-
class mail, registered or certified, return receipt requested, with proper
postage prepaid, and
(a) If to the Employee, addressed to;
Xx. Xxxxxxx X. Xxxx
Chief Financial Officer
MegaMarketing Corporation
c/o Aberdeen Marketing Group, Inc.
0000 Xxxxxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
(b) If to the Company, addressed to:
Xxxx X. Xxxxx
Chief Executive Officer
MegaMarketing Corporation
0000 Xxxx Xxxxxxx Xxxx.
Xxxxx 000
Xxxxx, XX 00000
with a copy to:
Xxxxxxx X. Xxxxxx, Esq.
Xxxxxx Xxxxxxx Xxxxx & Scarborough, L.L.P.
First Union Plaza, Suite 1400
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
or to such other person or address as shall be furnished in writing by any party
to the other prior to the giving of the applicable notice or communication. The
copy to Xx. Xxxxxx, however, shall not constitute notice.
Section 12.5 Counterparts. This Agreement may be executed in
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counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
Section 12.6 Entire Agreement. This Agreement is intended by the
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parties to be the final expression of their agreement with respect to the
subject matter of this Agreement and is the complete and
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exclusive statement of the terms thereof, notwithstanding any representations,
statements or agreements to the contrary heretofore made. This Agreement may be
modified only by a written instrument signed by each of the parties to this
Agreement.
Section 12.7 Severability. All provisions of this Agreement are severable
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from one another, and the unenforceability or invalidity of any provision of
this Agreement shall not affect the validity or enforceability of the remaining
provisions of this Agreement; provided, however, that should any judicial body
interpreting this Agreement deem any provision to be unreasonably broad in time,
territory, scope or otherwise, the Company and Employee intend for the judicial
body, to the greatest extent possible, to reduce the breadth of the provision to
the maximum legally allowable parameters rather than deeming such provision
totally unenforceable or invalid.
Section 12.8 Waiver. The waiver by either the Company or Employee of a
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breach of any provision of this Agreement shall not operate or be construed as a
waiver of any prior or subsequent breach of the same provision by the other
party or a waiver of a breach of another provision of this Agreement by the
other party. No waiver or modification of any provision of this Agreement shall
be valid unless in writing and duly executed by the party to be charged with the
waiver or modification.
IN WITNESS WHEREOF, the parties to this Agreement have executed this
Agreement as of the date first above written.
MEGAMARKETING CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Executive Vice President
EMPLOYEE
/s/ Xxxxxxx X. Xxxx
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XXXXXXX X. XXXX
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