EXHIBIT 10.14
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EXECUTION COPY
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, effective as of September 19, 2001 (the
"Agreement"), by and between Change Technology Partners, Inc., a Delaware
corporation (the "Company"), and Xxxxxxx X. Xxxxx (the "Executive").
WITNESSETH:
WHEREAS, the Executive is currently the President and Chief Executive
Officer of the Company; and
WHEREAS, the Board of Directors of the Company (the "Board of
Directors") believes that it is in the best interests of the Company to provide
for the continued employment of the Executive on the terms and subject to the
conditions hereof; and
WHEREAS, the Executive desires to continue his employment with the
Company on the terms and subject to the conditions hereof.
NOW THEREFORE, in consideration of the premises and for other good and
valuable consideration, the parties hereby agree as follows:
1. EMPLOYMENT. The Company hereby employs the Executive, and the
Executive hereby accepts employment with and agrees to serve the Company, for
the Term (as hereinafter defined), in the capacities and subject to and upon the
terms and conditions hereinafter set forth.
2. TERM. Subject to Section 5 hereof, the term of the Executive's
employment hereunder (the "Term") shall be the period commencing on September
19, 2001 (the "Effective Date"), and expiring on December 31, 2004, and shall be
automatically renewed from year to year thereafter, unless not less than one
hundred twenty (120) days prior to December 31, 2004, or not less than one
hundred twenty (120) days prior to December 31 of any year thereafter, the
Company or the Executive shall notify the other in writing of its or his
intention not to renew this Agreement.
3. POSITION AND DUTIES. The Executive shall serve as the
President and Chief Executive Officer of the Company, reporting to the Board of
Directors, and shall have such executive powers and duties as may from time to
time be prescribed by the Board of Directors; PROVIDED, HOWEVER, that such
additional duties shall not be inconsistent with his present duties and his
position as a senior executive officer of the Company. If elected, the Executive
shall serve as a director of the Company or of any subsidiary or portfolio
company of the Company at no additional compensation. The Executive shall devote
to the Company substantially all of his business time for the fulfillment of his
obligations and the performance of his duties hereunder; PROVIDED, HOWEVER, that
nothing herein contained shall preclude him from pursuing personal investments
so as long as such activities do not interfere with the Executive's performance
of his duties hereunder; and PROVIDED, FURTHER, that the Executive may
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continue to serve on the boards of directors of the entities on which he serves
on the Effective Date, each in a non-executive capacity (except for European
Capital Ventures plc for which the Executive serves as Executive Chairman), and
as a managing member of XX XX Ventures, LLC so long as such service does not
interfere with the Executive's performance of his duties hereunder.
4. COMPENSATION.
(a) BASE SALARY. The Executive shall receive a base
salary (the "Base Salary") at the annual rate of $280,000.00, payable in
accordance with the Company's normal payroll practices. Any increase in the
Executive's Base Salary shall be determined by the Board of Directors or by the
Compensation Committee of the Board of Directors (the "Compensation Committee").
(b) BONUSES. The Executive shall be paid such bonuses
from to time as shall be determined by the Board of Directors or the
Compensation Committee in its sole discretion.
(c) PERQUISITES. During the Term, the Company shall also
furnish the Executive, without cost to him, with membership in one city luncheon
club of the Executive's choosing to be used for business entertainment. The
Company shall also reimburse the Executive for the cost of an annual physical
examination of the Executive by a physician selected by the Executive. The
Executive shall properly document such costs for federal income taxation
purposes to preserve any deduction for such reimbursements to which the Company
may be entitled.
(d) EXPENSES. During the Term, the Company shall
reimburse the Executive for all reasonable and necessary travel, entertainment
and other expenses and disbursements incurred by him for or on his behalf in the
performance of receipts or other evidence of such expenses.
(e) EMPLOYEE PLANS. The Executive shall be entitled to
participate in or receive benefits under any profit-sharing plan, savings plan,
pension plan, stock option plan, group insurance plan (including, by way of
illustration and not limitation, life, disability, accident, medical and dental
insurance), death benefits plan or other employee plan or arrangement, now
existing or hereafter adopted, for which he is eligible and which the Company
may provide for him or for executive employees generally (individually, a
"Benefit Plan" and collectively, the "Benefit Plans") to the fullest extent
permitted under any such Benefit Plans; PROVIDED, HOWEVER, that the foregoing
shall in no way restrict or prohibit the Company's right to terminate, amend or
otherwise change any such Benefit Plan. Nothing paid to the Executive under any
Benefit Plan shall be deemed to be in lieu of compensation to the Executive
hereunder.
(f) DIRECTOR'S FEES. The Executive shall not be entitled
to retain director's fees and compensation paid to him with respect to any
corporation (or other entity) for which he serves as a director (or the
equivalent) if the Executive is serving in such capacity at the request of the
Company.
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(g) VACATIONS. The Executive shall be entitled to the
number of paid vacation days in each calendar year determined by the Company
from time to time for its senior executive officers, but in no event less than
four weeks per year. The Executive shall also be entitled to all paid holidays
given by the Company to its senior executive officers.
(h) OPTIONS. The Executive shall receive on the Effective
Date a stock option or options to purchase 9,000,000 shares of common stock of
the Company, subject to the terms of the Company's stock option plan and a stock
option agreement to be entered into between Executive and the Company
substantially in the form attached hereto as Exhibit A, and subject to increase
in the Company's sole discretion. One-fourth of the shares subject to the option
shall vest on each of the first, second, third and fourth anniversary of the
Effective Date, provided Executive is employed by Company on such vesting date.
(i) LIFE INSURANCE. The Company shall provide the
Executive term life insurance in such an amount as may be purchased for an
initial annual premium of $10,000.
5. TERMINATION.
(a) Subject to the provisions of Section 6 hereof, the
employment of the Executive hereunder shall terminate upon the first to occur of
the following events or conditions:
(i) the expiration of the Term, and of any
renewal or extension thereof in accordance with Section 2 hereof; or
(ii) the death of the Executive; or
(iii) the delivery to the Company of a Notice of
Termination (as such terms is defined in Section 5(c) hereof stating the
Executive's voluntary departure from employment by the Company; or
(iv) the delivery to the Executive of a Notice of
Termination (as such term is defined in Section 5(c) hereof) setting forth the
decision of the Board of Directors to terminate the Executive's employment for
"disability" (within the meaning of Section 5(b)(i) hereof) or for "cause"
(within the meaning of Section 5(b)(ii) hereof); or
(v) written notice to the Company of the
resignation by the Executive due to a Change of Control of the Company, as
defined in the Severance Compensation Agreement substantially in the form
attached hereto as Exhibit B.
(b) The Board of Directors may elect to terminate the
employment of the Executive hereunder:
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(i) for "disability", if it shall determine, in
good faith, that, by reason of a physical or mental illness continuing for more
than one-hundred twenty (120) consecutive business days or for shorter periods
aggregated more than one hundred eighty (180) business days in any period of
twelve (12) consecutive months (excluding, in each case, Saturdays, Sundays,
holidays and days which the Executive was on vacation), the Executive has been
and continues to be substantially unable to render services of the character
contemplated by this Agreement; PROVIDED, HOWEVER, that, in the event that the
Executive does not agree with such determination by the Board of Directors, he
shall be examined by a physician selected by him, who shall provide a statement
as to whether or not the Executive is disabled within the meaning of this
Agreement; PROVIDED, FURTHER, that, if the Company does not agree with such
physician's statement, the Executive shall submit to an examination by a
physician selected by the Company, and, if the two physicians disagree as to
whether or not the Executive is disabled within the meaning of this Agreement,
then the Executive shall submit to an examination by a third physician selected
by the other two physicians whose determination as to disability shall be
binding and conclusive; PROVIDED, FURTHER, that each such examination shall be
at the Company's expense; or
(ii) for "cause", if it shall determine, in good
faith, that the Executive has (x) willfully and continually failed to
substantially perform his duties hereunder if not cured within 10 days of
written notice by the Company specifying the Executive's actions or inactions
that are at issue and provided that such actions or inactions are not
inconsistent with Executive's position with the Company, other than because of
an incapacity due to physical or mental illness or (y) willfully engaged in
gross misconduct materially injurious to the Company. Notwithstanding the
foregoing, the Executive shall not be deemed to have been terminated for "cause"
unless and until there shall have been delivered to the Executive a copy of the
resolution, duly adopted by the affirmative vote of not less than a majority of
the entire membership of the Board of Directors (excluding the Executive) at a
meeting of the Board of Directors called and held for such purpose (after
reasonable notice to the Executive and an opportunity for him, together with his
counsel, to be heard before the Board of Directors), finding that, in the good
faith opinion of the Board of Directors, the Executive was guilty of conduct set
forth in clause (x) or (y) above, and specifying the particulars thereof in
detail.
(c) Any termination by the Company of the employment of
the Executive pursuant to Section 5(a)(iv) hereof or otherwise or by the
Executive pursuant to Section 5(a)(iii) hereof shall be communicated by written
Notice of Termination to the other party hereto. For purpose of this Agreement,
a "Notice of Termination" shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated.
(d) "Date of Termination" shall mean (i) if the
Executive's employment is terminated by his death, the date of his death, (ii)
if the Executive's employment is terminated pursuant to Section 5(b)(i) hereof,
thirty (30) days after the
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later to occur of (x) the giving of the Notice of Termination (provided that the
Executive shall not have returned to the performance of his duties on a
full-time basis during such thirty (30) day period) and (y) the binding and
conclusive determination of disability by the first or third physician, as the
case may be, as specified in Section 5(b)(ii) hereof, (iii) if the Executive's
employment is terminated pursuant to Section 5(a)(iii) hereof, the date
specified in the Notice of Termination, (iv) if the Agreement is not renewed, on
December 31 of the year during which the notice required by Section 2 hereof is
given and (v) if the Executive's employment is terminated for any other reason,
the date specified in the Notice of Termination.
6. COMPENSATION DURING DISABILITY OR UPON TERMINATION.
(a) During any period that the Executive fails to perform
his duties hereunder as a result of incapacity due to physical or mental
illness, the Executive shall continue to receive his full Base Salary until the
Executive's employment is terminated pursuant to Section 5(b)(i) hereof, or
until the Executive terminates his employment pursuant to Section 5(a)(iii)
hereof, whichever occurs first.
(b) In the event that the Executive's employment
hereunder is terminated by the Company by reason of the Executive's disability,
then, upon such termination, the Company shall pay to the Executive, in addition
to any amounts of Base Salary accrued but unpaid, an amount equal to one-half of
his annual Base Salary, which payment shall be made, at the option of the
Executive, either in one (1) lump sum or over a six (6) month period in six (6)
equal monthly installments.
(c) In the event that the Executive's employment
hereunder shall be terminated by reason of his death, then the Company shall pay
to the Executive's estate, any amounts of Base Salary accrued but unpaid.
(d) In the event that the Executive's employment shall be
terminated as provided in Section 5(a) or Section 5(b) for any reason other than
his death or disability (including for "cause," as defined in Section 5(b)(iii)
hereof), then the Company shall pay the Executive his full Base Salary through
the Date of Termination, plus the amount, if any, of any bonus for a prior year
which has not yet been awarded or paid to the Executive under any deferred
compensation plan.
(e) In the event that the Executive's employment
hereunder shall be terminated for any reason other than as provided in Section
5(a) or Section 5(b) hereof, then, in any such event, the Company shall pay the
Executive (as liquidated damages without any obligation to mitigate by the
Executive) an amount (the "Severance Amount") equal to the sum of (i) any amount
of Base Salary accrued but unpaid, (ii) the full Base Salary which would have
been payable during the remainder of the Term and (iii) any bonus for a prior
year which has not yet been awarded or paid to the Executive under any deferred
compensation plan. The Severance Amount shall be paid to the Executive, at his
option, either in one (1) lump sum or over a one (1) year period in twelve (12)
equal monthly installments. The Company agrees upon the Executive's demand to
pay, or to reimburse the Executive for, all of the Executive's legal, valuation,
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investigative and other related expenses and for all out-of-pocket costs and
expenses of every type and nature incurred by the Executive in connection with
the Executive's enforcement of his rights under this Section 6 and the
collection of the severance amount.
7. INDEMNIFICATION LITIGATION.
(a) In the event of any litigation or other proceeding
between the Company and the Executive with respect to the subject matter of this
Agreement and the enforcement of rights hereunder, the Company shall reimburse
the Executive for all costs and expenses relating to such litigation or other
proceeding, including reasonable attorney's fees and expenses, provided that
such litigation or proceeding results in any:
(i) settlement requiring the Company to make a
payment to the Executive; or
(ii) judgment, order, or award in favor of the
Executive, regardless of whether such judgment, order or award is subsequently
reversed on appeal or in a collateral proceeding.
(b) In no event shall the Executive be required to
reimburse the Company for any of the costs and expenses relating to such
litigation or other proceeding.
8. NO EFFECT ON OTHER CONTRACTUAL RIGHTS. The provisions of this
Agreement, and any payments provided for hereunder, shall not reduce any amounts
otherwise payable, or in any way diminish the Executive's existing rights, or
rights which would accrue solely as a result of the passage of time, under any
Benefit Plan, employment agreement or other contract, plan or arrangement.
9. EFFECT OF PRIOR AGREEMENTS. This Agreement between the Company
and the Executive contains the entire understanding between the Company and the
Executive with respect to the subject matter hereof and supersedes any prior
employment agreement between the Company or any predecessor and the Executive,
except that this Agreement shall not affect or operate to reduce any benefit or
compensation inuring to the Executive of a kind elsewhere provided and not
expressly provided in this Agreement.
10. SUCCESSORS. This Agreement shall inure to the benefit of and
be binding upon the Executive, his assigns, his personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees or legatees, and the Company, its successors and assigns, including any
corporate successor by merger or consolidation and any person, firm or
corporation to which all or substantially all of the assets and business of the
Company may be sold; and as used herein, the term "Company" shall include any
such successor and assign.
11. NOTICES. Any notice or request required or permitted under
this Agreement shall be in writing and given or made by postage-paid registered
or certified mail, return receipt requested, addressed as follows:
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If to the Executive, to:
Xx. Xxxxxxx Xxxxx
000 Xxxxx Xxxxx Xxxx
Xxx Xxxxxx, XX 00000
If to the Company, to:
Change Technology Partners, Inc.
000 Xxxxxxxxx Xxxx
Xxxxxx Xxxxx
Xxxxxxxxx, XX 00000
or to either party hereto at such other address or addresses as such other party
may from time to time specify for the purpose in a notice similarly given to the
other party.
12. AMENDMENT. No amendment or modification of this Agreement
shall be valid unless in writing and signed by the parties hereto.
13. WAIVER. The waiver of the breach of any term or condition of
this Agreement shall not be deemed to constitute the waiver of any other or
subsequent breach of the same or any other term or condition.
14. CHOICE OF LAW. The invalidity, interpretation, construction
and performance of this Agreement shall be governed by the laws of the State of
Connecticut.
15. SEVERABILITY. The invalidity or unenforceability of any
provision or provisions 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.
16. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have executed this Employment Agreement
as of the date first above written.
CHANGE TECHNOLOGY PARTNERS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
Title: Compensation Committee Chairman
/s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx