EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), effective as of
November 23, 1998 (the "Effective Date"), is by and between APPOINTNET, INC., a
Pennsylvania corporation (the "Company"), and XXXXXXX X. XXXXXXX, XX., an
individual ("Employee").
B A C K G R O U N D
The Company wishes to employ Employee as Chief Operating
Officer and Executive Vice President of Sales and Marketing and Employee wishes
to enter into the employ of the Company on the terms and conditions set forth in
this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants contained herein, the Company and Employee, intending to be
legally bound, hereby agree as follows:
1. Employment. The Company hereby employs Employee as
Chief Operating Officer and Executive Vice President of Sales and Marketing of
the Company for the period and upon the terms and conditions provided in this
Agreement and Employee accepts such employment upon the terms and conditions
provided in this Agreement.
2. Duties. As Chief Operating Officer and Executive Vice
President of Sales and Marketing, Employee shall have such authority and such
responsibilities as the President or Board of Directors of the Company
reasonably may determine from time to time. During the term of this Agreement,
Employee shall devote his entire working time, energy, skill and best efforts to
the performance of his duties hereunder in a manner which will faithfully and
diligently further the business and interests of the Company, and shall not,
during the term, be engaged in any other business activity. If requested by the
Company, Employee shall serve as a director of the Company or one or more of its
affiliates, without additional compensation.
3. Term. The term of this Agreement shall be two (2)
years, commencing on the Effective Date and expiring on November 22, 2000 (the
"Initial Term"), and shall continue in full force and effect for consecutive
one-year renewal periods after the expiration of the Initial Term unless (i)
either party elects to terminate this Agreement at the end of the then current
term by giving the other party written notice of termination at least 60 days
prior to the end of the then current term, or (ii) unless earlier terminated in
accordance with the terms of this Agreement. The Initial Term, together with
each additional one-year term for which this Agreement is continued as described
above, is hereafter referred to as the "Term."
4. Compensation. During the Term, as compensation for the
services rendered by Employee to the Company, Employee shall receive the
following:
a. Base Compensation. The Company shall pay to
Employee an annual base salary ("Base Compensation") of $150,000 for the first
year of the Initial Term and $175,000 for each year of the Term thereafter
(unless otherwise modified by agreement of the parties). Employee's Base
Compensation shall be payable in periodic installments in accordance with the
Company's regular payroll practices in effect from time to time. In the event
the parties agree to renew the Term after the Initial Term, the Company agrees
that the Board will review the Base Compensation.
b. Incentive Compensation. In addition to Base
Compensation, Employee shall be eligible to receive additional compensation
("Incentive Compensation") pursuant to the Company's Executive Sales
Compensation Plan (which shall be established by the Company).
c. Commission on Sale of the Company. Employee has
been hired by the Company, in part, to aid in the sale of the Company to a third
party. Employee shall be entitled to receive a commission ("Commission") as set
forth below upon the consummation of a Sale Transaction (as defined below),
provided the following conditions precedent have been met: (i) the Company is
sold to a person or entity introduced to the Company by Employee, (ii) the
Company or its shareholders have entered into a binding agreement as to the Sale
Transaction on or before the end of the Initial Term, and (iii) the Company is
sold for a Sale Price (as defined below) in excess of $30 million. If the
foregoing conditions are met, the Commission shall equal 1.5% of the Sale Price.
The amount paid pursuant to this subsection shall be paid to Employee in the
same form as the consideration received by the shareholders or the Company, as
the case may be, in the Sale Transaction within 10 business days of the closing
date of the Sale Transaction, provided, however, if the consideration is other
than cash, the Board of Directors of the Company, in its sole discretion, may
cause the Commission to be paid in cash, rather than the consideration received
by the Company or the shareholders.
(1) "Sale Price" shall mean the proceeds of any
Sale Transaction paid to and actually received by the shareholders or the
Company, as the case may be, whether consisting of cash, instruments, securities
or other tangible property, together with, if an asset sale, the amount of any
indebtedness assumed by the purchaser, LESS the sum of (i) any and all costs and
expenses (or the portion thereof) incurred by the shareholders and/or the
Company in connection with or relating to the Sale Transaction, including
without limitation, legal, accounting and other professional fees and expenses,
appraisal and other expert fees and expenses, and investment banker and broker
fees and expenses and (ii) any and all federal, state and local income, sales,
transfer, excise and other taxes imposed on the Company in respect of the Sale
Transaction, the income of the Company for all periods prior to and including
the Sale Transaction and/or the receipt by the Company of the proceeds thereof.
Notwithstanding the foregoing, in the event that any of the Sale Price received
at the closing of the Sale Transaction consists of a future promise to pay or
the like, any amounts or payments to be received by the Company or the
shareholder after the closing of the Sale Transaction shall not be deemed to
constitute part of the Sale Price for purposes of the Commission until received
by the Company or the shareholders, as the case may be, and the Commission with
respect thereto shall be payable to the Employee within 30 days of receipt of
such proceeds by the Company or the shareholders, as the case may be.
(2) "Sale Transaction" shall mean the first (i)
sale or exchange of all or substantially all the Company's assets, (ii) merger
or consolidation of the Company with any other person or entity, provided that
the Company or its shareholders do not obtain on the closing date thereof
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control of the surviving person or entity, or (iii) sale by the shareholders of
the Company of more than 80% of the Company's issued and outstanding Common
Stock in a single transaction.
5. Options. The Company shall grant to Employee options (the
"Options") to purchase 560,000 shares of the Company's Common Stock, $.01 par
value per share (the "Common Stock"), pursuant to the Company's 1998 Stock
Option Plan (the "Plan"). The Options shall be represented by the form of option
agreement typically used by the Company pursuant to the Plan, with such changes
as shall be required to conform to this Agreement. The Options shall vest as
referred to in each clause below (subject to accelerated and immediate vesting
upon a Change in Control (as defined in the Plan)).
a. Options for 100,000 shares of Common Stock shall have an
exercise price of $1.25 per share and shall vest in six equal monthly
installments on the 16th day of each month commencing December 16, 1998;
b. Options for 240,000 shares of Common Stock shall have an
exercise price of $1.25 per share and shall vest in eighteen equal monthly
installments on the 16th day of each month commencing December 16, 1998; and
c. Options for 220,000 shares of Common Stock shall have an
exercise price of $1.25 per share and shall vest in thirty-six equal monthly
installments on the 16th day of each month commencing December 16, 1998.
Any Options which have not vested upon the termination of Employee's employment
with the Company shall thereupon terminate and become null and void. In any
event, all Options shall terminate on December 15, 2003, subject to early
termination upon death, disability and termination of employment as set forth in
the Plan.
6. Employee Benefits. During the Term, Employee shall have the
right to participate in any retirement plans (qualified and non-qualified),
401-K plan, pension, insurance, health, disability or other benefit plan or
program (other than any stock option or other similar plan except as and to the
extent described in Paragraph 5 above) that has been or is hereafter adopted by
the Company on terms similar to other senior executives of the Company, in each
case subject to and in accordance with the terms of such plan or program.
7. Vacation and Personal Days. Employee shall be entitled to
three (3) weeks of paid vacation and five (5) paid personal days in each year
during the Term. Any vacation or personal days not taken in any year shall not
accrue for use in any subsequent year and Employee shall not receive any
remuneration for unused vacation or personal days.
8. Expenses. Employee shall be reimbursed for all reasonable
and necessary business-related expenses in accordance with the Company's expense
reimbursement procedures; provided, however, that Employee shall not be
reimbursed for any expenditures in excess of $5,000.00 unless approved in
advance (in writing) by the Company.
9. Termination of Employment. Notwithstanding any other
provision of this Agreement, Employee's employment with the Company may be
terminated as set forth below:
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a. Termination for Cause. The Company may discharge
Employee at any time for (i) Employee's indictment for or charge with a felony
(whether or not related to Employee's employment), (ii) substance abuse, (iii)
gross negligence, (iv) failure to adequately perform his employment duties and
responsibilities, (v) violation of any reasonable express direction or any
reasonable rule or regulation established by the Company from time to time, (vi)
violation of the terms of this Agreement, or (vii) any misrepresentation made by
Employee in this Agreement. After discharge, the Company shall have no further
obligations or liabilities hereunder to Employee other than payment of Base
Compensation for periods prior to the last date of Employee's employment
hereunder.
b. Death or Disability. Upon Employee's death during the
Term, all payments hereunder shall cease at the end of the month in which
Employee's death shall occur and the Company shall have no further obligations
or liabilities hereunder to Employee's estate or legal representative or
otherwise, other than the payment of Base Compensation for periods of employment
prior to the date of Employee's death. In the event that the Employee is unable
to perform his duties hereunder by reason of illness or incapacity for 150 days
in any 12-month period, the Company may, in its sole discretion, terminate this
Agreement without further obligation or liabilities hereunder other than payment
of Base Compensation for periods of employment prior to the last date of
Employee's employment hereunder; provided, however, that the Company shall be
entitled during the period of illness or incapacity to reduce the Base
Compensation payable to Employee by the amount, if any, received or receivable
by Employee from Company-sponsored or reimbursed disability insurance or from
worker's compensation, social security or other governmental programs relating
to the illness or incapacity.
c. Failed Performance. The Company may discharge Employee
in the event that Employee fails to reach the goals set forth in Exhibit "A"
attached hereto. In the event Employee is discharged pursuant to this Paragraph
9(c), the Company shall pay Employee as severance Employee's Base Compensation
at the time of termination for the lesser of six months or the remainder of the
then current Term of this Agreement, with such payments being made at the same
time as Base Compensation would have been paid if Employee's employment had
continued. Upon payment of the severance in accordance with this Paragraph 9(c),
the Company shall have no further obligation or liability hereunder to Employee.
d. Termination upon a Sale Transaction. The Company may
discharge Employee at any time after a Sale Transaction in which Employee
received a Commission as set forth in Paragraph 4(c) of this Agreement, upon 30
days advance written notice. After discharge, the Company shall have no further
obligations or liabilities hereunder to Employee other than payment of Base
Compensation and Incentive Compensation, if any, for periods prior to the last
date of Employee's employment hereunder.
10. Company Property. All advertising, sales and other
materials or articles or information, including without limitation, data
processing reports, customer sales analyses, invoices, price lists or
information, or any other materials or data of any kind furnished to Employee by
the Company or developed by Employee on behalf of the Company or at the
Company's direction or for the Company's use or otherwise in connection with
Employee's employment hereunder, are and shall remain the sole and confidential
property of the Company. If the Company requests the return of such materials at
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any time during or after the termination of Employee's employment, Employee
shall immediately deliver the same to the Company.
11. Noncompetition, Trade Secrets, etc.
a. During the Term of this Agreement and for a period of
one (1) year after the termination of his employment for any reason whatsoever,
whether by Employee or the Company, Employee shall not, directly or indirectly,
(i) solicit, hire or engage any employee or independent contractor of the
Company to render services for any person or entity other than the Company, (ii)
solicit, hire or engage any person or entity who was employed with or provided
services to the Company at any time within six months of the termination of
Employee's employment to render services for any person or entity, and/or (iii)
engage in (as a principal, partner, director, officer, agent, employee,
consultant or otherwise), or be financially interested in, or lend money to, any
business which is involved in internet calendaring anywhere in the world;
provided, however, that the foregoing restriction shall not prevent Employee
from holding for investment not more than 3% of any class of equity securities
of a company whose securities are traded on a national securities exchange or
traded on the over-the-counter market.
b. During the Term of this Agreement and at all times
thereafter, Employee shall not use for his personal benefit, or disclose,
communicate or divulge to, or use for the direct or indirect benefit of any
person, firm, association or company other than the Company, any material
referred to in Paragraph 10 above or any information regarding the business
methods, business policies, pricing or other procedures, techniques, research or
development projects or results, or any software, technology, trade secrets or
other intellectual property, knowledge or processes of or developed by or for
the Company or any names and addresses of subscribers, customers, clients or
joint venture partners or any data on or relating to past, present or
prospective subscribers, customers, clients or joint venture partners or any
other confidential information relating to or dealing with the assets, business
operations or activities of the Company, made known to Employee or learned or
acquired by Employee before and/or while in the employ of the Company.
c. Any and all ideas, writings, improvements, processes,
inventions, procedures and/or techniques and other creative works and works of
authorship, whether or not patentable or copyrightable, which Employee may make,
conceive, discover or develop, either solely or jointly with any other person or
persons, at any time during the Term of this Agreement, whether during working
hours or at any time before or after working hours and whether at the request or
upon the suggestion of the Company or otherwise, which relate to or are useful
in connection with any business now or hereafter carried on or contemplated by
the Company, including developments or expansions of its present fields of
operations (collectively, the "Intellectual Property"), shall be deemed "Work
For Hire" and shall be the sole and exclusive property of the Company. Employee
shall make full disclosure to the Company of any and all Intellectual Property.
Employee hereby assigns and transfers to the Company all his right, title and
interest in and to the Intellectual Property, in consideration of his rights
hereunder and without any additional consideration, and agrees to do everything
necessary or desirable to vest the absolute title thereto in the Company
(including, without limitation, signing and delivering all documents requested
by the Company, such as assignments, certificates and other evidences of
transfer and patent and copyright applications and the like).
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d. Employee acknowledges and agrees that, because the
Company is an internet-based operation, the business activities of which are
conducted throughout the world, the type, nature and scope of the restrictions
contained in the foregoing subparagraphs 11(a), 11(b) and 11(c) (including
restrictions without any geographic limitation) are reasonable and necessary
under the circumstances in order to protect the legitimate interests of the
Company, and that any violation thereof would result in irreparable injuries to
the Company, and Employee therefore acknowledges that, in the event of his
violation of any of these restrictions, the Company shall be entitled to obtain
from any court of competent jurisdiction preliminary and permanent injunctive
relief as well as damages and an equitable accounting of all earnings, profits
and other benefits arising from such violation, which rights shall be cumulative
and in addition to any other rights or remedies to which the Company may be
entitled.
e. If the period of time or the unlimited geographical
scope of the noncompetition restrictions should be adjudged unreasonable in any
proceeding, then the period of time shall be reduced by such number of months or
the area shall be reduced by the elimination of such portion thereof or both, so
that such restrictions may be enforced in such area and for such time as is
adjudged to be reasonable. If Employee violates any of the restrictions
contained in the foregoing subparagraph 11(a), the restrictive period shall not
run in favor of Employee from the time of the commencement of any such violation
until such time as such violation shall be cured by Employee to the satisfaction
of the Company.
f. Paragraphs 10 and 11 shall survive the termination of
Employee's employment as well as the expiration of this Agreement at the end of
the Term or at any time prior thereto.
12. Representation and Warranties. Employee represents and
warrants to the Company as follows:
a. He has full power to enter into this Agreement and
perform his duties hereunder; that the execution and delivery of this Agreement
and his performance of his duties hereunder shall not result in a breach of, or
constitute a default under, any agreement or understanding, oral or written, to
which he is a party or by which he may be bound; and this Agreement represents
the valid and legally binding obligation of Employee and is enforceable against
him in accordance with its terms;
b. In connection with his determination to terminate his
employment with Netscape Communication Corp. and accept employment with the
Company in a management level position, Employee acknowledges that he is
familiar with the condition of the Company, financial and otherwise, and with
its business operations and prospects, and further acknowledges that (i) he and
his advisors have been provided with or given complete access to all of the
financial and other information required by him or them, (ii) he has reviewed
all such information and this Agreement with his legal, tax and other advisors,
and (iii) he has based the decision to enter into this Agreement and to purchase
the shares of Common Stock pursuant to this Agreement based solely on the
foregoing; and
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c. The certificates for the shares of Common Stock
purchased pursuant to this Agreement shall bear such legends as the Company in
its sole discretion shall deem reasonable and appropriate.
13. Authority to Bind the Company. Employee is not permitted
or authorized to make any disbursements or purchases or to incur any liabilities
on behalf of the Company or to otherwise obligate the Company in any manner
whatsoever, except as expressly authorized by the Board of Directors, the
Chairman of the Board or the President of the Company.
14. Withholding. Employee acknowledges and agrees that he is
responsible for paying any and all federal, state, and local income taxes
assessed with respect to any money, benefits or other consideration received
from the Company and the Company is entitled to withhold any tax payments from
amounts otherwise due Employee to the extent required by applicable statutes,
rulings and regulations.
15. Right of Offset. Employee and the Company may become
parties to a: (i) Common Stock Purchase Agreement, (ii) Promissory Note (the
"Note") and (iii) Pledge Agreement in connection with the purchase by Employee
of Common Stock of the Company. In such event, upon the occurrence of an Event
of Default (as such term is defined in the Note), Employee agrees that the
Company may offset any amounts owed to Employee hereunder against (and therefore
retain as payment against the Note) any amount owed by Employee to the Company
under the Note; provided, however, that in no event shall the amount payable to
Employee in any pay period be less than the product of the number of weeks in
such pay period times $155.00.
16. Miscellaneous.
a. Indulgences, etc. Neither the failure nor any delay on
the part of either party to exercise any right, power, privilege or remedy
hereunder ("Right") under this Agreement shall operate as a waiver thereof, nor
shall any single or partial exercise of any Right preclude any other or further
exercise of the same or of any other Right, nor shall any waiver of any Right
with respect to any occurrence be construed as a waiver of such Right with
respect to any other occurrence. No waiver shall be effective unless it is in
writing and is signed by the party asserted to have granted such waiver.
b. Controlling Law. This Agreement and all questions
relating to its validity, interpretation, performance and enforcement
(including, without limitation, provisions concerning limitations of actions),
shall be governed by and construed in accordance with the laws of the
Commonwealth of Pennsylvania, and without the aid of any canon, custom or rule
of law requiring construction against the draftsman.
c. Notices. All notices, requests, demands and other
communications required or permitted under this Agreement shall be in writing
and shall be deemed to have been duly given, made and received only when
delivered (personally, by courier service such as Federal Express, or by other
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messenger) or when deposited in the United States mails, registered or certified
mail, postage prepaid, return receipt requested, addressed as set forth below:
(1) If to Employee:
Xxxxxxx X. Xxxxxxx, Xx.
000 Xxxx Xxxx Xxxx
Xxxx Xxxxxxx, XX 00000
(2) If to the Company:
AppointNet, Inc.
000 X. Xxxxxxxx Xxxxxxxxx
Xxxxx Xxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx
Any party may alter the address to which communications or copies are to be sent
by giving notice of such change of address in conformity with the provisions of
this paragraph for the giving of notice.
d. Binding Nature of Agreement; Assignability. This
Agreement shall be binding upon and inure to the benefit of the Company and its
successors and assigns and shall be binding upon Employee, his heirs and legal
representatives. Upon the transfer of all or substantially all of the assets or
business of the Company, whether by merger, consolidation, purchase or
otherwise, the Company shall have the right to assign this Agreement (including
the restrictive covenants set forth in Paragraph 11) to the transferee, in which
case such transferee shall be deemed substituted for the Company and shall be
deemed to be a party hereto. Employee hereby agrees and consents to any
assignment pursuant to the preceding sentence.
e. Execution in Counterparts. This Agreement may be
executed in any number of counterparts, each of which shall be deemed to be an
original as against any party whose signature appears thereon, and all of which
shall together constitute one and the same instrument. This Agreement shall
become binding when one or more counterparts hereof, individually or taken
together, shall bear the signatures of all of the parties reflected hereon as
the signatories.
f. Provisions Separable. The provisions of this Agreement
are independent of and separable from each other, and no provision shall be
affected or rendered invalid or unenforceable by virtue of the fact that for any
reason any other or others of them may be invalid or unenforceable in whole or
in part.
g. Entire Agreement. This Agreement contains the entire
understanding among the parties hereto with respect to the subject matter
hereof, and supersedes all prior and contemporaneous agreements and
understandings, inducements or conditions, express or implied, oral or written,
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except as herein contained. The express terms hereof control and supersede any
course of performance and/or usage of the trade inconsistent with any of the
terms hereof. This Agreement may not be modified or amended other than by an
agreement in writing.
h. Paragraph Headings. The paragraph headings in this
Agreement are for convenience only; they form no part of this Agreement and
shall not affect its interpretation.
IN WITNESS WHEREOF, the parties have executed and delivered
this Agreement on the 16th day of December, 1998.
APPOINTNET, INC.
BY: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------
XXXXXXX X. XXXXXXXX, President
/s/ Xxxxxxx X. Xxxxxxx, Xx.
---------------------------------
XXXXXXX X. XXXXXXX, XX.
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