EXHIBIT 10.5
EMPLOYMENT AGREEMENT
Agreement dated as of February 4, 1999 between Xxxx.xxx, Inc., a
Delaware corporation, (hereinafter the "Company") and Xxxxxxx Xxxxxx
(hereinafter the "Employee").
I. EMPLOYMENT: Effective on the date hereof, Company hereby agrees to
employ Employee upon the terms and conditions this agreement, and
Employee accepts employment by Company upon the terms and conditions
set forth in this Agreement (hereinafter the "Agreement").
A. DUTIES AND POSITION: The Company employs Xx. Xxxxxx as Executive
Vice President, Technology. The Employee will have such duties as
are assigned or delegated to the Employee by the Chairman and
Chief Executive Officer.
B. EMPLOYMENT AT WILL: Employment of Employee by Company is "at
will". Either the Employee or the Company may terminate the
employment relationship for any reason at any time upon thirty
(30) days prior written notice to the other party, subject to the
provisions of this agreement.
a. COMPENSATION UPON TERMINATION: Except as otherwise provided
in this section, the Employee's compensation, and any and all
other rights of the Employee under this Agreement will
terminate upon the occurrence of any of the following events:
i. upon the death of the Employee;
ii. upon the disability of the Employee immediately upon
notice from either party to the other. Disability shall
mean the inability of the Employee, with or without a
reasonable accommodation, to perform his duties as a
result of a physical or mental illness for a period of
three (3) consecutive months;
iii. for cause, immediately upon notice from the Company to
the Employee, or at such later time as such notice may
specify. Termination for cause shall mean (i) the
willful failure by the Employee to follow directions
communicated to him by the Chief Executive Officer; (ii)
the willful engaging by the Employee in conduct which is
materially injurious to the Company, monetarily or
otherwise; (iii) a conviction of, a plea of NOLO
CONTENDERE, a guilty plea or confession by the Employee
to an act of fraud, misappropriation or embezzlement or
to a felony; (iv) the Employee's habitual drunkenness or
use of illegal substances; (v) the material breach by
the Employee of this Agreement; or (vi) an act of gross
neglect or gross misconduct which the Company deems to
be good and sufficient cause; or
iv. Upon the mutual consent of the Parties.
b. TERMINATION OF PAY: Effective upon the termination of the
Employee's employment, the Company will be obligated to pay
the Employee such compensation as is provided in this
Section. For purposes of this section, in the event of the
Employee's death, the Employee's designated beneficiary will
be such individual beneficiary or trust, located at such
address, as the Employee may designate by notice to the
Company from time to time or, if the Employee fails to give
notice to the Company of such a beneficiary, the Employee's
estate.
c. TERMINATION FOR CAUSE: If the Company terminates the
Employee's employment for cause, the Employee will be
entitled to receive his Salary only through the date such
termination is effective, but will not be entitled to any
Incentive Compensation described at I(E) for the Fiscal Year
during which such termination occurs or any subsequent Fiscal
Year.
d. TERMINATION UPON DISABILITY: If the Employee's employment is
terminated by either party as a result of the Employee's
disability, the Company will pay the Employee his Salary
through the remainder of the calendar month during which such
termination is effective and for the lesser of (A) three
consecutive months thereafter, or (B) the difference between
disability insurance benefits and full salary for six months.
e. TERMINATION UPON DEATH: If the Employee's employment is
terminated because of the Employee's death, the Employee will
be entitled to receive his Salary through the end of the
calendar month in which his death occurs and for three (3)
consecutive months thereafter.
f. TERMINATION WITHOUT CAUSE: If the Company terminates the
Employee's employment without cause, the Employee will be
entitled to receive his Salary through the end of the week in
which written notice of termination occurred and for four (4)
consecutive weeks thereafter.
g. TERMINATION UPON THE EMPLOYEE'S RESIGNATION: If the Employee
resigns his employment, the Employee will be entitled to
receive his Salary only through the date such termination is
effective, but will not be entitled to any Incentive
Compensation for the Fiscal Year during which such
termination occurs or any subsequent Fiscal Year.
h. SHARES AND OPTIONS TERMINATION PROVISION: Under all events of
termination above the options and shares on which the
Employee has vested prior to the date of Termination shall be
the property of the Employee in accordance with the terms of
the Stock Option Agreement and Plan under which they were
granted and shall not be revoked. Notwithstanding anything
herein to the contrary, the Options granted under the Xxxxxxx
Xxxxxx Stock Option agreement dated January, 1, 1998 between
GlobeComm, Inc. and Xxxxxxx Xxxxxx (the "Xxxxxxx Xxxxxx Stock
Option Agreement") shall be exercisable in accordance with
the terms of such Agreement and such exercise rights shall
not terminate upon an event of termination described above.
C. FULL TIME EFFORTS: Except for Employee's business activity with
MusicTogether of Montclair, Inc., employee will devote full time
and attention to the business of Company, and, during his or her
employment, will not engage in any other business activity,
regardless of whether such activity is pursued for profit, gain,
or other pecuniary advantage, unless Employee receives prior
written approval from Company. Employee will use his best efforts
to promote the success of the Company's business, and will
cooperate fully with the Officers and Board of Directors in the
advancement of the best interests of the Company. However,
Employee is not prohibited from making personal investments in any
other businesses, so long as those investments do not require
Employee to participate in the operation of the companies in which
he or she invests, subject to the qualifications set forth in
section C1.
1. QUALIFICATIONS: Nothing in this Agreement will prevent the
Employee from engaging in additional activities in connection
with personal investments and businesses that are not
inconsistent with and which do not detract from the
Employee's duties under this Agreement.
D. SALARY: The Employee shall be paid an annual salary of one hundred
sixty thousand dollars ($160,000) (the "Salary"), subject to
adjustment as provided below, which shall be payable in equal
periodic installments according to the Company's customary payroll
practices, but no less frequently than monthly, commencing on the
Effective Date. The Salary will be reviewed
by the Chief Executive Officer and Compensation Committee of the
Board of Directors not less frequently than annually, and may be
adjusted upward or downward in their sole discretion.
E. INCENTIVE COMPENSATION: As additional compensation for the
services to be rendered by the Employee pursuant to this
Agreement, the Employee shall be entitled to receive a bonus with
respect to each Fiscal Year, payable on such date as determined by
the Compensation Committee of the Board of Directors, and which
amount shall be determined by the Chief Executive Officer and
approved by the Compensation Committee of the Board of Directors
(the "Incentive Compensation").
F. ADDITIONAL INCENTIVE COMPENSATION: In addition to the Incentive
Compensation, the Company agrees to consider granting options to
the Employee (the "Option") in the future to purchase additional
shares of Class A Common Stock in the same manner as additional
grants may be given to other employees of the Company, i.e. as
part of a bonus, etc. Any additional option grants shall be
approved by the Compensation Committee of the Board of Directors.
This paragraph and other provisions of this Agreement governing
Options are not intended to refer to the options granted under the
Xxxxxxx Xxxxxx Stock Option Agreement described at I(B)(h) nor are
they intended to affect, alter, amend or change in any way the
terms and conditions of such Agreement and the options granted
thereunder
G. EXERCISE OF OPTIONS: The Options described at Part I(F) may be
exercised by the Employee, in whole or in part, from time to time
after the date hereof, commencing and prior to the termination of
the Option in accordance with the terms of the Stock Option
Agreement under which they were granted.
H. BENEFITS: The Employee shall be entitled to participate in such
pension, profit sharing, bonus, life insurance, hospitalization,
major medical, and other employee benefit plans of the Company
that may be in effect from time to time, to the extent the
Employee is eligible under the terms of those plans (collectively,
the "Benefits").
I. PAID TIME OFF: The Employee will be entitled to paid time off in
accordance with the provisions of Company's Comprehensive Paid
Time Off Plan. The Employee will also be entitled to all company
designated holidays.
J. COMPANY RULES AND REGULATIONS: Employee agrees to review and abide
by all Company rules and regulations set forth in the Company
Employee Handbook, a copy of which shall be made available to
Employee.
II. CONFIDENTIALITY: Company and its Affiliates hold certain trade,
business, and financial secrets in connection with the business. The
nature of services provided by the Company requires information to be
handled in a private, confidential manner. Throughout the Employee's
employment there may be disclosed to the Employee certain trade
secrets, confidential information and proprietary data.
A. EMPLOYEE CONFIDENTIALITY AGREEMENT: Employee agrees that all
knowledge and information Employee gains from the trade secrets,
confidential information and proprietary information, which are
revealed to Employee shall for all time be regarded as strictly
confidential, are, and shall remain the sole and confidential
property of Company. The Company shall be entitled to restrain
Employee from disclosing any trade secret or other confidential
information, or from rendering any services to any entity to whom
this information has been or is threatened to be disclosed. The
right to an injunction is not exclusive, and Company may pursue
any other remedies it has against Employee for a breach or
threatened breach of this condition, including the recovery of
damages. Employee will only reveal or disclose the trade secrets
to another person, firm, corporation, company or entity if Company
instructs Employee to do so in writing. This secrecy protection
will continue even after Employee's dismissal by
Company. Employee acknowledges that if employee reveals the trade
secrets to unauthorized persons Employee may be penalized and sued
for injunctive relief and money damages as well as face possible
criminal charges by Company.
B. CONFIDENTIALITY AFTER TERMINATION OF EMPLOYMENT: Employee agrees
that during and after termination of employment, Employee shall
not use for employee or others, or disclose or divulge to others,
any trade secrets, confidential information, or any other data of
Company in violation of this agreement. Upon terminating
employment with Company:
1. Employee shall return to Company all documents and property
pertaining to Company, including but not limited to:
drawings, blueprints, records, reports, manuals,
correspondence, customer lists, computer programs,
inventions, and all other materials and all copies thereof
relating in any way to Company's business, or in any way
obtained by Employee during employment. Employee further
agrees that Employee shall not retain any copies or
reproductions of the foregoing.
2. Company may notify any future or prospective Company of this
agreement.
C. DEFINITIONS: The definition of trade secrets, confidential
information and proprietary information includes but is not
limited to:
1. TECHNICAL INFORMATION: Methods, processes, formulae,
compositions, systems, techniques, inventions, machines,
computer programs and research projects, unpatented
inventions, designs, know-how, trade secrets, technical
information and data, specifications, blueprints,
transparencies, test data, and additions, modifications, and
improvements thereon which are revealed to Employee.
2. GENERAL BUSINESS INFORMATION: Customer lists, pricing data,
sources of supply, marketing, production, or merchandising
systems or plans, documents, financial statements, quotes,
correspondence.
3. "REDIRECT BUSINESS" shall mean any business based on or with
a focus on value-added email services or Email and URL,
redirect services, or that derives revenues from the sale of
Email or URL redirect services. Value added email services
include but are not limited to email to fax/pager
technologies and email redirection enhancements.
4. "BROKER/AGENT BUSINESS" shall mean any business that sells
Internet assets, including secondary domain name rights, and
IP address rights.
5. "NEW TLD BUSINESS" shall mean a business that registers new
top level domain names.
6. INDUSTRY SPECIFIC INFORMATION: Information regarding the
Redirect Business, the Broker/Agent Business, New TLD
Business or Company's business methods. Company's user
payment data, user demographic data, and user account
information. Company's business policies, procedures,
techniques, trade secrets, patents, processes, formulas,
research, intellectual property or other knowledge developed
by Company.
7. OTHER MATERIALS: Information, including without limitation
data processing reports, customer sales analyses, invoices,
price lists or information, samples, any other materials,
data or software of any kind furnished to Employee by Company
or developed by Employee on behalf of Company or for
Company's use or otherwise in connection with Employee's
employment hereunder, or any other data that could be used by
third parties to the disadvantage of Company.
III. INTELLECTUAL PROPERTY
A. AGREEMENT ON INVENTIONS AND PATENTS: Employee agrees that Employee
shall promptly provide Company a complete record of any and all
inventions and improvements, whether patentable or not, which
Employee, solely or jointly, may conceive, make, or first disclose
in the course of his employment with the Company. Employee agrees
to the following:
1. Employee hereby grants, assigns and delivers to Company, or
its nominee, Employee's entire right, title, and interest in
and to all inventions and improvements made, developed or
created by the Employee in the course of his employment with
the Company (whether at the request or the suggestion of the
Company or otherwise, whether alone or in conjunction with
others) that relate in any way to the actual or anticipated
business or activities of Company, or its Affiliates, or that
are suggested by or result from any task or work for or on
behalf of Company or its Affiliates, together with any and
all domestic and foreign patent rights in such inventions and
improvements. Employee agrees promptly to take all lawful and
reasonable action to assist Company or its nominee in
securing patents thereto, both during and after employment,
without additional compensation, but at Company's expense.
2. Employee agrees that, upon accepting employment with any
organization in competition with Company or its Affiliates
during a two year period following termination of employment
Employee shall notify Company in writing within thirty days
of the name and address of such new Company. Such notice is
required regardless of whether Employees believes they will
be employed in competition with the business of the Company.
3. Employee agrees to give Company timely written notice of any
prior employment agreements or patent rights that may
conflict with the interests of Company or its Affiliates.
B. AGREEMENT ON PROPRIETARY RIGHTS: Employee acknowledges that
Employee may have Company and industry related ideas and
suggestions, which Company may consider for commercial
exploitation. Employee understands that Company cannot accept such
suggestions in confidence. Employee therefore agrees to submit any
suggestions to the Company under the following conditions:
1. Company's review of Employee's suggestions is made only upon
Employee's request, and Company accepts no responsibility for
holding any submitted information in confidence.
2. No obligation of any kind is assumed nor may be implied
against Company unless or until Employee has entered into a
formal written contract with Company pertaining to Employee's
submissions. In addition, any obligation shall be only such
as is expressed in writing.
3. Neither Company nor any of its Affiliates shall have any
rights under any patents Employee now has nor may later
obtain for Employee's submissions covered by this Agreement,
but, in consideration of Company examining and considering
same, Employee hereby releases the Company from any liability
in connection with Employee's submissions or from liability
because of Company's use of Employee's submissions or of any
portion thereof, except such liability as may accrue under
valid patents now or hereafter issued.
4. Subject to these conditions, Employee certifies that no prior
disclosure to Company or any of its Affiliates regarding
these submissions has been made and that the entire
disclosure now made by Employee to Company is included with
this Agreement and submitted for retention by Company. If, at
any time, Employee corresponds with or discuss submissions
with an officer, employee, agent or representative of Company
and, in the course of such correspondence or discussion,
makes any additional disclosures regarding such submissions,
Employee shall, upon request, furnish Company an illustration
or a complete description, or both, of such additional
disclosure, so that it can be made a part of the permanent
record of Company.
IV. NON-COMPETITION: Employee hereby acknowledges that Company shall or may
in reliance of this agreement provide Employee access to trade secrets,
customers and accounts, and other confidential or propriety
information, and that this agreement is reasonably necessary to protect
Company.
A. NON-COMPETITION AGREEMENT: For good consideration and as an
inducement for Company to employ Employee, Employee hereby agrees
not to directly or indirectly compete with the business of Company
during the period of employment and for a period of two years
thereafter following termination of employment and notwithstanding
the cause or reason for termination, unless Company ceases
operations.
1. EXCEPTIONS: Any exceptions to this policy must be with
Company's written prior consent. Employee acknowledges that
money damages may not be sufficient remedy for any breach of
this agreement and agrees that Company will be entitled to
seek specific performance and injunctive or other equitable
relief for any such breach.
2. DEFINITIONS: The term "not compete" shall mean that:
a. Employee shall not, on Employee's behalf or on behalf of
any other party, solicit or seek the business of any
customer or account of Company existing during the term
of employment and wherein said solicitation involves a
product and/or service substantially similar to or
competitive with any present or future product and/or
service of Company of which Employee was aware during
his employment.
b. Employee shall not directly or indirectly own, operate,
consult to or be employed by any firm in a business
substantially similar to or competitive with the present
business of the Company or such business activity in
which the Company may engage during the term of
employment.
c. Employee shall not to be involved, directly or
indirectly, in the Redirect Business, the Broker/Agent
Business, New TLD Business, and other new Company
businesses while employed by Company and will not be
involved, directly or indirectly, nor have a financial
interest in, the Redirect Business, the Broker/Agent
Business, New TLD Business and other new Company
businesses.
d. Employee shall not directly or indirectly solicit
Company's customers, vendors, subcontractors, or
prospects with services or products of the nature of
those being sold by Company.
V. CONFLICT OF INTEREST: Employee acknowledges that neither Employee, nor
any other business to which Employee may be associated, nor, to the
best of Employee's knowledge, any member of Employee's immediate
family, has any conflict between Employee's personal affairs or
interests and the proper performance of Employee's responsibilities for
Company that would constitute a conflict of interest with Company.
Furthermore, Employee declares that during employment, Employee shall
continue to maintain avoid any conflict with Company's interests.
VI. DOMAIN NAME REGISTRATION: Employee agrees that while working for
Company, Employee will give Company the right of first refusal on any
Domain names that Employee intends on
registering or purchasing. To the extent that Company does not act
to register the Domain name then Employee can register the Domain
name after seven days from notifying Company of Employee's intent.
Employee cannot use these Domain names for any business while
working for Company and then is bound by the non-compete
restrictions.
VII. GENERAL CONTRACT TERMS
A. SURVIVAL AND BREACH: Both parties recognize that the services to
be rendered under this Agreement by the Employee are special,
unique and extraordinary in character, and that in the event of a
breach or a threatened by Employee of the terms and conditions of
the Agreement to be performed by him, then the Company shall be
entitled, if it so elects, to institute and prosecute proceedings
in any court of competent jurisdiction, either in law or in
equity, to obtain damages for any breach of this Agreement, or to
enforce the specific performance thereof by the Employee. Without
limiting the generality of the foregoing, the parties acknowledge
that a breach by the Employee of his obligations under Sections
II, III or IV or would cause the Company irreparable harm, that no
adequate remedy at law would be available in respect thereof and
that therefore the Company would be entitled to injunctive relief
with respect thereto. Employee affirms having the opportunity to
fully discuss and negotiate the covenants set forth in Sections
II, III and IV and acknowledges understanding and acceptance. If
any part of this covenant is declared invalid, then Employee
agrees to be bound by a covenant as near to the original as
lawfully possible. The covenants set forth in Sections II, III,
and IV shall survive the term and termination of employment.
Employee shall further be liable for all costs of enforcement.
B. LIMITED EFFECT OF WAIVER OF BREACH BY COMPANY. If Company waives a
breach of any provision of this agreement by Employee, that waiver
will not operate or be construed as a waiver of any succeeding
breach by Employee. No waiver of a right by Company constitutes a
waiver of any other right of Company, and temporary waiver by
Company does not constitute a permanent waiver or any additional
temporary waiver.
C. EFFECT OF PRIOR AGREEMENT: This agreement supersedes any prior
employment agreement between Company or any predecessor of Company
and Employee, except that this Agreement shall not affect or
operate to reduce any benefit or compensation inuring to Employee
of a kind elsewhere provided and not expressly provided in this
Agreement and this Agreement shall not affect the terms and
conditions of the Xxxxxxx Xxxxxx Stock Option Agreement described
at I(B)(h).
D. SETTLEMENT BY ARBITRATION: Any claim or controversy that arises
out of or relates to this Agreement, or the breach thereof, will
be settled by arbitration in the office nearest the Company in
accordance with the prevailing rules of the American Arbitration
Association. Judgment upon the award rendered may be entered in
any court possessing jurisdiction of arbitration awards. Company
shall be liable for all legal costs of any such arbitration
proceedings or legal proceedings relating to this agreement.
E. SEVERABILITY: If for any reason any portion of this Agreement and
the covenants herein are declared invalid, this agreement and the
covenants herein shall continue in effect as if the invalid
portion had never been part hereof, and the other portions of this
Agreement and the covenants herein will remain in effect, insofar
as is consistent with the governing laws.
F. INDEMNIFICATION Company shall defend and hold harmless employee
from all actions against such employee that occur as a result of
the business operations.
G. INVALIDITY: If this agreement is held invalid or cannot be
enforced, then to the full extent permitted by the governing laws
any prior agreement between Company (or any predecessor
thereof) and Employee will be deemed reinstated as if this
Agreement had not been executed.
H. ASSUMPTION OF AGREEMENT: The rights and obligations under this
Agreement will inure to the benefit and be binding upon the
parties, their successors, heirs, assigns and personal
representatives.
I. ORAL MODIFICATIONS NOT BINDING: This instrument is the entire
agreement. Oral changes will have no effect. This Agreement and
the covenants herein may be altered only by a written agreement
signed by the party against whom enforcement of any waiver,
change, modification, extension, or discharge is sought.
J. GOVERNING LAW: This Agreement and the covenants herein shall be
governed and interpreted under the laws of the State of New York.
K. FULL DISCLOSURE: Company and Employee know of no restrictions on
their ability to complete this Agreement
In Witness Whereof, the parties have executed this Agreement as of the date
first written above.
By: /s/ Xxxxxx Xxxxxx By: /s/ Xxxxxxx Xxxxxx
----------------------- ---------------------------------
Name: Xxxxxx Xxxxxx Name: Xxxxxxx Xxxxxx
CEO Executive Vice President, Technology
Xxxx.xxx, Inc. Xxxx.xxx, Inc.
