EMPLOYMENT AGREEMENT
EMPLOYMENT
AGREEMENT
This
Employment Agreement (this “Agreement”), is made and entered into as of June 29,
2007, by and between Guideline, Inc., a New York corporation (“Company”), and
Xxxx Xxxxxxxxx (“Employee”).
BACKGROUND
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A.
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On
June 28, 2007, infoUSA
Inc., a Delaware Corporation (“infoUSA”) and the Company entered into an
Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which a
wholly-owned subsidiary of infoUSA (the “Subsidiary”) will conduct a
tender offer for all of the outstanding shares of capital stock of
the
Company, after which such subsidiary will be merged with and into
the
Company (the “Merger”), with the Company continuing as the surviving
corporation.
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B.
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As
a condition to entering into the Merger Agreement, infoUSA has requested
that the Company and Employee enter into this Agreement providing
for the
Employee’s employment and certain non-competition, non-interference,
confidentiality and intellectual property related obligations on
the part
of Employee, and the Company and Employee have agreed to do the same,
subject to the closing of the tender offer contemplated by the Merger
Agreement.
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NOW
THEREFORE, in consideration of the mutual covenants and obligations hereinafter
set forth, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Company and Employee, intending
to
be legally bound, hereby agree as follows:
1. Position.
During
the Employment Term (as defined below), Employee shall be employed as CEO and
shall perform such duties as are consistent with such position for Company
as
well as such other duties as determined from time to time by Company. The
Company acknowledges that in the event Employee terminates his employment as
the
result of any attempt by the Company to materially reduce or otherwise
materially diminish Employee's job, title or Base Salary, such termination
shall
be considered a Termination without Cause, as set forth in Section 7(d) below.
Employee shall diligently devote all of Employee’s business time to performing
Employee’s duties pursuant to this Agreement. Notwithstanding the foregoing, and
provided that such activities do not interfere with the fulfillment of
Employee’s obligations hereunder in any material respect, Employee may
(a) serve as a director or trustee of any charitable or non-profit entity;
and (b) acquire solely as an investment any securities so long as
(i) he remains a passive investor in such entity and (ii) such entity
is not, directly or indirectly, in competition with Company or any of its
affiliates (other than an interest of not more than 5% of the outstanding stock
of any entity which is publicly traded on a national stock exchange or
over-the-counter market).
2. Term
of Employment.
Employee’s term of employment under this Agreement shall begin on the date that
infoUSA and/or the Subsidiary accept tender of a total of at least sixty-six
and
two-thirds percent (66 2/3%) or more of the outstanding shares of capital stock
of the Company pursuant to the Merger Agreement and shall continue for
five (5) years (the “Employment Term”), unless sooner terminated as
described in paragraph 7. In the event the Merger Agreement is terminated,
this
Agreement shall be deemed negated and all provisions hereof shall be null and
void, and Employee's current Employment Agreement shall remain in full force
and
effect.
3. Compensation.
As
compensation for Employee’s services pursuant to this Agreement, Employee shall
receive:
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(a)
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An
annual base salary of $350,000, less applicable withholdings, which
shall
be payable in regular periodic installments according to Company’s normal
payroll practices (the “Base Salary”). Company shall review the Base
Salary at least once a year to determine whether the Base Salary
should be
increased at Company’s discretion.
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(b)
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Employee
shall also be entitled to participate in the Company incentive bonus
plan
for fiscal year 2007 (the “Incentive Bonus Plan”), as described in the
documents attached hereto as Exhibit
A.
Such incentive bonus shall be payable on or before that date which
is one
month after the end of the Company’s fiscal year. Xxxxx Xxxxx, on behalf
of the Company, and Employee shall negotiate and determine the structure
and criteria for the Incentive Bonus Plan for fiscal year 2008 and
any
subsequent years at a later date. Employee shall be entitled to receive
a
prorated portion of the incentive bonus he would have been entitled
to
receive under the Incentive Bonus Plan in any year in which Employee
is
terminated pursuant to the provisions of Section 7(d).
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(c)
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Employee
shall also be entitled to receive an automobile allowance in the
amount of
$500 per month during the term of his
employment.
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(d)
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Employee
shall receive a one-time sign-on bonus of $200,000, less applicable
withholdings, payable within 10 business days of the date of this
Agreement.
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4. Employee
Benefits.
Employee shall be entitled to participate in any Company-sponsored employee
benefit plans on substantially the same terms as other similarly situated
employees of Company. Employee shall also be entitled to such other fringe
benefits as may be offered from time to time to other similarly situated
executive employees of Company, subject to the terms and conditions applicable
to such fringe benefits. If Employee elects COBRA coverage after termination
of
his employment with Company, Company shall pay the premium for Employee’s COBRA
coverage during any period in which Employee is receiving severance payments
under this Agreement; provided,
however
that
Employee’s severance payments will be reduced by an aggregate amount equal to
the amount which Employee was responsible to pay on a monthly basis for such
insurance coverage under the Company’s plan immediately prior to termination
multiplied by the total number of months of severance the Employee is to
receive.
5. Paid
Time Off.
Employee shall be entitled to a prorated portion of four weeks paid time off
for
the remainder of 2007. Except as set forth in the previous sentence, Employee
shall be entitled to paid time off consistent with similarly situated employees
of Company as set forth in Company’s Employee Handbook.
6. Expenses.
Company
shall pay or reimburse Employee, in accordance with Company’s reimbursement
policy, for any expenses reasonably incurred by Employee in furtherance of
Employee’s duties hereunder, including, but not limited to, expenses for
reasonable traveling, meals and hotel accommodations, upon submission by
Employee of vouchers or itemized lists prepared in compliance with such rules
and policies as Company may from time to time adopt and as may be required
in
order to permit such payments as proper deductions to Company under the Internal
Revenue Code and the rules and regulations adopted now or hereafter in
effect.
7. Termination.
Employee’s employment with Company may be terminated prior to the end of the
Employment Term upon the occurrence of any one of following events:
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(a)
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Death.
Immediately upon the death of Employee. In such event, Company shall
pay
Employee severance in an amount equal to one (1) times Employee’s
then-current Base Salary to be paid over a one-year period in regular
periodic installments and in accordance with Company’s then-current
payroll practices.
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(b)
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Disability.
Employee’s physical or mental disability (as defined by the Americans With
Disabilities Act), which prevents Employee from performing the essential
functions of Employee’s duties, with or without reasonable accommodation,
for a continuous period of 90 days or for a period of 120 days in
any six
month period.
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(c)
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Voluntary
Termination.
Voluntary termination of this employment by Employee upon giving
Company
at least thirty (30) days’ advance written notice. In such event,
Company shall pay Employee severance in an amount equal to one (1)
times
Employee’s then-current Base Salary to be paid over a one-year period in
regular periodic installments and in accordance with Company’s
then-current payroll practices. Severance payments provided under
this
Section 7(c) shall be reduced by the amount earned by Employee in
any
other employment during the severance period.
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(d)
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Termination
Without Cause.
Termination of this employment by Company without cause upon giving
thirty
(30) days’ advance written notice to Employee. In such event, Company
shall pay Employee severance in an amount equal to two (2) times
Employee’s then-current Base Salary to be paid over a two-year period in
regular periodic installments and in accordance with Company’s
then-current payroll practices.
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(e)
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Termination
For Cause.
Termination of this employment by Company for cause upon giving written
notice to Employee. As used herein, “cause” means (i) conviction of
or entering of a guilty or nolo contendere plea to a felony or a
misdemeanor involving moral turpitude; (ii) conduct that is
detrimental to the business or reputation of Company or any of its
affiliates; (iii) fraud, misappropriation or embezzlement against any
person or entity; (iv) material refusal to comply with directives of
Company consistent with the terms of this Agreement, following written
notice of such failure from the Company and Employee's failure to
cure
such refusal within seven (7) days of such notice; or (v) failure
to
perform or neglect of Employee’s material duties, following written notice
of such failure from the Company and Employee's failure to cure such
conduct within seven (7) days of such notice.
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(f)
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Mutual
Agreement.
Termination of this employment by mutual written agreement of Employee
and
Company.
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(g)
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Non-Renewal
of Employment Agreement.
In the event that the Company does not renew this Agreement following
its
expiration, Company shall pay Employee severance in an amount equal
to one
(1) times Employee’s then-current Base Salary to be paid over a one-year
period in regular periodic installments and in accordance with Company’s
then-current payroll practices.
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Upon
notice of termination of employment pursuant to paragraph 7(c) or 7(d), Company
shall have the right, in its sole and absolute discretion, to immediately
relieve Employee of Employee’s duties pursuant to this Agreement but to continue
paying Employee’s Base Salary through the remainder of the notice period. If
Employee is not relieved of Employee’s regular duties through this notice
period, Employee acknowledges and agrees that Employee shall continue to perform
Employee’s duties in a professional and ethical manner.
Upon
termination of Employee’s employment for any reason, Employee acknowledges and
agrees that, except as specifically provided herein, Employee is not entitled
to
any other compensation or benefits following the effective date of termination.
Payment of any severance amount pursuant to this agreement is conditioned upon
(i) Employee’s execution of a signed general release from Employee to Company in
a form to be determined and provided by Company in its reasonable discretion
and
(ii) Employee’s continued compliance with any and all applicable
confidentiality, nonsolicitation, noncompetition, and noninterference
obligations.
8. Noncompetition.
Employee shall not during the Restrictive Period, directly or
indirectly:
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(a)
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engage
in direct or indirect competition with the Business as conducted
and
operated by Company during Employee's employment with the Company,
and as
conducted and operated on the date of termination of such employment
("Company's Business") in any state or country in which the Company's
Business is conducted or operated; provided
that Employee
shall not violate this Section 8(a) if (i) Employee is employed by
a
company whose primary business is not competitive with Company's
Business,
and (ii) Employee's service for such company does not compete, directly
or
indirectly, with Company's
Business;
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(b)
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solicit,
for himself or any other person, business that is competitive with
Company's Business from any customers, clients or accounts, or active
prospective customers, clients or accounts of Company's Business,
except
on behalf of Company in the course of his employment with Company;
or
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(c)
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acquire
a direct or indirect interest or an option to acquire such interest
in any
business engaged in competition with Company's Business (other than
an
interest of not more than 5% of the outstanding stock of any company
which
is publicly traded on a national stock exchange or the over-the-counter
market).
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9. Noninterference.
Employee acknowledges that the past relationship between Employee and the
customers and employees of Company has resulted in a unique and special
situation whereby Employee is placed in a position to either further or damage
Company's Business. Accordingly, Employee shall not during the Restrictive
Period, directly or indirectly:
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(a)
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encourage,
in any way or for any reason, any customer, client or account of
Company's
Business, to sever or alter the relationship of such customer, client
or
account with Company's Business;
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(b)
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aid
any other person attempting to take customers, clients or accounts
from
Company's Business;
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(c)
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unless
approved in writing by Company, serve or work, outside of his employment
with Company, in any way for any customers, clients or accounts of
Company's Business;
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(d)
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while
employed by Company, fail to promptly notify Company whenever he
has any
leads or information which may further Company's Business, or furnish
such
leads or information to any other
person;
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(e)
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defame
or make false statements regarding Company or any of its affiliates,
or
any of its directors, officers or employees, nor engage in any deceptive
trade practices toward Company or any of its affiliates;
or
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(f)
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solicit,
employ, retain as a consultant, interfere with or attempt to entice
away
from Company any current employee of Company or any individual who
has
agreed to be, or has been, employed or retained by Company within
2 years
prior to such solicitation, employment, retention, interference or
enticement.
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10. Intellectual
Property.
Employee shall not use (except for use within the scope of his employment with
Company), appropriate or interfere with, directly or indirectly, any
Intellectual Property of Company or any of its affiliates, or any combination,
abbreviation or derivation thereof, or any applicable logos of Company, or
any
of its affiliates, at any time during or after the Restrictive Period. Employee
covenants and agrees that Employee will:
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(a)
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promptly
disclose to Company, and Company will own all right, title and interest
in, all inventions, improvements, technical information, methods
and
suggestions, computer software and other intellectual property (the
“Employee Developed Intellectual Property”) which Employee conceives or
develops during the course of Employee’s employment (excluding that which
Employee conceives or develops without the use of time, resources
or
facilities of Company and which does not relate to the past, present
or
perspective activities of Company);
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(b)
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at
the request of Company, affix appropriate legends and copyright notices
indicating Company’s ownership of all Employee Developed Intellectual
Property and all underlying documentation; and
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(c)
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execute
such further assignments and other documents as may be reasonably
requested by Company in order to vest, perfect, maintain or defend
Company’s right, title and interest in the Employee Developed Intellectual
Property.
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11. Confidentiality.
Employee shall not use (except for use within the scope of his employment with
Company), appropriate or disclose to any person, directly or indirectly, any
Confidential Information of Company (including any Confidential Information
of
Company's Business) or any of its affiliates, at any time during or after the
Restrictive Period. Upon the termination of Employee’s employment with Company,
Employee will promptly return to Company in good condition all documents, data
and records of any kind which contain any Confidential Information or which
were
prepared based on Confidential Information.
12. Notices.
All
notices, requests, demands and other communications hereunder shall be in
writing and shall be given by hand delivery, telecopy, overnight courier
service, or United States certified or registered mail, return receipt
requested. Each such notice, request, demand or other communication shall be
effective (a) if delivered by hand or by overnight courier service, when
delivered at the address specified in this paragraph; (b) if given by
facsimile, when such facsimile is transmitted to the facsimile number specified
in this paragraph and the appropriate machine confirmation is received; and
(c) if given by certified or registered mail, three (3) days after the
mailing thereof.
Address
for notices (unless and until written notice is given of any other
address):
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If
to Employer, to:
0000
Xxxxx 00xx Xxxxxx
Xxxxx,
XX 00000
Attention:
General Counsel
Fax:
(000) 000-0000
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If
to Employee, to:
00
Xxxxx Xxxxx
Xxxxxxxx,
XX 00000
With
a copy to:
Cuddy
& Xxxxx LLP
000
Xxxxxxxx Xxxxxx, 00xx
Xxxxx
Xxxxx
Xxxxxx, XX 00000
Attention:
Xxxxxx X. Xxxxxx, Esq.
Fax:
(000) 000-0000
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13. Definitions.
As used
in this Agreement the following terms shall have the following meanings:
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(d)
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"Business"
means the business of [customized research and analysis designed
to help
companies make more informed decisions about critical business issues,
including, but not limited to, custom market research, strategic
intelligence and on-demand
research].
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(e)
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“Confidential
Information” means sensitive, confidential and proprietary information of
Company that includes, but is not limited to, information about products,
services, markets, customers, prospective customers, personnel,
compensation, accounting, financial and technical data, business
plans and
operational and marketing strategies regarding
Company.
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(f)
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“Intellectual
Property” means (a) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements
thereto, and all patents, patent applications and patent disclosures,
together with all reissuances, continuations, continuations-in-part,
revisions, extensions and reexaminations thereof; (b) all trademarks,
service marks, trade dress, logos, trade names, corporate names and
domain
names, together with all abbreviations, translations, adaptations,
derivations and combinations thereof and including all goodwill associated
therewith, and all applications, registrations and renewals in connection
therewith; (c) all copyrightable works, all copyrights and all
applications, registrations and renewals in connection therewith;
(d) all mask works and all applications, registrations and renewals
in connection therewith; (e) all trade secrets and confidential
business information (including ideas, research and development,
know-how,
formulas, compositions, manufacturing and production processes and
techniques, technical data, designs, drawings, specifications, customer
and supplier lists, pricing and cost information and business and
marketing plans and proposals); (f) all computer software (including
data and related documentation); (g) all other proprietary rights;
and (h) all copies and tangible embodiments thereof (in whatever form
or medium).
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(g)
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"Restrictive
Period" means that period of time which commences on the date of
this
Agreement and ends two (2) years after the termination or expiration
of
Employee's employment with Company; provided,
however
that if termination of Employee’s employment with the Company is pursuant
to Section 7(c) of the Employment Agreement (Voluntary Termination),
then
Restrictive Period shall mean that period of time which commences
on the
date of this Agreement and ends one (1) year after the termination
of
Employee’s employment with Company.
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14. Intended
Third Party Beneficiaries.
Employee acknowledges and understands that some of the Confidential Information
and/or Intellectual Property accessible to Employee in the performance of
Employee’s duties during Employee’s employment with Company may belong to and be
provided by one of Company’s affiliates. Employee expressly acknowledges and
agrees that the affiliates are intended third party beneficiaries of this
Agreement as it pertains to Employee’s obligations under this Agreement and
shall have the right to enforce this Agreement directly against Employee in
their own names or jointly with Company or each other. This Agreement is not
intended to and shall not grant any third party beneficiary any ownership
interest in any of Company’s Confidential Information or Intellectual
Property.
15. Governing
Law and Venue.
This
Agreement shall be governed by, and construed and enforced in accordance with
the laws of the State of New
York.
Each party agrees that any action by either party to enforce the terms of this
Agreement must be brought in an appropriate court in New York, and waives all
objections based on lack of jurisdiction or improper or inconvenient venue
of
any such court.
16. Captions.
The
paragraph headings contained herein are for reference purposes only and shall
not in any way affect the meaning or interpretation of this
Agreement.
17. Entire
Agreement.
This
Agreement sets forth the entire agreement and understanding of the parties
relating to the subject matter hereof, and supersedes all prior agreements,
arrangements and understandings, written or oral, between the parties concerning
such subject matter. The previous sentence notwithstanding, Employee expressly
acknowledges that Employee may be subject to additional policies instituted
for
the purpose of protecting the Confidential Information and Intellectual
Property; as such, Employee expressly acknowledges that all such policies and
agreements shall be used together with this Agreement to protect such interests
of Company to the fullest extent allowed by law.
18. Successors
and Assigns.
This
Agreement is binding upon and shall inure to the benefit of Company and its
successors and assigns and upon Employee and Employee’s heirs and personal
representatives; provided, however, in no event may Employee assign any of
Employee’s duties or obligations under this Agreement.
19. Severability.
Employee and Company intend and agree that if a court of competent jurisdiction
determines that the scope of any provision of this Agreement is too broad to
be
enforced as written, the court should reform such provisions to such narrower
scope as it determines to be enforceable. Employee and Company further agree
that if any provision of this Agreement is determined to be unenforceable for
any reason, such provision shall be deemed separate and severable and the
unenforceability of any such provisions shall not invalidate or render
unenforceable any of the remaining provisions hereof. In addition, each of
the
parties to this Agreement recognizes and acknowledges that the covenants and
provisions contained in this Agreement are properly required for the adequate
protection of Company, the Company's Business and the goodwill of the Business.
Each of the parties to this Agreement also recognizes and acknowledges that
the
covenants and restrictions contained in this Agreement are accepted as part
of
the consideration paid.
20. Amendments;
Waivers.
This
Agreement may be amended, modified, superseded, canceled, renewed or extended,
and the terms or covenants hereof may be waived only by a written instrument
executed by all of the parties hereto, or in the case of a waiver, by the party
waiving compliance. The failure of any party at any time or times to require
performance of any provision hereof shall in no manner affect the right of
such
party at a later time to enforce the same. No waiver by any party of the breach
of any term or covenant contained in this Agreement, whether by conduct or
otherwise, in any one or more instances, shall be deemed to be, or construed
as,
a further or continuing waiver of any such breach, or a waiver of the breach
of
any other term or covenant contained in this Agreement.
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21. Counterparts/Electronic
Transmission.
This
Agreement may be executed in one or more counterparts, any of which may be
executed and transmitted by facsimile or other electronic method, and each
of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
[Balance
of page intentionally left blank. Signatures follow.]
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IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date
first above written.
| Guideline, Inc., a New York corporation, Employer | ||
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By:
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/s/ Xxxxx Xxxxx | |
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Its:
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Chief Executive Officer | |
| /s/ Xxxx Xxxxxxxxx | ||
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Xxxx
Xxxxxxxxx, Employee
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