EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this “Employment Agreement”), dated as of January 1, 2006 (the “Commencement Date”), by and between XxxXxxxxx.xxx, Inc., a Delaware corporation (the “Company” or “XxxXxxxxx.xxx”), and Xxxxxx X. Xxxxxx, Xx. (“Xxxxxx”).
WHEREAS, the Company desires that Xxxxxx enter into this Employment Agreement, and Xxxxxx desires to enter into this Employment Agreement, on the terms and conditions set forth herein; and
NOW THEREFORE, the parties hereto agree as follows:
Section 1. Duties; Term.
(a) The Company agrees to employ Xxxxxx, and Xxxxxx agrees to be so employed, in the position of Chairman and Chief Executive Officer of the Company, reporting to the Board of Directors (the “Board”) of the Company. Xxxxxx agrees to perform such duties, functions and responsibilities as are generally incident to such positions, for a period commencing on January 1, 2006 and ending on December 31, 2007, unless sooner terminated in accordance with Section 4 hereof (the “Term”). Xxxxxx agrees to faithfully perform the lawful duties assigned to him pursuant to this Employment Agreement to the best of his abilities and to devote all of his business time and attention to the Company’s business. Xxxxxx shall be subject to all laws, rules, regulations and policies as are from time to time applicable to employees of the Company and, in the case of rules or policies adopted by the Company, communicated to him in writing, including XxxXxxxxx.xxx’s Policy on Investments. Xxxxxx will make recommendations to the Compensation Committee of the Board (the “Committee”) with regard to compensation levels (including equity awards) for senior executive officers and the Committee shall consider such recommendations.
(b) Notwithstanding the foregoing, Xxxxxx may (i) serve on civic or charitable boards or not-for-profit industry related organizations, (ii) engage in charitable, civic, educational, professional, community and/or industry activities without remuneration therefor and (ii) manage personal and family investments, so long as such activities do not interfere with performance of Xxxxxx’x duties under the Employment Agreement. Xxxxxx also may serve on the board of directors or advisory committee of other for-profit enterprises subject to the consent of the Board, which shall not unreasonably be withheld; provided, however, that Xxxxxx shall not serve on more than two such boards at the same time.
Section 2. Compensation.
(a) Annual Salary. As compensation for his services hereunder, during the Term the Company shall pay to Xxxxxx a salary of Four Hundred and Ten Thousand Dollars ($410,000) per annum, payable in accordance with the Company’s standard payroll policies, and less all applicable federal, state and local withholding taxes (the
“Annual Salary”). The Annual Salary shall be reviewed at least annually during the Term, and may be increased in the sole discretion of the Committee, taking into consideration both the Company’s and Xxxxxx’x performance during the preceding year.
(b) 2005 Annual Bonus. Xxxxxx shall receive a cash bonus for his employment during calendar year 2005 in an amount equal to at least 20% of his annual salary in effect for calendar year 2005, which shall be paid no later than February 1, 2006.
(c) Annual Bonus. Except as set forth in Section 4 hereof, in addition to the Annual Salary, Xxxxxx shall be entitled to receive additional cash bonus compensation for his employment during calendar years 2006 and 2007 (the “Annual Bonus”) in accordance with the bonus plan for senior management of the Company (the “Bonus Plan”) with a target bonus of 75% of his Annual Salary. Sixty percent (60%) of the Annual Bonus shall be based upon achievement of the Company’s pre-established financial and operational goals and forty percent (40%) shall be based upon pre-established individual performance goals, as approved by the Committee with meaningful input on all goals from Xxxxxx.
(d) Long-term Equity Incentive Compensation. In addition to stock options previously granted pursuant to the terms of the XxxXxxxxx.xxx, Inc. Amended and Restated 1998 Stock Incentive Plan, as amended (the “Plan”) and option agreements dated October 18, 1999, December 8, 1999, April 18, 2000, November 30, 2000, January 1, 2002, January 1, 2003, January 2, 2004 and January 3, 2005 (collectively, the “Old Option Agreements”), the Company shall annually grant to Xxxxxx on or about each of January 1, 2006 and January 1, 2007 long-term equity incentive compensation in such form as the Committee may reasonably determine having a value equal to the value on the date hereof, using the Black-Scholes option valuation methodology as calculated by the Company’s independent accounting firm or compensation consulting firm, of stock options to purchase an aggregate of One Hundred Fifty-Seven Thousand (157,000) shares of Common Stock in the Company (the “New Equity Grants”) at an exercise price equal to the fair market value of a share of Common Stock in the Company as defined in the Plan and expiring on the fifth (5th) anniversary of the grant date. The New Equity Grants will vest with respect to the following percentage of each New Equity Grant on the dates set forth below, provided that Xxxxxx is in the Service (as defined below) of the Company or one of its subsidiaries on each such date:
|
|
|
|
|
|
|
|
Date |
|
|
Percentage |
|
|
|
|
|
|
|
First anniversary of grant date |
|
33.33% |
||
|
Second anniversary of grant date |
|
33.33% |
||
|
Third anniversary of grant date |
|
33.34% |
||
For purposes of this Section 2(d), Xxxxxx shall be considered to be in the “Service” of the Company or one of its subsidiaries if he is a common law employee of the Company (or one if its subsidiaries, as applicable). Notwithstanding any other provision hereof,
2
following the termination of Xxxxxx’x employment by the Company without Cause, a voluntary termination by Xxxxxx for Good Reason, upon the expiration of this Employment Agreement without the Company having previously offered to renew this Employment Agreement on commercially reasonable terms as determined by the Company in good faith, or the upon the occurrence of a Change of Control (as defined in the Plan) prior to the termination of Xxxxxx’x employment hereunder for any reason, the then unvested portion of the New Equity Grants will immediately become vested. The New Equity Grants shall also have such other terms not inconsistent with the foregoing as shall be determined by the Company and set forth in a grant agreement.
Section 3. Benefits; Expense Reimbursement.
During the Term, Xxxxxx shall participate in any group insurance, accident, sickness and hospitalization insurance, and any other employee benefit plans of the Company in effect during the Term and available to the Company’s executive officers. Without limiting the generality of the foregoing, during the Term, the Company will provide Xxxxxx at its expense with a term life insurance policy with a death benefit equal to two (2) times Xxxxxx’x Annual Salary, the beneficiary to be named by Xxxxxx; provided that the Company shall not be required to incur annual expense in excess of $5,000 in connection with such term life insurance policy. Xxxxxx shall have the right to reimbursement, upon proper accounting, of reasonable expenses and disbursements incurred by him in the course of his duties hereunder. In addition, during each year of the Term, Xxxxxx shall be entitled to five (5) weeks of paid vacation.
Section 4. Employment Termination.
(a) At any time during the Term, and except as otherwise provided in Sections 4(b) and 4(c) hereof, the Company shall only have the right to terminate this Employment Agreement and Xxxxxx’x employment with the Company hereunder, upon written notice to Xxxxxx, in the event Xxxxxx engages in conduct which constitutes “Cause.” For purposes of this Employment Agreement, Cause shall mean (i) Xxxxxx’x willful misconduct in the performance of his obligations under this Employment Agreement or gross negligence in the performance of his obligations under this Employment Agreement, (ii) dishonesty or misappropriation by Xxxxxx relating to the Company or any of its funds, properties, or other assets, (iii) inexcusable repeated or prolonged absence from work by Xxxxxx (other than as a result of, or in connection with, a disability), (iv) any unauthorized disclosure by Xxxxxx of confidential or proprietary information of the Company which is reasonably likely to result in material harm to the Company, (v) a conviction of Xxxxxx (including entry of a guilty or nolo contendere plea) involving fraud, dishonesty, or moral turpitude, or involving a violation of federal or state securities laws, or (vi) the failure by Xxxxxx to attempt to perform faithfully his duties hereunder, or other material breach by Xxxxxx of this Employment Agreement, and such failure or breach is not cured, to the extent cure is possible, by Xxxxxx within thirty (30) days after written notice thereof from the Company to Xxxxxx; provided, however, that no event or condition described in clauses (i), (ii), (iii), (iv) and (vi) shall constitute Cause unless (x) the Company first gives Xxxxxx written notice of its intention to terminate his employment for Cause and the grounds for such termination no fewer than ten (10) days
3
prior to the date of termination; and (y) Xxxxxx is provided the opportunity to appear before the Board, with or without legal representation at his election to present arguments on his own behalf; provided further, however, that notwithstanding anything to the contrary in this Agreement and subject to the other terms of this proviso, the Company may take any and all actions, including without limitation suspension (but not without pay), it deems appropriate with respect to Xxxxxx and his duties at the Company pending such appearance. No act or failure to act on Xxxxxx’x part will be considered “willful” unless done, or omitted to be done, by Xxxxxx not in good faith and without reasonable belief that his action or omission was in the best interests of the Company. If this Employment Agreement and Xxxxxx’x employment with the Company hereunder is terminated for Cause, or if Xxxxxx voluntarily resigns (which he may do at any time) from the Company without Good Reason during the Term, the Company shall pay Xxxxxx a lump sum amount within thirty (30) days of such termination, equal to the sum of (A) all earned but unpaid portions of the Annual Salary, (B) any earned but unpaid Annual Bonus for a previously completed fiscal year of the Company, (C) reimbursement for any unreimbursed business expenses incurred by Xxxxxx prior to the date of termination or resignation (the “Termination Date”) subject to reimbursement pursuant to Section 3, and (D) payment for any unused vacation days through the Termination Date, and (E) any other amounts or benefits (other than severance, termination or similar pay) required to be paid or provided by law or under any plan, program or policy of the Company ((A)-(E) collectively, the “Accrued Amounts”), and following any such termination, Xxxxxx shall not be entitled to receive any other compensation or benefits from the Company hereunder, including, without limitation, any portion of the Annual Bonus for the year in which he is terminated.
(b) This Employment Agreement and Xxxxxx’x employment with the Company hereunder may also be terminated by the Company without Cause, or by Xxxxxx upon the occurrence of an event constituting Good Reason. For purposes of this Employment Agreement, “Good Reason” shall mean (i) the failure of the Company to cure a material adverse change made by it in Xxxxxx’x authority, functions, duties, or responsibilities in his position with the Company as provided in this Employment Agreement, or (ii) prior to a Change in Control, any adverse change in Xxxxxx’x positions, titles or reporting responsibility (such that Xxxxxx reports to a person other than the Board), or (iii) the assignment of duties to Xxxxxx that are inconsistent with his position and status as Chairman and Chief Executive Officer, or (iv) a reduction in the Annual Salary during the Term, or (v) the failure of the Company to cure any other material breach of this Employment Agreement (as described below), or (vi) in connection with the occurrence of a Change of Control, there is a significant reduction of Xxxxxx’x authority, duties or responsibilities relative to his authority, duties or responsibilities in effect immediately prior to such reduction; provided, however, that the foregoing provision shall not include a reduction in duties or responsibilities solely by virtue of the Company being acquired and made part of a larger entity (as, for example, if Xxxxxx is not appointed as Chief Executive Officer of the acquiring corporation, but continues to have a substantially similar level of responsibility over the affairs of the Company following such Change of Control), or (vii) Xxxxxx’x relocation by the Company or a successor thereto to a location more than fifty (50) miles from either the Company’s
4
current headquarters or Bridgewater, New Jersey; provided that in the case of (i) through (v) above, the Company has failed to cure the event constituting Good Reason within thirty (30) days following written notice thereof from Xxxxxx. In the event that Xxxxxx’x employment with the Company shall terminate during the Term on account of termination by the Company without Cause, or by Xxxxxx with Good Reason, then the Company shall pay or provide to Xxxxxx, as his sole and exclusive remedy hereunder, (A) the Accrued Amounts, (B) a pro rata (based on the number of days employed in the year of termination or resignation) bonus for the fiscal year in which such termination or resignation occurs based on the average of the Annual Bonuses paid to Xxxxxx for the two (2) years immediately preceding such termination or resignation (a “Pro Rated Bonus”), (C) group life, disability, sickness, hospitalization and accident insurance benefits equivalent to those to which Xxxxxx would have been entitled if he had continued working for the Company for an additional twelve (12) month period following the Termination Date, (D) 100% of the Annual Salary to the same extent to which Xxxxxx would have been entitled if he had continued working for the Company for an additional twelve (12) month period following the Termination Date, and (E) 50% of the Annual Salary to the same extent to which Xxxxxx would have been entitled if he had continued working for the Company for the period, if any, commencing on the first anniversary of the Termination Date and ending on December 31, 2007. The payments provided for in (A), (B), (D) and (E) above shall be made to Xxxxxx in a lump sum payment within thirty (30) days following such termination or resignation; provided that the payments provided for in (D) and (E) shall be contingent upon Xxxxxx’x continued compliance with Sections 5 and 6 hereof (except that Xxxxxx shall not be deemed for purposes of this Section 4(b) not to have been in compliance with Section 6 solely as a result of an unintentional and immaterial disclosure of confidential information) and Xxxxxx shall be obligated to repay all such payments upon determination by the Board that Xxxxxx has failed to comply as such with Sections 5 or 6 hereof; and provided further that the benefits continuation provided for in (C) above shall terminate upon Xxxxxx’x becoming eligible for corresponding benefits in connection with new employment.
(c) This Employment Agreement and Xxxxxx’x employment with the Company hereunder shall terminate immediately and automatically upon (i) the death or Disability (as defined below) of Xxxxxx or (ii) the expiration of the Term. For purposes of this Employment Agreement, “Disability” shall mean physical or mental incapacity of a nature which prevents Xxxxxx, in the good faith judgment of the Company’s Board of Directors, from performing his duties under this Employment Agreement for a period of 90 consecutive days or 150 days during any year with each year under this Employment Agreement commencing on each anniversary of the date hereof. If this Employment Agreement and Xxxxxx’x employment with the Company hereunder is terminated on account of (i) or (ii) above, then the Company shall pay Xxxxxx, or his estate, conservator or designated beneficiary, as the case may be, an amount equal to (A) the Accrued Amounts, and (B) a Pro Rated Bonus, and following any such termination, neither Xxxxxx, nor his estate, conservator or designated beneficiary, as the case may be, shall be entitled to receive any other compensation or benefits from the Company hereunder, provided, however, that if Xxxxxx’x employment is terminated on account of (ii) above, and the Company has not previously offered to renew this Employment Agreement on
5
commercially reasonable terms as determined by the Company in good faith, then the Company shall also pay or provide to Xxxxxx (C) group life, disability, sickness, hospitalization and accident insurance benefits equivalent to those to which Xxxxxx would have been entitled if he had continued working for the Company for an additional twelve (12) month period, and (D) the Annual Salary to the same extent to which Xxxxxx would have been entitled if he had continued working for the Company for an additional twelve (12) month period. The payments provided for in (A), (B) and (D) above shall be made in a lump sum payment within thirty (30) days following such termination; provided that the payments provided for in (D) shall be contingent upon Xxxxxx’x continued compliance with Sections 5 and 6 hereof (except that Xxxxxx shall not be deemed for purposes of this Section 4(c) not to have been in compliance with Section 6 solely as a result of an unintentional and immaterial disclosure of confidential information) and Xxxxxx shall be obligated to repay all such payments upon determination by the Board that Xxxxxx has failed to comply as such with Sections 5 or 6 hereof; and provided further that the benefits continuation provided for in (C) above shall terminate upon Xxxxxx’x becoming eligible for corresponding benefits in connection with new employment.
(d) This Employment Agreement and Xxxxxx’x employment with the Company hereunder shall terminate immediately and automatically upon the final and complete liquidation or dissolution of the Company or a final and complete shutdown of the business then conducted by the Company(each, a “Liquidation Event”). In the event that Xxxxxx remains employed by the Company under this Employment Agreement until the time of any Liquidation Event, then the Company shall pay to Xxxxxx, as his sole and exclusive remedy hereunder, an amount equal to his then-current Annual Salary and the Accrued Amounts, less any amounts required to be withheld by law.
(e) Upon the termination of this Employment Agreement pursuant to Section 4 hereof, the Company shall have no further obligations under this Employment Agreement; provided, (except for amounts and benefits payable in Section 2 thru 4 above) however, that Sections 5 through 25 hereof shall survive and remain in full force and effect.
Section 5. Non-Competition.
(a) Xxxxxx hereby agrees that, during the period from the Commencement Date through the end of the first twelve (12) months after the cessation of Xxxxxx’x employment with the Company, he will not engage in “Competition” with the Company. For purposes of this Employment Agreement, Competition by Xxxxxx shall mean Xxxxxx’x engaging in, or otherwise directly or indirectly being employed by or acting as a consultant or lender to, or being a director, officer, employee, principal, agent, stockholder, member, owner or partner of, or permitting his name to be used in connection with the activities of any other business or organization anywhere in the United States which primarily engages in the business of providing original editorial financial news and commentary over the Internet (a “Competing Business”);provided, however, that, notwithstanding the foregoing, it shall not be a violation of this Section 5(a) for Xxxxxx to (x) become the registered or beneficial owner of up to three percent
6
(3%) of any class of the capital stock of a competing corporation registered under the Securities Exchange Act of 1934, as amended, provided that Xxxxxx does not otherwise participate in the business of such corporation or (y) work in a non-competitive business of a company which is carrying on a Competing Business, the revenues of which represent less than 20% of the consolidated revenues of that company, or, as a result thereof, owning compensatory equity in that company.
(b) Xxxxxx hereby agrees that, during the period from the Commencement Date through the end of the first twelve (12) months after the cessation of Xxxxxx’x employment with the Company, he will not solicit for employment or hire, in any business enterprise or activity, any employee of the Company who was employed by the Company during the Term; provided, the foregoing shall not be violated by general advertising not targeted at Company employees nor by serving as a reference upon request.
Section 6. Confidentiality; Intellectual Property.
(a) Except as otherwise provided in this Employment Agreement, at all times during and after the Term, Xxxxxx shall keep secret and retain in strictest confidence, any and all confidential information relating to the Company, and shall use such confidential information only in furtherance of the performance by him of his duties to the Company and not for personal benefit or the benefit of any interest adverse to the Company’s interests. For purposes of this Employment Agreement, “confidential information” shall mean any information including without limitation plans, specifications, models, samples, data, customer lists and customer information, computer programs and documentation, and other technical and/or business information, in whatever form, tangible or intangible, that can be communicated by whatever means available at such time, that relates to the Company’s current business or future business contemplated during the Term, products, services and development, or information received from others that the Company is obligated to treat as confidential or proprietary (provided that such confidential information shall not include any information that (a) has become generally available to the public or is generally known in the relevant trade or industry other than as a result of an improper disclosure by Xxxxxx, or (b) was available to or became known to Xxxxxx prior to the disclosure of such information on a non-confidential basis without breach of any duty of confidentiality to the Company), and Xxxxxx shall not disclose such confidential information to any Person other than the Company, except with the prior written consent of the Company, as may be required by law or court or administrative order (in which event Xxxxxx shall so notify the Company as promptly as practicable), or in performance of his duties hereunder. Further, this Section 6(a) shall not prevent Xxxxxx from disclosing Confidential Information in connection with any litigation, arbitration or mediation to enforce this Employment Agreement, provided that such disclosure is necessary for Xxxxxx to assert any claim or defense in such proceeding.
(b) Upon termination of the Term for any reason, Xxxxxx shall return to the Company all copies, reproductions and summaries of confidential information in his possession and erase the same from all media in his possession, and, if the Company so
7
requests, shall certify in writing that he has done so. All confidential information is and shall remain the property of the Company (or, in the case of information that the Company receives from a third party which it is obligated to treat as confidential, then the property of such third party); provided, Xxxxxx shall be entitled to retain copies of (i) information showing his compensation or relating to reimbursement of expenses, (ii) information that is required for the preparation of his personal income tax return, (iii) documents provided to him in his capacity as a participant in any employee benefit plan, policy or program of the Company and (iv) this Employment Agreement and any other agreement by and between him and the Company with regard to his employment or termination thereof.
(c) All Intellectual Property (as hereinafter defined) and Technology (as hereinafter defined) created, developed, obtained or conceived of by Xxxxxx during the Term, and all business opportunities presented to Xxxxxx during the Term, shall be owned by and belong exclusively to the Company, provided that they reasonably relate to any of the business of the Company on the date of such creation, development, obtaining or conception, and Xxxxxx shall (i) promptly disclose any such Intellectual Property, Technology or business opportunity to the Company, and (ii) execute and deliver to the Company, without additional compensation, such instruments as the Company may require from time to time to evidence its ownership of any such Intellectual Property, Technology or business opportunity. For purposes of this Employment Agreement, (x) the term “Intellectual Property” means and includes any and all trademarks, trade names, service marks, service names, patents, copyrights, and applications therefor, and (y) the term “Technology” means and includes any and all trade secrets, proprietary information, invention, discoveries, know-how, formulae, processes and procedures.
Section 7. Covenants Reasonable.
The parties acknowledge that the restrictions contained in Sections 5 and 6 hereof are a reasonable and necessary protection of the immediate interests of the Company, and any violation of these restrictions could cause substantial injury to the Company and that the Company would not have entered into this Employment Agreement, without receiving the additional consideration offered by Xxxxxx in binding himself to any of these restrictions. In the event of a breach or threatened breach by Xxxxxx of any of these restrictions, the Company shall be entitled to apply to any court of competent jurisdiction for an injunction restraining Xxxxxx from such breach or threatened breach; provided however, that the right to apply for an injunction shall not be construed as prohibiting the Company from pursuing any other available remedies for such breach or threatened breach.
Section 8. No Third Party Beneficiary.
This Employment Agreement is not intended and shall not be construed to confer any rights or remedies hereunder upon any Person, other than the parties hereto or their permitted assigns (including, without limitation, Xxxxxx’x estate following his death). “Person” shall mean an individual, corporation, partnership, limited liability
8
company, limited liability partnership, association, trust or other unincorporated organization or entity.
Section 9. Notices.
Unless otherwise provided herein, any notice, exercise of rights or other communication required or permitted to be given hereunder shall be in writing and shall be given by overnight delivery service such as Federal Express, telecopy (or like transmission) or personal delivery against receipt, or mailed by registered or certified mail (return receipt requested), to the party to whom it is given at such party’s address set forth below such party’s name on the signature page or such other address as such party may hereafter specify by notice to the other party hereto. Any notice or other communication shall be deemed to have been given as of the date so personally delivered or transmitted by telecopy or like transmission or on the next business day when sent by overnight delivery service.
Section 10. Representations.
The Company hereby represents and warrants that the execution and delivery of this Employment Agreement and the performance by the Company of its obligations hereunder have been duly authorized by all necessary corporate action of the Company.
Section 11. Amendment.
This Employment Agreement may be amended only by a written agreement signed by the parties hereto.
Section 12. Binding Effect.
The rights and duties under this Employment Agreement are not assignable by Xxxxxx other than as a result of his death. None of Xxxxxx’x rights under this Employment Agreement shall be subject to any encumbrances or the claims of Xxxxxx’x creditors. This Employment Agreement shall be binding upon and inure to the benefit of the Company and any successor organization which shall succeed to the Company by merger or consolidation or operation of law, or by acquisition of all or substantially all of the assets of the Company (provided that a successor by way of acquisition of assets shall have undertaken in writing to assume the obligations of the Company hereunder).
Section 13. Governing Law.
This Employment Agreement shall be governed by and construed in accordance with the internal laws of the State of New York applicable to contracts to be performed wholly within the state and without regard to its conflict of laws provisions.
9
Section 14. Severability.
If any provision of this Employment Agreement, including those contained in Sections 5 and 6 hereof, shall for any reason be held invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions hereof shall not be affected or impaired thereby. Moreover, if any one or more of the provisions of this Employment Agreement, including those contained in Sections 5 and 6 hereof, shall be held to be excessively broad as to duration, activity or subject, such provisions shall be construed by limiting and reducing them so as to be enforceable to the maximum extent allowable by applicable law. To the extent permitted by applicable law, each party hereto waives any provision of law that renders any provision of this Employment Agreement invalid, illegal or unenforceable in any way.
Section 15. Execution in Counterparts.
This Employment Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original and all of which shall constitute one and the same instrument.
Section 16. Entire Agreement.
This Employment Agreement, together with the Old Option Agreements, sets forth the entire agreement, and supersedes all prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof and thereof.
Section 17. Titles and Headings.
Titles and headings to Sections herein are for purposes of reference only, and shall in no way limit, define or otherwise affect the meaning or interpretation of any of the provisions of this Employment Agreement.
Section 18. Conflicts of Interest.
Xxxxxx specifically covenants, warrants and represents to the Company that he has the full, complete and entire right and authority to enter into this Employment Agreement, that he has no agreement, duty, commitment or responsibility of any kind or nature whatsoever with any corporation, partnership, firm, company, joint venture or other entity or other Person which would conflict in any manner whatsoever with any of his duties, obligations or responsibilities to the Company pursuant to this Employment Agreement, that he is not in possession of any document or other tangible property of any other Person of a confidential or proprietary nature which would conflict in any manner whatsoever with any of his duties, obligations or responsibilities to the Company pursuant to his Employment Agreement, and that he is fully ready, willing and able to perform each and all of his duties, obligations and responsibilities to the Company pursuant to this Employment Agreement.
10
Section 19. Consent to Jurisdiction.
Xxxxxx hereby irrevocably submits to the jurisdiction of any New York State or Federal court sitting in the City of New York in any action or proceeding to enforce the provisions of this Employment Agreement, and waives the defense of inconvenient forum to the maintenance of any such action or proceeding.
Section 20. Indemnification.
The Company agrees that if Xxxxxx is or is made a party, or is threatened to be made a party, to any action, suit or proceeding (a “Proceeding”), by reason of the fact that he is or was a director, officer or employee of the Company or is or was serving at the request of the Company as a director, officer, member, employee or agent of another entity, Xxxxxx shall be fully indemnified and held harmless by the Company to the fullest extent permitted by law against all cost, expense, liability and loss reasonably incurred or suffered by Xxxxxx in connection therewith, and such indemnification shall continue after termination of Xxxxxx’x employment with respect to acts or omissions which occurred prior to his termination of employment and which occur after his termination of employment pursuant to this Section 20, and shall inure to the benefit of Xxxxxx’x heirs, executors and administrators. To the fullest extent allowed by law, the Company shall advance to Xxxxxx all reasonable costs and expenses incurred by him in connection with a Proceeding within 20 calendar days after receipt by the Company of a written request for such advance. Such request shall include an undertaking by Xxxxxx to repay the amount of such advance if it shall ultimately be determined that he is not entitled to be indemnified against such costs and expenses.
Section 21. Liability Insurance.
The Company shall cover Xxxxxx under directors and officers liability insurance both during and, while potential liability exists, after the Term in the same amount and to the same extent as the Company generally provides to its other senior executive officers and directors. This provision shall in all events survive any termination of this Employment Agreement.
Section 22. No Duty to Mitigate.
Xxxxxx shall have no duty to mitigate or off-set any amounts payable by the Company to Xxxxxx hereunder.
Section 23. Release
As a condition to the obligation of the Company to make the payments provided for in this Employment Agreement and otherwise perform its obligations hereunder to Xxxxxx upon termination of Xxxxxx’x employment (other than due to his death), Xxxxxx or his legal representatives shall deliver to the Company a written release, substantially in the form attached hereto as Exhibit A, and the time for revocation of such
11
release shall have expired; provided, however, that such release shall be conditioned on the receipt from the Company of a release of Xxxxxx, provided that such release from the Company shall not be such a condition and shall be null and void and of no force or effect in the event of any act or omission by Xxxxxx that could constitute the basis for termination for Cause or that could be a crime of any kind.
Section 24. Legal Fees.
The Company shall pay the reasonable legal fees incurred by Xxxxxx in connection with this Employment Agreement in an amount not to exceed $20,000.
Section 25. Section 409A.
(a) Notwithstanding any provision of this Employment Agreement to the contrary, if Xxxxxx is a “specified employee” as defined under Section 409A (“Section 409A”) of the Internal Revenue Code of 1996, as amended or any regulations or Treasury guidance promulgated thereunder, Xxxxxx shall not be entitled to any payments upon a termination of his employment until the earlier of (i) the date which is six months after his termination of employment for any reason other than death or (ii) the date of his death. The provisions of this Section 25(a) shall only apply if required to comply with Section 409A.
(b) If any provision of this Employment Agreement (or of any award of compensation, including equity compensation or benefits) would cause Xxxxxx to incur any additional tax or interest under Section 409A, the parties agree to negotiate in good faith to reform such provision in such manner as to maintain, to the maximum extent practicable, the original intent and economic terms of the applicable provision without violating the provisions of Section 409A.
[END OF TEXT]
12
IN WITNESS WHEREOF, the undersigned have executed this Employment Agreement as of the date first written above.
|
|
|
|
|
|
|
|
/s/ Xxxxxx X. Xxxxxx, Xx. |
|
||
|
|
|
|
||
|
|
Xxxxxx X. Xxxxxx, Xx. |
|
||
|
|
0 Xxxxxxxxxx Xxxxx |
|
||
|
|
Xxxxxxxxxxx, Xxx Xxxxxx 00000 |
|
||
|
|
|
|
||
|
|
XXXXXXXXX.XXX, INC. |
|
||
|
|
|
|
||
|
|
By: /s/ Xxxxxxx Xxxxxxxxxx |
|
||
|
|
|
|
|
|
|
|
Name: Xxxxxxx Xxxxxxxxxx |
|
||
|
|
Title: Director, Member of Compensation Committee |
|||
|
|
|
|
||
|
|
By: /s/ Xxxxxx Xxxxxx |
|
||
|
|
|
|
|
|
|
|
Name: Xxxxxx Xxxxxx |
|
||
|
|
Title: Director, Member of Compensation Committee |
|||
|
|
|
|
||
|
|
Address: |
00 Xxxx Xxxxxx |
|
|
|
|
|
|
00xx Xxxxx |
|
|
|
|
Xxx Xxxx, XX 00000 |
|
|
|
|
Telephone No.: (000) 000-0000 |
|
||
|
|
Telecopy No.: (000) 000-0000 |
|
||
13
EXHIBIT A
Form of Release
This Release (this “Release”) is entered into by Xxxxxx X. Xxxxxx, Xx. (“Xxxxxx”) and XxxXxxxxx.xxx, Inc., a Delaware corporation (the “Company”), effective as of [DATE] (the “Effective Date”).
In consideration of the promises set forth in the Employment Agreement between Xxxxxx and the Company, dated as of January 1, 2006 (the “Employment Agreement”), Xxxxxx and the Company agree as follows:
1. General Releases and Waivers of Claims.
(a) Xxxxxx’x Release of Company. In consideration of the payments and benefits provided to Xxxxxx under the Employment Agreement and after consultation with counsel, Xxxxxx and each of his respective heirs, executors, administrators, representatives, agents, successors and assigns (collectively, the “Xxxxxx Parties”) hereby irrevocably and unconditionally release and forever discharge the Company and its subsidiaries and affiliates and each of their respective officers, employees, directors, shareholders and agents (“Company Parties”) from any and all claims, actions, causes of action, rights, judgments, fees and costs (including attorneys’ fees), obligations, damages, demands, accountings or liabilities of whatever kind or character (collectively, “Claims”), including, without limitation, any Claims based upon contract, tort, or under any federal, state, local or foreign law, that the Xxxxxx Parties may have, or in the future may possess, arising out of any aspect of Xxxxxx’x employment relationship with and service as an employee, officer, director or agent of the Company, or the termination of such relationship or service, that occurred, existed or arose on or prior to the date hereof; provided, however, that Xxxxxx does not release, discharge or waive (i) any rights to payments and benefits provided under the Employment Agreement that are contingent upon the execution by Xxxxxx of this Release, (ii) any right Xxxxxx may have to enforce this Release or the Employment Agreement, (iii) Xxxxxx’x eligibility for indemnification in accordance with the Company’s certificate of incorporation, bylaws or other corporate governance document, or any applicable insurance policy, with respect to any liability he incurred or might incur as an employee, officer or director of the Company, including, without limitation, pursuant to Section 21 of the Employment Agreement, or (iv) any claims for accrued, vested benefits under any employee benefit or pension plan of the Company Parties subject to the terms and conditions of such plan and applicable law including, without limitation, any such claims under the Employee Retirement Income Security Act of 1974.
(b) Executive’s Specific Release of ADEA Claims. In further consideration of the payments and benefits provided to Xxxxxx under the Employment Agreement, the Xxxxxx Parties hereby unconditionally release and forever discharge the Company Parties from any and all Claims that the Xxxxxx Parties may have as of the date Xxxxxx signs this Release arising under the Federal Age Discrimination in Employment Act of 1967, as amended, and the applicable rules and regulations promulgated
thereunder (“ADEA”). By signing this Release, Xxxxxx hereby acknowledges and confirms the following: (i) Xxxxxx was advised by the Company in connection with his termination to consult with an attorney of his choice prior to signing this Release and to have such attorney explain to him the terms of this Release, including, without limitation, the terms relating to his release of claims arising under ADEA, and Xxxxxx has in fact consulted with an attorney; (ii) Xxxxxx was given a period of not fewer than 21 days to consider the terms of this Release and to consult with an attorney of his choosing with respect thereto; and (iii) Xxxxxx knowingly and voluntarily accepts the terms of this Release. Xxxxxx also understands that he has seven (7) days following the date on which he signs this Release within which to revoke the release contained in this paragraph, by providing the Company a written notice of his revocation of the release and waiver contained in this paragraph.
(c) Company’s Release of Executive. The Company for itself and on behalf of the Company Parties hereby irrevocably and unconditionally release and forever discharge the Xxxxxx Parties from any and all Claims, including, without limitation, any Claims based upon contract, tort, or under any federal, state, local or foreign law, that the Company Parties may have, or in the future may possess, arising out of any aspect of Xxxxxx’x employment relationship with and service as an employee, officer, director or agent of the Company, or the termination of such relationship or service, that occurred, existed or arose on or prior to the date hereof, excepting any Claim which would constitute or result from conduct by Xxxxxx that could constitute the basis for termination for Cause under the Employment Agreement or could be a crime of any kind. Anything to the contrary notwithstanding in this Release, nothing herein shall release Xxxxxx or any other Executive Party from any Claims based on any right the Company may have to enforce this Release or the Employment Agreement.
(d) No Assignment. The parties represent and warrant that they have not assigned any of the Claims being released under this Release.
2. Proceedings. Neither Xxxxxx nor the Company have filed, any complaint, charge, claim or proceeding against the other party before any local, state or federal agency, court or other body relating to Xxxxxx’x employment or the termination thereof (each, individually, a “Proceeding”).
3. Remedies.
(a) In the event Xxxxxx initiates or voluntarily participates in any Proceeding involving any of the matters waived or released in this Release, or if he fails to abide by any of the terms of this Release, or if he revokes the ADEA release contained in Paragraph 2(b) of this Release within the seven-day period provided under Paragraph 2(b), the Company may, in addition to any other remedies it may have, reclaim any amounts paid to him, and terminate any benefits or payments that are due, pursuant to the termination provisions of the Employment Agreement, without waiving the release granted herein. In addition, in the event that the Board of Directors of the Company determines that Xxxxxx has failed to comply with Sections 5 and/or 6 of the Employment Agreement (other than as a result of an unintentional and immaterial disclosure of
2
confidential information), the Company may, in addition to any other remedies it may have, reclaim any amounts paid to him pursuant to Sections 4(b)(D) and (E) or Section 4(c)(D) of the Employment Agreement, without waiving the release granted herein. Xxxxxx acknowledges and agrees that the remedy at law available to the Company for breach of any of his post-termination obligations under the Employment Agreement or his obligations herein would be inadequate and that damages flowing from such a breach may not readily be susceptible to being measured in monetary terms. Accordingly, Xxxxxx acknowledges, consents and agrees that, in addition to any other rights or remedies that the Company may have at law or in equity, the Company shall be entitled to seek a temporary restraining order or a preliminary or permanent injunction, or both, without bond or other security, restraining Xxxxxx from breaching his post-termination obligations under the Employment Agreement or his obligations hereunder. Such injunctive relief in any court shall be available to the Company, in lieu of, or prior to or pending determination in, any arbitration proceeding.
(b) Xxxxxx understands that by entering into this Release he will be limiting the availability of certain remedies that he may have against the Company and limiting also his ability to pursue certain claims against the Company.
(c) The Company acknowledges and agrees that the remedy at law available to Xxxxxx for breach of any of its post-termination obligations under the Employment Agreement or its obligations hereunder would be inadequate and that damages flowing from such a breach may not readily be susceptible to being measured in monetary terms. Accordingly, the Company acknowledges, consents and agrees that, in addition to any other rights or remedies that Xxxxxx may have at law or in equity, Xxxxxx shall be entitled to seek a temporary restraining order or a preliminary or permanent injunction, or both, without bond or other security, restraining the Company from breaching its post-termination obligations under the Employment Agreement or its obligations hereunder. Such injunctive relief in any court shall be available to Xxxxxx, in lieu of, or prior to or pending determination in, any arbitration proceeding.
(d) The Company understands that by entering into this Release it will be limiting the availability of certain remedies that it may have against Xxxxxx and limiting also its ability to pursue certain claims against Xxxxxx.
4. Severability Clause. In the event any provision or part of this Release is found to be invalid or unenforceable, only that particular provision or part so found, and not the entire Release, will be inoperative.
5. Nonadmission. Nothing contained in this Release will be deemed or construed as an admission of wrongdoing or liability on the part of the Company or Xxxxxx.
6. Governing Law. All matters affecting this Release, including the validity thereof, are to be governed by, and interpreted and construed in accordance with, the laws of the New York applicable to contracts executed in and to be performed in that State.
3
7. Notices. All notices or communications hereunder shall be made in accordance with Section 9 of the Employment Agreement:
XXXXXX ACKNOWLEDGES THAT HE HAS READ THIS RELEASE AND THAT HE FULLY KNOWS, UNDERSTANDS AND APPRECIATES ITS CONTENTS, AND THAT HE HEREBY EXECUTES THE SAME AND MAKES THIS RELEASE AND THE RELEASE AND AGREEMENTS PROVIDED FOR HEREIN VOLUNTARILY AND OF HIS OWN FREE WILL.
IN WITNESS WHEREOF, the parties have executed this Release as of the date first set forth above.
|
|
|
|
|
|
|
|
||
|
|
XXXXXXXXX.XXX, INC. |
||
|
|
|
||
|
|
By: |
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
Xxxxxx X. Xxxxxx, Xx. |
||
4
