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EXHIBIT 10.2
XXXX EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (this "AGREEMENT") is made as of
April 28, 2000, between PROXICOM, INC., a Delaware corporation (the "COMPANY"),
and Xxxxxx Xxxx (the "EXECUTIVE").
RECITALS
A. An Affiliate has employed Executive prior to the date hereof as
an Executive and the Company wishes to Executive to serve as President on and
after the effective date hereof on the terms and conditions hereof.
B. This Agreement replaces and supercedes any prior employment
agreement entered into between Executive, the Company and any Affiliates.
AGREEMENT
NOW, THEREFORE, in consideration of the promises and mutual obligations
of the parties contained herein, and for other valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. ENGAGEMENT. The Company hereby engages Executive to serve as
President of the Company, and Executive agrees to serve the Company in the
capacities, and subject to the terms and conditions, set forth in this
Agreement.
2. SERVICES. While employed by the Company or an Affiliate,
Executive, as President of the Company, shall have all the duties and
responsibilities customarily rendered by presidents of companies of similar size
and nature and as may be delegated from time to time by the Board in its sole
discretion. Executive will devote his best efforts and substantially all of his
business time and attention (except for vacation periods and periods of illness
or other incapacity) to the business of the Company and its Affiliates.
Notwithstanding the foregoing, and provided that such activities do not
interfere with the fulfillment of Executive's obligations hereunder, Executive
may (A) serve as a director or trustee of any charitable or non-profit entity;
(B) acquire investment interests in one (1) or more entities which are not,
directly or indirectly, in competition with the Company or its Affiliates and
which do not provide supplies to the Company; or (C) own up to one percent (1%)
of the outstanding voting securities of any publicly held company regardless of
whether such publicly held company is in competition with the Company. Unless
the Company and Executive agree to the contrary, Executive's place of employment
shall be at the Company's offices in New York City, New York; provided, however,
that Executive will travel to such other
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locations of the Company and its Affiliates as may be reasonably necessary
and/or as required by the Board in its sole discretion in order to discharge his
duties hereunder.
3. COMPENSATION
(a) SALARY, BONUS AND BENEFITS. The Company or an Affiliate
will pay Executive a base salary (the "ANNUAL BASE SALARY") as the Board may
designate from time to time, which initial Annual Base Salary shall be at the
rate of $400,000 per annum. Executive's Annual Base Salary may be reviewed by
the Board (or its Compensation Committee) periodically but shall be reviewed at
least annually. Executive's base salary shall be subject to increase in
connection with any such review(s) but shall not be subject to decrease except
as part of a general company or management reduction in salaries. Executive
shall be eligible to receive a bonus of up to 50% of Executive's Annual Base
Salary for each year as determined by the Board in its sole discretion, based
upon the Company's achievement of budgetary and other objectives set by the
Board. In addition, while employed, Executive will be entitled to such other
benefits approved by the Board and made generally available to the Company's or
Affiliate's senior management (including health, dental, vision, life insurance,
three weeks accrued vacation, sick leave accrual and paid holidays). Executive
will also receive life insurance and disability insurance consistent with that
provided by comparable companies to similarly situated executives.
(b) STOCK OPTIONS. On February 4, 2000, Executive received
options to purchase one million (1,000,000) post-stock split shares of Company
common stock at an option exercise price equal to the fair market value of the
shares of stock on the date of grant pursuant to the terms of the Proxicom Stock
Option Plan. The options vest in accordance with the following schedule: 100,000
options on the date of grant, 37,500 options at the end of each quarter for the
first four (4) quarters after the grant date and 62,500 options at the end of
each subsequent quarter until full vesting. On April 17, 2000 Executive received
an option to purchase two hundred thousand (200,000) shares of Company common
stock at an option exercise price equal to the fair market value of the stock on
the date of grant pursuant to the terms of the Proxicom Stock Option Plan. The
options vest in accordance with the following schedule: 100,000 options on the
date of grant, 6,250 options at the end of each quarter until full vesting. In
the event of a change of control of the Company (defined as the sale of greater
than fifty percent (50%) of the common stock or assets of the Company to a
purchaser), Executive will be credited with an additional twelve (12) months
towards vesting in the stock options if, after the change of control, any of the
following occur: (i) Executive's employment is terminated; (ii) Executive's then
current position, authority, duties or responsibilities are diminished; (iii)
Executive's base salary is reduced; or (iv) Executive is required to move his
primary office more than fifty (50) miles from the metropolitan area in which it
was located immediately before the change of control.
4. TERMINATION.
(a) EVENTS OF TERMINATION. Executive's employment with the
Company or its Affiliates shall cease upon:
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(i) Executive's death.
(ii) Executive's disability, which means his
incapacity due to physical or mental illness such that he is unable to
perform the duties and services required of his position for a
continuous period of ninety (90) days or for a period of one hundred
twenty (120) days out of any twelve (12) month period.
(iii) Termination by the Company or an Affiliate by the
delivery to Executive of a written notice from the Board that Executive
has been terminated ("NOTICE OF TERMINATION") with or without Cause.
"CAUSE" shall mean: Executive's (aa) conviction of a felony; (bb)
chronic alcoholism or substance abuse; or (cc) neglect of Executive's
duties and responsibilities to the Company after written notice of such
neglect and an opportunity to cure, all as determined in good faith by
the Company:
(iv) Executive's voluntary resignation by the delivery to the
Board of a written notice from Executive that Executive has resigned
with or without a "Constructive Discharge." In order to constitute a
termination for "Constructive Discharge", Executive must resign within
six (6) months of an event that constitutes Constructive Discharge.
"CONSTRUCTIVE DISCHARGE" shall mean (aa) any action by the Company which
results in a diminution in Executive's position, authority, duties or
responsibilities; or (bb) a reduction in Executive's base salary (except
as part of a general company or management reduction in salaries); or
(cc) Executive is not promoted by the date that is eighteen (18) months
after Executives commences employment with the Company, provided
Executive has then fully satisfied all the requirements for promotion as
determined in the sole discretion of the current-Chief Executive Officer
and the Board of Directors.
(b) RIGHTS ON TERMINATION.
(i) In the event that a termination of employment occurs by
Executive due to a Constructive Discharge or Executive is terminated or
removed from the position of President by the Company or an Affiliate
without Cause, the Executive will continue to serve as a consultant
providing services to the Company and reporting to the Chief Executive
Officer for a one year period. The Company or an Affiliate will continue
to pay Executive an amount equal to Executive's Annual Base Salary for a
one year period commencing on the date of termination of employment (the
"CONSULTING PERIOD") on regular salary payment dates (the "CONSULTING
PAYMENTS"). Executive's stock options will continue to vest during the
Consulting Period. Executive will continue to be provided health
benefits for the Consulting Period. To the extent that Executive is not
allowed to participate in the Company's or an Affiliate's health benefit
programs following his termination of employment, the Company or an
Affiliate will pay his COBRA premiums for the Consulting Period.
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(ii) If the Company or an Affiliate terminates Executive's
employment for Cause, if Executive dies or is disabled, or if Executive
resigns other than due to a Constructive Discharge, the Company's or an
Affiliate's obligations to pay any compensation or benefits under this
Agreement will cease effective the date of termination. Executive's
right to receive any other benefits will be determined under the
provisions of applicable plans, programs or other coverages.
(iii) During (aa) the period in which Executive is receiving
payments from the Company or any Affiliate and (bb) thereafter,
Executive shall not make, directly or indirectly, disparaging
statements, whether oral or written, regarding the Company or any
Affiliate. Furthermore, Executive shall not disclose in violation of the
Confidentiality and Non-solicitation Agreement referenced in Section 6
of this Agreement any confidential or proprietary information of the
Company or any Affiliate. Executive acknowledges that (cc) the
restrictions contained in this section 4(b)(iii) of this Agreement are
reasonable and necessary to protect the business and interests of the
Company, (dd) the Company is relying upon the enforceability of such
restrictions in entering into this Agreement, (ee) any violation of
these restrictions will cause substantial irreparable injury to the
Company, (ff) the full extent of Company's damages will be impossible to
ascertain and (gg) monetary damages will not be an adequate remedy for
Company. Therefore, Executive agrees that a violation of this Section
4(b)(iii) will result a forfeiture of payments and benefits provided to
Executive in this Section 4(b) and that the Company is entitled, in
addition to other remedies, to preliminary and permanent injunctive
relief to secure specific performance, and to prevent a breach or
contemplated breach, of this Section 4(b)(iii), to the fullest extent
permissible under state law. The restriction set forth herein shall be
construed as an independent covenant, and the existence of any claim or
cause of action against the Company, whether predicated upon this
Agreement or otherwise, shall not constitute a defense to the
enforcement by the Company of the restriction contained in this Section
4(b)(iii). Employee hereby consents to the jurisdiction over his person
of any courts within the Commonwealth of Virginia with respect to any
proceedings in equity arising out of this Agreement. If any court of
competent jurisdiction shall hold that the restriction contained in this
Section 4(b)(iii) is unreasonable as to time or scope, said restriction
shall be deemed to be reduced to the extent necessary in the opinion of
such court to make it reasonable.
(c) Non-Disparagement.
(i) Executive expressly agrees that he will not make any
knowingly false, disparaging or derogatory comments concerning the
Company or any Affiliate, with respect to the business affairs or
financial condition of the Company or any Affiliate or any of the
Company's or its Affiliate's employees.
(ii) The Company and its Affiliates expressly agree that
their officers and directors will not make any knowingly false,
disparaging or derogatory comments concerning the Executive.
(iii) No provision of this Agreement shall be construed as
prohibiting the provision of truthful and accurate information by
Executive or the Company in form of verified facts directly observed by
or known to either the Executive or the Company pursuant to a valid
subpoena issued by a court of competent jurisdiction or arbitrator
requesting the specific information to be disclosed. However, both the
Executive and the Company agree promptly to notify the other through
counsel before complying with any subpoena so that the Executive and
the Company may protect their respective proprietary and other
interests.
5. AT WILL EMPLOYMENT. Except as set forth in this Agreement, the
terms and conditions of Employment with the Company or an Affiliate do not
constitute an employment contract or guarantee of continued employment, and
either Executive, the Company or an Affiliate has the right to end the
employment relationship at will.
6. CONFIDENTIALITY AND NONSOLICITATION. Executive agrees that he is
subject to the Company's or its Affiliates' standard agreement governing
confidentiality and nonsolicitation and to execute such agreement.
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GENERAL PROVISIONS
7. DEFINITIONS.
"AFFILIATE" of any particular person or entity means any other person or
entity controlling, controlled by or under common control with such particular
person or entity.
"BOARD" means the Board of Directors of the Company.
"PERSON" means an individual, a partnership, a limited liability
company, a corporation, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
8. NOTICES. Any notice provided for in this Agreement must be in
writing and must be either personally delivered or sent by reputable overnight
courier service (charges prepaid) to the recipient at the address below
indicated:
If to the Company or an Affiliate:
Proxicom, Inc.
00000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx
Tel No.: (000) 000-0000
Fax No.: (000) 000-0000
with a copy to:
Xxxxx & Xxxxxxx L.L.P.
000 00xx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxx Xxxxx, Esq.
Tel. No.: (000) 000-0000
Fax No.: (000) 000-0000
If to Executive:
Xxxxxx Xxxx
00 Xxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
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or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement will be deemed to have been given when so delivered
or sent or, if mailed, five (5) days after deposit in the U.S. mail.
9. GENERAL PROVISIONS.
(a) SEVERABILITY. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
(b) COMPLETE AGREEMENT. This Agreement, those documents
expressly referred to herein and other documents of even date herewith embody
the complete agreement and understanding among the parties and supersede and
preempt any prior understandings, agreements or representations by or among the
parties, written or oral, which may have related to the subject matter hereof in
any way.
(c) COUNTERPARTS. This Agreement may be executed in separate
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.
(d) SUCCESSORS AND ASSIGNS. Except as otherwise provided
herein, this Agreement shall bind and inure to the benefit of and be enforceable
by Executive, the Company, its Affiliates and their respective successors and
assigns; provided that the rights and obligations of Executive under this
Agreement shall not be assignable and, provided further that, the rights and
obligations of the Company may be assigned to any Affiliate of the Company.
(e) CHOICE OF LAW. This Agreement, the rights and
obligations of the parties hereto, and any claims or disputes relating thereto,
shall be governed by and construed in accordance with the laws of the
Commonwealth of Virginia (but not including the choice of law rules thereof).
(f) AMENDMENT AND WAIVER. The provisions of this Agreement
may be amended and or waived only with the prior written consent of the Company
or its Affiliate and Executive.
(g) BUSINESS DAYS. If any time period for giving notice or
taking action hereunder expires on a day which is a Saturday, Sunday or holiday
in the state in which the Company's chief executive office is located, the time
period shall be automatically extended to the business day immediately
following, such Saturday, Sunday or holiday.
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(h) NO WAIVER. A waiver by any party hereto of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which such party would otherwise have on any future occasion. No
failure to exercise nor any delay in exercising on the part of any party hereto,
any right, power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. The
rights and remedies herein provided are cumulative and may be exercised singly
or concurrently, and are not exclusive of any rights or remedies provided by
law.
(i) INSURANCE. The Company or an Affiliate, at its
discretion, may apply for and procure in its own name for its own benefit life
and/or disability insurance on Executive in any amount or amounts considered
available. Executive agrees to cooperate in any medical or other examination,
supply any information, and to execute and deliver any applications or other
instruments in writing as may be reasonably necessary to obtain and constitute
such insurance. Executive hereby represents that he has no reason to believe
that his life is not insurable at rates now prevailing for healthy men of his
age.
(j) WITHHOLDING TAXES. The Company and its Affiliates shall
be entitled to deduct or withhold from any amounts owing from the Company or any
of its Affiliates to Executive any federal, state, provincial, local or foreign
withholding taxes, excise taxes, or employment taxes ("TAXES") imposed with
respect to Executive's compensation or other payments from the Company or any of
its Affiliates or Executive's ownership interest in the Company, including, but
not limited to, wages, bonuses, dividends, the receipt or exercise of stock
options and/or the receipt or vesting of restricted stock.
(k) FURTHER ASSURANCES. Executive shall execute and deliver
all documents, provide all information, and take or refrain from taking such
actions as may be necessary or appropriate to achieve the purposes of this
Agreement.
(l) ARBITRATION. Except as provided in Section 4(b)(iii),
any dispute arising out of this Agreement, the Executive's relationship with the
Company or any of its Affiliates, or the Executive's separation from employment
shall be subject to binding arbitration. The arbitration shall be governed by,
and conducted in accordance with, the American Arbitration Association Labor
Arbitration Rules. Within ninety (90) days after the dispute, controversy or
claim arises, the party demanding arbitration shall give the other party written
notice of his/its intention to arbitrate, which notice shall contain a statement
setting forth the nature of the dispute and the remedy sought. Immediately
following a demand for arbitration, the parties shall request a list of
arbitrators from the American Arbitration Association. The list shall be limited
to arbitrators who are members of the National Academy of Arbitrators and who
are familiar with labor and employment disputes. Within fourteen (14) days after
the mailing date of the list, the parties shall select one arbitrator from the
list. The arbitration shall be confidential. The arbitration hearing shall be
held in the Commonwealth of Virginia, and shall be private and not open to the
public. The arbitrator's fees and expenses shall be shared equally by the
parties during the arbitration. In the arbitrator's final award, the arbitrator
may award, in the arbitrator's
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discretion, the party substantially prevailing all costs incurred by that party
in connection with the arbitration, including reasonable attorneys' fees and
that party's share, if any, of the fees charged by the arbitrator, and all
filing and/or arbitration administration fees incurred by that party in
connection with the arbitration.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first written above.
PROXICOM, INC.
By: /s/ Xxxx X. Xxxxxxxxx
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Name: Xxxx X. Xxxxxxxxx
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Title: Chairman and Chief Executive Officer
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EXECUTIVE
/s/ Xxxxxx Xxxx
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XXXXXX XXXX
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