Exhibit 10.42
[EXECUTION COPY]
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT effective as of February 9, 2000, between
WORLDWIDE WEB NETWORX CORPORATION, a Delaware corporation (the "COMPANY"), and
XXXXXX X. XXXXX (the "EXECUTIVE"), an individual residing at 00 Xxxxxxx Xxxxxx,
Xxxxxxxx, Xxx Xxxx.
RECITAL:
The parties hereto desire to enter into this Agreement to provide for
the employment of the Executive by the Company and for certain other matters in
connection with such employment, all as set forth more fully in this Agreement.
NOW, THEREFORE, in consideration of the premises and covenants set
forth herein, and intending to be legally bound hereby, the parties to this
Agreement hereby agree as follows:
1. DUTIES. The Company agrees that the Executive shall be employed by
the Company as its Executive Vice President - Mergers and Acquisitions, and the
Executive agrees to be so employed, to devote his best efforts and substantially
all of his business time to advance the interests of the Company and to perform
such executive, managerial, administrative and other duties as are from time to
time assigned to him by the President and Chief Executive Officer of the Company
and are consistent with his position as a senior executive of the Company.
2. TERM. Subject to SECTIONS 4 AND 5, the initial term of the
Executive's employment hereunder shall commence on March 6, 2000 (the
"Commencement Date") and shall continue for a term of 3 years, until March 6,
2003 ("EXPIRATION DATE"). If either party elects not to renew this Agreement
following the Expiration Date, or if the parties are otherwise unable to agree
to mutually acceptable terms for a renewal period within 180 days prior to the
Expiration Date, then (subject to the provisions of SECTION 16) this Agreement
shall terminate effective as of the Expiration Date.
3. COMPENSATION.
(a) SALARY. During the term of his employment under this
Agreement, the Executive shall be paid an annual salary at the initial rate of
not less than $225,000 (the "BASE SALARY"). The Base Salary may be increased
from time to time by the Board of Directors of the Company (the "BOARD") in its
sole and absolute discretion. The Board shall review the Base Salary at least
annually at the end of each fiscal year of the Company. The Base Salary shall be
paid in accordance with the Company's regular payroll practices.
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(b) BONUSES. Executive shall receive a signing bonus equal to
$75,000, less applicable payroll deductions, payable (a) $50,000 on the
Commencement Date and (b) $25,000 within 60 sixty days of the Commencement Date.
At the end of each fiscal year of the Company that ends during the term of this
Agreement and at such other times as the Board determines, the Board shall
consider the award of a performance bonus to the Executive for such fiscal year.
As the Executive's duties principally involve the identification and negotiation
of strategic relationships, joint ventures and investments, as well as the
development of such strategic relationships, joint ventures and investments, the
Executive shall receive bonuses in the following amounts upon the achievement of
the following milestones:
Milestone Bonus Amount
--------- ------------
Negotiation and entrance into $30,000
2 or more strategic relationships,
joint ventures, or investments
Outside investment of $10,000,000 $25,000
or more into any entity in which
the Company owns 30% or more
of the outstanding equity
Under-written initial public offering $75,000
of any class of securities by any entity
in which the Company owns 30% or
more of the outstanding equity
Each bonus shall be awarded independent of each other bonus.
The Executive will receive a bi-weekly draw against future bonuses in amount
equal to $961.53, less applicable payroll deductions.
(c) FRINGE BENEFITS. The Executive shall be entitled to
participate in all insurance, vacation and other fringe benefit programs of the
Company to the extent and on the same terms and conditions as are accorded to
other officers and key executives of the Company from time to time.
(d) REIMBURSEMENT OF EXPENSES. The Executive shall be
reimbursed for all normal items of travel, entertainment and miscellaneous
business expenses reasonably incurred by him on behalf of the Company, provided
that such expenses are documented and submitted in accordance with the
reimbursement policies of the Company as in effect from time to time.
(e) STOCK OPTIONS. The Executive and the Company have entered
into a Stock Option Grant Agreement, pursuant to which the Executive has been
granted certain options to purchase 200,000 shares of the Common Stock of the
Company, on the terms and subject to the conditions set forth therein, EXCEPT
that should a Change in Control (as defined
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below) occur, any options to purchase securities of the Company that were not
previously vested will immediately and fully vest.
(f) ENTIRE COMPENSATION. The compensation provided for in this
Agreement shall constitute full payment for the services to be rendered by the
Executive to the Company hereunder.
4. DEATH OR TOTAL DISABILITY OF THE EXECUTIVE.
(a) DEATH. In the event of the death of the Executive during
the term of this Agreement, this Agreement shall terminate effective as of the
date of the Executive's death, and the Company shall not have any further
obligation or liability under this Agreement except that the Company shall: (i)
pay to the Executive's estate any portion of the Executive's Base Salary for the
period up to the Executive's date of death that has been earned but remains
unpaid; (ii) pay to the Executive's estate any benefits that have accrued to the
Executive under the terms of the benefit plans of the Company in which he is a
participant, which benefits shall be paid in accordance with the terms of those
plans; and (iii) vest any options to purchase securities of the Company that
were not previously vested pursuant to the schedule in SECTION 5(B).
(b) TOTAL DISABILITY. In the event of the Total Disability (as
that term is hereinafter defined) of the Executive, for (i) a period of 180
consecutive days or (ii) for any 180 days within a period of 360 consecutive
days, at any time during the term of this Agreement, the Company shall have the
right to terminate the Executive's employment hereunder by giving the Executive
30 days' written notice thereof, and, upon expiration of such 30-day period, the
Company shall not have any further obligation or liability under this Agreement
except that the Company shall: (i) pay to the Executive any portion of the
Executive's Base Salary for the period up to the date of termination that has
been earned but remains unpaid; (ii) pay to the Executive any benefits that have
accrued to the Executive under the terms of the benefit plans of the Company in
which he is a participant, which benefits shall be paid in accordance with the
terms of those plans; and (iii) vest any options to purchase securities of the
Company that were not previously vested pursuant to the schedule in SECTION
5(B). The term "TOTAL DISABILITY," when used herein, shall mean a mental or
physical condition that in the reasonable opinion of the Board renders the
Executive unable or incompetent to carry out the essential functions of the job
responsibilities he held or the tasks that he was assigned at the time the
disability was incurred.
5. TERMINATION.
(a) TERMINATION BY THE COMPANY FOR CAUSE. The Company may
discharge the Executive and thereby terminate his employment hereunder upon
written notice to the Executive for any of the following reasons: (i) material
violation of any policy regarding substance abuse as may be promulgated by the
Company from time to time; (ii) the willful failure to substantially perform the
duties or responsibilities of his position as those may be delegated or assigned
to the Executive by the President and CEO or by the Board in accordance with
this Agreement; (iii) any material breach of any covenant or agreement contained
in
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SECTIONS 6 OR 7 of this Agreement; (iv) engaging in conduct that is intended to
cause material damage to the Company or its business reputation; (v) conviction
(by trial or guilty plea) or a plea of non-contest, NOLO CONTENDERE or similar
plea to a felony (or misdemeanor which the Company determines has, or is
reasonably reported expected to have a material adverse effect on the Company or
its reputation) which has become non-appealable; (vi) adjudication as an
incompetent; or (vii) misappropriation of any funds or property of the Company
materially affecting the Company, theft, embezzlement or fraud; provided,
however, that with respect only to subsections (i) and (ii) above, the Company
shall not discharge the Executive for cause unless the Executive fails, refuses
or for any reason does not cure such violation to the reasonable satisfaction of
the Company within 30 days following written notice from the Company that there
exists a reason for discharge for cause. In the event that the Company shall
discharge the Executive pursuant to this SECTION 5(A), the Company shall not
have any further obligation or liability under this Agreement, except that the
Company shall pay to the Executive: (i) any portion of the Executive's Base
Salary for the period up to the date of termination that has been earned but
remains unpaid; and (ii) any benefits that have accrued to the Executive under
the terms of the benefit plans of the Company in which he is a participant,
which benefits shall be paid in accordance with the terms of those plans.
(b) OTHER TERMINATION BY THE COMPANY. The Company may
discharge the Executive and thereby terminate his employment hereunder at any
time upon 10 business days' prior written notice for any reason other than one
specified in SECTION 5(A). If the Company shall terminate the employment of the
Executive for any reason other than one specified in SECTION 5(A), the Executive
shall be entitled to: (i) be paid any portion of the Executive's Base Salary for
the period up to the date of termination that has been earned but remains
unpaid; (ii) be paid a severance payment equal to an amount equal to the
Executive's Base Salary for a period of 6 months, if and only if Executive has
been employed be the Company for a period greater than 16 months; (iii) be paid
any benefits that have accrued to the Executive under the terms of any benefit
plans of the Company in which he is a participant, which benefits shall be paid
in accordance with the terms of those plans; and (iv) have any options to
purchase securities of the Company that were not previously vested vest pursuant
to the following schedule:
LENGTH EMPLOYED % OF OPTIONS VESTING
0-3 months 0
3-9 months 40%
9-15 months 60%
15-21 months 80%
more than 21 months 100%
(the sum of options vesting may not exceed 100% of options
granted)
(c) TERMINATION BY THE EXECUTIVE. The Executive may terminate
his employment hereunder at any time upon 10 business days' prior written notice
for Good Reason (as defined below). If the Agreement is so terminated, the
Executive shall be entitled to: (i) be
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paid any portion of the Executive's Base Salary for the period up to the date of
termination that has been earned but remains unpaid; (ii) be paid a severance
payment equal to an amount equal to the Executive's Base Salary for a period of
12 months, if and only if Executive has been employed be the Company for a
period greater than 6 months; (iii) be paid any benefits that have accrued to
the Executive under the terms of any benefit plans of the Company in which he is
a participant, which benefits shall be paid in accordance with the terms of
those plans; and (iv) have any options to purchase securities of the Company
that were not previously vested vest pursuant to the schedule in SECTION 5(B)
except in the case of (D) below, which shall be governed by SECTION 3(E). For
purposes of this Agreement, "GOOD REASON" means, without the Executive's express
written consent, any of the following circumstances:
(A) Executive's removal from his position as Executive Vice
President, or a significant diminution in the nature or status of Executive's
responsibilities;
(B) Executive being assigned to any duties inconsistent with
Executive's status as an executive of the Company holding the position of
Executive Vice President;
(C) A reduction by the Company in Executive's Base Salary or
benefits;
(D) A Change in Control occurs; for purposes of this SECTION
5(C)(D), a "CHANGE IN CONTROL" means any one of the following: (I) an
acquisition of 50% or more of the combined voting power of all of the Company's
securities, (II) a merger where, following the transaction, the Company's
stockholders own 50% or less of the voting securities of the surviving or
resulting entity, (III) the liquidation or sale of substantially all of the
assets of the Company, or (IV) the individuals who currently form a majority of
the Board cease to be a majority of the Board, unless the new directors are
nominated for election by the current Board or their nominated successors.
6. NON-DISCLOSURE AND NON-COMPETITION.
(a) NON-DISCLOSURE. The Executive acknowledges that in the course of
performing services for the Company, the Executive may have had access to
confidential and proprietary information and records, data and other trade
secrets of the Company ("CONFIDENTIAL INFORMATION"). Confidential Information
shall include, without limitation, the following types of information or
material, both existing and contemplated, regarding the Company, or its
subsidiary or affiliated companies: corporate information, including plans,
strategies, policies, resolutions, and any litigation or negotiations; marketing
information, including strategies, methods, customers, prospects, or market
research data; financial information, including cost and performance data, debt
arrangement, equity structure, investors, and holdings; operational and
scientific information, including trade secrets and technical information; and
personnel information, including personnel lists, resumes, personnel data,
organizational structure, compensation structure, and performance evaluations.
The Executive agrees that, during his
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employment by the Company hereunder and after the termination or expiration of
the Executive's employment hereunder, to keep the Confidential Information
secret and confidential; not to publish, disclose or divulge the Confidential
Information to any other party; not to use any of the Confidential Information
for the Executive's own benefit or to the detriment of the Company without the
prior written consent of the Company, whether or not such Confidential
Information was discovered or developed by the Executive. The Executive also
agrees not to divulge, publish or use any proprietary and/or confidential
information of others that the Company is obligated to maintain in confidence
for the relevant time period of the Company's obligation. Notwithstanding the
foregoing, the provisions of this SECTION 6(A) will not apply when the
Confidential Information (i) is publicly disclosed other than by the Executive
or (ii) is the subject of a valid order of a court or administrative agency.
(B) NON-COMPETITION. The Executive agrees that, during his
employment by the Company hereunder and for an additional period of 1 year after
the termination or expiration of the Executive's employment hereunder, neither
the Executive nor any corporation or other entity in which the Executive may be
interested as a partner, trustee, director, officer, executive, employee, agent,
shareholder, lender of money or guarantor, or for which he performs services in
any capacity (including as a consultant or independent contractor) shall at any
time during such period (i) be engaged, directly or indirectly, in any
Competitive Business (as that term is hereinafter defined) or (ii) solicit,
hire, contract for services or otherwise employ, directly or indirectly, any of
the executives of the Company. Nothing herein contained shall be deemed to
prevent the Executive from investing in or acquiring one per cent or less of any
class of securities of any company if such class of securities is listed on a
national securities exchange or is quoted on the Nasdaq Stock Market. For
purposes of this SECTION 6(B), the term "COMPETITIVE BUSINESS" shall mean any
business that engages in the development of businesses that conduct
business-to-business transactions via an electronic commerce system, or which
engages in any other activities that are competitive with the business of the
Company at the time of termination or expiration of this Agreement. If the
Executive violates any provision of this SECTION 6(b), the 1-year restrictive
period set forth herein shall be extended for the duration of any such
violation, so that the Company enjoys the full term of such restrictive period.
Notwithstanding the foregoing, the Company acknowledges and agrees that the
provisions of this SECTION 6(B) shall not apply if the Executive's employment is
terminated under the provisions of SECTIONS 5(B) OR 5(C).
7. COMPANY DOCUMENTATION. The Executive shall hold in a fiduciary
capacity for the benefit of the Company all documentation, disks, programs,
data, records, drawings, manuals, reports, sketches, blueprints, letters, notes,
notebooks and all other writings, electronic data, graphics and tangible
information and materials of a secret, confidential or proprietary information
nature relating to the Company or the Company's business that are in the
possession or under the control of the Executive.
8. INJUNCTIVE RELIEF. The Executive acknowledges that his compliance
with the agreements in SECTIONS 6 AND 7 is necessary to protect the good will
and other proprietary interests of the Company and that he is one of the
principal executives of the Company and
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conversant with its affairs, its trade secrets and other proprietary
information. The Executive acknowledges that a breach of any of his agreements
in SECTIONS 6 AND 7 hereof will result in irreparable and continuing damage to
the Company for which there will be no adequate remedy at law; and the Executive
agrees that in the event of any breach of the aforesaid agreements, the Company
and its successors and assigns shall be entitled to injunctive relief and to
such other and further relief as may be proper.
9. SUPERSEDES OTHER AGREEMENTS. This Agreement supersedes and is in
lieu of any and all other employment arrangements between the Executive and the
Company.
10. AMENDMENTS. Any amendment to this Agreement shall be made in
writing and signed by the parties hereto.
11. ENFORCEABILITY. If any provision of this Agreement shall be invalid
or unenforceable, in whole or in part, then such provision shall be deemed to be
modified or restricted to the extent and in the manner necessary to render the
same valid and enforceable, or shall be deemed excised from this Agreement, as
the case may require, and this Agreement shall be construed and enforced to the
maximum extent permitted by law as if such provision had been originally
incorporated herein as so modified or restricted or as if such provision had not
been originally incorporated herein, as the case may be.
12. CONSTRUCTION. This Agreement shall be construed and interpreted in
accordance with the internal laws of the State of New York without reference to
its conflict of laws provisions.
13. ASSIGNMENT.
(a) BY THE COMPANY. The rights and obligations of the Company
under this Agreement shall inure to the benefit of, and shall be binding upon,
the successors and assigns of the Company. The Company shall require each and
every successor (whether direct or indirect, by asset or stock purchase, share
exchange, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company, by agreement in form and substance
satisfactory to the Executive, to expressly assume and agree to perform this
Agreement in the same manner and to the same extent the Company would be
required to perform it if no such succession had taken place. As used in this
Agreement, "the Company" shall mean the Company as hereinbefore defined and any
successor to its business and/or assets as provided above that executes and
delivers the agreement provided for in this SECTION 13(A) or that otherwise
becomes bound by all the terms and provisions of this Agreement by operation of
law. Notwithstanding the provisions of this Section 13(a), if the Company and
the Executive agree to the employment of the Executive by an affiliate or
subsidiary of the Company, then this Agreement may be assigned by the Company to
such affiliate or subsidiary.
(b) BY THE EXECUTIVE. This Agreement and the obligations
created hereunder may not be assigned by the Executive, but all rights of the
Executive hereunder shall inure to the
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benefit of and be enforceable by his heirs, devisees, legatees, executors,
administrators and personal representatives.
14. NOTICES. All notices required or permitted to be given hereunder
shall be in writing and shall be deemed to have been given when mailed by
certified mail, return receipt requested, or delivered by a national overnight
delivery service addressed to the intended recipient as follows:
If to the Company: WorldWide Web NetworX Corporation
000 Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxx Xxxxxx, XX 00000
Attention: President and CEO
Fax: 000-000-0000
If to the Executive: Xxxxxx X. Xxxxx
00 Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Any party may from time to time change its address for the purpose of notices to
that party by a similar notice specifying a new address, but no such change
shall be deemed to have been given until it is actually received by the party
sought to be charged with its contents.
15. WAIVERS. No claim or right arising out of a breach or default under
this Agreement shall be discharged in whole or in part by a waiver of that claim
or right unless the waiver is supported by consideration and is in writing and
executed by the aggrieved party hereto or his or its duly authorized agent. A
waiver by any party hereto of a breach or default by the other party hereto of
any provision of this Agreement shall not be deemed a waiver of future
compliance therewith, and such provisions shall remain in full force and effect.
16. SURVIVAL OF COVENANTS. The provisions of SECTIONS 6, 7 AND 8 hereof
shall survive any termination or expiration of this Agreement. Furthermore, any
provision of this Agreement which provides a benefit to the Executive and which
by the express terms hereof does not terminate upon the termination of the
Executive's employment shall remain binding upon the Company until such time as
such benefits are paid in full to the Executive or his successors.
[The signature page is the next page]
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IN WITNESS WHEREOF, this Agreement has been executed by the parties as
of the date first above written.
WORLDWIDE WEB NETWORX CORPORATION
By: /s/ Xxxxxx Xxxxxxxxx
---------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: President and CEO
/s/ Xxxxxx X. Xxxxx
-------------------------------------
Xxxxxx X. Xxxxx
EMPLOYMENT AGREEMENT FEBRUARY 9, 2000 PAGE 9
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