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EXHIBIT 10.4
EMPLOYMENT AGREEMENT
EMPLOYMENT AND NON-COMPETITION AGREEMENT
THIS EMPLOYMENT AND NON-COMPETITION AGREEMENT, dated as of the 11th day
of February, 1997, by and between American Business Information, Inc., a
Delaware corporation ("ABI" or the "COMPANY"), DBA Holdings, Inc., a New Jersey
corporation ("DBA") and Xx Xxxxxxxxx the undersigned executive (the "EXECUTIVE")
of DBA.
RECITALS
A. The Executive is an employee of DBA; and
B. ABI, DBA and certain other parties have entered into an Agreement and
Plan of Reorganization dated as of February 11, 1997 (the "MERGER AGREEMENT"),
which requires, among other things, that the Executive enter into this
Employment and Non-Competition Agreement in connection with the merger of DBA
with and into a subsidiary of ABI (the "MERGER"), as described in the Merger
Agreement. Capitalized terms not otherwise defined herein shall have the
meanings set forth in the Merger Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
1. Effectiveness of Agreement; Employment.
(a) Effectiveness of Agreement. This Employment and Non-Competition
Agreement shall become effective as of the date the Merger becomes effective
(the "EFFECTIVE TIME"). In the event that the Merger is not consummated, this
Agreement shall be null and void.
(b) Duties. The Company agrees to employ the Executive in an executive
and managerial capacity, with duties commensurate to a Level 7 or greater ABI
employee, and the Executive agrees to perform such reasonable responsibilities
and duties as may be required of him by the Company; provided, however, that the
Chief Executive Officer of ABI (the "CEO") shall have the right to revise such
responsibilities from time to time as the CEO may deem appropriate. The
Executive shall carry out his duties and responsibilities hereunder in a
diligent and competent manner and shall devote his full business time, attention
and energy thereto.
(c) Employment At-Will: Severance Benefits. The Company and the
Executive acknowledge and agree that the Executive's employment is at-will, as
defined under applicable law. During the first five (5) years after the
Effective Time, if Executive's employment is terminated by the Company without
Cause, then Executive shall be entitled to the severance benefits as provided in
Section 3 of this Agreement. Except as provided by law, Executive shall not be
entitled to any payments, benefits, damages, awards or compensation other than
as provided in Section 3 of this Agreement.
2. Compensation and Benefits.
(a) Base Compensation. The Company shall pay the Executive as
compensation for his services a base salary at the annualized rate of $250,000.
Such salary shall be subject to applicable tax withholding and shall be paid
periodically in accordance with normal Company payroll. The annual compensation
specified in this Section 2, together with any increases in such compensation
that the Company may, in its sole discretion, grant from time to time, is
referred to in this Agreement as "BASE COMPENSATION." Executive shall be
entitled to participate in the Company's bonus program or any future programs
for exectutive or managerial personnel at a level to be determined in the sole
discretion of the Company's Board of Directors. Employee will be reimbursed for
business expenses incurred in accordance with Company policy and practice.
(b) Increases in Base Compensation. At the sole discretion of ABI, but
in any event based on the Executive's performance and responsibilities
consistent with ABI's past practices and commensurate with executives of ABI at
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similar levels of employment, the Executive shall be entitled to be considered
for regular changes in Base Compensation. In the event there is a reduction in
base compensation, the Company shall give Executive 45 days in advance notice.
(c) Executive Benefits. Executive shall be eligible to participate in
the Company's employee benefit plans and arrangements which are available or
which become available, in the discretion of the Company, to other executive or
managerial employees of the Company, subject in each case to the generally
applicable terms and conditions of the plan or program in question and to the
determination of any committee administering such plan or program.
(d) Vacation. Executive shall be entitled to vacation in accordance
with the normal vacation policies of the Company for similar managerial or
executive employees.
(e) Stock Option. The Company shall grant Executive an option (the
"OPTION") to purchase 40,000 shares of ABI Common Stock to be effective as of
the Effective Time. The per share exercise price for the Option shall be equal
to the per share fair market value of ABI Common Stock at the Effective Time.
Except as otherwise provided herein, the Option shall be granted pursuant to,
and shall be governed by, the ABI 1992 Stock Option Plan.
3. Severance Payments.
(a) Termination Without Cause. If, during the period ending five years
after the Effective Time, the Executive's employment is terminated by the
Company for any reason other than for Cause, death or disability (the
"TERMINATION WITHOUT CAUSE"), then, subject to the Executive's continuing
obligations under Sections 4 and 5 hereof, the Executive shall receive (i) his
Base Compensation (as determined on the date of termination) at the end of each
month for the period beginning on the date of termination and ended on the fifth
anniversary of the Effective Time and (ii) a lump sum payment equal to one month
of base compensation for each full year of service with ABI, DBA or their
predecessors. Any obligations of the Company pursuant to this Section are
contingent on Executive signing a Release of Claims as defined below.
Termination without cause shall also include Executive's voluntary departure
within thirty (30) days following a reduction in base compensation of more than
10% which is not generally applied to level 7 and above ABI employees.
(b) Voluntary Resignation; Termination for Cause. If the Executive's
employment terminates by reason of Executive's voluntary resignation, or if the
Executive is terminated for Cause (as defined in Section 6(a)), the Executive
shall not be entitled to receive severance or other benefits.
(c) Death or Disability. If the Executive's employment terminates as a
result of his death or disability, no compensation or payments will be made to
either the Executive or, in the case of death, Executive's beneficiary or
estate, other than those to which he is entitled under the Company's existing
benefit plans and policies at the time of such termination. For this purpose,
disability is defined to be the inability of the employee to perform his regular
duties for a period of one year due to illness, physical or mental incapacity or
other disability.
4. Covenants Not to Compensate and Not to Solicit.
(a) Non-Competition and Non-Solicitation. Executive agrees that during
a period beginning on the date his employment with the Company ends, for
whatever reason (the "TERMINATION DATE") and extending through the third
anniversary of the Termination Date, Executive will not, either for himself or
on behalf of any other person, partnership, firm, association or corporation in
any territory in which ABI is actively engaged in business (1) open or operate a
business which is in competition with any business of ABI on the Termination
Date, (2) act as an employee, agent, advisor or consultant of any then existing
competitor of ABI on the Termination Date, or (3) take any action to, or do
anything reasonably intended to, divert business from ABI or influence or
attempt to influence any existing customer of ABI to cease doing business with
ABI or to alter its then existing business relationship with ABI on the
Termination Date. Executive also covenants that he will not recruit, attempt to
hire, solicit, or assist others in recruiting or hiring any person who is an
employee of ABI or induce or attempt to induce any such employee to terminate
his employment with ABI. As used in this Section 4, "ABI" includes ABI and its
direct and indirect subsidiaries.
(b) Geographic Area. The parties acknowledge that the business of ABI
is international in scope. Accordingly, the parties agree that the geographical
areas in which the restrictions provided for in this Section apply include all
cities, counties and states of the United States of America and all cities and
provinces of Canada.
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(c) Severability. The scope of the geographic, time and subject matter
restrictions set forth in this Section 4 are intended to conform to applicable
law. If, however, a court determines that the scope of any such restrictions
exceeds what is permitted by law, then such restriction shall be limited or
otherwise reformed as necessary to comply with and be enforceable under
applicable law. If a court determines that any provision of this Section 4 is
unenforceable and cannot be reformed, then such provision shall be deemed
eliminated from this Section to the extent necessary to permit the remaining
provisions of this Section to be enforced.
5. Confidential Information.
(a) Company Information. Executive agrees at all times during the term
of Executive's employment and thereafter, to hold in the strictest confidence,
and not to use, except for the benefit of the Company, or to disclose to any
person, firm or corporation without written authorization of the Board of
Directors of ABI, any Confidential Information of the Company. Executive
understands that "CONFIDENTIAL INFORMATION" means any Company proprietary
information, technical data, trade secrets or know-how, including, but not
limited to, research product plans, products, services, customer lists and
customers (including, but not limited to, customers of the Company on whom
Executive's called or with whom Executive became acquainted during the terms of
Executive's employment), markets, software, developments, inventions,
technology, designs, drawings, engineering, hardware configuration information,
marketing, finances or other business information disclosed to Executive by the
Company either directly or indirectly in writing, orally or by drawings or
observation of parts or equipment. Executive further understands that
Confidential Information does not include any of the foregoing items which has
become publicly known and made generally available through no wrongful act of
Executive or of others who were under confidentiality obligations as to the item
or items involved.
(b) Third Party Information. Executive recognizes that the Company has
received and in the future will receive from third parties their confidential or
proprietary information subject to a duty on the Company's part to maintain the
confidentiality of such information and to use it only for certain limited
purposes. Executive agrees to hold all such confidential or proprietary
information in the strictest confidence and not to disclose it to any person,
firm or corporation or to use it except as necessary in carrying out Executive's
work for the Company consistent with the Company's agreement with such third
party.
6. Definitions. As used herein, the terms.
(a) Cause. "CAUSE" means the Executive's termination only if:
(i) Executive has engaged in willful and material misconduct,
including willful and material failure to perform his duties as an officer or
employee of the Company or a material breach of this Agreement and has failed to
"cure" such default within thirty (30) days after receipt of written notice of
default from the Company;
(ii) The commission of an act of fraud or embezzlement which
results in loss, damage or injury to the Company;
(iii) Executive's violation of Sections 4 or 5 of this Agreement;
(iv) The indictment on charges relating to a felony either in
connection with the performance of the Executive's obligations to the Company or
which shall adversely affect the Executive's ability to perform such
obligations. In the event of arrest or the filing of charges relating to a
felony as set forth above, payments to Employee as provided herein shall be held
pending proof of innocence;
(v) Gross negligence, dishonesty, breach of fiduciary duty or
material breach of the terms of the this Agreement or any other agreement in
favor of the Company; or
(vi) The commission of an act which constitutes unfair
competition with the Company.
(b) Release of Claims. "RELEASE OF CLAIMS" shall mean a waiver by
Executive, in a form substantially similar to that attached as Exhibit A, of all
employment related obligations of and claims and causes of action against the
Company.
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7. Prior Agreements. Executive represents that Executive has not entered
into any agreements, understandings, or arrangements with any person or entity
which would be breached by Executive as a result of, or that would in any way
preclude or prohibit Executive from entering into Agreement with the Company or
performing any of the duties and responsibilities provided for in this
Agreement.
8. Conflicting Employment. Executive agrees that, during the term of
Executive's employment with the Company, Executive will not engage in any other
employment, occupation, consulting or other business activity directly related
to the business in which the Company is now involved or becomes involved during
the term of Executive's employment, nor will Executive engage in any other
activities that conflict with Executive's obligations to the Company.
9. Returning Company Documents. Executive agrees that, at the time of
leaving the employ of the Company, Executive will deliver to the Company (and
will not keep in Executive's possession, recreate or deliver to anyone else) any
and all devices, records, data, notes, reports, proposals, lists,
correspondence, specifications, materials, equipment, other documents or
property, or reproductions of any aforementioned items developed by Executive
pursuant to Executive's employment with the Company or otherwise belonging to
the Company, its successors or assigns.
10. Notices. Any notice, report or other communication required or
permitted to be given hereunder shall be in writing to both parties and shall be
deemed given on the date of delivery, if delivered, or three days after mailing,
if mailed first-class, postage prepaid, to the following addresses:
If to the Executive, at the address set forth below the
Executive's signature at the end hereof.
If to the Company:
American Business Information, Inc.
0000 X. 00xx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Attn: Chief Executive Officer
or to such other address as any party hereto may designate by notice given as
herein provided.
11. Governing Law. This Employment and Non-Competition Agreement shall be
governed by and construed and enforced in accordance with the internal
substantive laws, and not the choice of law rules of New Jersey.
12. Severability. The invalidity or unenforceability of any provision or
provisions of this Employment and Non-Competition Agreement shall not affect the
validity or enforceability of any other provision hereof, which shall remain in
full force and effect.
13. Successors.
(a) Company's Successors. Any successor to the Company (whether direct
or indirect and whether by purchase, lease, merger, consolidation, liquidation
or otherwise) to all or substantially all of the Company's business and/or
assets shall assume the obligations under this Agreement and agree expressly to
perform the obligations under this Employment and Non-Competition Agreement in
the same manner and to the same extent as the Company would be required to
perform such obligations in the absence of a succession. For all purposes under
this Employment and Non-Competition Agreement, the term "COMPANY" shall include
any successor to the Company's business and/or assets which executes and
delivers the assumption agreement described in this subsection (a) or which
becomes bound by the terms of this Employment and Non-Competition Agreement by
operation of law.
(b) Executive's Successors. The terms of this Employment and
Non-Competition Agreement and all rights of the Executive hereunder shall inure
to the benefit of, and be enforceable by, the Executive's personal or legal
representatives, executors, administrators, successor, heirs, distributees,
devisees or legatees.
14. Amendment. No waiver, alteration or modification of any of the
provisions of this Employment and Non-Competition Agreement shall be binding
unless in writing and signed by duly authorized representatives of the parties
hereto.
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15. Merger. This Employment and Non-Competition Agreement shall remain in
effect from the date hereof until it is terminated by either party unless the
Merger contemplated by the Merger Agreement is not consummated. In the event of
such a termination, the Executive's obligations hereunder shall terminate
effective as of the effective date of the termination of the Merger Agreement.
16. Arbitration.
(a) Executive and Company agree that any dispute or controversy
arising out of, relating to, or in connection with this Employment and
Non-Competition Agreement, or the interpretation, validity, construction,
performance, breach, or termination thereof, shall be finally settled by binding
arbitration to be held in New York, New York under the National Rules for the
Resolution of Employment Disputes supplemented by the Supplemental Procedures
for Large Complex Disputes of the American Arbitration Association as then in
effect (the "RULES"). The arbitrator may grant injunctions or other relief in
such dispute or controversy. The decision of the arbitrator shall be final,
conclusive and binding on the parties to the arbitration. Judgment may be
entered on the arbitrator's decision in any court having jurisdiction. During
the period that any arbitration is taking place, amounts in controversy shall be
paid by the Company into an escrow account.
(b) The arbitrator(s) shall apply New Jersey law to the merits of any
dispute or claim, without reference to rules of conflicts of law. The
arbitration proceedings shall be governed by federal arbitration law and by the
Rules, without reference to state arbitration law.
(c) Unless otherwise permitted for by law, or as set forth in the
immediately following sentence, the Company and the Executive shall each pay
half of the costs and expenses of such arbitration. The Company shall pay all of
the costs and expenses of such arbitration in the event that the arbitrator(s)
find in favor of Executive on all matters submitted.
(d) EXECUTIVE HAS READ AND UNDERSTANDS THIS SECTION 16, WHICH
DISCUSSES ARBITRATION. EXECUTIVE UNDERSTANDS THAT BY SIGNING THIS EMPLOYMENT AND
NON-COMPETITION AGREEMENT, EXECUTIVE AGREES TO SUBMIT ANY CLAIMS ARISING OUT OF,
RELATING TO, OR IN CONNECTION WITH THIS EMPLOYMENT AND NON-COMPETITION
AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH OR
TERMINATION THEREOF TO BINDING ARBITRATION, AND THAT THIS ARBITRATION CLAUSE
CONSTITUTES A WAIVER OF EXECUTIVE'S RIGHT TO A JURY TRIAL AND RELATES TO THE
RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE EMPLOYER/EMPLOYEE
RELATIONSHIP.
17. Counterparts. This Employment and Non-Competition Agreement may be
executed in several counterparts, each of which shall be an original, but all of
which together shall constitute one and the same agreement.
18. Effect of Headings. The section headings herein are for convenience
only and shall not affect the construction or interpretation of this Employment
and Non-Competition Agreement.
19. Definitions. All capitalized terms not otherwise defined herein shall
have the meaning defined in the Merger Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Employment
and Non-Competition Agreement as of the date first written above.
AMERICAN BUSINESS INFORMATION, INC.
By:
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Its:
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DBA HOLDINGS, INC.
By:
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Its:
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EXECUTIVE
/s/ Xxxxx X. Xxxxxxxxx
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(Signature)
Xxxxx X. Xxxxxxxxx
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(Print Name)
0 Xxxx Xxxxxx Xxxxx
Xxx Xxxx, XX 00000
