EXHIBIT 10.36
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "AGREEMENT") is made and entered into by
and among xXxxx.xxx Limited, incorporated in England and Wales (the "COMPANY"),
and Xxxxxx Xxxxxxxx, an individual ("EXECUTIVE"), as of December 19, 2002 and
shall be effective as of the Effective Time of the proposed merger pursuant to
that certain Agreement and Plan of Merger, dated of even date herewith, by and
among USA Interactive, a Delaware corporation ("PARENT"), Geffen Acquisition Sub
Inc., a Delaware corporation and wholly owned subsidiary of Parent ("MERGER
Sub"), and xXxxx.xxx, Inc., a Delaware corporation ("UDATE") (the "MERGER
AGREEMENT"). The Company is a wholly-owned subsidiary of uDate. Capitalized
terms used herein but not otherwise defined shall have the meanings ascribed to
them in the Merger Agreement.
RECITALS
WHEREAS, pursuant to the Merger Agreement, Merger Sub will be merged
with and into uDate (the "MERGER") and uDate will, upon the closing of the
transactions contemplated by the Merger Agreement, become a wholly-owned
subsidiary of Parent;
WHEREAS, at the Effective Time of the Merger, Executive will resign
from his employment by the Company, the terms of which are set forth in that
certain Contract of Employment ,dated as of May 9, 2000, by and between the
Company and Executive, as amended by those certain letter agreements, dated as
of July 13, 2001 and January 3, 2002 (as amended, the "EMPLOYMENT AGREEMENT");
WHEREAS, immediately following Executive's resignation from the Company
at the Effective Time of the Merger, the Employment Agreement shall terminate
according to its terms and the Company shall thereafter employ Executive
pursuant to the terms and provisions set forth in this Agreement;
WHEREAS, as a condition to Parent's willingness to enter into the
Merger Agreement, Parent has requested that the Executive execute and deliver
this Agreement; and
WHEREAS, Executive is a holder of options to purchase shares of the
Company and, in such capacity, Executive has received good and valuable
consideration from Parent in exchange for the options held by Executive and in
exchange for the covenants set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing recitals and the
terms and provisions of this Agreement and the Merger Agreement, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the parties
to this Agreement agree as follows:
AGREEMENT
1. Appointment. The Company hereby appoints the Executive and the
Executive shall initially serve as Chief Operating Officer of the Company upon
the terms and subject to the conditions of this Agreement.
2. Duties and Responsibilities. Executive hereby agrees to
perform in good faith and to the best of his ability all services which may be
required of Executive in such position and to be available to render such
services at all reasonable times and places in accordance with such reasonable
directions and requests as the Board of Directors of the Company may from time
to time reasonably specify. During Executive's employment with the Company,
Executive shall report directly to the Chief Executive Officer of the Company,
or such other officer as Parent may designate from time to time. Executive
shall, during the Employment Period (as defined below), devote substantially all
of his time, ability, energy and skill to the performance of his duties and
responsibilities hereunder on a full-time basis.
3. Place of Work. The Executive will perform his duties
principally at 0 Xxxxx Xxxxx, Xxxxx Xxxx, Xxxxx. The Company will not require
the Executive, without his prior consent, to go or to reside anywhere outside a
fifty (50) mile radius of Derby, except for visits in the ordinary course of
business including business abroad as is reasonable required.
4. Period of Employment. The period of Executive's employment
with the Company pursuant to the provisions of this Agreement shall commence at
the Effective Time and shall continue until terminated in accordance with
Section 10 or otherwise, (the "EMPLOYMENT PERIOD"). The parties agree that, for
the purposes of determining the Executive's continuous period of employment
pursuant to the Employment Rights Xxx 0000, the Executive's employment commenced
on June 1, 2000.
5. Compensation.
(a) During the Employment Period, the Company shall pay to the
Executive a base salary equal to $275,000 per year. The Company shall, in its
sole discretion, review the base salary to be offered to Executive on a yearly
basis. Any change to the base salary shall be an increase only.
(b) Executive's base salary shall be paid at monthly intervals
over the Employment Period, in accordance with the Company's standard payroll
practices. The Company shall deduct and withhold from Executive's compensation
payable hereunder any and all applicable taxes and any other amounts required to
be deducted or withheld by the Company under applicable statutes, regulations or
orders.
(c) Executive shall be eligible to receive a yearly bonus in
the sole discretion of the Board of Directors of the Company.
6. Business Expense Reimbursement. Executive shall be entitled,
in accordance with the reimbursement policies in effect from time to time, to
receive reimbursement from the Company for all travel and other reasonable
business expenses incurred by Executive in the
performance of his duties hereunder, provided Executive furnishes the Company
with vouchers, receipts and other details of such expenses in accordance with
the Company's policies.
7. Benefits: Car; Holiday; Sickness.
(a) During the Executive's employment under this Agreement,
the Company shall provide Executive and his dependents with coverage under
medical, dental and/or vision plans and other welfare or retirement benefit
programs commensurate to that provided to executives of Parent, to the extent
Executive and his dependents satisfy the applicable eligibility requirements.
(b) During the Executive's employment under this Agreement he
will not be provided with a Motor Car.
(c) The Executive shall be entitled, without loss of
remuneration, to 25 working days' holiday (in addition to United Kingdom
statutory and public holidays) in each twelve month period (each a "HOLIDAY
YEAR"). Upon the termination of his employment, the Executive's entitlement to
accrued holiday pay (which shall accrue at the rate of 1/12 x 25 days per month)
shall be calculated on a pro rata basis in respect of each completed month of
service in the Holiday Year in which his employment terminates. If the Executive
has taken more days holiday than his accrued entitlement during any Holiday
Year, the Company is hereby authorised to make an appropriate deduction from the
Executive's final salary payment.
(d) (i) If the Executive is absent from his duties as a result
of illness or injury he will notify the Chief Executive Officer as soon as
possible and complete any self-certification forms which are required by the
Company. If the incapacity continues for a period of seven days or more he will
produce to the Company a medical certificate to cover the duration of such
absence.
(ii) Subject to the rest of clause 7(d) and subject
to the receipt of the appropriate certificates in accordance with
clause 7(d)(i) above, if the Executive is absent from his duties as a
result of illness or injury he will be entitled to payment of his
salary at the full rate in respect of such illness or injury for a
period (in total) of no more than 26 weeks in any period of 12 months
(whether the absence is intermittent or continuous). Thereafter the
Executive will not be entitled to any further payment from the Company
or any company in the Group (as defined in section 170 of the Taxation
of Chargeable Gains Act 1992) until the resumption of his duties.
(iii) If the Executive is absent from work because of
any injury or condition (physical or mental and whether or not
sustained in the course of his duties) caused wholly or partly by any
act or omission of any person, firm, company or organisation (other
than the Company or any company in the group) from whom the Executive
may be or become entitled to recover damages or compensation, any sum
paid by the Company to the Executive in respect of the said absence
will be an interest free loan (subject to any limit imposed under the
Companies Xxx 0000 or other relevant legislation) to the Executive
repayable immediately by the Executive to the Company on recovery by
him of any such damages or compensation.
(iv) If the Executive has been absent from work
because of any injury or condition caused wholly or partly by the
Company or any company in the Group or any person for whom the Company
or any company in the Group is vicariously liable and for which the
Executive may be or become entitled to recover damages or compensation,
any such damages or compensation payable will be reduced by the amount
of any sick pay (statutory or otherwise) paid to him and by the pension
received or receivable by him in the period in respect of which such
damages or compensation are calculated.
(v) The remuneration paid under clause 7(d)(ii) above
will include any Statutory Sick Pay payable and when this is exhausted
will be reduced by the amount of any Social Security Sickness Benefit
or other benefits recoverable by the Executive (whether or not
recovered). For the avoidance of doubt the provisions of this clause
7(d) and any right or prospective right the Executive has or may have
to receive any benefits under the Company's permanent health insurance
scheme referred to in clause 7(a) will not prejudice or limit in any
way the Company's right to terminate this Agreement.
(vi) Whether or not the Executive is absent by reason
of sickness, injury or other incapacity the Executive will at the
request of the Board agree to have a medical examination performed by a
doctor appointed and paid for by the Company and the Executive hereby
authorises the Board to have unconditional access to any report or
reports (including copies) produced as a result of any such examination
as the Board may from time to time require and entitlements to salary
pursuant to clause 7(d)(ii) above will be conditional on the Executive
complying with the terms of this clause 7(d)(vi).
8. Restrictive Covenants. During the Employment Period:
(a) Executive shall devote substantially all of his time and
energy to the performance of Executive's duties described herein on a full-time
basis, except during periods of illness or vacation periods.
(b) Executive shall not, directly or indirectly, provide
services to or through any person, firm or other entity except the Company,
unless otherwise authorised by the Company in writing.
(c) Executive shall not render any services of any kind or
character for Executive's own account or for any other person, firm or entity
without first obtaining the Company's written consent.
(d) Notwithstanding the foregoing, Executive shall have the
right to perform such incidental services as are necessary in connection with
(i) his private passive investments, but only if Executive is not obligated or
required to (and shall not in fact) devote any managerial efforts which
interfere with the services required to be performed by him hereunder, (ii) his
charitable or community activities or (iii) participation in trade or
professional organisations, but only if such incidental services do not
significantly interfere with the performance of Executive's services hereunder.
9. Non-Competition Covenants. Executive will not, and he will
procure that no Restricted Person (as defined below) will:
(a) Divulge to any person or otherwise make use of any
secrets, trade secrets, confidential knowledge or information concerning the
business, finance or affairs of the Company or any company in the Group or of
any customer or supplier of the Company or of any company in the Group (save for
any information which is in or comes into the public domain otherwise than
through a breach of this Agreement) and will use his best endeavors to prevent
the publication or disclosure of any such secrets, knowledge or information by
any third party;
(b) for a period of 12 months from the date of termination of
this Agreement (the "Termination Date"), whether for his own account or in
partnership with another or others or as agent for another or others, engage in
or be concerned with or interested in any business engaging in the Restricted
Business (as defined below) or any other business which supplies Relevant
Products or Services in competition with the Company or uDate provided that this
restriction does not apply to prevent the Executive from holding shares or other
securities in any company which is quoted, listed or otherwise dealt in on a
recognised investment exchange or other securities market and which confer not
more than 1% of the votes which could be cast at a general meeting of such
company;
(c) for a period of 12 months following the Termination Date,
directly or indirectly solicit, interfere with or endeavor to entice away from
the Company or any company in the Group, any person who is a director or Key
Employee (as defined below) of the Company or any such company in the Group
(whether or not such person would commit any breach of his contract of
employment or engagement by reason of leaving the service of the Company or any
company in the Group), nor knowingly employ or aid or assist in or procure the
employment by any other person, firm or company of any such director or Key
Employee;
(d) for the period of twelve months following the Termination
Date and for the purpose of any Restricted Business, canvass, solicit or
endeavor to entice away from the Company or Parent or any of their respective
subsidiaries or affiliates any person who, for a period from the date one year
prior to the date of this Agreement to the date one year after the date of this
Agreement, was a customer of the Company or any company in the Group, or
purchased or agreed or offered to purchase goods or services from the Company or
any company in the Group, or who has been canvassed by the Company or any
company in the Group (other than by general advertising) for the purpose of, and
with the Company's or such company in the Group's reasonable expectation of such
person's becoming, a customer of the Company or such company in the Group; and
(e) for the period of twelve months following the Termination
Date, take any action reasonably likely to have the effect of causing any
supplier of goods or services to the Company or any company in the Group, or any
other person in the habit of dealing commercially with the Company or any
company in the Group to be unable or unwilling to deal with the Company or
Parent or any of their respective subsidiaries or affiliates, either at all or
in part or on substantially the same terms on which he dealt with the Company or
any company in the Group prior to the Effective Time, or take any action
reasonably likely to have the effect of
causing any person having a contract or arrangement with the Company or any
company in the Group to breach, terminate or modify that contract or
arrangement.
(h) Executive, having taking legal advice, agrees that the
undertakings contained in this Section 9 are reasonable and necessary for the
protection of the legitimate interests of Company, and that, having regard to
those circumstances, the covenants contained herein do not work harshly on him.
(i) For purposes of this Agreement:
(w) "KEY EMPLOYEE" shall mean a senior executive
or any employee of the Company or any company in the Group reasonably deemed to
be material to the running of the Restricted Business;
(x) "RESTRICTED BUSINESS" shall mean the
business of providing online and offline personals, dating and match-making
services in the United States of America and the United Kingdom; and
(y) "RESTRICTED PERSON" shall mean Executive,
Executive's spouse and all entities controlled by Executive, whether a trust,
corporation, partnership, limited liability company, business association, joint
venture or any entity similar to any of the foregoing.
10. Termination of Employment.
(a) After an initial period of 9 months from the Effective
Time, either the Company or the Executive may terminate the Executive's
employment under this Agreement by giving to the other not less than three (3)
months' previous notice in writing to that effect.
(b) Notwithstanding the provisions of Section 10(a) and
without in any way limiting any rights of the Company, the Company shall be
entitled, but not bound, to terminate this Agreement with immediate effect, or
on the expiry of such period of notice as the Company may consider appropriate
or as set out below, by giving to the Executive written notice to that effect at
any time after the happening of any one or more of the following events:
(i) if the Executive shall have committed any
material breach (whether by one or several acts or omissions) of his obligations
hereunder (provided that if such breach is capable of being remedied it has not
been remedied within a reasonable time of the Executive being called upon to do
so by the Board) or knowingly repeated or continued any breach of his
obligations hereunder amounting to a material breach after he has at any time
received written warning from the Company in respect of such breach, or shall
have been guilty of serious or persistent misconduct amounting to gross
misconduct;
(ii) if the Executive shall have been found
guilty of any arrestable criminal offence (other than an offence under Road
Traffic legislation in the UK or elsewhere for which a non-custodial penalty is
imposed);
(iii) if the Executive shall have become bankrupt,
or made any formal arrangement or composition with his creditors generally (or
their respective equivalents in any jurisdiction); and
(iv) if the Executive is disqualified from
holding office as a director of the Company or any company in the Group by
reason of any order under the Companies Xxx 0000 or by reason of any provisions
of the Insolvency Xxx 0000 or the Company Directors Disqualification Xxx 0000.
(c) Without prejudice to the rights of the Executive to
remuneration and other benefits hereunder and to the rights of the Company
hereunder, including, without prejudice to the foregoing generality of Sections
9 and 10(b) (but subject as provided below), the Company shall have a right at
any time on or after the Company or the Executive has served notice to terminate
the Appointment and/or this Agreement to require the Executive not to attend at
any place of work and to exclude him from any premises of the Company (or any
company in the Group) at such times as the Company may determine and the Company
shall be entitled to restrict (in whole or in part) the powers, duties and work
of the Executive (in any manner the Company may determine) and the Company shall
be under no obligation to vest in or assign to the Executive any powers or
duties or to provide any work for the Executive and shall have the right to
suspend him (in whole or in part) from the performance of any duties or
obligations hereunder (provided that the Executive shall not be suspended or
otherwise prevented from continuing his duties hereunder for a continuous period
in excess of the relevant period of notice).
(d) The Company shall be entitled (but not bound) to terminate
the Appointment with effect from the End Date (as defined below) by notice in
writing to the Executive accompanied by a cheque for an amount equal to the
XXXXX Payment (as defined below) and details of how it is calculated and it is
expressly agreed and declared that any such termination shall not constitute a
repudiation of this Agreement. For the purpose of this Section 10(d) "XXXXX
PAYMENT" shall mean an amount equal to the Company's reasonable estimate of:
(i) the cash equivalent value of the Executive's
gross salary and other contractual benefits payable in terms of this Agreement
as at the date of the notice but calculated as if they would have continued to
have been paid to the Executive for the period from the date of termination of
employment expressed in the notice served under this Section 10(d) (the "END
DATE") until the date this Agreement would otherwise have terminated if notice
had been served under Section 10(a);
(ii) less any tax and other statutory deductions
which the Company is required to make.
Without prejudice to the legality of the termination, the Executive
shall have 28 days from receipt of the XXXXX Payment to serve notice on the
Company disagreeing with the Company's calculation of the XXXXX Payment failing
which he shall be deemed to have agreed it and the Company's estimate of the
XXXXX Payment shall be final and binding on the parties. If the Executive serves
notice within the 28 days referred to above the matter shall be referred to a
firm of lawyers agreed by the parties (failing which the parties will invite the
Chairman for the
time being of the Law Society to appoint a firm of lawyers) who shall act as
experts and not as arbitrators and whose determination shall be final and
binding on the parties.
(e) Upon the termination of the Appointment:
(i) the Executive shall deliver forthwith to the
Company all intellectual property materials, confidential records, other
materials and property including car, credit or charge cards, letters,
documents, files, films, records, reports, plans, papers, and computer discs and
all copies thereof used in or relating to the business of the Company or any
company in the Group as are in the possession, or under the control, of the
Executive;
(ii) the Executive shall, upon the request of the
Board, tender his written resignation, without claim for compensation, from all
offices held by him in the Company or any company in the Group or otherwise by
virtue of his employment and resign as a trustee of any pension scheme operated
by the Company or any company in the Group and should he fail to do so the
Company is hereby irrevocably authorised to appoint some person in his name and
on his behalf to sign any documents or do all things necessary or requisite to
give effect thereto; provided that such resignation or resignations shall be
given and accepted on the basis that it is or they are without prejudice to any
claims which the Executive may have against any such company, including the
Company and any company in the Group arising out of this Agreement or of the
termination of the Appointment;
(iii) the Executive shall not at any time
thereafter represent himself as being employed by or in any way connected with
the Company or any company in the Group (except as a former employee for the
purpose of communicating with prospective employers or complying with any
applicable statutory requirements);
(iv) the Executive shall not at any time
thereafter intentionally make any untrue or misleading oral or written statement
concerning the business or affairs of the Company or any company in the Group;
(v) the Executive shall immediately repay all
outstanding debts or loans properly due to the Company or any company in the
Group and the Company is hereby authorised to deduct from any wages (as defined
in section 2 of the Employment Rights Act 1996) of the Executive a sum which the
Executive agrees or is legally determined to be correct in repayment of all or
any part of any such debts or loans; and
(vi) the Company shall immediately repay all
outstanding debts or loans properly due to the Executive.
11. Disciplinary and Grievance Procedures.
(a) If Executive wishes to appeal against any disciplinary
sanction in relation to his employment or the termination thereof, he may apply
in writing to the Board of Directors whose decision will be final. The
disciplinary procedure will not apply to Executive
(b) If the Executive has a grievance in relation to his
employment or is dissatisfied with a disciplinary decision against him, he may
apply in writing to the Board of Directors whose decision will be final.
12. Entire Agreement. This Agreement constitutes the entire
agreement and understanding of the Company, Executive and Parent with respect to
the terms set forth herein and supersedes all prior and contemporaneous written
or verbal agreements and understandings between Executive, the Company and
Parent relating to such subject matter, other than as provided herein. This
Agreement may only be amended by written instrument signed by Executive, the
Company and Parent. Any and all prior agreements, understandings or
representations relating to Executive's employment with the Company are hereby
terminated and canceled in their entirety and are of no further force or effect.
13. Notices. All notices and other communications provided for
herein shall be deemed validly given, made or served if in writing and delivered
personally or sent by prepaid first class port, or by overnight courier or by
e-mail as follows:
If to Parent, to the address set forth in Section 11.3 of the
Merger Agreement; if to the Company, c/o uDate to the address
set forth in Section 11.3 of the Merger Agreement.
If to Executive:
Xxxxxx Xxxxxxxx
000 Xxxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxx, Xxxxxxx
Telephone: x00 (0) 0000 000000
Fax: ____________
E-mail ____________
Any party may, from time to time, designate any other address to which any such
notice to such party shall be sent. Notices mailed as provided herein shall be
deemed given on receipt or refusal of an otherwise proper delivery.
14. Severability. Each undertaking and agreement contained in
Section 8 shall be read and construed independently of the other undertakings
and agreements herein contained and if any undertaking or agreement is held to
be invalid whether as an unreasonable restraint of trade or for any other
reason, the remaining undertakings and agreements shall continue to apply to the
extent that they shall not also be found to be invalid, and the undertaking or
agreement which is held to be invalid shall be referred by the parties to a
Queen's Counsel (to be mutually selected by Executive and Parent or, in default
of agreement between them, to be nominated on the application of either of them
by the Chair for the time being of the Bar Council), whose opinion shall be
sought (as an expert and not as an arbiter) as to what restriction would be
legal and valid and the parties hereby agree that such undertaking or agreement
shall be altered accordingly.
15. Remedies. Executive acknowledges that any breach of the
undertakings in Section 9 would cause Parent irreparable injury and that
monetary damages would not be an
adequate remedy for any such breach. In the event of a breach or threatened
breach of any of such undertakings, Executive agrees that Parent shall be
entitled to injunctive relief in any court of competent jurisdiction restraining
Executive (or, if applicable, a Restricted Person) from breaching the
undertakings in Section 9. Nothing contained in this Section 15 shall prohibit
Parent from pursuing any other remedies available to it for such breach of
threatened breach including specific performance or implement and recovery
monetary damages.
16. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the internal, substantive laws of
England, without giving effect to the conflict of laws rules thereof.
17. Captions. The captions used herein are for ease of reference
only and shall not define or limit the provisions hereof.
18. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but of which taken
together shall constitute one and the same agreement.
19. Release. In consideration of this Agreement and the amounts
paid to Executive upon termination of the Employment Agreement, the sufficiency
and receipt of which is hereby acknowledged, Executive unconditionally and
irrevocably agrees that Executive and Executive's representatives, agents,
attorneys, executors, administrators, estate, heirs, successors and assigns
(collectively, the "RELEASOR") hereby completely release, remise and forever
discharge the Company, Parent, and each of their respective predecessors,
successors, assigns, parents, affiliates, subsidiaries, divisions, insurers, and
its and their past and present directors, officers, employees, stockholders,
attorneys, and representatives (the "RELEASEES"), of and from any and all
claims, actions, suits, debts, obligations, complaints, liabilities,
entitlements to damages, costs, expenses, rights and demands arising out of or
in connection with Executive's employment with the Company prior to the
termination of the Employment Agreement, whether based in law or in equity,
whether known or unknown, and whether existing or contingent. Executive
acknowledges that Executive's intention in executing this Agreement is that this
Agreement shall be effective as a bar to all claims described in this Section
19. Neither this Agreement nor any of its terms and provisions, nor any of the
negotiations or proceedings connected with it, shall be construed as, offered in
evidence as, received in evidence as and/or deemed to be evidence of an
admission of liability or wrongdoing by the Releasees, and such liability or
wrongdoing is hereby expressly denied by the Releasees.
20. Termination of Employment Agreement. Upon Executive's
resignation of his employment with the Company at the Effective Time, all
obligations of the parties to the Employment Agreement shall cease, except for
the Company's obligation to make any payments to Executive thereunder pursuant
to the terms and conditions set forth in the Employment Agreement. The
satisfaction of such payments shall fully discharge all of the Company's
obligations to Executive under the Employment Agreement.
21. Employment Rights Act. The information contained herein
constitutes a written statement of the terms of the Executive's employment in
compliance with the provision of the Employment Rights Xxx 0000.
IN THE WITNESS WHEREOF the parties have executed this Agreement on the
date and year first above written.
Xxxxxx Xxxxxxxx /s/ M Xxxxxxxx by his attorney Xxxxx Xxxx
Witness: /s/Xxxxx Watson____________________
(Witness)
Occupation: Accountant
Address: 000 Xxxxxxxx, Xxxxx Xxxxxxx
xXxxx.xxx Limited /s/ Xxx Olisa_______________________
Director
/s/ Xxx Morris______________________
Director/Secretary
