Exhibit 10.5
Employment Agreement dated as of January 29, 2001 between
Registrant and Xxxxx X. Xxxxx
EMPLOYMENT AGREEMENT
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THIS AGREEMENT, dated as of January 29, 2001, is between EarthWeb Inc.,
a Delaware corporation (the "Company"), with its principal place of business at
0 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, and Xxxxx X. Xxxxx, an individual whose
address is [Address] (the "Employee").
In consideration of the Company securing the services of the Employee
and the Employee's undertaking employment with the Company, the Company and the
Employee hereby agree to be bound by and comply with the following terms and
conditions and agree as follows:
Section 1. At-Will Employment. Employee acknowledges and agrees that
his employment status is that of an employee-at-will and that Employee's
employment may be terminated by the Company or the Employee at any time with or
without cause, subject to the terms and conditions in the Addendum hereto.
Section 2. Compensation. In consideration of the services to be
rendered hereunder, the Employee shall be paid in accordance with the Addendum
hereto.
Section 3. Employee Inventions and Ideas.
(a) The Employee will maintain current and adequate written records on
the development of, and disclose to the Company, all Inventions (as defined
herein). "Inventions" shall mean all ideas, potential marketing and sales
relationships, inventions, copyrightable expression, research, plans for
products or services, marketing plans, computer software (including, without
limitation, source code), computer programs, original works of authorship,
characters, know-how, trade secrets, information, data, developments,
discoveries, improvements, modifications, technology, algorithms and designs,
whether or not subject to patent or copyright protection, made, conceived,
expressed, developed, or actually or constructively reduced to practice by the
Employee solely or jointly with others during the term of the Employee's
employment with the Company, which refer to, are suggested by, or result from
any work which the Employee may do during his employment, or from any
information obtained from the Company or any affiliate of the Company.
(b) The Inventions shall be the exclusive property of the Company, and
the Employee acknowledges that all of said Inventions shall be considered as
"work made for hire" belonging to the Company. To the extent that any such
Inventions, under applicable law, may not be considered work made for hire by
the Employee for the Company, the Employee hereby agrees to assign and, upon its
creation, automatically and irrevocably assigns to the Company, without any
further consideration, all right, title and interest in and to such materials,
including, without limitation, any copyright, other intellectual property
rights, moral rights, all contract and licensing rights, and all claims and
causes of action of any kind with respect to such materials. The Company shall
have the exclusive right to use the Inventions, whether original or derivative,
for all purposes without additional compensation to the Employee. At the
Company's expense, the Employee will assist the Company in every proper way to
perfect the Company's rights in the Inventions and to protect the Inventions
throughout the world, including, without limitation, executing in favor of the
Company or any designee(s) of Company patent, copyright, and other applications
and assignments relating to the Inventions. The Employee agrees not to challenge
the validity of the ownership by the Company or its designee(s) in the
Inventions.
(c) Should the Company be unable to secure the Employee's signature on
any document necessary to apply for, prosecute, obtain, or enforce any patent,
copyright, or other right or protection relating to any Invention, whether due
to the Employee's mental or physical incapacity or any other cause, the Employee
hereby irrevocably designates and appoints the Company and each of its duly
authorized officers and agents as the Employee's agent and attorney in fact, to
act for and in the Employee's behalf and stead and to execute and file any such
document, and to do all other lawfully permitted acts to further the
prosecution, issuance, and enforcement of patents, copyrights, or other rights
or protections with the same force and effect as if executed and delivered by
the Employee.
Section 4. Proprietary Information.
(a) The Employee will not disclose or use, at any time either during or
after the term of employment, except at the request of the Company or an
affiliate of the Company, any Confidential Information (as herein defined).
"Confidential Information" shall mean all Company proprietary information,
technical data, trade secrets, and know-how, including, without limitation,
research, product plans, customer lists, customer preferences, marketing plans
and strategies, software, development, inventions, discoveries, processes,
ideas, formulas, algorithms, technology, designs, drawings, business strategies
and financial data and information, including, but not limited to Inventions,
whether or not marked as "Confidential." "Confidential Information shall also
mean any and all information received by the Company from customers, vendors and
independent contractors of the Company or other third parties subject to a duty
to be kept confidential.
(b) The Employee hereby acknowledges and agrees that all personal
property, including, without limitation, all books, manuals, records, reports,
notes, contracts, lists, blueprints, and other documents, or materials, or
copies thereof, Confidential Information as defined in Section 4(a) above, and
equipment furnished to or prepared by the Employee in the course of or incident
to his employment, including, without limitation, records and any other
materials pertaining to Inventions, belong to the Company and shall be promptly
returned to the Company upon termination of employment. Following termination,
the Employee will not retain any written or other tangible or electronic
material containing any Confidential Information or information pertaining to
any Invention.
Section 5. Limited Agreement Not to Compete.
(a) While employed by the Company and for a period of nine (9) months
after the termination of the Employee's employment with the Company, the
Employee shall not, directly or indirectly, as an employee, employer,
consultant, agent, principal, partner, manager, stockholder, officer, director,
or in any other individual or representative capacity, engage or participate in
any business that is competitive with the business of the Company.
Notwithstanding the foregoing, the Employee may own less than two percent (2%)
of any class of stock or security of any corporation, which competes with the
Company listed on a national securities exchange.
(b) While employed by the Company and for a period of twelve (12)
months after the termination of the Employee's employment with the Company, the
Employee shall not, directly or indirectly, solicit for employment any person
who was employed by the Company at the time of the Employee's termination from
the Company.
Section 6. Company Resources. Other than incidental personal use, the
Employee may not use any Company equipment for personal purposes without written
permission from the Company. The Employee may not give access to the Company's
offices or files to any person not in the employ of the Company without written
permission of the Company.
Section 7. Post-Termination Period. Because of the difficulty of
establishing when any idea, process or invention is first conceived or developed
by the Employee, or whether it results from access to Confidential Information
or the Company's equipment, facilities, and data, the Employee agrees that any
idea, invention, research, plan for products or services, marketing plan,
computer software (including, without limitation, source code), computer
program, original work of authorship, character, know-how, trade secret,
information, data, developments, discoveries, technology, algorithm, design,
patent or copyright, or any improvement, rights, or claims relating to the
foregoing, shall be presumed to be an Invention if it is conceived, developed,
used, sold, exploited or reduced to practice by the Employee or with the aid of
the Employee within one (1) year after termination of employment. The Employee
can rebut the above presumption if he proves the idea, process or invention (i)
was first conceived or developed after termination of employment, (ii) was
conceived or developed entirely on the Employee's own time without using the
Company's equipment, supplies, facilities, personnel or Confidential
Information, and (iii) did not result from or is not derived directly or
indirectly, from any work performed by the Employee for the Company or from work
performed by another employee of the Company to which the Employee had access.
Section 8. Injunctive Relief. The Employee agrees that the remedy at
law for any breach of the provisions of Section 4, Section 4 or Section 5 of
this Agreement shall be inadequate, the Company will suffer immediate and
irreparable harm, and the Company shall be entitled to injunctive relief in
addition to any other remedy at law which the Company may have.
Section 9. Severability. In the event any of the provisions of this
Agreement shall be held by a court or other tribunal of competent jurisdiction
to be unenforceable, the other provisions of this Agreement shall remain in full
force and effect.
Section 10. Survival. Sections 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12
and 14 and the Addendum survive the termination of this Agreement.
Section 11. Representations and Warranties. The Employee represents and
warrants that the Employee is not under any obligation to any third party which
could interfere with the Employee's performance under this Agreement, and that
the Employee's performance of his obligations to the Company during the term of
his employment with the Company will not breach any agreement by which the
Employee is bound not to disclose any proprietary
information including, without limitation, that of former employers; provided
that notwithstanding the foregoing, in the event employee determines that an
action which the Company requests him to pursue would cause him to violate any
such agreement, so informs the Company, and the Company instructs him to proceed
with such action, Employees proceeding with such action shall not be deemed to
be a violation of this representation and warranty.
Section 12. Governing Law. The validity, interpretation,
enforceability, and performance of this Agreement shall be governed by and
construed in accordance with the laws of the State of New York without giving
effect to its conflict of law rules.
Section 13. Not Used.
Section 14. General. This Agreement supersedes and replaces any
existing agreement between the Employee and the Company relating generally to
the same subject matter, and may be modified only in a writing signed by the
parties hereto. Failure to enforce any provision of the Agreement contains the
entire agreement between the parties with respect to the subject matter herein.
The Employee agrees that he will not assign, transfer, or otherwise dispose of,
whether voluntarily or involuntarily, or by operation of law, any rights or
obligations under this Agreement. Any purported assignment, transfer, or
disposition shall be null and void. Nothing contained in this Agreement shall
prevent the consolidation of the Company with, or its merger into, any other
corporation, or the sale by the Company of all or substantially all of its
properties or assets, or the assignment by the Company of this Agreement and the
performance of its obligations hereunder. Subject to the foregoing, this
Agreement shall be binding upon and shall inure to the benefit of the parties
and their respective heirs, legal representatives, successors, and permitted
assigns, and shall not benefit any person or entity other than those enumerated.
Section 15. Employee Acknowledgment. The Employee acknowledges (i) that
he has consulted with or has had the opportunity to consult with independent
counsel of his own choice concerning this Agreement and has advised to do so by
the Company, and (ii) that he has read and understands the Agreement, is fully
aware of its legal effect, and has entered into it freely based on his own
judgment.
AGREED TO BY:
EARTHWEB INC. Xxxxx X. Xxxxx
Sign: /s/ Xxxxx Xxxxxxxx Sign: /s/Xxxxx X. Xxxxx
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Addendum to Employment Agreement - Xxxxx X. Xxxxx (Employee)
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Section 1
Title and Job Description. The Employee shall be employed as President and Chief
Executive Officer of the Company. In such capacity, the Employee shall be
responsible for the day-to-day operation of the Company and any other
responsibilities reasonably assigned by the Company
from time to time. The Employee shall report to the Board of Directors of the
Company (the "Board") and shall serve as a Director on the Board.
The Employee shall be located in EarthWeb's New York offices currently located
in New York City or within 40 miles of New York City.
Section 2
Compensation. In consideration of the services to be rendered hereunder: the
Employee shall be paid an annual base salary of $300,000 per year (prorated for
calendar year 2001) plus a bonus to be determined by the Board of Directors.
The Employee shall receive 393,303 stock options ("Stock Options") to be granted
on the administration date following the initial date of the Employee's
employment with the Company, made pursuant to the terms and conditions of
EarthWeb's 1998 Stock Incentive Plan (the "Stock Option Plan") and
option-granting documents and subject to approval by the Board. The Stock
Options shall vest ratably on a monthly basis over a three-year period.
The Employee shall be eligible for all employee benefits under the Company's
benefit plans in effect from time to time, including health, life, dental,
vision, short-term disability, 401(k) Plan, and Employee Stock Purchase Plan.
The Employee shall be entitled to four weeks of vacation per year.
The Employee's compensation shall be reviewed on at least an annual basis.
Section 3
Severance. In lieu of any severance pay or severance benefits otherwise payable
to the Employee under any plan, policy, program or arrangement of the Company or
its subsidiaries, the following shall apply:
(a) If there is a Termination (as herein defined) of the Employee's employment
with the Company at any time prior to a "Change of Control" (as defined herein)
without "Cause" (as defined herein), the Employee shall be entitled to receive a
lump-sum severance payment equal to (i) one hundred percent (100%) of his then
current annual salary plus (ii) the amount of his then current target bonus. The
Employee is then entitled to accelerated vesting with respect to twenty-five
(25%) of his then unvested Stock Options.
(b) If there is a Termination of the Employee's Employment with the Company
following a Change of Control, the Employee shall be entitled to receive a
lump-sum severance payment equal to (i) one hundred percent (100%) of his then
current annual salary plus (ii) the amount of his then current bonus target. All
outstanding Stock Options granted to the Employee which are not vested and
exercisable as of the date of Termination shall become vested and exercisable as
of such date and remain exercisable for the periods prescribed in the Stock
Option Plan.
(c) The Employee, such Employee's spouse and eligible dependents will continue
to be provided with medical and dental benefits for the twelve (12)-month period
following such Employee's Termination on the same basis as provided to active
employees of the Company.
Following such twelve (12)-month period, the Employee, such Employee's spouse
and eligible dependents will begin eligibility for continuation of medical and
dental coverage in accordance with Section 4980B of the Internal Revenue Code of
1986, as amended (the "Code"). The Employee shall have no duty to mitigate
damages by seeking other employment. The Company shall have no right to offset
hereunder with respect to any compensation or benefits received by the Employee
from or in connection with any employment subsequent to such Employee's
Termination of employment with the Company.
Section 4
Definitions.
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(a) For purposes of this Employment Agreement only, a "Change of
Control" of the Company shall be deemed to have occurred if at any
time on or after the date of the Employment Agreement one or more
of the following events shall have occurred:
(i) the direct or indirect acquisition by any person or related
group of persons (other than an acquisition from or by the
Company or by a Company-sponsored employee benefit plan or
by a person that directly or indirectly controls, is
controlled by, or is under common control with, the
Company) of beneficial ownership (within the meaning of
Rule 13d-3 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) of securities possessing more
than fifty percent (50%) of the total combined voting power
of the Company's outstanding securities; or
(ii) any stockholder-approved transfer or other disposition of
all or substantially all of the Company's assets; or
(iii) the Company adopts any plan of liquidation providing for
the distribution of all or substantially all of its assets;
or
(iv) the consummation by the Company of a reorganization, merger
or consolidation or sale or other disposition of all or
substantially all of the assets of the Company or the
acquisition of assets or stock of another corporation (a
"Business Combination"), in each case, unless, following
such Business Combination, (a) all or substantially all of
the individuals and entities who were the beneficial
owners, respectively, of the outstanding common stock and
outstanding company voting securities immediately prior to
such Business Combination beneficially own, directly or
indirectly, more than 60% of, respectively, the then
outstanding shares of common stock and the combined voting
power of the then outstanding voting securities entitled to
vote generally in the election of directors, as the case
may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation
which as a result of such transaction owns the Company or
all or substantially all of the Company's assets either
directly or through one or more subsidiaries) in
substantially the same proportions as their ownership,
immediately prior to such Business Combination of the
outstanding Company common stock and outstanding Company
voting securities, as the case may be, (b) no person
(excluding any corporation resulting from such Business
Combination or any employee benefit plan (or related trust)
of the Company or such corporation resulting from such
Business Combination) beneficially owns, directly or
indirectly, 20% or more of, respectively, the then
outstanding shares of common stock of the corporation
resulting from such Business Combination or
the combined voting power of the then outstanding voting
securities of such corporation except to the extent that
such ownership existed prior to the Business Combination
and (c) at least a majority of the members of the board of
directors of the corporation resulting from such Business
Combination were members of the incumbent board at the time
of the execution of the initial agreement, or of the action
of the board of directors, providing for such Business
Combination; or
(v) a change in the composition of the Board over a period of
thirty-six (36) months or less such that a majority of the
Board members (rounded up to the next whole number) ceases,
by reason of one or more contested elections for Board
membership, to be comprised of individuals who are
continuing directors.
(b) For purposes of this Employment Agreement only, "Cause" shall mean
(i) embezzlement by the Employee, (ii) misappropriation by the
Employee of funds of the Company, (iii) conviction of a felony,
(iv) commission of any other act of dishonesty which causes
material economic harm to the Company, (v) acts of fraud or deceit
by the Employee which causes material economic harm to the
Company, (vi) material breach of any provision of the Employment
Agreement by the Employee, (vii) willful failure by the Employee
to substantially perform such Employee's duties hereunder, (viii)
willful breach of fiduciary duty by the Employee to the Company
involving personal profit or (ix) significant violation of Company
policy of which the Employee is made aware (or such Employee
should reasonably be expected to be aware) or other contractual,
statutory or common law duties to the Company. No act, or failure
to act on the part of the Employee, shall be deemed willful unless
it is done, or omitted to be done, by the Employee in bad faith or
without reasonable belief that the Employee's action or omission
was in the best interests of the Company.
(c) For purposes of this Employment Agreement only, "Good Reason"
shall mean (i) a diminution in the responsibilities, title, duties
and reporting lines of the Employee compared to those existing
immediately prior to a Change of Control, (ii) a reduction in
salary, incentive compensation and other employee benefits of the
Employee compared to those existing immediately prior to the
Change of Control, (iii) relocation of the Employee to an office
more than 40 miles from the principal office at which the Employee
is employed immediately prior to the Change of Control, (iv) any
breach by the Company of the Employment Agreement or (v) the
failure of any successor to assume, in writing, all obligations
under the Employment Agreement.
(d) For purposes of this Employment Agreement only, "Termination"
shall mean termination of the Employee's employment without Cause
or by the Employee for Good Reason.
Section 5
Excise Tax. In the event that the Employee becomes entitled to the payments and
benefits provided in Section 3 (the "Severance Payments") of this Addendum to
the Employment Agreement, if any of the Severance Payments will be subject to
the excise tax (the "Excise Tax") imposed under Section 4999 of the Code, the
Company shall pay to the Employee an additional amount (the "Gross-Up Payment")
such that the net amount retained by the Employee, after deduction of any Excise
Tax on the Severance Payments and any Federal, state and local income
and employment tax and Excise Tax upon the payments and benefits provided for by
Section 5 of this Addendum to the Employment Agreement, shall be equal to the
Severance Payments. For purposes of determining whether any of the Severance
Payments will be subject to the Excise Tax and the amount of such Excise Tax,
(i) any other payments or benefits received or to be received by the Employee in
connection with a change in ownership or control (within the meaning of section
280G of the Code and the regulations promulgated thereunder) of the Company or
the Employee's termination of employment by the Company without Cause or by the
Employee for Good Reason (whether pursuant to the terms of the Employment
Agreement or any other plan, arrangement or agreement with the Company, any
person whose actions result in a change of control or any person affiliated with
the Company or such person) shall be treated as "parachute payments" within the
meaning of section 280G(b)(2) of the Code, and all "excess parachute payment"
within the meaning of section 280G(b)(1) of the Code shall be treated as subject
to the Excise Tax, unless in the opinion of tax counsel selected by the
Company's' independent auditors and reasonably acceptable to the Employee such
other payments or benefits (in whole or in part) do not constitute parachute
payments, including by reason of Section 280G(b)(4)(A) of the Code, or such
excess parachute payments (in whole or in part) represent reasonable
compensation for services actually rendered, within the meaning of section
280G(b)(4)(B) of the Code, in excess of the "base amount" allocable to such
reasonable compensation, or are otherwise not subject to the Excise Tax, (ii)
the amount of the Severance Payments which shall be treated as subject to the
Excise Tax shall be equal to the lesser of (A) the total amount of the Severance
Payments or (B) the amount of excess parachute payments within the meaning of
section 280G(b)(1) of the Code (after applying clause (i), above), and (iii) the
value of any non-cash benefits or any deferred payment or benefit shall be
determined by the Company's independent auditors in accordance with the
principles of sections 280G(d)(3) and (4) of the Code. For purposes of
determining the amount of the Gross-Up Payment, the Employee shall be deemed to
pay Federal income taxes at the highest marginal rate of Federal income taxation
in the calendar year in which the Gross-Up Payment is to be made and state and
local income taxes at the highest marginal rate of taxation in the state and
locality of the Employee's residence on the date of termination, net of the
maximum reduction in Federal income taxes which could be obtained from the
deduction of such state and local taxes.
Section 6
All amounts payable hereunder shall be subject to and paid net of, all required
withholding taxes.
AGREED TO BY:
EARTHWEB INC. Xxxxx X. Xxxxx
Sign: /s/ Xxxxx Xxxxxxxx Sign: /s/Xxxxx X. Xxxxx
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