Exhibit 10.23
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of the 29TH day of January, 1999 between ICC
TECHNOLOGIES, INC. ("ICC"), a Delaware corporation, RARE MEDIUM, INC. (the
"Company"), a New York corporation with its principal offices at 00 Xxxx 00xx
Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the Company") and XXXXXX X.
XXXXXXX, an individual residing at 0000 Xxxxxx Xxxxxx Xxxxx, Xxxxx, Xxxxx 00000
(the "Employee").
In consideration of their mutual promises and covenants set forth herein,
and intending to be legally bound hereby, Company and Employee agree as follows:
1. Employment. The Company hereby employs the Employee and the Employee
accepts such employment on the terms and conditions hereinafter set forth.
2. Term. The term of this Agreement shall begin on February 1, 1999 and
shall terminate on January 31, 2003, unless sooner terminated in accordance with
Paragraph 6 hereof.
3. Duties. The Employee is engaged hereunder as President and Chief
Operating Officer of the Company and he agrees to perform the duties and
services incident to that position, or such other or further duties and services
of a similar nature as may be reasonably required of him by the Board of
Directors of the Company or the Board's designee. Employee shall at all times be
subject to the supervision of the Board of Directors of the Company and of such
other persons as the Board may designate.
The Employee shall devote his full business time, attention, energies and
best efforts to the performance of his duties hereunder and to the promotion of
the business and interests of the Company and of any corporate subsidiaries or
affiliated companies. The foregoing shall not be construed, however, as
preventing the Employee from investing his assets in such form or manner as will
not require services on the part of the Employee in the operations of the
business in which such investment is made and provided such business is not in
competition with the Company or, if in competition, such business has a class of
securities registered under the Securities Exchange Act of 1934 and the interest
of Employee therein is solely that of an investor owning not more than 3% of any
class of the outstanding equity securities of such business.
The Employee recognizes that he will be required by the Company to travel
outside of the Dallas metropolitan area in order to perform a portion of the
services to be rendered hereunder, but the nature or extent of such traveling
shall not be such as to make it reasonably necessary for the Employee to
relocate his permanent residence from the Dallas metropolitan area.
4. Compensation: Expenses.
(a) Base Salary. The Employee shall be paid a salary at the rate of not
less than $225,000 per year (the "Base Salary"). The Base Salary shall be paid
in installments in arrears in accordance with the Company's regular payroll
practices. The Company may, in its discretion, increase the Employee's Base
Salary and his other compensation provided for herein.
Employee shall be entitled to annual increases in Base Salary as determined by
the Board of Directors.
(b) Fringe Benefits.
(i) The Employee shall be entitled to participate in all current and
future 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
management employees of the Company, provided, however, that nothing herein
shall be deemed to require grants or awards to Employee under any benefit plans
which provide for awards or grants at the discretion of the Board of Directors
or of any committee or administrator, and that entitlement to vacations shall be
governed solely by clause (ii) of this subparagraph (b).
(ii) The Employee shall be entitled in each calendar year commencing
with 1998 to a vacation of four (4) weeks, without loss of or reduction in his
compensation. Each vacation shall be taken by the Employee at such time or times
as agreed upon by the Company and Employee. Any portion of Employee's vacation
not used during any calendar year shall be carried forward, provided that
Employee may not take more than six (6) weeks vacation during any calendar year.
(c) Business Expenses. The Company will pay, or reimburse the Employee for,
all ordinary and reasonable out-of-pocket business expenses incurred by Employee
in connection with his performance of services hereunder during the Employment
Term in accordance with the Company's expense authorization and approval
procedures then in effect upon presentation to the Company of an itemized
account and written proof of such expenses.
(d) Stock Options. Concurrently with the execution of this Agreement, ICC
shall grant to Employee, Stock Options to purchase an aggregate of 1,000,000
shares of Common Stock of ICC at the exercise price equal to the closing price
on the day the Board of Directors of ICC approves the issuance of the options
which shall become exercisable 250,000 after the first anniversary; an
additional 250,000 on each 12-month anniversary thereafter all over a period of
four (4) years from the date of grant for a period of ten (10) years from the
date of grant. Such options shall entitle the Holder to exercise them with
cashless exercise and the Option Agreement shall so provide.
If the employee is terminated without cause, 50% of all outstanding
options not vested shall vest, and all options shall be exercisable through
their initial expiration date.
(e) Entire Compensation. The compensation provided for in this Agreement is
in full payment of the services to be rendered by the Employee to the Company
hereunder, except that Employee shall be eligible to participate in any
performances based bonus plan in effect at the relevant time as determined by
the Board of Directors.
5. Death or Total Disability of the Employee.
(2)
(a) Death. In the event of the death of the Employee during the term of
this Agreement, this Agreement shall terminate effective as of the date of the
Employee's death, and the Company shall not have any further obligation or
liability hereunder except that the Company shall pay to Employee's designated
beneficiary or, if none, his estate the portion, if any, of the Employee's Base
Salary for the period up to the Employee's date of death which remains unpaid;
and 50% of unvested stock options shall vest and the employee's named
beneficiary shall have, through their initial expiration date, to exercise any
unexercised options.
(b) Total Disability. In the event of the Total Disability (as that term is
hereinafter defined) of the Employee, the Company shall have the right to
terminate the Employee's employment hereunder by giving the Employee 10 days'
written notice thereof and, upon expiration of such 10-day period, the Company
shall not have any further obligation or liability under this Agreement except
that the Company shall pay to the Employee the portion, if any, of the
Employee's Base Salary for the period up to the date of termination which
remains unpaid, provided that if the Employee, during any period of disability,
receives any periodic payments representing lost compensation under any health
and accident policy or under any salary continuation insurance policy, the
premiums for which have been paid by the Company, the amount of Base Salary that
the Employee would be entitled to receive from the Company during such period of
disability shall be decreased by the amounts of such payments and 50% of
unvested stock options shall continue to vest according to their regular
schedule and all options shall be exercisable through their initial expiration
date. (This should be interpreted to mean 125,000 shares of each 250,000 share
block yet to be vested.)
The term "Total Disability," when used herein, shall mean a mental,
emotional or physical condition which either (i) has rendered the Employee for a
period of 90 consecutive days, or for a total of 150 days during any period of
24 consecutive months, during the term of this Agreement, or (ii) in the
reasonable opinion of the Company is expected to render the Employee, for a
period of 3 months, unable or incompetent to carry out, on a substantially
full-time basis, the job responsibilities he held or tasks that he was assigned
at the time the disability was incurred. The Employee agrees, in the event of
any dispute as to the determination made pursuant to this paragraph, to submit
to a physical or other examination by a licensed physician selected by the
Company, the cost of which examination shall be paid by the Company.
6. Termination of Employment. In addition to termination pursuant to
paragraph 5, the Company may discharge the Employee and thereby terminate his
employment hereunder for the following reasons ("for cause"): (i) habitual
intoxication which materially affects the Employee's performance; (ii) drug
addiction; (iii) conviction of a felony Materially adversely affecting the
Company or the Employee's ability to perform his duties hereunder; (iv)
adjudication as an incompetent; or (v) misappropriation of corporate funds or
other acts of dishonesty; or (vi) the Employee's willful breach of this
Agreement in any other material respect which are not remedied within 30 days
from the event.
In the event that the Company shall discharge the Employee pursuant to this
paragraph 6, the Company shall not have any further obligations or liability
under this Agreement.
In the event that the Company shall discharge the Employee other than "For
Cause" Employee shall continue to receive his then current Base Salary for a
period of 12 months after such
(3)
discharge and except as set forth in this sentence, the Company shall not have
any further obligations or liability under this Agreement.
In the event of a "Change in Control" of the Company as defined below, at
Employee's option, Employee shall have the right to terminate this Agreement.
Upon said election to terminate by Employee: (a) Employee shall receive a lump
sum payment from the Company which shall be equal to (i) the total of Employee's
salary plus all incentive compensation for the remaining portion of the term of
this Agreement, plus (ii) the cash value of all benefits which would have been
received by the Employee from the remaining portion of the term of this
Agreement, plus (iii) the cash value of all unexercised stock options (whether
or not vested) or the cashless exercise value thereof.
For purposes of this Agreement, a "Change of Control" means the happening
of any of the following: When any "person" as defined in Section 3(a)(9) of the
Securities Exchange Act of 1934 ("Exchange Act") and as used in Section 13(d)
and 14(d) thereof, including a "group" as defined in Section 13(d) of the
Exchange Act but excluding ICC, the Company and any Subsidiary and any employee
benefit plan sponsored or maintained by ICC, the Company or any subsidiary
(including any trustee of such plan acting as trustee), directly or indirectly
becomes a "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act,
as amended from time to time), of securities of ICC representing 40 percent or
more of the combined voting power of ICC representing 40 percent or more of
ICC's then outstanding securities including the options written relating to a
financing by ICC.
7. Non-Disclosure.
(a) Non-Disclosure. The Employee recognizes and acknowledges that he will
have access to certain confidential information of the Company and that such
information constitutes valuable, special and unique property of the Company.
The Employee agrees that he will not, for any reason or purpose whatsoever,
during or after the term of his employment, use any of such confidential
information or disclose any of such confidential information to any party
without express authorization of the Company, except as necessary in the
ordinary course of performing his duties hereunder. The obligation of
confidentiality imposed by this subparagraph shall not apply to information
which appears in issued patents or printed publications or which otherwise
becomes generally known in the industry through no act of the Employee in breach
of this Agreement.
(b) Inventions, Designs and Product Developments. All inventions,
discoveries, concepts, improvements, formulas, processes, devices, methods,
innovations, designs, ideas and product developments (collectively, the
"Developments"), developed or conceived by Employee, solely or jointly with
others, whether or not patentable or copyrightable, at any time during the
Employment Term or within one year after the termination hereof and which relate
to the actual or planned business activities of the Company and all of the
Employee's right, title and interest therein, shall be the exclusive property of
the Company. The Employee hereby assigns, transfers and conveys to the Company
all of his right, title and interest in and to any and all such Developments.
Employee shall disclose fully, as soon as practicable and in writing, all
Developments to the Board of Directors of the Company. At any time and from time
to time, upon the request of the Company, the Employee shall execute and deliver
to the Company any and all instruments, documents and papers, give evidence and
do any and all other acts which, in the
(4)
opinion of counsel for the Company, are or may be necessary or desirable to
document such transfer or to enable the Company to file and prosecute
applications for and to acquire, maintain and enforce any and all patents,
trademark registrations or copyrights under United States or foreign law with
respect to any such Developments or to obtain any extension, validation,
reissue, continuance or renewal of any such patent, trademark or copyright. The
Company will be responsible for the preparation of any such instruments,
documents and papers and for the prosecution of any such proceedings and will
reimburse the Employee for all reasonable expenses the Employee incurs upon
authorization of the Board of Directors of the Company.
8. Noncompetition. The Employee agrees that during the term of this
agreement and for a period of one (1) year thereafter, the Employee shall not,
unless acting pursuant hereto or with the prior written consent of the Board of
Directors of the Company, directly or indirectly:
(a) solicit business from or perform services for, any persons, company or
other entity which at any time during the Employee's employment by the Company
is a client or customer of the Company if such business or services are of the
same general character as those engaged in or performed by the Company;
(b) solicit for employment or in any other fashion hire any of the
employees of the Company;
(c) own, manage, operate, finance, join, control or participate in the
ownership, management, operation, financing or control of, or be connected as an
officer, director, employee, partner, principal, agent, representative,
consultant or otherwise with any business or enterprise engaged in the business
of designing, developing, and implementing Internet web site applications and
strategies, or any other business engaged in by the Company for which Employee
had primary responsibility, or any of its affiliates (collectively, the
"Business") within a radius of 20 miles from Company's or any of Company's
affiliates principal places of business (the "Restricted Area");
(d) use or permit his name to be used in connection with, any business or
enterprise engaged in the Business within the Restricted Area; or
(e) use the name of the Company or any name similar thereto, but nothing in
this clause shall be deemed, by implication, to authorize or permit use of such
name after expiration of such period;
provided, however, that this provision shall not be-construed to prohibit the
ownership by the Employee of not more than 3% of any class of the outstanding
equity securities of any corporation which is engaged in any of the foregoing
businesses having a class of securities registered pursuant to the Securities
Exchange Act of 1934. In the event that the provisions of this Section should
ever be adjudicated to exceed the time, geographic, service or product
limitations permitted by applicable law in any jurisdiction, then such
provisions shall be deemed reformed in such jurisdiction to the maximum time,
geographic, service or product limitations permitted by applicable law.
(5)
Notwithstanding the foregoing, if employee is terminated other "than for
cause" as defined in this Agreement, Employee's obligations pursuant to
provision 8(c) and 8(d) shall be terminated, but all other subdivisions of this
paragraph shall remain in effect.
9. Equitable Relief; Survival.
(a) The Employee acknowledges that the restrictions contained in paragraphs
7(a), 7(b) and 8 hereof are, in view of the nature of the business of the
Company, reasonable and necessary to protect the legitimate interests of the
Company, and that any violation of any provisions of those Sections will result
in irreparable injury to the Company. The Employee also acknowledges that the
Company shall be entitled to temporary and permanent injunctive relief, without
the necessity of proving actual damages, and to an equitable accounting of all
earnings, profits and other benefits arising from any such violation, which
rights shall be cumulative and in addition to any other rights or remedies to
which the Company may be entitled. In the event of any such violation, the
Company shall be entitled to commence an action for temporary and permanent
injunctive relief and other equitable relief in any court of competent
jurisdiction and Employee further irrevocably submits to the jurisdiction of any
New York State court or Federal court sitting in the Southern District of New
York over any suit, action or proceeding arising out of or relating to paragraph
7 or 8. The Employee hereby waives, to the fullest extent permitted by law, any
objection that he may now or hereafter have to such jurisdiction or to the venue
of any such suit, action or proceeding brought in such a court and any claim
that such suit, action or proceeding has been brought in any inconvenient forum.
Effective service of process may be made upon the Employee by mail under the
notice provisions contained in paragraph 12 hereof.
(b) Survival of Covenants. The provisions of paragraphs 7 and 8 shall
survive the termination of this Agreement.
10. Remedies Cumulative; No Waiver. No remedy conferred upon the Company by
this Employment Agreement is intended to be exclusive of any other remedy, and
each and every such remedy shall be cumulative and shall be in addition to any
other remedy given hereunder or now or hereafter existing at law or in equity.
No delay or omission by the Company in exercising any right, remedy or power
hereunder or existing at law or in equity shall be construed as a waiver
thereof-, and any such right, remedy or power may be exercised by the Company
from time to time and as often as may be deemed expedient or necessary by the
Company in its sole discretion.
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. Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if (and then two
business days after) it is sent by registered or certified
(6)
mail, return receipt requested, postage prepaid, and addressed to the intended
recipient as set forth below:
If to Company: Copy to:
Rare Medium, Inc. Xxxxxxx X. Xxxxx, Esq.
00 Xxxx 00xx Xxxxxx Mesirov Xxxxxx Xxxxx Xxxxxx &
0xx Xxxxx Xxxxxxxx, XXX
Xxx Xxxx, XX 00000 0000 Xxxxxx Xxxxxx
Attention: Xxxxx X. Xxxxxx Xxxxxxxxxxxx, XX 00000
If to Employee: Copy to:
0000 Xxxxxx Xxxxxx Xxxxx
Xxxxx, Xxxxx 00000
Any party hereto may give any notice, request, demand, claim or other
communication hereunder using any other means (including personal delivery,
expedited courier, messenger service, telecopy, telex, ordinary mail, or
electronic mail), but no such notice, request, demand, claim, or other
communication shall be deemed to have been duly given unless and until it
actually is received by the individual for whom it is intended. Any party hereto
may change the address to which notices, requests, demands, claims, and other
communications hereunder are to be delivered by giving the other parties hereto
notice in the manner herein set forth.
13. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws (and not the law of conflicts) of the State of
New York.
14. Contents of Agreement: Amendment and Assignment. This Agreement sets
forth the entire understanding between the parties hereto with respect to the
subject matter hereof and supersedes and is instead of all other employment
arrangement between the Employee and the Company. This agreement cannot be
changed, modified or terminated except upon written amendment duly executed by
the parties hereto. All of the terms and provisions of this Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
heirs, representatives, successors and assigns of the parties hereto, except
that the duties and responsibilities of the Employee hereunder are of a personal
nature and shall not be assignable in whole or in part by the Employee.
IN WITNESS WHEREOF, this Agreement has been executed by the parties on the
date first above written.
RARE MEDIUM, INC.
By: /s/ Xxxxx X. Xxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chairman, President and CEO
/s/ Xxxxxx X. Xxxxxxx
-------------------------------
Xxxxxx X. Xxxxxxx(Employee)
(7)
