EMPLOYMENT AGREEMENT
Exhibit
10.1
This
Employment Agreement (the “Agreement”) is entered into as of the 7th day of
August, 2009, by and between, interCLICK, Inc., a company organized under the
laws of the State of Delaware (the “Company”), and Xxxxx Xxxxx (the
“Executive”).
In
consideration of the mutual covenants contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and the Executive, intending to be legally bound,
hereby agree as follows:
1. Employment and
Duties. The Company hereby agrees to employ the Executive as
its Chief Financial Officer (the “CFO”), and the Executive hereby accepts such
employment, on the terms and conditions set forth herein. During the
Term (as defined below), the Executive shall serve as CFO and shall report to
the CEO. The Executive shall have those powers and duties customarily
associated with the position of CFO of entities comparable to the Company and
such other powers and duties as may be prescribed by the Board. The Executive’s
primary commitment shall be to the performance of his duties for the Company;
however, the Executive is not precluded from participating in activities and
functions separate and apart from, and which are not inconsistent with, his
function as CFO of the Company.
2. Term. The
term of the Executive’s employment hereunder shall be for a period of three (3)
years commencing on August 4, 2009 (the “Initial Term”). The
term of this Agreement shall automatically be extended for additional terms of
one (1) year each (each a “Renewal Term”) unless
either party gives prior written notice of non-renewal to the other party no
later than sixty (60) days prior to the expiration of the Initial Term (“Non-Renewal Notice”),
or the then current Renewal Term, as the case may be. For purposes of this
Agreement, the Initial Term and any Renewal Term are hereinafter collectively
referred to as the “Term.”
3. Compensation, Benefits and
Equity Awards.
(a) Base
Salary. During the Term, the Executive shall receive an
annual base salary of $225,000 in year 1; and effective on each one-year
anniversary of this Agreement, an increase of at least 10% to the Executive’s
then-current base salary. On an annual basis, the Board will review
the Executive’s performance and determine, in its sole discretion, the degree to
which an adjustment greater than 10% to the Executive’s then-current base salary
is appropriate. The Executive’s base salary shall be paid in
accordance with the Company’s regular payroll practices, including any and all
usual and customary withholdings.
(b) Annual
Bonus. The Executive shall be entitled to receive an
annual cash bonus in an amount equal to fifty percent (50%) of his then-current
Base Salary based upon the achievement of annual company and individual
performance goals to be mutually agreed upon by the Executive and the Board (the
“Bonus”). The
Executive’s Bonus will be pro-rated for partial calendar years during the
Term. The Bonus may be paid in any combination of cash and shares of
Company stock that the Executive determines. Any Bonus earned during
a calendar year shall be paid at such time as the Company customarily pays
annual bonuses.
(c) Guaranteed Minimum
Bonus. The Executive shall be guaranteed a Bonus of no less
than $25,000 for 2009 (the “Guaranteed Minimum Bonus”). The Company
shall pay the Guaranteed Minimum Bonus no later than forty-five (45) days after
the Executive’s start date. Such payment will be considered an
advance against the Executive’s pro-rated Bonus; however, in the event that no
bonus is earned, the Executive will not be required to repay the
$25,000.
(d) Expenses. The
Company shall reimburse the Executive for all reasonable business expenses,
including attorneys’ fees in connection with this Employment Agreement, upon the
presentation of itemized statements of such expenses in accordance with Company
policies and procedures as may be in effect from time to time, provided however,
that the Executive shall be reimbursed no later than thirty (30) days after
presentation of any reasonable expense to the Company.
(e) Vacation. The
Executive shall be entitled to at least three (3) weeks of paid vacation per
calendar year (pro rated for 2009) to be used and accrued in accordance with the
Company’s policies as may be in effect from time to time. In addition
to vacation, the Executive shall be entitled to the number of sick days,
personal days and national holidays per year to which other executives of the
Company may be entitled.
(f) Other Benefit
Plans. During the Term, the Executive shall be entitled to
participate in such employee benefit plans and insurance programs offered by the
Company, or which may be in effect from time to time, in accordance with any
eligibility requirements for participation therein. Such benefits will include
medical, dental and vision coverage. The Company agrees to pay 100%
of the Executive’s individual coverage and 50% of the incremental cost
associated with any spouse/family plan.
(g) Equity
Awards. The Executive shall receive options to purchase
500,000 shares of the Company’s common stock at an exercise price of
$1.60 per share (subject to adjustment for dividends, splits,
reclassifications and similar transactions) and such options shall vest
quarterly as of the end of each calendar quarter and evenly over a 3 year term
with the first vesting date on September 30, 2009, subject to continued
employment with the Company on each applicable vesting date or as otherwise
provided for in Section 5 hereof. Such options, unless otherwise
provided for herein, shall be subject to the terms and conditions of the
Company’s 2007 Incentive Stock and Award Plan (the
“Plan”). Additionally, under the Plan the Executive shall receive
20,000 shares of restricted common stock, which shall vest six months after he
commences employment with the Company, subject to continued employment as of
that date. The Executive shall also remain eligible to receive future
additional grants of stock options and restricted stock (e.g., annually, or at
such other time equity grants are awarded to other executives and employees) as
determined by the Board. Upon a “change in ownership” of the Company,
as this concept is defined in U.S. Treasury Regulations Section
1.409A-3(i)(5)(v) or successor provisions, all options and restricted common
stock granted by the Company to the Executive shall immediately
vest.
2
(h) Other. The
Executive shall be entitled to participate in all other bonus, long-term
incentive, equity, 401(k) matching, deferred compensation, and benefit plans and
insurance programs made available to other executives and employees of the
Company.
4. Termination. This
Agreement and the Executive’s employment hereunder shall terminate upon any of
the following events:
(a) the
Executive’s death;
(b) the
Executive’s “Total
Disability.” For purposes of this Agreement, the Executive
shall be deemed to have incurred a “Total Disability” if
(i) Executive is unable to engage in any substantial gainful activity by reason
of any medically determinable physical or mental impairment that can be expected
to result in death, or last for a continuous period of not less than twelve
(12) months; (ii) Executive is, by reason of any medically
determinable physical or mental impairment that can be expected to result in
death, or last for continuous period of not less than twelve (12) months,
receiving income replacement benefits for a period of not less than three
(3) months under an accident and health plan covering employees of the
Company; or (iii) Executive is determined to be totally disabled by the
Social Security Administration. Any question as to the existence of a Total
Disability shall be determined by the written opinion of the Executive’s
regularly attending physician. If the Company disagrees with the
opinion of this physician (the “First Physician”), it may engage, at its own
expense, another physician (the “Second Physician”) to examine the
Executive. If the First Physician and Second Physician agree in
writing that the Executive is or is not subject to a Total Disability, their
written opinion shall, except as otherwise set forth in this paragraph, be
conclusive on the issue of Total Disability. If the First Physician
and Second Physician disagree on the Total Disability of the Executive, they
shall choose a third consulting physician (whose expense shall be borne by the
Company), and the written opinion of a majority of these three physicians shall,
except as otherwise provided in this paragraph, be conclusive as to the
Executive’s Total Disability. If there is a conclusive finding that
the Executive is not subject to a Total Disability, the Company shall have the
right to request additional determinations of Total Disability in accordance
with this paragraph, provided the Executive shall pay all the expenses of such
determinations and shall not request an additional determination more frequently
than once every twelve (12) months. In conjunction with a
determination of Total Disability pursuant to this paragraph, the Executive
hereby consents to any required medical examination, and agrees to furnish any
medical information requested by an examining physician and to waive any
applicable physician-patient privilege and consent to any disclosure of
Executive’s protected health information (under HIPAA or any other applicable
law) that may arise because of such examination and required production of
records. All physicians except the First Physician must be board
certified in the specialty most closely related to the nature of the Total
Disability alleged to exist.
(c) the expiration of the
Term, either the Initial Term of this Agreement or any Renewal Term
thereof, if either party has provided a timely notice of non-renewal in
accordance with Section 2, above;
(d) at the
Executive’s option, a voluntarily
resignation, upon sixty (60) days prior written notice to the
Company;
3
(e) at the
Executive’s option, in the event of an act by the Company constituting “Good
Reason.” For purposes of this Agreement, the term Good Reason shall
mean:
(i) a
material diminution in the Executive’s authority, duties or responsibilities;
or
(ii) a
material diminution in the Executive’s base salary;
(iii) if
the Executive must materially relocate the geographic location at which he must
perform services (which includes moving his principal office more than 5 miles
outside of Manhattan); or
(iv) any other action or inaction that
constitutes a material breach by the Company under this
Agreement.
Prior to
the Executive terminating his employment with the Company for Good Reason, the
Executive must provide written notice to the Company, within ninety (90) days
following the initial existence of such condition, that such Good Reason exists
and setting forth in detail the grounds the Executive believes constitutes Good
Reason. If the Company does not cure the condition(s) constituting
Good Reason within thirty (30) days following receipt of such notice, then
Executive’s employment shall be deemed terminated for Good Reason.
(f) at the
Company’s option, in the event of an act by the Executive as constituting “Cause,” which shall
exist upon a good faith determination by the Board, following a hearing before
the Board at which the Executive has legal representation. It is
specifically understood that Cause shall not include any act of commission or
omission in the good faith exercise of the Executive’s business judgment or upon
the advice of counsel to the Company. For the purposes of this
Agreement, Cause shall mean:
(i) the
willful or continued failure by the Executive to substantially perform his
duties, including, but not limited to, acts of fraud, willful misconduct, gross
negligence or other act of dishonesty which has a material adverse effect on the
Company or its business;
(ii) a
material violation or material breach of this Agreement which is not cured
within ten (10) days written notice to the Executive, or which the Executive
does not commence to cure and thereafter diligently continue to pursue the cure
thereof if such material violation or material breach cannot be cured within
said ten (10) day period;
(iii) misappropriation
of funds, properties or assets of the Company by the Executive which has a
materially adverse effect on the Company or its business;
(iv) the
conviction of, or plea of guilty or no contest to, a felony or any other crime
involving moral turpitude, fraud, theft, embezzlement or
dishonesty;
(v) abuse of
drugs or alcohol which impairs the Executive’s ability to perform his duties as
CFO;
4
(vi) by
reason of a wrongful act or omission of the Executive, the Executive becomes
subject to a preliminary or permanent injunction issued by a United States
District Court enjoining the Executive from violating any securities law or rule
administered or regulated by the Securities and Exchange
Commission;
(vii) by
reason of a wrongful act or omission of the Executive,the Executive becomes
subject to a cease and desist order or other order issued by the Securities and
Exchange Commission or state securities regulator after an opportunity for a
hearing;
(viii)
the Executive has been found in a civil action to have materially breached any
provision of Section 7 and to have thereby caused material harm to the
Company;
(ix) by
reason of a wrongful act or omission of the Executive, the Executive becomes
subject to a preliminary or permanent injunction issued by a state court having
jurisdiction over him and enjoining the Executive from violating any state
securities law, including any rule adopted by the applicable state securities
administrator;
(x) the
Executive has been found to have committed any act or to have failed to take any
action (other than the failure to file any required report) which results in the
Company’s common stock being delisted or not listed for trading (or traded on)
on the Over-the-Counter Bulletin Board, the Nasdaq Stock Market or other
national securities exchange,whichever is the principal trading market;
or
(xi) by
reason of the Executive’s misstatement or concealment of a material fact or
material error or mistake of the Executive, whether of commission or omission,
the Company has been required to restate any of its financial statements filed
with the Securities and Exchange Commission, unless the Company’s securities
counsel has advised the Company in writing that such restatement occurred as the
result of a change in a technical interpretation which the Company’s registered
independent public accounting firm had previously approved.
5. Effects
of Termination.
(a) Upon
termination of the Executive’s employment in the event of death, Total
Disability, expiration of the Term, voluntary resignation or for Cause pursuant
to Section 4(a) or (b) or (c) or (d) or (f), the Executive shall be entitled to
the accrued but unpaid compensation and vacation payable through the date of
termination and any other benefits accrued to him under any Benefit Plans
outstanding at such time and the reimbursement of documented, unreimbursed
expenses incurred prior to such date.
(b) Upon
termination of the Executive’s employment for Good Reason pursuant to Section
4(e), in
addition to all unpaid compensation and vacation and other benefits accrued to
him under any Benefit Plans outstanding at such time and reimbursement of
documented, unreimbursed expenses incurred prior to such date, the Executive
shall be entitled to the following severance benefits:
5
(i) twelve
(12) months Base Salary at the then-current rate, payable in a lump sum, less
withholding of applicable taxes; and
(ii) payment
on a pro-rated basis of any Bonus to which the Executive is entitled pursuant to
this Agreement to the extent it has been earned as of the termination date, and
any other payments earned as of the date of termination; and
(iii) continued
provision for a period of twelve (12) months following the
Executive’s termination of the Executive’s then-current employee benefit plans
and insurance programs or such other plans as may be adopted and extended from
time to time by the Company to its senior executives; and
(iv) all
outstanding options or grants of restricted stock scheduled to vest within one
(1) year after the date of termination, or if sooner, the date on which the
options or grants of restricted stock otherwise expire by their terms, shall
immediately vest and may be exercised by the Executive or his estate,
beneficiaries, or legal representatives, as applicable, within one (1) month
following such vesting.
(c) Upon
termination of the Executive’s employment without Cause (i.e., other than
pursuant to Section 4(f)), in addition to the accrued but unpaid compensation
and vacation pay through the date of termination and any benefits accrued to him
under any Benefit Plans outstanding at such time and the reimbursement of
documented, unreimbursed expenses incurred prior to such date, the Executive
shall be entitled to the following severance benefits:
(i) The
greater of twelve (12) months’ Base Salary at the then-current rate, or the
remainder of the Base Salary due under this Agreement, to be paid upon the date
of the termination of employment in a lump sum, less withholding of applicable
taxes;
(ii) payment
of all Bonuses to which the Executive is entitled over the Term of this
Agreement to the extent earned, and any other payments earned as of the date of
termination; and
(iii) continued
provision for a period of twelve (12) months following the date of termination
of the Executive’s then-current employee benefit plans and insurance programs or
such other plans as may be adopted and as extended from time to time by the
Company to its senior executives; and
(iv) all
outstanding options or grants of restricted stock shall be immediately vested
and may be exercised by the Executive or his estate, beneficiaries, or legal
representatives, as applicable, at any time within one (1) year after the date
of termination, or if sooner, the date on which the options or grants of
restricted stock otherwise expire by their terms.
6. The
Company shall execute and deliver in favor of the Executive an Indemnification
Agreement on substantially the same terms and conditions entered into with the
other officers and directors of the Company. Such agreement shall provide for
the indemnification of the Executive for the term of his employment and for a
period of at least six (6) years thereafter or such longer term as is provided
therein. The Company shall maintain directors’ and officers’ insurance covering
the Executive during the Term and for a period of the greater of (i) two years
from termination of employment or (ii) as long as the Company maintains such
insurance not to exceed six (6) years or (iii)
such longer term as is provided in the Indemnification Agreement.
6
7. Restrictive
Covenants.
(a) Acknowledgments. The
Executive acknowledges that: (i) as a result of the Executive’s employment by
the Company, the Executive has obtained and will obtain Confidential Information
(as defined below); (ii) the Confidential Information has been developed and
created by the Company at substantial expense and the Confidential Information
constitutes valuable proprietary assets; (iii) the Company will suffer
substantial damage and irreparable harm which will be difficult to compute if,
during the Term and thereafter, the Executive should enter a Competitive
Business (as defined below) in violation of the provisions of this Agreement;
(iv) the nature of the Company’s business is such that it could be conducted
anywhere in the world and that it is not limited to a geographic scope or
region; (v) the Company will suffer substantial damage which will be difficult
to compute if, during the term of employment or thereafter, the Executive should
solicit or interfere with the Company’s employees, clients or customers or
should divulge Confidential Information relating to the business of the Company
and its affiliates; (vi) the provisions of this Agreement are reasonable and
necessary for the protection of the business of the Company; (vii) the Company
would not have hired or continued to employ the Executive unless he agreed to be
bound by the terms hereof; and (viii) the provisions of this Agreement will not
preclude the Executive from other gainful employment. “Competitive
Business,” as used in this Agreement, shall mean any business which directly
competes with any significant aspect of the Company’s business. A
parent or sister company to such a business shall not be considered a
Competitive Business under the terms of this Agreement. “Confidential
Information,” as used in this Agreement, shall mean any and all confidential
and/or proprietary knowledge, data, or information of the Company, including,
without limitation, any: (A) trade secrets, drawings, inventions, methodologies,
ideas, processes, formulas, source and object codes, data, programs, software
source documents, works of authorship, know-how, improvements, discoveries,
developments, designs and techniques, and all other work product of the Company,
whether or not patentable or registrable under trademark, copyright, patent or
similar laws; (B) information regarding plans for research, development, new
service offerings and/or products, marketing, advertising and selling,
distribution, business plans, business forecasts, budgets and unpublished
financial statements, licenses, prices and costs, suppliers, customer lists,
customers or distribution arrangements; (C) any information regarding the skills
and compensation of employees, suppliers, agents, and/or independent contractors
of the Company; (D) concepts and ideas relating to the development and
distribution of content in any medium or to the current, future and proposed
products or services of the Company; or (E) any other information, data or the
like that is labeled confidential or orally disclosed to the Executive as
confidential.
(b) Confidentiality. In
consideration of the benefits provided for in this Agreement, the Executive
agrees not to, at any time, either during the Term or thereafter, divulge, use,
publish or in any other manner reveal, directly or indirectly, to any person,
firm, corporation or any other form of business organization or arrangement and
keep in the strictest confidence any Confidential Information, except (i) as may
be necessary to the performance of the Executive’s duties hereunder, (ii) with
the Company’s express written consent, (iii) to the extent that any such
information is in or becomes in the public domain other than as a result of the
Executive’s breach of any of obligations hereunder, or (iv) where required to be
disclosed by court order, subpoena or other government process and, in such
event, the Executive shall cooperate with the Company in attempting to keep such
information confidential. Upon the request of the Company, the
Executive agrees to promptly deliver to the Company the originals and all
copies, in whatever medium, of all such Confidential Information.
7
(c) Non-Compete. In
consideration of the benefits provided for in this Agreement, the Executive
covenants and agrees that during the Term and for a period of twelve (12) months
following the termination of his employment for whatever reason, or from the
date of entry by a court of competent jurisdiction of a final judgment enforcing
this covenant, whichever is last to occur (the “Restricted Period”), he will
not, for himself, or in conjunction with any other person, firm, partnership,
corporation or other form of business organization or arrangement (whether as a
shareholder, partner, member, principal, agent, lender, director, officer,
manager, trustee, representative, employee or consultant), directly or
indirectly, be employed by, provide services to, in any way be affiliated or
associated with or have any interest in, or give advice or consultation to any
Competitive Business.
(d) Non-Solicitation of
Employees. In consideration of the benefits provided for in
this Agreement, the Executive covenants and agrees that during the Restricted
Period, the Executive shall not, without the prior written permission of the
Company, directly or indirectly solicit, employ or retain, or cause any other
person or entity to solicit, employ or retain, any person who is employed by or
who is providing services to the Company at the time of the Executive’s
termination of employment or who was providing such services to the Company
within the twelve (12) month period prior to the Executive’s termination of
employment.
(e) Non-Solicitation of Clients
and Customers. In consideration of the benefits provided for
in this Agreement, the Executive covenants and agrees that during the Restricted
Period, he will not, for himself, or in conjunction with any other person, firm,
partnership, corporation or other form of business organization or arrangement
(whether as a shareholder, partner, member, lender, principal, agent, director,
officer, manager, trustee, representative, employee or consultant), directly or
indirectly: (i) solicit or accept any business that is directly related to the
business of the Company, from any person or entity who, at the time of, or at
any time during the twelve (12) months preceding the Executive’s termination,
was an existing or prospective customer or client of the Company; (ii) request
or cause any of the Company’s customers or clients to cancel or terminate any
business relationship with the Company; or (iii) request or cause any employee
of the Company to breach or threaten to breach any terms of said employee’s
agreements with the Company or to terminate his or his employment with the
Company.
8
(f) Post-Employment
Property. The parties agree that any work of authorship,
invention, design, discovery, development, technique, improvement, source code,
hardware, device, data, apparatus, practice, process, method or other work
product whatever (whether patentable or subject to copyright, or not, and
hereinafter collectively called “discovery”) related to training or marketing
methods and techniques that the Executive, either solely or in collaboration
with others, has made or may make, discover, invent, develop, perfect, or reduce
to practice during the term of his employment, whether or not during regular
business hours and created, conceived or prepared on the Company’s premises or
otherwise, shall be the sole and complete property of the
Company. More particularly, and without limiting the foregoing, the
Executive agrees that all of the foregoing and any (i) inventions (whether
patentable or not, and without regard to whether any patent therefor is ever
sought), (ii) marks, names, or logos (whether or not registrable as trade or
service marks, and without regard to whether registration therefor is ever
sought), (iii) works of authorship (without regard to whether any claim of
copyright therein is ever registered), and (iv) trade secrets, ideas, and
concepts ((i) - (iv) collectively, “Intellectual Property Products”) created,
conceived, or prepared on the Company’s premises or otherwise, whether or not
during normal business hours, shall perpetually and throughout the world be the
exclusive property of the Company, as shall all tangible media (including, but
not limited to, papers, computer media of all types, and models) in which such
Intellectual Property Products shall be recorded or otherwise
fixed. The Executive further agrees promptly to disclose in writing
and deliver to the Company all Intellectual Property Products created during his
engagement by the Company, whether or not during normal business
hours. The Executive agrees that all works of authorship created by
the Executive during his engagement by the Company shall be works made for hire
of which the Company is the author and owner of copyright. To the
extent that any competent decision-making authority should ever determine that
any work of authorship created by the Executive during his engagement by the
Company is not a work made for hire, the Executive hereby assigns all right,
title and interest in the copyright therein, in perpetuity and throughout the
world, to the Company. To the extent that this Agreement does not otherwise
serve to grant or otherwise vest in the Company all rights in any Intellectual
Property Product created by the Executive during his engagement by the
Company, the Executive hereby assigns all right, title and interest
therein, in perpetuity and throughout the world, to the Company. The
Executive agrees to execute, immediately upon the Company’s reasonable request
and without charge, any further assignments, applications, conveyances or other
instruments, at any time after execution of this Agreement, whether or not the
Executive is engaged by the Company at the time such request is made, in order
to permit the Company, or its assigns, to protect, perfect, register, record,
maintain, or enhance their rights in any Intellectual Property Product;
provided, that, the Company shall bear the cost of any such assignments,
applications or consequences. Upon termination of the Executive’s
employment by the Company for any reason whatsoever, and at any earlier time the
Company so requests, the Executive will immediately deliver to the custody of
the person designated by the Company all originals and copies of any documents
and other property of the Company in the Executive’s possession, under the
Executive’s control or to which he may have access.
(g) Non-Disparagement. Both
parties acknowledge and agree not to defame or publicly criticize the services,
business, integrity, veracity or personal or professional reputation of the
other, in either a professional or personal manner, at any time during or
following the Term. With respect to the Company, this shall include
any officers, directors, partners, executives, employees, representatives or
agents of the Company.
(h) Enforcement. The
Executive acknowledges that any breach of the foregoing covenants and
restrictions in this Section, would cause irreparable injury to the Company for
which there is no adequate remedy at law. In addition to all of the
rights and remedies as to which the Company may be entitled, the Company shall
also be entitled to obtain a temporary restraining order and/or a preliminary or
permanent injunction which would prevent the Executive from violating or
attempting to violate any such provisions. In seeking such an order,
any requirement to post a bond or other undertaking shall be
waived. In any action or proceeding brought to enforce these
restrictive covenants, if it is successful in any such action or proceeding the
Company shall be entitled to an award of all reasonable costs and fees incurred
in bringing such an action or proceeding, including reasonable attorneys’
fees. In the event the Company is unsuccessful in sustaining any such
claim of such a breach, then the Executive shall be entitled to an award of all
reasonable costs and fees incurred in defending any such action or proceeding,
including reasonable attorneys’ fees. In addition, the Company shall
have the right to cease making any payments or provide any benefits to the
Executive under this Agreement in the event he breaches or threatens to breach
any of the provisions hereof, provided however, that if the Company is
unsuccessful in sustaining any such claim of such a breach, the Company shall
remain liable to the Executive for all such withheld payments and
benefits.
9
(i) Blue
Pencil. If, at any time, the provisions of this Section 6
shall be determined to be invalid or unenforceable under any applicable law, by
reason of being vague or unreasonable as to area, duration or scope of activity,
this Agreement shall be considered divisible and shall become and be immediately
amended to only such area, duration and scope of activity as shall be determined
to be reasonable and enforceable by the court or other tribunal having
jurisdiction over the matter and the Executive and the Company agree that this
Agreement, as so amended, shall be valid and binding as though any invalid or
unenforceable provision had not been included herein.
8. Executive’s
Representations. The Executive hereby represents and warrants
to the Company that: (i) his execution and performance of duties under this
Agreement does not and shall not conflict with, breach, violate or cause a
default under any contract, agreement, arrangement, understanding, order,
judgment or decree as to which the Executive is a party or by which he is bound;
(ii) the Executive is not a party to or bound by any employment agreement,
non-compete agreement, confidentiality agreement or any similar agreement or
arrangement with any other person or entity which effects or impacts his ability
to be employed by the Company pursuant to the terms of this Agreement; and (iii)
upon the execution and delivery of this Agreement by the Company, this Agreement
shall constitute a valid and binding obligation of the Executive, enforceable in
accordance with its terms. In addition, the Executive acknowledges that the
Company has relied on such representations and warranties in employing the
Executive, that he has not entered into, and will not enter into, any agreement,
either oral or written, in conflict with this Agreement. If it is determined
that the Executive is in breach or has breached any of the representations set
forth herein, the Company shall have the right to immediately terminate the
Executive’s employment with the Company and such termination shall be deemed a
termination with Cause. The Executive hereby acknowledges and represents that he
has consulted with independent legal counsel regarding his rights and
obligations under this Agreement and that he fully understands the terms and
conditions contained herein.
9. Successors. The
rights and benefits of the Executive hereunder shall not be assignable, whether
by voluntary or involuntary assignment or transfer by the
Executive. This Agreement shall be binding upon, and inure to the
benefit of, the successors and assigns of the Company, and the heirs, executors
and administrators of the Executive, and shall be assignable by the Company to
any entity acquiring substantially all of the assets of the Company, whether by
merger, consolidation, sale of assets or similar transactions.
10. Notice. For
the purposes of this Agreement, notices, demands and all other communications
provided for in this Agreement shall be in writing and shall be delivered (i)
personally, (ii) by first class mail, certified, return receipt requested,
postage prepaid, (iii) by overnight courier, with acknowledged receipt, or (iv)
by facsimile transmission followed by delivery by first class mail or by
overnight courier, in the manner provided for in this Section, and properly
addressed as follows:
10
|
If
to the Company, to:
|
Xxxxxxx
Xxxxxxx
000
Xxxx Xxxxxx Xxxxx
Xxxxx
000-000
Xxx
Xxxx, Xxx Xxxx 00000
|
|
With
a copy to:
|
Xxxxxxx
X. Xxxxxx, Esq.
Xxxxxx
Xxxxxx LLP
0000
Xxxx Xxxxx Xxxxx Xxxx
Xxxx
Xxxx Xxxxx, XX 00000
Direct
000-000-0000
|
|
If
to the Executive to:
|
Xxxxx
Xxxxx
000
Xxxxxxx Xxxxxx
Xxxxxxx,
XX 00000
(201)
444.0232 – home
(000)
000.0000 – cell
|
|
With
a Copy to:
|
Xxxxxxx
Xxxxxxxxx, Esq.
Snow
Xxxxxx Xxxxxx P.C.
000
Xxxxx Xxxxxx
Xxx
Xxxx, Xxx Xxxx 00000-0000
(000)
000-0000
|
or to
such other address as the Company or the Executive may later indicate in
writing.
11. Governing Law and Dispute
Resolution. This Agreement is governed by, and is to be
construed and enforced in accordance with, the laws of the State of New York,
without regard to principles of conflicts of laws. If, under such
law, any portion of this Agreement is at any time deemed to be in conflict with
any applicable statute, rule, regulation or ordinance, such portion shall be
deemed to be modified or altered to conform thereto or, if that is not possible,
to be omitted from this Agreement, and the invalidity of any such portion shall
not affect the force, effect and validity of the remaining portion
hereof. Each party expressly agrees, consents and submits to the
personal jurisdiction and venue of the American Arbitration Association (“AAA”)
in New York County, New York for adjudication of any and all disputes arising
from or related to this Agreement under the AAA’s commercial rules before one
(1) arbitrator. Such arbitration shall be conducted in a confidential
manner and shall be identified to the AAA as a confidential
proceeding. Each party waives any and all rights, under law or in
equity, to object or contest the jurisdiction and venue of said
tribunal.
12. Amendment. No
provisions of this Agreement may be amended, modified, or waived unless such
amendment, modification or waiver is agreed to in writing signed by the
Executive and by a duly authorized officer of the Company. No waiver
by either party hereto at any time of any breach by the other party hereto of
any condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time.
11
13. Entire
Agreement. This Agreement sets forth the entire agreement of
the parties hereto in respect of the subject matter contained herein and
supersedes any and all prior agreements, promises, covenants, arrangements,
understandings, communications, representations or warranties, whether oral or
written, by any officer, employee or representative of any party
hereto. Any prior agreement by the parties hereto with respect to the
subject matter of this Agreement is hereby terminated and canceled as of the
date hereof.
14. Severability. The
covenants of this Agreement shall be construed as covenants independent of one
another and as obligations distinct from any other agreement between the
parties. Should any provision herein be held to be void or
unenforceable, the remaining provisions shall remain in full force and effect,
to be read and construed as if the void or unenforceable provisions were
originally deleted.
15. Counterparts. This
Agreement may be executed in counterparts, each of which shall be deemed to be
an original but all of which together will constitute one and the same
instrument.
16. Section
409A.
a. Notwithstanding
anything to the contrary contained in this Agreement, if at the time of the
Executive’s separation from service within the meaning of Section 409A of the Code, the Company determines that the Executive is
a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code, then to the extent any payment or
benefit that the Executive becomes entitled to under this Agreement on account
of the Executive’s separation from service would be considered deferred
compensation subject to the 20% additional tax imposed pursuant to
Section 409A(a) of the Code as a result of the
application of Section 409A(a)(2)(B)(i) of the
Code, such payment shall not be payable and such benefit shall not be provided
until the date that is the earlier of (i) six months and one day after the
Executive’s separation from service, or (ii) the Executive’s death (the
“Six Month Delay Rule”).
b. For
purposes of this Section 16, amounts payable under the Agreement should not be
considered a deferral of compensation subject to Section 409A to the extent
provided in Treasury Regulation Section 1.409A-1(b)(4) (i.e., short-term
deferrals), Treasury Regulation Section 1.409A-1(b)(9) (i.e., separation pay
plans, including the exception under subparagraph (iii)), and other applicable
provisions of Treasury Regulations Sections 1.409A-1 through A-6.
c. To
the extent that the Six Month Delay Rule applies to payments otherwise payable
on an installment basis, the first payment shall include a catch-up payment
covering amounts that would otherwise have been paid during the six-month period
but for the application of the Six Month Delay Rule, and the balance of the
installments shall be payable in accordance with their original
schedule.
d. To
the extent that the Six Month Delay Rule applies to the provision of benefits
(including, but not limited to, life insurance and medical insurance), such
benefit coverage shall nonetheless be provided to the Executive during the first
six months following his separation from service (the “Six Month Period”),
provided that, during such Six-Month Period, the Executive pays to the Company,
on a monthly basis in advance, an amount equal to the Monthly Cost (as defined
below) of such benefit coverage. The Company shall
reimburse the Executive for any such payments made by the Executive in a lump
sum not later than 30 days following the sixth month anniversary of the
Executive’s separation from service. For purposes of this subparagraph, “Monthly
Cost” means the minimum dollar amount which, if paid by the Executive on a
monthly basis in advance, results in the Executive not being required to
recognize any federal income tax on receipt of the benefit coverage during the
Six Month Period.
12
e. The
parties intend that this Agreement will be administered in accordance with
Section 409A of the Code. To the extent that any
provision of this Agreement is ambiguous as to its compliance with
Section 409A of the Code, the provision shall be
read in such a manner so that all payments hereunder comply with
Section 409A of the Code. The parties agree that
this Agreement may be amended, as reasonably requested by either party, and as
may be necessary to fully comply with Section 409A
of the Code and all related rules and regulations in order to preserve the
payments and benefits provided hereunder without additional cost to either
party.
f. The
Company makes no representation or warranty and shall have no liability to the
Executive or any other person if any provisions of this Agreement are determined
to constitute deferred compensation subject to Section 409A of the Code but do not satisfy an exemption from, or the
conditions of, such Section.
[Signature Page to
Follow]
13
IN WITNESS WHEREOF, the
parties hereby enter into this Agreement and affix their signatures as of the
date first above written.
| By: |
/s/
Xxxxxxx Xxxxxxx
|
|
|||
|
Xxxxxxx
Xxxxxxx
|
|
||||
|
Chief
Executive Officer
|
|
|
/s/
Xxxxx Xxxxx
|
|
|||
|
Xxxxx
Xxxxx
|
|
14
