EMPLOYMENT AGREEMENT
EMPLOYMENT
AGREEMENT (the “Agreement”), dated as of March 5, 2007 (the "Effective Date")
between Accoona Corp., a Delaware corporation (the “Company”), and Valentine X.
Xxxxxx (the “Executive”).
WHEREAS,
the Executive is a member of the Board of Directors of the Company (the
“Board”); and
WHEREAS,
the Company desires to employ the Executive as a full-time employee in the
position of Vice Chairman and the Executive desires to be so employed by the
Company, all upon the terms and subject to the conditions set forth
herein;
NOW,
THEREFORE, in consideration of the premises and the mutual agreements contained
herein, the parties hereby agree as follows:
1. Employment.
The
Executive is hereby employed by the Company upon the terms and subject to the
conditions contained in this Agreement. The term of employment of the Executive
by the Company pursuant to this Agreement shall commence as of the Effective
Date and, unless earlier terminated or renewed pursuant to the terms hereof,
shall end on the eighteen (18) month anniversary of the hereof (the “Initial
Employment Period”), subject to renewal as described below, and earlier
termination as set forth in Section 4 hereof. This Agreement shall be subject
to
unlimited consecutive automatic renewals, each for a period of one year (the
“Renewals”), unless either party hereto provides written notice to the other
party at least 90 days prior to each Renewal of its intention not to renew
this
Agreement. The Initial Employment Period and any Renewals shall be referred
to
herein as the “Employment Period”.
2. Position
and Duties.
(a) The
Company shall employ the Executive, and the Executive agrees to be employed
by
the Company, in the position of Vice Chairman. The Executive shall also be
the
Chairman of the Executive Committee of Management of the Company and shall
assume and perform the duties of Chairman of the Board (“Chairman”) in the
Chairman’s absence. The Executive shall report directly to the Chairman and the
Board. The Executive shall be the most senior executive officer of the Company,
with no executive officer ranking equal to or above the Vice Chairman, and
shall
perform such functions as may from time to time be designated by the Board,
not
inconsistent with such position, and shall have all the duties customarily
associated with the most senior executive officer of the Company, including
responsibility for the general operation, management and profitability of the
Company and complete authority, in consultation with the Board as directed
or
required, with respect to hiring, firing and compensation decisions, subject
to
established budget limits and written policies and procedures, as shall be
established by the Company from time to time. During the Employment Period,
the
Company shall nominate the Executive as a member of the Board. In the event
that
the Executive’s employment with the Company terminates for any reason, the
Executive agrees to resign from the Board upon the request of the Board. All
other employees of the Company shall report directly to the Executive or to
such
other persons as the Executive shall direct. During the Employment Period,
the
Executive shall perform the Executive’s duties hereunder to the best of the
Executive’s abilities, well and faithfully and at the highest professional
level. The Executive shall devote his full business time, attention, skills
and
efforts to the affairs of the Company, and shall use his best efforts to promote
the interests of the Company; provided however, during the first 90 days the
Executive may spend a portion of his time winding up two (2) existing consulting
projects; provided that they do not materially interfere with the performance
of
his duties hereunder. Notwithstanding the foregoing, the Executive may engage
in
charitable, civic or community activities and lecturing (including at industry
functions) and, subject to the approval of the Board, serving as a member of
the
Board of Directors of public companies (24/7 Real Media, Inc. hereby being
approved) provided that they do not interfere with the performance of his duties
hereunder.
(b) Throughout
the Employment Period, the Executive’s duties will be performed primarily at the
Company’s offices in the New York City metropolitan area, including Jersey City,
New Jersey, as established by the Company, subject to the travel requirements
of
his position, which Executive acknowledges may be substantial.
3. Performance
Review; Compensation.
(a) Performance
Review.
Annually, during the Employment Period the Executive shall receive a performance
review by the Board or the Compensation Committee. As part of the performance
review, the Board or the Compensation Committee shall: (x) establish Executive’s
base salary prospectively, (y) grant Executive such bonuses, if any, as
determined by the Board or the Compensation Committee in its sole discretion
for
the prior or current period and, in such reviewing party’s sole discretion,
establish the amount, if any, terms or performance requirements for any future
bonus, and (z) determine the amount and nature of employee benefits and fringe
benefits available to the Executive. Notwithstanding the foregoing, until such
time as the Executive receives a performance review within the meaning of this
Section 3(a) and the Board or Compensation Committee formally advises the
Executive of any changes in his compensation:
(i) During
the Employment Period, the Company shall pay to the Executive an annual base
salary at the rate of $300,000 per annum.
(ii) During
the Employment Period, the Executive shall be entitled to participate in the
Company’s employee benefit plans and fringe benefit arrangements that are
generally available from time to time to executives of the Company at the most
senior level, subject to the terms of such plans and arrangements and subject
to
the right of the Company to modify, revise or eliminate such benefit plans
and
arrangements from time to time in its sole discretion. It is understood that
the
Executive has his own [health and life insurance] and that upon the Executive
opting out of the Company’s insurance plans, the Company will pay to the
Executive an amount equal to the premiums the Company would have paid if the
Executive had not opted out of said insurance.
(iii) During
the Employment Period the Executive shall be eligible for an annual bonus as
determined by the Board in its sole discretion based on Executive’s
performance.
2
(iv) Contemporaneously
herewith the Company is granting to the Executive two options, each to purchase
up to 1,500,000 shares of common stock of the Company, in the form of
Exhibits
A-1
and
A-2
hereof.
The
Executive agrees that the Compensation under this Section 3 shall constitute
full compensation for all services rendered by the Executive during the
Employment Period. All payments of base salary shall be in accordance with
the
Company’s regular payroll practices and base salary and all other cash payments
hereunder shall be in U.S. Dollars.
(b) Vacation.
Executive shall be entitled to four (4) weeks of vacation per year, with carry
over for one year; provided however no more than two weeks may be taken during
the first six months of employment.
(c) Automobile.
At
Company expense the Company shall lease for the Executive’s business use during
the Employment Period a Honda Odyssey or similar car, shall pay the insurance
and gas with respect thereto and shall reimburse Executive for parking for
up to
$300 per month.
(d) Expense
Reimbursement.
The
Company shall reimburse the Executive for all ordinary and reasonable
out-of-pocket business expenses reasonably incurred by the Executive in the
performance of the Executive’s duties hereunder in accordance with the Company’s
policies and procedures for its most senior executives. The Executive shall
submit appropriate invoices for all expenses for which the Executive seeks
reimbursement.
4. Termination;
Consequences of Termination of Employment Period.
(a) The
Executive’s employment may be terminated at any time during the Employment
Period(s) by the Company for Disability or with or without Cause and
(ii) by the Executive for Good Reason upon at least ninety (90) days
notice.
(b) If
(A)
the Executive’s employment is terminated prior to the end of the Employment
Period (i) by the Company other than for Cause (but not for death or Disability)
or (ii) by the Executive for Good Reason, or (B) if the Executive’s employment
is terminated due to the expiration of the Employment Period and the election
of
the Company not to renew the same, the Company’s obligations hereunder shall
cease as of the date of such termination, except that the Executive shall be
entitled to cash payments (the “Severance Payments”) in an aggregate amount
equal to the Executive’s base salary and benefits (or the cash equivalent value
thereof to Executive, which would be affected by Executive electing COBRA and
the Company reimbursing the Executive for the same) (but not any bonuses or
other compensation) for a period of six (6) months from the date of termination
to be paid to Executive in accordance with the regular payroll practices of
the
Company. The Executive shall be under no obligation to mitigate his damages
or
to seek other employment.
(c) If
the
Executive’s employment terminates for any other reason prior to end of the
Employment Period, including (A) by reason of death or Disability of the
Executive, (B) by the Company for Cause, or (C) by the Executive without Good
Reason, the Company’s obligations hereunder shall cease as of the date of such
termination, and the Executive shall not be entitled to any severance by virtue
of this Agreement or otherwise.
3
(d) In
the
event of any termination of Executive’s employment under this Section 4,
Executive (or his estate) shall be paid such portion of the Executive’s base
salary as has accrued by virtue of his service during the period prior to
termination and has not yet been paid, together with any amounts for expense
reimbursement and similar items which have been properly incurred in accordance
with the provisions hereof prior to termination and have not yet been
paid.
5. Federal
and State Withholding.
The
Company shall deduct from the amounts payable to the Executive pursuant to
this
Agreement the amount of all required federal and state withholding taxes in
accordance with the Executive’s Form W-4 on file with the Company and all
applicable social security and Medicare taxes.
6. Agreement
to Protect Confidential Information.
The
Executive has executed a separate Agreement to Protect Confidential Information,
Assign Inventions and Prevent Unfair Competition and Unfair Solicitation dated
the date hereof (the “Restrictive Covenant Agreement”). Said agreement is hereby
incorporated herein and made a part hereof by this reference.
7. Life
Insurance.
The
Company may, in its sole discretion, and at any time during the Employment
Period, apply for and procure as owner and for its own benefit insurance on
the
life of the Executive, in such amounts and in such form or forms as the Company
may choose. The Executive shall have no interest whatsoever in any such policy
or policies, but he shall, at the request of the Company, submit to such medical
examinations, supply such information, and execute such documents as may be
reasonably required by the insurance company or companies to whom the Company
has applied for such insurance. Subject to requirements of law and except as
necessary to obtain any insurance, the Company shall direct the insurance
company and any broker not to disclose to the Company any confidential
information regarding the Executive. Upon the termination of Executive’s
employment by the Company, if the Company owns any life insurance policy on
the
Executive’s life, the Executive shall have the option to acquire such life
insurance from such owner at a price equal to its cash surrender value, if
any,
at the date of the termination of the Executive’s employment, and if the Company
owns any term life insurance on the Executive’s life, the Executive shall have
the option to acquire such life insurance from such owner at a price equal
to
the prepaid premium at the date of the termination of the Executive’s
employment.
8. Arbitration;
Certain Costs.
Any
dispute or controversy between the Company and the Executive, whether arising
out of or relating to this Agreement, the breach or alleged breach of this
Agreement, or otherwise, shall be settled by arbitration in New York City
administered by the American Arbitration Association before a single arbitrator
in accordance with its Commercial Rules then in effect and judgment on the
award
rendered by the arbitrator may be entered in any court having jurisdiction
thereof. The arbitrator shall have the authority to award any remedy or relief
that a court of competent jurisdiction could order or grant, including, without
limitation, the issuance of an injunction. However, either party may, without
inconsistency with this arbitration provision, apply to any court having
jurisdiction over such dispute or controversy and seek interim provisional,
injunctive or other equitable relief until the arbitration award is rendered
or
the controversy is otherwise resolved. Except as necessary in court proceedings
to enforce this arbitration provision or an award rendered hereunder, or to
obtain interim relief, neither a party nor an arbitrator may disclose the
existence, content or results of any arbitration hereunder without the prior
written consent of the Company and the Executive. The Company and the Executive
acknowledge that this Agreement evidences a transaction involving interstate
commerce. Notwithstanding any choice of law provision included in this
Agreement, the United States Federal Arbitration Act shall govern the
interpretation and enforcement of this arbitration provision.
4
9. Notices.
All
notices and other communications required or permitted hereunder shall be in
writing and shall be deemed to have been duly given when personally delivered
or
five days after deposit in the United States mail, certified and return receipt
requested, postage prepaid, addressed (a) if to the Executive, to the most
recent address then shown on the employment records of the Company, and if
to
the Company, to Accoona Corp., 000 Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx Xxxx,
XX
00000 to the attention of the Chairman of the Board of Directors, with a copy
to
Xxxxxx X. Xxxx, Loeb & Loeb LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
or (b) to such other address as either party may have furnished to the other
in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
10. Certain
Definitions.
The
following terms shall have the following meanings for purposes of this
Agreement:
(a) “Cause”
means (i) Executive’s continued willful failure or refusal to perform written
directives of the Chairman of the Board or the Board regarding Executive’s
duties and responsibility which are not contrary to the scope and nature of
Executive’s duties and responsibilities as set forth in Paragraph 2(a) hereof,
which failure or refusal is not cured within 10 days after written notice
thereof to Executive, (ii) the willful engaging by Executive in conduct that
is,
or that the Board determines in good faith is reasonably likely to be,
materially injurious to the business, reputation, character or community
standing of the Company, which failure has not been cured within 10 days after
written notice thereof to the Executive by the Company, (iii) any act of
dishonesty, fraudulent or unethical conduct or moral turpitude affecting, or
which in the good faith judgment of the Board, reasonably might materially
adversely affect, the Company, (iv) Executive’s conviction in a court of law or
plea of nolo contendere to any felony, or (v) a material breach by the Executive
of any material term of this Agreement or the Restrictive Covenant Agreement,
provided if such breach is susceptible of cure, such breach is not cured within
10 days after written notice thereof to the Executive by the
Company.
(b) “Disability”
means the Executive having become unable to perform regularly Executive’s duties
hereunder by reason of illness or incapacity for a period of more than 60
consecutive days or a total of 120 days, even if not consecutive, within any
period of 360 consecutive days. If there should be a dispute between the parties
hereto as to the Executive’s physical or mental disability for purposes of this
Agreement, the question shall be settled by the opinion of an impartial
reputable physician or psychiatrist agreed upon for the purpose by the parties
or their representatives, or of the parties cannot agree within fifteen (15)
days after a request for designation of such party, then each party shall
designate a physician or psychiatrist and the two of them shall designate a
third such medical professional and the opinion of a majority of the three
(3)
of them shall settle the question. The certification of such physician or
psychiatrist or the majority of the three (3) of them, as the case may be,
as to
the question in dispute shall be final and binding upon the parties
hereto.
5
(c) “Good
Reason” means the occurrence, without the Executive’s express written consent,
of any of the following events: (i) removal as the Vice Chairman of the Company
or removal or failure to reelect the Executive as a Director of the Company;
provided, that such failure or removal is not in connection with a termination
of Executive’s employment hereunder (ii) any material dimunition in the
Executive’s duties, authority, responsibilities or reporting relationships with
respect to the Company or assignment to the Executive of any duties that are
materially inconsistent with the Executive’s position or duties described
herein, provided such changes are not in connection with the Executive’s
termination of employment (iii) the Executive’s base compensation is reduced
and/or fringe benefits are materially reduced, and (iv) a change in the location
of the principal offices of the Company to a location outside of Jersey City,
New Jersey or the New York metropolitan area, without the consent of Executive.
Notwithstanding the foregoing, an isolated, insubstantial and inadvertent action
taken by the Company in good faith that is remedied by the Company promptly
(the
earlier of 20 days or as soon as reasonably practicable) after receipt of
written notice thereof given by the Executive shall not constitute a basis
for
Good Reason.
11. Indemnification.
The
Company agrees that, in addition to any rights that the Executive may have
under
the certificate of incorporation and by-laws of the Company as the same may
be
in effect from time to time hereafter as to indemnification and advancement
of
expenses, the Executive shall hereby, as a matter of separate contract, be
entitled and continue to be entitled to all rights of indemnification and
advancement of expenses provided to directors, officers, employees or agents
of
the Company or who serve or served at the request of the Company in any capacity
with any other corporation or other enterprise, under the certificates or
articles of incorporation and by-laws of the Company and such other companies
as
in effect on the date hereof (the provisions of which are incorporated herein
by
reference), regardless of any amendments thereto which thereafter occur, which
rights the Company expressly agrees shall apply to the Executive as a director,
officer, employee and agent of the Company, and which rights shall continue
indefinitely in the Executive’s favor as to any actions, suits, claims or
proceedings now pending or threatened and as to any actions, suits, claims
or
proceedings which may hereafter be brought or threatened.
12. Severability.
Whenever possible, each provision of this Agreement shall be interpreted in
such
a manner as to be effective and valid under applicable law, but if any provision
of this Agreement is determined to be invalid, illegal or unenforceable in
any
respect under applicable law or rule in any jurisdiction, such invalidity,
illegality or unenforceability shall not affect the validity, legality or
enforceability of any other provision of this Agreement or the validity,
legality or enforceability of such provision in any other jurisdiction, but
this
Agreement shall be reformed, construed and enforced in such jurisdiction as
if
such invalid, illegal or unenforceable provision had never been contained
herein.
13. Entire
Agreement.
This
Agreement constitutes the entire agreement and understanding between the parties
with respect to the subject matter hereof and supersedes and preempts any prior
understandings, agreements or representations by or between the parties, written
or oral, which may have related in any manner to the subject matter hereof.
6
14. Successors
and Assigns.
This
Agreement shall be enforceable by the Executive and the Executive’s heirs,
executors, administrators and legal representatives, and by the Company and
its
successors and permitted assigns. This Agreement shall not be assigned by the
Company other than to a successor pursuant to a merger, consolidation or
transfer of all or substantially all of the capital stock or assets of the
Company. The Executive may not assign any of his duties under this
Agreement.
15. Governing
Law.
This
Agreement shall be governed by and construed and enforced in accordance with
the
internal laws of the State of New York without regard to principles of conflict
of laws.
16. Survival.
Sections 4-18 of this Agreement shall survive and continue in full force and
effect in accordance with its terms, notwithstanding any termination of the
Employment Period.
17. Amendment
and Waiver.
The
provisions of this Agreement may be amended or waived only by the written
agreement of the Company (upon the approval of the Board) and the Executive,
and
no course of conduct or failure or delay in enforcing the provisions of this
Agreement shall affect the validity, binding effect or enforceability of this
Agreement.
18. Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed to be an original and all of which together shall constitute one and
the
same instrument.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date
first above written.
| ACCOONA CORP. | ||
| |
|
|
| By: | /s/ Xxxxxx X. Xxxxxx | |
|
Xxxxxx X. Xxxxxx Its: Chairman of the Board |
||
| EXECUTIVE: | ||
| |
|
|
| By: | /s/ Valentine X. Xxxxxx | |
|
Valentine X. Xxxxxx |
||
7
