Exhibit 10.1
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of this 31st day of December, 1996,
between INFORMATION VENTURES LLC, a limited liability company (the "Company") ,
and Xxxxx Xxxxxx (the "Executive").
R E C I T A L S:
WHEREAS, the Company recognizes that the future growth,
profitability and success of the Company's business will be substantially and
materially enhanced by the employment of the Executive by the Company;
WHEREAS, the Company desires to employ the Executive and the
Executive has indicated his willingness to provide his services, on the terms
and conditions set forth herein;
NOW, THEREFORE, on the basis of the foregoing premises and in
consideration of the mutual covenants and agreements contained herein, the
parties hereto agree as follows:
Section 1. Employment. The Company hereby agrees to employ the
Executive and the Executive hereby accepts employment with the Company, on the
terms and subject to the conditions hereinafter set forth. Subject to the terms
and conditions contained herein, the Executive shall serve as a President and
Chief Executive officer of the. Company and, in such capacity, shall report
directly to the Board of Directors and shall have such duties as are typically
performed by a president and chief executive officer of a corporation, together
with such additional duties, commensurate with the Executive's position as a
President of the Company, as may be assigned to the Executive from time to time
by the Board of Directors of the Company (the "Board of Directors") . The
principal location of the Executive's employment shall be at the Company's
principal executive office located in the Greater New York Area, or such other
place that the Company and Slaine shall jointly deem appropriate to locate the
office, although the Executive understands and agrees that he may be required to
travel from time to time for business reasons.
Section 2. (a). Term. Unless terminated pursuant to ion 6 hereof,
the Executive's employment hereunder shall commence on the date hereof and shall
continue during the initial period ending forty-two (42) months after the date
hereof (the "Initial Term"). Thereafter, the Employment Term shall extend
automatically for consecutive periods of two (2) years unless either party shall
provide notice of termination not less than one hundred and twenty (120) days
prior to the end of the Employment Term. The Initial Term, together with any
extension pursuant to this Section 2, is referred to herein as the "Employment
Term."
Section 3. Compensation.
(a) Salary. As compensation for the performance of the Executive's
services hereunder, the Company shall pay to the Executive a salary (the
"Salary") of $300,000 per annum with increases, as may be approved in writing by
the Board of Directors. The Salary shall be payable in accordance with the
payroll practices of the Company as the same shall exist from time to time. In
no event shall the Salary be decreased during the Employment Term.
(b) Bonus Plan. The Executive shall be eligible to receive an annual
cash bonus ("Bonus") which shall be determined by the Board of Directors.
(c) Benefits. In addition to the Salary and Bonus, if any, the
Executive shall be entitled to participate in health, insurance, pension,
automobile and other benefits provided to other senior executives of the Company
on terms no less favorable than those available to such senior executives of the
Company. The Executive shall also be entitled to the same number of vacation
days, holidays, sick days and other benefits as are generally allowed to other
senior executives of businesses of comparable size and geography as the Company,
including a leased car.
Section 4. Exclusivity. During the Employment Term, the Executive
shall devote his full time to the business of the Company, shall faithfully
serve the Company, shall in all respects conform to and comply with the lawful
and reasonable directions and instructions given to him by the Board of
Directors in accordance with the terms of this Agreement shall use his best
efforts to promote and serve the interests of the Company and shall not engage
in any other business activity, whether or not such activity shall be engaged in
for pecuniary profit, except that the Executive may (i) participate in the
activities of professional trade organizations related to the business of the
Company, (ii) engage in personal investing activities, provided that activities
set forth in these clauses W and (ii), either singly or in the aggregate, do not
interfere in any material respect with the services to be provided by the
Executive hereunder and (iii) engage in activities necessary to manage. his
interests in Progressive Grocer, provided such activities do not interfere in
any. material respect with the services to be provided by Executive hereunder.
Section 5. Reimbursement for Expenses. The Executive is authorized
to incur reasonable expenses in the discharge of the services to be performed
hereunder, including expenses for travel, entertainment, lodging and similar
items in accordance with the Company's expense reimbursement policy, as the same
may be modified by the Board of Directors from time to time. The Company shall
reimburse the Executive for all such proper expenses upon presentation by the
Executive of itemized accounts
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of such expenditures in accordance with the financial policy of the Company, as
in effect from time to time.
Section 6. Termination and Default.
(a) Death. this Agreement shall automatically terminate upon the
death of the Executive and upon such event, the Executive's estate shall be
entitled to receive the amounts specified in Section 6(f) below as if
termination had occurred for Good Reason.
(b) Disability. If the Executive is unable to perform the duties
required of him under this Agreement because of illness, incapacity, or physical
or mental disability, this Agreement shall remain in full force and effect and
the Company shall pay all compensation required to be paid to the Executive
hereunder, unless the Executive is unable to perform the duties required of him
under this Agreement for an aggregate of 180 days (whether or not consecutive)
during any 12-month period during the term of this Agreement, in which event
this Agreement (other than Sections 6 (f), 7, 8, and 10 hereof), including, but
not limited to, the Company's obligations to pay any Salary or to provide any
privileges under this Agreement, shall terminate at the end of the 180 days of
complete disability.
(c) Just Cause. The Company may terminate the Executive's employment
during any term hereunder only for "Just Cause" as that term is defined below.
In the event of termination pursuant to this Section 6(c) for Just Cause, the
Company shall deliver to the Executive written notice setting forth the basis
for such termination, which notice shall specifically set forth the nature of
the Just Cause which is the reason for such termination. Termination of the
Executive's employment hereunder shall be effective upon delivery of such notice
of termination. For purposes of this Agreement, "Just Cause" shall mean: W the
Executive's failure (except where due to a disability contemplated by subsection
(b) hereof), neglect or refusal to perform the material duties of his position
hereunder which failure, neglect or refusal shall not have been corrected by the
Executive within 30 days of receipt by the Executive of written notice from the
Company of such failure, neglect or refusal, which notice shall specifically set
forth the nature of said failure, neglect or refusal, (ii) any willful or
intentional act of the Executive that has the effect of materially injuring the
business of the Company or its affiliates in any material respect; (iii)
conviction of the Executive for the commission of a felony; or (iv) the
commission by the Executive of an act of fraud or embezzlement against the
Company.
(d) Good Reason. The Executive may resign for "Good Reason" if he
resigns from his employment hereunder following a Substantial Breach (as
hereinafter defined) and such Substantial Breach shall (30) days of Executive of
notice shall Breach which "Substantial not have been corrected by the Company
within thirty
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receipt by the Company of written notice from the occurrence of such Substantial
Breach, which specifically set forth the nature of the Substantial is the reason
for such resignation. The term Breach" means (i) such actions taken by the
Company or its Members which prevent the Executive from performing his
responsibilities hereunder; provided, however, that the Members' exercise of its
right to approve or not approve any transaction shall not be deemed to be an
action which would prevent the Executive from performing his responsibilities
hereunder; (ii) the failure by the Company to pay to the Executive the Salary
and Bonus, if any, in accordance with Sections 3 (a) and 3 (b) hereof; (iii) the
failure by the Company to allow the Executive to participate in the Company's
employee benefit plans generally available from time to time to senior
executives of the Company; or (iv) the failure of any successor to all or
substantially all of the business and/or assets of the Company to assume this
Agreement; provided, however, that the term "Substantial Breach" shall not
include a termination of the Executive's employment hereunder pursuant to
Sections 6(b) or (c) hereof. The date of termination of the Executive, s
employment under this Section 6(d) shall be the effective date of any
resignation specified in writing by the Executive, which shall not be less than
thirty (30) days after receipt by the Company of written notice of such
resignation, provided that such resignation shall not be effective pursuant to
this Section 6(d) and the Substantial Breach shall be deemed to have been cured
if such Substantial Breach is corrected by the Company during such 30-day
period.
(e) Change in Control. The Executive shall have the right to
immediately resign his employment in the event a "Change of Control". Change of
Control shall be deemed to have occurred if any party or affiliated parties,
other than the Executive, owns more units of the Company than Warburg Pincus
Ventures, L.P. and its affiliates.
(f) Payments. In the event that the Executive resigns without Good
Reason or the Executive's employment hereunder terminates for Just Cause, the
Company shall pay to the Executive all amounts accrued but unpaid hereunder
through the date of termination in respect of Salary, unused vacation or
unreimbursed expenses. In the event the Executive's employment hereunder is
terminated by the Executive with Good Reason, in addition to the amounts
specified in the foregoing sentence, (i) the Executive shall continue to receive
the Salary (less any applicable withholding or similar taxes) at the rate in
effect hereunder on the date of such termination periodically, in accordance
with the Company's prevailing payroll practices, for a period of twelve months
following the date of such termination (the "Severance Term") and (ii) the
Executive (and/or his covered dependents) shall continue to receive any health
or insurance benefits provided to him as of the date of such termination in
accordance with Section 3(c) hereof during the severance Term. In the event the
Executive accepts other employment or engages in his own business prior to the
last date of the Employment Term, the
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Executive shall forthwith notify the Company and the Company shall be entitled
to set off from amounts due the Executive under this Section 6(f) the amounts
paid to the Executive in respect of such other employment or business activity.
Amounts owed by the Company in respect of the Salary or reimbursement for
expenses under the provisions of Section 5 hereof shall, except as otherwise set
forth in this Section 6(f), be paid promptly upon any termination. Upon any
termination of this Agreement, all of the rights, privileges and duties of the
Executive hereunder shall cease, except for his rights under this Section 6(f)
and his obligations under Sections 7, 8, 9, 10, and 11 hereunder.
Section 7. Non-Disclosure Non-Interference and Inventions.
(a) No Competing Employment. The Executive acknowledges that the
agreements and covenants contained in this Section 7 are essential to protect
the value of the Company's business and assets and by his current employment
with the Company and its subsidiaries, the Executive has obtained and will
obtain such knowledge, contacts, know-how, training and experience and there is
a substantial probability that such knowledge, know-how contacts, training and
experience could be used to the substantial advantage of a competitor of the
Company and to the Company's substantial detriment. Therefore, the Executive
agrees that for the period commencing on the date of this Agreement and ending
an the first anniversary of the termination of the Executive's employment
hereunder (such period is hereinafter referred to as the "Restricted Period"),
the Executive shall not participate or engage, directly or indirectly, for
himself or on behalf of or in conjunction with any person, partnership,
corporation or other entity, whether as an employee, agent, officer, director,
shareholder, partner, joint venturer, investor or otherwise, in any business
activities in the United States if such activity consists of any activity
undertaken or expressly contemplated to be undertaken by the Company or any of
its subsidiaries or by the Executive at any time during the Employment Term;
provided, however, that the foregoing shall not preclude the Executive from
owning less than 2% of the shares of a public company. Notwithstanding the
foregoing, this Section 7(a) shall not apply if the Executive resigns for Good
Reason pursuant to Section 6(d) .
(b) Nondisclosure of Confidential Information. The Executive, except
in connection with his employment hereunder, shall not disclose to any person or
entity or use, either during the Employment Term or at any time thereafter, any
information not in the public domain or generally known in the industry, in any
form, acquired by the Executive while employed by the Company or any predecessor
to the Company's business or, if acquired following the Employment Term, such
information which, to the Executive's knowledge, has been acquired, directly or
indirectly, from any person or entity owing a duty of confidentiality to the
Company or any of its subsidiaries or affiliates, relating to the
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Company, its subsidiaries or affiliates. The Executive agrees and acknowledges
that all of such information, in any form, and copies and extracts thereof, are
and shall remain the sole and exclusive property of the Company, and upon
termination of his employment with the Company, the Executive shall return to
the Company the originals and all copies of any such information provided to or
acquired by the Executive in connection with the performance of his duties for
the Company, and shall return to the Company all files, correspondence and/or
other communications received, maintained and/or originated by the Executive
during the course of his employment.
(c) No Interference. During the Restricted Period, the Executive
shall not, whether for his own account or for the account of any other
individual, partnership, firm, corporation or other business organization (other
than the Company), directly or indirectly solicit, endeavor to entice away from
the Company or its subsidiaries, or otherwise directly interfere with the
relationship of the Company or its subsidiaries with any person who, to the
knowledge of the Executive, is employed by or otherwise engaged to perform
services for the Company or its subsidiaries (including, but not limited to, any
independent sales representatives or organizations) or who is, or was within the
then most recent twelve-month period, a customer or client, of the Company, its
predecessors or any of its subsidiaries. The placement of any general classified
or "help wanted" advertisements and/or general solicitations to the public at
large shall not constitute a violation of this Section 7(c) unless the
Executive's name is contained in such advertisements or solicitations.
(d) Inventions, etc. The Executive hereby sells, transfers and
assigns to the Company or to any person or entity designated by the Company all
of the entire right, title and interest of the Executive in and to all
inventions, ideas, disclosures and improvements, whether patented or unpatented,
and copyrightable material, made or conceived by the Executive, solely or
jointly, during his employment by the Company which relate to methods,
apparatus, designs, products, processes or devices, sold, leased, used or under
consideration or development by the Company, or which otherwise relate to or
pertain to the business, functions or operations of the Company or which arise
from the efforts of the Executive during the course of his employment for the
Company. The Executive shall communicate promptly and disclose to the Company,
in such form as the Company requests, all information, details and data
pertaining to the aforementioned inventions, ideas, disclosures and
improvements; and the Executive shall execute and deliver to the Company such
formal transfers and assignments and such other papers and documents as may be
necessary or required of the Executive to permit the Company or any person or
entity designated by the Company to file and prosecute the patent applications
and, as to copyrightable material, to obtain copyright thereof. Any invention
relating to the business of the Company and disclosed
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by the Executive within one year following the termination of his employment
with the Company shall be deemed to fall within the provisions of this paragraph
unless proved to have been first conceived and made following such termination.
Section 8. Injunctive Relief. Without intending to limit the
remedies available to the Company, the Executive acknowledges that a breach of
any of the covenants contained in Section 7 hereof may result in material
irreparable injury to the Company or its subsidiaries or affiliates for which
there is no adequate remedy at law, that it will not be possible to measure
damages for such injuries precisely and that, in the event of such a breach or
threat thereof, the Company shall be entitled to obtain a temporary restraining
order and/or a preliminary or permanent injunction, without the necessity of
proving irreparable harm or injury as a result of such breach or threatened
breach of Section 7 hereof, restraining the Executive from engaging in
activities prohibited by Section 7 hereof or such other relief as may be
required specifically to enforce any of the covenants in Section 7 hereof.
Section 9. Successors and Assigns; No Third-Party Beneficiaries.
This Agreement shall inure to the benefit of, and be binding upon, the
successors and assigns of each of the parties, including, but not limited to,
the Executive's heirs and the personal representatives of the Executive's
estate; provided, however, that neither party shall assign or delegate any of
the obligations created under this Agreement without the prior written consent
of the other party. Notwithstanding the foregoing, the Company shall have the
unrestricted right to assign this Agreement and to delegate all or any part of
its obligations hereunder to any of its subsidiaries or affiliates, but in such
event such assignee shall expressly assume all obligations of the Company
hereunder and the Company shall remain fully liable for the performance of all
of such obligations in the manner prescribed in this Agreement. Nothing in this
Agreement shall confer upon any person or entity not a party to this Agreement,
or the legal representatives of such person or entity, any rights or remedies of
any nature or kind whatsoever under or by reason of this Agreement.
Section 10. Waiver and Amendments. Any waiver, alteration, amendment
or modification of any of the terms of this Agreement shall be valid only if
made in writing and signed by the parties hereto; provided, however, that any
such waiver, alteration, amendment or modification is consented to on the
Company's behalf by the Board of Directors. No waiver by either of the parties
hereto of their rights hereunder shall be deemed to constitute a waiver with
respect to any subsequent occurrences or transactions hereunder unless such
waiver specifically states that it is to be construed as a continuing waiver.
Section 11. Severability and Governing Law. The Executive
acknowledges and agrees that the covenants set forth in
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Section 7 hereof are reasonable and valid in geographical and temporal scope and
in all other respects. If any of such covenants or such other provisions of this
Agreement are found to be invalid or unenforceable by a final determination of a
court of competent jurisdiction (a) the remaining terms and provisions hereof
shall be unimpaired and (b) the invalid or unenforceable term or provision shall
be deemed replaced by a term or provision that is valid and enforceable and that
comes closest to expressing the intention of the invalid or unenforceable term
or provision. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE.
Section 12. Notices.
(i) All communications under this Agreement shall be in writing and
shall be delivered by hand or mailed by overnight courier or by registered or
certified mail, postage prepaid:
(1) if to the Executive such address as the Executive may have furnished
the Company in writing,
(2) if to the Company, at c/o Warburg, Xxxxxx Ventures, L.P., 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, marked for the attention of the
Board of Directors, or at such other address as it may have furnished in writing
to the Executive, or
(ii) Any notice so addressed shall be deemed to be given: if delivered by
hand, on the date of such delivery; if mailed by courier, on the first business
day following the date of such mailing; and if mailed by registered or certified
mail, on the third business day after the date of such mailing.
Section 13. Section Headings. The headings of the sections and
subsections of this Agreement are inserted for convenience only-and shall not be
deemed to constitute a part thereof, affect the meaning or interpretation of
this Agreement or of any term or provision hereof.
Section 14. Entire Agreement. This Agreement constitutes the entire
understanding and agreement of the parties hereto regarding the employment of
the Executive. This Agreement supersedes all prior negotiations, discussions,
correspondence, communications, understandings and agreements between the
parties relating to the subject matter of this Agreement.
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Section 15. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original and all of which
together shall be considered one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above written.
INFORMATION VENTURES LLC
BY WARBURG, XXXXXX INFORMATION
VENTURES, INC.
MEMBER
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: President
By: /s/ Xxxxx Xxxxxx
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XXXXX XXXXXX
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