EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of
January 27, 2010 (this “Agreement”), by and between ATRINSIC, INC., a Delaware
corporation (the “Company”), and XXXXXXX XXXXXXXX (“Executive”).
W I T N E
S S E T H :
WHEREAS, the Company desires to employ
Executive on the terms and subject to the conditions hereinafter set forth, and
Executive desires so to be employed.
NOW, THEREFORE, in consideration of the
premises and the mutual covenants hereinafter set forth, the parties agree as
follows:
1. Offices and
Duties. During the Term (as hereinafter defined), Executive
shall serve as the Chief Executive Officer of the Company and shall have such
duties and responsibilities that are commensurate with such position and such
other duties and responsibilities as are from time to time assigned to the
Executive by the Company’s board of directors. The Company’s board of
directors may elect or designate Executive to serve in such other corporate
offices of the Company or a subsidiary or affiliate of the Company as the
Company’s board of directors from time to time may reasonably deem necessary,
proper or advisable and as the Executive shall accept so long as such other
offices, and the duties and responsibilities related thereto, are reasonably
complimentary to Executive’s role as Chief Executive Officer of the Company and
of no lesser role than senior executive management of such subsidiary or
affiliate. Executive hereby agrees that throughout the Term he shall faithfully,
diligently and to the best of his ability, in furtherance of the business of the
Company, perform the duties assigned to him or incidental to the offices assumed
by him pursuant to this Section. Executive shall devote all of his
business time and attention to the business and affairs of the Company and the
performance of Executive’s duties and responsibilities
hereunder. Executive may engage or participate in such other
activities, including serving on the board of directors of other companies whose
business activities are not directly competitive with that of the Company, and
in a manner as do not interfere or conflict with, or compromise his ability to
perform, his duties hereunder, and do not create a potential business conflict,
and with respect to which the Company’s board of directors has expressly
consented and approved in advance in writing. Executive shall at all
times be subject to the supervision, direction and control of the Company’s
board of directors, and observe and comply with such written rules, regulations,
policies and practices as the Company’s board of directors may from time to time
establish. Executive shall report to the Company’s board of directors
on a regular basis regarding the business activities of the
Company. The Executive represents and warrants to the Company that
(i) the Executive has the legal right to enter into this Agreement and to
perform all of the obligations on the Executive’s part to be performed hereunder
in accordance with its terms; and (ii) that the Executive is not a party to any
agreement or understanding, written or oral, which could prevent the Executive
from entering into this Agreement or performing all of the Executive’s
obligations hereunder.
2. Term. The employment
of Executive hereunder shall commence on the date hereof (the “Commencement
Date”) and continue for a term ending on the third (3rd) twelve
month anniversary of the last day of the calendar month in which such
Commencement Date occurs, subject to earlier termination upon the terms and
conditions provided elsewhere herein (the “Term”). As used herein,
“Termination Date” means the last day of the Term. Subject to the
provisions of Section 13 hereof, the Executive shall be an “at-will” employee of
the Company such that the Company may terminate the Executive’s employment with
the Company and the Term upon advance written notice at any time and for any
reason (or no reason).
3. Compensation.
(a) As
compensation for Executive’s services hereunder, the Company shall pay to
Executive during the Term an annual salary (the “Base Salary”), which shall
initially be equal to Two Hundred Seventy Five Thousand Dollars ($275,000.00),
payable in accordance with the ordinary payroll practices of the
Company. The Base Salary shall be subject to increase at the end of
each year of the Term at the sole and complete discretion of the Company’s board
of directors.
(b) Executive
may also receive a target annual bonus equal to his Base Salary for each
calendar year during the Term if the Company’s business operations meet or
exceed certain financial performance standards to be determined by the Company’s
board of directors in accordance with Exhibit A and the
Company’s 2010 Annual Incentive Compensation Plan, a copy of which is included
in Exhibit A
hereto.
(c) In
addition to his Base Salary and other compensation provided herein, during the
Term Executive shall be entitled to participate, to the extent he is eligible
under the terms and conditions thereof, in any stock, stock option or other
equity participation plan and any profit-sharing, pension, retirement,
insurance, medical service or other employee benefit plan generally available to
the executive officers of the Company, and to receive any other benefits or
perquisites generally available to the executive officers of the Company
pursuant to any employment policy or practice, which may be in effect from time
to time during the Term. The Company shall be under no obligation
hereunder to institute or to continue any such employee benefit plan or
employment policy or practice.
(d) During
the Term, Executive shall not be entitled to additional compensation for serving
in any office of the Company (or any subsidiary thereof) to which he is elected
or appointed.
4. Options to Purchase Common
Stock.
(a) On
the Commencement Date, the Company shall grant to Executive (i) an option (the
“First Option”) to acquire Five Hundred Thousand (500,000) shares of the
Company’s common stock, par value $.001 per share (the “Common Stock”) pursuant
to the Company’s 2009 Stock Incentive Plan and (ii) an option (the “Second
Option”, and together with the First Option, the “Options”) to acquire Five
Hundred Thousand (500,000) shares of the Company’s Common Stock pursuant to the
Company’s 2007 Stock Incentive Plan. The First Option will vest in
equal monthly installments over a period of thirty six months commencing on
January 31, 2010 and on the last day of each calendar month thereafter until
fully vested and be subject to the terms and conditions of the Company’s 2009
Stock Incentive Plan and a stock option agreement substantially in the form
annexed to this Agreement as Exhibit
B. The Second Option will vest over a period of four years,
with 25% of the Second Option vesting on the first anniversary of the date of
this Agreement, and the remaining 75% vesting thereafter in equal monthly
installments over a period of thirty six months commencing on January 31, 2011
and on the last day of each calendar month thereafter until fully
vested. The Second Option will be subject to the terms and conditions
of the Company’s 2007 Stock Incentive Plan and a stock option agreement
substantially in the form annexed to this Agreement as Exhibit
B. As a condition to receiving the Options, Executive shall
execute and deliver to the Company the stock option
agreements. Notwithstanding the foregoing, if a Change of Control (as
defined herein) occurs while Executive is employed with the Company, and
Executive’s employment is terminated by the Company other than for Disability,
death or cause (as defined herein) or by Executive for good reason (as defined
herein) within three (3) months before or six (6) months after the effective
date of the Change of Control, all Options will automatically vest immediately
prior to the termination of Executive’s employment and shall remain exercisable
for a period of one (1) year after such termination.
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(b) As
provided in the stock option agreements, any portion of the Options that remain
unvested at the time of termination of Executive’s employment (the “Unvested
Portion”) shall be extinguished and cancelled and Executive shall have no rights
or benefits whatsoever with respect to the Unvested
Portion. Executive represents and warrants that he is acquiring the
Options and the shares of Common Stock issuable upon exercise thereof for
investment purposes only, and not with a view to distribution
thereof. Executive is aware that the Options and such shares may not
be registered under the federal or any state securities laws and that, in
addition to the other restrictions, the Options and such shares issuable upon
exercise thereof will not be able to be transferred unless an exemption from
registration is available or the Option or such shares become
registered.
5. Expense
Allowance. The Company shall pay directly, or advance funds to
Executive or reimburse Executive for, all out-of-pocket expenses reasonably
incurred by him in connection with the performance of his duties hereunder and
the business of the Company, including travel and accommodations, in each case
subject to and in accordance with the Company’s standard policies and practices
(including, without limitation, expense verification policies) regarding the
reimbursement of business expenses, as in effect from time to time. Without
limiting the foregoing, the Company shall reimburse Executive for the reasonable
legal costs incurred by him (up to a maximum of Five Thousand Dollars ($5,000))
in connection with the review, preparation and execution of this Agreement and
the exhibits referred to herein.
6. Vacation. Executive
shall be entitled to four (4) weeks paid vacation during each year of his
employment hereunder (as pro rated for partial years), such vacation to be taken
at such time or times as shall be agreed upon by Executive and the Company with
due regard to the needs of the Company. Vacation time shall be
cumulative from year to year, except that Executive shall not be entitled to
take more than six (6) weeks vacation during any period of twelve (12)
consecutive months during the Term; and provided further that at no time shall
Executive be entitled to accrue more than six (6) weeks of vacation time under
this Agreement; and provided further that the rights of Executive to vacation
shall be otherwise subject to the Company’s policies on vacation as in effect
from time to time.
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7. Key-Man
Insurance. The Company shall have the right from time to time
to purchase, increase, modify or terminate insurance policies on the life of
Executive for the benefit of the Company in such amounts as the Company may
determine in its sole discretion. In connection therewith, Executive
shall, at such time or times and at such place or places as the Company may
reasonably direct, submit himself to routine insurance physical examinations and
execute and deliver such documents as the Company may deem necessary or
appropriate.
8. Ancillary
Agreement. Without limiting any other rights that the Company
may have, if Executive materially breaches any provision of that certain
Acknowledgment Regarding Proprietary Information and Inventions executed by
Executive on October 8, 2009, any right that Executive may have to receive any
compensation or payments from the Company hereunder shall be forfeited by
Executive and extinguished in all respects.
9. Termination of
Employment. Executive’s employment and the Term will terminate
on the first of the following to occur:
(a) Automatically
upon Executive’s death.
(b) Upon
written notice by the Company to Executive of termination due to Disability (as
defined below). For the purposes of this Agreement, “Disability”
shall mean a condition that entitles Executive to benefits under an applicable
Company long-term disability plan or, if no such plan exists, a physical or
mental disability which, in the reasonable judgment of the Company’s board of
directors, is likely to render Executive unable to perform his regular assigned
duties and obligations under this Agreement for 180 days in any 12-month
period.
(c) Upon
written notice by the Company to the Executive of a termination for “cause”
pursuant to Section 10 of this Agreement.
(d) Upon
termination for “good reason” under Section 11 of this Agreement.
(e) Upon
written notice by the Company to the Executive of an involuntary termination
without “cause”, other than for death or Disability.
(f) Upon
“voluntary termination” by Executive under Section 12 of this
Agreement.
10. Termination for
Cause.
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(a) In
addition to any other rights or remedies provided by law or in this Agreement,
the Company may terminate Executive’s employment under this Agreement for
“cause” if:
(i)
Executive
is convicted of, or enters a plea of guilty or nolo contendere to, a
felony offense (unless, in the case of a conviction, the conviction shall have
been reversed on appeal); or
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(ii)
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the
Company’s board of directors determines that Executive
has:
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(A) committed
fraud against, or embezzled or misappropriated funds or other assets of, the
Company (or any subsidiary thereof);
(B) violated,
or caused the Company (or any subsidiary thereof) or any officer, employee or
other agent thereof, or any other person to violate, any material law,
regulation or ordinance or, repeatedly violated, or caused the Company (or any
subsidiary thereof) or any officer, employee or other agent thereof, or any
other person to violate, any material rule, regulation, policy or practice
established by the Company’s board of directors;
(C) willfully,
or because of gross or persistent negligence, (A) failed to properly perform his
duties hereunder or (B) acted in a manner detrimental to, or adverse to the
interests of, the Company, and such failure or action has caused, or is likely
to cause, the Company (or any subsidiary thereof) to suffer or incur casualty,
loss, penalty, expense or other liability or cost;
(D) violated,
or failed to perform or satisfy any material covenant, condition or obligation
required to be performed or satisfied by Executive under this Agreement or
contained in the Company’s employee handbook or policies, as in force from time
to time; or
(E) habitually
used illegal drugs or consumed alcohol and such consumption has caused or is
likely to cause material damage to the Company.
(b) The
Company may effect such termination for cause by giving Executive written notice
to such effect, setting forth in reasonable detail the factual basis for such
termination (the “Cause Notice”); provided, however, that
Executive may avoid such termination if the termination is based on any
occurrence, act or event described in clauses (A) to (E) of paragraph (ii) of
Section 10(a) (each, a “For Cause Event”), if the matters giving rise to such
termination (including without limitation, any breach or violation by Executive)
are remedied or cured, if capable of remedy or cure, within 30 days after
receipt of the Cause Notice (“30-Day Executive Cure Period”). For the
avoidance of doubt, Executive’s employment hereunder and the Term shall be
terminated immediately upon delivery of the Cause Notice if Executive’s
employment is being terminated due to the occurrence, act or event described in
paragraph (i) of Section 10(a), and Executive’s employment hereunder and the
Term shall be terminated immediately upon expiration of the 30-Day Executive
Cure Period if Executive’s employment is terminated due to the occurrence, act
or events described in clauses (A) to (E) of paragraph (ii) of Section 10(a)
(assuming the matters, violations or conditions giving rise to such termination
are capable of being cured or remedied, provided that if they are incapable of
being so cured or remedied, then such termination shall be immediate upon
delivery of the Cause Notice).
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(c) In
making any determination pursuant to paragraph (ii) of Section 10(a) based on or
due to any For Cause Event, the board of directors may take into account each
and all of the following:
(i) if
Executive is made a party to, or target of, any Proceeding arising under or
relating to any For Cause Event, Executive’s failure to defend against such
Proceeding or to answer any complaint filed against him therein, or to deny any
claim, charge, averment, or allegation thereof asserting or based upon the
occurrence of a For Cause Event;
(ii) any
judgment, award, order, decree or other adjudication or ruling in any such
Proceeding finding or based upon the occurrence of a For Cause Event (that is
not reversed or vacated on appeal); or
(iii) any
settlement or compromise of, or consent decree issued in, any such Proceeding in
which Executive expressly admits the occurrence of a For Cause Event; provided that the
Company’s board of directors shall not be required to treat any of the foregoing
as dispositive or giving rise to an irrebuttable presumption of the occurrence
of such For Cause Event; and provided further that the
Company's board of directors may rely on any other factor or event as convincing
evidence of the occurrence of a For Cause Event.
(d) In
determining and assessing the detrimental effect of any For Cause Event on the
Company and whether such For Cause Event warrants the termination of Executive’s
employment hereunder, the Company's board of directors may take into account
each and all of the following:
(i) whether
the Company's Board of Directors directed or authorized Executive to take, or to
omit to take, any action involved in such For Cause Event, or approved,
consented to or acquiesced in his taking or omitting to take such
action;
(ii) any award
of damages, penalty or other sanction, remedy or relief granted or imposed in
any Proceeding based upon or relating to such For Cause Event, and whether such
sanction, remedy or relief is sufficient to recompense the Company or any other
injured person, or to prevent or to deter the recurrence of such For Cause
Event;
(iii) whether
any lesser sanction would be appropriate and effective; and
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(iv) any
adverse effect that the loss of Executive's services would have, or be
reasonably likely to have, upon the Company.
Nothing
contained in this Section 10 shall be construed in any way to limit or restrict
the right and ability of the board of directors of the Company to consider or
base its determination on any other factors that the board of directors deems to
be relevant in connection with any determination or assessment under this
Section 10.
11. Termination by Executive for
Good Reason.
(a) In
addition to any other rights or remedies provided by law or in this Agreement,
Executive may terminate his employment hereunder for “good reason” if (A) the
Company violates, or fails to perform or satisfy any material covenant,
condition or obligation required to be performed or satisfied by it hereunder;
or (B) as a result of any action or failure to act by the Company, there is a
material adverse change in the nature or scope of the duties, obligations,
rights or powers of Executive’s employment, in each case subject to the terms
set forth in this Section 11.
(b) Executive
may effect such termination for good reason by giving the Company written notice
to such effect, setting forth in reasonable detail the factual basis for such
termination (the “Good Reason Notice”); provided, however, that the Company may
avoid such termination, if the matters giving rise to such termination
(including without limitation, any breach or violation by the Company) are
remedied or cured, within 30 days after receipt of the Good Reason Notice
(“30-Day Company Cure Period”). For the avoidance of doubt,
Executive’s employment hereunder and the Term shall be terminated immediately
upon expiration of the 30-Day Company Cure Period in the case of a termination
for “good reason” under this Section 11.
12. Voluntary Termination by
Executive. In addition to any other rights or remedies
provided by law or in this Agreement, Executive may terminate his employment
hereunder at any time by giving the Company written notice to such effect at
least ninety (90) days prior to the date of termination set forth therein, such
termination to be irrevocable upon receipt of such notice by the
Company.
For the avoidance of doubt, the
termination by Executive of his employment hereunder for “good reason” pursuant
to Section 11 of this Agreement shall not constitute or be deemed to constitute
for any purpose a "voluntary termination" of his employment under this Section
12.
13. Compensation and Benefits
upon Termination.
(a) If
Executive’s employment is terminated as a result of his death or Disability, the
Company will pay or provide to Executive any (i) Accrued Benefits (as
hereinafter defined) and (ii) a sum equal to a prorated portion of the annual
bonus to which Executive would have been entitled if his employment had
continued until the end of the employment year in which his death or disability
occurred (the “Pro Rated Bonus Amount”). For the purposes of this
Agreement, “Accrued Benefits” means: 1) any unpaid Base Salary through the date
of termination; (2) reimbursement for any unreimbursed expenses incurred through
the date of termination; (3) any unused vacation time accrued (through the date
of termination) in accordance with Company policy or as otherwise required by
law; and (4) any other payments, benefits or fringe benefits to which the
Executive may be entitled under the terms of any applicable compensation
arrangement or benefit plan or program or this Agreement, in all cases only
through the date of termination (collectively items (1) through (4) shall be
hereafter referred to as “Accrued Benefits”). The Pro Rated Bonus
Amount shall be calculated by multiplying the total amount of the corresponding
annual bonus by a fraction, the numerator of which is the number of days served
by Executive during such employment year, and the denominator shall be three
hundred sixty five (365) days.
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(b) If
Executive’s employment is terminated for cause under Section 10, or if
Executive’s employment is terminated by Executive voluntarily under Section 12
or voluntarily other than for good reason pursuant to Section 11 hereof, the
Company will pay or provide to Executive any Accrued Benefits.
(c) If
Executive’s employment is terminated by Executive for good reason pursuant to
Section 11 or by the Company other than for cause under Section 10, the Company
will pay or provide the Executive with (i) any Accrued Benefits and (ii) subject
to Executive’s compliance with the obligations herein, a one time payment equal
to his Base Salary. Any amount due to Executive under clause (i) and (ii) of
this Section shall be payable as follows: fifty percent (50%) of such
amount shall be payable in a lump sum within thirty (30) days of termination of
employment, and the balance shall be payable in twelve (12) equal monthly
installments over the period of twelve (12) months following such termination;
provided, however, that if such amounts due to Executive become payable under
this Section as a result of a termination of Executive’s employment occurring at
any time before the first (1st)
anniversary of the date of any Change of Control, such amounts (to the extent
not previously paid) shall be paid in a single lump sum payment within thirty
(30) days of such termination of employment, except as provided in Section 14
hereof. Amounts payable to Executive under this Section 11(c), if
any, are hereinafter referred to as the “Parachute Amount.”
(d) Except
as expressly set forth herein, any amount payable to Executive upon termination
of his employment hereunder shall be paid promptly, and in any event within
thirty (30) days, after the Termination Date.
14. Change of
Control.
(a) For
the purposes of this Section 14, the following terms shall be defined as
hereinafter provided:
(i) The
"Act" is the Securities Exchange Act of 1934, as amended.
(ii) A
"person" includes a "group" within the meaning of Section 13(d)(3) of the
Act.
(iii) "Beneficially
owns" and "acquisition" are used herein as defined in Rules 13d-3 and 13d-5,
respectively, under the Act.
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(iv) "Non-Affiliated
Person" means any person, other than Executive, an employee stock ownership
trust of the Company (or any trustee thereof for the benefit of such trust), or
any person controlled by Executive, the Company or such a trust.
(v) "Voting
Securities" includes Common Stock and any other securities of the Company that
ordinarily entitle the holders thereof to vote, together with the holders of
Common Stock or as a separate class, with respect to matters submitted to a vote
of the holders of Common Stock; provided, however, that securities of the
Company as to which the consent of the holders thereof is required by applicable
law or the terms of such securities only with respect to certain specified
transactions or other matters, or the holders of which are entitled to vote only
upon the occurrence of certain specified events (such as default in the payment
of a mandatory dividend on preferred stock or a scheduled installment of
principal or interest of any debt security), shall not be Voting
Securities.
(vi) "Right"
means any option, warrant, restricted stock unit or other right to acquire any
Voting Security (other than such a right of conversion or exchange included in a
Voting Security).
(vii) The
"Code" is the Internal Revenue Code of 1986, as amended.
(viii) "Base
amount," "present value" and "parachute payment" are used herein as defined in
Section 280G of the Code.
(b) A
"Change of Control" occurs upon an acquisition of Voting Securities or Rights by
a Non-Affiliated Person or any change in the number or voting power of
outstanding Voting Securities, which results in such Non-Affiliated Person
beneficially owning Voting Securities or Rights entitling such person to cast a
number of votes (determined in accordance with Section 14(f)) equal to or
greater than fifty percent (50%) of the sum of (A) the number of votes that may
be cast by all other holders of outstanding Voting Securities and (B) the number
of votes that may be cast by such Non-Affiliated Person (determined in
accordance with Section 14(f)).
(c) It
is intended that the present value of any payments or benefits to Executive,
whether hereunder or otherwise, that are includible in the computation of the
Parachute Amount shall not exceed 2.99 times the Executive's base
amount. Accordingly, if Executive receives any payment or benefit
from the Company prior to payment of the Parachute Amount which, when added to
the Parachute Amount, would subject any of the payments or benefits to Executive
to the excise tax imposed by Section 4999 of the Code, the Parachute Amount
shall be reduced by the least amount necessary to avoid such tax. The Company
shall have no obligation hereunder to make any payment or provide any benefit to
Executive after the payment of the Parachute Amount which would subject any of
such payments or benefits to the excise tax imposed by Section 4999 of the
Code.
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(d) Any
other provision hereof notwithstanding, Executive may, prior to his receipt of
the Parachute Amount pursuant to Section 13(c), waive the payment thereof, or,
after his receipt of the Parachute Amount thereunder, treat some or all of such
amount as a loan from the Company which Executive shall repay to the Company
within one hundred eighty (180) days after the receipt thereof, together with
interest thereon at the rate provided in Section 7872 of the Code, in either
case, by giving the Company notice to such effect.
(e) Any
determination of the Executive's base amount, the Parachute Amount, any
liability for excise tax under Section 4999 of the Code or other matter required
to be made pursuant to this Section 14, shall be made by the Company's
regularly-engaged independent certified public accountants, whose determination
shall be conclusive and binding upon the Company and Executive; provided that
such accountants shall give to Executive, on or before the date on which payment
of the Parachute Amount or any later payment or benefit would be made, a notice
setting forth in reasonable detail such determination and the basis therefor,
and stating expressly that Executive is entitled to rely thereon.
(f) The
number of votes that may be cast by holders of Voting Securities or Rights upon
the issuance or grant thereof shall be deemed to be the largest number of votes
that may be cast by the holders of such securities or the holders of any other
Voting Securities into which such Voting Securities or Rights are convertible or
for which they are exchangeable or exercisable, determined as though such Voting
Securities or Rights were immediately convertible, exchangeable or exercisable
and without regard to any anti-dilution or other adjustments provided for
therein.
15. Other Termination
Provisions. The Company shall defend, indemnify and hold
Executive harmless from any and all liabilities, obligations, claims or expenses
which arise in connection with or as a result of Executive's service as an
officer or director of the Company, and/or any of its subsidiaries and/or
affiliates, to the greatest extent now provided in the Company's Certificate of
Incorporation and Bylaws and as otherwise allowed by law. Commencing on the date
hereof and ending on the seventh anniversary of the date of the termination of
Executive’s employment hereunder, Executive shall be entitled to the same
directors and officers' liability insurance coverage that the Company provides
generally to its other directors and officers, as may be amended from time to
time for such directors and officers.
16. Limitation of
Authority. Except as expressly provided herein, no provision
hereof shall be deemed to authorize or empower either party hereto to act on
behalf of, obligate or bind the other party hereto.
17. IRC
409A. This Agreement is intended to satisfy the requirements
of Section 409A(a)(2), (3) and (4) of the Code, including current and future
guidance and regulations interpreting such provisions. To the extent
that any provision of this Agreement fails to satisfy those requirements, the
provision shall automatically be modified in a manner that, in the good-faith
opinion of the Company, brings the provisions into compliance with those
requirements while preserving as closely as possible the original intent of the
provision. Notwithstanding anything to the contrary in this
Agreement, no severance payments or benefits shall be paid to Executive during
the six (6) month period following Executive's separation from service to the
extent that the Company and Executive mutually agree and determine in good faith
that paying such amounts at the time or times indicated in this Agreement would
cause Executive to incur an additional tax under Section 409A of the Code, in
which case such amounts shall be paid at the time or times indicated in this
Section. If the payment of any such amounts are delayed as a result of the
previous sentence, then on the first day following the end of such six (6) month
period, the Company will pay Executive a lump-sum amount equal to the cumulative
amount that would have otherwise been payable to Executive during such six (6)
month period.
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18. Notices. All
notices which are required by or may be given pursuant to the terms of this
Agreement must be in writing and must be delivered personally; sent by certified
mail, return receipt requested, postage prepaid; sent by facsimile (with written
confirmation of transmission), provided that notice is also sent via first class
mail, postage prepaid; or sent for next business day delivery by a nationally
recognized overnight delivery service as follows:
If to the
Company at:
000
0xx
Xxxxxx, 00xx
Xxxxx
Xxx Xxxx,
XX 00000
Attn: Xxx
Xxxxxx
with a
copy to:
Xxxxxx
Xxxxxxxx & Markiles LLP
00000
Xxxxxxx Xxxx., 00xx
Xxxxx
Xxxxxxx
Xxxx, Xxxxxxxxxx 00000
Attn:
Xxxxx Xxxxx, Esq.
Fax:
(000) 000-0000
If to
Executive at:
with a
copy to:
Xxxxx X. Xxxxxxxxx, Esq.
00000 Xxxxxxx Xx. #000
Xxxxxxx
Xxxxxxxxx, XX. 00000
Fax:
(000) 000-0000
Any of
the addresses and other contact information set forth above may be changed from
time to time by written notice (delivered in accordance with this Section) from
the party requesting the change.
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Such
notices and other communications will be treated for all purposes of this
Agreement as being effective immediately if delivered personally or by facsimile
(with written confirmation of transmission) during normal business hours, or
five (5) days after mailing by certified mail, return receipt requested, first
class postage prepaid, or one business day after deposit for next business day
delivery by a nationally recognized overnight delivery service.
19. Amendment. Except
as otherwise provided herein, no amendment of this Agreement shall be valid or
effective, unless in writing and signed by or on behalf of the parties
hereto.
20. Waiver. No
course of dealing or omission or delay on the part of either party hereto in
asserting or exercising any right hereunder shall constitute or operate as a
waiver of any such right. No waiver of any provision hereof shall be
effective, unless in writing and signed by or on behalf of the party to be
charged therewith. No waiver shall be deemed a continuing waiver or
waiver in respect of any other or subsequent breach or default, unless expressly
so stated in writing.
21. Governing
Law. This Agreement shall be governed by, and interpreted and
enforced in accordance with, the laws of the State of New York without regard to
principles of choice of law or conflict of laws.
22. Arbitration. Any
dispute or controversy arising out of or related to this Agreement or any breach
hereof shall be settled by binding arbitration by JAMS (or any organization
successor thereto) in New York, New York in accordance with its Employment
Arbitration Rules then prevailing. A panel of three (3) arbitrators
shall be jointly selected by the parties from the list (the “List”) of
arbitrators supplied by JAMS. Such arbitrators shall all be former or retired
judges or justices of any New York state or federal court with experience in
complex litigation matters involving commercial transactions. If the
parties hereto after notification of the other party(ies) to such dispute cannot
agree upon a panel of arbitrators within thirty (30) days following receipt of
the List by all parties to such arbitration, then either party may request, in
writing, that JAMS appoint a panel of three (3) arbitrators within ten (10) days
following receipt of such request. Judgment and the award rendered by the
arbitration panel may be entered in any court or tribunal of competent
jurisdiction. This provision encompasses all disputes relating to
Executive’s employment, this Agreement, the termination of Executive’s
employment, and the amounts paid to the Executive upon termination, regardless
of whether such dispute arises during or after the Executive’s
employment. In any arbitration proceeding conducted pursuant to this
Section 22, both parties shall have the right to discovery, to call witnesses
and to cross-examine the other party’s witnesses (through legal counsel, expert
witnesses, or both). All decisions of the arbitration panel shall be
final, conclusive and binding upon the parties, and not subject to judicial
review. The arbitration panel shall have no power to change any of
the provisions hereof in any respect or make an award of reformation, and the
jurisdiction of the arbitrators is expressly limited accordingly. All
statutes of limitations that would otherwise be applicable shall apply to any
arbitration proceeding hereunder. Each of the parties hereto shall
pay the fees and expenses of its counsel, accountants and other experts incident
to any such arbitration. The fees and expenses of the arbitrator
shall be paid fifty percent (50%) by the Company and fifty percent (50%) by
Executive. Any notice or other process relating to any such
arbitration may be effected in the manner provided by Section 18.
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23. Remedies. In
the event of any actual or prospective breach or default by either party hereto,
the other party shall be entitled to seek equitable relief, including remedies
in the nature of rescission, injunction and specific performance. All
remedies hereunder are cumulative and not exclusive, and nothing herein shall be
deemed to prohibit or limit either party hereto from pursuing any other remedy
or relief available at law or in equity for such actual or prospective breach or
default, including the recovery of damages.
24. Severability. The
provisions hereof are severable and in the event that any provision of this
Agreement shall be determined to be invalid or unenforceable in any respect by a
court of competent jurisdiction, the remaining provisions hereof shall not be
affected, but shall, subject to the discretion of such court, remain in full
force and effect, and any invalid or unenforceable provision shall be deemed,
without further action on the part of the parties hereto, amended and limited to
the extent necessary to render the same valid and enforceable.
25. Counterparts. This
Agreement may be executed in counterparts, including, without limitation, by
facsimile, each of which shall be deemed an original and which together shall
constitute one and the same agreement.
26. Assignment. This
Agreement, and each right, interest and obligation hereunder, may not be
assigned by either party hereto without the prior written consent of the other
party hereto, and any purported assignment without such consent shall be void
and without effect, except that this Agreement shall be assigned to, and assumed
by, any person with or into which the Company merges or consolidates, or which
acquires all or substantially all of its assets, or which otherwise succeeds to
and continues the Company’s business substantially as an
entirety. Except as otherwise expressly provided herein or required
by law, Executive shall not have any power of anticipation, assignment or
alienation of any payments required to be made to him hereunder, and no other
person may acquire any right or interest in any thereof by reason of any
purported sale, assignment or other disposition thereof, whether voluntary or
involuntary, any claim in a bankruptcy or other insolvency proceeding against
Executive, or any other ruling, judgment, order, writ or decree.
27. Withholding. The
Company may withhold from any and all amounts payable under this Agreement such
federal, state and local taxes, as may be required to be withheld pursuant to
any applicable law or regulation, and all other applicable
withholdings.
28. Binding
Effect. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns. This Agreement is not intended, and shall not be deemed, to
create or confer any right or interest for the benefit of any person not a party
hereto.
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29. Titles and
Captions. The titles and captions of the Articles and Sections
of this Agreement are for convenience of reference only and do not in any way
define or interpret the intent of the parties hereto or modify or otherwise
affect any of the provisions hereof.
30. Grammatical
Conventions. Whenever the context so requires, each pronoun or
verb used herein shall be construed in the singular or the plural sense and each
capitalized term defined herein and each pronoun used herein shall be construed
in the masculine, feminine or neuter sense.
31. References. The
terms “herein,” “hereto,” “hereof,” “hereby,” and “hereunder,” and other terms
of similar import, refer to this Agreement as a whole, and not to any Article,
Section or other part hereof.
32. No
Presumptions. Each party hereto acknowledges that it has had
an opportunity to consult with counsel and has participated in the preparation
of this Agreement. No party hereto is entitled to any presumption
with respect to the interpretation of any provision hereof or the resolution of
any alleged ambiguity herein based on any claim that the other party hereto
drafted or controlled the drafting of this Agreement.
33. Certain
Definitions. As used herein:
(a) “Person”
includes, without limitation, a natural person, corporation, joint stock
company, limited liability company, partnership, joint venture, association,
trust, government or governmental authority, agency or instrumentality, or any
group of the foregoing acting in concert.
(b) A
“Proceeding” is any suit, action, arbitration, audit, investigation or other
proceeding before or by any court, magistrate, arbitration panel or other
tribunal, or any governmental agency, authority or instrumentality of competent
jurisdiction.
34. Entire
Agreement. This Agreement embodies the entire agreement of the
parties hereto with respect to the subject matter hereof and supersedes any
prior or contemporaneous agreement, commitment or arrangement relating thereto,
written or oral, including that certain offer letter dated October 8, 2009 (the
“Offer Letter”), which shall terminate immediately upon the commencement of the
Term, except that (a) each party thereto shall remain required to perform any
act and to satisfy any obligation or condition that such party is required to
perform or satisfy thereunder with respect to any event occurring or
circumstance existing prior to the commencement of the Term hereof (including,
without limitation, the payment or delivery to Executive of any compensation,
reimbursable expense or employee benefit or perquisite to which he may be
entitled, but which has not yet been paid to him, on account of his employment
under any such prior arrangement) that has not been so performed or satisfied,
(b) each party thereto shall retain his or its right under any such prior
assignment to assert or to allege any claim or cause of action relating to or
based upon, or otherwise to enforce, any provision thereof with respect to any
event occurring or circumstance existing during the term thereof and (c) the
certain Acknowledgement regarding Proprietary Information and Inventions
attached to the Offer Letter as Exhibit A shall remain in full force and
effect.
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35. Force Majeure. No party
shall be liable for any damages, including, without limitation, incidental and
consequential damages, arising out of such party’s failure to perform any
obligation or duty hereunder if:
a. Such
failure was due to circumstances beyond such party’s control, including, without
limitation, Acts of God, labor disputes, wars or other conflicts, or civil
disorders (each occurrence of such circumstances shall be deemed a “Force
Majeure Event”); and
b. That
such party could not be reasonably expected to have avoided or overcome the
circumstances or the consequences of such Force Majeure Event; provided,
however, that such party shall undertake all reasonable efforts to resume
performance hereunder with the least possible delay.
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IN WITNESS WHEREOF, the undersigned
have duly executed this Agreement as of the day and year first above
written.
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By:
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/s/ Xxxxxx X. Xxxxxx | ||
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Name:
Xxxxxx X. Xxxxxx
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Title:
Chairman
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/s/
Xxxxxxx
Xxxxxxxx
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Xxxxxxx
Xxxxxxxx
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