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Ex - 10.8
XXXXXX X. XXXXXXXX
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, signed as of the 4th day of November, 1997 (this
"Agreement"), between NovaLink USA Corporation, a Massachusetts corporation,
having a place of business at 000 Xxxxxxx Xxxxxxx, Xxxxxxxxxxx, Xxxxxxxxxxxxx
00000 (the "Company"), and Xxxxxx X. Xxxxxxxx, an individual residing at 000
Xxxxxxxxx Xxxx, Xxxxxxxx, XX 00000 (the "Employee").
In consideration of the mutual agreements and covenants herein contained,
the adequacy and the sufficiency of which are hereby acknowledged, the parties
hereby agree as follows:
1. Effective Date. The effective date of this Agreement shall be November
19, 1997 (the "Effective Date").
2. Employment. The Company hereby engages the Employee as an employee of
the Company and the Employee hereby accepts such engagement upon the terms and
conditions of this Agreement.
3. Term. The term of this Agreement shall commence on the Effective Date
and shall continue until otherwise terminated by either party at any time with
or without cause (the "Term").
4. Employment Duties. During the Term, the Employee will serve as
President and Chief Executive Officer of the Company and shall perform such
duties as may be reasonably assigned to him from time to time by the Board of
Directors of the Company (the "Board"). During the term hereof, the Employee
shall be employed by the Company on a full-time basis and shall devote his full
business time and best efforts to the advancement of the business and interests
of the Company. It is expected that the Employee will be nominated and elected
to the Board and shall serve as a member of the Board so long as he is President
and Chief Executive Officer of the Company.
5. Consideration.
(a) In consideration of the services performed by the Employee under
this Agreement, the Company shall pay the Employee a base salary at the rate of
$225,000 per year payable bi-weekly, subject to increase from time to time by
the Compensation Committee of the Board (the "Compensation Committee") in its
sole discretion. Compensation under this Agreement shall be paid in arrears in
equal monthly installments, and will be reviewed annually.
(b) The Company shall reimburse the Employee for all ordinary and
necessary business expenses paid or incurred by the Employee in connection with
the execution of his responsibilities under this Agreement in accordance with
its usual reimbursement policies, which policies are subject to change on no
less than thirty (30) days' prior written notice to Employee.
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Reimbursement shall be made not less frequently than once each month against
presentation by the Employee of written reports, in reasonable detail and in the
then standard format in use by the Company, of all amounts so expended.
(c) The Employee shall be eligible to receive an annual bonus of up to
$50,000. The amount and timing of payment of the annual bonus shall be
established by the Compensation Committee. The Compensation Committee shall
award the bonus based upon Employees meeting or exceeding certain performance
objectives (the "Performance Objectives") to be established initially by the
Employee and the Board by not later than ninety (90) days after the Effective
Date and thereafter by the Compensation Committee. Any failure to establish such
Performance Objectives shall not affect the validity and enforceability of this
Agreement.
(d)
(i) The Company shall grant to the Employee, within ninety (90)
days of the Effective Date, qualified stock options to purchase a number of
shares of the Company's Common Stock equal to five percent (5%) of the Company's
"Common Stock Equivalents" (as defined in Sections 5(d)(iv) after the Company's
first round of outside venture capital financing, for a price of $.25 per share.
The options shall vest ratably on a monthly basis over a four year (48 month)
period beginning on the Effective Date, provided that no stock options shall
vest until six (6) months after the Effective Date, at which time options shall
vest retroactively for the prior six (6) months (i.e., ________ options). The
options shall be exercisable for a period of ten years, subject to termination
ninety (90) days after termination of the Employee's employment hereunder.
(ii) If the Employee shall meet or exceed the Performance
Objectives, the Company shall grant to the Employee on the first anniversary of
the Effective Date qualified stock options in addition to those described in
Section 5(d)(i) to purchase a number of shares of the Company's Common Stock
equal to an additional one percent (1%) of the Company's Common Stock
Equivalents (as defined in Section 5(d)(iv) after the Company's first round of
outside venture capital financing, for a price of $.25 per share. These
additional options shall have the same terms and conditions as those granted
under Section 5(d)(i) above, except that the four year (48 month) vesting period
shall begin on the first anniversary of the Effective Date.
(iii) All options granted to you pursuant to this Section 5(d)
shall fully vest upon a "Change of Control" of the Company. A "Change of
Control" will occur upon the acquisition by any individual, entity or group of
50 percent or more of the combined voting power of the then outstanding
securities of the Company entitled to vote generally in the election of
directors; provided, however, that the following acquisitions shall not
constitute a Change of Control: (A) any acquisition of voting securities
directly from the Company (excluding an acquisition by virtue of the exercise of
a conversion privilege); (B) any acquisition by the Company or by any
corporation controlled by the Company; (C) any acquisition by an employee
benefit plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company; or (D) any acquisition by any corporation
pursuant to a consolidation or merger, if, following such consolidation, the
holders of the capital stock of the Company hold a majority of the voting stock
of the consolidated entity or following such merger,
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the Company is the surviving entity, or (E) any acquisition of additional shares
of capital stock of the Company by any person or entity who or which has
previously provided financing to the Company.
(iv) "Common Stock Equivalents" for purposes of this Section 5(d)
means (A) outstanding shares of common stock of the Company, (B) shares of
common stock into which any outstanding preferred stock of the Company is
convertible, (C) shares of common stock which are issuable upon exercise of
outstanding warrants, options and the like and (D) all common stock reserved for
issuance under stock option, restricted stock or other similar employee benefit
plans.
(e) The Employee shall be entitled to participate in the Company's
standard employee welfare plans, including a PPO medical insurance plan, short
and long term disability and life insurance, and a 401(k) retirement plan. The
Company will match the Employee's contribution to the 401(k) retirement plan in
an amount equal to one-half of the Employee's contribution up to the first five
percent (5%) of his income. The Employee will also receive fifteen (15) days of
paid vacation annually, one day of which will accrue each month commencing with
the third month of Employee's employment by the Company and five (5) days of
which will accrue at the completion of six (6) months of Employee's employment
with the Company.
(f) In the event of termination of the employment of the Employee
hereunder by reason of death or permanent disability (as determined in good
faith by the Board), the Employee shall be entitled to compensation hereunder
through the date of such termination and to those benefits to which the Employee
may be entitled pursuant to the Company's standard benefit plans referred to in
subparagraph (e) of this paragraph 5.
6. Related Agreements.
(a) Non-Solicitation and Non-Competition. As a material inducement to
the Company to employ the Employee, and in order to protect the Company's
proprietary information and good will, the Employee agrees to the following:
(i) For a period of twelve (12) months after termination of
employment with the Company or its present or future affiliates for
any reason, whether with or without cause, Employee will not directly
or indirectly solicit or accept business relating to Competing
Products from any of the customers or accounts of the Company with
which Employee had any contact as a result of his employment.
(ii) For a period of twelve (12) months after termination of
employment with the Company or its present or future affiliates for
any reason, whether with or without cause, the Employee will not
render services, directly or indirectly, as an employee, consultant or
otherwise, to any Competing Organization in connection with research
on or the acquisition, development, production, distribution,
marketing, or providing of any Competing Product.
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(iii) For a period of twelve (12) months after termination of
employment with the Company or its present or future affiliates for any
reason, whether with or without cause, Employee will not recruit or
otherwise solicit or induce employees or consultants of the Company or its
present or future affiliates to terminate their employment with, or
otherwise cease their relationships with, the Company or any such
affiliates.
(iv) For a period of twelve (12) months after termination of
employment with the Company or its present or future affiliates for any
reason, whether with or without cause, Employee will not directly or
indirectly induce or attempt to induce a customer, prospective customer,
supplier, agent, vendor, contractor, subcontractor, developer, employee or
consultant to terminate or not enter into any contract with the Company or
its present or future affiliates.
Employee agrees that the restrictions set forth in this Section 6 are fair
and reasonable and are reasonably required for the protection of the interests
of the Company. However, should an arbitrator or court nonetheless determine at
a later date that such restrictions are unreasonable in light of the
circumstances as they then exist, then Employee agrees that this Section shall
be construed in such a manner as to impose on Employee such restrictions as may
then be reasonable and sufficient to assure Company of the intended benefits of
this Section.
(b) For the purposes of Section 6:
(i) "Competing Product" means any product, process, or service of any
person or organization other than the Company, in existence or under
development, (A) which is identical to, substantially the same as, or
performs the same or a similar function as, any product, process, or
service of the Company, in existence or under development, and (B) which is
(or could reasonably be anticipated to be) marketed or distributed in such
a manner and in such a geographic area as to actually compete with such
product, process or service of the Company.
(ii) "Competing Organization" means any person or organization,
including Employee, engaged in, or about to become engaged in, research on
or the acquisition, development, production, distribution, marketing, or
providing of a Competing Product.
(c) Nondisclosure and Assignment of Inventions. The Employee shall execute
the Nondisclosure and Assignment of Inventions Agreement attached hereto as
Exhibit A (the "Nondisclosure Agreement"), the provisions of which are deemed to
be incorporated by reference herein.
7. Termination. This Agreement may be terminated by either party at any
time with or without cause; provided, however, that, the provisions of Section 6
shall survive any termination of this Agreement.
8. Severance. Upon termination of Employee's employment by the Company
other than for "Cause", the Company shall pay to the Employee his base salary
and shall continue his employee welfare benefits set forth in Section 5(e) of
this Agreement for the six (6) month period
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following termination. If at the end of such six (6) month period, Employee has
not obtained "Comparable Work" as an employee or consultant for any other firm
or entity, the Company shall pay to the Employee his base salary and provide his
employee welfare benefits until the earlier of (i) the Employee's obtaining
Comparable Work or (ii) twelve (12) months from the date of termination of his
employment by the Company. "Comparable Work" means full time work, providing
remuneration to the Employee on an annualized base of at least ninety percent
(90%) of Employee's base salary; provided, however, that full-time consultancy
shall constitute Comparable Work only if it can reasonably be expected to have a
duration of six (6) months or more. As used herein, "Cause" shall be defined as
the Employee having (a) engaged in gross negligence relative to the affairs of
the Company, or (b) been convicted of a felony. Prior to terminating the
Employee for cause, the Company shall first provide him with notice and the
opportunity to be heard. In addition to his rights to continuation of base
salary and employee welfare benefits as described above in this Section 8, the
Employee shall be entitled to any COBRA or other statutory benefits and to any
conversion rights or privileges that he may have under insurance policies.
9. Binding Effect. This Agreement is binding upon and shall inure to the
benefit of the successors, assigns and legal representatives of the parties
hereto.
10. Miscellaneous.
(a) Entire Agreement. This instrument contains the entire agreement
of the parties with respect to the employment of the Employee and may not be
changed orally but only by an agreement in writing signed by the party against
whom enforcement is sought. This Agreement supersedes any and all earlier
agreements concerning the provision of services to the Company by the Employee,
which, as of the Effective Date, shall be terminated and be of no further force
or effect, and Employee hereby acknowledges satisfaction by the Company of all
requirements thereunder, including without limitation any and all obligations to
pay salary, bonuses, benefits or severance payments.
(b) Employee Representation. Employee represents that his employment
by the Company hereunder will not violate any agreement between Employee and any
of his previous employers.
(c) Enforcement of Covenants. The Employee acknowledges that he has
carefully read and considered all the terms and conditions of this Agreement and
the Nondisclosure Agreement, including the restraints imposed on the Employee by
Section 6 hereof. The Employee agrees that said restraints are necessary for the
reasonable and proper protection of the Company and its affiliates and that each
and every one of the restraints is reasonable in respect to subject matter,
length of time and geographic area. The Employee further acknowledges that, were
he to breach any of the covenants contain in Section 6 hereof, the damage to the
Company would be irreparable. The Employee therefore agrees that the Company, in
addition to any other remedies available to it, shall be entitled to preliminary
and permanent injunctive relief against any breach or threatened breach by the
Employee of any of said covenants, without having to post bond. The parties
further agree that, in the event that any
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provision of Section 6 hereof shall be determined by any court of competent
jurisdiction to be unenforceable by reason of its being extended over too great
a period of time, too large a geographic area or too great a range of
activities, such provision shall be deemed to be modified to permit its
enforcement to the maximum extent permitted by law.
(d) Remedies.
(i) Subject to subsection (d)(ii) below, any claim or controversy
arising out of or relating to this Agreement, including (without limitation) a
claim by the Company that the Employee has violated any one or more of the
restrictions set forth in Section 6, shall be settled by arbitration before a
single arbitrator (who shall be a lawyer) in Boston, Massachusetts in accordance
with the Commercial Arbitration Rules of the American Arbitration Association.
If the arbitrator finds that a violation of the foregoing restrictions exists or
is threatened, he shall prescribe appropriate relief which may include an award
that the Employee desist from such violation, whether or not such an order would
issue, in the circumstances, under the equity powers of a court. Judgment upon
the award rendered by the arbitrator may be entered in any court of competent
jurisdiction.
(ii) The Company shall have the right, which may be exercised in
lieu of or in addition to the procedure set forth in subsection (d)(i) above, to
submit a claim that the Employee has violated any one or more of the
restrictions set forth in Section 6 to any court of competent jurisdiction and
the Company will be entitled, in addition to any other remedies available to it
from such court, to obtain injunctive relief from such court to enforce the
terms of this Agreement. The Employee, upon receipt of written notice of the
institution of proceedings in such court, hereby agrees to submit to the
jurisdiction of such court.
(e) Notice. Unless written designation of a different address is
filed with each of the other parties hereto, all notices, requests, demands or
other communications required by or otherwise issued with respect to this
Agreement shall be in writing and shall be deemed to have been duly given to any
party when delivered personally (by courier service or otherwise); when
delivered by facsimile, transmission confirmed; the next business day after
timely delivery to the courier, if sent by overnight courier guaranteeing next
day delivery; or five days after being mailed by first-class mail, postage
prepaid and return receipt requested, in each case to the applicable address set
forth at the beginning of this Agreement.
(f) Waiver. The waiver by either party of a breach of any provision
of this Agreement shall not operate or be construed as a waiver of any
subsequent breach thereof.
(g) Severability. If any portion or portions of this Agreement are
declared to be void for illegality, then the remaining portions of the Agreement
shall remain and be valid and binding.
(h) Governing Law. This Agreement shall be governed by and construed
under the laws of the Commonwealth of Massachusetts, without regard to its
conflict of laws principles.
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(i) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same instrument.
(j) Captions. The captions of the sections of this Agreement are
inserted for convenience only and are not intended to be a part of this
Agreement.
IN WITNESS WHEREOF, each of the parties has executed this Agreement, or
caused this Agreement to be executed by its duly authorized officer, under seal,
as of the date first written above.
NOVALINK USA CORPORATION
By: /s/ X. Xxxxxx
Xxx Xxxxxx, Chairman
EMPLOYEE
/s/ Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx
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EXHIBIT A
Xxxxxx X. Xxxxxxxx
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Employee
NONDISCLOSURE AND ASSIGNMENT OF INVENTIONS AGREEMENT
In consideration of my employment or the continuation of my employment by
NovaLink USA Corporation (the "Company"), I hereby agree as follows:
I. Confidential Information. I understand that the Company's confidential
information includes matters not generally known outside the Company, such as
software and systems, methods, designs, processes and trade secrets relating to
existing and future projects involving internet website development products and
services marketed or used by the Company, any contracts and other data including
sales and customer information, relating to the business operations,
methodologies and techniques of the Company such as information relating to the
Company's e-prise software. I further understand that while I am employed by the
Company, I may obtain or hear of confidential information of the Company and of
other parties which has been provided to the Company in confidence. I agree not
to disclose, use or copy any confidential information of the Company (whether or
not produced by me) or of other parties which has been provided to the Company
in confidence, except as the Company may authorize or direct.
II. Business Opportunities and Discoveries. I agree to make full and
prompt disclosure to the Company of all business opportunities relating to
internet web site development (collectively, "Business Opportunities"), as well
as of all computer software systems, methods, designs, processes and trade
secrets whether patentable, copyrightable or not, made, conceived or reduced to
practice by me or under my direction or jointly with others during my employment
by the Company, whether or not made, conceived or reduced to practice during
normal working hours or on the premises of the Company (all of which are
collectively termed "Discoveries"). I hereby assign and transfer to the Company
without further compensation the entire worldwide right, title and interest in
and to all Discoveries and any patents, patent applications, copyrights,
copyright registrations, or trade secrets covering such Discoveries. I further
agree, both during and after my employment with the Company, to execute and
deliver such assignments, patents, copyrights and applications, and other
documents as the Company may direct, and agree to cooperate fully with the
Company to enable the Company to secure and patent, copyright and otherwise
perfect and protect such Discoveries in any and all countries. This paragraph
will not apply to Discoveries which do not relate to the actual, planned or
anticipated business or research and development of the Company or affiliated
business entities and which are made, conceived or reduced to practice by me
during other than normal working hours, not on the Company's premises and
without the use of any of the Company's tools, devices, equipment, resources or
confidential information.
III. Intellectual Property Rights. I acknowledge and agree that ownership
of copyrights, patents and any other intellectual property rights in the
designs, drawings, and related documents and works of authorship created for the
Company or within the scope of my employment belong to the Company exclusively
throughout the world. There shall be no obligation of the Company or any of
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its direct or indirect licensees to designate me as author of any such design,
drawing, related documentation or other work of authorship when distributed
publicly or otherwise, nor to make any such distribution. I hereby waive and
release all my rights, if any, to the foregoing and hereby assign and transfer
to the Company without further compensation any interest I may have in the
entire worldwide right, title and interest in and to the foregoing. I further
agree to execute any papers and to assist the Company in any manner deemed
necessary by the Company to permit the Company to apply for, obtain and defend
copyrights and other intellectual property rights related to the foregoing.
IV. Obligations to Other Parties. I hereby represent that I have no
present obligation to assign to any former employer or any other person,
corporation, business entity or firm, any items covered by paragraphs 2 and 3,
and I am not bound by any employment contracts or restrictive agreements which
would prevent full performance of my duties to the Company, including but not
limited to the duties set forth in this Agreement. I will not disclose and have
not disclosed to the Company, and I will not induce or cause and have not
induced or caused the Company to use, any confidential information of other
persons, corporations or firms, including former employers. In addition, I will
not bring or provide and have not brought or provided to the Company, any
documents or other tangible items containing confidential information of other
persons, corporations or firms, including any former employers.
V. Affiliates or Subsidiaries. If my employment is transferred to a
subsidiary or affiliated business entity of the Company, this agreement will
continue to apply as though I were still employed by the Company unless I sign
an agreement provided to me by such other company covering essentially the same
matters as this Agreement.
VI. Termination of Employment. Upon any termination of my employment by
the Company, I agree to leave with or return to the Company all records,
drawings, files, notebooks, software, including object and source code versions
thereof, and other documents, including such items in electronic or other
intangible format, pertaining to the Company's confidential information, whether
prepared by me or others, and any equipment, tools or devices owned by the
Company then in my possession or under my control however such items were
obtained.
VII. Vesting of Rights. The rights, title and other interests granted by me
to the Company under this Agreement shall automatically vest in the Company as
each item to which a right, title or other interest applies comes into
existence.
VIII. Photographs. I hereby give the Company and its assigns permission to
use photographs of me (whether or not I am identified by name) during and after
my employment by the Company in connection with the reasonable business purposes
of the Company or its assigns.
IX. Not a Contract of Employment. I understand that this Agreement does
not constitute a contract of employment or give me rights to employment or
continued employment by the Company.
X. Survival. My obligations under this Agreement shall survive any
termination of my employment with the Company, shall be binding upon my heirs,
executors and administrators and shall inure to the benefit of the Company and
its successors and assigns.
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XI. Enforcement of Covenants. I acknowledge that I have carefully read and
considered all the terms and conditions of this Agreement, including the
restraints imposed on me pursuant to Sections 1, 2, 3 and 4 hereof. I agree that
said restraints are necessary for the reasonable and proper protection of the
Company and its affiliates, and I further acknowledge that, were I to breach any
of the covenants contained in Sections 1, 2, 3 and 4 hereof, the damage to the
Company would be irreparable. I therefore agree that the Company, in addition to
any other remedies available to it, shall be entitled to preliminary and
permanent injunctive relief against any breach or threatened breach by me of any
of said covenants, without having to post bond.
XII. Severability. In the event that any one or more of the provisions of
this Agreement shall be invalid, illegal or unenforceable in any respect for any
reason, the validity, legality and enforceability of any such provision in every
other respect and of the remaining provisions of this Agreement shall not be in
any way impaired.
XIII. Entire Agreement; Modifications. This Agreement constitutes the
entire agreement covering the subject matter set forth herein and may be
modified only by agreement in writing signed by me and an officer of the
Company.
14. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts.
Date: Nov. 4, 1997 /s/ Xxxxxx X. Xxxxxxxx
Signature of Employee
Xxxxxx X. Xxxxxxxx
Printed Name of Employee
Witness:
/s/ X. Xxxxxx
Xxx Xxxxxx
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