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AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
WHEREAS, CKS Group, Inc., a California corporation (hereinafter
referred to as the "Employer" or "CKS Group") and Xxxxxxx Xxxxxxxx ("Employee")
(jointly referred to hereafter as the "parties") wish to enter into an
employment agreement ("Agreement");
WHEREAS, CKS Group and Employee entered into an Employment
Agreement in March 1997 and desire to amend and restate such Employment
Agreement in its entirety;
NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL BENEFITS TO EACH
OF THE PARTIES, THEY HEREBY AGREE AS FOLLOWS:
1. Employment.
1.1 Position. Employee agrees to serve as the Employer's
President of "Company to be named" ("President"), reporting to Xxxx X. Xxxxxx,
Chairman and Chief Executive Officer ("C.E.O.") of CKS Group, Inc. Employee
shall manage the day-to-day operations of the "Company to be named" Company
(hereinafter referred to as the "Company"), with the specific objectives of:
(a) maintaining and extending terms of existing and
acquired contracts, including identification of merger and acquisition
opportunities;
(b) keeping all CKS Group, Inc. executive officers
informed of all material facts and developments concerning the Company's
operations;
(c) hiring, firing, promoting, demoting and
discipline of non-managerial operations personnel, consistent with CKS Group,
Inc.'s human resources policies and procedures, and other policies of the
Company;
(d) making regular reports on the Company's
operations to the C.E.O. and to the Board of Directors of CKS Group, Inc. (the
"Board"), as well as making other special reports as required by the C.E.O.
and/or the Board;
(e) training such persons as may be designated by
the C.E.O. with respect to any or all aspects of the Company's operations
including a successor President;
(f) in the case of Employee's departure from
employment with the Company, working with other executive officers of the
Company in order to ensure a smooth transition to a successor President for the
Company; and
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(g) responding as required for participating in the
acquisition of new entities and in the supervision of those newly acquired
entities as is designated by the C.E.O.
1.2 Time and Effort
(a) Subject to Paragraph 1.2(b) and 1.2(c) below,
during his employment, Employee shall devote his full energies, interest,
abilities, and productive time to the performance of this Agreement and shall
not, without the C.E.O.'s prior written consent, render to others services of
any kind for compensation, or engage in any other business activity that would
materially interfere with the performance of his duties under this Agreement.
(b) Current Outside Employment. The parties hereby
agree that, during the term of this Agreement, Employee may hold the position of
director at the Cabrini Medical Foundation. As stated in Paragraph 1.2(a) above,
Employee shall not accept outside employment or board of director membership
other than as provided in this paragraph without the prior written consent of
the CKS Group, Inc. Board of Directors, with the exception of the foundation
referenced in this paragraph.
(c) Current Outside Investments. The parties hereby
acknowledge that Employee has engaged in stock purchases and other investments
prior to the date of execution of this Agreement in companies which compete with
CKS Group, Inc. and its affiliates. Effective on the date of execution of this
Agreement, Employee shall not invest in or purchase shares in any advertising or
marketing company, not including CKS Group, Inc. or its affiliates, which
performs work substantially similar to that engaged in by CKS Group, Inc. or its
affiliates, without the prior written authorization of the CKS Group, Inc. Board
of Directors. This includes investments made directly by the Employee or
investments made by the Employee through an investment advisor, investment
counselor, or person with similar title and responsibilities. This does not
include any holdings in a mutual fund or similar investment which includes
shares of advertising and marketing companies within its investment portfolio,
or acquisition of additional shares in companies in which Employee has invested
as of the date of execution of this Agreement by way of stock splits or stock
repurchase plans.
(d) Disclosure of Information. Employee recognizes
that as an executive of the Employer, Employee occupies a position of trust with
respect to much business information of a secret or confidential nature which is
the property of the Employer and which will be imparted to Employee from time to
time in the course of Employee's duties. Employee therefore agrees that Employee
shall not, at any time, whether in the course of his employment or thereafter,
use or disclose directly or indirectly to any person outside the Employer any of
such information, except as required in the ordinary course of Employee's duties
under this Agreement.
1.3 Duration of Employment. This Agreement provides for
employment for a five (5) year term, commencing on a date mutually agreed to by
employee and employer an in no event
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later than May 12, 1997, (the "Start Date") and continuing until terminated by
either party, as specified in Section 3 below.
1.4 Location of Corporate Offices. The Company's corporate
headquarters shall be located in New York city, New York. Employee's
recommendation for the corporate office space must be approved by Xxxx X. Xxxxxx
in advance of its establishment.
1.5 Financial Advisor. Employee shall be permitted to hire a
financial consultant who shall provide financial advice and assistance to the
Company and who will jointly report to Employee and the Chief Financial Officer
(C.F.O.) of CKS Group, Inc. The C.F.O. of CKS Group, Inc. will supervise this
financial consultant on a day-to-day basis. Employee's final selection of a
financial consultant must be approved by Xxxx X. Xxxxxx and the C.F.O. of CKS
Group, Inc.
1.6 First Year Expectations. Employee's primary responsibility
shall be the acquisition and management of Company subsidiaries. It is expected
during the first 12 months of Employee's employment that Employee shall identify
and evaluate appropriate acquisition targets for consideration by the Company
and CKS Group, Inc. Employee's performance shall be evaluated on the basis of
Employee's acquisition efforts and the financial performance of the acquired
entities, based upon individual financial goals set at or near the time of
acquisition.
2. Compensation and Benefits.
2.1 Basic Salary. Beginning on the Start Date, Employer shall pay
a basic salary to Employee at the rate of $250,000.00 per year, payable in equal
bi-weekly installments in accordance with Employer's regular payroll practices
except as otherwise agreed between Employer and Employee, provided that no
salary shall be due or payable during any period of unpaid leave, in accord with
Employer's regular policies as they may exist or be changed from time to time.
The compensation package shall be subject to periodic review, and any
modifications thereto must be in a writing signed by the parties to this
Agreement.
2.1.1 Initial Stock Options. Subject to the provisions of Section
3 of this Agreement, after the Start Date Employee shall receive an option on
75,000 shares of CKS Group, Inc. Common Stock, which shall vest in accordance
with the terms and conditions of the CKS Group, Inc. 1995 Stock Option Plan, and
subject to any legal or other requirements imposed by law, the corporation's
governing documents, or any relevant stock subscription agreements or rules of
the corporation.
2.2 Bonus. Employee shall be entitled to bonus compensation,
based upon Employee's performance, as follows:
(a) Personal Incentive. Employee's performance will
be formally evaluated on or about the expiration of one year following the Start
Date. As a result of said
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performance evaluation, Employee will be granted a bonus of additional options
on shares of CKS Group, Inc. Common Stock, depending upon Employee's performance
as evaluated by the C.E.O. The criterion for said performance evaluation will be
established within the first 30 days of Employee's employment through subsequent
negotiations between Employee and Employer; provided, however, such agreement
shall be reduced to writing and signed by the parties hereto. This option shall
be offered in accordance with and subject to the terms and conditions of the CKS
Group, Inc. 1995 Stock Option Plan and any legal or other requirements imposed
by law, the corporation's governing documents, or any relevant stock
subscription agreements or rules of the corporation. In subsequent years, and
depending upon Employee's performance as evaluated by the Employer and subject
to the same legal requirements, Employee will be eligible for the options
provided to Employer's other executives pursuant to the 1995 Executive
Compensation Plan.
(b) Objective Bonus. It is expected that the
newly-created Company will achieve specified gross revenue goals at 15% pretax
operating profit under current accounting practices, or as those practices are
changed by Employer from time to time. If these gross revenue and profitability
goals are met or exceeded by the end of any relevant fiscal year, then
additional bonus amounts will be allocated to the Company Management Team bonus
pool. The gross revenue goals and bonus pool allocation procedure will be agreed
within 30 days after the Start Date; provided, however, such agreement shall be
reduced to writing and signed by the parties hereto. This section is not
intended to create any third party beneficiaries to this Agreement.
2.3 Employee Benefits.
(a) Fringe Benefits. During his employment,
Employee shall be entitled to receive the Employee benefits described below (so
long as, and to the extent that, Employer continues to provide these benefits),
including life insurance with an indemnity amount in accordance with Employer's
regular practice, and medical, dental, vision and disability insurance in
accordance with Employer's plans as they exist or are modified from time to
time.
(b) Automobile. Beginning on the Start Date and
continuing for the duration of the term of this Agreement, Employer will provide
Employee a monthly automobile subsidy for the acquisition, insurance and
maintenance of a vehicle for Company business use of $833.00 per month, payable
in equal installments in accordance with the Employer's regular payroll
practices.
(c) Parking Allowance. Beginning on the Start Date
and continuing for the duration of the term of this Agreement, Employer shall
reimburse Employee for reasonable monthly expenses incurred in order to obtain
parking at the location of Employee's office, not to exceed $300.00 per month.
(d) Vacation. Employee shall also be entitled to
annual vacation which will accrue at the rate of the greater of either twenty
(20) days per annum, or such greater amount as is consistent with Employer's
executive vacation practices, subject, however, to the accrual maximums
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now or hereafter set by Employer's policies for the accrual of unused vacation,
but in no event shall the accrual maximum for Employee be less than twenty (20)
days. Employee shall also be entitled to holiday pay for all holidays recognized
by Employer.
2.4 Business Expenses. During Employee's employment, Employer
shall reimburse Employee for reasonable out-of-pocket expenses incurred in
connection with Employer's business, including travel and entertainment
expenses, food, and lodging while away from home, subject to such policies as
Employer may from time to time establish for its employees.
2.5 Club Membership. Upon approval of the C.E.O., during
Employee's employment, Employer shall reimburse Employee for reasonable
out-of-pocket expenses, up to $5,000.00, incurred in connection with Employee's
membership at appropriate club(s) and/or organization(s).
2.6 Withholding. All amounts indicated above are before any
required withholding for taxes. Employer may withhold from any and all payments,
compensation or other remuneration paid to Employee such amounts as Employer
believes it is required to withhold under any federal, state, local or foreign
law, rule or regulation.
3. Termination.
3.1 Termination Reasons. This Agreement may be terminated at-will
by either party with or without cause or notice. Terms and conditions of
employment with the Company may be modified at the sole discretion of the
Company with or without cause or notice. Examples of the types of terms and
conditions of employment which are within the sole discretion of the Company
include, but are not limited to, promotion, demotion, transfers, compensation,
benefits, discipline, layoff or recall, job duties and responsibilities,
production standards, alteration or cessation of operations, and any other terms
and conditions that the Company determines to be necessary for the safe,
efficient and economic operation of its business.
3.2 Severance Benefits. If this Agreement is terminated by either
party for any or no reason, and Employee executes a severance agreement and
release of claims in a form to be specified by the CKS Group, Inc. Board of
Directors, such as that set forth in Exhibit A of this Agreement, Employee will
receive the severance benefits in an amount equal to six (6) months salary as
defined in section 2.1 above.
(a) Except as provided in this section, employee
shall not be entitled to compensation of any kind, and Employee shall forfeit
any and all right to stock options not yet accrued and any bonus compensation
during the year in which employment is terminated.
(b) The parties hereto may elect to continue
Employee's employment as a consultant or other employment relationship during
the severance period, in which case the terms
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and conditions of employment, including but not limited to those contained in
Sections 4 and 5 of this Agreement, will still apply.
3.3 Termination By Death or Disability. This Agreement will
terminate automatically upon the death or permanent disability of Employee which
cannot be reasonably accommodated by Employer, in which case Employee or his
estate will be entitled only to compensation earned through the date of such
death or permanent disability, and Employee shall forfeit any and all right to
stock options not yet accrued and any bonus compensation during the year in
which employment is terminated.
4. Trade Secrets and Confidential Information.
4.1 Confidential Information. Employee hereby acknowledges that
in order to perform Employee's duties as an employee of Employer, Employee has
received, and will in the future be given access to, certain confidential,
secret and proprietary information in the form of records, data, specifications,
formulas, technology, inventions, devices, products, methods, know-how,
processes, financial data, customer and/or vendor information and practices,
customer lists, marketing methods, cost information, employee information and
trade secrets (collectively, "Confidential Information") developed and owned by
Employer concerning the business, products and/or services of Employer.
4.2 Non-Disclosure. Except as otherwise specifically provided
herein, Employee will not, directly or indirectly, disclose, or cause or permit
to be disclosed, to any person or to any entity whatsoever any Confidential
Information acquired pursuant to Employee's employment with Employer (whether
acquired prior to or subsequent to the execution of this Agreement).
4.3 Permitted Disclosure. Employee may disclose the Confidential
Information only to the extent reasonably necessary and required in the
discharge of Employee's duties as an employee of Employer.
4.4 Duplication. Employee shall not, without the prior written
consent of the C.E.O., duplicate or cause or permit to be duplicated, any
material (including, without limitation, written, typed, or printed material, or
material embodied in other forms including embodiment on computer discs and
tapes) included in the Confidential Information covered hereby.
4.5 Restricted Use. Except as specifically provided herein,
Employee will not, directly or indirectly, use, or permit to be used for his
personal benefit, at any time or in any manner whatsoever, any Confidential
Information acquired pursuant to Employee's employment with Employer, or
pursuant to Employee's capacity as consultant under Section 3. Employee shall
not at any time or in any manner, unless required by Employee's job
responsibilities or by law, publish, disclose or use for Employee's own benefit
(or authorize anyone else to publish, disclose or make use of), any Confidential
Information unless and until such Confidential Information shall cease to be
secret as evidenced by general public knowledge.
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4.6 Return of Information. Employee will immediately, upon the
request of Employer, return to Employer all originals, copies or other summaries
of any Confidential Information, or other information, received under this
Agreement or otherwise. Employee will not retain, or cause or permit to be
retained, any copies or other embodiments of the materials so returned.
4.7 Non-Competition with Employer. During his employment, or
during Employee's performance of any services as a consultant under Section 3.2,
above, and so long as this contract remains in effect and any payments are being
made to the Employee, Employee shall not, directly or indirectly, promote,
participate, or engage in any activity or other business competitive with
Employer's business, or any of its affiliates, and shall not solicit Employer's
employees or customers, or the employees or customers of any of Employer's
affiliates, nor shall Employee engage in any act or conduct which creates, or
appears to create, a conflict of interest with Employer.
5. Covenants. Employee covenants and agrees that unless approved
in advance expressly in writing by the C.E.O. or the Board, during the term of
his employment and/or during the term of any subsequent consulting arrangement
with the Employer, he will refrain from:
(a) Any direct or indirect communication in which
Employee expressly or impliedly makes any statement or conveys any information
derogatory of CKS Group, Inc. or its affiliates, successors or assigns.
(b) Any direct or indirect communication with
anyone for the purpose of, or on the subject of, procuring, assisting, defeating
or identifying any possible transaction in which a substantial amount of the
assets of CKS Group, Inc. or its affiliates, successors or assigns might be
acquired.
(c) Any direct or indirect communication with, or
disclosure to, anyone of the interest, if any, of CKS Group, Inc. or its
affiliates, successors or assigns in pursuing discussions regarding a potential
acquisition of other businesses or enterprises, or of the terms, conditions or
other facts with respect to any such possible acquisition or financing, except
as is required by Employee's job responsibilities as described in Section 1.1.
(d) Any direct or indirect communication with any
investment banker, or other potential acquisition or financing intermediary
regarding CKS Group, Inc., or its affiliates, successors or assigns, except as
is required in the ordinary course and scope of Employee's duties.
(e) Any direct or indirect communication with
anyone other than authorized personnel or representatives of CKS Group, Inc.,
including, but not limited to, competitors of CKS Group, Inc. or its affiliates,
regarding the financial condition, business strategies, or plans of CKS Group,
Inc., its affiliates, successors or assigns, except as required to carry out
non-material operations of CKS Group, Inc. or its affiliates.
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(f) Any direct or indirect disclosure of any
information regarding the business or operations of CKS Group, Inc. or its
affiliates, successors or assigns, including but not limited to confidential
financial, customer, or personnel information, except as expressly permitted by
the C.E.O. and to the extent such disclosure can be made without violating the
trade secret/proprietary information agreement above.
6. Miscellaneous.
6.1 Notice. All notices, requests and other communications
required or permitted to be given hereunder shall be in writing and shall be
deemed given (a) upon receipt, if given by personal delivery; (b) upon delivery,
if given by electronic facsimile; and (c) upon the third business day following
mailing, if mailed by deposit in the United States mail, with certification and
postal charges prepaid, addressed as follows:
If to Employer:
CKS Group, Inc.
00000 Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attn: Chairman and Chief Executive Officer
Tel: (000) 000-0000
Fax: (000) 000-0000
If to Employee:
Xxxxxxx Xxxxxxxx
c/o Xxxx Xxxxxx, Esq.
Lampf, Lipkind, Prupis, Petigrow & XxXxx
00 Xxxx Xxxxxx
X. Xxxxxx, XX 00000
Tel: (000) 000-0000
6.2 Delegation of Duties. Employee may not delegate the services
and obligations he is required to perform under this Agreement. Any attempt by
Employee to delegate his duties hereunder shall be null and void.
6.3 Amendment. This Agreement may be modified or amended only by
and to the extent that such modification or amendments is reduced to a written
agreement executed by
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Employer and Employee, and references this Agreement and identifies itself as a
modification or amendment to this Agreement.
6.4 Previous Agreements. This Agreement contains the entire
agreement between the parties and supersedes all prior oral and written
agreements, understandings, commitments, and practices between the parties,
including all prior employment or consulting agreements, whether or not fully
performed before the date of this Agreement.
6.5 Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of California.
6.6 Section Headings. The various section headings are inserted
for convenience of reference only and shall not affect the meaning or
interpretation of this Agreement or any section thereof.
6.7 Severability. If provision of this Agreement is held by a
court of competent jurisdiction to be invalid, illegal or unenforceable, such
provision will be deemed amended to the minimum extent necessary to conform to
applicable law so as to be valid, legal and enforceable; if such provision
cannot be amended as provided above, it will be stricken and the remainder of
this Agreement will remain in full force and effect.
6.8 Arbitration. It is further understood and agreed that if, at
any time, a violation of any term of this Agreement is asserted by any party
hereto, that party shall have the right to seek specific performance of that
term and/or any other necessary and proper relief, including but not limited to
damages, before an arbitrator as set forth below, and the prevailing party shall
be entitled to recover its reasonable costs and attorneys' fees. The prevailing
party in said litigation shall be the same party who would be entitled to an
award of costs and attorneys' fees in civil litigation. The parties agree that
if they have any dispute as to the terms of or obligations created by this
Agreement, or should either party to this Agreement have any dispute as to
Employee's termination or compensation, or should Employee allege that Employer
or any of its employees, managers, officers, directors or other representatives
has violated any of Employee's rights under state or federal civil rights laws
including, but not limited to, the California Fair Employment and Housing Act
(Cal. Gov. Code Sections 12900, et seq.), the Civil Rights Act of 1964 (42
U.S.C. Sections 2000e, et seq.), the Equal Pay Act of 1963 (29 U.S.C. Sections
206(d)), the Americans With Disabilities Act of 1990 (42 U.S.C. Sections 12101,
et seq.), or California Labor Code Section 1102.1, they will submit any such
dispute to final and binding arbitration pursuant to the Commercial Arbitration
Rules of the American Arbitration Association before a neutral arbitrator
selected from the list of Commercial Arbitrators maintained by that Association,
or before any other neutral, and pursuant to any other such procedures, as the
parties may agree upon. To be timely, any such dispute must be referred to
arbitration within twelve (12) months of the incident or complaint giving rise
to the dispute; disputes not referred to arbitration within such twelve (12)
month period shall be deemed waived, and the arbitrator shall deny any untimely
claims. THE PARTIES EXPRESSLY AGREE THAT SUCH ARBITRATION SHALL BE THE
EXCLUSIVE, FINAL AND BINDING
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REMEDY FOR ANY DISPUTE INVOLVING OR RELATED TO AN ALLEGED BREACH OF THIS
AGREEMENT, EMPLOYMENT TERMINATION, COMPENSATION, THE VIOLATION OF XX. XXXXXXXX'X
CIVIL RIGHTS, OR ANY OTHER MATTER ARISING OUT OF OR RELATED TO XX. XXXXXXXX'X
EMPLOYMENT, AND HEREBY EXPRESSLY WAIVE ANY RIGHT THEY HAVE OR MAY HAVE TO A
COURT TRIAL OR A JURY TRIAL OF ANY SUCH DISPUTE. In making an award, the
arbitrator shall have no power to add to, delete from or modify this Agreement,
or to enforce purported unwritten agreements or prior agreements, or to construe
implied terms or covenants into the Agreement, the parties being in agreement
that no such oral or implied terms or covenants or unwritten agreements or prior
agreements are intended by them to remain enforceable, to the extent they may
ever have been so. In reaching his or her decision, the arbitrator shall adhere
to the relevant law and applicable precedent, and shall have no power to vary
therefrom. In construing this Agreement, its language shall be given a fair and
reasonable construction in accordance with the intention of the parties, and
without regard to, or the aid of, section 1654 of the California Civil Code. At
the time of issuing a decision, the arbitrator shall (in the decision or
separately) make specific findings of fact and shall set forth such facts as
support the decision, as well as his conclusions of law, and the reasons and
bases for his opinion, and such a decision incorporating these elements shall be
a condition precedent to its enforcement. The decision of the arbitrator shall
be final and binding, provided, however, that in the event the arbitrator
exceeds the powers or jurisdiction here conferred, or fails to issue a decision
in conformance herewith, it is specifically agreed that the aggrieved party may
petition a court of competent jurisdiction to correct or vacate such award, and
that the arbitrator's act of exceeding his or her powers shall be grounds for
granting such relief. It is further agreed by the parties that venue for any
arbitration proceedings shall be Santa Xxxxx County, California. This
arbitration clause is entered pursuant to, and shall be governed by, the Federal
Arbitration Act (9 U.S.C. Section 1, et seq.), but in all other respects this
agreement shall be governed by the provisions of California law. If any one or
more provisions of this arbitration clause shall for any reason be held invalid
or unenforceable, it is the specific intent of the parties that such provisions
shall be modified to the minimum extent necessary to make it or its application
valid and enforceable.
6.9 Termination of Prior Agreement. CKS Group and Employee agree
that this Agreement sets forth the sole and entire agreement on the subject
matter among CKS Group and Employee. Upon execution of this Agreement by CKS
Group and Employee, all prior Employment Agreements between CKS Group and
Employee shall be terminated in their entirety and superseded and governed by
this Agreement.
6.10 Waiver. Waiver of any default or breach of this Agreement or
of any warranty, representation, covenant or obligation contained herein shall
not be construed as a waiver of any subsequent breach.
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6.11 As used through this Agreement, "the "Employer" shall
include CKS Group, Inc., a Delaware corporation (including its subsidiaries,
affiliated companies, officers, directors, managers, employees, agents,
attorneys, consultants, advisors, representatives, successors and assigns).
IN WITNESS WHEREOF, the parties have executed this Agreement in one or
more counterparts which, taken together, shall constitute one agreement.
EMPLOYER:
"Company to be Named" (the "Company")
by: CKS GROUP, INC.
Date: November 28, 1997 By: /s/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx
Chairman and Chief Executive Officer
CKS GROUP, INC.
Date: November 28, 1997 By: /s/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx
Chairman and Chief Executive Officer
EMPLOYEE:
Date: November 28, 1997 By: /s/ Xxxxxxx Xxxxxxxx
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Xxxxxxx Xxxxxxxx
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