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Exhibit 10.26
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement"), entered into as of the 1st
day of July, 1999, is by and among Xxxxxxxx.xxx Incorporated, a New York
corporation ("Cytation"), XxxxxxxXxxx.xxx Incorporated, a Delaware corporation
and wholly-owned subsidiary of Cytation (the "Company"), and Xxxxxx Xxxxxxx
("Xxxxxxx").
W I T N E S S E T H :
WHEREAS, the Company is engaged primarily in the business of providing
on-line college application and related services; and
WHEREAS, Cytation and the Company desire to employ Xxxxxxx as President
of the Company under the terms and conditions specified herein, and Xxxxxxx
desires to be so employed by the Company.
NOW THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties do hereby agree as follows:
1. EMPLOYMENT AND DUTIES.
(a) Effective as of July 1, 1999 and through the period ending June 30,
2000, Cytation and the Company hereby agree to employ Xxxxxxx as President of
the Company. As such, Xxxxxxx shall have the responsibilities, duties and
authority reasonably accorded to and expected of such position. Xxxxxxx will
report directly to the Board of Directors of Cytation and carry out its
directives to him.
(b) Xxxxxxx hereby agrees to accept the employment, responsibilities
and duties described in subparagraph (a) above upon the terms and conditions
herein contained. Xxxxxxx agrees to devote all of his business and productive
time, skill, attention and efforts to promote and further the business of the
Company. In all aspects of his employment, Xxxxxxx shall faithfully adhere to,
execute and fulfill all directives, policies and standards established by the
Company. Xxxxxxx shall not, during the term of Xxxxxxx' employment hereunder, be
engaged in any other business activity pursued for gain, profit or other
pecuniary advantage if such activity interferes with Xxxxxxx' duties and
responsibilities hereunder.
2. COMPENSATION. For all services rendered by Xxxxxxx, the Company
shall compensate Xxxxxxx as follows:
(a) BASE SALARY. The Company shall pay to Xxxxxxx base salary at the
rate of $140,000 per year. Base salary shall be paid in accordance with the
Company's standard payroll procedures.
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(b) STOCK OPTIONS. Effective as of July 1, 1999, the Company and
Cytation agree to award Xxxxxxx an option to purchase 300,000 shares of the
common stock of Cytation, $.001 par value, at an exercise price equal to $6.125
per share. One third of such option shall vest and become exercisable on June
30, 2000, and the remaining portion of such option shall vest and become
exercisable ratably on a monthly basis over a two-year period commencing on July
31, 2000 and ending June 30, 2002; provided, however, that in the event Xxxxxxx'
employment is terminated at the expiration of this Agreement or thereafter for
reasons other than Cause, this option shall become immediately exercisable in
full as of the date of such termination. The option shall have a term of 10
years except as otherwise provided in Paragraph 4 hereof and the written option
agreement between the Company and Xxxxxxx, the terms of which shall be
conclusive and binding.
(c) STOCK. Effective as of January 1, 2000, the Company and Cytation
agree to award Xxxxxxx 5,000 shares of the common stock of Cytation, $.001 par
value. Such 5,000 shares shall be included in the first registration statement
filed by Cytation with the Securities and Exchange Commission on or after March
31, 2000 covering the offering of Cytation securities.
(d) WELFARE AND RETIREMENT BENEFITS. During the term of Xxxxxxx'
employment with the Company, Xxxxxxx may participate in such employee benefit
plans, including but not limited to 401(k), pension, health and dental insurance
plans, as the Company makes available generally to executives of the Company.
(e) BUSINESS EXPENSES. During the term of this Agreement, the Company
will reimburse Xxxxxxx in a manner consistent with Company practice for any
reasonable travel and out-of-pocket expenses actually incurred by Xxxxxxx in
connection with his employment hereunder. The Company's agreement under this
subparagraph (d) is subject to Xxxxxxx' substantiation and reporting of such
expenses in accordance with Company policy and federal and state income tax
laws.
3. NON-COMPETITION AGREEMENT.
(a) Xxxxxxx will not, during the period of Xxxxxxx' employment by or
with the Company, and for a period of one (1) year immediately following the
termination of Xxxxxxx' employment under this Agreement, for any reason
whatsoever, directly or indirectly, for Xxxxxxx or on behalf of or in
conjunction with any other person, persons, company, partnership, corporation or
business of whatever nature:
(i) engage, as an officer, director, stockholder,
owner, partner, joint venturer, or in a managerial, consulting
or advisory capacity, whether as an employee, independent
contractor, consultant or advisor, or as a sales
representative, in any business which offers any services or
products in direct competition with the Company within the
United States of America ("USA");
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(ii) call upon any person who is, at that time,
within the USA, an employee of the Company in a managerial
capacity for the purpose or with the intent of enticing such
employee away from or out of the employ of Company;
(iii) call upon any person or entity which is, at
that time, or which has been, within one (1) year prior to
that time, a client of Company within the USA for the purpose
of soliciting or selling products or services in direct
competition with the Company within the USA;
(iv) call upon any prospective acquisition candidate,
on Xxxxxxx' own behalf or on behalf of any competitor, which
candidate was, to Xxxxxxx' actual knowledge after due inquiry,
either called upon by Company or for which Company made an
acquisition analysis, for the purpose of acquiring such
entity; or
(v) induce or attempt to induce any person known by
Xxxxxxx to be a customer, supplier, or business relation of
the Company to cease doing business with the Company or in any
way interfere with the relationship between the Company and
any person known by Xxxxxxx to be a customer, supplier,
licensee, or business relation of the Company.
Notwithstanding the above, the foregoing covenants shall not be deemed
to prohibit Xxxxxxx from acquiring as an investment not more than one percent
(1%) of the capital stock of a competing business, whose stock is traded on a
national securities exchange or over-the-counter.
(b) Because of the difficulty of measuring economic losses to Company
as a result of a breach of the foregoing covenants, and because of the immediate
and irreparable damage that could be caused to Company for which Company would
have no other adequate remedy, Xxxxxxx agrees that the foregoing covenants may
be enforced by Company in the event of breach by Xxxxxxx, by injunctions and
restraining orders.
(c) The covenants in this Paragraph 3 are severable and separate, and
the unenforceability of any specific covenant shall not affect the provisions of
any other covenant. Moreover, in the event any court of competent jurisdiction
shall determine that the scope, time or territorial restrictions set forth are
unreasonable, then it is the intention of the parties that such restrictions be
enforced to the fullest extent which the court deems reasonable, and this
Agreement shall thereby be reformed.
(d) Xxxxxxx acknowledges that the covenants in this Paragraph 3 (i) are
agreed to by Xxxxxxx as an inducement for and in consideration of the Company's
entering into this Agreement, and (ii) contain limitations as to time,
geographic area and scope of activity to be restrained that are reasonable and
do not impose a greater restraint than is necessary to protect the goodwill or
other business interests of Company.
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(e) Xxxxxxx agrees that all of the covenants in this Paragraph 3 shall
be construed as an agreement independent of any other provision in this
Agreement, that Company shall be the beneficiary of and have the right to
enforce such covenants, and that the existence of any claim or cause of action
of Xxxxxxx against Company, whether predicated on this Agreement or otherwise,
shall not constitute a defense to the enforcement by Company of such covenants.
It is specifically agreed that the period of one (1) year following termination
of Xxxxxxx' employment stated at the beginning of this Paragraph 3, during which
the agreements and covenants of Xxxxxxx made in this Paragraph 3 shall be
effective, shall be computed by excluding from such computation any time during
which Xxxxxxx is in violation of any provision of this Paragraph 3.
4. TERM AND TERMINATION.
(a) TERM. Xxxxxxx' employment pursuant to this Agreement shall begin on
July 1, 1999 and shall terminate on June 30, 2000. This Agreement may be
extended only by a further written agreement between the parties. Future
employment of Xxxxxxx by the Company or Cytation without a written agreement
between the parties will be "at-will" employment. Notwithstanding the foregoing,
either party may terminate this Agreement as described below.
(b) EXECUTIVE RESIGNATION. Xxxxxxx may terminate the Agreement by
providing Cytation with at least thirty (30) business days advance written
notice. Upon termination of this Agreement by Xxxxxxx, Xxxxxxx shall be entitled
to receive base salary accrued through the date of termination. The stock option
described in Paragraph 2(b) hereof shall terminate immediately.
(c) COMPANY TERMINATION WITHOUT CAUSE. Cytation may terminate this
Agreement without Cause (as defined below) by providing Xxxxxxx at least thirty
(30) business days advance written notice. Upon termination of this Agreement by
Cytation without Cause, Xxxxxxx shall be entitled to receive base salary through
June 30, 2000 as provided in Paragraph 2(a) hereof. The stock option described
in Paragraph 2(b) hereof shall become immediately vested and exercisable in
full, and shall remain outstanding for a period of one year following such
termination.
(d) TERMINATION FOR CAUSE. Cytation may terminate this Agreement
without notice for Cause (as defined below). In the event Cytation terminates
Xxxxxxx' employment during the term of this Agreement for Cause, Xxxxxxx shall
be entitled to base salary accrued through the date of termination, but shall be
entitled to no further rights or benefits hereunder. The stock option described
in Paragraph 2(b) hereof shall terminate immediately. For purposes of this
Agreement, "Cause" means, as determined in good faith by two-thirds of the Board
of Directors of Cytation, (1) Xxxxxxx' material and irreparable breach of this
Agreement, (2) Xxxxxxx' gross negligence in the performance of any of his
material duties and responsibilities hereunder; (3) Xxxxxxx' willful dishonesty
or fraud with respect to the business or affairs of the Company; (4) Xxxxxxx'
conviction of a felony crime; or (5) chronic alcohol abuse or illegal drug abuse
by Xxxxxxx.
(e) DEATH. Upon the death of Xxxxxxx during the term of this Agreement,
the Company shall pay to Xxxxxxx' designated beneficiary(ies) compensation
accrued through the last day of the month in which the date of death occurs.
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5. RETURN OF COMPANY PROPERTY. All records, files, business plans,
financial statements, manuals, memoranda, lists, designs, patents, and other
property delivered to or compiled by Xxxxxxx by or on behalf of Company or any
of its representatives, vendors or clients which pertain to the business of
Company shall be and remain the property of Company and be subject at all times
to its discretion and control. Likewise, all correspondence, reports, records,
charts, advertising materials and other similar data pertaining to the business,
activities or future plans of Company which is collected by Xxxxxxx shall be
delivered promptly to the Company without request by it upon termination of
Xxxxxxx' employment.
6. INVENTIONS AND WORKS. Xxxxxxx shall disclose promptly to the Company
any and all significant conceptions and ideas for inventions, improvements and
valuable discoveries, whether patentable or not, and any and all works of
authorship (including computer software), whether copyrightable or not, which
are conceived or made by Xxxxxxx, solely or jointly with another, during the
period of employment or within six (6) months thereafter and which are directly
related to the business or activities of Company and which Xxxxxxx conceives as
a result of Xxxxxxx' employment by the Company. Xxxxxxx hereby assigns and
agrees to assign all Xxxxxxx' interests therein to the Company or its nominee.
Whenever requested to do so by the Company, Xxxxxxx shall execute any and all
applications, assignments or other instruments that the Company shall deem
necessary to apply for and obtain copyright registration or Letters Patent of
the United States or any foreign country or to otherwise protect the Company's
interest therein.
7. TRADE SECRET, PROPRIETARY AND CONFIDENTIAL INFORMATION. Xxxxxxx
acknowledges and agrees that during the course of Xxxxxxx' employment with the
Company, Xxxxxxx may learn about, develop or be entrusted with Trade Secret,
Proprietary and Confidential Information. The Company has in the past and will
in the future use reasonable efforts to keep secret the Trade Secret,
Proprietary and Confidential Information. Xxxxxxx expressly acknowledges and
agrees that unless the Trade Secret, Proprietary and Confidential Information
becomes publicly known through legitimate means not involving an act or omission
by Xxxxxxx: (i) the Trade Secret, Proprietary and Confidential Information is,
and at all times shall remain, the sole and exclusive property of the Company,
(ii) Xxxxxxx shall use the utmost diligence to guard and protect the Trade
Secret, Proprietary and Confidential Information from disclosure to any other
person or entity except in the scope of the discharge of his duties to the
Company; (iii) Xxxxxxx shall not use for his own benefit, or for the benefit of
any other person or entity other than the Company, and shall not disclose,
directly or indirectly, to any other person or entity, any of the Trade Secret,
Proprietary and Confidential Information except in the scope of the discharge of
his duties to the Company; and (iv) except in the scope of the discharge of his
duties to the Company, Xxxxxxx shall not seek or accept any of the Trade Secret,
Proprietary and Confidential Information from any former, present, or future
employee of the Company.
For purposes of this Agreement, "Trade Secret, Proprietary or
Confidential Information" means any and all confidential, trade secret and/or
proprietary information of the Company or its clients, including without
limitation financial information, projected budgets, marketing strategies, past
performances, client lists, pricing policies, operational methods, marketing
plans
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or strategies, product development techniques or plans, flowcharts, software
programs, data, systems, techniques, business acquisition plans, inventions and
research projects and other business affairs or any other documents or
materials, whether or not reduced to tangible form, pertaining to the business
of Company.
8. COMPLETE AGREEMENT. This Agreement is not a promise of future
employment. This written Agreement is the final, complete and exclusive
statement and expression of the agreement between the Company and Xxxxxxx and of
all the terms of this Agreement, and it cannot be varied, contradicted or
supplemented by evidence of any prior or contemporaneous oral or written
agreements. This written Agreement may not be later modified or extended except
by a further writing signed by a duly authorized officer of the Company and
Xxxxxxx, and no term of this Agreement may be waived except by writing signed by
the party waiving the benefit of such term.
9. NOTICE. Whenever notice is required hereunder, it shall be given in
writing and addressed to Cytation and the Company at the main business office of
Cytation, and to Xxxxxxx at the address reflected in the payroll records of the
Company, with a copy to Xxxxxxx X. Xxxxxxx, Esq., Xxxxx & Xxxxxxx, LLP, 00
Xxxxxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxx Xxxxxx 00000.
10. GOVERNING LAW. This Agreement shall in all respects be construed
according to the laws of the State of Delaware.
11. ARBITRATION. Any dispute, controversy or claim arising out of or
relating to this Agreement or the breach or performance hereof will be settled
by arbitration in accordance with the laws of the State of Delaware by an
arbitrator mutually agreed upon by the Company and Xxxxxxx. If an arbitrator
cannot be agreed upon, the Company and Xxxxxxx shall each choose an arbitrator,
and these two together shall select a third arbitrator. If the first two
arbitrators cannot agree on the appointment of a third arbitrator, then the
third arbitrator will be appointed by the American Arbitration Association in
Providence, Rhode Island. Such arbitration will be conducted in the City of
Providence in accordance with the Commercial Arbitration Rules of the American
Arbitration Association, except with respect to the selection of arbitrators
which shall be as provided in this Paragraph 11. Judgment upon the award
rendered by the arbitrators may be entered in any court having jurisdiction
thereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
XXXXXXXX.XXX INCORPORATED
By: /s/ Xxxxxxx X. Xxxxxx
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Title: Chairman
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XXXXXXXXXXX.XXX INCORPORATED
By: /s/ Xxxxxx Xxxxx
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Title: Treasurer
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XXXXXX XXXXXXX:
/s/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx
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