Exhibit 10.4
FORM OF
EMPLOYMENT AGREEMENT
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EMPLOYMENT AGREEMENT, dated as of ______________, 1999, between Consumer
Financial Network, Inc., a Delaware corporation (the "Company"), and C. Xxxxxxxx
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Xxxxxxxx (the "Executive"). The parties hereto agree as follows:
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1. Employment.
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(a) Agreement to Employ. Upon the terms and subject to the conditions of
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this Agreement, the Company shall hereby employ the Executive and the Executive
hereby agrees to be employed by the Company.
(b) Term of Employment. Subject to Section 6 and Section 7, the Company
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shall employ the Executive pursuant to the terms hereof for the period
commencing on the date Executive begins exclusive employment with the Company
(the "Start Date"), which shall be the earliest date reasonably possible for
Executive, and ending on December 31, 2001, provided that the Executive's
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employment with the Company shall be deemed to be automatically renewed upon the
same terms and conditions for an additional one-year period on each of December
31, 2001 and December 31, 2002 unless either party hereto shall have given the
other party written notice that such party does not intend to renew the
Agreement as of such date at least three months in advance of the date on which
this Agreement would otherwise automatically be renewed. The period during which
the Executive is employed pursuant to this Agreement, including any renewal
thereof in accordance with this Section (1)(b), shall be referred to as the
"Employment Period."
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2. Position and Duties.
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During the Employment Period, the Executive shall serve as President and
Chief Operating Officer of the Company and the Executive shall have the duties,
responsibilities and obligations customarily assigned to individuals serving in
the position or positions in which the Executive serves hereunder. The
Executive shall report to the Chief Executive Officer of the Company. The
Executive shall devote her full time to the services required of her hereunder,
except for vacation time and reasonable periods of absence due to sickness,
personal injury or other disability, and shall use her best efforts, judgment,
skill and energy to perform such services in a manner consonant with the duties
of her position and to improve and advance the business and interests of the
Company. The Executive shall also serve as a Director of the Company during the
Employment Period without additional compensation.
3. Compensation.
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(a) Salary and Bonus. The Company shall pay the Executive a base salary at
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an annual rate of $250,000. The Company shall pay the Executive such base
salary in equal bi-monthly installments or in such other installments as the
parties may agree. Beginning with the fiscal year ended December 31, 1999 and
continuing until the end of the Employment Period, the Company shall pay the
Executive an annual bonus (the "Bonus"). Such bonus shall be paid within 15
days after the delivery of the annual audited financial statements of the
Company and its subsidiaries by the Company's independent accountant. The
amount of any such bonus shall be based upon certain strategic and financial
goals which shall be determined by the Executive and other senior officers of
the Company and shall be determined by the Board of Directors of the Company,
with a target maximum of $50,000 per year.
(b) Stock Options. The Executive shall be granted an aggregate of 500,000
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options to purchase Class B Common Stock, par value $.01 per share, of iXL
Enterprises, Inc., at an exercise price of $10 per share. Except as provided in
Section 6 and Section 7, such options shall vest over four years, with 25% of
such options vesting on the last day of the month of the first anniversary of
the Start Date, and thereafter 2.088% of such options vesting on the last day of
each of the subsequent thirty-six months. Notwithstanding such vesting
schedule, Executive shall not exercise any of such options prior to the
expiration of the Review Period (as defined in Section 6 hereof).
4. Benefits and Vacation.
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During the Employment Period, the Executive shall be eligible to
participate in the health, disability and life insurance plans sponsored or
maintained by the Company for the benefit of its senior executive corporate
officers to the extent that the Executive is eligible to participate in any such
plans under the generally applicable provisions thereof. The Company may, in
its discretion, amend or terminate any such plans in accordance with the terms
thereof. During the Employment Period, the Executive shall be entitled to three
weeks of paid vacation annually. Unused vacation days for any given calendar
year may be carried over to the subsequent year, or, at Executive's option, may
be surrendered to the Company for a cash payment equal to (a) the quotient of
the number of unused vacation days surrendered, divided by 365, times (b)
Executive's base salary for the year in which such unused vacation day was
initially accrued.
5. Residence; Corporate Apartment; Travel Expenses.
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The Company is headquartered in Duluth, Georgia. The Executive may
continue to reside in Connecticut and utilize the facilities of iXL-New York,
Inc., an affiliate of the Company, in the course of her work. However,
Executive shall commute to the Company's headquarters as necessary for the
execution of her duties and responsibilities. The Company anticipates that the
execution of the Executive's duties and responsibilities will require the
Executive to commute to the Company's headquarters an average of four days per
week. The Company shall reimburse the Executive all reasonable travel expenses
associated with the Executive's regular commute between her residence in
Connecticut and Atlanta, Georgia, including, but not limited to, roundtrip
airfare.
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Reimbursement requests shall be submitted to the Chief Executive Officer of the
Company for approval. The Company shall maintain a two-bedroom corporate
apartment convenient to the Company's headquarters reserved for use by the
Executive.
6. First Anniversary Employment Review.
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(a) Within the thirty (30) days prior to and the thirty (30) days after the
first anniversary of the Start Date (such sixty-day period is hereinafter
referred to as the "Review Period"), the Company shall have the option to
terminate Executive's employment with the Company. If the Company terminates
Executive's employment with the Company during the Review Period,
(i) at the Company's option, Executive shall be entitled to either
(A) receive severance pay equal to the base salary payable to the
Executive under Section 3(a) for the six months following such
termination (payable monthly), in which case all options, vested
or unvested, granted to Executive pursuant to Section 3(b) hereof
shall be surrendered to the Company unexercised, or (B) retain
125,000 options granted pursuant to Section 3(b) hereof which
were scheduled to vest on the last day of the month of the first
anniversary of the Start Date, in which case all other options,
vested or unvested, granted to Executive pursuant to Section 3(b)
hereof shall be surrendered to the Company unexercised; and
(ii) Section 11 hereof shall continue in full force and effect.
(b) Within the thirty (30) day period prior to the first anniversary of the
Start Date, the Executive shall have the option to terminate Executive's
employment with the Company. If the Executive so terminates her employment with
the Company,
(i) Executive shall receive no severance pay and all options, vested
or unvested, granted to Executive pursuant to Section 3(b) hereof
shall be surrendered to the Company unexercised; and
(ii) Section 11 hereof shall not apply.
7. Change of Control.
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If the Executive's employment with the Company is terminated in connection
with a sale of the Company, and if the Change of Control Vesting (as calculated
below) exceeds the number of the Executive's vested options at the time of such
termination, the vesting of the options granted to the Executive pursuant to
Section 3(b) hereof shall be immediately accelerated such that the Executive
shall have a number of vested options equal to the Change of Control Vesting as
calculated in accordance with the following formula:
Change of Control Vesting = (X - $75,000,000)(500,000)(4 / 3) / 100,000,000
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Where: X = in the case of a sale of all or substantially all of the assets
of the Company, the total sales price received by the Company upon
the sale of such assets, or, in the case of the sale of all of the
equity interests of the Company, the total sales price received by
the equity interest holders of the Company upon the sale of such
equity interests.
For example, if the Company is sold for $100,000,000:
Change of Control Vesting = ($100,000,000 - $75,000,000)(500,000)(4/3)/100,000,000
= (25,000,000)(666,666.67)/(100,000,000)
= 166,667
Provided, however, that if the number derived from the formula above exceeds the
number of the Executive's unvested options, the vesting of all of the
Executive's options remaining unvested shall be immediately accelerated. All
options remaining unvested after such acceleration shall terminate.
8. Termination of Employment.
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If the Executive's employment with the Company terminates earlier than upon
the expiration of the Employment Period, other than a termination pursuant to
Section 6 or Section 7 hereof, the Executive shall be entitled to receive the
following payments under the following circumstances:
(a) Death. Upon the death of the Executive, the Executive's spouse, if
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any, or her estate shall receive the Executive's base salary payable in the year
of her death pursuant to Section 3(a) hereof, life insurance benefits and a pro
rata portion of the Executive's Bonus that would have been payable pursuant to
Section 3(a) hereof with respect to the fiscal year in which the Executive died.
Such pro rata portion shall be determined by multiplying (i) the total Bonus
that the Executive would have received in respect of the year of her death by
(ii) the quotient of the number of days in such year prior to her death, divided
by 365. Such pro rata Bonus payment will be payable at the same time that the
full Bonus would have been payable to the Executive pursuant to Section 3(a)
hereof.
(b) Disability. Upon the Disability of the Executive, she shall receive
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her Earned Salary, any disability benefits payable under any disability program
in which she participates, any other benefits under any benefit plan of the
Company to which she is entitled pursuant to the terms of such plan and a
portion of the Executive's Bonus that would have been payable pursuant to
Section 3(a) hereof with respect to the fiscal year in which the Executive
became disabled. Such pro rata portion shall be determined by multiplying (i)
the total Bonus that the Executive would have received in respect of the year of
her Disability by (ii) the quotient of the number of days in such year prior to
her Disability, divided by 365. Such pro rata Bonus payment will be payable at
the same time that the full Bonus would have been payable to the Executive
pursuant to Section 3(a) hereof.
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(c) Termination for Cause or a Resignation Other than for Good Reason. If
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the Executive's employment terminates due to a Termination for Cause or a
Resignation Other than for Good Reason, the Executive shall receive her Earned
Salary and any other benefits under any benefit plan of the Company to which she
is entitled pursuant to the terms of such plan.
(d) Termination Without Cause or Resignation for Good Reason. If the
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Executive's employment terminates due to a Termination Without Cause or a
Resignation for Good Reason the Executive shall receive severance pay equal to
the base salary (but not the bonus) payable to the Executive under Section 3(a)
for the six months immediately following such termination or resignation.
Notwithstanding anything herein to the contrary, in no event shall the Company
be obligated to pay any amount to the Executive with respect to any period after
such six-month period.
9. Definitions.
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For purposes of this Agreement, capitalized terms have the following
meanings:
"Cause" shall mean a termination by the Company due to (i) the continued
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failure (other than any such failure resulting from incapacity due to reasonably
documented physical or mental illness) by the Executive substantially to perform
her duties, responsibilities or obligations as an officer, director or employee
of the Company or any of its subsidiaries after having been given written notice
of such failure to perform, listing in reasonable specificity such failures, and
after having failed to improve such performance within the time period (which
shall have been a reasonable time period) specified in such notice or (ii) the
engaging by the Executive in serious misconduct which is material to the
performance by the Executive of her duties and obligations for the Company,
including, without limitation, gross negligence, dishonesty, willful
malfeasance, gross insubordination or gross misconduct or conviction of a felony
or the entering of a plea of nolo contendere to a felony.
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"Disability" shall mean the Executive's inability for more than six months
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within any 12-month period of performing her duties, responsibilities or
obligations as an officer, director or employee of the Company on a full-time
basis because of a physical, mental or emotional incapacity resulting from
injury, sickness or disease and within 30 days after written notice of
termination has been given to the Executive, the Executive shall not have
returned to the full-time performance of her duties, responsibilities and
obligations. The date of termination in the case of a termination for
"Disability" shall be the last day of the aforementioned 30-day period.
"Earned Salary" means the base salary earned, but unpaid, for services
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rendered to the Company on or prior to the date of disability, resignation or
termination of the Executive's employment, as the case may be. Earned Salary
shall be paid in a single lump sum as soon as practicable, but in no event more
than 30 days following such date.
"Resignation for Good Reason" means a resignation by the Executive as a result
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of any of the following:
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(a) a material breach by the Company of its obligations under this Agreement
with respect to the base salary, Bonus, benefits or vacation to which the
Executive is entitled under Sections 3 and 4 hereof; or
(b) the taking of any action by the Company that would substantially diminish
the aggregate value of the benefits provided to the Executive under the
benefit plans of the Company that may be in effect at such time in which
she was participating, other than any such reduction which is (i) required
by law, (ii) implemented in connection with a general concessionary
arrangement affecting all employees or affecting the group of senior
corporate executive employees or (iii) generally applicable to all
similarly situated beneficiaries of such plans.
"Resignation Other than for Good Reason" shall be any resignation other than a
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Resignation with Good Reason.
"Termination for Cause" shall be any termination of the Executive's employment
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by the Company for Cause.
"Termination Without Cause" shall be any termination of the Executive's
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employment by the Company other than a Termination for Cause.
10. Full Discharge of Company Obligations.
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The amounts payable to the Executive pursuant to Section 6, Section 7, or
Section 8 following termination of her employment shall be in full and complete
discharge of the Executive's rights under this Agreement and any other claims
she may have in respect of her employment by the Company or any of its
subsidiaries. Such amounts payable shall constitute liquidated damages with
respect to any and all such rights and claims and, upon the Executive's receipt
of such amounts, the Company shall be released and discharged from any and all
liability to the Executive in connection with this Agreement or otherwise in
connection with the Executive's employment with the Company and its
subsidiaries.
11. Noncompetition and Confidentiality.
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(a) Noncompetition. If the Executive's employment with the Company terminates
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during the Employment Period for any reason (other than a resignation by
Executive pursuant to Section 6(c) or due to her death or Disability),
during the six-month period following such termination or resignation of
the Executive (the "Restriction Period"), the Executive shall not become
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associated with any entity, whether as a principal, partner, employee,
consultant or shareholder (other than as a holder of not in excess of 1% of
the outstanding voting shares of any publicly traded company), that is
actively engaged in the business of internet-based sales of financial
services to the corporate market.
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(b) Confidentiality. Without the prior written consent of the Company, except
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for disclosures of Confidential Information (as defined below) in the
ordinary course of business that, individually and in the aggregate, are
not materially injurious to the Company or any of its subsidiaries, and
except to the extent required by an order of a court having competent
jurisdiction or under subpoena from an appropriate government agency, the
Executive shall not disclose any trade secrets, customer lists, computer
programs, drawings, designs, marketing or sales plans, management
organization information (including data and other information relating to
members of the Board or management), operating policies or manuals,
business plans, financial records or other financial, commercial, business
or technical information relating to the Company or any of its subsidiaries
or information designated as confidential or proprietary that the Company
or any of its subsidiaries may receive belonging to suppliers, customers or
others who do business with the Company or any of its subsidiaries
(collectively, "Confidential Information") to any third person unless such
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Confidential Information has been previously disclosed to the public by the
Company or is in the public domain (other than by reason of the Executive's
breach of this Section 11(b)). If the Executive receives an order of a
court or a subpoena requiring the Executive to disclose any Confidential
Information, as described above, the Executive shall promptly deliver a
copy of such order or subpoena to the Company and the Company shall use its
best efforts to assist the Executive in responding thereto.
(c) Company Property. Promptly following the Executive's termination of
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employment, the Executive shall return to the Company all property of the
Company, and all copies thereof in the Executive's possession or under her
control, including, without limitation, all Confidential Information, in
whatever media.
(d) Nonsolicitation of Employees. During the Employment Period and the
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Restriction Period, the Executive shall not directly or indirectly induce
any employee of the Company or any of its subsidiaries to terminate
employment with such entity, and will not directly or indirectly, either
individually or as owner, agent, employee, consultant or otherwise, employ
or offer employment to any person who is or was employed by the Company or
a subsidiary thereof unless such person shall have ceased to be employed by
such entity for a period of at least six months.
(e) Certain Payments to the Executive during the Restriction Period. If the
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Executive's employment with the Company is terminated due to a Termination
for Cause or a Resignation Other than for Good Reason, then, as
consideration for the covenants set forth in Section 11(a) and Section
11(d), the Company shall pay the Executive, for the duration of the
Restriction Period, the salary (but not the bonus) she otherwise would have
received under Section 3(a). If the Executive's employment with the
Company is terminated due to a Termination Without Cause or a Resignation
for Good Reason, then, as consideration for the covenants set forth in
Section 11(a) and Section 11(d), the Company shall pay the Executive the
compensation set forth in Section 8(d). If the Executive's employment is
terminated pursuant to Section 6(b), then the receipt by the Executive of
the compensation elected by the Company pursuant to Section 6(c) will
constitute the consideration for the covenants set forth in Section 11(a)
and Section 11(d). If the Restriction Period extends beyond the Employment
Period, the Company shall continue to pay the Executive her then current
salary until the end of the Restriction Period for that portion of the
Restricted Period which extends beyond the Employment Period. Except in
the case of a Termination Without Cause or such Resignation for Good
Reason, the Company may elect at any time during the Restriction Period
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upon thirty (30) days prior written notice to discontinue such salary
payments, in which event the Executive shall be released from any further
obligation to comply with the provisions of Sections 11(a) and 11(d)
herein. If the Company fails to timely make any payment due under this
Section 11(e) and if such failure continues for ten (10) business days
after notice by the Executive to the Company of such failure, the Executive
shall be released from any further obligation to comply with the provisions
of Sections 11(a) and 11(d) herein.
(f) Injunctive Relief with Respect to Covenants. The Executive acknowledges and
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agrees that the covenants and obligations of the Executive with respect to
noncompetition, nonsolicitation, confidentiality and Company property
relate to special, unique and extraordinary matters and that a violation of
any of the terms of such covenants and obligations will cause the Company
and its subsidiaries irreparable injury for which adequate remedies are not
available at law. Therefore, the Executive agrees that the Company and its
subsidiaries shall be entitled to an injunction, restraining order or such
other equitable relief (without the requirement to post bond) as a court of
competent jurisdiction may deem necessary or appropriate to restrain the
Executive from committing any violation of the covenants and obligations
contained in this Section 11. These injunctive remedies are cumulative and
are in addition to any other rights and remedies the Company or its
subsidiaries may have at law or in equity.
12. Miscellaneous.
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(a) Binding Effect. This Agreement shall be binding on the Company and any
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person or entity which succeeds to the interest of the Company (regardless
of whether such succession occurs by operation of law, by reason of the
sale of all or a portion of the Company's stock or assets or a merger,
consolidation or reorganization involving the Company). This Agreement
shall also inure to the benefit of the Executive's heirs, executors,
administrators and legal representatives.
(b) Assignment. Except as provided under Section 12(a) above, neither this
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Agreement nor any of the rights or obligations hereunder shall be assigned
or delegated by either party hereto without the prior written consent of
the other party.
(c) Entire Agreement. This Agreement supersedes any and all prior agreements
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between the parties hereto, and constitutes the entire agreement between
the parties hereto with respect to the matters referred to herein, and no
other agreement, oral or otherwise, shall be binding between the parties
unless it is in writing and signed by the party against whom enforcement is
sought. There are no promises, representations, inducements or statements
between the parties other than those that are expressly contained herein.
The Executive acknowledges that she is entering into this Agreement of her
own free will and accord, and with no duress, that she has read this
Agreement and that she understands it and its legal consequences. No parol
or other evidence may be admitted to alter, modify or construe this
Agreement, which may be changed only by a writing signed by the parties
hereto.
(d) Severability; Reformation. In the event that one or more of the provisions
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of this Agreement shall become invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not be affected thereby. In the
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event any of Section 11(a), (b), (c), (d) or (e) is not enforceable in
accordance with its terms, the Executive and the Company agree that such
Section, or such portion of such Section, shall be reformed to make it
enforceable in a manner which provides the Company the maximum rights
permitted under applicable law.
(e) Waiver. Waiver by either party hereto of any breach or default by the
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other party of any of the terms of this Agreement shall not operate as a
waiver of any other breach or default, whether similar to or different from
the breach or default waived. No waiver of any provision of this Agreement
shall be implied from any course of dealing between the parties hereto or
from any failure by either party hereto to assert their rights hereunder on
any occasion or series of occasions.
(f) Notices. Any notice required or desired to be delivered under this
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Agreement shall be in writing and shall be delivered personally, by courier
service, by registered mail, return receipt requested, or by telecopy and
shall be effective upon dispatch to the party to whom such notice shall be
directed, and shall be addressed as follows (or to such other address as
the party entitled to notice shall hereafter designate in accordance with
the terms hereof):
If to the Company:
Consumer Financial Network, Inc.
0000 Xxxxx Xxxxxx, XX
Xxxxxxx, XX 00000
Fax: 404/000-0000
Attention: U. Xxxxxxx Xxxxx, Xx.
with a copy to:
Xxxxxx & Xxxxxx, P.C.
One Buckhead Plaza
0000 Xxxxxxxxx Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Fax: 404/000-0000
with an additional copy to:
Xxxxx & Company
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxx XX, Esq.
Fax: 212/000-0000
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If to the Executive:
C. Xxxxx Xxxxxxxx
0000 Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Fax: __________
with a copy to:
Sack & Sack
000 X. 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxxx Xxxx
Fax: 212/000-0000
(g) Amendments. This Agreement may not be altered, modified or amended except
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by a written instrument signed by each of the parties hereto.
(h) Headings. Headings to sections in this Agreement are for the convenience
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of the parties only and are not intended to be part of or to affect the
meaning or interpretation hereof.
(i) Counterparts. This Agreement may be executed in counterparts, each of
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which shall be deemed an original but both of which together shall
constitute one and the same instrument.
(j) Withholding. Any payments provided for herein shall be reduced by any
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amounts required to be withheld by the Company from time to time under
applicable Federal, state or local income or employment tax laws or similar
statutes or other provisions of law then in effect.
(k) Governing Law. This Agreement shall be governed by the laws of the State
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of Georgia, without reference to principles of conflicts or choice of law
under which the law of any other jurisdiction would apply.
[Signatures on Following Page]
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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by
its duly authorized officer and the Executive has hereunto set her hand as of
the day and year first above written.
Consumer Financial Network, Inc.
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By: U. Xxxxxxx Xxxxx, Xx.
Title: Chief Executive Officer
The Executive:
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C. Xxxxxxxx Xxxxxxxx
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