WEB.COM GROUP INC. AMENDED AND RESTATED EMPLOYMENT AGREEMENT
XXX.XXX
GROUP INC.
AMENDED
AND RESTATED
This
Amended and Restated Employment Agreement (“Agreement”),
as amended and restated on December 11, 2008, is entered by and between Xxxxx X.
Xxxxx (“Executive”)
and Xxx.xxx
Group, Inc. (the “Company”,
formerly known as Website Pros, Inc.), a Delaware corporation
on October 28, 2009 (the “Effective
Date”).
Whereas,
Executive has been providing services to the Company under the terms of an
Employment Agreement effective as of the initial public offering of the
Company’s common stock pursuant to a registration statement on Form S-1 (the
“Existing
Agreement”); and
Whereas, the
Company and Executive wish to further amend and restate the Existing
Agreement in order to clarify the vesting of equity awards upon
termination of employment.
Now,
Therefore, in consideration of the mutual promises and covenants
contained herein, it is hereby agreed by and between the parties hereto as
follows, effective as of the Effective Date:
1. Employment
by the Company.
1.1 Amendment and Restatement of Existing
Agreement. The Existing Agreement is hereby amended and
restated in its entirety.
1.2 Title and
Responsibilities. Subject to the terms set forth herein,
Executive will continue to be employed as the Company’s Chief Executive
Officer. During his employment with the Company, Executive will
devote his best efforts and substantially all of his business time and attention
(except for vacation periods and reasonable periods of illness or other
incapacity permitted by the Company’s general employment policies) to the
business of the Company. Notwithstanding the foregoing, it is
acknowledged and agreed that Executive shall be permitted to perform his duties
and responsibilities as a principal of Atlantic Partners and may engage in civic
and not-for-profit activities and/or serve on the boards of directors of
non-competitive private or public companies; provided, in each case that
such activities do not materially interfere with the performance of his duties
hereunder.
1.3 Executive
Position. Executive will serve in an executive capacity and
shall report to the Company’s Board of Directors (the “Board”).
Executive shall perform the duties of his executive position as required by the
Board.
1.4 At-Will
Employment. Executive’s relationship with the Company is
at-will. The Company shall have the right to terminate this Agreement
and Executive’s employment with the Company at any time with or without Cause
(as defined in Section 4.1(a)), and with or without advance
notice. In addition, the Company retains the discretion to modify the
terms of Executive’s employment, including but not limited to position, duties,
reporting relationship, office location, compensation, and benefits, at any
time. Executive’s at-will employment relationship may only be changed
in a written agreement approved by the Board and signed by Executive and a
member of the Board (or a duly authorized officer of the
Company). Executive also may be removed from any position he holds in
the manner specified by the Bylaws of the Company and applicable
law.
1.5 Company Employment
Policies. The employment relationship between the parties
shall continue to be governed by the general employment policies and procedures
of the Company, including those relating to the protection of confidential
information and assignment of inventions, except that when the terms of this
Agreement differ from or are in conflict with the Company’s general employment
policies or procedures, this Agreement shall control.
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2.
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Compensation.
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2.1 Salary. Executive
shall receive for services to be rendered hereunder a base salary at an
annualized rate of $385,000, payable on the Company’s standard payroll
dates. Executive will be considered for annual increases in base
salary in accordance with Company policy and subject to review and approval by
the Compensation Committee of the Board (the “Committee”).
2.2 Equity
Awards. Except as set forth below, Executive’s current
compensatory equity awards are not affected by this Agreement and will remain in
effect in accordance with the terms of the applicable award agreements and stock
plan(s). The parties agree that the Company will not provide
Executive with any additional or new stock awards in connection with his
entering into this Agreement.
2.3 Target
Bonus. Subject to annual review by the Committee, Executive
shall be eligible to earn a target annual bonus of up to ninety percent (90%) of
Executive’s base salary (such actual target amount, which may be more or less
than 90%, as determined in the sole discretion of the Committee, the “Target Bonus”). Whether
Executive earns a Target Bonus, and if so, in what amount, shall be determined
solely by the Company in its discretion. Executive must remain an
active employee through the time the Compensation Committee of the Board
determines bonus amounts for executives of the Company in order to earn any
bonus. Executive will not earn any bonus if his employment terminates
for any reason before the Compensation Committee of the Board has determined
Executive’s bonus, except as expressly set forth herein. No prorated
bonus can be earned.
2.4 Standard Company
Benefits. Executive shall be entitled to participate in the
Company’s employee benefits and compensation plans which may be in effect from
time to time and provided by the Company to its executives, under the terms and
conditions of such benefit and compensation plans. The Company shall also
maintain a supplemental life insurance policy of a minimum of $2,000,000 and
disability policies of a minimum of 80% of Executive’s annual base salary for
the Executive’s benefit.
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2.5 Executive Severance Benefit
Plan. Executive acknowledges and agrees that he is not an
“Eligible Employee” under the Company’s Executive Severance Benefit
Plan. Upon a termination of employment, Executive’s rights to receive
any severance pay or post-termination benefit continuation will be only as set
forth in this Agreement and as otherwise required by applicable
law.
3. Confidential
Information. As a condition of his continued employment,
Executive must continue to comply with the Proprietary Information and
Inventions Agreement (the “Confidential
Information Agreement”) he has executed previously. Nothing in
this Agreement is intended to modify in any respect the Confidential Information
Agreement, and the Confidential Information Agreement shall remain in full force
and effect. In addition, Executive agrees that during his employment
with the Company, and in the two (2) year period immediately following the date
on which Executive ceases to be employed by the Company for any reason,
Executive will not, whether directly or indirectly, personally or through
others: (a) encourage, induce, attempt to induce, solicit or attempt to solicit
any employee of the Company or any of the Company’s subsidiaries to leave his or
her employment with the Company or any of the Company’s subsidiaries, (b)
encourage, induce, attempt to induce, solicit or attempt to solicit any customer
of the Company or any of the Company’s subsidiaries to reduce or terminate its
customer relationship with the Company, or (c) be or become an officer,
director, stockholder, owner, co-owner, affiliate, partner, promoter, employee,
agent, representative, designer, consultant, advisor, manager, licensor,
sublicensor, licensee or sublicensee of, for or to, or otherwise be or become
associated with or acquire or hold (of record, beneficially or otherwise) any
direct or indirect interest in, any entity that engages directly or indirectly
in competition with the Company; provided, however, that Executive may, without
violating this paragraph, provide services to a business division of a competing
entity if such business division does not compete with the Company and
Executive’s services to the competing entity are limited to such business
division, and provided further, that Executive may own, as a passive investor,
an equity interest of any competing entity, so long as Executive’s holdings in
such entity do not in the aggregate constitute more than 1% of the voting stock
of such entity. Executive acknowledges that, due to the nature of the
Company’s business and the products and services provided by the Company, it is
possible to compete with the Company from any location within the world, and
Executive acknowledges and agrees that it is thus impossible to identify or
otherwise limit the geographic scope of this agreement and that it is reasonable
for the restrictions contained herein to apply on a worldwide
basis.
4. Termination
Of Employment; Change of Control
4.1 Termination
With or Without Cause.
(a) Definition of
Cause. For purposes of this Agreement, “Cause”
shall mean (i) conviction of any felony, or of any crime involving moral
turpitude or dishonesty; (ii) perpetration of a material fraud or act of
dishonesty against the Company; (iii) persistent, willful and material breach of
the Executive’s duties that has not been cured within thirty (30) days after
written notice from the Board or the Committee of such breach; or (iv) material
breach of this Agreement or the Confidential Information Agreement that has not
been cured within thirty (30) days after written notice from the Board or the
Committee, or has caused irreparable damage incapable of cure.
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(b) Termination for Cause. If the
Company terminates Executive’s employment at any time for Cause, Executive’s
salary shall cease on the date of termination, and Executive will not be
entitled to any Severance Benefits (as defined below), severance pay, pay in
lieu of notice or any other such compensation, or any accelerated vesting of any
equity awards, other than payment of accrued salary and such other accrued
benefits as expressly required in such event by applicable law or the terms of
any applicable Company benefit plans.
(c) Termination Without
Cause. If the Company terminates Executive’s employment at any
time prior to a Change of Control without Cause (and other than as a result of
Executive’s death or disability) and such termination constitutes a “separation
from service” (as defined under Treasury Regulation Section 1.409A-1(h)),
Executive shall be eligible for the following severance benefits (the “Severance
Benefits”): (i) the Company shall make a lump sum severance
payment to Executive in an amount equal to eighteen (18) months of Executive’s
then-current base salary plus 150% of the greater of (A) 80% of the Target Bonus
for the year in which the termination occurs and (B) the prior year’s Target
Bonus actually earned by Executive, subject to withholdings and deductions, (ii)
the vesting of each then-outstanding, unvested equity award held by Executive
will accelerate as to that number of shares under each such award that would
have vested in the ordinary course had Executive continued to be employed by the
Company for an additional eighteen (18) months (or, if no shares would vest
during such time under a specific award due to a cliff vesting provision, then
the number of shares vesting and becoming exercisable pursuant to this paragraph
shall equal the product of (i) the total number of shares subject to the award
and (ii) a fraction, the numerator of which is eighteen (18) plus the number of
whole months that have elapsed between the Executive’s vesting commencement date
and the date of termination, and the denominator of which is the total number of
months in the vesting schedule), with such vesting occurring as of the date of
the Executive’s termination, (iii) the post-termination exercise
period of all non-statutory stock options then held by Executive shall be
extended so that such options, to the extent vested, are exercisable until the
earlier of (A) the original term expiration date for such award and (B) the
first anniversary of Executive’s termination date and (iv) if Executive timely
elects COBRA health insurance coverage, the Company will pay Executive’s COBRA
premiums for eighteen (18) months following the date his employment terminates
or until such earlier date as he is no longer eligible for COBRA coverage or he
becomes eligible for health insurance coverage from another source (provided
that Executive must promptly inform the Company, in writing, if he becomes
eligible for health insurance coverage from another source within eighteen (18)
months after the termination). Executive shall not be entitled to the
Severance Benefits unless and until the release requirements set forth in
Section 5 of this Agreement are satisfied.
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4.2 Resignation
With or Without Good Reason.
(a) Definition of Good
Reason. For purposes of this Agreement, a Resignation for
“Good
Reason” shall mean that Executive resigns from all positions he
then-holds with the Company and its affiliates if (i) (A) the Company makes a
material adverse change in the Executive’s position causing such position to be
of materially reduced stature or responsibility, (B) there is a material
reduction of the Executive’s base salary, (C) the Executive is required to
relocate his primary work location to a location that would increase Executive’s
one way commute distance by more than twenty (20) miles, or (D) the Company (or
any successor thereto) materially breaches the terms of this Agreement
(including but not limited to a material reduction in Target Bonus percentage,
provided that fluctuation in actual Target Bonus amounts earned and paid will
not constitute Good Reason), (ii) Executive provides written notice to the
Company’s General Counsel within the sixty (60) days immediately following such
material change or reduction, (iii) such material change or reduction is not
remedied by the Company within thirty (30) days following the Company’s receipt
of such written notice and (iv) Executive’s resignation is effective not
later than ninety (90) days after the expiration of such thirty (30) day cure
period. For purposes of calculating Executive’s severance benefits
under this agreement, his “then-current base salary” shall be the his base
salary as in effect immediately prior to his termination, ignoring, however, any
reduction in base salary that is the basis for Executive’s resignation for Good
Reason under this paragraph.
(b) Executive’s
Resignation. Executive may resign from his employment with the
Company at any time, with or without advance notice, and with or without Good
Reason.
(c) Executive’s Resignation Without Good
Reason. In the event that Executive resigns his employment
without Good Reason, Executive will not be entitled to the Severance Benefits,
severance pay, pay in lieu of notice or any other such compensation, or any
accelerated vesting of equity awards, other than payment of accrued salary and
such other accrued benefits as expressly required in such event by applicable
law or the terms of any applicable Company benefit plans. Termination
of Executive’s employment due to Executive’s death or disability will be treated
as Executive’s resignation without Good Reason.
(d) Executive’s Resignation for Good
Reason. Executive may resign his employment for Good Reason at
any time prior to a Change of Control so long as Executive tenders his
resignation in writing to the Company in accordance with the time frames set
forth in Section 4.2(a) above. If Executive resigns his employment for Good
Reason effective at any time prior to a Change of Control and such resignation
constitutes a “separation from service” (as defined above), Executive will be
eligible to receive the Severance Benefits if Executive satisfies the release
requirements set forth in Section 5 of this Agreement.
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4.3 Change
of Control.
(a) Definition of Change of
Control. For purposes of this Agreement, a “Change of
Control” shall mean any of the following: (i) a sale, lease or other
disposition in one transaction or a series of transactions, of all or
substantially all of the assets of the Company, (ii) a merger or consolidation
in which the Company is not the surviving entity or if the Company is the
surviving entity, as a result of which the shares of the Company’s capital stock
are converted into or exchanged for cash, securities of another entity, or other
property, unless (in any case) the holders of the Company’s outstanding shares
of capital stock immediately before such transaction own more than fifty percent
(50%) of the combined voting power of the outstanding securities of the
surviving entity immediately after the transaction, (iii) the Company’s
stockholders approve a plan or proposal to liquidate or dissolve the Company or
(iv) a person or group hereafter acquires beneficial ownership of more than
fifty percent (50%) of the outstanding voting securities of the Company (all
within the meaning of Section 13(d) of the Securities Exchange Act of 1934, as
amended, and the regulations promulgated thereunder).
(b) Change of Control Benefits. If
the Company undergoes a Change of Control, then, subject to Executive’s
continued employment through such date and the satisfaction of the release
requirements set forth in Section 5 of this Agreement, Executive shall be
entitled to receive the following benefits immediately as of the Change of
Control (the “Change of Control
Benefits”):
(i) The
Company shall make a lump sum payment to Executive in an amount equal to
eighteen (18) months of Executive’s then-current base salary plus 150% of the
greater of (A) 80% of the Target Bonus for the year in which the transaction
occurs and (B) the prior year’s Target Bonus actually earned by Executive,
subject to withholdings and deductions.
(ii) The
vesting of each equity award held by Executive immediately prior to such Change
of Control transaction shall accelerate as to all of the then-unvested shares
subject to each such award, effective as of immediately prior to the effective
time of such Change of Control.
Executive
shall not be entitled to receive both the Change of Control Benefits and the
Severance Benefits.
4.4 Cessation of
Benefits. If Executive violates this Agreement or the
Confidential Information Agreement, then Executive’s eligibility for and
entitlement to receive the Severance Benefits and the Change of Control Benefits
will cease immediately, and Executive will not be entitled to any further
compensation and benefits from the Company, the Company will have no further
obligation to provide any such compensation or benefits, and to the extent
Executive has already received Severance Benefits and/or Change in Control
Benefits under this Agreement, all such benefits will be forfeited and Executive
shall be required to immediately return any cash payments made pursuant to such
benefits.
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4.5 Application of Internal Revenue Code
Section 409A.
(a) If
the Company (or, if applicable, the successor entity thereto) determines that
the Severance Benefits and/or any other termination payments and benefits
provided under this Agreement or otherwise (the “Payments”)
constitute “deferred compensation” under Code Section 409A (together, with any
state law of similar effect, “Section
409A”) and Executive is a “specified employee” (as such term is defined
in Section 409A(a)(2)(B)(i)) of the Company or any successor entity thereto upon
his separation from service, then, solely to the extent necessary to avoid the
incurrence of the adverse personal tax consequences under Section 409A as a
result of the payment of compensation upon his “separation from service”, the
timing of the Payments shall be delayed as follows: on the earlier to
occur of (i) the date that is six months and one day after the date of the
separation from service or (ii) the date of Executive’s death (such earlier
date, the “Delayed Initial
Payment Date”), the Company (or the successor entity thereto, as
applicable) shall (A) pay to Executive a lump sum amount equal to the sum of the
Payments that Executive would otherwise have received through the Delayed
Initial Payment Date (including reimbursement for any premiums paid by Executive
for health insurance coverage under COBRA) if the commencement of the payment of
the Payments had not been delayed pursuant to this Section 4.5 and (B) commence
paying the balance of the Payments in accordance with the applicable payment
schedules set forth above.
(b) It
is intended that (i) each installment of the Payments and the Change of Control
Benefits provided under this Agreement is a separate “payment” for purposes of
Section 409A, (ii) all of the Payments and the Change of Control Benefits
satisfy, to the greatest extent possible, the exemptions from the application of
Section 409A provided under of Treasury Regulation 1.409A-1(b)(4),
1.409A-1(b)(5) and 1.409A-1(b)(9), and this Agreement will be construed to the
greatest extent possible as consistent with those provisions.
4.6 Certain
Offsets. The Company shall reduce Executive’s Severance
Benefits, in whole or in part, by any other severance benefits, pay in lieu of
notice, or other similar benefits payable to Executive by the Company that
become payable in connection with Executive’s termination of employment,
including but not limited to any payments that are owed pursuant to (i) any
applicable legal requirement, including, without limitation, the Worker
Adjustment and Retraining Notification Act (the “WARN
Act”), or (ii) any Company policy or practice providing for Executive to
remain on the payroll for a limited period of time after being given notice of
the termination of Executive’s employment. The termination payments
and benefits provided under this Agreement are intended to satisfy, in whole or
in part, any and all statutory obligations that may arise out of Executive’s
termination of employment. In the Company’s sole discretion, such
reductions may be applied on a retroactive basis, with severance benefits
previously paid being recharacterized as payments pursuant to the Company’s
statutory obligation. If Executive is indebted to the Company at his
or her termination date, the Company reserves the right to offset any severance
payments under the Plan by the amount of such indebtedness.
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4.7 Excess
Parachute Payments.
(a) If
any payment or benefit that Executive would be entitled to receive pursuant to
this Agreement or otherwise in connection with a Change of Control from the
Company or otherwise (collectively, the “Acquisition
Payments”) would (i) constitute a “parachute payment” within the meaning
of Section 280G of the Code, and (ii) but for this sentence, be subject to the
excise tax imposed by Section 4999 of the Code (the “Excise
Tax”), then the Company shall cause to be determined, before any amounts
of the Acquisition Payments are paid to Executive, which of the following two
alternative forms of payment shall be paid to Executive: (i) payment in full of
the entire amount of the Acquisition Payments (a “Full
Payment”), or (ii) payment of only a part of the Acquisition Payments so
that Executive receives the largest payment possible without the imposition of
the Excise Tax (a “Reduced
Payment”). The determination shall be made as
follows:
(i) A
Full Payment shall be made if payment of all of the Acquisition Payments, plus
an additional payment from the Company not to exceed $1,000,000 (such additional
amount, a “Gross-Up
Payment”), less all ordinary income and employment taxes and the Excise
Tax imposed on the Acquisition Payments and the Gross-Up Payment, is greater
than the Reduced Payment.
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(1)
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If
the Full Payment is made, the Company shall pay, and Executive shall be
entitled to receive, the Gross-Up from the Company in an amount equal to
(A) the Excise Tax on the Acquisition Payments, (B) any interest or
penalties imposed on Executive with respect to the Excise Tax on the
Acquisition Payments, and (C) an additional amount sufficient to pay the
Excise Tax and the federal and state income and employment taxes arising
from the payments made by the Company to Executive pursuant to (A), (B)
and (C).
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(2)
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For
purposes of determining the amount of the Gross-Up Payment, Executive
shall be deemed to have: (A) paid federal income taxes at the highest
marginal rate of federal income and employment taxation for the calendar
year in which the Gross-Up Payment is to be made, and (B) paid applicable
state and local income taxes at the highest rate of taxation for the
calendar year in which the Gross-Up Payment is to be made, net of the
maximum reduction in federal income taxes which could be obtained from
deduction of such state and local
taxes.
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(3)
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Except
as expressly provided herein, Executive shall not be entitled to any
additional payments or other indemnity arrangements in connection with the
Acquisition Payments or the Gross-Up
Payment.
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(ii) A
Reduced Payment shall be made in the event that the Full Payment, after the
imposition of the Excise Tax, is less than or equal to the Reduced
Payment. If a Reduced Payment is made, Executive shall have no rights
to any additional payments and/or benefits constituting the Acquisition Payments
beyond the amount of the Reduced Payment. The reduction in the
Acquisition Payments shall occur in the following order: (1) reduction of cash
payments; (2) cancellation of accelerated vesting of equity awards other than
stock options; (3) cancellation of accelerated vesting of stock options; and (4)
reduction of other benefits paid to Executive. In the event that
acceleration of compensation from Executive’s equity awards is to be reduced,
such acceleration of vesting shall be canceled in the reverse order of the date
of grant.
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(b) The
independent professional firm engaged by the Company for general tax audit
purposes as of the day prior to the effective date of the Change of Control
shall make all determinations required to be made under this Section
4.7. If the independent professional firm so engaged by the Company
is serving as an advisor, accountant or auditor for the individual, entity or
group affecting the Change of Control, the Company shall appoint a nationally
recognized professional firm to make the determinations required
hereunder. The Company shall bear all expenses with respect to the
determinations by such firm required to be made hereunder.
(c) The
firm engaged to make the determinations hereunder shall provide its
calculations, together with detailed supporting documentation, to the Company
and Executive not later than thirty (30) calendar days after the date on which
Executive’s right to the Acquisition Payments is triggered (if requested at that
time by the Company or Executive) or such other time as reasonably requested by
the Company or Executive. Any good faith determinations of the firm
made hereunder shall be final, binding and conclusive upon the Company and
Executive.
(i) If
the firm determines that no Excise Tax is payable with respect to the
Acquisition Payments, either before or after the application of the Reduced
Amount, it shall furnish the Company and Executive with an opinion reasonably
acceptable to Executive that no Excise Tax will be imposed with respect to the
Acquisition Payments.
(ii) If
the firm determines that an Excise Tax is payable with respect to the
Acquisition Payments and that a Gross-Up Payment is due to Executive, the
Company shall pay the Gross-Up Payment not later than thirty (30) days after the
date on which Executive remits the Excise Tax to the appropriate taxing
authorities.
(d) If
the Excise Tax is subsequently determined to be less than the amount taken into
account under this Section 4.7 (including by reason of any payment the existence
or amount of which cannot be determined at the time the firm makes its
calculations), Executive shall repay to the Company (within thirty (30) days
following the time at which the amount of such reduction in Excise Tax is
finally determined) the portion of the Gross-Up Payment attributable to such
reduction plus the portion of the Gross-Up Payment attributable to the Excise
Tax and federal, state and local income tax imposed on the Gross-Up Payment
being repaid by Executive (if such repayment results in a reduction in Excise
Tax and/or a federal, state or local income tax deduction) plus interest on the
amount of such repayment at the rate provided in Section 1274(b)(2)(B) of the
Code.
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(e) If
the Excise Tax is subsequently determined to exceed the amount taken into
account under this Section 4.7 (including by reason of any payment the existence
or amount of which cannot be determined at the time the firm makes its
calculations), the Company shall make an additional Gross-Up Payment in respect
of such excess within thirty (30) days following the time at which the amount of
such excess is finally determined in accordance with the principles set forth in
this Section 4.7.
5. Release. As a condition of
receiving the Severance Benefits and/or the Change of Control Benefits under
this Agreement to which Executive would not otherwise be entitled, Executive
shall execute, and allow to become effective, a release substantially in the
form attached hereto as Exhibit A (the “Release”)
(the Company shall determine the actual form of Release to be provided by
Executive) not later than thirty (30) days following (a) Executive’s “separation
from service” in the case of the Severance Benefits and (b) the Change of
Control in the case of the Change of Control Benefits. Unless the
Release is timely executed by Executive, delivered to the Company, and becomes
effective within the required period (the date on which the Release becomes
effective, the “Release
Date”, which date shall in no event be later than February 28 of the year
following the year in which the applicable event occurs), Executive shall not
receive any of the Severance Benefits and/or the Change of Control Benefits
provided for under this Agreement. Any lump sum payments owed to
Executive shall be paid within ten (10) business days following the Release
Date, but in no event later than March 15 of the year following the year in
which applicable event occurs.
6. General
Provisions.
6.1 Notices. Any
notices provided hereunder must be in writing and shall be deemed effective upon
the earlier of personal delivery (including, personal delivery, email and
facsimile transmission), delivery by express delivery service (e.g. Federal
Express), or the third day after mailing by first class mail, to the Company at
its primary office location and to Executive at his address as listed on the
Company payroll (which address may be changed by either party by written
notice).
6.2 Severability. Whenever
possible, each provision of this Agreement will be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this
Agreement is held to be invalid, illegal or unenforceable in any respect under
any applicable law or rule in any jurisdiction, such invalidity, illegality or
unenforceability will not affect any other provision or any other jurisdiction,
and such invalid, illegal or unenforceable provision will be reformed, construed
and enforced in such jurisdiction so as to render it valid, legal, and
enforceable consistent with the intent of the parties insofar as
possible.
6.3 Waiver. If either
party should waive any breach of any provisions of this Agreement, he or it
shall not thereby be deemed to have waived any preceding or succeeding breach of
the same or any other provision of this Agreement.
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6.4 Entire
Agreement. This Agreement, including its exhibits, constitutes
the entire agreement between Executive and the Company regarding the subject
matter hereof. As of the Effective Date, this Agreement supersedes
and replaces any and all other agreements, promises, or representations, written
or otherwise, between Executive and the Company with regard to this subject
matter, including the Existing Agreement. This Agreement is entered
into without reliance on any agreement, promise, or representation, other than
those expressly contained or incorporated herein, and, except for those changes
expressly reserved to the Company’s or Board’s discretion in this Agreement, the
terms of this Agreement cannot be modified or amended except in a writing signed
by Executive and a duly authorized officer of the Company which is approved by
the Board.
6.5 Counterparts. This
Agreement may be executed in separate counterparts, any one of which need not
contain signatures of more than one party, but all of which taken together will
constitute one and the same Agreement. Signatures transmitted via
facsimile shall be deemed the equivalent of originals.
6.6 Headings and
Construction. The headings of the sections hereof are inserted
for convenience only and shall not be deemed to constitute a part hereof or to
affect the meaning thereof. For purposes of construction of this
Agreement, any ambiguities shall not be construed against either party as the
drafter.
6.7 Successors and
Assigns. This Agreement is intended to bind and inure to the
benefit of and be enforceable by Executive, the Company, and their respective
successors, assigns, heirs, executors and administrators, except that Executive
may not assign any of his duties hereunder and he may not assign any of his
rights hereunder without the written consent of the Company.
6.8 Attorney Fees. If
either party hereto brings any action to enforce his or its rights hereunder,
the prevailing party in any such action shall be entitled to recover his or its
reasonable attorneys’ fees and costs incurred in connection with such
action.
6.9 Arbitration. To provide a mechanism
for rapid and economical dispute resolution, Executive and the Company agree
that any and all disputes, claims, or causes of action, in law or equity,
arising from or relating to this Agreement (including the Release) or its
enforcement, performance, breach, or interpretation, or arising from or relating
to Executive’s employment with the Company or the termination of Executive’s
employment with the Company, will be resolved, to the fullest extent permitted
by law, by final, binding, and confidential arbitration held in Xxxxx County,
Florida and conducted by JAMS, Inc. (“JAMS”),
under its then-applicable Rules and Procedures. By agreeing to this arbitration
procedure, both Executive and the Company waive the right to resolve any such
dispute through a trial by jury or judge or by administrative
proceeding. Executive will have the right to be represented by
legal counsel at any arbitration proceeding at his expense. The
arbitrator shall: (a) have the authority to compel adequate
discovery for the resolution of the dispute and to award such relief as would
otherwise be available under applicable law in a court proceeding; and
(b) issue a written statement signed by the arbitrator regarding the
disposition of each claim and the relief, if any, awarded as to each claim, the
reasons for the award, and the arbitrator’s essential findings and conclusions
on which the award is based. The Company shall bear all fees for the
arbitration, except for any attorneys’ fees or costs associated with Executive’s
personal representation. The arbitrator, and not a court, shall also
be authorized to determine whether the provisions of this paragraph apply to a
dispute, controversy or claim sought to be resolved in accordance with these
arbitration procedures. Notwithstanding the provisions of this
paragraph, the parties are not prohibited from seeking injunctive relief in a
court of appropriate jurisdiction to prevent irreparable harm on any basis,
pending the outcome of arbitration. Any awards or orders in such
arbitrations may be entered and enforced as judgments in the federal and the
state courts of any competent jurisdiction.
-11-
6.10 Governing Law. All
questions concerning the construction, validity and interpretation of this
Agreement shall be governed by the law of the State of Florida without regard to
conflicts of laws principles.
6.11 Termination of this
Agreement. This Agreement will terminate automatically upon a
Change of Control, subject to the satisfaction of the obligations of the
Company, or any successor thereto, to pay the benefits and payments to which
Executive is entitled to under this Agreement as a result of such Change of
Control.
6.12 Exhibits.
Exhibit A – Release Agreement
-12-
In Witness
Whereof, the parties have executed this Employment
Agreement effective as of the Effective Date written above.
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Xxx.xxx
Group, Inc.
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By:
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Chairman,
Compensation Committee
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of
the Board of Directors
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By:
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Xxxxx
Xxxxx
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Chief
Executive Officer
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EXHIBIT
A
Release
Agreement
I
understand that my employment with Xxx.xxx
Group, Inc. (the “Company”)
terminated effective ___________, _____ (the “Separation
Date”). The Company has agreed that if I choose to sign this
Release Agreement (“Release”),
the Company will provide me certain severance benefits (minus the standard
withholdings and deductions) pursuant to the terms of the Employment Agreement
(the “Agreement”)
entered into and effective as of ___________ ___, ____, between myself and the
Company, and any agreements incorporated therein by reference. I
understand that I am not entitled to such severance benefits unless I sign this
Release and allow it to become effective. I understand that,
regardless of whether I sign this Release, the Company will pay me all of my
accrued salary and vacation through the Separation Date, to which I am entitled
by law.
I also
confirm my obligations set forth in Section 3 of the
Agreement. Specifically, I agree that in the two (2) year period
immediately following the date on which I cease to be employed by the Company,
for any reason, I will not, whether directly or indirectly, personally or
through others: (a) encourage, induce, attempt to induce, solicit or attempt to
solicit any employee of the Company or any of the Company’s subsidiaries to
leave his or her employment with the Company or any of the Company’s
subsidiaries, (b) encourage, induce, attempt to induce, solicit or attempt to
solicit any customer of the Company or any of the Company’s subsidiaries to
reduce or terminate its customer relationship with the Company, or (c) be or
become an officer, director, stockholder, owner, co-owner, affiliate, partner,
promoter, employee, agent, representative, designer, consultant, advisor,
manager, licensor, sublicensor, licensee or sublicensee of, for or to, or
otherwise be or become associated with or acquire or hold (of record,
beneficially or otherwise) any direct or indirect interest in, any entity that
engages directly or indirectly in competition with the Company; provided,
however, that I may, without violating this paragraph, provide services to a
business division of a competing entity if such business division does not
compete with the Company and my services to the competing entity are limited to
such business division, and provided further, that I may own, as a passive
investor, an equity interest of any competing entity, so long as my holdings in
such entity do not in the aggregate constitute more than 1% of the voting stock
of such entity. I acknowledge that, due to the nature of the
Company’s business and the products and services provided by the Company, it is
possible to compete with the Company from any location within the world, and I
acknowledge and agree that it is thus impossible to identify or otherwise limit
the geographic scope of this agreement and that it is reasonable for the
restrictions contained herein to apply on a worldwide basis.
In
consideration for the severance benefits I am receiving under the Agreement, I
hereby generally and completely release the Company and its officers, directors,
agents, attorneys, employees, shareholders, parents, subsidiaries, and
affiliates from any and all claims, liabilities, demands, causes of action,
attorneys’ fees, damages, or obligations of every kind and nature, whether they
are now known or unknown, arising at any time prior to or on the date I sign
this Release. This general release includes, but is not limited to:
(a) all claims arising out of or in any way related to my employment with the
Company or the termination of that employment; (b) all claims related to my
compensation or benefits from the Company, including salary, bonuses,
commissions, vacation pay, expense reimbursements, severance pay, fringe
benefits, stock, stock options, or any other ownership interests in the Company;
(c) all claims for breach of contract, wrongful termination, and breach of
the implied covenant of good faith and fair dealing (including, but not limited
to, any claims based on or arising from the Agreement); (d) all tort
claims, including claims for fraud, defamation, emotional distress, and
discharge in violation of public policy; and (e) all federal, state, and local
statutory claims, including claims for discrimination, harassment, retaliation,
attorneys’ fees, or other claims arising under the federal Civil Rights Act of
1964 (as amended), the federal Americans with Disabilities Act of 1990, the
federal Age Discrimination in Employment Act of 1967 (as amended), and the
California Fair Employment and Housing Act (as
amended). Notwithstanding the release in the preceding sentence, I am
not releasing any right of indemnification I may have in my capacity as an employee, officer
and/or director of the Company pursuant to any express indemnification agreement
or otherwise, nor am I releasing any rights I may have as an owner and/or holder
of the Company’s common stock and stock options. Excluded from this
Release are any claims which cannot be waived by law. I am waiving,
however, my right to any monetary recovery should any agency, such as the EEOC,
pursue any claims on my behalf.
In
releasing claims unknown to me at present, I am waiving all rights and benefits
under Section 1542 of the California Civil Code, and any law or legal principle
of similar effect in any jurisdiction: “A general release does not extend to
claims which the creditor does not know or suspect to exist in his favor at the
time of executing the release, which if known by him must have materially
affected his settlement with the debtor.”
If I am
forty (40) years of age or older as of the Separation Date, I acknowledge that I
am knowingly and voluntarily waiving and releasing any rights I may have under
the federal Age Discrimination in Employment Act of 1967, as amended (“ADEA”). I
also acknowledge that the consideration given for the waiver in the above
paragraphs is in addition to anything of value to which I was already
entitled. I have been advised by this writing, as required by the
ADEA that: (a) my waiver and release do not apply to any claims that
may arise after the date that I sign this Release; (b) I should consult with an
attorney prior to signing this Release (although I may choose voluntarily not to
do so); (c) I have twenty-one (21) days within which to consider this Release
(although I may choose voluntarily to sign this Release earlier); (d) I have
seven (7) days following the date that I sign this Release to revoke the Release
by providing written notice of revocation to the Company’s Board of Directors;
and (e) this Release will not be effective until the eighth day after this
Release has been signed by me.
I hereby
represent that I have been paid all compensation owed and for all hours worked,
have received all the leave and leave benefits and protections for which I am
eligible, pursuant to the Family and Medical Leave Act or otherwise, and have
not suffered any on-the-job injury for which I have not already filed a
claim.
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Understood
and Agreed:
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Xxxxx
X. Xxxxx
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Dated:
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