EXHIBIT 10.39
EMPLOYMENT AGREEMENT
THIS AGREEMENT made and entered into this 10th day of May, 2001, to be effective
as of April 1, 2001, by and between IntraNet Solutions, Inc., a Minnesota
corporation (hereinafter referred to as "Company"), and Xxxxx Xxxxxx, residing
at 0000 Xxxxxx Xxxx Xx., Xxxxxx, XX 00000, (hereinafter referred to as
"Employee").
WITNESSETH:
WHEREAS, the Company desires to assure itself of the services of Employee; and
WHEREAS, Employee desires to be employed by the Company.
NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, the parties hereto agree as follows:
1. Employment. The Company agrees to employ Employee and Employee agrees to
accept such employment upon the terms and conditions hereinafter set forth.
2. Duties. Employee shall serve in an executive capacity as the President of the
Company's Information Exchange Division and Vice President, Strategy, of the
Company, performing such services as the By Laws provide, and as the Company's
Board of Directors may, from time to time, determine.
3. Term. This Agreement shall be for a one (1) year period commencing on
April 1, 2001 and terminating on March 31, 2002, unless extended by mutual
written agreement of the parties. Expiration of this agreement will be deemed a
Constructive Termination only if: (i) a new Agreement has not been presented by
Employer to Employee prior to the expiration of this Agreement; or (ii) the
parties have not mutually agreed in writing to extend this Agreement prior to
the expiration of this Agreement.
4. Base Salary. In consideration for the Employee's service under this
Agreement, the Company agrees to pay Employee a Base Salary at a rate of Two
Hundred Thousand Dollars ($200,000). Annually, on or before April 1st of each
year, Employee will receive a performance review and the Base Salary may be
increased at such time in the sole discretion of the Chief Executive Officer.
The Base Salary shall be subject to any withholding required by law and shall be
payable in accordance with the normal payroll practices of the Company.
Employee's annual Base Salary shall not be reduced after any increase and the
term "Base Salary" for purposes of this Agreement shall refer to Base Salary as
most recently increased.
5. Annual Bonus. Employee will be eligible for an annual bonus of up to 50% of
Base Salary, payable quarterly, dependent upon achievement of Company
performance and personal objectives as established by the Chief Executive
Officer from time to time.
6. Additional Benefits and Working Facilities.
(a) The Company shall furnish Employee with the equipment, office
space, secretarial support and such other items related to his employment that
Employee determines are necessary, useful, and appropriate to him for the duties
required by his employment. The Company shall reimburse for reasonable travel,
entertainment and other business related expenses, including but not limited to,
conference membership fees and cellular phone costs and charges, Employee incurs
on behalf of the Company.
(b) The Company shall provide Employee health and dental insurance,
401(k), and any other benefits included in its corporate benefit program on
terms no less favorable than those applicable to the Company's Chief Executive
Officer. In addition, Employee shall have the benefit of such other employee
benefit plans that the Company may, from time to time, establish and in which
Employee would be entitled to participate pursuant to the terms thereof. THE
COMPANY AT ITS SOLE DISCRETION SHALL HAVE THE RIGHT TO CHANGE OR DISCONTINUE
SUCH PLANS.
(c) Employee shall be entitled to annual paid vacation accruing at the
rate of four weeks per year of employment. Unused vacation will carry over into
subsequent years.
(d) In addition to Section 7(c) above, Employee shall accrue personal
days at the rate of six (6) personal days per year of employment. Any personal
days not used within one year following accrual shall lapse.
(e) The Company shall reimburse Employee for all reasonable expenses
incurred by Employee in connection with the Company's business, upon
presentation of itemized statements therefore.
(f) As additional consideration for the Employee's services under this
Agreement, the Company agrees to grant Employee an option grant to purchase
25,000 shares of the Company's Common Stock at the fair market value on April 3,
2001, vesting ratably over a 4 year period on each anniversary of the grant
date. Vested options are exercisable until the earliest of (i) the ten year
anniversary of the grant date; or (ii) the one-year anniversary of employment
termination for any reason. The options granted to Employee pursuant to this
Section shall be "incentive stock options," intended to qualify, and as
permitted, under Section 422 of the Internal Revenue Code of 1986.
7. Events of Termination. This Agreement may be terminated as follows:
On the expiration of the term set forth at Section 3 above.
By mutual written agreement of the parties.
(c) Upon Employee's death.
(d) Severance Payments. If the Company terminates Employee's employment
other than for "Cause" or Employee terminates employment due to a "Constructive
Termination," the Company will continue Employee's annual Base Salary and health
benefits for six months after termination of employment. Effective January 10,
2002, if the Company terminates Employee's employment other than for "Cause" or
Employee terminates employment due to a "Constructive Termination," the Company
will continue Employee's annual Base Salary and health benefits for twelve
months after termination of employment.
(i) "Cause" for purposes hereof shall mean the Employee's (i)
willful and continued failure to substantially perform duties,
after the Board delivers written demand for performance which
specifically identifies the failure, and after a 30 day opportunity
for Employee to cure such failure; (ii) conduct that is
demonstrably and materially injurious to the Company; or (iii)
conviction of a felony that directly reflects upon his fitness to
act as President of the Company's Information Exchange Division and
Vice President, Strategy, of the Company.
(ii) "Constructive Termination" shall mean (i) a material reduction
or change in Employee's job duties, responsibilities and
requirements inconsistent with Employee's position with the
Company; (ii) any reduction in Employee's annual compensation; or
(iii) the relocation of Employee's base office outside the Chicago
area.
8. Accelerated Vesting of Stock Options. Effective on July 10, 2001, if
the Company terminates Employee's employment other than for Cause or if Employee
terminates his employment due to a Constructive Termination, then, for each
stock option, either (a) Employee will be credited with one year additional
vesting service, or (b) one-half (1/2) of the then-unvested portion of each
stock option will become fully vested, whichever acceleration provision produces
the most vested options.
9. Inventions.
(a) "Inventions," as used in this Section 9, means any discoveries,
improvements, and ideas (whether or not they are in writing or reduced to
practice) or works of authorship (whether or not they can be patented or
copyrighted) that the Employee makes, authors, or conceives (either alone or
with others) and that:
(i) concern directly the Company's business or the Company's
present or demonstrably anticipated future research or development;
(ii) result from any work that Employee performs for the Company;
(iii) use the Company's equipment, supplies, facilities, or trade
secret information; or
(iv) Employee develops during the time the Employee is performing
employment duties for the Company.
(b) Employee agrees that all inventions made by Employee during the
term of this Agreement will be the Company's sole and exclusive property, and
that Employee will, with respect to any invention:
(i) keep current, accurate, and complete records, which will
belong to the Company and be kept and stored on the Company's
premises while Employee is employed by the Company;
(ii) promptly and fully disclose the existence and describe the
nature of the Invention to the Company in writing
(and without request);
(iii) assign (and Employee does hereby assign) to the Company all
of his rights to the Invention, any applications he makes for
patents or copyrights in any country, and any patents or copyrights
granted to him in any country; and
(iv) acknowledge and deliver promptly to the Company any written
instruments, and perform any other acts necessary in the Company's
opinion to preserve property rights in the Invention against
forfeiture, abandonment, or loss and to obtain and maintain letters
patent and/or copyrights on the invention and to vest the entire
right to title the Invention in the Company. The requirements of
this subsection (b) do not apply to any Invention for which no
equipment or trade secret information of the Company was used which
was developed on the Employee's own time and: (1) which does not
relate directly to the Company's business or to the Company's
actual or demonstrably anticipated research or development; or (2)
which does not result in any way from any work Employee performed
for the Company. Except as previously disclosed to the Company in
writing, prior to the commencement of employment hereunder, the
Employee does not have and will not assert, any claims to or rights
under any discoveries, improvements, ideas or works of authorship
which are within the scope of the Company's business. With respect
to obligations performed by the Employee under this subsection 9(b)
following termination of employment, the Company will pay Employee
reasonable hourly compensation (consistent with the last Base
Salary) and will pay or reimburse all reasonable out-of-pocket
expenses.
10. Confidential Information.
(a) "Confidential Information," as used in this Section 10, means
information that is not generally known and that is proprietary. Any
information, that Employee reasonably should consider Confidential Information,
or the Company designates as Confidential Information, will be presumed to be
Confidential Information (whether Employee or others originated it and
regardless of how the Employee obtained it).
(b) Except as specifically permitted by the Company's Board of
Directors or by written Company policies, Employee will never, either during or
after his employment by the Company, use Confidential Information for any
purpose other than the business of the Company or disclose it to any person who
is not also an employee of the Company. When Employee's employment with the
Company ends, Employee will promptly deliver to the Company all records and any
compositions, articles, devices, apparatus and other items that disclose,
describe, or embody Confidential Information including all copies, reproductions
and specimens of the Confidential Information in the Employee's
possession, regardless of who prepared them and will promptly deliver any other
property of the Company in the Employee's possession, whether or not
Confidential Information. The provisions of this Section shall not apply to
testimony as a witness, compliance with other legal obligations, or assertion of
or defense against any claim of breach of this Agreement, or to her statements
or disclosures to officers or directors of the Company, and shall not require
the Employee to make false statements or disclosures.
11. Conflicts of Interest. Employee agrees that he will not, directly or
indirectly, transact business with the Company personally, or as agent, owner,
partner or shareholder of any other entity; provided, however, that any such
transaction may be entered into if knowingly approved by all of the
disinterested members of the Company's Board of Directors.
12. Non-Competition Agreement. During the full term hereof, and on the
termination of Employee's employment for any reason, Employee shall not, for a
period of twelve (12) months from the date of such termination:
(a) directly or indirectly, anywhere in the United States, own, manage,
operate or control, or participate in the ownership, management, operation or
control of, or be connected with, or have any interest in, as a stockholder,
director, officer, employee, agent, advisor, consultant, partner, or otherwise:
(b) any "business" that manufactures, produces, sells, markets or
distributes any products or services that are being manufactured, produced,
marketed, sold or distributed by Company as of the date of such termination; or
(b) any other business that is competitive with any business currently or
hereafter conducted by Company as of the date of such termination; provided,
however, that nothing contained herein shall prohibit Employee from owning less
than 3% of any class of securities listed on a national securities exchange or
traded publicly in the over-the-counter market. Employee acknowledges and agrees
that the provisions of this Section are both reasonable and valid in
geographical and temporal scope and in all other respects. If any of the
provisions of this Section are held to be unenforceable because of the scope,
duration or area of its applicability, the court making such determination shall
have the power to modify such scope, duration or area or all of them, and such
provision shall then be applicable in such modified form.
(c) either directly or indirectly, alone or with others, solicit or
assist anyone else in the solicitation of, any of the employees employed by
Company at the time of Employee's termination of employment with Company, to
terminate their employment with Company and to become employed by any business
enterprise with which the Employee may then be associated, affiliated or
connected.
Employee will, prior to accepting employment, consulting or similar contract or
agreement with any third party, inform that party of this Agreement and provide
that party with a copy of this Agreement. Employee acknowledges that Sections 4,
5 and 7d are adequate compensation for this Section 12.
13. No Adequate Remedy. Employee understands that if the Employee fails to
fulfill the Employee's obligations under Section 9, 10, 11 or 12 of this
Agreement, the damages to the Company would be very difficult to determine.
Therefore, in addition to any other
rights or remedies available to the Company at law, in equity, or by statute,
the Employee thereby consents to the specific enforcement of the provisions of
those Sections by the Company through an injunction or restraining order issued
by an appropriate court.
14. Certain Additional Payments by the Company. If Employee becomes
entitled to any payments or benefits whether pursuant to the terms of this
Agreement or any other plan, arrangement or agreement with the Company, any
successor to the Company or to all or a part of the business or assets of the
Company (whether direct or indirect, by purchase, merger, consolidation, spin
off, or otherwise and regardless of whether such payment is made by or on behalf
of the Company or such successor) or any person whose actions result in a change
in control or any person affiliated with the Company or such persons (in the
aggregate, "Payments" or singularly, "Payment") which are determined to be
subject to the tax imposed by Section 4999 or any successor provision of the
Code or any similar state or local tax, or any interest or penalties are
incurred by Employee with respect to such excise tax (such excise tax, together
with any such interest and penalties, are hereinafter collectively referred to
as the "Excise Tax"), the Company shall pay Employee as soon as practical an
additional amount ("Gross-Up Payment") such that the net amount retained by
Employee, after deduction or payment of (i) any Excise Tax on Payments, (ii) any
federal, state and local income tax and Excise Tax upon the payment provided for
by this Section, and (iii) any additional interest and penalties imposed because
the Excise Tax is not paid when due shall be equal to the full amount of the
Payments. This Section 14 shall have an amount payable by the Company of no
more than $25,000.
15. Additional Documents. The parties shall each, without further
consideration, execute such additional documents as may be reasonably required
in order to carry out the purpose and intent of this Agreement and to fulfill
the obligation of the respective parties hereunder.
16. Waiver. Any waiver of any term or condition of this Agreement shall not
operate as a waiver of any other breach of such term or condition, or of any
other term or condition, nor shall any failure to enforce a provision hereof
operate as a waiver of such provision or of any other provision hereof.
17. Notices. All communications with respect to this Agreement shall be
considered given if delivered or sent as follows:
(a) If to Employee, by first class certified mail, postage prepaid,
return receipt requested, addressed as follows:
Xxxxx Xxxxxx
0000 Xxxxxx Xxxx Xx.
Xxxxxx, XX 00000
(b) If to the Company, by first class mail, postage prepaid, return
receipt requested, addressed as follows:
Xx. Xxxxxx X. Xxxxx, Chief Executive Officer
IntraNet Solutions, Inc.
0000 Xxxxxx Xxxxxxxx Xxxxx
Xxxx Xxxxxxx, XX 00000
or mailed to such other address as the parties hereto may designate by notice
given in like manner. Notice shall be effective three (3) calendar days after
mailing or upon personal delivery.
18. Entire Agreement. This Agreement, together with all exhibits and
writings required or contemplated hereby, constitutes the entire Agreement
between the parties hereto with respect to the transaction contemplated hereby
and no party shall be liable or bound to another in any manner by and
warranties, representations, or guarantees, except as specifically set
forth herein.
19. Modification, Amendments and Waivers. The parties hereto at any time
may, by written Agreement: (i) extend the time for the performance of any of the
obligations or other acts of the parties hereto; (ii) waive any inaccuracies in
the representations and warranties contained in this Agreement or in any
exhibit, schedule, letter, certificate, or other instrument delivered pursuant
hereto; (iii) waive compliance with any of the covenants or agreements contained
in this Agreement; or (iv) make any other modifications of this Agreement. This
Agreement shall not be altered or otherwise amended except pursuant to an
instrument in writing executed by both parties hereto.
20. Severability. No finding or adjudication that any provision of this
Agreement is invalid or unenforceable shall affect the validity or
enforceability of the remaining provision herein, and this Agreement shall be
construed as through such invalid or unenforceable provisions were omitted.
21. Miscellaneous.
(a) The terms and conditions of this Agreement shall inure to the
benefit of and be binding upon the parties hereto and the respective legal
representatives, successors, and assigns of both of the parties hereto.
(b) This Agreement is made pursuant to and shall be construed under the
laws of the State of Minnesota, without regard to its conflicts of laws
provisions.
(c) This Agreement shall be executed in two (2) counterparts, but each
of these counterparts shall, for all purposes, be deemed to be an original, but
both counterparts shall together constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement effective the date
set forth above.
EMPLOYER: EMPLOYEE:
INTRANET SOLUTIONS, INC.
/s/ Xxxxxx X. Xxxxx /s/ Xxxxx Xxxxxx
------------------------- --------------------------
By Xxxxxx X. Xxxxx Xxxxx Xxxxxx
CEO
