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EXHIBIT 10.7
PETROCHEMNET HOLDINGS, INC.
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is made this 1st day of
May, 1999 by and between PetroChemNet Holdings, Inc., a Delaware corporation
(the "Employer"), and Xxxx Xxxx (the "Employee").
WITNESSETH:
WHEREAS, the Employer desires to employ the Employee and to enter into
an agreement embodying the terms of such employment; and
WHEREAS, the Employee desires to enter into this Agreement and to
accept such employment, subject to the terms and provisions of this Agreement.
NOW, THEREFORE, in consideration of the promises and mutual covenants
contained herein and for other good and valuable consideration, the receipt of
which is mutually acknowledged, the Employer and the Employee, intending to be
legally bound, hereby agree as follows:
ARTICLE 1.
TERM OF EMPLOYMENT
Section 1.1. Specified Period.
Employer hereby employs Employee, and Employee hereby accepts
employment with Employer for the period beginning on May 1, 1999 and ending on
April 30, 2001, subject to earlier termination as provided in Article 6.
Section 1.2. Automatic Renewal.
After April 30, 2001, this Agreement shall be renewed automatically for
succeeding terms of one year each, subject to earlier termination as provided in
Article 6, unless one party gives notice to the other at least ninety (90) days
prior to the expiration of any term of his or its intention not to renew.
Section 1.3. "Employment Term" Defined.
As used herein, the phrase "Employment Term" refers to the entire
period of employment of Employee by Employer hereunder, whether for the
period(s) provided above, or whether terminated earlier as hereinafter provided
or extended by mutual agreement between Employer and Employee.
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ARTICLE 2.
DUTIES AND OBLIGATIONS OF EMPLOYEE
Section 2.1. General Duties.
Employee shall serve as Chairman of the Board of Employer. In such
capacity, Employee shall do and perform all services, acts or things in
accordance with the policies set by the Board of Directors of Employer. Employee
shall perform such services in Stamford, Connecticut, unless otherwise directed
by Employer.
Section 2.2. Devotion to Employer's Business.
a) During the Employment Term, Employee shall devote his time
and attention to the business of Employer during normal business hours and for
such additional amounts of time as are customary in the performance of his
duties and responsibilities or as is further required by the Board of Directors
of Employer. However, the expenditure of reasonable amounts of time for
education, charitable or professional activities, service on the Board of
Directors in any corporation or other business entity, and/or management of
personal investments and business affairs shall not be deemed a breach of this
Agreement if those activities do not materially interfere with the services
required under this Agreement or create a conflict of interest with Employer.
Section 2.3. Confidential Information; Tangible Property; Competitive
Activities.
a) During the Employment Term and for a period of two years
thereafter, Employee shall hold in confidence and not use or disclose to any
person or entity without the express written authorization of Employer any
Confidential Information of Employer. For purposes of this Section 2.3,
"Employer" shall include all corporations and entities controlled by,
controlling or under common control with, Employer, and "control" shall mean
beneficial ownership of greater than fifty percent (50%) of the voting power of
the corporation or entity. Information and materials received in confidence from
third parties by Employee are included within the meaning of the phrase
"Confidential Information of Employer" as used in this Section. If any
Confidential Information of Employer described in this Section is sought by
legal process, Employee shall promptly notify Employer and will cooperate with
Employer in preserving its confidentiality in connection with any legal
proceeding.
b) The parties hereto hereby stipulate that the following
information and materials ("Confidential Information of Employer") is important,
material and has independent economic value (actual or potential) from not being
generally known to others who could obtain economic value from its disclosure or
use and constitutes confidential trade secrets that affect the successful
conduct of Employer's business and its goodwill and that any material breach of
any term of this Section 2.3 is a material breach of this Agreement:
(I) All software in any media used by the Employer
(other than publicly available information relating to off-the-shelf
software used by the Employer) and all components thereof, including
any and all proprietary routines and subroutines,
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communications protocols, interfaces and linkages, all computer code,
including all object code, all source code, all manuals and other
documentation relating thereto;
(II) The names, buying habits and practices of
Employer's existing customers or prospects;
(III) Employee's business, marketing, merchandising
and sales methods, plans, techniques and related data;
(IV) Employer's vendors and suppliers and the
contents of agreements with such vendors and suppliers including
discounts, payment terms and credit extended to Employer;
(V) Costs of services and materials;
(VI) The prices Employer obtains or has obtained or
for which it sells or has sold its products or services;
(VII) Manufacturing and sales costs; Employer's
proprietary manufacturing processes, information processes, and
technical plans;
(VIII) Compensation paid to employees of Employer or
other terms of employment;
(IX) Employer's past and projected sales volume,
profit, profit margins and other financial information concerning
Employer;
(X) Proposed new products or services;
(XI) Enhancements of existing products or services;
(XII) The existence of and contents of contracts and
licenses;
(XIII) Any additional proprietary or confidential
information or materials resulting from or part of any task assigned to
Employee or work performed by Employee, during the Employment Term; and
(XIV) Any additional information or materials deemed
by Employer to be confidential by marking or stamping "Confidential" or
similar words on the cover of such information or materials, by
advising Employee orally or in writing that certain information is
confidential or by generally treating such information in such a manner
that Employee should reasonably believe it to be deemed confidential by
Employer.
Employee's obligations under this Section 2.3 shall not apply
to (i) information which Employee can demonstrate is or has become generally
known other than through Employee's act in violation of this Agreement and (ii)
information which Employee can demonstrate was lawfully acquired by Employee
prior to employment from sources other than Employer.
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c) All manuals, reports, files, memoranda, models, samples,
tools, machinery, equipment, notes, books, computer hardware, computer software
(in both source and object code form), correspondence, drawings, data and other
written, graphical or electromagnetic records or documentation relating to any
of the products or services of Employer or containing Confidential Information
of Employer which Employee shall prepare, use, construct, observe, possess, or
control shall be and shall remain the sole property of Employer and shall be
returned to Employer immediately upon termination of employment, and Employee
further agrees to return to Employer promptly any such materials which turn up
in Employee's possession subsequent to his termination of employment.
d) Employee shall not (i) during the Employment Term and (ii)
for a one year period immediately following the termination of Employee's
employment with Employer for any reason, or no reason, directly or indirectly,
perform any services for any person or entity engaged in any business that
competes directly with the products and services provided or sold (whether
existing or under development) on the date of termination of Employee's
employment with the Employer, including without limitation, any person or entity
engaged in the business of spot market trading of petroleum-based chemical
products on an internet based trading platform, but excluding third party
services remarketed or resold by the Employer without the addition of
substantial value by the Employer (collectively, the "Business"); or, without
limiting the generality of the foregoing, be or become or agree to be or become,
interested in or associated with, in any capacity (whether as a partner,
shareholder, owner, officer, director, employee, principal, agent, creditor,
trustee, consultant, co-venturer or otherwise) any individual, corporation,
firm, association, partnership, joint venture or other business entity that
competes directly with the Business (collectively, the "Prohibited
Competition"); provided, however, that nothing contained herein shall prohibit
Employee from (i) investing in the securities of a publicly held company so long
as Employee does not perform services for or otherwise assist such company in
the conduct of its business, or (ii) performing services for a person or entity
that competes with the Business so long as Employee's own services do not
compete with the Business, whether directly or indirectly. Notwithstanding the
foregoing, if the Employer fails to pay Employee any amount required by Section
7.3 or Section 7.4, as applicable, and such payment remains due for a period of
three (3) months, Employee may engage in Prohibited Competition; provided, that,
if Employee engages in such Prohibited Competition, Employer shall have no
obligation to pay Employee the severance payments set forth in Section 7.3(a) or
Section 7.4(a), as applicable, from and after the date Employee commences the
Prohibited Competition.
e) During the Employment Term, Employee shall not, directly or
indirectly, undertake planning for or organization of any business activity
competitive with Employer's Business, or combine or conspire with other
employees or representatives of Employer for the purpose of organizing any
activity competitive with the Business.
f) Employee agrees that during the Employment Term and for one
(1) year thereafter, he will not directly or indirectly, or by action in concert
with others, induce or influence (or seek to induce or influence) any person who
is engaged (as an employee, agent, independent contractor, or otherwise) by
Employer to terminate his or her employment or engagement with Employer.
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g) Covenants of this Section 2.3 shall be construed as
separate covenants covering their subject matter in each of the separate
counties and states in the United States in which Employer transacts its
business. To the extent that any covenant shall be judicially unenforceable in
any one or more of said counties or states, said covenant shall not be affected
with respect to each other county and state; each covenant with respect to each
county and state being construed as severable and independent.
h) Employee hereby covenants and represents that he will not
at any time during the Employment Term, in any fashion, form or manner, directly
or indirectly, use or divulge, disclose or communicate to Employer or any
independent contractors, representatives, or other agents of Employer, any
confidential information belonging to others. Employee hereby represents that to
the best of Employee's knowledge, the performance of Employee's duties with
Employer will not require the disclosure of any such confidential information.
Employee covenants and agrees that in the event the loyal and complete
performance of his duties hereunder would, in his opinion, require disclosure of
any such confidential information, Employee shall immediately report such belief
in writing to Employer. Employee represents and warrants that Employee is free
to enter into this Agreement and to perform each of the terms and covenants of
it.
Section 2.4. Inventions And Original Works.
a) Employee agrees that he will promptly make full written
disclosure to Employer, will hold in trust for the sole right and benefit of
Employer, and hereby assigns to Employer, all of his right, title and interest
in and to any and all inventions (and patent rights with respect thereto),
original works of authorship (including all copyrights with respect thereto),
developments, discoveries, computer software, operating methods, improvements or
trade secrets which Employee may solely or jointly conceive or develop or reduce
to practice, or cause to be conceived or developed or reduced to practice,
during the course of performing his duties under this Agreement.
b) Employee acknowledges that all original works of authorship
which are made by him (solely or jointly with others) within the scope of his
duties under this Agreement and which are protected by copyrights are "works
made for hire," as that term is defined in the United States Copyright Act (17
U.S.C.A., Section 101, et seq.) and that Employee is an employee as defined
under that Act. Employee further agrees from time to time to execute written
transfers to Employer of ownership of specific original works of authorship (and
all copyrights therein) made by Employee (solely or jointly with others) which
may, despite the preceding sentence, be deemed by a court of law not to be
"works made for hire" in such form as is acceptable to Employer in its
reasonable discretion.
(c) Sections 2.4(a) and (b) shall not apply, however, to
inventions, original works of authorship, developments, discoveries, computer
software, operating methods, improvements or trade secrets which are outside the
scope of the Business, which do not create a conflict of interest with Employer,
and which do not materially interfere with the services required under this
Agreement.
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Section 2.5. Maintenance of Records.
Employee agrees to use commercially reasonable efforts to keep and
maintain adequate and current written records of all inventions, original works
of authorship, and trade secrets developed or made by him (solely or jointly
with others) during the Employment Term. The records will be in the form of
notes, sketches, drawings and other formats that may be specified by Employer.
The records will be available to and remain the sole property of Employer at all
times.
Section 2.6. Obtaining Letters Patent and Copyright Registration.
a) Employee agrees to assist Employer to obtain United States
or foreign letters patent, and copyright registrations (as well as any transfers
of ownership thereof) covering inventions and original works of authorship
assigned hereunder to Employer. Such obligation shall continue beyond the
termination of this Agreement, but Employer shall compensate Employee at a
reasonable rate no less than the Employee's then current salary, whether with
Employer or another entity for time actually spent by Employee at Employer's
request on such assistance after such termination.
b) If Employer is unable for any reason whatsoever, including
Employee's mental or physical incapacity, to secure Employee's signature to
apply for or to pursue any application for any United States or foreign letters
patent or copyright registrations (or any document transferring ownership
thereof) covering inventions or original works of authorship assigned to
Employer under this Agreement, Employee hereby irrevocably designates and
appoints Employer and its duly authorized officers and agents as Employee's
agent and attorney-in-fact to act for and in his behalf and stead to execute and
file any such applications and documents and to do all other lawfully permitted
acts to further the prosecution and issuance of letters, patent or copyright
registrations or transfers thereof with the same legal force and effect as if
executed by Employee. This appointment is coupled with an interest in and to the
inventions and works of authorship and shall survive Employee's death or
disability. Employee hereby waives and quitclaims to Employer any and all claims
(past and present) of any nature whatsoever which Employee now or may hereafter
have for infringement of any patents or copyrights resulting from or relating to
an such application for letters patent or copyright registrations assigned
hereunder to Employer.
ARTICLE 3.
OBLIGATIONS OF EMPLOYER
Section 3.1. General Description.
Employer shall provide Employee with the compensation, incentives and
benefits specified elsewhere in this Agreement.
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ARTICLE 4.
COMPENSATION OF EMPLOYEE
Section 4.1. Annual Salary.
a) As compensation for his services hereunder, Employee shall
be paid a salary at the rate of $ 175,000 per year (the "Base Salary") from May
1, 1999. The Base Salary shall be due and payable in equal installments, not
less frequently than twice monthly.
b) Employee shall receive additional increases in Base Salary
during the term of this Agreement as may be determined by Employer in its sole
discretion from time to time, but Employer shall not decrease the Base Salary
set forth in Section 4.1(a) except with Employee's consent.
c) Not later than June 21, 1999, Employer shall grant
Employee, effective as of May 1, 1999, options to purchase an aggregate of
266,316 shares of Common Stock, par value $.01 per share, of Employer
(collectively, the "Options") pursuant to Employer's 1999 Stock Plan (the
"Plan"). An agreement between the Employer and Employee granting the Options
(the "Option Agreement") shall provide the following terms; provided, that to
the extent the terms set forth herein conflict with the terms of the Option
Agreement, the terms herein shall prevail: The exercise price for the Options
shall be the fair market value of the Common Stock on the date of grant. The
Options shall have a ten-year term and shall be immediately exercisable. The
shares purchased under the Options (the "Option Shares") shall be subject to
repurchase by the Employer at the exercise price; provided, however, that the
repurchase right of the Employer shall expire in installments over a four-year
period as follows: (i) with respect to the first 25% of the shares of Common
Stock subject to the Options, the Option Shares shall be released from the
repurchase right quarterly in equal installments during the one-year period
commencing on the date of grant and ending on the first anniversary of the date
of grant and (ii) with respect to the remaining 75% of the shares of Common
Stock subject to the Options, the Option Shares shall be released from the
repurchase right monthly in equal installments for the remaining thirty-six
months thereafter.
d) During the Employment Term, in addition to the Base Salary
set forth in Section 4.1(a), the Employee shall be eligible to receive a
performance based cash bonus with a target rate of 50% of the Base Salary per
annum for each fiscal year in the Employment Term. The amount of the bonus
payment payable to the Employee under this Section 4.1(d), if any, shall be
determined by the Compensation Committee of the Board of Directors of Employer
in a manner consistent with the bonus determinations applicable to the other
executive and senior management employees of Employer.
e) Subject to approval of the agreement by the Employer's
stockholders, the Employee shall be eligible to participate in a Management
Incentive Agreement, substantially in the form attached hereto as Exhibit A.
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Section 4.2. Tax Withholding.
Employer shall have the right to deduct or withhold from the
compensation due to Employee hereunder any and all sums required for federal
income and social security taxes and all state or local taxes now applicable or
that may be enacted and become applicable in the future.
ARTICLE 5.
EMPLOYEE BENEFITS
Section 5.1. Annual Vacation.
From the date hereof until the first anniversary of Employee's
employment with Employer, Employee shall accrue paid vacation in equal
installments on a monthly basis up to a maximum of three (3) weeks of paid
vacation for such year. Thereafter, Employee shall accrue paid vacation in equal
installments on a monthly basis for each year in the Employment Term up to a
maximum of four (4) weeks of paid vacation for each such year. Notwithstanding
the foregoing, if in any such year, the full number of vacation days are not
used by the Employee, such unused vacation days will not accrue to the next
year. Employee shall not be entitled to receive pay instead of unused vacation,
except upon termination of employment. Employee may be absent from his
employment for vacation for periods in excess of five (5) consecutive days only
at such times as are approved by Employer.
Section 5.2. Benefits.
Employee shall be eligible to participate in any and all benefit plans
provided by Employer to all employees generally, should Employee elect to
participate in any such plans.
Section 5.3. Business Expenses.
Employer shall reimburse Employee for all appropriate expenses for
travel and entertainment by Employee for legitimate business purposes provided
that Employee furnishes to Employer adequate records and documentary evidence
for the substantiation of each such expenditure.
ARTICLE 6.
TERMINATION OF EMPLOYMENT
Section 6.1. Termination.
Employee's employment hereunder may be terminated by Employee or
Employer as herein provided, without further obligation or liability, except as
expressly provided herein.
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Section 6.2. Resignation, Death or Disability.
Employee's employment hereunder shall be terminated by Employee's
resignation, death, or his inability to perform his duties under this Agreement
on a full-time basis, for a continuous period of ninety (90) days or more or for
an aggregate of ninety (90) days within any period of one hundred eighty (180)
days, because of a physical or mental illness as confirmed by a physician chosen
by Employer and reasonably acceptable to Employee ("Disability").
Section 6.3. Termination For Cause.
a) A termination for Cause (as defined below) shall not take
effect unless the provisions of this Section 6.3(a) are complied with. The
Employee shall be given written notice by the Board of Directors of Employer of
the Employer's intention to terminate his employment with Employer for Cause,
such notice (A) to state in reasonable detail the particular act or acts or
failure or failures to act that constitute the grounds on which the proposed
termination for Cause is based and (B) to be given within three (3) months of
the Board of Directors of Employer learning of such act or acts or failure or
failures to act. The Employee shall have 30 days after the date that such
written notice has been given to the Employee in which to cure such conduct, to
the extent such cure is possible. If he fails to cure such conduct, the Employee
shall then be entitled to a hearing before the Board of Directors (provided,
however, that if the Employee is a member of the Board of Directors at such
time, the Employee shall abstain from such hearing). Such hearing shall be held
within 45 days of such notice to the Employee, provided he requests such hearing
within 10 days of the written notice from the Board of the intention to
terminate him for Cause. If, within five (5) days following such hearing, the
Employee is furnished written notice by the Board confirming that, in its
judgment (with the Employee abstaining from any such vote), grounds for Cause on
the basis of the original notice exist, he shall thereupon be terminated for
Cause.
b) Employee's employment hereunder may be terminated by
Employer at any time for Cause. "Cause" shall mean:
(i) Employee has engaged in willful and material
misconduct in connection with his employment, including willful and material
failure to perform his duties as an officer or employee of Employer;
(ii) Employee has been convicted of or has pleaded
guilty or nolo contendere to a felony other than involving a traffic related
infraction that materially adversely affects the Employee's ability to perform
under this Agreement;
(iii) Employee has committed fraud, misappropriation
of funds or embezzlement, as found by a court of competent jurisdiction,
involving the assets of the Employer, its customers, suppliers or affiliates; or
(iv) Employee's use of narcotics, liquor or illicit
drugs has had a detrimental effect on the performance of his employment
responsibilities, as determined by the board of directors of Employer;
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Section 6.4. Termination Without Cause.
Employee's employment hereunder may be terminated by the Board of
Directors of Employer at any time without Cause upon sixty (60) days' notice for
any reason, subject to the payment of any amounts required by Section 7.3 or
Section 7.4, as applicable.
Section 6.5. Expiration.
Employee's employment hereunder shall be terminated upon expiration of
the Employment Term as provided in Sections 1.1 and 1.2.
Section 6.6. Notice of Termination.
Any termination of Employee's employment by Employer or by Employee
(other than termination by reason of death) shall be communicated by written
Notice of Termination to the other party hereto. For purposes of this Agreement,
a "Notice of Termination" shall mean a notice which shall include the specific
termination provision in this Agreement relied upon, and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Employee's employment under the provision so indicated.
Section 6.7. Date of Termination.
The "Date of Termination" shall be:
a) if the Employee's employment is terminated by his death,
the date of his death;
b) if the Employee's employment is terminated by his
retirement or resignation, the date of his retirement or resignation;
c) if the Employee's employment is terminated by reason of
Employee's Disability, thirty (30) days after Notice of Termination is given
(provided that Employee is unable to perform his duties on a full-time basis
during such thirty (30) day period);
d) if the Employee's employment is terminated by Employer for
Cause or without Cause, the date the Notice of Termination is given or after if
so specified in such Notice of Termination.
e) If there is a Constructive Termination Without Cause
following a Change in Control, then the date the Employee gives notice thereof.
ARTICLE 7.
PAYMENTS TO EMPLOYEE, UPON TERMINATION
Section 7.1. Death, Disability or Retirement.
In the event of Employee's retirement, death or Disability, all accrued
but unpaid salary and benefits generally available to Employee as of the Date of
Termination shall be payable to Employee or Employee's estate without reduction,
in accordance with the terms of any plan,
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contract, understanding or arrangement forming the basis for such payment. In
addition, Employee (or his representative) shall be entitled to (i) such other
payments as might arise from any other plan, contract, understanding or
arrangement between Employee and Employer at the time of any such event, (ii)
accrued and unpaid salary and vacation through the date of termination, (iii)
the pro rata portion of the bonus to which the Employee would have been entitled
pursuant to Section 4.1(d) for the year in which such termination occurs and
(iv) to exercise any Options or warrants granted under the Plan (as defined
below), to the extent otherwise exercisable on the date of death, Disability or
retirement, at any time within the term of the Option or warrant.
Section 7.2. Termination For Cause or Resignation.
In the event Employee's employment with Employer is terminated by
Employer for Cause or Employee resigns, neither Employer nor any parent,
subsidiary or affiliate company of Employer shall have any obligation to
Employee under this Agreement or otherwise, except for accrued but unpaid salary
and vacation as of the Date of Termination or as otherwise may be expressly
required by law, no further Option Shares shall become Eligible Shares and all
unexercised Options shall terminate thirty (30) days following the Date of
Termination, at which time, such Options shall no longer be exercisable to any
extent whatsoever.
Section 7.3. Termination Without Cause Prior to a Change in Control.
Subject to other provisions in this Article 7 to the contrary, upon the
occurrence of a termination of Employee's employment with Employer without Cause
or by Constructive Termination Without Cause (as defined below) at any time
prior to a Change in Control:
a) Employer shall pay to Employee, or in the event of
Employee's subsequent death, to Employee's surviving spouse, or if none, to
Employee's estate, as severance pay or liquidated damages, or both, a sum equal
to the greater of (i) the Base Salary Employee would have earned through the end
of the current term but for his early termination or (ii) the annual Base
Salary, as in effect immediately prior to such termination, which sum shall be
payable over a one-year period commencing on the Date of Termination in
conformity with Company's customary practices for executive compensation as such
practices may be modified from time to time and shall be subject to all
applicable federal, state and local withholding, payroll and other taxes.
b) Employee shall be entitled to any amounts earned, accrued,
owing or otherwise provided for, but not yet paid, under Article 4 or 5 above.
c) All Option Shares and other Stock Rights (as defined in the
Plan), if any, granted pursuant to the Plan held by the Employee at the time of
such termination which have not yet become Eligible Shares (as defined in the
Option Agreement) at the time of such termination shall become Eligible Shares
for an additional number of shares of Common Stock equal to fifty percent (50%)
of the aggregate of number of shares of Common Stock which are not Eligible
Shares at the time of such termination. To the extent not already exercised,
such Options as may be required to fulfill the number of shares as determined in
the previous sentence shall remain exercisable until the expiration of the
original term of such option. In addition, any warrants
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(referred to as "Purchases" in the Plan) granted to Employee under the Plan
which are held by the Employee at the time of such termination shall remain
exercisable until the expiration of the original term of such warrant.
Notwithstanding the foregoing, in the event of a Change in Control or public
offering of the Employer's shares within one hundred twenty (120) days of such
termination, then (i) the remaining fifty percent (50%) of the aggregate of
number of shares of Common Stock which were not Eligible Shares at the time of
such termination shall become Eligible Shares (and transferred by the Company
back to the Employee for the repurchase price if already repurchased) and (ii)
as necessary to fulfill the preceding, the Company shall extend the term of
those Options which were not exercised at the time of termination. Nothing
contained herein shall be deemed to modify or limit any options or warrants held
by Employee that were not granted pursuant to the Plan.
Section 7.4. Termination Without Cause Following a Change in Control.
Subject to other provisions in this Article 7 to the contrary, upon the
occurrence of (i) a termination of Employee's employment with Employer without
Cause at any time following a Change in Control (as defined below) or (ii) a
Constructive Termination Without Cause (as defined below) at any time following
a Change in Control:
a) Employer shall pay to Employee, or in the event of
Employee's subsequent death, to Employee's surviving spouse, or if none, to
Employee's estate, as severance pay or liquidated damages, or both, a sum equal
to the greater of (i) the Base Salary Employee would have earned through the end
of the current term but for his early termination or (ii) the annual Base
Salary, as in effect immediately prior to such termination, which sum shall be
payable over a one-year period commencing on the date of such termination in
conformity with Company's customary practices for executive compensation as such
practices may be modified from time to time and shall be subject to all
applicable federal, state and local withholding, payroll and other taxes.
b) Employee shall be entitled to any amounts earned, accrued,
owing or otherwise provided for, but not yet paid, under Article 4 or 5 above.
c) All Option Shares and Stock Rights, if any, granted under
the Plan held by the Employee at the time of such termination which have not yet
become Eligible Shares at the time of such termination shall become Eligible
Shares whether or not exercised. To the extent not already exercised, such
Option Shares and warrants (referred to as Purchases by the Plan) shall remain
exercisable until the expiration of the original term of such Option or warrant.
Nothing contained herein shall be deemed to modify or limit any options or
warrants held by Employee that were not granted pursuant to the Plan.
For purposes of this Agreement, the following terms shall have the
following meanings:
"Change in Control" shall mean the closing of (i) a sale by
the Employer of all or substantially all of its assets; (ii) the acquisition in
a single transaction, or a series of related transactions, of shares of capital
stock of the Employer representing at least a majority of the issued and
outstanding shares of capital stock of the Employer (measured on the basis of
voting
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power) by a person (as defined in Sections 3(a)(9) and 13(d) of the Securities
Exchange Act of 1934), or (iii) a merger or consolidation of the Employer with
or into another entity in a transaction where the shares of the Employer's
capital stock outstanding immediately prior to the closing of such merger or
consolidation represent or are converted into or exchanged for shares that
represent less than a majority of the shares of capital stock of the resulting
or surviving entity outstanding immediately after the closing of such merger or
consolidation. Notwithstanding the foregoing, the term "Change in Control" shall
exclude (1) the closing of the purchase and sale of Employer's preferred stock
and warrants pursuant to the terms of that certain Preferred Stock and Warrant
Purchase Agreement (the "Battery Purchase Agreement") to be entered into by and
among Employer, Battery Ventures V, L.P. and affiliated entities and the other
parties thereto, including without limitation the closing of the issuance and
sale of the Series A Shares or the Series B Shares (in each case as defined in
the Battery Purchase Agreement) and (2) the closing of the acquisition of
CheMatch, Inc. by Employer pursuant to the terms of that certain Agreement and
Plan of Reorganization and the related Plan of Merger, including the issuance of
shares of capital stock of Employer in connection therewith.
"Constructive Termination Without Cause" shall mean a
termination of the Employee's employment with the Employer at his initiative
following the occurrence, without the Employee's written consent, of one or more
of the following events (except in consequence of a prior termination):
(i) a reduction by at least ten percent (10%) of
Employee's then current Base Salary;
(ii) the termination or material reduction of any
employee benefit or perquisite enjoyed by the Employee which is otherwise
offered to similarly situated employees of the Employer generally (other than as
part of an across-the-board reduction applicable to all Employee officers of the
Employer);
(iii) a material diminution in the Employee's duties
or the assignment to the Employee of duties which are materially inconsistent
with such duties;
(iv) the relocation of the Employer's principal
office, or the Employee's own office location as assigned to him by the
Employer, to a location more than 50 miles from Stamford, Connecticut; or
(v) the failure of the Employer to obtain the
assumption in writing of its obligation to perform this Agreement by any
successor to all or substantially all of the assets of the Employer within 60
days after the consummation of a Change in Control.
Section 7.5 Termination Upon Expiration.
Subject to other provisions in this Article 7 to the contrary, upon the
termination of Employee's employment hereunder pursuant to Section 6.5
(Expiration), Employer shall pay to Employee, or in the event of Employee's
subsequent death, to Employee's surviving spouse, or if none, to Employee's
estate, as severance pay or liquidated damages, or both, a sum equal to
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seventy-five percent (75%) of the annual Base Salary, as in effect immediately
prior to such termination, which sum shall be payable over a nine-month period
commencing on the date of such termination in conformity with Company's
customary practices for executive compensation as such practices may be modified
from time to time and shall be subject to all applicable federal, state and
local withholding, payroll and other taxes.
Section 7.6 No Duty to Cover.
In connection with the payments made pursuant to Sections 7.3, 7.4 and
7.5 hereof, Employee shall have no duty to seek other employment or otherwise
attempt to cover his damages as a condition to receipt of such payments;
provided that, this Section shall not apply in the event Employee claims he is
entitled to any payment in excess of that provided for in Sections 7.3, 7.4 or
7.5, as applicable.
ARTICLE 8.
GENERAL PROVISIONS
Section 8.1. Indemnification.
a) Employer agrees that if the Employee is made a party, or is
threatened to be made a party, to any action, suit or proceeding, whether civil,
criminal, administrative or investigative (a "Proceeding"), by reason of the
fact that he is or was a director, officer or employee of Employer or is or was
serving at the request of Employer as a director, officer, member, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans, whether or
not the basis of such Proceeding is the Employee's alleged action in an official
capacity while serving as a director, officer, member, employee or agent, the
Employee shall be indemnified and held harmless by Employer to the fullest
extent legally permitted or authorized by Employer's certificate of
incorporation or bylaws or, if greater, by the laws of the State of Delaware,
against all cost, expense, liability and loss (including, without limitation,
attorney's fees, judgments, fines, ERISA excise taxes or penalties and amounts
paid or to be paid in settlement) reasonably incurred or suffered by the
Employee in connection therewith, and such indemnification shall continue as to
the Employee even if he has ceased to be a director, member, employee or agent
of Employer or other entity and shall inure to the benefit of the Employee's
heirs, executors and administrators. Employer shall advance to the Employee all
reasonable costs and expenses incurred by him in connection with a Proceeding
within 20 days after receipt by Employer of a written request for such advance.
Such request shall include an undertaking by the Employee to repay the amount of
such advance if it shall ultimately be determined that he is not entitled to be
indemnified against such costs and expenses.
b) Neither the failure of Employer (including its Board of
Directors, independent legal counsel or stockholders) to have made a
determination prior to the commencement of any proceeding concerning payment of
amounts claimed by the Employee under Section 8.1(a) above that indemnification
of the Employee is proper because he has met the applicable standard of conduct,
nor a determination by Employer (including its Board of Directors, independent
legal counsel or stockholders) that the Employee has not met such applicable
standard
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of conduct, shall create a presumption that the Employee has not met the
applicable standard of conduct.
c) The Company will maintain Directors and Officers Liability
Insurance in the amount of at least $5,000,000 (such amount of coverage which
will be reevaluated by the Directors of the Company following a public offering
of the Company's Common Stock).
Section 8.2. Notices.
Any notices to be given thereunder by either party to the other shall
be in writing and shall be to have been duly given on the date of delivery if
personally delivered or delivered electronically, with electronic verification,
to the persons identified below, or three days after mailing if mailed by
registered or certified, postage prepaid with return receipt requested addressed
as follows:
Employee: Xxxx Xxxx
0 Xxxxxxxx Xxxxx Xxxxx
Xxxxxx, XX 00000
Employer: PetroChemNet Holdings, Inc.
0000 Xxxx Xxxxxx
Xxxxxxxx, XX 00000
with a copy to: Mintz, Levin, Cohn, Ferris, Glovsky and
Popeo, P.C.
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx, Esq.
Each party may change its address by written notice in
accordance with this Section.
Section 8.3. Arbitration.
Any controversy, dispute or claim arising out of or in connection with
this Agreement, or the breach, termination or validity hereof, shall be settled
by final and binding arbitration to be conducted by an arbitration tribunal in
Stamford, Connecticut pursuant to the rules of the American Arbitration
Association. The arbitration tribunal shall consist of three arbitrators. The
party initiating arbitration shall nominate one arbitrator in the request for
arbitration and the other party shall nominate a second in the answer thereto
within thirty (30) days of receipt of the request. The two arbitrators so named
will then jointly appoint the third arbitrator. If the answering party fails to
nominate its arbitrator within the thirty (30) day period, or if the arbitrators
named by the parties fail to agree on the third arbitrator within sixty (60)
days, the office of the American Arbitration Association in Stamford,
Connecticut shall make the necessary appointments of such arbitrator(s). The
decision or award of the arbitration tribunal
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(by a majority determination, or if there is no majority, then by the
determination of the third arbitrator, if any) shall be final, and judgment upon
such decision or award may be entered in any competent court or application may
be made to any competent court for judicial acceptance of such decision or award
and an order of enforcement. In the event of any procedural matter not covered
by the aforesaid rules, the procedural law of the State of Delaware shall
govern.
Section 8.4. Attorneys' Fees and Costs.
If any action at law or in equity is necessary to enforce or interpret
the terms of this Agreement, the prevailing party shall be entitled to
reasonable attorneys' fees, costs and necessary disbursements in addition to any
other relief to which that party may be entitled. This provision shall be
construed as applicable to the entire contract.
Section 8.5. Entire Agreement.
This Agreement supersedes any and all other agreements, either oral or
in writing, between the parties hereto with respect to the subject matter
contained herein and contains all of the covenants and agreements between the
parties with respect to the subject matter hereof. Each party to this Agreement
acknowledges that no representations, inducements, promises or agreements,
orally or otherwise, have been made by any party, or one acting on behalf of any
party, which are not embodied herein, and that no other agreement, statement or
promise not contained in this Agreement shall be valid or binding on either
party.
Section 8.6. Governing Law.
This Agreement shall be governed by and construed in accordance with
the internal laws of the State of Delaware. Subject to the provisions of Section
8.3, any claims or legal actions by one party against the other arising out of
the relationship between the parties contemplated herein (whether or not arising
under this Agreement) shall be commenced and maintained in any state or federal
court located in such state, and both parties hereby submit to the jurisdiction
and venue of any such court.
Section 8.7. Modifications.
Any modification of this Agreement will be effective only if it is in
writing, has been approved by the Board of Directors of Employer, and is signed
by the Employee and by a duly authorized officer of the Employer.
Section 8.8. Effect of Waiver.
The failure of either party to insist on strict compliance with any of
the terms, covenants or conditions of this Agreement by the other party shall
not be deemed a waiver or that term, covenant or condition, nor shall any waiver
or relinquishment of any right or power at any one time or times be deemed a
waiver or relinquishment of that right or power for all or any other times.
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Section 8.9. Partial Invalidity.
If any provision in this Agreement is held by a court of competent
jurisdiction to be invalid, void or unenforceable, the remaining provisions
shall nevertheless continue in full force without being impaired or invalidated
in any way.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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Executed on this the 21st day of June, 1999 as an instrument under
seal.
EMPLOYER: EMPLOYEE:
PETROCHEMNET HOLDINGS, INC.
By: /s/ XXXX XXXX /s/ XXXX XXXX
--------------------------------- ------------------------------------
Name: Xxxx Xxxx Xxxx Xxxx
Title: President
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