EXHIBIT 10.6
EXECUTIVE EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement"), dated as of the 12th day of August,
2004, is entered into by and between MatchNet PLC, an English company (the
"Company"), with its registered office at 00 Xxxxx Xxxx, Xxxxxx XX0 OAE, and
Xxxxx Xxxxxxxx, an individual, residing at 00000 Xxx Xxxxxx Xxx, Xxx Xxxxx
Xxxxx, XX 00000 (the "Executive").
RECITALS:
A. Whereas the Company and the Executive have previously entered into a
letter agreement dated 17 February, 2004, setting forth the terms for
Executive's service as a member of the Company Board of Directors (the
"Directorship Agreement").
B. Whereas the Company wishes to employ Executive as Chief Executive
Officer of the Company effective as of the date of this Agreement, and Executive
is willing to serve in such capacity under the terms of this Agreement.
In consideration of the promises and respective covenants and agreements of the
parties herein contained, and intending to be legally bound, the parties hereto
agree as follows:
1. EMPLOYMENT. The Company and Executive hereby agree that Executive will be
employed by the Company on the terms set forth in this Agreement.
2. TERM. The employment of Executive by the Company under this Agreement will
commence on the date of this Agreement and shall continue until terminated as
set forth in Section 6 of this Agreement.
3. POSITION AND DUTIES. Executive shall serve as Chief Executive Officer of the
Company and shall have such responsibilities and authority commensurate with
such position as may from time to time be assigned to Executive by the Board of
Directors of the Company. Executive shall devote substantially all his working
time and efforts to the business and affairs of the Company.
4. DIRECTORSHIP AGREEMENT.
4.1 Executive shall continue to serve as a Director for the Company
while acting as Chief Executive Officer. The Company's Board of Directors shall
determine the Board committee appointments that are appropriate for Executive in
his capacity as a Board member. Effective as of the date of this Agreement,
Executive shall no longer be compensated under the Directorship Agreement for
services as a Board member or for attendance at Board or Committee meetings.
4.2 Executive shall retain all stock options awarded to Executive as
contemplated in the Directorship Agreement which have vested as of the date
hereof, 25,000 shares ("Directorship Option Shares"), and such Directorship
Option Shares shall be exercisable on the terms set forth in the Option
Agreement relating thereto ("Existing Option Agreement").
4.3 The Directorship Agreement shall terminate on the date this
Agreement becomes effective, and the Existing Option Agreement shall be modified
as set forth below.
5. COMPENSATION AND RELATED MATTERS.
5.1 SALARY: The Company shall pay to Executive a salary at a rate of
not less than US $480,000 per annum, which rate may be increased from time to
time in accordance with normal business practices of the Company.
5.2 STOCK OPTIONS. The Company shall grant Executive a stock option to
purchase up to 1,250,000 of the Company's ordinary shares (the "Option Shares").
The exercise price per share will be E3.11. Option Shares shall vest over a
four-year period beginning on the date of this Agreement. Twelve and one half
percent (12.5%) of the total number of Option Shares (156,250 Option Shares)
will vest on each of those dates that are six months and twelve months from the
date of this Agreement. Twenty five percent (25%) of the total number of Option
Shares (312,500 Option Shares) will vest on each date which is 24, 36 and 48
months after the date of this Agreement. If Company terminates this Agreement
without cause under Section 6.1 below or if Executive terminates this Agreement
for Good Reason under Section 6.4 below, vesting shall be accelerated for a
portion of the unvested Option Shares, as more fully provided in Section 6.6
below. Vesting of all unvested Option Shares shall also be accelerated if
Executive's employment with the Company terminates within six months following a
"Change of Control Event", which accelerated vesting shall occur on the same
basis as applies to the Directorship Option Shares under the Existing Option
Agreement. Except as provided in the two prior sentences, no additional Option
Shares shall vest following the termination of this Agreement. The grant of the
Option Shares shall be documented in an Option Agreement in substantially the
same form as the Existing Option Agreement except that the Option Agreement
shall refer to Executive's position as an employee of the Company and shall
include the provisions described in this Section 5.2.
5.3 TEMPORARY LIVING EXPENSES; TRAVEL EXPENSES. For a period of six
months commencing on the date of this Agreement, the Company shall pay to
Executive (a) the sum of Three Thousand Dollars per month to be used by
Executive to cover rent and other living expenses for accommodations in or
around Los Angeles, California and (b) an amount sufficient for Executive to
travel once a week on a commercial round-trip flight between Los Angeles and the
San Francisco Bay Area. If Company determines that it is required to withhold
and pay employment taxes on some or all of the amounts payable to Executive
under this Section 5.3, the Company shall pay an additional amount to Executive
so that the net after tax amount available for Executive's accommodations and
travel shall be the amounts required by the terms of this Section.
5.4 VACATION. In addition to legal holidays observed by the Company,
Executive shall be entitled to 20 days of paid vacation per year, which vacation
days shall accrue and be useable by Executive in accordance with the Company's
standard vacation policies. Upon termination of employment unused vacation days
will be paid in accordance with the requirements of California law.
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5.5 EXPENSES. During the term of Executive's employment hereunder,
Executive shall be entitled to receive prompt reimbursement for all reasonable
expenses incurred by Executive in performing services hereunder, including all
expenses of travel and living expenses while away from home on business or at
the request or and in the service of the Company, provided that such expenses
are incurred and accounted for in accordance with the policies and procedures
established by the Company.
5.6 HEALTH AND OTHER BENEFITS. The Company shall keep in full force and
effect, and Executive shall be entitled to participate in all of the Company's
executive benefit plans or arrangements, including (without limitation) health
insurance, bonus pools, stock options and stock ownership programs. The Company
shall not make any changes in such plans and arrangements which would adversely
affect Executive's rights or benefits thereunder, unless such change occurs
pursuant to a program applicable to all executive officers of the Company and
does not result in a proportionately greater reduction in the rights of or
benefits to Executive as compared with any other executives of the Company.
6. TERMINATION:
6.1 TERMINATION WITHOUT CAUSE. Either party may terminate this
Agreement without cause by giving to the other party thirty (30) days written
notice.
6.2 TERMINATION UPON DEATH OR DISABILITY. Executive's employment
hereunder shall terminate upon his death. If, as a result of Executive's
incapacity due to physical or mental illness, Executive shall have been absent
from his duties hereunder on a full-time basis for the entire period of three
consecutive months, and within thirty (30) days after written notice of
termination is given (which may occur before or after the end of such six-month
period), Executive shall not have returned to the performance of his duties
hereunder on a full-time basis, the Company may terminate Executive's employment
hereunder.
6.3 TERMINATION BY COMPANY FOR CAUSE. The Company may terminate this
Agreement "For Cause" at any time. For purposes of this Agreement "Cause" shall
mean and include: (i) a material misappropriation of any monies or assets or
properties of the Company, (ii) a material breach by the Executive of the terms
of this Agreement that has not been cured within thirty (30) days after written
notice to the Executive of such breach, (iii) the conviction of, or plea of
guilty or nolo contendere, by the Executive to a felony or to any criminal
offense involving the Executive's moral turpitude or (iv) gross negligence or
willful misconduct of the Executive in connection with the material duties
required by this Agreement.
6.4 TERMINATION BY EXECUTIVE FOR GOOD REASON. The Executive may
terminate this Agreement for "Good Reason" at any time. Good Reason shall
include (a) any material adverse change by Company in Executive's title,
position, authority or reporting relationships with Company, (b) Company's
requirement that Executive relocate to a location in excess of fifty (50) miles
from Company's current office location or from any future office location
acceptable to Executive; or (c) any material breach by Company of this Agreement
which is not cured within thirty (30) days of written notice thereof by
Executive to Company.
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6.5 SEVERANCE PAY. If Company terminates this Agreement without cause
under Section 6.1 or if Executive terminates this Agreement for Good Reason
under Section 6.4, Executive shall be entitled to receive Severance Pay from
Company for a period of nine months following termination. The amount of
Severance Pay to be paid to Executive each month shall be equal to Executive's
monthly salary under Section 5.1 at the time the Agreement is terminated, less
applicable payroll tax withholding. Severance pay shall be due and payable
regardless of whether or not Executive becomes employed during such eighteen
month period.
6.6 ACCELERATED VESTING OF OPTION SHARES. If prior to that date which
is six months from the date of this Agreement the Company terminates this
Agreement without Cause under Section 6.1 or if Executive terminates this
Agreement for Good Reason under Section 6.4 and at such time any of the Option
Shares have not yet vested, fifteen percent (15%) of all unvested Option Shares
(187,500 Option Shares) shall immediately vest and become exercisable. If on or
after that date which is six months from the date of this Agreement Company
terminates this Agreement without Cause under Section 6.1 or if Executive
terminates this Agreement for Good Reason under Section 6.4 and at such time any
of the Option Shares have not yet vested, thirty percent (30%) of all unvested
Option Shares shall immediately vest and become exercisable.
6.7 RETURN OF COMPANY PROPERTY FOLLOWING TERMINATION. Upon termination
for whatever reason, the Executive shall return all books, documents, papers,
materials and any other property, including any Company vehicles (including the
documentation pertaining thereto) which relates to the business of the Company
(or any subsidiary, affiliated, or holding companies) which may be in the
Executive's possession or under the Executive's power or control.
7. NON-COMPETITION. As consideration for the Company to enter into this
Agreement, the Executive shall not during the term of this Agreement, for
whatever reason, directly or indirectly, either as principal, agent, employee,
employer, partner or in any other capacity, solicit or serve any customer of the
Company, or engage in any business, which is substantially the same, or similar
business as the Company, nor shall the Executive seek to entice away or
disaffect any other employee of the Company. In the event of a breach or
threatened breach by Executive of any of the provisions of this paragraph, the
Company, in addition to and not in limitation of any rights, remedies or damages
available to the Company at law or in equity, shall be entitled to a permanent
injunction in order to prevent or to restrain any such breach by Executive, or
by Executive's partners, agents, representatives, servants, employers, employees
and/or any and all persons directly or indirectly acting for or with him.
8. CONFIDENTIALITY. Executive acknowledges that, in and as a result of his
employment hereunder he will be making use of, acquiring and/or adding to
confidential information of special and unique nature and value relating to such
matters as the Company's trade secrets, systems, procedures, manuals,
confidential reports and lists of clients, as well as the nature and type of
services rendered by the Company and the equipment and methods used by the
Company. As a material inducement to the Company to enter into this Agreement,
Executive covenants and agrees that he shall not, at any time during or
following the term of his employment hereunder, directly or indirectly divulge
or disclose, for any purpose whatsoever other than as reasonably necessary to
perform his employment duties, any of such confidential information which has
been obtained by or disclosed to him as a result of his employment by the
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Company. In the event of a breach or threatened breach by Executive of any of
the provisions of this paragraph, the Company, in addition to and not limitation
of any rights, remedies or damages available to the Company at law or in equity,
shall be entitled to a permanent injunction in order to prevent or to restrain
any such breach by Executive, or by Executive's partners, agents,
representatives, servants, employers, Executive and/or any and all persons
directly or indirectly acting for or with him.
9. INDEMNIFICATION; INSURANCE. To the fullest extent permitted by the Company's
charter documents and applicable law, the Company agrees to defend and indemnify
Executive and hold Executive harmless against any liability that Executive incur
within the scope of his service as an officer and director of the Company. The
Company agrees to use its best efforts to purchase and maintain adequate
Directors' and Officers' liability insurance from a reputable and financially
sound insurer with coverage limits of not less than Fifteen Million
($15,000,000) and with provisions that will provide coverage for Executive as a
director and officer as well as coverage as a former director and officer
following any termination of this Agreement.
10. NOTICE. For the purposes of this Agreement, notices, demands and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or (unless otherwise specified)
mailed by registered mail, return receipt requested, postage prepaid, addressed
as set forth above, or to such other address as any party may have furnished to
the other in writing in accordance herewith, except that notices of change of
address shall be effective only upon receipt.
11. MISCELLANEOUS.
11.1 The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of California.
11.2 Sections 7 and 8 of this Agreement shall remain in full force and
effect and shall survive the termination of this Agreement.
11.3 In any action undertaken to enforce the terms of this Agreement,
the prevailing party shall be reimbursed by the non-prevailing party for such
prevailing party's reasonable attorneys' fees and expenses, including the costs
of enforcing a judgment.
12. VALIDITY. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the
date and year first above written.
MatchNet PLC
By: /s/Xxx Xxxxxxx /s/ Xxxxx Xxxxxxxx
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Name: Xxxxx Xxxxxxxx
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Title:
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