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Exhibit 10.14
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement"), dated as of June 25, 1999,
between XXXxxx.xxx LLC, an Ohio limited liability company (together with its
successors and assigns permitted under this Agreement, the "Company"), and Xxxxx
Xxxxxxx (the "Employee").
RECITALS
A. In connection with the Contribution Agreement by and among KB Online
Holdings LLC, XxxxxXxxx.xxx, Inc., and XXXxxx.xxx LLC, dated as of May 18, 1999
(the "Contribution Agreement"), the Employee will become an employee of the
Company;
B. The Company and the Employee desire to enter into an employment
arrangement;
C. The Company has determined that it is in the best interests of the
Company and its equityholders to enter into this Agreement setting forth the
obligations and duties of both the Company and the Employee; and
D. The Company wishes to assure itself of the services of the Employee
for the period hereinafter provided, and the Employee is willing to be employed
by the Company for said period, upon the terms and conditions provided in this
Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the receipt of
which is mutually acknowledged, the Company and the Employee (individually, a
"Party" and together, the "Parties") agree as follows:
1. EMPLOYMENT. The Company hereby agrees to employ the Employee, and
the Employee hereby agrees to serve the Company, on the terms and conditions set
forth herein.
2. TERM. The term of this Employment Agreement shall begin on the date
hereof and shall continue until terminated as hereinafter provided (the "Term of
Employment").
3. POSITION AND DUTIES.
(a) The Employee shall serve as Vice President - Technology of
the Company, and in such other capacity or capacities as the Chief
Executive Officer ("CEO") or Board of Managers (the "Board") of the
Company shall reasonably determine, without additional compensation
therefor.
(b) The Employee shall devote his full time and best efforts to
his employment and perform diligently such duties as the CEO or the
Board shall reasonably determine. The Employee shall devote his entire
working time and attention to the performance of his responsibilities
hereunder.
4. BASE SALARY. The Employee shall receive from the Company an annual
base salary, payable in accordance with the regular payroll practices of the
Company, of One Hundred Twenty
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Thousand Dollars ($120,000). During the Term of Employment, the Board shall
review the base salary no less often than annually for possible increase, any
such increase to be based on the performance of the Employee.
5. EXPENSE REIMBURSEMENT. During the Term of Employment, the Employee
shall be entitled to prompt reimbursement by the Company for all reasonable
out-of-pocket expenses incurred by him in performing services under this
Agreement, upon submission of such accounts and records as may be required under
Company policy.
6. EFFECT OF AGREEMENT ON OTHER BENEFITS. During the Term of
Employment, the Employee will be entitled to such medical, dental, life
insurance, 401(k), option plan and such other similar employment privileges and
benefits as are afforded generally from time to time by the Company and two (2)
weeks paid vacation time per year to be taken at times mutually acceptable to
the Company and the Employee. The Employee shall be awarded options to acquire
the number of Units in the Company set forth on EXHIBIT A pursuant to a grant
under the Company's 1999 Option Plan on terms and conditions to be approved by
the Board.
7. TERMINATION OF EMPLOYMENT. The Employee's employment may be
terminated under the following circumstances:
(a) DEATH. The Employee's employment is terminated upon his
death.
(b) DISABILITY. The Employee's employment may be terminated by
the Company, due to illness or other physical or mental disability of
the Employee, resulting in his inability to perform substantially his
duties under this Agreement for a period of one hundred eighty (180)
or more consecutive days or for two hundred seventy (270) days in the
aggregate during any consecutive twelve (12) month period
("Disability").
(c) NOTICE. The Employee's employment may be terminated by either
Party upon thirty (30) days written notice to the other Party.
(d) OTHER POSITIONS. Upon termination of this Agreement by the
Employee, the Employee shall be deemed to have resigned from all
offices and directorships, if applicable, held by the Employee with
the Company or any of its affiliates or subsidiaries.
8. COMPENSATION UPON TERMINATION.
(a) If the Employee's employment is terminated as a result of the
Employee's death or Disability, the Employee, or his estate, shall be
entitled to:
(i) any base salary earned but not yet paid, payable in
accordance with the regular payroll practices of the Company;
(ii) reimbursement in accordance with this Agreement of any
business expense incurred by the Employee but not yet paid; and
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(iii) other benefits accrued and earned by the Employee
through the date of his death or Disability in accordance with
the applicable plans and programs of the Company.
(b) If the Employee's employment is terminated by the Company or by the
Employee upon thirty (30) days written notice, the Employee shall be entitled
to:
(i) his base salary, at the rate in effect on the date of
his termination of employment, until the earlier of (A) the first
anniversary of the date of termination or (B) the date he begins
working for a subsequent employer not in violation of Section 9
of this Agreement (the "Severance Period"), payable in accordance
with the regular payroll practices of the Company;
(ii) continued participation in all employee benefit plans
or programs in which he was participating on the date of his
termination of employment, until the end of the Severance Period;
(iii) reimbursement in accordance with this Agreement of any
business expenses incurred by the Employee but not yet paid to
him on the date of his termination of employment; and
(iv) other benefits accrued and earned by the Employee
through the date of his termination in accordance with the
applicable plans and programs of the Company.
(c) Any amounts due under this Section 8 are in the nature of severance
payments or liquidated damages or both, and shall fully compensate the Employee
and his dependents or beneficiaries, as the case may be, for any and all direct
damages and consequential damages that any of them may suffer as a result of
termination of the Employee's employment, and they are not in the nature of a
penalty.
9. COVENANTS AND CONFIDENTIAL INFORMATION.
(a) The Employee agrees that so long as he is employed by the Company
and for a period of one (1) year thereafter and, as to subsection 9(a)(v) below,
at any time after the Term of Employment he will not, directly or indirectly, do
or suffer any of the following:
(i) Own, manage, control or participate in the ownership,
management or control of, or be employed or engaged by or otherwise
affiliated or associated as a consultant, independent contractor or
otherwise with, any other corporation, partnership, proprietorship,
firm, association or other business entity or otherwise engage in any
business that is engaged in any manner in, or otherwise competes with,
the business of the Company or any of the Company's affiliates or
subsidiaries (as conducted on the date the Employee ceases to be
employed by the Company in any capacity, including as a consultant)
in any state in the United States or any foreign
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country in which the Company or such affiliates or subsidiaries are then doing
business and then only with respect to the business of the Company, its
affiliates or subsidiaries then being conducted in such states or countries;
provided, however, that the ownership of not more than 1% of the stock of any
publicly traded corporation shall not be deemed a violation of this covenant.
(ii) Employ, assist in employing, or otherwise associate in
business with any present or former or future employee, officer or
agent of the Company or any of the Company's affiliates or
subsidiaries.
(iii) Induce any person who is an employee, officer, agent,
customer or supplier of the Company or any of the Company's affiliates
or subsidiaries to terminate said relationship.
(iv) Solicit or direct business of any current or prospective
customers of the Company, its affiliates or subsidiaries, who are
current or prospective customers during the Term of Employment, either
for himself or for any other individual or entity or advise any person
or entity with respect thereto. As used herein, "customer" means any
customer of the Company or its affiliates or subsidiaries whose
identity the Employee learned through his employment with the Company
or with whom the Employee and/or the Company had business contact
during the twelve (12) month period immediately before the Employee's
employment with the Company terminated.
(v) Disclose, divulge, discuss, copy or otherwise use or suffer
to be used in any manner in competition with, or contrary to the
interests of, the Company or any of the Company's affiliates or
subsidiaries, the customer lists, product research or engineering
data, requirements, prices or other trade secrets of the Company or
any of the Company's affiliates or subsidiaries, it being acknowledged
by the Employee that all such information regarding the business of
the Company and the Company's affiliates or subsidiaries, compiled or
obtained by, or furnished to, the Employee while the Employee shall
have been employed by or associated with the Company is confidential
information and the Company's exclusive property; provided, however,
that this prohibition will not apply to any item of confidential
information which is otherwise publicly available or becomes so other
than as a result of the Employee's violation of this Agreement. Upon
termination of this Agreement, Employee shall promptly return to the
Company all books, manuals, reports, client and customer lists, keys
and other materials referred to above and any other materials that
belong to the Company.
(b) All business ideas, concepts, inventions, improvements and
developments made or conceived by the Employee during the Term of Employment and
relating to the business of the Company or to any business or product the
Company is considering entering or developing, shall become and remain the
exclusive property of the Company, its successors and assigns. The Employee will
promptly disclose in writing to the Company all such ideas,
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concepts, inventions, improvements and developments, and will
cooperate fully in confirming, protecting and obtaining legal
protection of the Company's ownership rights.
(c) The Employee expressly agrees and understands that the
remedy at law for any breach by him of this Section 9 will be
inadequate and that the damages flowing from such breach are not
readily susceptible of being measured in monetary terms. Accordingly,
it is acknowledged that upon adequate proof of the Employee's
violation of any legally enforceable provision of this Section 9,
the Company shall be entitled to seek immediate injunctive relief and
may obtain a temporary order restraining any threatened or further
breach. Nothing in this Section 9 shall be deemed to limit the
Company's remedies at law or in equity for any breach by the Employee
of any of the provisions of this Section 9 that may be pursued or
availed of by the Company.
(d) In the event that the Employee shall violate any legally
enforceable provision of this Section 9 as to which there is a
specific time period during which he is prohibited from taking
certain actions or from engaging in certain activities, as set forth
in such provision, then such violation shall toll the running of that
time period from the date of its commencement until the date of its
cessation.
(e) The Employee has carefully considered the nature and
extent of the restrictions upon him and the rights and remedies
conferred upon the Company under this Section 9, and hereby
acknowledges and agrees that the same are reasonable in time and
territory, are designed to eliminate competition that would otherwise
be unfair to the Company, do not stifle the inherent skill and
experience of the Employee, would not operate as a bar to the
Employee's sole means of support, are fully required to protect the
legitimate interests of the Company and do not confer a benefit upon
the Company disproportionate to the detriment to the Employee.
10. WITHHOLDING TAXES. All payments to the Employee or his beneficiary
shall be subject to withholding on account of federal, state and local taxes as
required by law. If any payment hereunder is insufficient to provide the amount
of such taxes required to be withheld, the Company may withhold such taxes from
any other payment due the Employee or his beneficiary. In the event all cash
payments due the Employee are insufficient to provide the required amount of
such withholding taxes, the Employee or his beneficiary, within five days after
written notice from the Company, shall pay to the Company the amount of such
withholding taxes in excess of all cash payments due the Employee or his
beneficiary.
11. ASSIGNABILITY; BINDING NATURE. This Agreement shall be binding upon
and inure to the benefit of the Parties and their respective successors, heirs
(in the case of the Employee) and assigns. No rights or obligations of the
Company under this Agreement may be assigned or transferred by the Company
except that such rights or obligations may be assigned or transferred pursuant
to (a) a merger or consolidation in which the Company is not the continuing
entity or (b) a sale or liquidation of all or substantially all of the assets of
the Company, provided that the assignee or transferee is the successor to all or
substantially all of the assets of the Company and such assignee or transferee
assumes the liabilities, obligations and duties of the Company, as contained in
this Agreement, either
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contractually or as a matter of law. The Company further agrees that, in the
event of a sale of assets or liquidation as described in the preceding sentence,
it will use its best efforts to cause such assignee or transferee expressly to
assume the liabilities, obligations and duties of the Company hereunder. No
obligations of the Employee wider this Agreement may be assigned or transferred
by the Employee.
12. ENTIRE AGREEMENT. Except to the extent otherwise provided herein,
this Agreement contains the entire understanding and agreement between the
Parties concerning the subject matter hereof and supersedes any prior
agreements, whether written or oral, between the Parties concerning the subject
matter hereof.
13. AMENDMENT OR WAIVER. No provision in this Agreement may be amended
unless such amendment is agreed to in writing and signed by both the Employee
and an authorized officer of the Company No waiver by either Party of any breach
by the other Party of any condition or provision contained in this Agreement to
be performed by such other Party shall be deemed a waiver of a similar or
dissimilar condition or provision at the same or any prior or subsequent time.
Any waiver must be in writing and signed by the Employee or an authorized
officer of the Company, as the case may be.
14. SEVERABILITY. In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any reason, in
whole or in part, the remaining provisions of this Agreement shall be unaffected
thereby and shall remain in full force and effect to the fullest extent
permitted by law.
15. SURVIVORSHIP. The respective rights and obligations of the Parties
hereunder shall survive any termination of the Employee's employment with the
Company to the extent necessary to the intended preservation of such rights and
obligations as described in this Agreement.
16. GOVERNING LAW. This Agreement shall be governed by and construed
and interpreted in accordance with the laws of the State of Colorado, without
reference to principles of conflict of laws.
17. NOTICES. Any notice given to either Party shall be in writing and
shall be deemed to have been given when delivered personally or one (1) day
after having been sent by overnight courier service or three (3) days after
having been sent by certified or registered mail, postage prepaid, return
receipt requested, duly addressed to the Party concerned at the address
indicated below or to such changed address as such Party may subsequently give
such notice of:
If to the Company or the Board: XXXxxx.xxx LLC
000 Xxxxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attn: Chief Executive Officer
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If to the Employee: Xxxxx Xxxxxxx
0000 X. 00xx Xxxxx
Xxxxxx, XX 00000
18. HEADINGS. The headings of the sections contained in this Agreement
are for convenience only and shall not be deemed to control or affect the
meaning or construction of any provision of this Agreement.
19. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date and year first above written.
XXXXXX.XXX LLC
By: /s/Xxxxxxx Xxxxxxxxxx
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Xxxxxxx Xxxxxxxxxx
Chief Executive Officer
EMPLOYEE
/s/ Xxxxx Xxxxxxx
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Xxxxx Xxxxxxx
Vice President - Technology
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EXHIBIT A
The Employee shall be awarded options to acquire 119,000 Units in the Company.
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