EMPLOYMENT AGREEMENT
EMPLOYMENT
AGREEMENT (this “Employment Agreement”), dated as of September ___, 2007 (the
“Commencement Date”), by and between XxxXxxxxx.xxx, Inc., a Delaware corporation
(the “Company” or “XxxXxxxxx.xxx”), and Xxxxxx X. Xxxxxx, Xx.
(“Xxxxxx”).
WHEREAS,
the Company and Xxxxxx previously entered into an employment agreement dated
as
of January 1, 2006 (the “Prior Employment Agreement”), and the Company and
Xxxxxx now desire to revise the terms set forth in the Prior Employment
Agreement by entering into this Employment Agreement, on the terms and
conditions set forth herein; and
NOW
THEREFORE, the parties hereto agree as follows:
Section
1. Duties;
Term.
(a)
The
Company agrees to employ Xxxxxx, and Xxxxxx agrees to be so employed, in the
position of Chairman and Chief Executive Officer of the Company, reporting
to
the Board of Directors (the “Board”) of the Company. Xxxxxx agrees to perform
such duties, functions and responsibilities as are generally incident to such
positions, for a period commencing on the Commencement Date and ending on
September 30, 2009, unless sooner terminated in accordance with Section 4 hereof
(the “Initial Term”). The Initial Term automatically shall be extended for one
(1) additional year at the end of the Initial Term and then again after each
successive year thereafter (the “Term”). However, either party may terminate
this Employment Agreement at the end of the Initial Term, or at the end of
any
successive one (1) year term thereafter, by giving the other party written
notice of intent not to renew delivered at least 90 (ninety) days prior to
the
end of such Initial Term or successive one (1) year term. Xxxxxx agrees to
faithfully perform the lawful duties assigned to him pursuant to this Employment
Agreement to the best of his abilities and to devote all of his business time
and attention to the Company’s business. Xxxxxx shall be subject to all laws,
rules, regulations and policies as are from time to time applicable to employees
of the Company and, in the case of rules or policies adopted by the Company,
communicated to him in writing, including XxxXxxxxx.xxx’s Policy on Investments.
Xxxxxx will make recommendations to the Compensation Committee of the Board
(the
“Committee”) with regard to compensation levels (including equity awards) for
senior executive officers and the Committee shall consider such
recommendations.
(b)
Notwithstanding the foregoing, Xxxxxx may (i) serve on civic or charitable
boards or not-for-profit industry related organizations, (ii) engage in
charitable, civic, educational, professional, community and/or industry
activities without remuneration therefor and (iii) manage personal and
family investments, so long as such activities do not interfere with performance
of Xxxxxx’x duties under the Employment Agreement. Xxxxxx also may serve on the
board of directors or advisory committee of other for-profit enterprises subject
to the consent of the Board, which shall not unreasonably be withheld; provided,
however, that Xxxxxx shall not serve on more than two such boards at the same
time.
Section
2.
Compensation.
(a)
Annual
Salary.
As
compensation for his services hereunder, during the Term the Company shall
pay
to Xxxxxx a salary of Four Hundred and Ten Thousand Dollars ($410,000) per
annum, payable in accordance with the Company’s standard payroll policies, and
less all applicable federal, state and local withholding taxes (the “Annual
Salary”). The Annual Salary shall be reviewed at least annually during the Term,
and may be increased in the sole discretion of the Committee, taking into
consideration both the Company’s and Xxxxxx’x performance during the preceding
year.
(b)
Annual
Bonus.
Except
as set forth in Section 4 hereof, in addition to the Annual Salary, Xxxxxx
shall
be entitled to receive an additional cash bonus opportunity for his employment
during calendar year 2007 (as previously established in accordance with the
terms of the Agreement for Grant of Cash Performance Award granted to Xxxxxx
on
May 15, 2007 under the 2007 Performance Incentive Plan (the “2007 Plan”), as
well as Annual Bonus opportunities in each subsequent calendar year during
the
Term in accordance with the bonus plan for senior management of the Company
(the
“Bonus Plan”) with an annualized target bonus of 75% of his Annual Salary, and
upon such terms as are established at the sole discretion of the Committee
(the
amount earned under such bonus opportunity referred to herein as the “Annual
Bonus”).
(c)
Long-term
Equity Incentive Compensation.
The
Company shall annually grant to Xxxxxx on or about January 1 of each year of
his
employment during the Term long-term equity incentive compensation opportunities
in such form as the Committee may reasonably determine having a grant date
economic value of not less than three hundred thousand dollars ($300,000),
as
determined by the Committee in its sole discretion (the “New
LTIs”).
In
the
event such long-term equity incentive compensation award is provided in a form
other than stock options, stock appreciation rights or restricted stock, payment
of such award shall be paid on or within sixty (60) days after the vesting
of
the award.
Notwithstanding
any other provision hereof, following the termination of Xxxxxx’x employment by
the Company without Cause, a voluntary termination by Xxxxxx for Good Reason,
upon the expiration of this Employment Agreement as a result of the Company
delivering notice of non-renewal pursuant to Section 1(a), or the upon the
occurrence of a Change of Control (as defined in the 2007 Plan) prior to the
termination of Xxxxxx’x employment hereunder for any reason, the then unvested
portion of the New LTIs will immediately become vested. The New LTIs shall
also
have such other terms not inconsistent with the foregoing as shall be determined
by the Company and set forth in a grant agreement.
Section
3.
Benefits;
Expense Reimbursement.
During
the Term, Xxxxxx shall participate in any group insurance, accident, sickness
and hospitalization insurance, and any other employee benefit plans of the
Company in effect during the Term and available to the Company’s executive
officers. Without limiting the generality of the foregoing, during the Term,
the
Company will provide Xxxxxx at its expense with a term life insurance policy
with a death benefit equal to two (2) times Xxxxxx’x Annual Salary, the
beneficiary to be named by Xxxxxx; provided that the Company shall not be
required to incur annual expense in excess of $5,000 in connection with such
term life insurance policy. During the Term, Xxxxxx shall annually receive
a
physical exam at a distinguished medical facility (such as the Mayo Clinic
or
the Cleveland Clinic). All reasonable expenses associated with these annual
physicals (including travel) shall be paid by the Company.
2
Xxxxxx
shall have the right to reimbursement, upon proper accounting, of reasonable
expenses and disbursements incurred by him in the course of his duties
hereunder. In addition, during each year of the Term, Xxxxxx shall be entitled
to five (5) weeks of paid vacation.
Section
4.
Employment
Termination.
(a)
At
any time during the Term, and except as otherwise provided in Sections 4(b)
and
4(c) hereof, the Company shall only have the right to terminate this Employment
Agreement and Xxxxxx’x employment with the Company hereunder, upon written
notice to Xxxxxx, in the event Xxxxxx engages in conduct which constitutes
“Cause.” For purposes of this Employment Agreement, Cause shall mean (i)
Xxxxxx’x willful misconduct in the performance of his obligations under this
Employment Agreement or gross negligence in the performance of his obligations
under this Employment Agreement, (ii) dishonesty or misappropriation by Xxxxxx
relating to the Company or any of its funds, properties, or other assets, (iii)
inexcusable repeated or prolonged absence from work by Xxxxxx (other than as
a
result of, or in connection with, a disability), (iv) any unauthorized
disclosure by Xxxxxx of confidential or proprietary information of the Company
which is reasonably likely to result in material harm to the Company, (v) a
conviction of Xxxxxx (including entry of a guilty or nolo contendere plea)
involving fraud, dishonesty, or moral turpitude, or involving a violation of
federal or state securities laws, or (vi) the failure by Xxxxxx to attempt
to
perform faithfully his duties hereunder, or other material breach by Xxxxxx
of
this Employment Agreement, and such failure or breach is not cured, to the
extent cure is possible, by Xxxxxx within thirty (30) days after written notice
thereof from the Company to Xxxxxx; provided, however, that no event or
condition described in clauses (i), (ii), (iii), (iv) and (vi) shall constitute
Cause unless (x) the Company first gives Xxxxxx written notice of its
intention to terminate his employment for Cause and the grounds for such
termination no fewer than ten (10) days prior to the date of termination; and
(y) Xxxxxx is provided the opportunity to appear before the Board, with or
without legal representation at his election to present arguments on his own
behalf; provided further, however, that notwithstanding anything to the contrary
in this Agreement and subject to the other terms of this proviso, the Company
may take any and all actions, including without limitation suspension (but
not
without pay), it deems appropriate with respect to Xxxxxx and his duties at
the
Company pending such appearance. No act or failure to act on Xxxxxx’x part will
be considered “willful” unless done, or omitted to be done, by Xxxxxx not in
good faith and without reasonable belief that his action or omission was in
the
best interests of the Company. If this Employment Agreement and Xxxxxx’x
employment with the Company hereunder is terminated for Cause, or if Xxxxxx
voluntarily resigns from the Company without Good Reason during the Term or
gives notice of non-renewal of this Employment Agreement as provided by Section
1(a), except as otherwise required by Section 27 hereof the Company shall pay
Xxxxxx (i) a lump sum amount within thirty (30) days of such termination, equal
to the sum of (A) all earned but unpaid portions of the Annual Salary, (B)
any
earned but unpaid Annual Bonus for a previously completed fiscal year of the
Company, (C) reimbursement for any unreimbursed business expenses incurred
by
Xxxxxx prior to the date of termination or resignation (the “Termination Date”)
subject to reimbursement pursuant to Section 3, and (D) payment for any unused
vacation days through the Termination Date ((A) - (D) collectively the “Accrued
Amounts”), and (ii) any other amounts or benefits (other than severance,
termination or similar pay) required to be paid or provided by law or under
any
plan, program or policy of the Company (the “Accrued Benefits”) in accordance
with the terms thereof, and following any such termination, Xxxxxx shall not
be
entitled to receive any other compensation or benefits from the Company
hereunder, including, without limitation, any portion of the Annual Bonus for
the year in which he is terminated.
3
(b)
This
Employment Agreement and Xxxxxx’x employment with the Company hereunder may also
be terminated by the Company without Cause, or by Xxxxxx upon the occurrence
of
an event constituting Good Reason. For purposes of this Employment Agreement,
“Good Reason” shall mean (i) the failure of the Company to cure a material
adverse change made by it in Xxxxxx’x authority, functions, duties, or
responsibilities in his position with the Company as provided in this Employment
Agreement, or (ii) prior to a Change in Control, any adverse change in Xxxxxx’x
positions, titles or reporting responsibility (such that Xxxxxx reports to
a
person other than the Board), or (iii) the assignment of duties to Xxxxxx that
are inconsistent with his position and status as Chairman and Chief Executive
Officer, or (iv) a reduction in the Annual Salary during the Term, or (v) the
failure of the Company to cure any other material breach of this Employment
Agreement (as described below), or (vi) in connection with the occurrence of
a
Change of Control, there is a significant reduction of Xxxxxx’x authority,
duties or responsibilities relative to his authority, duties or responsibilities
in effect immediately prior to such reduction; provided, however, that the
foregoing provision shall not include a reduction in duties or responsibilities
solely by virtue of the Company being acquired and made part of a larger entity
(as, for example, if Xxxxxx is not appointed as Chief Executive Officer of
the
acquiring corporation, but continues to have a substantially similar level
of
responsibility over the affairs of the Company following such Change of
Control), or (vii) Xxxxxx’x relocation by the Company or a successor thereto to
a location more than fifty (50) miles from either the Company’s current
headquarters or Bridgewater, New Jersey; provided that in the case of (i)
through (v) above, the Company has failed to cure the event constituting Good
Reason within thirty (30) days following written notice thereof from Xxxxxx.
In
the event that Xxxxxx’x employment with the Company shall terminate during the
Term on account of termination by the Company without Cause, or by Xxxxxx with
Good Reason, then the Company shall pay or provide to Xxxxxx, as his sole and
exclusive remedy hereunder, (A) the Accrued Amounts, (B) the Accrued Benefits,
(C) a pro rata (based on the number of days employed in the year of termination
or resignation) bonus for the fiscal year in which such termination or
resignation occurs based on the average of the Annual Bonuses paid to Xxxxxx
for
the two (2) years immediately preceding such termination or resignation (a
“Pro
Rated Bonus”), (D) group life, disability, sickness, hospitalization and
accident insurance benefits equivalent to those to which Xxxxxx would have
been
entitled if he had continued working for the Company for an additional twelve
(12) month period following the Termination Date, (E) 100% of the Annual Salary
to the same extent to which Xxxxxx would have been entitled if he had continued
working for the Company for an additional twelve (12) month period following
the
Termination Date, and (F) 50% of the Annual Salary to the same extent to which
Xxxxxx would have been entitled if he had continued working for the Company
for
the period, if any, commencing on the first anniversary of the Termination
Date
and ending on the last day of the Term. The Accrued Benefits shall be provided
in accordance with their terms. Except as otherwise required by Section 27,
the
payments provided for in (A), (C), (E) and (F) above shall be made to Xxxxxx
in
a lump sum payment within thirty (30) days following such termination or
resignation; provided that the payments provided for in (E) and (F) shall be
contingent upon Xxxxxx’x continued compliance with Sections 5, 6, and 7 hereof
(except that Xxxxxx shall not be deemed for purposes of this Section 4(b) not
to
have been in compliance with Section 6 solely as a result of an unintentional
and immaterial disclosure of confidential information) and Xxxxxx shall be
obligated to repay all such payments upon determination by the Board that Xxxxxx
has failed to comply as such with Sections 5, 6, or 7 hereof; and provided
further that the benefits continuation provided for in (D) above shall terminate
upon Xxxxxx’x becoming eligible for corresponding benefits in connection with
new employment.
4
(c)
This
Employment Agreement and Xxxxxx’x employment with the Company hereunder shall
terminate immediately and automatically upon (i) the death or Disability (as
defined below) of Xxxxxx or (ii) the expiration of the Term as a result of
the
Company giving notice to Xxxxxx to terminate this Employment Agreement as
provided by Section 1(a). For purposes of this Employment Agreement,
“Disability” shall mean physical or mental incapacity of a nature which prevents
Xxxxxx, in the good faith judgment of the Company’s Board of Directors, from
performing his duties under this Employment Agreement for a period of 90
consecutive days or 150 days during any year with each year under this
Employment Agreement commencing on each anniversary of the date hereof. If
this
Employment Agreement and Xxxxxx’x employment with the Company hereunder is
terminated on account of (i) or (ii) above, then the Company shall pay Xxxxxx,
or his estate, conservator or designated beneficiary, as the case may be, an
amount equal to (A) the Accrued Amounts, (B) the Accrued Benefits and (C) a
Pro
Rated Bonus, and following any such termination, neither Xxxxxx, nor his estate,
conservator or designated beneficiary, as the case may be, shall be entitled
to
receive any other compensation or benefits from the Company hereunder, provided,
however, that if Xxxxxx’x employment is terminated on account of (ii) above,
then the Company shall also pay or provide to Xxxxxx (D) group life, disability,
sickness, hospitalization and accident insurance benefits equivalent to those
to
which Xxxxxx would have been entitled if he had continued working for the
Company for an additional twelve (12) month period, and (E) the Annual Salary
to
the same extent to which Xxxxxx would have been entitled if he had continued
working for the Company for an additional twelve (12) month period. The Accrued
Benefits shall be provided in accordance with their terms. Except as otherwise
required by Section 27, the payments provided for in (A), (C) and (E) above
shall be made in a lump sum payment within thirty (30) days following such
termination; provided that the payments provided for in (E) shall be contingent
upon Xxxxxx’x continued compliance with Sections 5, 6, and 7 hereof (except that
Xxxxxx shall not be deemed for purposes of this Section 4(c) not to have been
in
compliance with Section 6 solely as a result of an unintentional and immaterial
disclosure of confidential information) and Xxxxxx shall be obligated to repay
all such payments upon determination by the Board that Xxxxxx has failed to
comply as such with Sections 5, 6, or 7 hereof; and provided further that the
benefits continuation provided for in (D) above shall terminate upon Xxxxxx’x
becoming eligible for corresponding benefits in connection with new
employment.
5
(d)
This
Employment Agreement and Xxxxxx’x employment with the Company hereunder shall
terminate immediately and automatically upon the final and complete liquidation
or dissolution of the Company or a final and complete shutdown of the business
then conducted by the Company (each, a “Liquidation Event”). In the event that
Xxxxxx remains employed by the Company under this Employment Agreement until
the
time of any Liquidation Event, then the Company shall pay to Xxxxxx upon such
Liquidation Event, as his sole and exclusive remedy hereunder, an amount equal
to his then-current Annual Salary, the Accrued Amounts and the Accrued Benefits,
less any amounts required to be withheld by law.
(e)
Upon
the termination of this Employment Agreement pursuant to Section 4 hereof,
the
Company shall have no further obligations under this Employment Agreement;
provided, (except for amounts and benefits payable in Section 2 thru 4 above)
however, that Sections 5 through 27 hereof shall survive and remain in full
force and effect.
Section
5.
Non-Competition.
(a)
Xxxxxx hereby agrees that, during the period from the Commencement Date through
the end of the first twelve (12) months after the cessation of Xxxxxx’x
employment with the Company, he will not engage in “Competition” with the
Company. For purposes of this Employment Agreement, Competition by Xxxxxx shall
mean Xxxxxx’x engaging in, or otherwise directly or indirectly being employed by
or acting as a consultant or lender to, or being a director, officer, employee,
principal, agent, stockholder, member, owner or partner of, or permitting his
name to be used in connection with the activities of any other business or
organization anywhere in the United
States, or
in any
other geographic area in which the Company operates or with respect to
which
the
Company provides financial news and commentary coverage (or from which such
other business or organization provides financial news and commentary coverage
of the United States), which
engages in a business that competes with any business in which the Company
or
any subsidiary is engaged (a “Competing Business”); provided, however, that,
notwithstanding the foregoing, it shall not be a violation of this Section
5(a)
for Xxxxxx to (x) become the registered or beneficial owner of up to three
percent (3%) of any class of the capital stock of a competing corporation
registered under the Securities Exchange Act of 1934, as amended, provided
that
Xxxxxx does not otherwise participate in the business of such corporation or
(y)
work in a non-competitive business of a company which is carrying on a Competing
Business, the revenues of which represent less than 20% of the consolidated
revenues of that company, or, as a result thereof, owning compensatory equity
in
that company.
6
(b)
Xxxxxx hereby agrees that, during the period from the Commencement Date through
the end of the first twelve (12) months after the cessation of Xxxxxx’x
employment with the Company, he will not solicit for employment or hire, in
any
business enterprise or activity, any employee of the Company who was employed
by
the Company during the Term; provided, the foregoing shall not be violated
by
general advertising not targeted at Company employees nor by serving as a
reference upon request.
Section
6.
Confidentiality;
Intellectual Property.
(a)
Except as otherwise provided in this Employment Agreement, at all times during
and after the Term, i.e., indefinitely from and after the Commencement Date,
Xxxxxx shall keep secret and retain in strictest confidence, any and all
confidential information relating to the Company, and shall use such
confidential information only in furtherance of the performance by him of his
duties to the Company and not for personal benefit or the benefit of any
interest adverse to the Company’s interests. For purposes of this Employment
Agreement, “confidential information” shall mean any information including
without limitation plans, specifications, models, samples, data, customer lists
and customer information, computer programs and documentation, and other
technical and/or business information, in whatever form, tangible or intangible,
that can be communicated by whatever means available at such time, that relates
to the Company’s current business or future business contemplated during the
Term, products, services and development, or information received from others
that the Company is obligated to treat as confidential or proprietary (provided
that such confidential information shall not include any information that (a)
has become generally available to the public or is generally known in the
relevant trade or industry other than as a result of an improper disclosure
by
Xxxxxx, or (b) was available to or became known to Xxxxxx prior to the
disclosure of such information on a non-confidential basis without breach of
any
duty of confidentiality to the Company), and Xxxxxx shall not disclose such
confidential information to any Person other than the Company, except with
the
prior written consent of the Company, as may be required by law or court or
administrative order (in which event Xxxxxx shall so notify the Company as
promptly as practicable), or in performance of his duties hereunder. Further,
this Section 6(a) shall not prevent Xxxxxx from disclosing Confidential
Information in connection with any litigation, arbitration or mediation to
enforce this Employment Agreement, provided that such disclosure is necessary
for Xxxxxx to assert any claim or defense in such proceeding.
7
(b)
Upon
termination of the Term for any reason, Xxxxxx shall return to the Company
all
copies, reproductions and summaries of confidential information in his
possession and erase the same from all media in his possession, and, if the
Company so requests, shall certify in writing that he has done so. All
confidential information is and shall remain the property of the Company (or,
in
the case of information that the Company receives from a third party which
it is
obligated to treat as confidential, then the property of such third party);
provided, Xxxxxx shall be entitled to retain copies of (i) information showing
his compensation or relating to reimbursement of expenses, (ii) information
that
is required for the preparation of his personal income tax return, (iii)
documents provided to him in his capacity as a participant in any employee
benefit plan, policy or program of the Company and (iv) this Employment
Agreement and any other agreement by and between him and the Company with regard
to his employment or termination thereof.
(c)
All
Intellectual Property (as hereinafter defined) and Technology (as hereinafter
defined) created, developed, obtained or conceived of by Xxxxxx during the
Term,
and all business opportunities presented to Xxxxxx during the Term, shall be
owned by and belong exclusively to the Company, provided that they reasonably
relate to any of the business of the Company on the date of such creation,
development, obtaining or conception, and Xxxxxx shall (i) promptly disclose
any
such Intellectual Property, Technology or business opportunity to the Company,
and (ii) execute and deliver to the Company, without additional compensation,
such instruments as the Company may require from time to time to evidence its
ownership of any such Intellectual Property, Technology or business opportunity.
For purposes of this Employment Agreement, (x) the term “Intellectual Property”
means and includes any and all trademarks, trade names, service marks, service
names, patents, copyrights, and applications therefor, and (y) the term
“Technology” means and includes any and all trade secrets, proprietary
information, invention, discoveries, know-how, formulae, processes and
procedures.
Section
7.
Non-Disparagement.
During
the Term and indefinitely thereafter, neither party shall make any statements,
written or oral, to any third party which disparage, criticize, discredit or
otherwise operate to the detriment of Xxxxxx or the Company, its present or
former officers, shareholders, directors and employees and their respective
business reputation and/or goodwill, provided, however, that nothing in this
Section 7 shall prohibit either party from (i) making any truthful statements
or
disclosures required by applicable law or regulation or (ii) taking any action
to enforce its rights under this Employment Agreement or any other agreement
in
effect between the parties.
Section
8.
Covenants
Reasonable.
The
parties acknowledge that the restrictions contained in Sections 5, 6, and 7
hereof are a reasonable and necessary protection of the immediate interests
of
the Company, and any violation of these restrictions could cause substantial
injury to the Company and that the Company would not have entered into this
Employment Agreement, without receiving the additional consideration offered
by
Xxxxxx in binding himself to any of these restrictions. In the event of a breach
or threatened breach by Xxxxxx of any of these restrictions, the Company shall
be entitled to apply to any court of competent jurisdiction for an injunction
restraining Xxxxxx from such breach or threatened breach; provided however,
that
the right to apply for an injunction shall not be construed as prohibiting
the
Company from pursuing any other available remedies for such breach or threatened
breach.
8
Section
9.
No
Third Party Beneficiary.
This
Employment Agreement is not intended and shall not be construed to confer any
rights or remedies hereunder upon any Person, other than the parties hereto
or
their permitted assigns (including, without limitation, Xxxxxx’x estate
following his death). “Person” shall mean an individual, corporation,
partnership, limited liability company, limited liability partnership,
association, trust or other unincorporated organization or entity.
Section
10.
Notices.
Unless
otherwise provided herein, any notice, exercise of rights or other communication
required or permitted to be given hereunder shall be in writing and shall be
given by overnight delivery service such as Federal Express, telecopy (or like
transmission) or personal delivery against receipt, or mailed by registered
or
certified mail (return receipt requested), to the party to whom it is given
at
such party’s address set forth below such party’s name on the signature page or
such other address as such party may hereafter specify by notice to the other
party hereto. Any notice or other communication shall be deemed to have been
given as of the date so personally delivered or transmitted by telecopy or
like
transmission or on the next business day when sent by overnight delivery
service.
Section
11.
Representations.
The
Company hereby represents and warrants that the execution and delivery of this
Employment Agreement and the performance by the Company of its obligations
hereunder have been duly authorized by all necessary corporate action of the
Company.
Section
12.
Amendment.
This
Employment Agreement may be amended only by a written agreement signed by the
parties hereto.
Section
13.
Binding
Effect.
The
rights and duties under this Employment Agreement are not assignable by Xxxxxx
other than as a result of his death. None of Xxxxxx’x rights under this
Employment Agreement shall be subject to any encumbrances or the claims of
Xxxxxx’x creditors. This Employment Agreement shall be binding upon and inure to
the benefit of the Company and any successor organization which shall succeed
to
the Company by merger or consolidation or operation of law, or by acquisition
of
all or substantially all of the assets of the Company (provided that a successor
by way of acquisition of assets shall have undertaken in writing to assume
the
obligations of the Company hereunder).
9
Section
14.
Governing
Law.
This
Employment Agreement shall be governed by and construed in accordance with
the
internal laws of the State of New York applicable to contracts to be performed
wholly within the state and without regard to its conflict of laws
provisions.
Section
15.
Severability.
If
any
provision of this Employment Agreement, including those contained in Sections
5,
6, and 7 hereof, shall for any reason be held invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions hereof
shall not be affected or impaired thereby. Moreover, if any one or more of
the
provisions of this Employment Agreement, including those contained in Sections
5, 6, and 7 hereof, shall be held to be excessively broad as to duration,
activity or subject, such provisions shall be construed by limiting and reducing
them so as to be enforceable to the maximum extent allowable by applicable
law.
To the extent permitted by applicable law, each party hereto waives any
provision of law that renders any provision of this Employment Agreement
invalid, illegal or unenforceable in any way.
Section
16.
Execution
in Counterparts.
This
Employment Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original and all of which shall constitute one and
the
same instrument.
Section
17.
Entire
Agreement.
This
Employment Agreement, together with the award agreements entered into by and
between Xxxxxx and the Company with respect to outstanding incentive awards
and
incentive awards granted after the date hereof, sets forth the entire agreement,
and supersedes all prior agreements and understandings, both written and oral,
including, but not limited to, the Prior Employment Agreement, between the
parties with respect to the subject matter hereof and thereof.
Section
18.
Titles
and Headings.
Titles
and headings to Sections herein are for purposes of reference only, and shall
in
no way limit, define or otherwise affect the meaning or interpretation of any
of
the provisions of this Employment Agreement.
10
Section
19.
Conflicts
of Interest.
Xxxxxx
specifically covenants, warrants and represents to the Company that he has
the
full, complete and entire right and authority to enter into this Employment
Agreement, that he has no agreement, duty, commitment or responsibility of
any
kind or nature whatsoever with any corporation, partnership, firm, company,
joint venture or other entity or other Person which would conflict in any manner
whatsoever with any of his duties, obligations or responsibilities to the
Company pursuant to this Employment Agreement, that he is not in possession
of
any document or other tangible property of any other Person of a confidential
or
proprietary nature which would conflict in any manner whatsoever with any of
his
duties, obligations or responsibilities to the Company pursuant to his
Employment Agreement, and that he is fully ready, willing and able to perform
each and all of his duties, obligations and responsibilities to the Company
pursuant to this Employment Agreement.
Section
20.
Consent
to Jurisdiction.
Xxxxxx
hereby irrevocably submits to the jurisdiction of any New York State or Federal
court sitting in the City of New York in any action or proceeding to enforce
the
provisions of this Employment Agreement, and waives the defense of inconvenient
forum to the maintenance of any such action or proceeding.
Section
21.
Indemnification.
The
Company agrees that if Xxxxxx is or is made a party, or is threatened to be
made
a party, to any action, suit or proceeding (a “Proceeding”), by reason of the
fact that he is or was a director, officer or employee of the Company or is
or
was serving at the request of the Company as a director, officer, member,
employee or agent of another entity, Xxxxxx shall be fully indemnified and
held
harmless by the Company to the fullest extent permitted by law against all
cost,
expense, liability and loss reasonably incurred or suffered by Xxxxxx in
connection therewith, and such indemnification shall continue after termination
of Xxxxxx’x employment with respect to acts or omissions which occurred prior to
his termination of employment and which occur after his termination of
employment pursuant to this Section 21, and shall inure to the benefit of
Xxxxxx’x heirs, executors and administrators. To the fullest extent allowed by
law, the Company shall advance to Xxxxxx all reasonable costs and expenses
incurred by him in connection with a Proceeding within 20 calendar days after
receipt by the Company of a written request for such advance. Such request
shall
include an undertaking by Xxxxxx 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.
Section
22.
Liability
Insurance.
The
Company shall cover Xxxxxx under directors and officers liability insurance
both
during and, while potential liability exists, after the Term in the same amount
and to the same extent as the Company generally provides to its other senior
executive officers and directors. This provision shall in all events survive
any
termination of this Employment Agreement.
11
Section
23.
No
Duty to Mitigate.
Xxxxxx
shall have no duty to mitigate or off-set any amounts payable by the Company
to
Xxxxxx hereunder.
Section
24.
Release.
As
a
condition to the obligation of the Company to make the payments provided for
in
this Employment Agreement and otherwise perform its obligations hereunder to
Xxxxxx upon termination of Xxxxxx’x employment (other than due to his death),
Xxxxxx or his legal representatives shall deliver to the Company a written
release, substantially in the form attached hereto as Exhibit A, and the time
for revocation of such release shall have expired, no later than thirty (30)
days following termination of Xxxxxx’x employment; provided, however, that such
release shall be conditioned on the receipt from the Company of a release of
Xxxxxx, provided that such release from the Company shall not be such a
condition and shall be null and void and of no force or effect in the event
of
any act or omission by Xxxxxx that could constitute the basis for termination
for Cause or that could be a crime of any kind.
Section
25.
[Intentionally
left blank.]
Section
26.
Forfeiture
of Compensation.
If
the
Company is required to restate its financial statements and the Board, in its
sole discretion, determines that (i) the need for the restatement was caused
by
fraud or misconduct, (ii) the payment of or entitlement to payment of Xxxxxx’x
Annual Bonus and/or long-term cash or equity incentives was based on the
achievement of financial results that were subsequently restated, (iii) a
smaller or no payment would have been made to Xxxxxx had the financial results
been properly reported, and (iv) it is appropriate that the Company recoup
all
or a portion of the amounts described in clause (ii), then Xxxxxx shall be
required to repay to the Company or shall forfeit, as the case may be, such
portion of the amounts described in clause (ii) and/or profits realized on
the
sale by Xxxxxx, during the 12-month period after public issuance of the
incorrect financial statements, of Company securities issued as equity
incentives as the Board, in its sole discretion, shall determine. In addition
to
any other remedy available to the Company under applicable law, the Company
shall have the right to offset any other amounts payable to Xxxxxx, under this
Employment Agreement or otherwise, by the amount of any required repayment
by
Xxxxxx which has not been repaid.
12
Section
27.
Section
409A.
(a)
Notwithstanding any provision of this Employment Agreement to the contrary,
if
Xxxxxx is a “specified employee” as determined by the Board or the Committee in
accordance with Section 409A of the Internal Revenue Code of 1986, as amended
or
any regulations or Treasury guidance promulgated thereunder (“Section 409A”),
Xxxxxx shall not be entitled to any payments of amounts which
constitute deferred compensation within the meaning of Section 409A upon
a
termination of his employment until the earlier of (i) the date which is six
months after his termination of employment for any reason other than death
(except that during such six (6) month period Xxxxxx may receive total payments
from the Company that do not exceed the amount specified in Treas. Reg. Section
1.409A-1(b)(9) or that constitute a short-term deferral within the meaning
of
Section 409A), or (ii) the date of his death.
(b)
If
any provision of this Employment Agreement or of any award of compensation,
including equity compensation or benefits would cause Xxxxxx to incur any
additional tax or interest under Section 409A, the parties agree to negotiate
in
good faith to reform such provision in such manner as to maintain, to the
maximum extent practicable, the original intent and economic terms of the
applicable provision without violating the provisions of Section 409A.
(c)
Notwithstanding any provision of this Employment Agreement to the contrary,
to
the extent any compensation or award which constitute deferred compensation
within the meaning of Section 409A shall vest upon the occurrence of a Change
of
Control and such Change of Control does not constitute a “change in the
ownership or effective control” or a “change in the ownership or a substantial
portion of the assets” of the Corporation within the meaning of
Section 409A, then notwithstanding such vesting payment will be made to
Xxxxxx on the earliest of (i) Xxxxxx’x “separation from service” with the
Company (determined in accordance with Section 409A) (or, if Xxxxxx is a
specified employee within the meaning of Section 409A, such later date as
provided in paragraph (a) of this Section 27), (ii) the date payment
otherwise would have been made, or (iii) Xxxxxx’x death.
13
IN
WITNESS WHEREOF, the undersigned have executed this Employment Agreement as
of
the date first written above.
|
/s/
Xxxxxx
X. Xxxxxx, Xx.
|
||
|
Xxxxxx
X. Xxxxxx, Xx.
|
||
|
0
Xxxxxxxxxx Xxxxx
|
||
|
Xxxxxxxxxxx,
Xxx Xxxxxx 00000
|
||
|
XXXXXXXXX.XXX.
INC.
|
||
|
|
||
| By: | /s/ Xxxxxxx Xxxxxx | |
| Name: Xxxxxxx Xxxxxx | ||
| Title: Director, Chairman of the Compensation Committee | ||
| Address: | 00 Xxxx Xxxxxx | |
|
00xx
Xxxxx
|
||
| Xxx Xxxx, XX 00000 | ||
|
Telephone
No.: (000) 000-0000
|
||
|
Telecopy
No.: (000) 000-0000
|
||
14
EXHIBIT
A
Form
of
Release
This
Release (this “Release”) is entered into by Xxxxxx X. Xxxxxx, Xx. (“Xxxxxx”) and
XxxXxxxxx.xxx, Inc., a Delaware corporation (the “Company”), effective as of
[DATE] (the “Effective Date”).
In
consideration of the promises set forth in the Employment Agreement between
Xxxxxx and the Company, dated as of September , 2007 (the “Employment
Agreement”), Xxxxxx and the Company agree as follows:
1. General
Releases and Waivers of Claims.
(a) Xxxxxx’x
Release of Company.
In
consideration of the payments and benefits provided to Xxxxxx under the
Employment Agreement and after consultation with counsel, Xxxxxx and each of
his
respective heirs, executors, administrators, representatives, agents, successors
and assigns (collectively, the “Xxxxxx Parties”) hereby irrevocably and
unconditionally release and forever discharge the Company and its subsidiaries
and affiliates and each of their respective officers, employees, directors,
shareholders and agents (“Company Parties”) from any and all claims, actions,
causes of action, rights, judgments, fees and costs (including attorneys’ fees),
obligations, damages, demands, accountings or liabilities of whatever kind
or
character (collectively, “Claims”), including, without limitation, any Claims
based upon contract, tort, or under any federal, state, local or foreign law,
that the Xxxxxx Parties may have, or in the future may possess, arising out
of
any aspect of Xxxxxx’x employment relationship with and service as an employee,
officer, director or agent of the Company, or the termination of such
relationship or service, that occurred, existed or arose on or prior to the
date
hereof; provided, however, that Xxxxxx does not release, discharge or waive
(i)
any rights to payments and benefits provided under the Employment Agreement
that
are contingent upon the execution by Xxxxxx of this Release, (ii) any right
Xxxxxx may have to enforce this Release or the Employment Agreement, (iii)
Xxxxxx’x eligibility for indemnification in accordance with the Company’s
certificate of incorporation, bylaws or other corporate governance document,
or
any applicable insurance policy, with respect to any liability he incurred
or
might incur as an employee, officer or director of the Company, including,
without limitation, pursuant to Section 22 of the Employment Agreement, or
(iv)
any claims for accrued, vested benefits under any employee benefit or pension
plan of the Company Parties subject to the terms and conditions of such plan
and
applicable law including, without limitation, any such claims under the Employee
Retirement Income Security Act of 1974.
(b)
Executive’s
Specific Release of ADEA Claims.
In
further consideration of the payments and benefits provided to Xxxxxx under
the
Employment Agreement, the Xxxxxx Parties hereby unconditionally release and
forever discharge the Company Parties from any and all Claims that the Xxxxxx
Parties may have as of the date Xxxxxx signs this Release arising under the
Federal Age Discrimination in Employment Act of 1967, as amended, and the
applicable rules and regulations promulgated thereunder (“ADEA”). By signing
this Release, Xxxxxx hereby acknowledges and confirms the following:
(i) Xxxxxx was advised by the Company in connection with his termination to
consult with an attorney of his choice prior to signing this Release and to
have
such attorney explain to him the terms of this Release, including, without
limitation, the terms relating to his release of claims arising under ADEA,
and
Xxxxxx has in fact consulted with an attorney; (ii) Xxxxxx was given a
period of not fewer than 21 days to consider the terms of this Release and
to
consult with an attorney of his choosing with respect thereto; and
(iii) Xxxxxx knowingly and voluntarily accepts the terms of this Release.
Xxxxxx also understands that he has seven (7) days following the date on
which he signs this Release within which to revoke the release contained in
this
paragraph, by providing the Company a written notice of his revocation of the
release and waiver contained in this paragraph.
(c) Company’s
Release of Executive.
The
Company for itself and on behalf of the Company Parties hereby irrevocably
and
unconditionally release and forever discharge the Xxxxxx Parties from any and
all Claims, including, without limitation, any Claims based upon contract,
tort,
or under any federal, state, local or foreign law, that the Company Parties
may
have, or in the future may possess, arising out of any aspect of Xxxxxx’x
employment relationship with and service as an employee, officer, director
or
agent of the Company, or the termination of such relationship or service, that
occurred, existed or arose on or prior to the date hereof, excepting any Claim
which would constitute or result from conduct by Xxxxxx that could constitute
the basis for termination for Cause under the Employment Agreement or could
be a
crime of any kind. Anything to the contrary notwithstanding in this Release,
nothing herein shall release Xxxxxx or any other Executive Party from any Claims
based on any right the Company may have to enforce this Release or the
Employment Agreement.
(d) No
Assignment.
The
parties represent and warrant that they have not assigned any of the Claims
being released under this Release.
2. Proceedings.
Neither
Xxxxxx nor the Company have filed, any complaint, charge, claim or proceeding
against the other party before any local, state or federal agency, court or
other body relating to Xxxxxx’x employment or the termination thereof (each,
individually, a “Proceeding”).
3. Remedies.
(a) In
the event Xxxxxx initiates or voluntarily participates in any Proceeding
involving any of the matters waived or released in this Release, or if he fails
to abide by any of the terms of this Release, or if he revokes the ADEA release
contained in Paragraph 1(b) of this Release within the seven-day period
provided under Paragraph 1(b), the Company may, in addition to any other
remedies it may have, reclaim any amounts paid to him, and terminate any
benefits or payments that are due, pursuant to the termination provisions of
the
Employment Agreement, without waiving the release granted herein. In addition,
in the event that the Board of Directors of the Company determines that Xxxxxx
has failed to comply with Sections 5, 6, and/or 7 of the Employment Agreement
(other than as a result of an unintentional and immaterial disclosure of
confidential information), the Company may, in addition to any other remedies
it
may have, reclaim any amounts paid to him pursuant to Sections 4(b)(D), (E)
and
(F) or Section 4(c)(D) and (E) of the Employment Agreement, without waiving
the
release granted herein. Xxxxxx acknowledges and agrees that the remedy at law
available to the Company for breach of any of his post-termination obligations
under the Employment Agreement or his obligations herein would be inadequate
and
that damages flowing from such a breach may not readily be susceptible to being
measured in monetary terms. Accordingly, Xxxxxx acknowledges, consents and
agrees that, in addition to any other rights or remedies that the Company may
have at law or in equity, the Company shall be entitled to seek a temporary
restraining order or a preliminary or permanent injunction, or both, without
bond or other security, restraining Xxxxxx from breaching his post-termination
obligations under the Employment Agreement or his obligations hereunder. Such
injunctive relief in any court shall be available to the Company, in lieu of,
or
prior to or pending determination in, any arbitration proceeding.
2
(b) Xxxxxx
understands that by entering into this Release he will be limiting the
availability of certain remedies that he may have against the Company and
limiting also his ability to pursue certain claims against the
Company.
(c) The
Company acknowledges and agrees that the remedy at law available to Xxxxxx
for
breach of any of its post-termination obligations under the Employment Agreement
or its obligations hereunder would be inadequate and that damages flowing from
such a breach may not readily be susceptible to being measured in monetary
terms. Accordingly, the Company acknowledges, consents and agrees that, in
addition to any other rights or remedies that Xxxxxx may have at law or in
equity, Xxxxxx shall be entitled to seek a temporary restraining order or a
preliminary or permanent injunction, or both, without bond or other security,
restraining the Company from breaching its post-termination obligations under
the Employment Agreement or its obligations hereunder. Such injunctive relief
in
any court shall be available to Xxxxxx, in lieu of, or prior to or pending
determination in, any arbitration proceeding.
(d) The
Company understands that by entering into this Release it will be limiting
the
availability of certain remedies that it may have against Xxxxxx and limiting
also its ability to pursue certain claims against Xxxxxx.
4. Severability
Clause.
In the
event any provision or part of this Release is found to be invalid or
unenforceable, only that particular provision or part so found, and not the
entire Release, will be inoperative.
5. Nonadmission.
Nothing
contained in this Release will be deemed or construed as an admission of
wrongdoing or liability on the part of the Company or Xxxxxx.
6. Governing
Law.
All
matters affecting this Release, including the validity thereof, are to be
governed by, and interpreted and construed in accordance with, the laws of
the
New York applicable to contracts executed in and to be performed in that
State.
3
7. Notices.
All
notices or communications hereunder shall be made in accordance with Section
10
of the Employment Agreement:
XXXXXX
ACKNOWLEDGES THAT HE HAS READ THIS RELEASE AND THAT HE FULLY KNOWS, UNDERSTANDS
AND APPRECIATES ITS CONTENTS, AND THAT HE HEREBY EXECUTES THE SAME AND MAKES
THIS RELEASE AND THE RELEASE AND AGREEMENTS PROVIDED FOR HEREIN VOLUNTARILY
AND
OF HIS OWN FREE WILL.
IN
WITNESS WHEREOF, the parties have executed this Release as of the date first
set
forth above.
|
/s/
Xxxxxx
X. Xxxxxx, Xx.
|
|||
|
Xxxxxx
X. Xxxxxx, Xx.
|
|||
|
|
|||
|
XXXXXXXXX.XXX.
INC.
|
|||
| By: | |||
4
