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EXHIBIT 10.1
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement ("the Agreement")
between Xxxxx X. Xxxxxx ("you" or "Employee") and CyberCash, Inc., a Delaware
corporation with offices at 0000 Xxxxxx Xxxxxxx, Xxxxxx, Xxxxxxxx ("CyberCash"
or the "Company") is entered into as of the 20th day of August, 1999 and sets
forth the new terms and conditions of your employment by CyberCash.
You and the Company are currently parties to an employment contract
dated as of March 17, 1999. In order to induce you to continue in your position
with the Company, it has agreed to amend that agreement. As a further
inducement, the Company has represented to you that its Board of Directors will
give consideration to elevating you to the position of Chief Executive Officer
should Xxxxxxx Xxxxxx, the current Chief Executive Officer, resign from that
position.
1. SCOPE
a) You will act as President and Chief Operating Officer of
CyberCash, and in that capacity you will report directly to
the Chief Executive Officer. You will be responsible for the
day-to-day oversight and management of the business of
CyberCash, including:
i) Assisting in the development of strategies to make
CyberCash the leading global provider of software and
services to enable payments.
ii) Providing general management of the Company's
marketing, sales, development, operations, human
resources, and finance and administration activities.
iii) Representing the interests of CyberCash and its
affiliated companies in accordance with the Company's
strategies.
b) If you are appointed Chief Executive Officer, you will assume
the duties normally inherent in that office, and you will
report directly to the Board of Directors.
c) You agree not to engage in any other employment or activity at
any time during your employment with CyberCash which
materially interferes with the performance of your duties for
CyberCash.
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2. TERM OF EMPLOYMENT
The term of this Agreement will be from March 17, 1998 through
December 31, 2002.
3. COMPENSATION AND BENEFITS
a) Your compensation will consist of the following:
i) Salary: Effective July 1, 1999, you will begin
receiving an annual base salary of $290,000, to be
paid monthly in arrears into a bank account
designated by you. You will be responsible for the
payment of any taxes due. Your base salary will be
increased to $320,000 on September 1, 2000, and
increased to $350,000 on January 1, 2002.
ii) Stock Options: Stock Options to purchase 100,00
shares of the Company's common stock at a price per
share equal to the closing price of the common stock
on the day prior to the date the options are approved
by the Board of Directors or its Compensation
Committee. Of these, options to purchase 50,000
shares will start vesting immediately and will vest
over 40 months in accordance with the Company's
standard policy. An additional 50,000 will commence
vesting on the last day of the first fiscal quarter
in which the Company reports an operating profit.
These options will be issued under, and will be
subject to, the terms and conditions of CyberCash's
1995 Employee Stock Option Plan ("ESOP") and will be
evidenced by CyberCash's standard form option
agreement reflecting the terms of this paragraph.
Additional Stock Options: CyberCash will grant you
additional stock options in the following amounts
under the terms set forth below:
(1) Options to purchase 200,000 shares of the
Company's Common Stock at the price of $10.20 per
share. Those options will start vesting immediately
and will vest over 40 months in accordance with the
Company's standard policy.
(2) Options to purchase 200,000 shares of the
Company's Common Stock at the price of $10.20 per
share. Those options will vest on December 31, 2002 .
These options will be issued under, and will be
subject to, the terms and conditions of CyberCash's
1995 ESOP and will be
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evidenced by CyberCash's standard form of option
agreement reflecting the terms of this paragraph; all
options will vest immediately in the event of a
Change in Control following which you are not
retained or appointed as the CEO under the new
ownership structure.
iii) Bonuses: CyberCash will pay you the following
bonuses:
September 01, 1999: $100,000
February 01, 2000: $150,000
February 01, 2001: $200,000
February 01, 2002: $250,000
February 01, 2003: $300,000
b) Severance Pay: You will be entitled to severance pay equal to
your then current base salary (without benefits, but not less
than $290,000 per annum) for eighteen months, paid in equal
monthly installments, plus a bonus equal to 1.5 times the
amount of any annual bonus you were paid for the calendar year
immediately preceding the termination of your employment if
(i) your employment with CyberCash is terminated by CyberCash
other than for Cause, (ii) there is a Change of Control or
Change of Responsibilities.
For the purposes of this Agreement:
i) Cause for termination shall exist if: (a) you fail or
refuse to perform your duties (not including a
failure to perform due to a disability entitling you
to disability benefits) and your failure or refusal
continues after written notice; (b) you are convicted
for a crime constituting a felony involving moral
turpitude; or (c) you commit a material act of fraud
or dishonesty resulting in substantial harm to the
Company.
ii) Change of Control shall mean (i) a transaction or
series of related transactions resulting in a change
in beneficial ownership of more than 50% of the
outstanding equity securities of the Company; (ii) or
a sale of all or substantially all of the assets of
the Company; provided that such a transaction shall
not be considered a change in Change in Control if
after the transaction a majority of the members of
the board of directors are persons who were members
of the board of directors prior to the transaction
and you remain the Chief Operating Officer (or, if
you have been promoted, the Chief Executive Officer)
of the Company.
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iii) There would be a Change of Responsibilities if because
of actions of the Board of Directors of the Company
you no longer are performing the functions normally
performed by the Chief Operating Officer (or, if you
have been promoted, the Chief Executive Officer) of a
corporation similar to the Company.
c) The Company shall provide you the following additional
benefits:
i) Health insurance benefits for you and your family, in
accordance with the standard CyberCash health
insurance plan for CyberCash executives.
ii) Twenty-three days per year of paid vacation.
iii) An allowance of up to $600 per month to lease an
automobile.
iv) A life insurance policy on your life in the amount of
$1,000,000 for the benefit of your named beneficiary.
v) Reimbursement of pre-approved business expenses.
4. CONFIDENTIAL INFORMATION.
a) In the course of your employment, CyberCash will disclose to
you confidential information concerning, among other things,
CyberCash's existing and prospective clients, existing and
contemplated products and services, inventions, software, and
other matters and information received from CyberCash clients,
any CyberCash affiliated entities, and other third parties,
which information constitutes valuable assets of CyberCash
("Confidential Information"). The term "Confidential
Information" shall include all information that is not known
by, or generally available to the public at large and that
concerns the business or affairs of CyberCash and CyberCash's
affiliated entities, including, but not limited to,
technology, methods of operation, and information regarding
clients of a party hereto. CyberCash shall have no obligation
to specifically identify any information as constituting
Confidential Information in order for it to be entitled to
protection as such.
b) You will not, at any time during or after your employment,
without the prior written consent of CyberCash, use any
portion of the Confidential Information for any purpose other
than as contemplated herein, and you agree that:
i) You will hold all Confidential Information in the
strictest confidence, and will exercise at least the
same care with respect thereto as you exercise with
respect to your own proprietary and confidential
information, and will not, without CyberCash's prior
written consent,
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copy or disclose any portion thereof to any third
party except as contemplated herein; and
ii) You will not remove or permit to be removed from any
Confidential Information any notice placed thereon by
CyberCash indicating the confidential nature of, or
the proprietary right of CyberCash in such items.
c) The foregoing shall not prohibit or limit your use of
information (including, but not limited to, ideas, concepts,
know-how, techniques, and methodologies) which: (i) are
already known to you; (ii) are independently developed by you;
(iii) were received by you on a non-confidential basis, prior
to receipt from CyberCash, from a third party lawfully
possessing and lawfully entitled to disclose such information;
or (iv) becomes part of the public domain through
circumstances unrelated to any breach by you of this
Agreement.
d) In the event you become aware that any person or entity is
taking or threatens to take any action which would violate any
of the foregoing provisions were that person or entity a party
to this Agreement, you shall promptly and fully advise
CyberCash (with written confirmation as soon as practicable
thereafter) of all facts known to you concerning such action
or threatened action. You shall not in any way aid, abet or
encourage any such action or threatened action. You agree to
cooperate in all reasonable ways to prevent such action or
threatened action, and you agree to do all reasonable things
and cooperate in all reasonable ways as may be requested by
CyberCash to protect the trade secrets, and proprietary rights
of CyberCash in and to the Confidential Information.
5. OWNERSHIP OF WORK.
a) CyberCash shall own and you hereby assign to CyberCash all
right, title and interest in any invention, technique,
process, device, discovery, improvement or know-how,
patentable or not, including all trade secrets and copyrights,
in and to the following works created by you on CyberCash
premises or at any other location: (i) works that relate to
or are derived from the actual or anticipated business of
CyberCash, and (ii) works that result from or are derived from
any services performed by you or, if not actually performed,
services requested by CyberCash to be so performed
(collectively the "Contract Work"). CyberCash shall own such
Contract Work even if you create such Contract Work outside
normal working hours and regardless of the ownership of the
equipment used to create such Contract Work. Such Contract
Work shall include program codes and documentation.
b) To the extent that any such Contract Work does not qualify as
works made for hire under U.S. copyright law, you hereby
assign to CyberCash and agree to assign to CyberCash,
irrevocably and in perpetuity, any and all right, title and
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interest that you may have in and to the Contract Work.
Promptly upon CyberCash's request, you agree that you will
execute any appropriate assignment document.
c) If you alone or jointly with others make or conceive of any
invention, technique, process, or other know-how, whether
patentable or not, in the course of your employment, which
relates in any manner to the actual or anticipated business of
CyberCash (collectively, "Inventions"), you hereby assign to
CyberCash your entire right, title and interest in such
Inventions. You will disclose any such Inventions to an
officer of CyberCash and will, upon request, promptly sign a
specific assignment of title to CyberCash, and do anything
else reasonably necessary to enable CyberCash to secure
patent, trade secret or any other proprietary rights in the
United States or foreign countries.
d) You hereby agree, at CyberCash's request, to assist CyberCash
and its nominees to secure, maintain, and defend for
CyberCash's own benefit all copyrights and patents, and other
proprietary rights in the Contract Work in any and all
countries. Your obligations to assist CyberCash in obtaining
and enforcing its proprietary rights in the Contract Work
shall continue beyond the termination or expiration of this
Agreement, but CyberCash shall compensate you for any
assistance rendered after such expiration or termination at a
reasonable rate for time actually spent by you at CyberCash's
request.
e) You understand that you may continue to work on, and retain
rights to, projects of your own interest outside of CyberCash
which do not in any way compete or conflict with the current
or planned business of CyberCash provided that (i) they do not
fall under the paragraphs titled "Ownership of Works" above;
and (ii) they do not interfere in any way with your time at
work or duties for CyberCash. You understand that you are not
permitted to engage in any outside business activities while
employed by CyberCash which compete with or conflict with the
current or planned business of CyberCash.
6. EQUITABLE RELIEF.
a) Because any breach by you of the promises set forth in
Sections 4 and 5 herein would cause irreparable harm and
significant injury which dollar amount would be difficult to
ascertain and which in fact would not be compensable by money
damages alone, you agree that CyberCash shall have the right
to enforce this Agreement and any of such provisions by
injunction, specific performance or other equitable relief
without prejudice to any other rights and remedies that
CyberCash may have for breach of this Agreement.
b) You hereby consent to the personal jurisdiction of the U.S.
federal courts in the Commonwealth of Virginia over you in
connection with all disputes regarding
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this Agreement and agree that all disputes regarding this
Agreement shall be exclusively settled in those courts.
7. RESTRICTIVE COVENANTS.
a) You further agree that, unless CyberCash has materially failed
to meet its obligations under this Agreement, during your
employment by CyberCash and for a period of eighteen months
(or, if you were employed by CyberCash for less than eighteen
months and you are not receiving the above described severance
pay, for a shorter period equal to the duration of your
employment by CyberCash) commencing on the date of termination
of your employment with CyberCash (the "Termination Date"),
you shall not:
i) solicit business or perform work for any of
CyberCash's past or present clients, or for any of
CyberCash's prospective clients to whom CyberCash has
made written proposals within six months prior to the
Termination Date, either directly or indirectly, for
the benefit of anyone other than CyberCash or
participate or assist in any way in the solicitation
of business from or performance of work for any such
clients as an independent contractor or consultant to
any other entity unless the business being solicited
or the work being performed is not directly
competitive with the services and products provided
by the CyberCash to such clients (the business of
CyberCash is international in scope, therefore, the
restrictions of this paragraph shall apply
worldwide);
ii) hire any past or present CyberCash employee, or
knowingly attempt to induce any employee of CyberCash
to leave CyberCash's employ;
iii) either directly or indirectly, alone or in
association with others, become an employee, officer,
director, partner or five percent or greater
stockholder of, or consultant to, any entity which
engages in the development, sale or marketing of
software or services to enable electronic payments,
or in any other business which is directly
competitive with any business conducted by CyberCash;
and
iv) enter the employ of any person, firm or other entity
engaged in any business that directly competes with
the Company Business, as defined below, or render any
services to any person, firm or other entity for use
in directly competing with the Company Business.
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b) You acknowledge that (i) CyberCash is engaged and in the
future will be engaged in the business of providing technology
and services to enable electronic payments (the foregoing,
together with any other businesses that CyberCash engages from
the date hereof to the date of the termination of this
Agreement, being hereinafter referred to as the "Company
Business"); (ii) your services to CyberCash have been and will
continue to be special and unique and have immeasurable value
to CyberCash; (iii) your work for CyberCash allows you access
to trade secrets of and confidential information concerning
CyberCash; (iv) the Company Business is national and
international in scope; (v) CyberCash would not have entered
into this Agreement and employed you but for the agreements
and covenants contained in this Agreement; and (vi) the
agreements and covenants contained in this Agreement are
essential to protect the business and goodwill of CyberCash.
8. GOVERNING LAW AND SEVERABILITY.
This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Virginia. If any provision of this Agreement
is for any reason found by a court of competent jurisdiction to be
unenforceable, that provision will be enforced to the maximum extent
permissible, and the remainder of this Agreement shall continue in full force
and effect.
9. NOTICES.
Any notices required or permitted hereunder shall be given to the
appropriate party at the address specified above or at such other address as
the party shall specify in writing. Such notice shall be deemed given upon
personal delivery to the appropriate address or three days after being sent by
certified or registered mail or Federal Express.
10. ENTIRE AGREEMENT AND MODIFICATION.
Except as modified in this Amended and Restated Employment Agreement,
all other terms and conditions of the Agreement remain in full force and
effect. This Agreement contains the entire agreement between you and CyberCash
concerning the subject matter hereof and supersedes all prior agreements and
understandings, including but not limited to the Employment Agreement dated
March 17, 1998. This Agreement may be modified only by a writing signed by
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the parties hereto. If the terms of this offer of employment are acceptable to
you, please sign and return the enclosed copy of this letter, confirming your
agreement with the foregoing.
Xxxxx X. Xxxxxx CyberCash, Inc.
/s/ XXXXX X. XXXXXX By: /s/ XXXXXXX X. XXXXXX
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Date: August 20, 1999 Name: Xxxxxxx X. Xxxxxx
Title: Chief Executive Officer
Date: August 20, 1999
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COMPENSATION AGREEMENT AND PERSONAL GUARANTEE
This Compensation Agreement and Personal Guarantee ("Compensation
Agreement") between Xxxxx X. Xxxxxx ("Xxxxxx") and Xxxxxxx Xxxxxx ("Xxxxxx") is
entered into this 20th day of August, 1999 .
WHEREAS pursuant to that certain Employment Agreement dated March 17,
1998, Xxxxxx is employed as the President and Chief Operating Officer of
CyberCash, Inc. a Delaware corporation with offices at 0000 Xxxxxx Xxxxxxx,
Xxxxxx, Xxxxxxxx ("CyberCash" or "Company"); and
WHEREAS CyberCash and Xxxxxx are considering entering into an Amended
and Restated Employment Agreement which would supersede the March 17, 1998
Employment Agreement; and
WHEREAS pursuant to the Amended and Restated Employment Agreement
CyberCash will agree to give Xxxxxx additional compensation in the form of
increased salary and stock and consider appointing him its Chief Executive
Officer upon Xxxxxx'x resignation; and
WHEREAS Xxxxxx himself, as the Chief Executive Officer of CyberCash and
a major stockholder, personally desires to secure Xxxxxx'x services by removing
the risk that Xxxxxx may not realize the full benefit of the compensation
package set forth in the Amended and Restated Employment Agreement; and
WHEREAS Xxxxxx has agreed to continue his employment at CyberCash in
reliance on Xxxxxx'x promise to guarantee Xxxxxx the full benefit of his
compensation package, regardless of the obligations of CyberCash and
notwithstanding the possibility that Xxxxxx might not otherwise be entitled
under the Amended and Restated Employment Agreement to the financial benefits
guaranteed herein by Xxxxxx;
NOW THEREFORE, THE PARTIES AGREE AS FOLLOWS:
1. In lieu of pursuing other opportunities currently available to him,
Xxxxxx agrees to execute the Amended and Restated Employment Agreement and
remain employed by CyberCash.
2. On or about the dates indicated below, Xxxxxx will pay Xxxxxx the
difference, if any, between the amount of any bonus paid to Xxxxxx by
CyberCash and the following amounts:
September 01, 1999: $100,000
February 01, 2000: $150,000
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February 01, 2001: $200,000
February 01, 2002: $250,000
February 01, 2003: $300,000
Xxxxxx may fulfill his obligation in this paragraph 2 by paying Xxxxxx in
cash or additional stock valued as of the date the bonus is due and
payable.
3. Xxxxxx hereby grants Xxxxxx the option to purchase 100,000 shares of
CyberCash common stock currently held by Xxxxxx at a price of $10.20 per
share. These options will vest on December 31, 2002 and Xxxxxx'x right to
exercise the options will expire on February 1, 2003. In recognition of his
obligation to Xxxxxx hereunder, and regardless of his rights and
obligations under any other Agreement to sell, transfer, or otherwise
dispose of CyberCash common stock that he currently holds, Xxxxxx agrees to
hold at least 100,000 shares of CyberCash common stock until February 1,
2003.
4. No later than February 1, 2003, Xxxxxx will pay Xxxxxx the difference,
if any, between $6 million and the combined value of Xxxxxx'x options
(approximately 800,000) under the Amended and Restated Employment Agreement
and this Compensation Agreement.
5. In the event of a Change in Control and a Change of Responsibilities
(as defined in the Amended and Restated Employment Agreement) prior to
December 31, 2002 (hereinafter together referred to as the "Transition
Event"), Xxxxxx'x guarantee of Xxxxxx'x compensation package will be
prorated for each 6 month period that Xxxxxx was employed by CyberCash
prior to the Transition Event. Thus, if the Transition Event occurs at any
time within the applicable time periods set forth below, Xxxxxx will pay
Xxxxxx the following amounts either in cash or equity, but only after first
subtracting the sum of the total value of all bonuses already paid by
Xxxxxx or the Company to Xxxxxx pursuant to this Compensation Agreement and
the total value of Xxxxxx'x vested options as of the date of the Transition
Event.
July 15, 1999 - January 15, 2000: $1,000,000
January 16, 2000 - July 15, 2000: $2,000,000
July 16, 2000 - January 15, 2001: $3,000,000
January 16, 2001 - July 15, 2001: $4,000,000
July 16, 2001 - January 15, 2002: $5,000,000
January 16, 2002 - July 15, 2002 $6,000,000
July 16, 2002 - December 31,2002: $7,000,000
6. In the event of Xxxxxx'x death prior to December 31, 2002, Xxxxxx'x estate
shall have the right to either (1) immediately vest all 500,000 options and
wait until
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December 31, 2002 to calculate the value of the options in order to
determine whether any additional amount is due by Xxxxxx pursuant to
paragraph 4 of this Compensation Agreement; or (2) transfer to Xxxxxx these
options with all their rights and privileges in exchange for immediate
payment of $6 million in cash or equity.
7. This Compensation Agreement shall inure to the benefit of each party's
successors, heirs, assigns, and personal representatives. In the event of
Xxxxxx'x death, all benefits owed to Xxxxxx pursuant to this Agreement
shall be paid to Xxxxxx'x designated beneficiary. In the event Xxxxxx does
not designate a beneficiary, all benefits shall be payable to Xxxxxx'x
estate.
8. In the event of Xxxxxx'x death, this Compensation Agreement will be binding
on Xxxxxx'x successors, heirs, assigns, and personal representatives.
/s/ XXXXXXX XXXXXX /s/ XXXXX X. XXXXXX
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Xxxxxxx Xxxxxx Xxxxx X. Xxxxxx
August 20, 1999 August 20, 1999
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