Exhibit 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") dated this 12th day of
May, 2000, by and among SOFTLOCK SERVICES, INC., a Delaware corporation and
wholly-owned subsidiary of XxxxXxxx.xxx, Inc. ("SSI"), XXXXXXXX.XXX, INC., a
Delaware corporation (the "Corporation") and XXXXXXXX XXXXXX (the "Executive").
In connection with the acquisition of certain assets of Chili Pepper,
Inc., a Massachusetts corporation (the "Seller") by the Corporation, pursuant to
the terms and conditions of the Asset Purchase Agreement dated May 12, 2000 by
and among the Corporation, the Seller, the Executive and Xxxx Xxxxxx (the
"Purchase Agreement"), the Corporation shall (i) issue to the Seller 193,289
shares of the Corporation's common stock, par value $.01 per share, and (ii)
employ the Executive under and according to the terms and conditions set forth
herein, including without limitation, the grant of Options (defined in Section
2.3 below) exercisable for shares of the Corporation's common stock.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements of the parties set forth in this Agreement, and of
other good an valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, intending legally to be bound, agree as
follows:
ARTICLE I
TERM OF EMPLOYMENT
SECTION 1.1 TERM OF EMPLOYMENT. SSI hereby agrees to employ the
Executive and the Executive agrees to be employed by SSI in accordance with the
terms and conditions set forth herein, for a period of two (2) years (the
"Employment Term"), commencing as of May 12, 2000 (the "Effective Date");
SUBJECT, HOWEVER, to earlier termination as expressly provided herein. This
Agreement, along with all corresponding rights, duties and covenants,
automatically shall expire at the end of the Employment Term (except as provided
in Article V hereof).
SECTION 1.2 POSITION AND RESPONSIBILITIES. During the Employment Term,
the Executive shall serve as the Vice President of Merchandising of the
Corporation or such other position or positions as may be mutually agreed
between Executive and the Board of Directors of the Corporation. The Executive
shall have the same status, privileges and responsibilities normally inherent in
such capacities in corporations of similar size and character.
SECTION 1.3 PERFORMANCE OF DUTIES. During the Employment Term, the
Executive agrees to devote his full business time, attention and energies to the
Corporation's business and will not engage in consulting work or any trade or
business for his own account or for or on behalf of any other person, firm or
corporation which competes or, in a material way, conflicts or interferes with
the performance of his duties hereunder. Subject to Article V hereof, the
Executive may serve as a director of other corporations so long as such service
does not interfere with the performance of his duties to the Corporation.
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ARTICLE II
COMPENSATION
As remuneration for all services to be rendered by the Executive during
the Employment Term, and as consideration for complying with the covenants
herein, the Corporation shall pay and provide to the Executive the following:
SECTION 2.1 BASE SALARY. SSI shall pay the Executive a base salary in
an amount which shall be established from time to time by SSI's Board of
Directors (the "Board"), provided that such base salary shall not be less than
One Hundred Twenty-Five Thousand Dollars ($125,000) per year (the "Base
Salary"). The Base Salary shall be paid to the Executive in installments
throughout the year consistent with normal payroll practices of SSI. The Base
Salary shall be reviewed at least annually following the Effective Date to
ascertain whether, in the sole judgment of the Board, the Base Salary should be
increased, based on the performance of the Executive during the year, inflation
and other factors deemed appropriate by the Board. If so increased, the Base
Salary, as stated above, shall, likewise, be increased for purposes of this
Agreement.
SECTION 2.2 BONUS. In addition to the Base Salary, the Executive shall
be eligible to receive a bonus (the "Bonus") based on the attainment of mutually
agreed upon objectives during the Employment Term. The Bonus shall be payable to
the Executive, if eligible, within sixty (60) days after the end of each
calendar year during the Employment Term. Notwithstanding the foregoing, any
Bonus shall, in the aggregate annually, not exceed fifty percent (50%) of the
Base Salary. Notwithstanding the foregoing, if any portion of the Employment
Term encompasses less than an entire calendar year, then the Executive shall
receive a pro rata Bonus, if eligible, for a Bonus during such period.
SECTION 2.3 INCENTIVE PLANS. The Executive shall be eligible to
participate in such profit-sharing, stock option, bonus, incentive and
performance award programs as are made available generally to executive officers
of SSI, such participation to be on a basis which is commensurate with the
Executive's position with SSI (and in any event, a level of participation at
least as favorable as that provided to executives with comparable authority or
duties). Notwithstanding the foregoing, however, the Executive shall, on the
Effective Date be awarded one hundred thousand (100,000) options to purchase
shares of the Corporation's common stock at an exercise price equal to fair
market value of the Corporation's common stock (defined for purposes hereof as
the closing price of such stock) on the trading day immediately prior to the
Closing Date (as defined in the Purchase Agreement) (the "Options") for the
purchase of the Corporation's common stock, fifty percent (50%) of such Options
to vest two (2) years from the Closing Date, twenty-five percent (25%) of such
Options to vest three (3) years from the Closing Date, and the remaining
twenty-five percent (25%) of such Options to vest four (4) years from the
Closing Date. The Options shall be subject to the Corporation's other standard
terms and conditions for stock options granted pursuant to the Corporation's
1998 Stock Option Plan and shall be granted pursuant to the Corporation's
standard form of option grant letter, attached to this Agreement as EXHIBIT A.
SECTION 2.4 ADDITIONAL BENEFITS. The Executive shall be entitled to
receive employee benefits, including, without limitation, pension, disability,
group, life, sickness, accident and
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health insurance programs and split-dollar life insurance programs, and
prerequisites as are made available generally to executive officers of SSI, such
participation to be on a basis which is commensurate with the Executive's
position within SSI (and in any event, a level of participation at least as
favorable as that provided to executives with comparable authority or duties).
SECTION 2.5 RIGHT TO CHANGE PLANS. Except as may otherwise be
specifically agreed herein, and subject to applicable law, SSI shall not be
obligated to institute, maintain, or refrain from changing, amending or
discontinuing any benefit plan, program or prerequisite, so long as such
changes, amendments or discontinuations are similarly applicable to executive
employees generally.
ARTICLE III
EXPENSES
SECTION 3.1 GENERAL. SSI shall pay or reimburse the Executive for all
ordinary and necessary expenses, in a reasonable amount, which the Executive
incurs in performing his duties pursuant to this Agreement. The Executive agrees
to provide SSI with receipts for all such reimbursable expenses. If the
Executive does not provide such receipts, the Executive agrees that any
remuneration by SSI pursuant to this Article III will be treated as taxable
income and all applicable withholdings mandated by the Internal Revenue Code of
1986, as amended, and state and local taxing authorities will be deducted from
such reimbursement.
ARTICLE IV
TERMINATION
SECTION 4.1 TERMINATION DUE TO RETIREMENT OR DEATH. In the event the
Executive's employment is terminated during the Employment Term by reason of
retirement or death, the Executive shall receive his Base Salary pro rated to
the date of termination and the Executive's benefits shall be determined in
accordance with SSI's retirement, survivor's benefits, insurance, and other
applicable programs, if any, then in effect. Upon the effective date of such
termination, SSI's obligation under this Agreement to pay and provide to the
Executive the elements of compensation described in Sections 2.1, 2.2 and 2.4
hereof shall immediately expire, except to the extent that the benefits
described in Section 2.4 hereof continue after Retirement under the terms of the
benefit plans and programs which apply generally to SSI's executives and except
that the Executive shall receive all other rights and benefits in which he is
vested pursuant to other plans and programs of SSI. If the Executive would have
been eligible for a Bonus during the year in which such termination occurs, then
the Executive or his estate, as the case may be, shall be entitled to a pro rata
Bonus for such calendar year. Within sixty (60) days after the effective date of
such termination, SSI shall, subject to the terms and conditions of Article III
hereof, reimburse the Executive for all reimbursable expenses submitted by the
Executive as of the effective date of termination.
SECTION 4.2 TERMINATION DUE TO DISABILITY. In the event that the
Executive becomes Disabled (as defined below) during the Employment Term and is,
therefore, unable to perform his duties herein for more than one hundred twenty
(120) total calendar days during any period of twelve (12) consecutive months
SSI shall have the right to terminate the Executive's active employment as
provided in this Agreement (a "Disability Termination"). However, the Board
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shall deliver written notice to the Executive of SSI's intent to terminate for
Disability at least thirty (30) calendar days prior to the effective date of
such termination (the "Disability Notice Period"). A Disability Termination
shall become effective upon the end of the Disability Notice Period (the
"Disability Termination Date"). Upon the Disability Termination Date, SSI's
obligation to pay and provide to the Executive the elements of compensation
described in Sections 2.1, 2.2, and 2.4 hereof shall immediately expire, except
to the extent that the benefits described in Section 2.4 hereof continue after
Disability under the terms of the benefit plans and programs which apply
generally to SSI's executives and except that the Executive shall receive all
rights and benefits in which he is vested pursuant to other plans and programs
of SSI. The Executive shall receive his Base Salary pro rated to the date of
termination and, if the Executive would have been eligible for a Bonus during
the year in which such termination occurs, then the Executive or his estate, as
the case may be, shall be entitled to a pro rata Bonus for such calendar year.
Within sixty (60) days after the effective date of such termination, SSI shall,
subject to the terms and conditions of Article III hereof, reimburse the
Executive for all reimbursable expenses submitted by the Executive as of the
effective date of termination.
The term "Disability" shall mean for purposes of this Agreement, the
incapacity of the Executive, due to injury, illness, disease or bodily or mental
infirmity, to engage in the performance of substantially all of the usual duties
of employment with SSI as contemplated by Article I hereof, such Disability to
be determined by the Board upon receipt and in reliance on competent medical
advice from one (1) or more individuals, selected by the Board and reasonably
satisfactory to Executive, who are qualified to give such professional medical
advice about the particular Disability exhibited by the Executive.
It is expressly understood that the Disability of the Executive for a
period of one hundred twenty (120) calendar days or less in the aggregate during
any twelve (12) consecutive months shall not constitute a failure by the
Executive to perform his duties hereunder and shall not be deemed a breach or
default of this Agreement and the Executive shall receive full compensation for
any such period of Disability or for any other temporary illness or incapacity
during the Employment Term.
SECTION 4.3 VOLUNTARY TERMINATION BY THE EXECUTIVE. The Executive may
terminate this Agreement at any time by giving the Board written notice of his
intent to terminate this Agreement, delivered at least thirty (30) days prior to
the effective date (the "Voluntary Termination Date") of such termination (the
"Voluntary Termination Period"). Upon the expiration of the Voluntary
Termination Period, the termination of this Agreement by the Executive shall
become effective. SSI shall pay the Executive the Base Salary, at the rate then
in effect as provided in Section 2.1 hereof, through the Voluntary Termination
Date, plus all other benefits to which the Executive has a vested right as of
the Voluntary Termination Date, plus, subject to the terms and conditions of
Article III hereof, any reimbursable expenses submitted by the Executive as of
the Voluntary Termination Date. SSI and the Executive shall have no further
obligations under this Agreement after the Voluntary Termination Date, except as
set forth in Article V hereof.
SECTION 4.4 INVOLUNTARY TERMINATION BY SSI WITHOUT CAUSE. The Board may
terminate the Executive's employment, as provided under this Agreement, at any
time, for reasons other than death, Disability, Retirement or for Cause (as
defined in Section 4.5 hereof) (a
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"Termination Without Cause"), by notifying the Executive, in writing, of SSI's
intent to terminate, at least thirty (30) calendar days prior to the effective
date of a Termination Without Cause (the "Without Cause Termination Date") (the
"Without Cause Termination Period"). Upon expiration of the Without Cause
Termination Period, the Executive's termination shall become effective
immediately. Upon termination pursuant to this Section 4.4, the Executive shall
be entitled to the Base Salary pro rated to the date of termination, a pro rata
Bonus for such calendar year and reimbursement for all reimbursable expenses
submitted by the Executive as of the effective date of termination. All benefits
described in this Section 4.4 shall continue under the terms of the benefit
plans and programs which generally apply to SSI's executives.
SECTION 4.5 TERMINATION BY SSI FOR CAUSE. Nothing in this Agreement
shall be construed as preventing the Board from terminating the Executive's
employment under this Agreement for "Cause".
"Cause", for purpose of this Section 4.5, shall mean any of the
following, as determined by the majority vote of the Board of Directors of the
Corporation: (i) a failure or refusal of the Executive to perform his duties
hereunder, insubordination regarding express instructions of the Board of
Directors or the Executive Committee thereof, or material breach by the
Executive of one or more of the terms of this Agreement; (ii) any substantial
dishonesty by the Executive in connection with the performance of his duties
hereunder, habitual insobriety or misappropriation of the funds or property of
the Corporation; or (iii) any conviction of, or plea of guilty by, the Executive
with respect to any crime, which conviction or plea is likely in the reasonable
judgment of the Board of Directors of the Corporation to adversely affect the
Executive's professional reputation, the reputation of the Corporation or of any
other member of the Group or the ability of the Executive to perform his duties
satisfactorily hereunder. In the event of a determination by the Board of
Directors of "Cause", but prior to terminating the Executive's employment
hereunder, the Board of Directors shall notify the Executive in writing
concerning such determination (the "Determination Notice") and the Executive may
by written notice delivered to the Corporation within ten (10) days after his
receipt of the Determination Notice invoke his right to address a meeting of the
Board of Directors at which a quorum is present concerning the "Cause" set forth
in the Determination Notice. Once the Executive has addressed the Board of
Directors, as provided in the previous sentence, or waived his right to do so by
failing to exercise such right within ten (10) business days following his
receipt of the Determination Notice, the Board of Directors may act.
Upon termination pursuant to this Section 4.5, the Executive shall be
entitled to the Base Salary pro rated to the date of termination and
reimbursement for all reimbursable expenses submitted by the Executive as of the
effective date of termination.
SECTION 4.6 TERMINATION FOR GOOD REASON. At any time during the
Employment Term, the Executive may terminate this Agreement for Good Reason (as
defined below) (a "Good Reason Termination") by giving the Board thirty (30)
calendar days written notice of his intent to terminate this Agreement (the
"Good Reason Notice Period"), which notice sets forth in reasonable detail the
facts and circumstances claimed to provide the basis for termination based upon
Good Reason. Upon expiration of the Good Reason Notice Period, the Good Reason
Termination shall become effective, and SSI shall pay and provide to the
Executive the benefits set forth in this Section 4.6.
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(a) "Good Reason" shall mean, without the Executive's express
written consent, the occurrence of any one (1) or more of the following:
(i) the assignment of the Executive to duties
materially inconsistent with the Executive's authorities,
duties, responsibilities and status (including offices, titles
and reporting requirements) as an officer of SSI, or a
reduction or alteration in the nature or status of the
Executive's authorities, duties or responsibilities from those
in effect during the immediately preceding fiscal year, other
than an insubstantial and inadvertent act that is remedied by
SSI promptly after receipt of notice thereof given by the
Executive;
(ii) SSI's requiring the Executive to be based at a
location which is at least ten (10) miles further from the
Executive's current primary residence than is such residence
from SSI's current headquarters, except for required travel on
SSI's business;
(iii) a reduction by SSI in the Executive's Base
Salary as in effect on the Effective Date, as provided in
Section 2.1 hereof, or as the same shall be increased from
time to time; or
(iv) the failure of SSI to obtain a satisfactory
agreement from any successor to SSI to assume and agree to
perform SSI's obligations under this Agreement, as
contemplated by Section 7.1 hereof.
(b) Upon a Good Reason Termination the Executive shall be
entitled to receive the same payments and benefits as he is entitled to receive
following a Termination Without Cause as specified in Section 4.4 hereof. The
payment of the Base Salary contemplated by Section 4.4 hereof shall be made to
the Executive within thirty (30) calendar days following the effective date of a
Good Reason Termination or earlier if required by applicable law.
(c) The Executive's right to terminate employment for Good
Reason shall not be affected by the Executive's incapacity due to physical or
mental illness. The Executive's continued employment shall not constitute
consent to or a waiver of rights with respect to, any circumstance constituting
Good Reason herein.
ARTICLE V
NON-COMPETITION, NONDISCLOSURE AND INTELLECTUAL PROPERTY
SECTION 5.1 PROHIBITION ON COMPETITION. Without the prior written
consent of SSI, during the Employment Term, and for twelve (12) months following
termination of this Agreement by SSI, the Executive shall not, as a stockholder,
partner, employee or an officer, engage directly or indirectly in any business
or enterprise which is "in competition" with SSI or its successors or assigns.
For purposes of this Agreement, a business or enterprise will be deemed to be
"in competition" if it is engaged in any business in connection with the
distribution and merchandising over the Internet of "purchased" digital content.
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However, the Executive shall be allowed to purchase and hold for
investment less than two percent (2%) of the shares of any corporation whose
shares are regularly traded on a national securities exchange or in
over-the-counter market.
SECTION 5.2 CONFIDENTIALITY COVENANT. The Executive shall not, at any
time prior to or after the Employment Term, divulge, use or communicate any
Confidential Information to any person other than those officers or employees of
SSI or the Corporation who have need to know such information, or as
specifically allowed by SSI or the Corporation in writing, or which SSI or the
Corporation is required to disclose pursuant to any law, regulation, or court or
administrative order. As used in this Agreement, the term "Confidential
Information" shall mean all of the confidential and proprietary information of
or relating to SSI or the Corporation including without limitation: (i) all
customers and customer lists of SSI or the Corporation; (ii) any and all
financial statements, financial data, names or identities of individuals or
entities that have purchased securities or otherwise participated in any private
offering of the Corporation's common or preferred stock, research and
development, engineering information, legal information, purchasing information,
manufacturing information, marketing and sales plans, customer lists, business
records, contracts (whether material or not), corporate books and records,
drawings, designs, diagrams, processes, plans, computer hardware and software,
methods, formulae, trade secrets, techniques, know-how, discoveries, concepts
and ideas (oral or written), which pertain or relate to SSI or the Corporation,
regardless of form and whether or not patented or patentable, copyrighted or
able to be copyrighted, or registered as a trademark or registrable as a
trademark; (iii) all improvements, alterations and enhancements to any of the
foregoing used in or relating in any way by SSI or the Corporation; (iv) any and
all information developed, extracted, compiled or extrapolated from any of the
foregoing; (v) any and all concepts or ideas reasonably related to or arising
out of the foregoing (whether oral or written); and (vi) any and all documents
or other materials in tangible form containing, relating to or pertaining to any
of the foregoing, in whole or in part.
SECTION 5.3 DISCLOSURE OF CONFIDENTIAL INFORMATION. The disclosure of
Confidential Information by the Executive shall not violate this Agreement if
such disclosure: (i) is of information that has been explicitly approved by the
Chief Executive Officer and Board of Directors of SSI or the Corporation, as the
case may be, for release by the Executive to specified persons or the general
public or has been released by SSI or the Corporation, as the case may be, to
the general public; or (ii) is pursuant to an order or subpoena of a court or
governmental agency of competent jurisdiction, provided that the Executive shall
first have given SSI or the Corporation, as the case may be, reasonable
opportunity to seek a confidentiality order or other confidential treatment of
such Confidential Information. Further, the confidentiality and nondisclosure
provisions contained in this Article V shall not apply to any information or
data, if and when such information or data becomes a matter of public knowledge
through no act or omission of the Executive or to any information or data which
was already known by the Executive prior to the Employment Term or any other
party in question other than as a result of a breach of this Agreement or any
other confidentiality obligation.
SECTION 5.4 DELIVERY OF CONFIDENTIAL INFORMATION. Upon termination or
expiration of this Agreement or at any other time immediately upon SSI's or the
Corporation's request, the Executive shall deliver to SSI or the Corporation, as
the case may be, all Confidential Information, including, but not limited to,
memoranda, notes, records, reports, photographs,
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drawings, plans, papers or other documents made or compiled by the Executive
during the Employment Term or made available to the Executive during the
Employment Term, and any copies or abstracts thereof, whether or not of a secret
or confidential nature.
SECTION 5.5 INTELLECTUAL PROPERTY COVENANT. The Executive agrees to and
does hereby assign, transfer and convey to the Corporation and its successors
and assigns, the entire right, title and interest in and to any Intellectual
Property made, developed or conceived by the Executive, either solely or jointly
with others during the Employment Term, whether prior or subsequent to the
execution of this Agreement, whether made, developed or conceived by the
Executive during or outside of regular working hours or on or away from SSI's or
the Corporation's premises or at the expense of the Executive, SSI, the
Corporation or some other person or persons. The Executive, upon the request and
at the expense of the Corporation, shall and shall use the Executive's
reasonable efforts to cause any such other person(s) to promptly and fully
disclose each and all such discoveries, inventions, improvements, ideas or
innovations to the Corporation or any nominee(s) thereof. The Executive, upon
the request and at the expense of the Corporation, shall and shall use the
Executive's reasonable efforts to cause any such other person(s) to, assign to
the Corporation, without further compensation therefore, all right, title and
interest in and to each and all such discoveries, inventions, improvements,
ideas or innovations which are reduced to writings, drawings or practice within
one (1) year after the termination or expiration of this Agreement. As used in
this Agreement, the term "Intellectual Property" shall mean any and all
software, inventions, discoveries, improvements, ideas, designs and innovations,
whether or not patentable, which the Executive may invent, discover, originate,
make or conceive during the Executive's services to SSI and the Corporation
during the Employment Term, either solely or jointly with others, and which in
any way relate to or are or may be used in connection with the business of SSI
or the Corporation.
SECTION 5.6 EXECUTION OF DOCUMENTS. The Executive agrees to execute at
any time, upon the request and at the expense of the Corporation, for the
benefit of the Corporation or any nominee(s) thereof, and all appropriate
applications, instruments, assignments and other documents, which the
Corporation shall deem necessary or desirable to protect its entire right, title
and interest in and to any Intellectual Property.
SECTION 5.7 PATENT PROTECTION. The Executive agrees, upon the request
and at the expense of SSI or the Corporation or any person to whom SSI or the
Corporation may have granted or grants rights, to execute any and all
appropriate applications, assignments, instruments and papers, which SSI or the
Corporation shall deem necessary for the procurement in the United States of
America and foreign countries of patent protection for Intellectual Property,
including the executing of new, provisional, continuing and reissue
applications, to make all rightful oaths, to testify in any proceeding before
any governmental authority authorized to grant or administer patent protection
or before any court, and generally to do everything lawfully possible to aid SSI
or the Corporation and their successors, assigns and nominees to obtain, enjoy
and enforce proper patent protection for Intellectual Property conceived or made
by the Executive during the Employment Term for a period of two (2) years after
the termination or expiration of this Agreement.
SECTION 5.8 REASSIGNMENT OF CERTAIN RIGHTS TO THE EXECUTIVE. SSI and
the Corporation agree that they will release, reassign, transfer and convey to
the Executive, or at the
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written direction of the Executive, the Executive's successors and assigns, all
right, title and interest in and to any Intellectual Property which SSI and the
Corporation find, in their sole discretion, does not relate to any matter in
which SSI or the Corporation may have or may reasonably be expected to develop
an interest.
SECTION 5.9 PAYMENT OF COSTS AND FEES.
The Executive, SSI and the Corporation covenant and agree that if an
such party shall violate any of the covenants and agreements contained in
Sections 5.2 through 5.8 hereof, and the party opposing such violation shall
prevail in enforcing its or his rights under any such provisions, the party
determined to be in violation shall pay all reasonable attorney fees of the
prevailing party.
SECTION 5.10 COVENANTS REGARDING OTHER EMPLOYEES. During the term of
this Agreement and for a period of one year thereafter, the Executive agrees not
to attempt to induce any employee of SSI or the Corporation to terminate his or
her employment with SSI or the Corporation or accept any employment with any
corporation or entity.
SECTION 5.11 SPECIFIC PERFORMANCE. The Executive understands and agrees
that SSI and the Corporation may suffer irreparable harm in the event that the
Executive breaches any of his covenants and agreements contained in Article V
hereof, and that monetary damages may be inadequate to compensate SSI or the
Corporation for such breach. Accordingly, the Executive agrees that, in the
event of a breach or threatened breach by the Executive of any one or more of
the covenants and agreements contained in Article V hereof, SSI and the
Corporation, in addition to and not in limitation of any other rights, remedies
or monetary damages available to them at law or in equity, shall be entitled to
seek a permanent injunction in order to prevent or to restrain any such breach
by the Executive, or by the Executive's partners, agents, representatives,
servants, employers, employees and/or any and all persons directly or indirectly
acting for or with the Executive.
ARTICLE VI
INDEMNIFICATION
SSI hereby covenants and agrees to indemnify and hold harmless the
Executive fully, completely and absolutely against and in respect to any and all
actions, suits, proceedings, claims, demands, judgments, costs, expenses
(including reasonable attorneys' fees), losses and damages resulting from the
Executive's good faith performance of his duties and obligations under the terms
of this Agreement, subject to compliance with any applicable requirements and
limitations improved by SSI's Certificate of Incorporation and Bylaws as in
effect on the date hereof and applicable law.
ARTICLE VII
ASSIGNMENT AND GUARANTY
SECTION 7.1 ASSIGNMENT BY SSI. This Agreement may and shall be assigned
or transferred to, and shall be binding upon and shall inure to the benefit of,
any affiliate, subsidiary or successor of SSI, and any such affiliate,
subsidiary or successor shall be deemed substituted for all purposes under the
terms of this Agreement for SSI. In the event this Agreement is assigned to any
affiliate, subsidiary or successor of SSI (an "Affiliate Assignment"), SSI will
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guaranty performance of this Agreement by such affiliate, subsidiary or
successor. No such guaranty by SSI shall be required, however, in the event of
an assignment that results in a change in control of SSI. No Affiliate
Assignment will be permitted to materially adversely effect the Executive's
Bonus hereunder.
SECTION 7.2 ASSIGNMENT BY THE EXECUTIVE. The services to be provided by
the Executive to SSI hereunder are personal to the Executive, and the
Executive's duties may not be assigned by the Executive; provided, HOWEVER, that
this Agreement shall inure to the benefit of and be enforceable by the
Executive's personal or legal representatives, executors, and administrators,
successors, heirs, distributees, devisees and legatees. If the Executive dies
while any amounts payable to the Executive hereunder remain outstanding, all
such amounts, unless otherwise provided herein, shall be paid in accordance with
the terms of this Agreement to the Executive's devisee, legatee or other
designee or, in the absence of such designee, to the Executive's estate.
SECTION 7.3 GUARANTY BY SOFTLOCK.
SoftLock hereby guarantees the obligations of SSI under this Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 ENTIRE AGREEMENT. This Agreement supercedes any and all
prior agreements or understanding, whether written or oral, between the parties
hereto, or between the Executive and SSI, with respect to the subject matter
hereof, and constitutes the entire agreement of the parties with respect hereto.
SECTION 8.2 MODIFICATION. This Agreement shall not be varied, altered,
modified, canceled, changed, or in any way amended except by mutual agreement of
the parties in a written instrument executed by the parties hereto or their
legal representatives.
SECTION 8.3 SEVERABILITY. In the event that any provision of this
Agreement shall be determined to be invalid or unenforceable for any reason, the
remaining provisions of this Agreement shall be unaffected thereby and shall
remain in full force and effect.
SECTION 8.4 TAX WITHHOLDING. SSI may withhold from any benefits payable
under this Agreement all Federal, state, city, or other taxes as may be required
pursuant to any law or governmental regulation or ruling.
SECTION 8.5 BENEFICIARIES. The Executive may designate one or more
persons or entities as the primary and/or contingent beneficiaries of any
amounts to be received under this Agreement. Such designation must be in the
form of a signed writing reasonably acceptable to the Board or the Board's
designee. The Executive may make or change such designation at any time.
SECTION 8.6 BOARD COMMITTEE. Any action to be taken, or determination
to be made, by the Board of Directors of the Corporation under this Agreement
may be taken or made by the
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Compensation Committee of the Corporation or any other committee authorized by
the Board of Directors of the Corporation to act on its behalf.
SECTION 8.7 GOVERNING LAW. To the extent not preempted by Federal law,
the provisions of this Agreement shall be construed and enforced in accordance
with the laws of the Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the Executive, SSI and the Corporation have
executed this Agreement as of the date first above written.
WITNESS/ATTEST SOFTLOCK SERVICES, INC.,
a Delaware corporation
/s/ XXXXX X. XXXXXX By: /s/ XXXXX X. XXXXXXXX
--------------------------------- --------------------------------
Name: Name: Xxxxx X. Xxxxxxxx
Title: President
XXXXXXXX.XXX, INC.,
A Delaware corporation
/s/ XXXXX X. XXXXXX By: /s/ XXXXX X. XXXXXXXX
--------------------------------- --------------------------------
Name: Name: Xxxxx X. Xxxxxxxx
Title: President & Chief Executive
Officer
EXECUTIVE
/s/ XXXXX X. XXXXXX /s/ XXXXXXXX XXXXXX
--------------------------------- -----------------------------------
Name: Xxxxxxxx Xxxxxx
11
EXHIBIT A
FORM OF XXXXXXXX.XXX, INC.
GRANT LETTER
