Contract
EXHIBIT
10.2
THIS
EMPLOYMENT AGREEMENT (this “Agreement”) is made
and entered into as of October 1, 2007 (the
“Effective
Date”), by and between InnerWorkings, Inc., a
Delaware corporation (the “Company”), and Xxxxxxxx Xxxxx (“Employee”).
1.
Employment; Position
and Duties. The Company agrees to employ Employee, and Employee agrees to
be employed by the Company, upon the terms and conditions of this Agreement.
Employee shall be employed by the Company as the Company’s Senior Vice President
of Operations and shall report to the Executive Vice President of the Company.
Employee shall perform his duties and responsibilities to the best of his
ability and in a diligent, businesslike and efficient manner. Employee shall be
employed on a full-time basis and shall devote his best efforts and all of his
business time and attention (except for permitted vacation periods and
reasonable periods of illness or other incapacity) to the business and affairs
of the Company. Employee’s duties shall include all those duties customarily
performed by the Senior Vice President of Operations and such other duties and
responsibilities commensurate with such position as may be reasonably assigned
to him by the Executive Vice President of the Company. Employee acknowledges and
agrees that his responsibilities shall include business development activities
and assistance and support to the mergers and acquisitions department. Employee
shall comply with any policies and procedures established for Company employees
from time to time which are not inconsistent with this Agreement, including
without limitation, those policies and procedures contained in the Company’s
employee handbook previously delivered to Employee. Employee agrees that during
the Term of Employment he shall not engage in any other employment, profitable
activities, or other pursuits which would cause him to utilize or disclose the
Company’s confidential information or trade secrets or detract in any material
way from his ability to devote his best efforts to the Company.
2.
Term of Employment.
The term of this Agreement shall commence on the Effective Date and shall expire
on September 30, 2010, unless earlier terminated by either party in accordance
with the terms of this Agreement. The period during which Employee is employed
by the Company pursuant to the terms of this Agreement is hereinafter referred
to as the “Term of Employment.” This Agreement may be terminated by Employee or
by the Company at any time, with or without Cause (as defined below). Upon the
termination of Employee’s employment with the Company for any reason, neither
party shall have any further obligation or liability under this Agreement to the
other party, except as set forth in Sections 5, 6, 7, 8, 9, 10, 11, 12 and 13 of
this Agreement.
3.
Compensation.
As compensation for the services to be rendered and the other obligations
undertaken by Employee under this Agreement, the Company shall pay Employee the
compensation set forth in this Section 3 as follows:
(a)
Base Salary.
During the Term of Employment, Employee shall be paid a base salary (“Base Salary”) of
$20,000.00 per month (or $240,000.00 on an annualized basis), subject to
applicable withholding, in accordance with the Company’s normal payroll
procedures. Employee’s salary shall be reviewed on an annual basis by the
Company for possible increase (but not decrease) based on the Company’s
operating results and financial condition, salaries paid to other Company
executives, and general marketplace and other applicable considerations. Such
increased Base Salary, if any, shall then constitute Employee’s “Base Salary”
for purposes of this Agreement.
(b)
Benefits.
During the Term of Employment, Employee shall have the right, on the same basis
as other members of management of the Company, to participate in and to receive
benefits under any of the Company’s employee benefit plans, insurance programs
and/or indemnification agreements, as the same may then be in effect from time
to time, subject to any applicable waiting periods and other terms and
restrictions thereof. The Company shall reimburse Employee for the full amount
of his and his family’s insurance costs should be elect to participate in the
Company’s insurance program(s).
(c)
Bonus. In
addition to the Base Salary, Employee shall be eligible to receive an annual
performance bonus (“Performance Bonus”)
of up to $80,000. The Performance Bonus shall be a discretionary bonus,
determined in the sole discretion of the Company, with consideration given to
Employee’s performance of his duties and the Company’s financial performance, as
well certain performance targets that are approved by the Employees and/or
Directors of the Company. The Performance Bonus shall be paid within 60 days
following the end of each fiscal year of the Company. The Company agrees to pay
Employee a one-time bonus of $60,000 on January 1, 2008, provided that Employee
continues to be employed by the Company on such date. The Company also agrees to
pay Domtar, Employee’s prior employer, an amount equal to $12,500 for repayment
of Employee’s unpaid indebtedness to Domtar as of the Effective
Date.
(d)
Expenses. The
Company agrees to pay or to reimburse Employee for all reasonable, ordinary,
necessary and documented business or entertainment expenses incurred during the
Term of Employment in the performance of his services hereunder in accordance
with the policy of the Company as from time to time in effect. Employee, as a
condition precedent to obtaining such payment or reimbursement, shall provide to
the Company any and all statements, bills or receipts evidencing the travel or
out-of-pocket expenses for which Employee seeks payment or reimbursement, and
any other information or materials, as the Company may from time to time
reasonably require. The Company shall reimburse Employee for up to $12,500 for
documented moving costs and related expenses incurred by Employee in connection
with his relocation to the Chicago area.
(e)
Vacation.
During the Term of Employment, Employee shall be entitled to four (4) weeks paid
vacation per calendar year, and shall be entitled to as many holidays, sick days
and personal days as are in accordance with the Company’s policy then in effect
generally for its employees. Vacation time will be accrued at a rate of 30 days
per month and will not carry over from year to year.
(f)
Car Allowance.
During the Term of Employment, the Company will provide Employee with a car
allowance equal to $600 per month in accordance with the Company’s automobile
policy then in effect generally for its executive employees.
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4. Restricted Stock.
Concurrently with the execution of this Agreement, Employee shall be issued
50,000 shares of Common Stock of the Company (the “Restricted Stock”). The Restricted
Stock shall be subject to the following vesting schedule: 10,000 shares shall
vest on each of October 1st, 2008,
October 1st, 2009,
October 1st 2010,
October 1st, 2011
and October 1st, 2012.
Except as provided herein, the Restricted Stock shall be subject to the terms of
the InnerWorkings, Inc. 2006 Stock Incentive Plan (the “Plan”) and the restricted stock
agreement provided to Employee pursuant to the Plan, and Employee’s receipt of
the Restricted Stock shall be subject to his executing such restricted stock
agreement. A copy of the Plan and the restricted stock agreement are attached
hereto as Exhibit
A and Exhibit
B, respectively.
5. Rights and Obligations Upon
Termination.
(a)
Definition of Cause.
For purposes of this Agreement, “Cause’ shall mean any
of the following:
(i)
Employee’s failure to perform reasonably assigned duties and responsibilities,
which failure is not cured by Employee after fifteen (15) days prior written
notice specifying the nature of the failure (provided, that any such notice also
must include a statement that failure to cure any such failure may result in the
termination by the Company of Employee’s employment for Cause) or is not capable
of being cured;
(ii)
the theft, dishonesty, fraud, misappropriation or other criminal malfeasance by
Employee against with respect to the Company or any of its subsidiaries or
affiliates or the falsification of any employment or other records of the
Company by Employee;
(iii)
the determination by the Company that Employee has committed an act
or acts constituting a felony or any other crime involving theft, dishonesty,
fraud or moral turpitude;
(iv)
the determination by the Company that Employee has engaged in
willful misconduct or gross negligence in the performance of his employment
duties;
(v)
the determination by the Company that Employee has engaged in
willful misconduct that reflects so seriously on his or the Company’s public
reputation as to prejudice the interests of the Company or any of its
subsidiaries or affiliates if he were to continue to be retained as one of its
employees; or
(vi)
the breach by Employee of any material provision of this Agreement,
which breach is not cured by Employee after fifteen (15) days prior written
notice specifying the nature of the breach (provided, that any such notice also
must include a statement that failure to cure any such breach may result in the
termination by the Company of Employee’s employment for Cause) or is not capable
of being cured.
(b)
Definition of Good
Reason. For purposes of this Agreement, “Good Reason” shall mean any of the
following:
(i)
a material reduction Employee’s duties or responsibilities in his
capacity as a Senior Vice President of Operations without Employee’s consent, or
a permanent change in Employee’s duties and responsibilities which are
materially inconsistent with the duties and responsibilities of a Senior Vice
President of Operations of the Company, which reduction or change is not cured
within fifteen (15) days of the receipt by the Company of written notice by
Employee stating the nature of such breach (provided, that any
such notice also must include a statement that failure to cure any such
reduction or change may result in a termination by Employee of his employment
for Good Reason);
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(ii)
Employee being required to relocate the office from which he
performs his responsibilities to an office that is located more than thirty (30)
miles outside of Chicago, Illinois; or
(iii)
a material breach of this Agreement by the Company, which breach is not
cured within fifteen (15) days of the receipt by the Company of written notice
by Employee stating the nature of such breach (provided, that any such notice
also must include a statement that failure to cure any such reduction or change
may result in a termination by Employee of his employment for Good
Reason).
(c)
Without Cause or For Good
Reason. Upon the termination of the Term of Employment by the Company
without Cause or by Employee for Good Reason, the Company shall:
(i)
continue to pay Employee’s Base Salary then in effect, less
applicable withholding and in accordance with the Company’s normal payroll
procedures, for a period equal to twelve (12) months following the effective
date of such termination (the “Severance
Period”);
(ii)
pay any unpaid reimbursable expenses outstanding as of the
date of termination;
(iii)
pay all benefits (including all accrued but unpaid vacation pay), if
any, that had accrued to Employee through the date of termination under the
benefit and retirement plans and programs in which he participated as an
employee of the Company in the manner and in accordance with the terms of such
plans and programs; and
(v)
continue participation for Employee and his eligible dependents on the
same basis (except all premiums shall be paid by the Company) as the other
executives of the Company in all, medical, dental, disability and life insurance
coverage (such benefits collectively called the “Continued Plans”) in
which be was participating on the effective date of termination (as such
Continued Plans are from time to time in effect) until the end of the Severance
Period; provided, however, if Employee
is precluded from continuing his participation in any Continued Plan, then,
during the Severance Period, the Company will be obligated to reimburse him for
any payments made by Employee in order to maintain his and his family’s rights
granted by the Consolidated Omnibus Budget Reconciliation Act (“COBRA”)
Notwithstanding
anything to the contrary herein, no payments shall be due under this Section
5(c) unless and until Employee shall have executed a general release and waiver
of claims against the Company, consistent with Section 8 below, and in a form
reasonably satisfactory to the Company, and the execution of such general
release and waiver shall be a condition to Employee’s rights under this Section
5(c).
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(d) Other Termination
Events. Upon the termination of the Term of Employment by the
Company for Cause, by Employee for any reason (other than for Good Reason), or
by reason of his death or Disability, the Company shall have no further
obligations under this Agreement, except the Company shall:
(i) pay
Employee his unpaid Base Salary through, and any unpaid reimbursable expenses
outstanding as of, the effective date of such termination;
(ii) pay
all benefits (including all accrued but unpaid vacation pay), if any, that had
accrued to Employee through the date of termination under the benefit and
retirement plans and programs in which he participated as an employee of the
Company in the manner and in accordance with the terms of such plans and
programs; and
(iii) afford
Employee and his family such rights granted by the COBRA.
(e) Return or
Destruction. Upon termination of the Term of Employment,
Employee shall not remove from any premises at which the business of the Company
is conducted any property of the Company, including without limitation, any
trade secrets or other confidential information, and shall return all the
property of the Company, including, without limitation, all tangible embodiments
of the trade secrets or other confidential information, in his possession or
under his control.
6.
Non-Competition. During
the Term of Employment and for a period of two (2) years following the
expiration or termination of the Term of Employment for any reason, except
termination without Good Cause or for Good Reason, in which case twelve (12)
months, Employee shall not, anywhere in the Geographic Area (as defined below),
other than on behalf of Company or with the prior written consent of Company,
directly or indirectly, perform services for (whether as an employee, agent,
consultant, advisor, independent contractor, owner, principal, proprietor,
partner, officer, director or otherwise), have any ownership interest in (except
for passive ownership of five percent (5%) or less of any entity whose
securities have been registered under the Securities Act or Section 12 of the
Securities Exchange Act of 1934, as amended), or participate or engage in the
financing, operation, management or control of, any firm, partnership,
corporation, entity or business that engages or participates in a “competing
business purpose” (as defied below).
For the
purpose of this Agreement, the term “competing business
purpose” shall mean any business which is competitive with the business
of the company and its affiliates during the term of this Agreement. The term
“Geographic
Area” shall mean any geographic area in which the Company or any of its
affiliates or subsidiaries conduct business.
The
covenants contained in this Section 6 shall be construed as a series of separate
covenants, one for each county, city, state, or any similar subdivision in any
Geographic Area. Except for geographic coverage, each such separate covenant
shall be deemed identical in terms to the covenants contained in the preceding
Sections. If, in any judicial proceeding, a court refuses to enforce any of such
separate covenants (or any part thereof), then such unenforceable covenant (or
such part) shall be eliminated from this Agreement to the extent necessary to
permit the remaining separate covenants (or portions thereof) to be enforced. In
the event that the provisions of this Section 8 are deemed to exceed the time,
geographic or scope limitations permitted by applicable law, then such
provisions shall be reformed to the maximum time, geographic or scope
limitations, as the case may be, permitted by applicable laws.
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7. Non-Solicitation. During
the Term of Employment and for a period of two (2) years following the
expiration or termination of the Term of Employment for any reason, except
termination without Cause or for Good Reason, in which case, twelve (12) months,
Employee shall not, directly or indirectly, on his own behalf or in the service
or on behalf of others:
(a)
solicit, induce or divert or attempt to solicit, induce or divert any
customer, potential customer, supplier, licensee, licensor, vendor or other
business relation of Company to cease doing business with Company, or in any way
interfere with the relationship between any customer, potential customer,
supplier, licensee, licensor, vendor or other business relation of Company or
solicit the business of any customer of Company. “Customer” means any individual
or entity have a current business relationship with the Company during the year
prior to the termination of his employment relationship with the Company
“Potential Customer” is defined as any individual or entity which has been
solicited with the intent of sales by the Company during the year prior to the
termination of his employment relationship with the Company.; and
(b)
solicit, induce or divert, or take any action which is
intended to solicit, induce or divert, or has the effect of soliciting, inducing
or diverting, any employee, consultant or independent contractor of Company or
any of its subsidiaries or affiliates to terminate his or his employment or
other relationship with Company or its subsidiary or affiliate, other than in
the discharge of his duties as an officer of the Company, or hire or attempt to
hire any such employee, consultant or independent contractor.
8.
Confidential
Information.
(a) As
used in this Agreement, “Confidential
Information,” shall mean any and all confidential and proprietary
technical and non-technical information of the Company or any of its
subsidiaries or affiliates, including patent, copyright, trade secret, and
proprietary information, techniques, sketches, drawings, models, inventions,
know-how, processes, apparatus, equipment, algorithms, software programs,
software source documents, and formulae related to the current, future and
proposed products and services of the Company or any of its subsidiaries or
affiliates and any suppliers or customers of the Company or any of its
subsidiaries or affiliates, and includes, without limitation, innovations,
tangible and intangible property, information of the Company or any of its
subsidiaries or affiliates concerning research, experimental work, development
design details and specifications, engineering, financial information,
procurement requirements, purchasing manufacturing, customer lists, business
forecasts, vendors, supplier agreements, sales, merchandising and marketing
plans and information.
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(b)
During the Term of Employment and for twenty-four (24) months after the
expiration or termination of the Term of Employment, Employee shall hold and
safeguard the Confidential Information in trust for the Company, its successors
and assigns and agrees that he shall not use, without the prior written consent
of the Company, for Employee’s own benefit or purposes or misappropriate or
disclose or make available to any Person for use outside the Company’s
organization at any time, either during his employment with the Company or
subsequent to the termination of his employment with the Company during the
24-month period following such termination, for any reason, any of the
Confidential Information or any copy, notes or item embodying Confidential
Information, whether or not developed by Employee, except (i) as required in the
performance of Employee’s employment duties and as authorized by the Company and
(ii) to the extent that such information (A) is or becomes generally available
to the public or the industry other than as a result of a disclosure by Employee
in violation of this Agreement or (B) is required to be disclosed pursuant to a
court order or other legal process (provided Employee gives the Company notice
of such obligation as soon as practical after Employee receives notice of such
obligation and prior to any disclosure pursuant to such obligation, affords the
Company the opportunity and reasonably cooperates with the Company in any
efforts by the Company to limit the scope of such obligation and/or to obtain
confidential treatment of any material disclosed pursuant to such
obligation).
9.
Equitable
Remedies. Employee acknowledges and agrees that the agreements and
covenants set forth in Sections 6, 7, and are reasonable in scope and essential
for the protection of the Company’s business interests, that irreparable injury
will result to the Company if Employee breaches any of the terms of said
covenants, and that in the event of Employee’s actual or threatened breach of
any such covenants, the Company will have no adequate remedy at law. Employee
accordingly agrees that, in the event of any actual or threatened breach by
Employee of any of said covenants, the Company will be entitled to seek
immediate injunctive and other equitable relief, without bond and without the
necessity of showing actual monetary damages. Nothing in this Section 9 will be
construed as prohibiting the Company from pursuing any other remedies available
to it for such breach or threatened breach, including the recovery of any
damages that it is able to prove.
10. Dispute Resolution.
In the event of any dispute or claim relating to or arising out of this
Agreement (including, but not limited to, any claims of breach of contract,
wrongful termination or age, sex, race or other discrimination), Employee and
the Company agree that all such disputes shall be fully and finally resolved by
binding arbitration conducted by the American Arbitration Association in
Chicago, Illinois in accordance with its National Employment Dispute Resolution
rules, as those rules are currently in effect (and not as they may be modified
in the future). Any award rendered by the arbitrator shall be final and binding
and may be entered by any court having jurisdiction thereof. Employee
acknowledges that by accepting this arbitration provision he is waiving any
right to a jury trial in the event of such dispute. Notwithstanding the
foregoing, this arbitration provision shall not apply to (i) any equitable
remedies which the Company may seek in connection with Employee’s breach or
alleged breach of any covenant or agreement in Sections 6, 7, 8, or 9 above or
(ii) any disputes or claims relating to or arising out of the misuse or
misappropriation of trade secrets or proprietary information.
11. Governing Law. THIS
AGREEMENT AND ALL RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF ILLINOIS
WITHOUT REFERENCE TO ANY CONFLICTS OR CONFLICT OF LAWS PRINCIPLES IN THE STATE
OF ILLINOIS THAT WOULD RESULT IN THE APPLICATION OF THE LAW OF ANY OTHER
JURISDICTION.
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12. Successors and
Assigns. This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns, provided that successor
or assignee is the successor to substantially all of the assets of the Company,
or a majority of its then outstanding Units, and that such successor or assignee
assumes the liabilities, obligations and duties of the Company under this
Agreement, either contractually or as a matter of law. In view of the personal
nature of the services to be performed under this Agreement by Employee, she
shall not have the right to assign or transfer any of his rights, obligations or
benefits under this Agreement, except as otherwise noted herein.
13. Severability. Each
section and subsection of this Agreement constitutes a separate and distinct
provision of this Agreement. It is the intent of the parties that the provisions
of this Agreement be enforced to the fullest extent permissible under the laws
and public policies applicable in each jurisdiction in which enforcement is
sought. Accordingly, if any provision of this Agreement is adjudicated to be
invalid, ineffective or unenforceable, the remaining provisions will not be
affected by such adjudication. The invalid, ineffective or unenforceable
provision, without further action by the parties, will be automatically amended
to effect the original purpose and intent of the invalid, ineffective or
unenforceable provision; provided, however, that such
amendment will apply only with respect to the operation of such provision in the
particular jurisdiction with respect to which such adjudication is
made.
14. Entire
Agreement. This Agreement, including the Exhibits attached
hereto, constitutes the entire agreement between Employee and the Company
regarding the terms and conditions of his employment. This Agreement supersedes
all prior negotiations, representations or agreements between Employee and the
Company, whether written or oral, concerning Employee’s employment.
15. No Conflict. Employee
represents and warrants to the Company that neither his entry into this
Agreement nor his performance of his obligations hereunder will conflict with or
result in a breach of the terms, conditions or provisions of any other agreement
or obligation to which Employee is a party or by which Employee is bound,
including without limitation, any non-competition or confidentiality agreement
previously entered into by Employee.
16. Survival of Certain
Obligations. The obligations of the Company and Employee set forth in
this Agreement that by their terms extend beyond or survive the termination of
this Agreement will not be affected or diminished in any way by the termination
of the Term of Employment.
17. Amendments. This
Agreement may not be modified or amended except by a written agreement signed by
Employee and the Company.
18. Legal Counsel. Each
party hereby agrees and acknowledges that it has had full opportunity to consult
with counsel and tax advisors of its selection in connection with the
preparation and negotiation of this Agreement.
[Signature Page
Follows]
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IN
WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year written below.
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COMPANY:
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INNERWORKINGS,
INC.
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By:
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/s/
Xxxxxxxx Xxxxxxx
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EMPLOYEE:
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/s/ Xxxxxxxxx
Xxxxx
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Xxxxxxxx
Xxxxx
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