EMPLOYMENT AGREEMENT
AGREEMENT made as
of the 18th day of
February, 2004 (the “Effective Date”), by and between XXXXX Online, Inc. with
its principal office at 00 Xxxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxx (“Company”),
and Xxxxxx Xxxxxx having an address at 00 Xxxxxxx Xxxx, Xxxxxx, XX 00000
(“Employee”).
W
I T N E S S E T H:
WHEREAS,
the Company operates a financial information business; and
WHEREAS,
the Company desires to employ the Employee as Chief Technology Officer and to be
assured of his services as such on the terms and conditions set forth herein;
and
WHEREAS,
the Employee is willing to accept such employment on such terms and
conditions.
NOW,
THEREFORE, in consideration of the foregoing and the mutual agreements
hereinafter set forth, the parties agree as follows:
1. Employment. The
Company shall employ the Employee and the Employee shall serve the Company, upon
the terms and conditions hereinafter set forth.
2.
Term. The
term of the Employee’s employment shall commence on the Effective Date and
unless terminated earlier or extended as provided below, shall continue for a
period of one year from the Effective Date (the “Initial Term”). On each
anniversary date after the expiration of the Initial Term, the employment of
Employee shall be renewed and extended for an additional year unless either
party provides written notice to the other party, of his or its, as the case may
be, desire to terminate this Agreement at least thirty (30) days prior to the
renewal date (such period, together with the Initial Term, shall be known
hereinafter as the “Employment Term.”).
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3.
Duties. During
the Employment Term, the Employee shall have such duties, functions, authority
and responsibilities normally associated with the positions of Chief Technology
Officer. During the Employment Term, the Employee shall devote his full
attention and business time to the business and affairs of the Company and the
Employee will use his best efforts to perform faithfully and efficiently, and to
discharge, the Employee’s responsibilities and duties under this Agreement.
Notwithstanding the foregoing, the Employee may devote such time to manage his
personal affairs and to serve on community, corporate, civic, professional or
charitable boards or committees, so long as such activities do not unreasonably
interfere with the performance of the Employee’s duties and responsibilities
under this Agreement.
4.
Compensation
and Employee Benefits.
The
Employee's base salary during the initial term of employment shall be no less
than $195,000 per year unless mutually agreed upon by the parties, payable in
accordance with the Company’s payroll practices as in effect from time to time.
The Employee’s base salary will be reviewed annually by the Company's Board of
Directors (the “Board”) to determine whether an increase is warranted or
appropriate. The Employee shall also receive 100,000 stock options on the
Effective Date to purchase the Company’s stock pursuant to the terms and
conditions of the Company’s 1999 Stock Option Plan. The Employee also will be
entitled to be considered for awards each year under the Company's then existing
incentive bonus program, which may take into account individual and Company-wide
performance, or such other performance criteria as the Board may from time to
time apply.
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5.
Benefits. During
the Employment Term, the Employee shall have the right to participate in such
health and disability insurance plans which the Company may provide to its
senior Employee officers and for which the Employee is eligible, (e.g.
long term
disability, life insurance and medical insurance for the Employee and his
dependents). During the Employment term, the Employee will be entitled to four
weeks of paid vacation in accordance with the Company’s policy. Such vacation
may be taken in the Employee's discretion with the prior approval of the
Company, and at such time or times as are not inconsistent with the reasonable
business needs of the Company.
6.
Business
Expenses. All
reasonable travel, entertainment, and other expenses (including a commutation
allowance of $1500 per month), incident to the performance of the Employee’s
duties or the rendering of services incurred on behalf of the Company by the
Employee during the Employment Term shall be paid by the Company.
7.
Termination.
Notwithstanding the provisions of Section 2 hereof, the Employee's employment
with the Company may be earlier terminated as follows:
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(a) By action
taken by the Board, the Employee may be discharged for cause (as defined below),
effective as of such time as the Board shall determine. Upon discharge of the
Employee pursuant to this Section 7(a), the Company shall have no further
obligation or duties to the Employee, except for payment of base salary and
bonus through the effective date of termination. The Employee shall have no
further obliga-tions or duties to the Company, except as provided in Section
8.
(b) In the
event of (i) the death of the Employee or (ii) by action of the Board in the
event of the inability of the Employee, by reason of physical or mental
disability, to continue substan-tially to perform his duties hereunder for an
aggregate period of 180 days during the Employment Term, during which 180 day
period salary and any other benefits hereunder shall not be suspended or
diminished. Upon any termination of the Employee's employment under this Section
7(b), the Company shall have no further obligations or duties to the Employee,
and the Employee shall have no further obliga-tions or duties to the Company,
except as provided in Section 8.
(c) In the
event that there is a change of control of the Company (as defined below), and
the Agreement is terminated by either the Employee or the Company for whatever
reason within one year of such a change of control, the Company shall pay to the
Employee, in addition to accrued salary and benefits payable to the Employee
through the date of termination of employment, a severance payment from the
Company equal to 1 times the sum of (x) the Employee’s then applicable base
salary and (y) the average of the last two year’s cash bonuses paid by the
Company to the Employee.
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(d) For
purposes of this Agreement, the Company shall have "cause" to terminate the
Employee's employment under this Agreement upon (i) the failure by the Employee
to substan-tially perform his duties under this Agreement except for those
reasons covered by Section 7(b), (ii) the conviction of the Employee in criminal
misconduct (including embezzlement and criminal fraud) which is materially
injurious to the Company, monetarily or otherwise, (iii) the conviction of the
Employee of a felony, or (iv) gross negligence on the part of the Employee. The
Company shall give written notice to the Employee, which notice shall specify
the grounds for the proposed termination and the Employee shall be given thirty
(30) days to cure if the grounds arise under clauses (i) or (iv) above.
(e) For
purposes of this Agreement, a “change of control of the Company” shall mean the
occurrence of (i) the acquisition by an individual, entity, or group of the
beneficial ownership of 50% or more of (1) the outstanding common stock, or (2)
the combined voting power of the Company's voting securities; provided,
however, that
the following acquisitions will not constitute a "change of control": (x) any
acquisition by any employee benefit plan of the Company or any affiliate or (y)
any acquisition by any Company if, immediately following such acquisition, more
than 50% of the outstanding common stock and the outstanding voting securities
of such Company is beneficially owned by all or substantially all of those who,
immediately prior to such acquisition, were the beneficial owners of the common
stock and the Company's voting securities (in substantially similar proportions
as their ownership of such Company securities immediately prior thereto); or
(ii) the approval by the Company's stockholders of a reorganization, merger or
consolidation, other than one with respect to which all or substantially all of
those who
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were the
beneficial owners, immediately prior to such reorganization, merger or
consolidation, of the Common Stock and the Company's voting securities
beneficially own, immediately after such transaction, more than 50% of the
outstanding common stock and voting securities of the Company resulting from
such transaction (in substantially the same proportions as their ownership,
immediately prior thereto, of the Common Stock and the Company's voting
securities); or (iii) the approval by the Company's stockholders of the sale or
other disposition of all or substantially all of the assets of the Company,
other than to a subsidiary of the Company.
(f) If
the Company terminates this Agreement prior to the Initial Term or during the
Employment Term for any reason other than that covered by Section 7(a) - (c), or
if the Company decides not to renew the Agreement pursuant to Section 2 hereof,
the Company will pay the Employee 1 times the sum of (x) the Employee’s then
applicable base salary and (y) the average of the last two cash bonuses paid to
employee.
8.
Confidentiality;
Noncompetition; Inventions.
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(a) The
Company and the Employee acknowledge that the services to be performed by the
Employee under this Agree-ment are unique and extraordinary and, as a result of
such employment, the Employee will be in possession of confidential information
relating to the business practices of the Company. The term "confidential
information" shall mean any and all information (oral or written) relating to
the Company or any of its affiliates, or any of their respective activities,
other than such information which can be shown by the Employee to be in the
public domain (such information not being deemed to be in the public domain
merely because it is embraced by more general information which is in the public
domain) other than as the result of breach of the provisions of this Section 8,
including, but not limited to, information relating to: trade secrets,
proprietary information, personnel lists, financial information, research
projects, services used, pricing, customers, customer lists and prospects,
product sourcing, marketing and selling and servicing. The Employee agrees that
he will not, during his employment or subsequent to the termination of
employment, directly or indirectly, use, communicate, disclose or disseminate to
any person, firm or Company any confidential information regarding the clients,
customers or business prac-tices of the Company acquired by the Employee during
his employ-ment by Company, without the prior written consent of Company;
provided,
however, that
the Employee understands that Employee will be prohibited from misappropriating
any trade secret at any time during or after the termination of employment. At
no time during the Employment Term, or thereafter shall the Employee directly or
indirectly, disparage the commercial, business or financial reputation of the
Company.
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(b) In
consideration of Company's hiring Employee, the payment by the Company to the
Employee as described herein and for other good and valuable consideration, the
Employee hereby agrees that he shall not, during the Employment Term and for a
period of one (1) year following such employment (the “Restrictive Period”),
directly or indirectly, take any action which constitutes an interference with
or a disruption of any of the Company's business activities.
(c) For
purposes of clarification, but not of limitation, the Employee hereby
acknowledges and agrees that the provisions of subparagraph 8(b) above shall
serve as a prohibition against him, during the Restrictive Period,
from:
(1) Directly
or indirectly, contacting, soliciting or directing any person, firm, or Company
to contact or solicit, any of the Company’s customers, prospective customers, or
business partners for the purpose of selling or attempting to sell, any products
and/or services that are the same as or similar to the products and services
provided by the Company to its customers during the Restrictive Period. In
addition, the Employee will not disclose the identity of any such business
partners, customers, or prospective customers, or any part thereof, to any
person, firm, Company, association, or other entity for any reason or purpose
whatsoever; and
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(2) Directly
or indirectly, engaging or carrying on in any manner (including, without
limitation, as principal, shareholder, partner, lender, agent, employee,
consultant, or investor (other than a passive investor with less than a five
percent (5%) interest) trustee or through the agency of any Company,
partnership, limited liability company, or association) in any business that is
in competition with the engaged in any business in competition with the business
of the Company; and
(3) Soliciting
on his own behalf or on behalf of any other person, the services of any person
who is an employee of the Company, and soliciting any of the Company’s employees
to terminate employment with the Company.
(d) Upon the
termination of the Employee's employment for any reason whatsoever, all
documents, records, notebooks, equipment, price lists, specifications, programs,
customer and prospective customer lists and other materials which refer or
relate to any aspect of the business of the Company which are in the possession
or under the control of the Employee including all copies thereof, shall be
promptly returned to the Company.
(e) Any and
all inventions, discoveries, improvements, ideas and works of authorship (herein
referred to as “Intellectual Property”), whether or not patentable,
copyrightable or subject to other forms of protection, made, developed, or
created by Employee related to Employee’s employment (whether at the request or
suggestion of the Company or otherwise, whether alone or in conjunction with
others, and whether during regular hours of work or otherwise) during the
Employment Term shall be the Company’s exclusive property and, after the
termination of Employee’s employment, Employee shall promptly deliver to an
appropriate representative of the Company all electronic data, computer
programs, papers, drawings, models and other
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material
relating to any Intellectual Property made, developed or created by Employee.
Employee shall, at the request of the Company, whether during or after
Employee’s period of employment, and without pay, execute a specific assignment
of title to the Company and do anything else reasonably necessary to protect the
Company’s interests in such Intellectual Property and/or to vest in the Company
title to such Intellectual Property anywhere in the world. The expense of
securing any such protection shall be borne by the Company.
(f) The
parties hereto hereby acknowledge and agree that (i) the Company would be
irreparably injured in the event of a breach by the Employee of any of his
obligations under this Section 8, (ii) monetary damages would not be an adequate
remedy for any such breach, and (iii) the Company shall be entitled to
injunctive relief, in addition to any other remedy which it may have, in the
event of any such breach. In addition, the parties agree that the provisions of
this Section 8 shall survive the termination of this Agreement.
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(g) The
rights and remedies enumerated in Section 8 shall be independent of the other,
and shall be enforceable, and all of such rights and remedies shall be in
addition to, and not in lieu of, any other rights and remedies available to the
Company under law or in equity.
(h)
If any
provision contained in this Section 8 is found to be unenforceable by reason of
the extent, duration or scope thereof, or otherwise, then the court making such
determi-nation shall have the right to reduce such extent, duration, scope or
other provision and in its reduced form any such restriction shall thereafter be
enforceable as contemplated hereby.
(i)
It is the
intent of the parties hereto that the covenants contained in this Section 8
shall be enforced to the fullest extent permissible under the laws and public
policies of each jurisdiction in which enforcement is sought (the Employee
hereby acknowledging that said restrictions are reasonably necessary for the
protection of the Company). Accordingly, it is hereby agreed that if any of the
provisions of this Section 8 shall be adjudicated to be invalid or unenforceable
for any reason whatsoever, said provision shall be (only with respect to the
operation thereof in the particular jurisdiction in which such adjudication is
made) construed by limiting and reducing it so as to be enforceable to the
extent permissible, without invalidating the remaining provisions of this
Agreement or affecting the validity or enforceability of said provision in any
other jurisdiction.
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9.
Prior
Agreements. This
Agreement cancels and supersedes any and all prior agreements and understandings
between the parties hereto respecting the employment of Employee by the
Company.
10.
Notices. All
notices, requests, demands and other communications hereunder shall be in
writing and shall be delivered personally or sent by registered or certified
mail, return receipt requested, to the other party hereto at his or its address
as set forth in the beginning of this Agreement. Either party may change the
address to which notices, requests, demands and other communications hereunder
shall be sent by sending written notice of such change of address to the other
party in the manner above provided.
11.
Assignability
and Binding Effect. This
Agreement shall inure to the benefit of and shall be binding upon the executors,
administrators, successors and legal representatives of Employee and shall inure
to the benefit of and be binding upon the Company and its successors and
assigns. The Employee may not delegate or assign his duties or rights under this
Agreement.
12.
Waiver. Waiver
by either party hereto of any breach or default by the other party in respect of
any of the terms and conditions of this Agreement shall not operate as a waiver
of any other breach or default, whether similar to or different from the breach
or default waived.
13.
Complete
Understanding: Amendment and Termination. This
Agreement constitutes the complete understanding between the parties with
respect to the employment of Employee hereunder and no statement,
representation, warranty or covenant has been made by either party with respect
thereto except as expressly set forth herein. This Agreement shall not be
altered, modified, amended or terminated except by written instrument signed by
each of the parties hereto provided,
however, that
the waiver by either party hereto of compliance with any provision hereof or of
any breach or default by the other party hereto need be signed only by the party
waiving such provision, breach or default.
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14.
Counterparts. This
Agreement may be executed in any number of counterparts, each of which shall be
an original but all of which taken together shall constitute one and the same
Agreement.
15.
Governing
Law. This
Agreement shall be governed by and construed in accordance with the laws of the
State of Connecticut.
IN
WITNESS WHEREOF, the
parties hereto have duly executed this Agreement as of the day and year first
above written.
XXXXX
ONLINE, INC.
By /s/
Xxxxx Xxxxxxxxxx
Its:
CEO
Date:
February 18, 2004
/s/
Xxxxxx
Xxxxxx
Xxxxxx
Xxxxxx
Date:
February 18,
2004
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