1
EXHIBIT 10.9
EMPLOYMENT AGREEMENT
--------------------
EMPLOYMENT AGREEMENT (this "Agreement"), dated as of December 11, 1997, by and
between BIZWATCH, INC., a Delaware corporation, having its principal office at
0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000 (the
"Company"), and Xxxxx X. Xxxxxxx, an individual residing at 0000 X Xxxxxx,
X.X., Xxxxxxxxxx, X.X. 00000 ("Executive").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company wishes to employ Executive in an executive capacity and
Executive is desirous of being so employed.
NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements herein contained, the parties hereto agree as follows:
1. Employment, Duties and Acceptance.
---------------------------------
(a) The Company hereby employs Executive for the Term (as hereinafter
defined) to render services to the Company, including any subsidiaries thereof,
as President and Chief Executive Officer ("CEO") and to perform such duties
commensurate with such office as he shall reasonably be directed by the Board of
Directors (the "Board") of the Company to perform, which duties shall be
consistent with the provisions of the Bylaws in effect on the date hereof that
relate to the duties of the President and CEO. Unless otherwise determined by
the Board or as required by the Bylaws of the Company, all employees and
executives of the Company and any subsidiaries thereof will report directly or
indirectly to the President and CEO.
(b) Executive agrees to devote his entire working time, attention and
energies to the performance of the business of the Company, including any
subsidiaries thereof, and Executive shall not, directly or indirectly, alone or
as a member of any partnership or other organization, or as an officer, director
or employee of any other corporation, partnership or other organization, be
actively engaged in or concerned with any other duties or pursuits which
materially interfere with the performance of his duties hereunder, or which,
even if noninterfering, may be inimical, or contrary, to the best interests of
the Company, except those duties or pursuits specifically authorized by the
Board.
(c) Executive further agrees to accept any appointment and to serve
during all or any part of the Term as a director of the Company without any
compensation therefor other than that specified in this Agreement. The Company
shall use its best efforts to cause Executive to be elected as a director during
the Term and shall include him in the management slate for election as a
director at every
2
stockholders meeting during the Term at which his term as a director would
otherwise expire.
(d) The principal place of employment of Executive hereunder shall at
all times during the Term be in the greater Alexandria, Virginia area, or other
locations mutually acceptable to Executive and the Company. Executive
understands and agrees that he may be required to travel from time to time for
business reasons.
(e) Executive hereby accepts such employment and agrees to render the
services described above and abide by the terms of this Agreement.
2. Term of Employment
------------------
Subject to the terms of this Agreement, including Section 8 hereof, the
term of Executive's employment under this Agreement will commence as of the date
hereof (the "Effective Date") and shall end on the later of (i) the third
anniversary hereof or (ii) the second anniversary of the closing of an initial
public offering of the Company's securities.
3. Compensation and Benefits
-------------------------
(a) (1) As full compensation for all services to be rendered
pursuant to this Agreement, commencing the Effective Date, the Company
agrees to pay Executive during the Term a base salary at an annual
rate of $165,000, payable in such installments as is the policy of the
Company with respect to executive employees of the Company (the
"Salary"). Thereafter, from time to time, and subject to the
provisions of subparagraph (a)(3) below, the Board of Directors of the
Company shall consider, in its sole and absolute discretion, any
appropriate adjustments to Executive's Salary.
(2) From time to time, and subject to the provisions of subparagraph
(a)(3) below, the Board of Directors of the Company shall consider, in
its sole absolute discretion, any bonus payments, whether consisting
of cash, securities or otherwise ("Bonus") to Executive.
(3) The aggregate amount of Salary and Bonus, if any, paid to
Executive during any calendar year shall not exceed $200,000 until
such time as the Company has generated cumulative revenues of at least
$4.3 million and is no longer experiencing a net operating loss on a
monthly basis. The Company and Executive hereby agree that, within
thirty (30) days following such time, the Company and Executive shall
increase Executive's Salary and Bonus by a mutually agreeable upon
amount which is reasonable in light of the salaries and bonuses then
offered by similarly situated and comparable companies.
-2-
3
(b) The Company shall pay or reimburse Executive for all reasonable
travel, entertainment and other business expenses actually incurred or paid by
him during the Term in the performance of his services under this Agreement,
upon presentation of expense statements or vouchers or such other supporting
information as the Company may reasonably require of Executive and in accordance
with the policy of the Company.
(c) Executive shall be eligible under any disability insurance, group
insurance, 401(k) or other so-called "fringe" benefits, if any, which the
Company generally provides for its executives.
(d) The Company shall provide to Executive, at the Company's expense,
medical, dental and vision insurance which the Company generally provides for
its executives.
(e) After the first six (6) months of the Term, Executive shall be
entitled to vacation time of four (4) weeks per year taken during the Term,
subject to fulfillment of his duties hereunder, in accordance with the vacation
policy of the Company.
4. Stock.
-----
Executive hereby acknowledges that Executive owns an aggregate of
2,562 shares (the "Shares") of the Company's common stock, par value $.001 per
share ("Common Stock") and options to purchase an aggregate of 10,829 shares of
Common Stock (the "Options"). Executive hereby further acknowledges that the
Shares and the Options were issued pursuant, and remain subject, to the
provisions of that certain Subscription Agreement, dated as of October 2, 1997,
as amended, that certain Option Agreement, dated October 2, 1997, as amended,
and that certain Shareholders Agreement, dated the date hereof by and among the
Company, Executive, Infoseek Corporation and certain other parties named
therein.
5. Confidentiality.
---------------
(a) Executive shall not, during the Term of this Agreement, or for a
period of three (3) years following termination of this Agreement, directly or
indirectly, disclose or permit to be known other than (i) as is reasonably
required in the regular course of his duties, including disclosures to the
Company's advisors and consultants, (ii) as required by law (in which case
Executive shall give the Company prior written notice of such required
disclosure) or (iii) with the prior written consent of the Board of Directors)
to any person, firm or corporation any information relating to the Company's
business or purpose, which information is not in the public domain or generally
known in the Company's Field of Interest, in any form acquired by Executive
during the course of, or as an incident to, his employment with the Company or
any predecessor to the Company's business or the rendering of services
hereunder, and relating to the Company, any subsidiaries or other Affiliates (as
defined below) thereof,
-3-
4
any client, investor, corporate partner or joint venturer of the Company or any
of its subsidiaries, or any corporation, partnership or other entity owned or
controlled, directly or indirectly, by the Company, any subsidiaries or other
Affiliates thereof or, to the knowledge of Executive, any of the other persons
or entities listed above, or in which the Company, any subsidiaries or other
Affiliates thereof or, to the knowledge of Executive, any of the other persons
or entities listed above, has a beneficial interest. Such information shall
include, but shall not be limited to, business affairs, proprietary technology,
trade secrets, patented processes, research and development data, know-how,
market studies and forecasts, competitive analyses, pricing policies, employee
lists, personnel policies, the substance of agreements with customers,
suppliers and others, marketing arrangements, customer lists and any other
documents embodying such confidential information. This confidentiality
obligation shall not apply to any information which becomes publicly available
other than pursuant to a breach of this Section 5 by Executive.
(b) All information and documents relating to the Company and any
subsidiaries or other Affiliates thereof as hereinabove described shall be the
exclusive property of the Company, and, upon termination of Executive's
employment with the Company, all documents, records, reports, writings and
other similar documents containing confidential information, including copies
thereof, then in Executive's possession or control shall be returned to and
left with the Company.
6. Noncompetition; Nonintervention.
(a) Executive shall not, during the Term of this Agreement, or for a
period of three (3) years following termination of this Agreement (the
"Restricted Period"), directly or indirectly, as owner, partner, joint
venturer, stockholder, employee, broker, agent, principal, trustee, corporate
officer, director, licensor, or in any capacity whatsoever engage in, become
financially interested in, be employed by, render any consultation or business
advice with respect to, or have any connection with any business which is in
the Company's Field of Interest (as defined below) anywhere within the United
States; provided, however, that Executive may own any securities of any
corporation which is engaged in such business and is publicly owned and traded
but in an amount not to exceed at any one time one percent (1%) of any class of
stock or securities of such company.
(b) During the Restricted Period, Executive shall not, whether for
his own account or for the account of any other individual, partnership, firm,
corporation or other business organization (other than the Company), directly
or indirectly solicit, endeavor to entice away from the Company or its
Affiliates, or otherwise directly interfere with the relationship of the
Company or its Affiliates with any person who, to the knowledge of Executive,
is employed by or otherwise engaged to perform services for the Company or its
Affiliates (including, but not limited to, any independent sales
representatives or organizations) or who is, or was within the then most recent
twelve-month period, a customer or client, of the Company, its predecessors or
any of its Affiliates. The placement of any general classified or "help wanted"
advertisements
-4-
5
and/or general solicitations to the public at large shall not constitute a
violation of this Section unless Executive's name is contained in such
advertisements or solicitations.
7. Injunction and Enforceability of Covenants.
(a) If Executive commits a breach, or threatens to
commit a breach, of any of the provisions of Sections 5, 6 or 9 hereof, the
Company shall have the right and remedy to have the provisions of this
Agreement specifically enforced by any court having equity jurisdiction, it
being acknowledged and agreed that any such breach or threatened breach will
cause irreparable injury to the Company and that money damages will not provide
an adequate remedy to the Company.
(b) If any of the covenants contained in Sections 5, 6 or
9 hereof, or any part thereof, is hereafter construed to be invalid or
unenforceable, the same shall not affect the remainder of the covenant or
covenants, which shall be given full effect without regard to the invalid
portions.
(c) If any of the covenants contained in Sections 5, 6
or 9 hereof, or any part thereof, is held to be unenforceable because of the
scope or duration of such provision or the area covered thereby, the parties
agree that the court making such determination shall have the power to reduce
the scope, duration and/or area of such provision to the least extent necessary
to render them enforceable and, in its reduced form, such provision shall then
be enforceable.
(d) The parties hereto intend to and hereby confer
jurisdiction to enforce the covenants contained in Sections 5, 6 or 9 hereof
upon the courts of any state within the geographical scope of such covenants.
In the event that the courts of any one or more of such states shall hold any
such covenant wholly unenforceable by reason of the breadth of such scope or
otherwise, it is the intention of the parties hereto that such determination
not bar or in any way affect the Company's right to the relief provided above
in the courts of any other states within the geographical scope of such other
covenants, as to breaches of such covenants in such other respective
jurisdictions, the above covenants as they relate to each state being, for this
purpose, severable into diverse and independent covenants.
(e) The existence of any claim or cause of action by
Executive against the Company or any subsidiaries or other Affiliates of the
Company shall not constitute a defense to the enforcement by the Company of the
covenants contained in Sections 5, 6 or 9 hereof, but such claim or cause of
action shall be litigated separately.
8. Termination of Employment.
(a) The Company may terminate this Agreement upon
written notice to Executive if Executive acts, or fails to act, in a manner
that provides Cause for termination. For purposes of this Agreement, the term
"Cause" means: (i) the willful or continual neglect by Executive of his duties
or obligations hereunder (other than
-5-
6
breaches of the covenants set forth in Sections 5, 6 and 9 hereof which events
are governed by clause (vi) below), provided that such neglect remains uncured
for a period of 30 days after written notice describing the same is given to
Executive, and provided further that isolated or insubstantial failures shall
not constitute Cause hereunder; (ii) Executive's conviction (which, through
lapse of time or otherwise, is not subject to appeal) of any felony or crime of
moral turpitude or any crime or offense involving money or other property of the
Company or any subsidiaries or other Affiliates thereof; (iii) Executive's
performance of any act or failure to act which, if Executive were prosecuted and
convicted therefor, would constitute a crime or offense either involving money
or property of the Company or any subsidiaries or other Affiliates thereof or
constituting a felony in the jurisdiction involved; (iv) any attempt by
Executive to improperly secure any personal profit in connection with the
business of the Company or any subsidiaries or other Affiliates thereof; (v)
chronic alcoholism or the use of illegal drugs; or (vi) any breach by Executive
of the terms of Sections 5, 6 or 9 hereof, provided such breach continues
uncured for 10 days after written notice of such breach is given by the Company
to Executive. All determinations of Cause shall be made by the vote of a
majority of the entire Board of Directors (without Executive's participation).
(b) Executive may terminate this Agreement upon written notice to
the Company for Good Reason. For purposes of this Agreement, the term "Good
Reason" means: (i) a substantial reduction of Executive's duties, position,
authority or responsibilities hereunder which is not corrected within thirty
(30) days after written notice from Executive; (ii) material breach by the
Company of its obligations hereunder if not remedied within thirty (30) days
after written notice from Executive; (iii) a material reduction in Executive's
compensation (provided, however, that a Company-wide salary reduction which is
instituted with the concurrence of Executive shall not constitute Good Reason
hereunder); or (iv) Executive is not the highest ranking officer of the Company.
(c) This Agreement shall immediately terminate upon the
occurrence of any of the following:
(1) Executive's death during the Term; provided, however,
that Executive's legal representatives shall be entitled to receive
Executive's Salary through the last day of the month in which his death
occurs; or
(2) Executive's physical or mental disability such that
he is unable substantially to perform his services hereunder for (i) a
period of 60 consecutive days or (ii) for shorter periods aggregating
120 days during any twelve-month period during the Term.
Notwithstanding such disability, the Company shall continue to pay
Executive his Salary through the date of such termination.
(d) In the event that Executive's employment is terminated for
any reason other than (i) at the end of the Term upon expiration of this
Agreement, (ii) by
-6-
7
the Company for Cause, (iii) death, (iv) disability or (v) by Executive other
than for Good Reason, the Company shall (x) pay Executive for a period equal to
the greater of two (2) years or the remainder of the Term (the "Severance
Period") his Salary at the then current rate (including an amount equal to any
bonuses paid to Executive during the prior twelve (12) month period), payable
in such installments as the Company customarily pays Executive, which amount
shall be in lieu of any and all other payments due and owing to Executive under
the terms of this Agreement (other than any payments constituting reimbursement
of expenses pursuant to Section 3(b) hereof), and (y) continue to allow
Executive to participate, during the Severance Period and at the Company's
expense, in the Company's health, dental and vision insurance and disability
insurance programs, if any, to the extent permitted under such programs and
applicable laws.
(e) Upon any termination of Executive's employment hereunder for any
reason, with or without Cause or Good Reason, whether by the Company or by
Executive, Executive shall be deemed to have resigned from all positions as an
officer, employee and director of the Company or any subsidiaries or other
Affiliates thereof.
9. Inventions Discovered by Executive.
Executive shall promptly disclose to the Company any invention,
improvement, discovery, process, formula or method or other intellectual
property, whether or not patentable, whether or not copyrightable, in the
Company's Field of Interest (collectively, "Inventions") made, conceived or
first reduced to practice by Executive, either alone or jointly with others,
while performing service hereunder. Executive hereby assigns to the Company all
of his right, title and interest in and to any such Inventions. During and
after the Term, Executive shall execute any documents necessary to perfect the
assignment of such Inventions to the Company and to enable the Company to apply
for, obtain and enforce patents and/or copyrights in any and all countries on
such Inventions. Executive hereby irrevocably designates counsel to the Company
as Executive's agent and attorney-in-fact to execute and file any such document
and to do all lawful acts necessary to apply for and obtain patents and/or
copyrights and to enforce the Company's rights under this Section 9. Any
invention relating to the business of the Company and disclosed by Executive
within six months following the termination or his or her employment with the
Company shall be deemed to fall within the provisions of this Section unless
proved to have been first conceived and made following such termination. This
Section 9 shall survive the termination of this Agreement.
10. Representations and Agreements of Executive.
(a) Executive represents and warrants that he is free to enter into
this Agreement and to perform the duties required hereunder and that there are
no employment contracts or understandings, restrictive covenants or other
restrictions, whether written or oral, preventing the performance of his duties
hereunder.
-7-
8
(b) Executive agrees to submit to a medical examination and to
cooperate and supply such other information and documents as may be required by
the Company in connection with its obtaining or providing any type of insurance
or other fringe benefit as the Company shall determine from time to time.
11. Definitions.
As used herein, the following terms have the following meanings:
(a) "Affiliate" means and includes any person, corporation or other
entity controlling, controlled by or under common control with the entity in
question; and
(b) "Company's Field of Interest" means the businesses of the Company
as conducted and proposed to be conducted as of the date hereof and any
business reasonably determined from time to time and during the Term by the
Company in its sole discretion to be competitive with the business of the
Company.
12. Arbitration.
Any controversy or claim arising out of or relating to this Agreement or
the breach thereof (other than disputes with respect to alleged violations of
the covenants contained in Sections 5, 6 and 9 hereof and the Company's pursuit
of the remedies described in Section 7 hereof in connection therewith) shall be
settled by arbitration in the City of New York, in accordance with the rules
then existing of the American Arbitration Association (three arbitrators), and
judgment upon the award rendered may be entered in any court having
jurisdiction thereof. The parties shall be free to pursue any remedy before the
arbitration tribunal that they shall be otherwise permitted to pursue in a
court of competent jurisdiction. The award of the arbitrators shall be final
and binding.
13. Notices.
All notices, requests, consents and other communications required or
permitted to be given hereunder shall be in writing and shall be deemed to have
been duly given if sent by private overnight mail service, registered or
certified mail (return receipt requested and received), telecopy or delivered
personally, as follows (or to such other address as either party shall
designate by notice in writing to the other in accordance herewith):
-8-
9
If to the Company:
BizWatch, Inc.
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Secretary
Telephone: (000) 000-0000
Fax: (000) 000-0000
With a copy to:
Xxxxxxx X. Xxxxxxxx, Esq.
Fulbright & Xxxxxxxx L.L.P.
Market Square
000 Xxxxxxxxxxxx Xxxxxx
Xxxxxxxxxx, X.X. 00000-0000
Telephone: (000) 000-0000
Fax: (000) 000-0000
If to Executive:
Xx. Xxxxx X. Xxxxxxx
0000 X Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
14. Withholding.
All payments required to be made by the Company to Executive under this
Agreement shall be subject to withholding taxes, social security and other
payroll deductions in accordance with the policy of the Company.
15. Successors and Assigns.
(a) This Agreement shall be binding upon and shall inure to the
benefit of the Company, its successors and assigns, and the Company shall
require any successor or assign to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform if no such succession or assignment had taken place. The
term "the Company" as used herein shall include such successors and assigns.
The term "successors and assigns" as used herein shall mean a corporation or
other entity acquiring all or substantially all of the assets and business of
the Company (including this Agreement) whether by operation of law or otherwise.
-9-
10
(b) This Agreement and all rights under this Agreement are personal
to Executive and shall not be assignable other than by will or the laws of
intestacy. All of Executive's rights under this Agreement shall inure to the
benefit of his heirs, personal representatives, designees or other legal
representatives, as the case may be.
16. General.
(a) This Agreement shall be governed by and construed and enforced
in accordance with the laws of the State of New York applicable to agreements
made and to be performed entirely in New York.
(b) This Agreement sets forth the entire agreement and understanding
of the parties relating to the subject matter hereof and supersedes all prior
agreements, arrangements and understandings, written or oral, relating to the
subject matter hereof; provided, however, that the terms and conditions of the
Stock Agreement shall continue to remain in full force and effect. No
representation, promise or inducement has been made by either party that is not
embodied in this Agreement or the Stock Agreement, and neither party shall be
bound by or liable for any alleged representation, promise or inducement not so
set forth.
(c) This Agreement may be amended, modified, superseded, canceled,
renewed or extended, and the terms or covenants hereof may be waived, only by a
written instrument executed by the parties hereto, or in the case of a waiver,
by the party waiving compliance. The failure or delay of a party at any time or
times to require performance of any provision hereof shall in no manner affect
the right at a later time to enforce the same. No waiver by a party of the
breach of any term or covenant contained in this Agreement, whether by conduct
or otherwise, or any one or more or continuing waivers of any such breach,
shall constitute a waiver of the breach of any other term or covenant contained
in this Agreement.
(d) Should any provision of this Agreement be held by an arbitration
tribunal to be invalid or unenforceable, such invalid or unenforceable
provision shall not render the entire Agreement invalid or unenforceable, and
this Agreement and each individual provision hereof shall be enforceable and
valid to the fullest extent permitted by law.
(e) The headings in this Agreement are for convenience of reference
only and shall not control or affect the meaning or construction of this
Agreement.
(f) This Agreement may be signed in any number of counterparts, each
of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument. This Agreement shall become
effective when each party hereto shall have received counterparts hereof signed
by the other party hereto.
-10-
11
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by
its duly authorized officer and Executive has executed this Agreement as of the
day and year first above written.
BIZWATCH, INC.
By: /s/ Xxxxxxx X. Xxxxx
-------------------------
Name: Xxxxxxx X. Xxxxx
Title: Secretary
/s/ Xxxxx X. Xxxxxxxx
-------------------------
Xxxxx X. Xxxxxxxx
-11-
