INTERCONTINENTALEXCHANGE, INC. EMPLOYMENT AGREEMENT FOR SCOTT A. HILL
Exhibit 10.1
INTERCONTINENTALEXCHANGE, INC.
FOR
XXXXX X. XXXX
This is an Employment Agreement entered into between IntercontinentalExchange, Inc., a
Delaware corporation, or “ICE”, and Xxxxx X. Xxxx, or “Executive”, the terms and conditions of
which are as follows:
§ 1. TERM OF EMPLOYMENT
1.1. Initial Term. Subject to the terms and conditions set forth in this Employment
Agreement, ICE agrees to employ Executive and Executive agrees to be employed by ICE for an initial
term of two (2) years, which initial term shall start on May 14, 2007 and shall end on the second
anniversary of such date. ICE and Executive further agree that such initial term shall be subject
to extensions in accordance with the rules set forth in § 1.2.
1.2. Extensions.
(a) General Rule. The initial term of this Employment Agreement as set forth in §
1.1 shall be extended every six (6) months so that the remaining term of this Employment Agreement
is never more than two (2) years or less than one and one half (1 1/2) years unless ICE or
Executive delivers written notice to the other before the effective date of any such extension that
there will be no such extension, in which event there will be no extension and no further
extensions of such initial term.
(b) Effective Date for Extensions.
(1) First Effective Date. The first effective date for an extension
described in § 1.2(a) shall be November 14, 2007.
(2) Second Effective Date. The second effective date for an extension
described in § 1.2(a) shall be May 14, 2008.
(3) Subsequent Effective Dates. Starting with the second effective date
for an extension described in § 1.2(a) there shall be two effective dates for
extensions in each year, one of which shall be the second effective date for
extensions or an anniversary of such date and the other of which shall be an
anniversary of the first effective date for extensions.
(c) Extensions. If the initial term is extended on the effective date for an
extension under § 1.2(b), the extension shall be for period required to extend the remaining term
of this Employment Agreement to two (2) years.
1.3. Term. The initial term described in § 1.1 plus any extension of such initial
term under § 1.2 shall be referred to in this Employment Agreement as the “Term”.
§ 2. TITLE, DUTIES AND RESPONSIBILITIES AND POWERS AND WORK SITE
2.1. Title. Executive’s title initially shall be Senior Vice President, Chief
Financial Officer.
2.2. Duties and Responsibilities and Powers. Executive’s duties and responsibilities
and powers shall be those commensurate with Executive’s position that
are set from time to time by ICE’s Chief Executive Officer or his or her delegate. Executive shall
undertake to perform all Executive’s duties and responsibilities and exercise all Executive’s
powers in good faith and on a full-time basis during ICE’s normal work week for senior executives
and shall at all times act in the course of Executive’s employment under this Employment Agreement
in the best interest of ICE.
2.3. Primary Work Site. Executive’s primary work site for the Term shall be at ICE’s
office in Atlanta, Georgia. However, Executive shall undertake such travel away from Executive’s
primary work site and shall work from such temporary work sites as necessary or appropriate to
fulfill Executive’s duties and responsibilities and exercise Executive’s powers under the terms of
this Employment Agreement.
2.4. Outside Activities. Executive shall have the right to continue to serve on the
board of directors of those business, civic and charitable organizations on which Executive is
serving on May 14, 2007 as long as doing so has no significant and adverse affect on the
performance of Executive’s duties and responsibilities or the exercise of Executive’s powers under
this Employment Agreement. Executive shall not serve on any other boards of directors and shall
not provide services (whether as an employee or independent contractor) to any for-profit
organization on or after May 14, 2007 absent the written consent of ICE’s Chief Executive Officer
or his or her delegate.
§ 3. COMPENSATION AND BENEFITS
3.1. Base Salary. Executive’s initial base salary shall be $390,000 per year, which
base salary shall be payable in accordance with ICE’s standard payroll practices and policies for
senior executives and shall be subject to such withholdings as required by law or as otherwise
permissible under such practices or policies. Executive’s base salary shall be subject to annual
review and periodic increases as determined by the Compensation Committee of ICE’s Board of
Directors, or at the direction of such committee, ICE’s Chief Executive Officer or his or her
delegate.
3.2. Annual Bonus. Executive during the Term shall be eligible to receive an annual
bonus each year, and such bonus, if any, shall be determined in accordance with a plan adopted and
approved by the Compensation Committee of ICE’s Board of Directors, or at the direction of such
committee, ICE’s Chief Executive Officer or his or her delegate. Each such bonus shall be
reasonable in light of the contribution made by Executive for such year in relation to the
contributions made and bonuses paid other senior ICE executives for such year.
- 2 -
3.3. Equity Compensation.
(a) General. Executive shall be eligible for grants of options to purchase common
stock of ICE and other forms of ICE equity or equity based grants in accordance with an ICE
equity compensation plan. The number of shares subject to or related to each such grant
shall be reasonable in light of the contribution made, or expected to be made, by Executive
for the period for which such grant is made in relation to the number of shares subject to
or related to the grants made to
other senior ICE executives based on the contributions made, or expected to made, by such
other senior ICE executives for such period.
(b) Special Employment Grants. When Executive commences employment, the
Compensation Committee of ICE’s Board of Directors shall grant to Executive under an ICE
equity compensation plan (1) restricted stock units which have a nominal value of
$566,666.67 (based on the value of ICE common stock on the date of grant as determined
under such plan) which shall become non-forfeitable in equal increments on the first,
second and third anniversary of the date of the grant if Executive remains employed by ICE
on such anniversary date and (2) a stock option to purchase shares of ICE common stock
which has a value of $283,333.33 (based on the value of ICE common stock on the actual date
of grant and ICE’s Black-Scholes model assumptions), where the option price shall be the
fair market value of ICE common stock on the actual date of grant (as determined under such
plan) and where Executive’s right to exercise the option shall vest in increments over
three years in accordance with the Company’s standard stock option vesting schedule if
Executive remains employed by ICE on such vesting dates. The grants described in this §
3.3(b) shall be made subject to the terms of the ICE equity compensation plan under which
these grants are made.
3.4. Employee Benefit Plans, Programs and Policies. Executive shall be eligible to
participate in the employee benefit plans, programs and policies maintained by ICE for similarly
situated senior executives in accordance with the terms and conditions to participate in such
plans, programs and policies as in effect from time to time.
3.5. Vacation and Other Similar Benefits. Executive shall accrue at least four (4)
weeks of vacation during each successive one year period in the Term, which vacation time shall be
taken subject to such terms and conditions as set forth in ICE’s executive vacation policy as in
effect from time to time. Executive in addition shall have such paid holidays, sick leave and
personal and other time off as called for under ICE’s standard policies and practices for
executives with respect to paid holidays, sick leave and personal and other time off.
3.6. Business Expenses. Executive shall have a right to be reimbursed for Executive’s
reasonable and appropriate business expenses which Executive actually incurs in connection with the
performance of Executive’s duties and responsibilities
- 3 -
under this Employment Agreement in
accordance with ICE’s expense reimbursement policies and procedures for its senior executives.
3.7. Signing and Relocation Bonus. If Executive signs this Employment Agreement, ICE
shall pay Executive the following one-time bonus payments (subject to applicable withholdings) as
soon as practicable after his first day at work for ICE; provided, however, (a) Executive shall
(subject to §3.7(b)) repay such bonus payments in full to ICE within 10 business days after
Executive’s employment with ICE terminates if his employment terminates before the end of the one
(1) year term described in § 1.1 unless such termination is a result of his death or his
“Disability” or he resigns for “Good Reason” or he is terminated by ICE without “Cause” (as the
terms “Disability”, “Good
Reason” and “Cause” are defined in this Employment Agreement) and (b) Executive’s repayment
obligation under § 3.7(a) shall be reduced by $29,166.67 for each full month that he remains
employed by ICE during one (1) year term described in § 1.1. These one-time bonus amounts consist
of the following:
(a) Signing bonus: $150,000; and
(b) Relocation bonus: $200,000.
§ 4. TERMINATION OF EMPLOYMENT
4.1. General. ICE shall have the right to terminate Executive’s employment at any
time, and Executive shall have the right to resign at any time. However, any notice to the effect
that there will be no extension of this Employment Agreement pursuant to § 1.2 shall not constitute
a termination of Executive’s employment or a resignation by Executive under § 4 of this Employment
Agreement.
4.2. Termination By ICE Other Than For Cause Or Disability Or By Executive For Good
Reason.
(a) Before a Change in Control. If ICE terminates Executive’s employment
other than for Cause (as defined in § 4.2(c)) or a Disability (as defined in § 4.2(d))
before the Effective Date (as defined in § 4.2(e)(1)) of a Change in Control (as defined in
§ 4.2(e)(2)) or Executive resigns for Good Reason (as defined in § 4.2(f)) before such an
Effective Date, ICE (in lieu of any severance pay under any severance pay plans, programs
or policies) shall (subject to applicable withholdings)
(1) continue to pay Executive’s base salary as in effect on the date
Executive’s employment terminates for the remainder of the Term in accordance with
§ 3.1,
(2) pay Executive an annual bonus in cash as if Executive had remained
employed until the end of the Term in accordance with ICE’s annual bonus payment
practices in effect before Executive’s termination of employment, which annual
bonus shall equal Executive’s target bonus for
- 4 -
the year in which Executive’s
employment terminates or the last annual bonus paid to Executive by ICE or its
affiliates, whichever is greater,
(3) with respect to options to purchase ICE stock or other equity or equity
based grants made to Executive on or after May 14, 2007, (a) accelerate Executive’s
right to exercise 100% of such options and vest in 100% of such equity grants so
that Executive has the right to exercise 100% of such options and receive such
equity grants on the date Executive’s employment terminates and (b) treat Executive
as if Executive had remained employed by ICE until the end of the Term so that the
time period over which Executive has the right to exercise such options shall be
the same as if there had been no termination of Executive’s employment until the
end of the Term,
(4) (a) continue to make available coverage under the plans, programs and
policies described in § 3.4 which provide healthcare, life insurance and accidental
death and dismemberment benefits under which Executive was covered immediately
before Executive’s employment
terminated as if Executive had remained employed by ICE for the Welfare
Benefit Continuation Period (as defined in § 4.2(a)(4)(c)) or, if ICE determines
that continuing such coverage would be impracticable or undesirable, reimburse
Executive for purchasing comparable coverage or, at Executive’s election, pay
Executive an allowance for the remainder of the Welfare Benefit Continuation Period
in lieu of reimbursing Executive for purchasing comparable coverage if Executive
determines that purchasing comparable coverage would be impracticable or
undesirable, and
(b) (1) make available to Executive at the end of the Welfare Benefit
Continuation Period whatever health care continuation coverage ICE would have been
required under applicable law to make available to Executive with respect to such
plans, programs and policies for the period which would have been required under
applicable law if Executive actually had remained employed by ICE until the end of
the Welfare Benefit Continuation Period or (2) either (A) reimburse Executive for
Executive’s cost to purchase comparable health care coverage for such period to the
extent that such cost exceeds the premium then charged by ICE for the health care
continuation coverage described in § 4.2(a)(4)(b)(1) if ICE determines that making
such continuation coverage available for such period would be impracticable or
undesirable or, at Executive’s election, (B) pay Executive an allowance for such
period in lieu of reimbursing Executive for purchasing comparable coverage for such
period if Executive determines that purchasing comparable coverage would be
impracticable or undesirable, where
(c) the term “Welfare Benefit Continuation Period” means the one and one half
(1 1/2) year period which starts on the date Executive’s
- 5 -
employment terminates
under this Employment Agreement or the period which starts on the date Executive’s
employment terminates under this Employment Agreement and ends on the last day of
the Term, whichever period is shorter, and
(5) make one, or if necessary, more than one Gross Up Payment (as described in
and paid in accordance with § 4.2(g) to Executive.
(b) After a Change of Control. If Executive resigns for Good Reason after the
Effective Date of a Change in Control or ICE terminates Executive’s employment (other than
for Cause or a Disability) after the Effective Date of a Change of Control, ICE (in lieu of
any severance pay under any severance pay plans, programs or policies) shall (subject to
applicable withholdings)
(1) make a lump sum cash payment to Executive equal to two (2) times
Executive’s base salary as in effect on the date Executive’s employment terminates,
(2) make a lump sum cash payment to Executive equal to two (2) times the
target bonus set for Executive for the year in which
Executive’s employment terminates or, if greater, the last annual bonus paid
to Executive by ICE,
(3) (a) accelerate Executive’s right to exercise 100% of the options granted
to Executive at any time on or after May 14, 2007 and vest Executive 100% in any
other equity or equity based grants made to Executive so that Executive has the
right to exercise 100% of such options and receive upon his termination of
employment 100% of any other equity or equity based grants, and
(b) treat Executive as if Executive had remained employed by ICE until the end
of the two (2) year period which starts on the date Executive’s employment
terminates so that the time period over which Executive has the right to exercise
such options shall be the same as if there had been no termination of Executive’s
employment until the end of such two (2) year period,
(4) (a) continue to make available coverage under the plans, programs and
policies described in § 3.4 which provide healthcare, life insurance and accidental
death and dismemberment benefits under which Executive was covered immediately
before Executive’s employment terminated as if Executive had remained employed by
ICE until the end of the Welfare Benefit Continuation Period (as defined in §
4.2(a)(4)(c)) or, if ICE determines that continuing such coverage would be
impracticable or undesirable, reimburse Executive for purchasing comparable
coverage or, at Executive’s election, pay Executive an allowance for the remainder
of
- 6 -
the Welfare Benefit Continuation Period in lieu of reimbursing Executive for
purchasing comparable coverage if Executive determines that purchasing comparable
coverage would be impracticable or undesirable, and
(b) (1) make available to Executive at the end of the Welfare Benefit
Continuation Period whatever health care continuation coverage ICE would have been
required under applicable law to make available to Executive with respect to such
plans, programs and policies for the period which would have been required under
applicable law if Executive actually had remained employed by ICE until the end of
the Welfare Benefit Continuation Period or (2) either (A) reimburse Executive for
Executive’s cost to purchase comparable health care coverage for such period to the
extent that such cost exceeds the premium then charged by ICE for the health care
continuation coverage described in § 4.2(b)(4)(b)(1) if ICE determines that making
such continuation coverage available for such period would be impracticable or
undesirable or, at Executive’s election, (B) pay Executive an allowance for such
period in lieu of reimbursing Executive for purchasing comparable coverage for such
period if Executive determines that purchasing comparable coverage would be
impracticable or undesirable, and
(5) make one or, if necessary, more than one, Gross Up Payment (as described
in and paid in accordance with § 4.2(g)) to Executive; provided, however
(6) Executive shall have a right (in lieu of any payments and benefits called
for under § 4.2(a)) to all the payments and benefits called for under this § 4.2(b)
if Executive resigns for Good Reason or ICE terminates Executive’s employment
(other than for Cause or a Disability) during the ninety (90) day period ending on
the Effective Date of a Change of Control.
(c) Cause. The term “Cause” as used in this Employment Agreement
shall (subject to § 4.2(c)(5)) mean:
(1) Executive is convicted of, pleads guilty to, or confesses or otherwise
admits to any felony or any act of fraud, misappropriation or embezzlement;
(2) Executive knowingly engages in any act or course of conduct or knowingly
fails to engage in any act or course of conduct (a) which is reasonably likely to
adversely affect ICE’s or its affiliates’ right or qualification under applicable
laws, rules or regulations to serve as an exchange or other form of a marketplace
for trading commodities or other listed products, or (b) which violates the rules
of any exchange or market on which ICE or its affiliates effects trades (or at such
time is actively
- 7 -
contemplating effecting trades) and which is reasonably likely to
lead to a denial of ICE’s or its affiliates’ right or qualification to effect
trades on such exchange or market;
(3) There is any act or omission by Executive involving malfeasance or gross
negligence in the performance of Executive’s duties and responsibilities under § 2
or the exercise of Executive’s powers under § 2 to the material detriment of ICE or
its affiliates; or
(4) (a) Executive breaches any of the provisions of § 5 or (b) Executive
violates any provision of any code of conduct adopted by ICE which applies to
Executive and any other ICE employees if the consequence to such violation for any
employee subject to such code of conduct ordinarily would be a termination of his
or her employment by ICE; provided, however,
(5) No such act or omission or event shall be treated as “Cause” under this
Employment Agreement unless (a) Executive has been provided a detailed, written
statement of the basis for ICE’s belief such act or omission or event constitutes
“Cause” and an opportunity to meet with the Compensation Committee of ICE’s Board
of Directors (together with Executive’s counsel if Executive chooses to have
Executive’s counsel present at such meeting) after Executive has had a reasonable
period in which to review such statement and, if the act or omission or event is
one which can be cured by Executive, Executive has had at least a thirty (30) day
period to take corrective action and (b) a majority of the Compensation Committee
of ICE’s Board of Directors after such meeting
(if Executive exercises Executive’s right to have a meeting) and after the end
of such thirty (30) day correction period (if applicable) determines reasonably and
in good faith that “Cause” does exist under this Employment Agreement.
(d) Disability. The term “Disability” as used in this Employment Agreement
means any physical or mental condition which renders Executive unable even with reasonable
accommodation by ICE to perform the essential functions of Executive’s job for at least a
one hundred and eighty (180) consecutive day period and which makes Executive eligible to
receive benefits under ICE’s long term disability plan as of the date that Executive’s
employment terminates.
(e) Effective Date and Change in Control.
(1) The term “Effective Date” as used in this Employment Agreement means either the date which includes
the “closing” (as such term is commonly understood in the United States) of the transaction which
makes a Change in Control effective if the Change in Control is made effective through a
transaction which has such a “closing” or the earliest
- 8 -
date a Change in Control is reported in
accordance with any applicable law, regulation, rule or common practice as effective to any
government or any agency of any government or to any exchange or market in which ICE or its
affiliates effects any trades if the Change in Control is made effective other than through a
transaction which has such a “closing”.
(2) The term “Change in Control” as used in this Employment Agreement means the occurrence of any of
the following events:
(A) any “person” (as that term is used in Sections 13(d) and 14(d)(2) of the 1934 Act), is or becomes
the beneficial owner (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of
securities representing 30% or more of the combined voting power of the then outstanding
securities of ICE eligible to vote for the election of the members of ICE’s Board of Directors
unless (1) such person is ICE or any subsidiary of ICE, (2) such person is an employee benefit plan
(or a trust which is a part of such a plan) which provides benefits exclusively to, or on behalf
of, employees or former employees of ICE or a subsidiary of ICE, (3) such person is an underwriter
temporarily holding such securities pursuant to an offering of such securities, (4) such person is
Executive, an entity controlled by Executive or a group which includes Executive or (5) such person
acquired such securities in a Non-Qualifying Transaction (as defined in § 4.2(e)(2)(D));
(B) during any period of two consecutive years or less beginning after the closing date of the initial
public offering of the common stock of ICE, individuals who at the beginning of such period
constitute the Board of Directors of ICE cease, for any reason, to constitute at least a majority
of such Board of Directors, unless the election or nomination for election of each new director was
approved by at least two-thirds of the directors then still in office who were directors at the
beginning of the period (either by a specific vote of such directors or by the approval of the ICE
proxy statement in which each such individual is named as a nominee for a director without written
objection to such nomination by such directors); provided, however, that no
individual initially elected or nominated as a
director of ICE as a result of an actual or threatened election contest with respect to directors
or as a result of any other actual or threatened solicitation of proxies or consents by or on
behalf of any person other than the Board of Directors of ICE shall be deemed to be approved;
(C) any dissolution or liquidation of ICE or any sale or the disposition of 50% or more of the assets
or business of ICE, or
- 9 -
(D) the consummation of any reorganization, merger, consolidation or share exchange or similar form of
corporate transaction involving ICE unless (1) the persons who were the beneficial owners of the
outstanding securities eligible to vote for the election of the members of ICE’s Board of Directors
immediately before the consummation of such transaction hold more than 60% of the voting power of
the securities eligible to vote for the members of the board of directors of the successor or
survivor corporation in such transaction immediately following the consummation of such transaction
and (2) the number of the securities of such successor or survivor corporation representing the
voting power described in § 4.2(e)(2)(D)(1) held by the persons described in § 4.2(e)(2)(D)(1)
immediately following the consummation of such transaction is beneficially owned by each such
person in substantially the same proportion that each such person had beneficially owned the
outstanding securities eligible to vote for the election of the members of ICE’s Board of Directors
immediately before the consummation of such transaction, provided (3) the percentage described in §
4.2(e)(2)(D)(1) of the securities of the successor or survivor corporation and the number described
in § 4.2(e)(2)(D)(2) of the securities of the successor or survivor corporation shall be determined
exclusively by reference to the securities of the successor or survivor corporation which result
from the beneficial ownership of shares of common stock of ICE by the persons described in §
4.2(e)(2)(D)(1) immediately before the consummation of such transaction (any transaction which
satisfies all of the criteria specified in (1), (2) and (3) above shall be deemed to be a
“Non-Qualifying Transaction”);
(f) Good Reason. The term “Good Reason” as used in this Employment Agreement shall
(subject to § 4.2(f)(6)) mean:
(1) there is a material reduction or, after the Effective Date of a Change in Control,
any reduction in Executive’s base salary under § 3.1 or there is a material reduction or,
after the Effective Date of a Change in Control, any reduction in Executive’s opportunity
to receive any annual bonus and equity grants without Executive’s express written consent;
(2) there is a material reduction or, after the Effective Date of a Change in Control,
any reduction in the scope, importance or prestige of Executive’s duties, responsibilities
or powers at ICE or Executive’s reporting relationships with respect to who reports to
Executive and whom Executive reports to at ICE without Executive’s express written consent;
(3) ICE transfers Executive’s primary work site from Executive’s primary work site on
May 14, 2007 or, if Executive subsequently consents in writing to such a transfer under
this Employment Agreement, from the primary
- 10 -
work site which was the subject of such consent, to a new primary work site which is
more than 30 miles (measured along a straight line) from Executive’s then current primary
work site unless such new primary work site is closer (measured along a straight line) to
Executive’s primary residence than Executive’s then current primary work site;
(4) ICE after the Effective Date of a Change in Control changes Executive’s job title
or fails to continue to make available to Executive the same or equivalent plans, programs
and policies pursuant to § 3.4 as made available before such Effective Date absent
Executive’s express written consent;
(5) there is a material breach or, after the Effective Date of a Change in Control,
any breach of this Employment Agreement by ICE; provided, however,
(6) No such act or omission shall be treated as “Good Reason” under this Agreement
unless
(a) (1) Executive delivers to the Chairman of the Compensation Committee of
ICE’s Board of Directors a detailed, written statement of the basis for Executive’s
belief that such act or omission constitutes Good Reason, (2) Executive delivers
such statement before the later of (A) the end of the ninety (90) day period which
starts on the date there is an act or omission which forms the basis for
Executive’s belief that Good Reason exists or (B) the end of the period mutually
agreed upon for purposes of this § 4.2(f)(6)(a)(2)(B) in writing by Executive and
the Chairman of the Compensation Committee of ICE’s Board of Directors, (3)
Executive gives the Compensation Committee of ICE’s Board of Directors a thirty
(30) day period after the delivery of such statement to cure the basis for such
belief and (4) Executive actually submits Executive’s written resignation to the
Chairman of the Compensation Committee of ICE’s Board of Directors during the sixty
(60) day period which begins immediately after the end of such thirty (30) day
period if Executive reasonably and in good faith determines that Good Reason
continues to exist after the end of such thirty (30) day period, or
(b) ICE states in writing to Executive that Executive has the right to treat
any such act or omission as Good Reason under this Employment Agreement and
Executive resigns during the sixty (60) day period which starts on the date such
statement is actually delivered to Executive; and
(7) If Executive consents in writing to any reduction described in § 4.2(f)(1) or §
4.2(f)(2), to any transfer described in § 4.2(f)(3) or to any change or failure described
in § 4.2(f)(4) in lieu of exercising Executive’s right to resign for Good Reason and
delivers such consent to the Chairman of the Compensation Committee of ICE’s Board of
Directors, the date such consent is so delivered thereafter shall be treated under this
definition as the Effective Date of a Change in Control for purposes of determining whether
Executive
- 11 -
subsequently has Good Reason under this Employment Agreement to resign as a
result of any such subsequent reduction, transfer or change or failure.
(g) Gross Up Payment. The term “Gross Up Payment” as used in this Employment
Agreement shall mean a payment to or on behalf of Executive which shall be sufficient to pay (1)
100% of any excise tax described in this §4.2(g), (2) 100% of any federal, state and local income
tax and social security and other employment tax on the payment made to pay such excise tax as well
as any additional taxes on such payment and (3) 100% of any interest or penalties assessed by the
Internal Revenue Service on Executive which are related to the timely payment of such excise tax
(unless such interest or penalties are attributable to Executive’s willful misconduct or gross
negligence with respect to such timely payment). A Gross Up Payment shall be made by ICE promptly
after either ICE or ICE’s independent accountants determine that any payments and benefits called
for under this Employment Agreement together with any other payments and benefits made available to
Executive by ICE and any other person will result in Executive’s being subject to an excise tax
under § 4999 of the Internal Revenue Code of 1986, as amended (which shall be referred to in this §
4.2(g) as the “Code”) or such an excise tax is assessed against Executive as a result of any such
payments and other benefits if Executive takes such action (other than waiving Executive’s right to
any payments or benefits in excess of the payments or benefits which Executive has expressly agreed
to waive under this § 4.2(g)) as ICE reasonably requests under the circumstances to mitigate or
challenge such excise tax; provided, however, if ICE or ICE’s independent accountants make the
determination described in this § 4.2(g) and, further, determine that Executive will not be subject
to any such excise tax if Executive waives Executive’s right to receive a part of such payments or
benefits and such part does not exceed $15,000, Executive shall irrevocably waive Executive’s right
to receive such part if an independent accountant or lawyer retained by Executive and paid by ICE
agrees with the determination made by ICE or ICE’s independent accountants with respect to the
effect of such reduction in payments or benefits. Any determinations under this §4.2(g) shall be
made in accordance with § 280G of the Code and any applicable related regulations (whether
proposed, temporary or final) and any related Internal Revenue Service rulings and any related case
law and, if ICE reasonably requests that Executive take action to mitigate or challenge, or to
mitigate and challenge, any such tax or assessment (other than waiving Executive’s right to any
payments or benefits in excess of the payments or benefits which Executive has expressly agreed to
waive under this §4.2(g)) and Executive complies with such request, ICE shall provide Executive
with such information and such expert advice and assistance from ICE’s independent accountants,
lawyers and other advisors as Executive may reasonably request and shall pay for all expenses
incurred in effecting such compliance and any related fines, penalties, interest and other
assessments.
4.3. Termination By ICE For Cause or By Executive Other Than For Good Reason. If ICE
terminates Executive’s employment for Cause or Executive resigns other than for Good Reason, ICE’s
only obligation to Executive under this Employment Agreement shall (subject to applicable
withholdings) be to pay Executive’s base salary and annual bonus, if any, which were due and
payable on the date Executive’s employment terminated and to reimburse Executive for expenses
Executive had already
- 12 -
incurred and which would have otherwise been reimbursed but for such
termination of employment.
4.4. Termination for Disability or Death.
(a) General. ICE shall have the right to terminate Executive’s employment on
or after the date Executive has a Disability, and Executive’s employment shall terminate at
Executive’s death.
(b) Base Salary and Bonus. If Executive’s employment terminates under this §
4.4, ICE’s only obligation under this Employment Agreement shall (subject to applicable
withholdings) be (1) to pay Executive or, if Executive dies, Executive’s estate the base
salary and annual bonus, if any, which were due and payable on the date Executive’s
employment terminated and (2) to reimburse Executive or, if Executive dies, Executive’s
estate for any expenses which Executive had already incurred and which would have otherwise
been reimbursed but for such termination of employment.
4.5. Benefits at Termination of Employment. Executive upon Executive’s termination of
employment shall have the right to receive any benefits payable under ICE’s employee benefit plans,
programs and policies which Executive otherwise has a nonforfeitable right to receive under the
terms of such plans, programs and policies independent of Executive’s rights under this Employment
Agreement; however, if a payment is made to Executive under § 4.2(a) or § 4.2(b), such payment
shall be in lieu of any severance pay under any severance pay plan, program or policy.
4.6. §409A. ICE and Executive agree that ICE shall take such action as ICE acting in
good xxxxx xxxxx necessary or appropriate to delay the payments and the benefits described in this
§4 to avoid reporting such payments or benefits to the IRS as subject to tax under §409A of the
Code, including but not limited to delaying such payments and benefits for six months and one day
after Executive terminates employment.
§ 5. COVENANTS BY EXECUTIVE
5.1. ICE and Affiliates Property.
(a) General. Executive upon the termination of Executive’s employment for any
reason or, if earlier, upon ICE’s request shall promptly return all Property (as defined in
§ 5.1(b)) which had been entrusted or made available to Executive by ICE and each of its
Affiliates and, if any copy of any such Property was made by, or for, Executive, each and
every copy of such Property.
(b) Property. The term “Property” means records, files, memoranda, tapes,
computer disks, reports, price lists, customer lists, drawings, plans, sketches, keys,
computer hardware and software, cellular telephones, credit cards, access cards,
identification cards, personal data assistants and the like, company cars and other
tangible personal property of any kind or description.
- 13 -
5.2. Trade Secrets.
(a) General. Executive agrees that Executive will hold in a fiduciary
capacity for the benefit of ICE and each of its affiliates, and will not directly or
indirectly use or disclose to any person not authorized by ICE, any Trade Secret (as
defined in § 5.2(b)) of ICE or its affiliates that Executive may have acquired (whether or
not developed or compiled by Executive and whether or not Executive is authorized to have
access to such information) during the term of,
and in the course of, or as a result of Executive’s employment by ICE or its
affiliates for so long as such information remains a Trade Secret.
(b) Trade Secret. The term “Trade Secret” for purposes of this Employment
Agreement means information, including, but not limited to, technical or nontechnical data,
a formula, a pattern, a compilation, a program, a device, a method, a technique, a drawing,
a process, financial data, financial plans, product plans, or a list of actual or potential
customers or suppliers that (a) derives economic value, actual or potential, from not being
generally known to, and not being generally readily ascertainable by proper means by, other
persons who can obtain economic value from its disclosure or use and (b) is the subject of
reasonable efforts by ICE and its affiliates to maintain its secrecy.
(c) Additional Rights. This § 5.2 is intended to provide rights to ICE and
its affiliates which are in addition to, not in lieu of, those rights ICE and its
affiliates have under the common law or applicable statutes for the protection of trade
secrets.
5.3. Confidential Information.
(a) General. Executive while employed under this Employment Agreement and
thereafter during the Restricted Period (as defined in § 5.4) shall hold in a fiduciary
capacity for the benefit of ICE and its affiliates, and shall not directly or indirectly
use or disclose to any person not authorized by ICE, any Confidential Information (as
defined in § 5.3(b)) of ICE or its affiliates that Executive may have acquired (whether or
not developed or compiled by Executive and whether or not Executive is authorized to have
access to such information) during the term of, and in the course of, or as a result of
Executive’s employment by ICE or its affiliates.
(b) Confidential Information. The term “Confidential Information” for
purposes of this Employment Agreement means any secret, confidential or proprietary
information possessed by ICE or its affiliates relating to their businesses, including,
without limitation, customer lists, details of client or consultant contracts, current and
anticipated customer requirements, pricing policies, price lists, market studies, business
plans, operational methods, marketing plans or strategies, product development techniques
or flaws, computer software programs (including object codes and source codes), data and
documentation, data, base technologies, systems, structures and
- 14 -
architectures, inventions
and ideas, past, current and planned research and development, compilations, devices,
methods, techniques, processes, future business plans, licensing strategies, advertising
campaigns, financial information and data, business acquisition plans and new personnel
acquisition plans (not otherwise included in the definition of a Trade Secret under this
Employment Agreement) that has not become generally available to the public by the act of
one who has the right to disclose such information without violating any right of ICE or
its affiliates.
(c) Additional Rights. This § 5.3 is intended to provide rights to ICE and
its affiliates which are in addition to, not in lieu of, those rights ICE and its
affiliates have under the common law or applicable statutes for the protection of
confidential information.
5.4. Restricted Period. The term “Restricted Period” for purposes of this Employment
Agreement shall mean the remainder of the Term without regard to the reason for Executive’s
termination of employment.
5.5. Nonsolicitation of Customers or Employees.
(a) Customers. Executive, while employed under this Employment Agreement and
thereafter during the Restricted Period, shall not, on Executive’s own behalf or on behalf
of any person, firm partnership, association, corporation or business organization, entity
or enterprise, call on or solicit for the purpose of competing with ICE or its affiliates
any customers of ICE or its affiliates with whom Executive had contact, knowledge, or
association at any time during Executive’s employment with ICE or its affiliates, or with
respect to the Restricted Period, at any time during the twenty-four (24) month period
immediately preceding the beginning of the Restricted Period.
(b) Employees. Executive, while employed under this Employment Agreement and
thereafter during the Restricted Period, shall not, either directly or indirectly, call on,
solicit or attempt to induce any other officer, employee or independent contractor of ICE
or its affiliates with whom Executive had contact, knowledge of, or association at any time
during Executive’s employment with ICE or its affiliates, or with respect to the Restricted
Period, at any time during the twelve (12) month period immediately preceding the beginning
of the Restricted Period, to terminate his or her employment or business relationship with
ICE or its or its affiliates and shall not assist any other person or entity in such a
solicitation.
5.6. Intellectual Property Rights. Executive hereby unconditionally and irrevocably
assigns to ICE all of Executive’s right, title and interest in any ideas, inventions, trademarks,
copyrights, developments and improvements that Executive conceives, alone or with others, during
the Term, whether or not conceived during working hours, which are within the scope of ICE’s
business operations or relate to any of ICE’s work, projects or research activities, all of which
shall be referred to as
- 15 -
“Intellectual Property”, and Executive shall assist ICE, at ICE’s expense,
in obtaining patents, copyright and trademark registrations for Intellectual Property, execute and
deliver all documents and do any and all things necessary and proper on Executive’s part to obtain
such patents and copyright and trademark registrations and execute specific assignments and other
documents for such Intellectual Property as may be considered necessary or appropriate by ICE at
any time during Executive’s employment. This § 5.6 shall not apply to any invention that Executive
develops entirely on Executive’s own time without using the equipment, supplies, facilities, or
trade secret information of ICE or its affiliates. Executive agrees not to place Intellectual
Property in the public domain or to disclose any inventions to third parties without the prior
written consent of ICE.
5.7. Non-Compete. Executive and ICE agree that (a) ICE and its affiliates are engaged
in a business-to-business electronic exchange for trading commodities and related contracts, which
shall be referred to as the “Business”, (b) the Business can be and is conducted anywhere there is
access to the internet, (c) the Business can be and is
available to any person or entity who or which has access to the internet and desires to trade, or
to monitor the trading of, commodities, (d) the Business consequently has no geographic boundary or
limitation and will have none during the Term, (e) Executive is, and is expected to continue to be
during the Term, intimately involved in the Business wherever it operates, (f) any covenant by
Executive not to compete with ICE and its affiliates which is restricted to a specific area or
territory, including an area in which ICE or its affiliates has offices or equipment or from which
trades have been initiated, would thus provide no meaningful protection to ICE and its affiliates
and (g) this § 5.7 is intended to provide fair and reasonable protection to ICE and its affiliates
in light of the unique circumstances of the Business. Executive therefore agrees that Executive
shall not during the Term or, if less, for the one (1) year period which starts on the date
Executive’s employment terminates under this Employment Agreement assume or perform, directly or
indirectly, whether as an owner, partner, employee, agent, consultant, advisor, contractor,
salesman, stockholder, investor, officer or director, any managerial or supervisory
responsibilities and duties that are substantially the same as those Executive performs for ICE on
the date Executive executes this Employment Agreement for or on behalf of any other corporation,
partnership, venture, or other business entity that engages in any business-to-business electronic
exchange for trading commodities and related contracts if any site of any of the offices or
equipment of such competitive business is in the United States, Canada, Mexico, Central America,
South America or in any country which is a member of the European Union; provided, however,
Executive may own up to five percent (5%) of the stock of a publicly traded company that engages in
such competitive business so long as Executive is only a passive investor and is not actively
involved in such company in any way.
5.8. Reasonable and Continuing Obligations. Executive agrees that Executive’s
obligations under this § 5 are obligations which will continue beyond the date Executive’s
employment terminates and that such obligations are reasonable and necessary to protect ICE’s and
its affiliates’ legitimate business interests. ICE in
- 16 -
addition shall have the right to take such
other action as ICE deems necessary or appropriate to compel compliance with the provisions of this
§ 5.
5.9. Remedy for Breach. Executive agrees that the remedies at law of ICE for any
actual or threatened breach by Executive of the covenants in this § 5 would be inadequate and that
ICE shall be entitled to specific performance of the covenants in this § 5, including entry of an
ex parte, temporary restraining order in state or federal court, preliminary and permanent
injunctive relief against activities in violation of this § 5, or both, or other appropriate
judicial remedy, writ or order, in addition to any damages and legal expenses which ICE may be
legally entitled to recover. Executive acknowledges and agrees that the covenants in this § 5
shall be construed as agreements independent of any other provision of this or any other agreement
between ICE and Executive, and that the existence of any claim or cause of action by Executive
against ICE, whether predicated upon this Employment Agreement or any other agreement, shall not
constitute a defense to the enforcement by ICE of such covenants.
§ 6. MISCELLANEOUS
6.1. Notices. Notices and all other communications shall be in writing and shall be
deemed to have been duly given when personally delivered or when mailed by
United States registered or certified mail. Notices to ICE shall be sent to 0000 XxxxxXxxx
Xxxxxxx, Xxxxx Xxxxx, Xxxxxxx, Xxxxxxx 00000, Attention: Corporate Secretary. Notices and
communications to Executive shall be sent to the address Executive most recently provided to ICE.
6.2. No Waiver. Except for the notice described in § 6.1, no failure by either ICE or
Executive at any time to give notice of any breach by the other of, or to require compliance with,
any condition or provision of this Employment Agreement shall be deemed a waiver of any provisions
or conditions of this Employment Agreement.
6.3. Choice of Law and Courts. This Employment Agreement shall be governed by Georgia
law (except to the extent that its choice of law provisions would call for the application of the
law of another jurisdiction), and (subject to § 6.8) any action that may be brought by either ICE
or Executive involving the enforcement of this Employment Agreement or any rights, duties, or
obligations under this Employment Agreement, shall be brought exclusively in the state or federal
courts sitting in Atlanta, Georgia, and Executive consents and waives any objection to personal
jurisdiction and venue in these courts for any such action.
6.4. Assignment and Binding Effect. This Employment Agreement shall be binding upon
and inure to the benefit of ICE and any successor to all or substantially all of the business or
assets of ICE. ICE may assign this Employment Agreement to any affiliate or successor, and no such
assignment shall be treated as a termination of Executive’s employment under this Employment
Agreement. Executive’s rights and obligations under this Employment Agreement are personal and
shall not be assigned or transferred. Any such assignment or attempted assignment by Executive
shall be null, void, and of no legal effect.
- 17 -
6.5. Other Agreements. This Employment Agreement replaces and merges any and all
previous agreements and understandings regarding all the terms and conditions of Executive’s
employment relationship with ICE, and this Employment Agreement constitutes the entire agreement of
ICE and Executive with respect to such terms and conditions.
6.6. Amendment. Except as provided in § 6.7, no amendment or modification to this
Employment Agreement shall be effective unless it is in writing and signed by ICE and by Executive.
6.7. Severability. If any provision of this Employment Agreement shall be found
invalid or unenforceable, in whole or in part, then such provision shall be deemed to be modified
or restricted to the extent and in the manner necessary to render such provision valid and
enforceable, or shall be deemed excised from this Employment Agreement, as may be required under
applicable law, and this Employment Agreement shall be construed and enforced to the maximum extent
permitted by applicable law, as if such provision had been originally incorporated in this
Employment Agreement as so modified or restricted, or as if such provision had not been originally
incorporated in this Employment Agreement, as the case may be.
6.8 Arbitration. ICE shall have the right to obtain an injunction or other equitable
relief arising out of the Executive’s breach of the provisions of § 5 of this Employment Agreement.
However, any other controversy or claim arising out of or relating to this Employment Agreement or
any alleged breach of this Employment
Agreement shall be settled by binding arbitration in Atlanta, Georgia in accordance with the rules
of the American Arbitration Association then applicable to employment-related disputes and any
judgment upon any award, which may include an award of damages, may be entered in the highest state
or federal court having jurisdiction over such award. In the event of the termination of
Executive’s employment, Executive’s sole remedy shall be arbitration under this § 6.8 and any award
of damages shall be limited to recovery of lost compensation and benefits provided for in this
Employment Agreement. No punitive damages may be awarded to Executive. ICE shall be responsible
for paying all reasonable fees of the arbitrator.
6.9 Executive’s Legal Fees and Expenses.
(a) Negotiation of this Employment Agreement. ICE shall reimburse Executive
for Executive’s reasonable legal fees and expenses which Executive incurs in connection
with the review and negotiation of this Employment Agreement subject to a cap of $2,000.
Any such reimbursement shall be made subject to applicable withholdings.
(b) Claims Unrelated to a Change in Control. ICE shall have no obligation
under the terms of this Employment Agreement to reimburse Executive for any of Executive’s
legal fees and expenses for any claims under this Employment Agreement except (i) with
respect to his rights under § 4.2(a)(5) to
- 18 -
one or, if necessary, more than one Gross Up
Payment (as described in and paid in accordance with § 4.2(g)), or (ii) as provided in §
6.9(c).
(c) Claims Related to a Change in Control. ICE shall reimburse Executive for
all Executive’s reasonable legal fees and expenses which Executive incurs in connection
with any claim made with respect to Executive’s rights under § 4.2(b), including his rights
under § 4.2(b)(5) to one or, if necessary, more than one, Gross Up Payment (as described in
and paid in accordance with § 4.2(g)). Any such reimbursement shall be made subject to
applicable withholdings.
6.10 Release. As a condition to ICE’s making any payments to Executive after
Executive’s termination of employment under this Employment Agreement (other than the compensation
earned before such termination and the benefits due under ICE’s employee benefit plans without
regard to the terms of this Employment Agreement), Executive or, if Executive is deceased,
Executive’s estate shall execute a release in the form of the release attached to this Employment
Agreement as Exhibit A, or in such other form as is acceptable to ICE and Executive.
6.11 Counterparts. This Employment Agreement may be executed in counterparts, each of
which will be deemed an original, but all of which together will constitute one and the same
Employment Agreement.
6.12 Headings; References. The headings and captions used in this Employment
Agreement are used for convenience only and are not to be considered in construing or interpreting
this Employment Agreement. Any reference to a section (§) shall be to a section (§) of this
Employment Agreement absent an express statement to the contrary in this Employment Agreement.
IN WITNESS WHEREOF, ICE and Executive have executed this Employment Agreement in multiple
originals to be effective on
May 14, 2007.
| INTERCONTINENTALEXCHANGE, INC. | ||||||
| By: | /s/ Xxxxxxx X. Xxxxxxxx
|
|||||
| Title: | Chairman and Chief Executive Officer
|
|||||
| This 30th day of April, 2007 | ||||||
| EXECUTIVE | ||||||
| /s/ Xxxxx X. Xxxx | ||||||
| Xxxxx X. Xxxx | ||||||
| This 27th day of April, 2007 | ||||||
- 19 -
