EXHIBIT 10.35
EMPLOYMENT AGREEMENT
AGREEMENT made as of 30th of June, 2001 (the "Effective Date"), between
XXXXX Online, Inc. with its principal office at 00 Xxxxxxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxxxxx ("Company"), and Xxx Xxx having an address at 000 Xxxxxxx Xxxxxx,
Xxxxx Xxxx, Xxxxxxxxxxx ("Employee").
W I T N E S S E T H:
WHEREAS, the Company operates an Internet financial information business;
and
WHEREAS, the Company desires to employ the Employee as President and Chief
Operating 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 five years from the Effective Date (the
"Employment Term"). Upon the expiration of the initial employment term and on
each anniversary date
thereafter, 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.
3. Duties. During the Employment Term, the Employee shall have such duties,
functions, authority and responsibilities normally associated with the positions
and offices of President and Chief Operating 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.
(a) The Employee's base salary during the initial term of
employment shall be no less than $150,000 per year 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 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.
(b) The Employee aggress to transfer to the Company his
accrued, but not yet payable, deferred compensation totaling Three Hundred
Twenty Thousand dollars ($320,000.00) in exchange for the Company's agreement to
create the XXXXX Online, Inc. Deferred Compensation Plan, a copy of which is
annexed as Schedule "A: (the "compensations plan") payable for the benefit of
the Employee. The Company further agrees to make payments to such deferred
compensation plan, beginning in this taxable year and continuing for the next
six (6) taxable years. The Company's obligation to transfer such amounts shall
remain in full force and effect even in the event the Employee shall be disabled
during any one of the six (6) plan years following the signing of this
Agreement. Notwithstanding anything to the contrary contained in this Paragraph,
the assets transferred by the Company to the deferred compensation plan shall
remain in the name of the Company, be subject to risk of forfeiture and shall be
subject to the claims of the Company's creditors.
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 executive 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 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 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:
(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
and shall continue payments to the deferred compensation plan for a period of
2.99 years following such date. The Employee shall have no further obligations
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 substantially 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 obligations or duties to
the Company, except as provided in Sections 4(b) and 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, (i) the cost of outplacement counseling for a period of up to one
year with the maximum cost to the Company not to exceed $25,000 , (ii) a
severance payment from the Company equal to 2.99 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, (iii) shall continue
the Employee's medical benefits at Company cost for the severance period or
until Employee obtains full time employment with an employer that provides
comparable heath coverage, and (iv) shall continue payments to the deferred
compensation plan for a period of 2.99 years. In addition, all stock options and
other awards issued to the Employee under any and all of the Company's stock
option plans shall immediately vest and remain exercisable for a period of the
lesser of (i) the original term of the stock option and (ii) five years.
(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 substantially perform his duties under this Agreement
except for those reasons covered by Section 7(b), (ii) the engaging by 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 (other than by Marc
and Xxxxx Xxxxxxxxxx and their affiliates) 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 corporation if, immediately following
such acquisition, more than 50% of the outstanding common stock and the
outstanding voting securities of such corporation 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 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 corporation 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
fifth anniversary of the effective date for any reason other than that covered
by Section 7(d), the Company will pay the Employee (v) 2.99 times the sum of (x)
the Employee's then applicable base salary and (w) the average of the last two
cash bonuses paid to employee. In addition the Company shall provide Employee
with the benefits listed in Sections 7(c)(i), 7(c)(iii) and 7(c)(iv), all stock
options issued to the Employee under any and all of the Company's stock option
plans shall immediately vest and remain exercisable for the period of the lesser
of (x) the original term of the stock option or (y) five years.
8. Confidentiality; Noncompetition.
(a) The Company and the Employee acknowledge that the services
to be performed by the Employee under this Agreement 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(a), 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 corporation any confidential information regarding the clients,
customers or business practices of the Company acquired by the Employee during
his employment 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.
(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:
(1) Directly or indirectly, contacting, soliciting or
directing any person, firm, or corporation 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, corporation, association, or other entity for any
reason or purpose whatsoever; and
(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 corporation, 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 Employer,
and soliciting any of the Employer's employees to terminate employment
with the Employer.
(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) 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.
(f) The rights and remedies enumerated in Section 8(e) 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.
(g) If any provision contained in this Section 8 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.
(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 determination 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.
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.
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.
16. Paragraph Headings. The paragraph headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
17. Execution of Agreement. Employee shall execute this Agreement no
later than June 30, 2001. In the event Employee does not execute this Agreement
by said date,
the non-signing of the Agreement constitutes Employee's choice to terminate his
employment with the Company.
18. Consideration. Employee hereby acknowledges and agrees that the
employment opportunity encompassed in this Agreement is contingent upon the
execution of this Agreement and that such employment, in addition to the mutual
promises herein, constitutes adequate consideration for this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
XXXXX ONLINE, INC.
By:________________________
Its:_______________________
Date:______________________
___________________________
Xxx Xxx
Date:______________________
Schedule A
