EXHIBIT 10.1
AMENDED EMPLOYMENT AGREEMENT
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This Amended Employment Agreement (this "Agreement") is made as of
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September 14, 1999 by and among U.S. Audiotex Corporation, a Delaware
corporation (the "Company"), Imperial Bank ("Imperial") and Xxxxxx X. Xxxxx
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("Executive").
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RECITALS
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WHEREAS, the Company desires to continue to employ Executive to serve
as Chief Executive Officer and Chairman of the Board of Directors (the "Board")
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of the Company on the terms and conditions herein provided;
WHEREAS, Executive desires to become an employee of the Company on the
terms and conditions herein provided;
WHEREAS, Imperial owns eighty percent (80%) of the shares of common
stock of the Company and desires that the Company and Executive enter into this
Agreement;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties agree as follows:
1. Employment. The Company hereby employs Executive, subject to the
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terms and conditions herein provided. During the Employment Period (as defined
below), Executive shall faithfully and diligently perform his duties under this
Agreement and shall use his best efforts to promote the interests of the
Company.
Executive shall be appointed to the Board and elected as the Chairman
("Chairman") of the Board for the duration of the Employment Period.
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The Company's corporate headquarters shall be located in or around New
York City.
2. Term. Subject to the terms and conditions hereof, the initial
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term of employment of Executive by the Company under this Agreement shall be
for the period commencing on August 26, 1999 (the "Commencement Date") and
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expiring when terminated as provided in Section 8 hereof (the "Expiration
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Date"). For purposes hereof, such period is referred to herein as the
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"Employment Period."
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3. Executive's Obligations.
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Executive shall serve as Chairman and Chief Executive Officer of the
Company with such powers and responsibilities as are customarily accorded to a
chairman and chief executive officer in companies of comparable size within the
same or similar industry. In his
capacity as Chief Executive Officer of the Company, Executive shall report
directly to the Board of the Company. Executive shall at all times comply with
and be subject to the Company's policies, procedures, directives and regulations
as established by the Company from time to time. Executive accepts such
employment, responsibility and authority and agrees to perform the services of
Chairman and Chief Executive Officer of the Company and such other services as
shall from time to time be reasonably assigned to him by or pursuant to
authorization of the Board, and agrees to devote all of his working time, skill
and attention to such services.
Notwithstanding the foregoing, the parties agree that the Executive
may continue the educational, charitable and community activities (including
membership on the board of educational, charitable or community organizations)
in which he is engaged on the date hereof and may engage in other educational,
charitable and community activities (including membership on the board of
educational, charitable or community organizations) and serve on boards of
directors of other companies provided such activities do not materially
interfere with the performance of his duties to the Company.
4. Executive's Compensation and Benefits. During the Employment
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Period, as full compensation to the Executive for his performance of the
services hereunder and for his acceptance of the responsibilities described
herein, the Company agrees to pay the Executive, and the Executive agrees to
accept, the following salary and other benefits:
4.1 Base Salary. The Company shall pay the Executive a salary at
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the annual rate of $200,000. The Board or the compensation committee of the
Board (the "Compensation Committee") shall periodically review Executive's base
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salary on an annual basis beginning on or before the first anniversary of the
date on which the Company's initial public offering is consummated (the "IPO
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Date"), and may increase but not decrease such base salary, from time to time,
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in their sole discretion. The base salary due the Executive hereunder (the "Base
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Salary") shall be payable in accordance with the Company's standard payment
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policy, less any amounts required to be withheld by the Company from such Base
Salary pursuant to the benefit plans in which Executive participates pursuant to
Section 4.5 and applicable laws and regulations.
4.2 Bonus. (a) The Executive shall be eligible to receive annual
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bonuses (each a "Bonus") at the discretion of, and in the amounts and at the
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times determined by, the Compensation Committee. Executive agrees that there
can be no assurance that the Compensation Committee will grant a Bonus in any
year.
(b) In addition, the Company shall pay a one-time bonus to the
Executive in the amount of $500,000, $250,000 of which was paid on the
Commencement Date and $250,000 of which shall be payable no later than the
first anniversary of the Commencement Date, less any amounts required to be
withheld by the Company from such bonus pursuant to applicable laws and
regulations.
4.3 Long Term Incentives. On the Commencement Date, the Company will
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grant Executive options to acquire 250,000 shares of its common stock, which
represents 5% of the Company's Fully Diluted Common Stock on the Commencement
Date (inclusive of the 250,000 share option grant to Executive). On the IPO
Date, the Company will grant executive
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additional options to acquire such number of shares of its common stock so that,
when combined with the options granted in the immediately preceding sentence,
Executive will have received pursuant to this Section 4.3 options to acquire
shares of common stock equal to an aggregate of five percent (5%) of the Fully
Diluted Common Stock of the Company outstanding as of the IPO Date (inclusive of
the option grant to Executive). For purposes of this Section 4.3, "Fully Diluted
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Common Stock" shall mean the aggregate of (i) the number of shares of Company
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common stock authorized and outstanding determined on an as-converted basis and
(ii) the number of shares of Company common stock subject to outstanding
options, warrants and other rights to acquire Company common stock determined on
an as-converted basis. Such options will be non-transferable and shall be
exercisable at any time for a ten year period after the date of grant. The
exercise price of such options shall be equal to $4.00 per share. All of the
option shares shall initially be unvested and subject to repurchase by the
Company at the exercise price paid per share. Subject to Section 8 hereof,
Executive shall acquire a vested interest in, and the Company's repurchase right
shall accordingly lapse with respect to one-third of the option shares granted
pursuant to this Section 4.3 on the first anniversary of the Commencement Date
and the remaining option shares in a series of twenty four (24) successive equal
monthly installments during the Employment Period. Following termination of the
Employment Period, Executive shall acquire a vested interest in, and the
Company's repurchase right shall accordingly terminate with respect to, all of
any unvested option shares for which the Company did not exercise its repurchase
right within thirty (30) days following such termination. Executive shall be
entitled to pay the exercise price of such options in the same manner and on the
same terms as the Company offers to members of its senior management who receive
similar options.
4.4 On the third anniversary of the Commencement Date, Imperial
and/or a guarantor reasonably acceptable to Executive and Imperial shall pay to
Executive, in cash, the amount, if any, by which the Guaranteed Amount (as
defined below) exceeds the aggregate Value (as defined below) of the option
shares which have vested pursuant to Section 4.3 (whether or not the options
have been exercised) (the "Guarantee Payment"); provided, however, that if at
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any time prior to such third anniversary, the Value exceeds $10,000,000, all
obligations under this Section 4.4 shall terminate and be of no further force
and effect. In the event that, on or prior to the third anniversary of the
Commencement Date, the Company has not consummated an initial public offering or
been sold to any Person (as defined in Section 7.1) other than an affiliate of
the Company, Imperial shall purchase from Executive, within five days of his
request, Executive's interest in all, but not less than all, options or shares
received under this Agreement for the amount equal to $10,000,000 less (i) the
option exercise price of any unexercised options, and (ii) any net profit
received by Executive in connection with any sale or transfer of any shares or
options received under this Agreement (i.e., after netting out the option
exercise price paid by Executive for the transferred shares); provided, that any
options or shares sold or transferred shall be treated as if they were sold at
the higher of the price received or fair market value at the time of sale.
Executive shall have one week from the date of the third anniversary of the
Commencement Date to request such payment. Thereafter, any rights to such
payment shall terminate. For purposes of this Section 4.4, "Value" shall mean
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(i) the product of (A) the highest average price of the common stock of the
Company calculated over a period of any 10 consecutive Business Days (as defined
below) from the Commencement Date until the third anniversary thereof,
multiplied by (B) the number of option
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shares which have vested pursuant to Section 4.3 (whether or not the options
have been exercised), less (ii) the product of (A) the weighted average exercise
price of such vested options, multiplied by (B) the number of option shares
which have vested pursuant to Section 4.3 (whether or not such options have been
exercised). The value of the Company's common stock shall be based on the
trading price, or other fair market value as mutually agreed by the Board and
Executive if the common stock is not traded on a national stock exchange or
quotation system. In the event that the Board and Executive are unable to agree
upon the fair market value of the Company's common stock for purposes of
determining Value under this Section 4.4, then the fair market value shall be
determined by an investment banking firm mutually acceptable to the Board and
Executive, provided that if the Board and Executive are unable to agree upon a
mutually acceptable investment banking firm, each of the Board and Executive
shall choose an investment banking firm, and the fair market value for purposes
of this Section 4.4 shall be deemed to be the average of the fair market values
determined by each investment banking firm. The "Guaranteed Amount" shall be
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$10,000,000, reduced by the amount of the Value of the option shares which have
vested on the first or second anniversary of the Commencement Date, whichever is
greater, calculated based on the last 10 Business Days prior to such
anniversary. "Business Days" shall mean, if the Company's common stock is traded
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on a national stock exchange or quotation system, any days on which such
exchange or quotation system is open for trading or, if the Company's common
stock is not traded on a national stock exchange or quotation system, any days
other than a Saturday, Sunday or a day on which banking institutions in the
State of New York are authorized or obligated by law or executive order to
close; provided, however, that "Business Days" shall not include any day on
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which Executive is prohibited from selling the option shares which have vested
pursuant to Section 4.3, as a result of securities laws restrictions or an
agreement between Executive and the Company or an underwriter relating to
restrictions on resale of the common stock, or as a result of any Company-
imposed "black-out" period to comply with securities laws.
4.5 Other Benefit Plans. Subject to all eligibility requirements, and
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to the extent permitted by law, the Executive shall be entitled to participate
in any and all employee benefit plans (including, but not limited to,
retirement, life insurance, medical, dental, disability, and savings plans)
established or maintained by the Company from time to time for the benefit of
their employees (or executives) in general.
4.6 Vacation. The Executive shall be entitled to four weeks paid
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vacation per annum.
4.7 Shareholder Rights. If, at any time, Imperial is granted "piggy-
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back" registration rights with respect to its shares of the Company's common
stock, Executive shall, at such time, be granted "piggy-back" registration
rights similar to those granted to Imperial, subject to customary underwriters
carve-backs and a carve-back in proportion to such shares sold by Imperial, if
any. Executive shall have "tag-along" rights, on a proportionate basis, on any
sales of Company shares by Imperial prior to consummation of an initial public
offering by the Company.
5. Reasonable Expenses. The Company will reimburse the Executive for
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all reasonable business expenses, including travel and lodging, which are
properly incurred by him in the performance of his duties hereunder, upon
presentation of proper vouchers therefor and in accordance with written policies
established from time to time by the Company for such reimbursements.
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6. Assistance. Executive shall make himself reasonably available,
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upon the request of the Company, to testify or otherwise assist in litigation,
arbitration, or other disputes involving the Company, or any of its officers,
directors, employees, subsidiaries or affiliates, during the Employment Period
and at reasonable times and locations following the termination of this
Agreement.
7. Covenant Not to Compete.
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7.1 General Covenant. During the Employment Period and for a period
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of one year after the termination of this Agreement pursuant to Sections 8.3,
8.4 or 8.5.1 (the "Non-Compete Period"), except in pursuit of his services as an
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officer and employee of the Company, Executive shall not, either individually or
as a partner, joint venturer, consultant, shareholder, member or Representative
(as defined below) of another Person (as defined below) or otherwise, directly
or indirectly, participate in, engage in, or have a financial or management
interest in, promote, or assist any other Person in any business operation or
any enterprise if such business operation or enterprise engages, or would
engage, in a Restricted Business in a Restricted Area; provided, however, the
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Executive may own up to one percent of the outstanding equity securities of any
Person.
For purposes of this Section 7.1: "Person" means an individual, a
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partnership, a limited liability company, a joint venture, a corporation, a
trust, an unincorporated organization, a division or operating group of any of
the foregoing, a government or any department or agency thereof or any other
entity.
"Representative" means any officer, director, principal, agent,
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employee, consultant or other representative of a Person.
"Restricted Business" means any business involved in the processing of
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payments to government entities or any other business in which the Company is
actively engaged on the date of termination of the Employment Period.
"Restricted Area" means any country in which the Company or its
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subsidiaries conducts a Restricted Business on the date of termination of the
Employment Period.
7.2 Nonsolicitation. During the Non-Compete Period and for a period
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of one year following termination of this Agreement, Executive shall not,
directly or indirectly (i) employ or seek to employ any person who is at the
date of termination of this Agreement, or was at any time within the six-month
period preceding the date of termination of this Agreement, an officer, general
manager or director or equivalent or more senior level employee of the Company,
their subsidiaries or affiliates or otherwise solicit, encourage, cause or
induce any such employee of the Company, its subsidiaries or affiliates to
terminate such employee's employment with the Company, its subsidiaries or
affiliates for the employment of another company (including for this purpose the
contracting with any person who was an independent contractor (excluding
consultant) of the Company during such period), except for persons who are
recruited by Executive to the Company within ninety (90) days after the
Commencement Date and are identified in writing by Executive to the Company
after the end of such period, or (ii) take any action that would interfere with
the relationship of the Company, its subsidiaries and
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affiliates with their respective suppliers and franchisees, except to the extent
permitted by the Board.
7.3 Enforcement. Executive agrees that all restrictions and
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agreements contained in this Section 7, including, without limitation, those
relating to duration and restricted territory, are necessary and fundamental to
the protection of the business of the Company, and are reasonable and valid, and
all defenses to the strict enforcement thereof by Executive are hereby waived.
Executive agrees that the remedy at law for any breach of this Agreement will be
inadequate, and that the damages flowing from such breach are not readily
susceptible to being measured in monetary terms. Accordingly, Executive agrees
that upon breach of this Section 7, the Company shall be entitled to immediate
injunctive relief and may obtain a temporary order restraining any threatened
further breach. Nothing in this Agreement shall be deemed to limit the
Company's remedies at law or in equity for any breach by Executive of any of the
provisions of this Agreement that may be pursued or availed of by the Company.
Nothing contained herein shall be construed as prohibiting the Company from
pursuing any other remedies available to it for such breach or threatened
breach, including the recovery of damages from the Executive.
Although the restrictions contained in Sections 7.1 and 7.2 are
considered by the parties to be fair and reasonable in the circumstances, it is
recognized that restrictions of such nature may fail for technical reasons, and
accordingly it is hereby agreed that if any of such restrictions shall be
adjudged to be void or unenforceable for whatever reason, but would be valid if
part of the wording thereof were deleted, or the period thereof reduced or the
area dealt with thereby reduced in scope, the restrictions contained in Sections
7.1 and 7.2 shall be enforced to the maximum extent permitted by law, and the
parties consent and agree that such scope or wording may be accordingly
judicially modified in any proceeding brought to enforce such restrictions.
Notwithstanding that the Executive's employment hereunder may be
terminated as provided in Section 8, this Agreement shall continue in full force
and effect insofar as is necessary to enforce the covenants and agreements of
the Executive contained in this Section 7.
8. Termination.
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8.1 Termination by the Company Without Cause. The Company may
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terminate the Employment Period upon thirty (30) days' prior written notice to
Executive for any reason other than the reasons specified in Sections 8.2, 8.3
and 8.4. Upon termination of the Employment Period pursuant to this Section
8.1, neither the Company on the one hand, nor Executive, on the other hand, will
have any liability or obligations to the other in respect of this Agreement,
except that (A) for the one-year period following the date of such notice,
Executive shall be entitled to continue to (i) receive the Base Salary then in
effect and (ii) to the extent permitted by such plans, participate in the
employee benefit plans maintained by the Company in which Executive participated
as of the date of such notice, or, to the extent not permitted by such plans,
receive equivalent benefits or cash payments on an individual basis, (B) in
addition to options or shares that are vested through the date of termination of
the Employment Period, all of the remaining unvested options or shares as of the
date of termination of the Employment Period (such number of options or shares
hereinafter referred to as the "Severance Shares") shall immediately vest,
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notwithstanding anything to the contrary in any other agreement between
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Executive and the Company and (C) Executive shall continue to be entitled to the
Guarantee Payment set forth in Section 4.4. Executive agrees that the right to
receive the benefits described in this Section 8.1 shall be full and adequate
compensation to Executive for all damages Executive may suffer as a result of
termination of his employment by the Company pursuant to this Section 8.1.
Notwithstanding anything contained herein to the contrary: (A) the Company's
obligations under this Section 8.1 shall be subject to Executive having executed
and delivered an instrument to the Company irrevocably waiving and releasing the
Company from any and all obligations or liabilities to Executive arising from or
in connection with Executive's employment with the Company or the termination
and claims Executive may have under federal, state or local statutes,
regulations or ordinances or under any common law principles or breach of
contract or the covenant of good faith and fair dealing, defamation, wrongful
discharge, intentional infliction of emotional distress or promissory estoppel
(the "Release and Waiver"); and (B) if the Company does not make the payment
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described in this Section 8.1, Executive shall be released from Executive's
obligations under Sections 7.1 and 7.2 to the Company; provided, however, that
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Executive shall not be so released if the sole reason for the Company's failure
to make such payment is Executive's failure to execute and deliver to the
Company the Release and Waiver.
8.2 Death. If Executive dies during the Employment Period, the
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Employment Period applicable to the Company shall automatically terminate and
all obligations of the parties shall terminate effective the date of death.
However, the Severance Shares shall immediately vest, notwithstanding anything
to the contrary in any other agreement between the Executive and the Company.
8.3 Disability. If Executive becomes Disabled (as hereinafter
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defined) during the Employment Period, the Company shall be entitled to
terminate his employment and the Employment Period upon written notice to
Executive or a person acting on his behalf. In the event of such termination,
Executive shall be released from any duties hereunder, and for the one year
period following such termination the Company shall be required to pay Executive
the Base Salary then in effect. In such event, to the extent permitted by such
plans, Executive shall also continue to participate in the employee benefit
plans maintained by the Company in which Executive participates as of the date
of termination for the balance of the term of this Agreement. In addition, the
Severance Shares shall immediately vest, notwithstanding anything to the
contrary in any other agreement between the Executive and the Company.
For purposes of this Agreement, "Disabled" shall mean mental or
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physical impairment or incapacity rendering Executive substantially unable to
perform his duties under this Agreement for a period of longer than 120 days out
of any 360 day period during the Employment Period. A determination of whether
Executive is Disabled shall be made by the Company in its sole discretion upon
its own initiative after obtaining certification from a duly licensed physician
or upon request of Executive or a person acting on his behalf.
8.4 Termination by the Company for Cause. The Company may terminate
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the Employment Period effective immediately upon written notice to Executive in
the event of any of the following:
(i) Executive's material breach of any material term
or condition of this Agreement, such breach
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continuing unremedied for 30 days after written notice
thereof from the Company specifying the acts constituting
the breach and requesting that they be remedied, it being
understood that issues with respect to the quality of
Executive's performance or results thereof shall not be
grounds for termination under this Section 8.4;
(ii) Executive's
(A) personal dishonesty, fraud,
misappropriation, willful misconduct or breach of fiduciary
duty, in each such case materially harmful to the Company's
property, personnel or business operations, or materially
damaging to the Company's relationships with its customers,
clients or employees or materially detrimental to the
goodwill of the Company; or
(B) intentional failure to perform the duties of
his employment or his other obligations hereunder, or any
continuing action by Executive materially detrimental to the
goodwill of the Company or materially damaging to the
Company's relationships with its customers, clients or
employees, which non-performance or actions remain
unremedied for 30 days after written notice thereof from the
Company specifying in detail the non-performance or actions
and requesting that they be remedied, it being understood
that issues with respect to the quality of Executive's
performance or results thereof shall not be grounds for
termination under this Section 8.4;
(iii) Executive's pleading guilty or no-contest to, or
conviction of, a felony or a crime involving moral turpitude
or fraud;
(iv) misappropriation (or attempted misappropriation)
of any of the Company's funds or property or of a business
opportunity of the Company, including attempting to secure
or securing any personal profit in connection with any
transaction entered into on behalf of the Company;
(v) Executive's conviction of any criminal offense
involving dishonesty or breach of trust or money laundering,
or Executive's agreement to enter into a pretrial diversion
or similar program in connection with a prosecution for such
offense;
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(vi) Executive's excessive drunkenness, use of
illegal drugs or abuse of any controlled substance; or
(vii) Executive's excessive absenteeism not related to
Executive's illness, which absenteeism remains unremedied
for 30 days after written notice thereof requesting that it
be remedied.
Upon termination of the Employment Period pursuant to this Section
8.4, the Executive will be bound by the provisions of Section 7 and the Company
will not have any liability to Executive in respect of this Agreement,
including, without limitation, claims for damages or liability to the Company by
Executive for compensation, severance payments and other benefits which would
have accrued to Executive hereunder after termination; provided, however, that
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all compensation, benefits and reimbursements accrued through the date of
termination shall be paid to Executive at the times normally paid by the
Company. Upon termination of the Employment Period pursuant to this Section
8.4, all of Executive's unvested options to acquire shares of common stock of
the Company shall be cancelled.
8.5 Termination by Executive.
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8.5.1 Voluntary Termination. Executive may terminate the Employment
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Period upon sixty (60) days' written notice to the Company and, upon such
termination, the provisions of the last paragraph of Section 8.4 shall apply,
except in the event that Executive terminates this Agreement pursuant to Section
8.5.2. Upon termination of the Employment Period pursuant to this Section 8.5.1,
all of Executive's unvested options to acquire shares of common stock of the
Company shall be cancelled. Executive agrees, in connection with the termination
of the Employment Period pursuant to this Section 8.5.1, not to publicly
disclose his intent to resign.
8.5.2 Termination for Good Reason. Executive may terminate the
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Employment Period at any time for Good Reason. "Good Reason" shall mean (i) a
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material diminution of Executive's authority, duties and responsibilities as
provided in Section 3, (ii) a reduction in or failure to pay timely Executive's
base salary, or (iii) the appointment of any person to a superior executive
position, (iv) any relocation of the Company's corporate headquarters to a place
90 miles or more outside of New York City, (v) the Company's breach of any
material term or condition of this Agreement and (vi) after expiration of the
six (6) month period following a Change in Control (as defined in Section 9.2);
provided, however, that each of the reasons set forth in (i) through (vi) of the
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preceding sentence shall be identified in written notice thereof delivered by
Executive to the Company specifying the nature of the reason and the Company
shall have been afforded a period of thirty (30) days to respond to such notice
and cure the condition set forth in such notice if capable of being cured. If
Executive terminates this Agreement for Good Reason, the provisions of Section
8.1 shall apply and Executive will be bound by the provisions of Section 7.
9. Change in Control.
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9.1 Acceleration of Options. If a Change in Control occurs, all of
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Executive's options to acquire shares of common stock of the Company shall
immediately vest and shall
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become immediately exercisable and all of Executive's option shares shall
immediately vest and cease to be subject to repurchase rights, if any,
notwithstanding anything to the contrary in any other agreement between
Executive and the Company. In addition, if the Company terminates the Employment
Period without cause as provided in Section 8.1 and within three (3) months
thereafter the Company enters into a definitive agreement for a Change in
Control (as defined in Section 9.2) occurs, Executive shall be entitled to the
benefits set forth in this Section 9.1.
9.2 Definition of Change of Control. For purposes of this Section 9,
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"Change in Control" shall mean: (i) the sale, lease, transfer, conveyance or
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other disposition (other than by way of merger or consolidation), in one or a
series of related transactions, of all or substantially all of the assets of the
Company and its subsidiaries (if any), taken as a whole to any Person other than
to the Company or one of its wholly-owned subsidiaries; (ii) the Company
consolidates with or merges into another Person (other than a subsidiary) or any
Person (other than a subsidiary) consolidates with, or merges into, the Company,
in any such event pursuant to a transaction in which the outstanding shares of
common stock of the Company are changed into or exchanged for cash, securities
or other property, other than any such transaction where the holders of the
shares of common stock of the Company immediately prior to such transaction own,
directly or indirectly, not less than a controlling interest in the voting
equity of the surviving or resulting Person immediately after such transaction;
(iii) the consummation of any transaction or series of transactions (including,
without limitation, any merger or consolidation) the result of which is that any
Person (other than a subsidiary of the Company), becomes the beneficial owner
(as such term is defined in Rule 13d-3 and Rule 13d-5 under the Securities
Exchange Act of 1934, as amended), directly or indirectly, of fifty percent
(50%) or more of the voting equity of the Company; or (iv) following the
Company's initial public offering, a change in the composition of the Company's
Board of Directors, as a result of which fewer than a majority of the incumbent
directors are directors who either (A) had been directors of the Company on the
Commencement Date or the date 24 months prior to the date of the event that may
constitute a Change in Control (the "original directors") or (B) were elected,
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or nominated for election, to the Company's Board of Directors with the
affirmative votes of at least a majority of the aggregate of the original
directors who were still in office at the time of the election or nomination and
the directors whose election or nomination was previously so approved.
Notwithstanding the foregoing, the term "Change in Control" shall not include
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any transaction or series of transactions with or to (A) any affiliate of the
Company, (B) any entity or successor entity in which the Company holds at least
a majority of the total voting power of such entity or successor entity (or
retains the right or ability by voting power, contract or otherwise to elect or
designate for election a majority of the members of the board of directors or
other governing body of such entity or successor entity), (C) any entity or
successor entity in which no person or entity holds a greater percentage of the
total voting power of such entity or successor entity than the Company's
percentage voting interest in such entity or successor entity or (D) any entity
formed at the direction of the Company in connection with obtaining financing
for the Company or any of its subsidiaries under an arrangement that provides
the Company with an option to reacquire its assets or other properties or other
similar financing arrangement.
10. Insurance. The Company will have the right at its own cost and
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expense to apply for and secure in its own name, or otherwise, life, health or
accident insurance or any or all of them covering Executive, and Executive
agrees to submit to the usual and customary
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medical examination and otherwise to cooperate with the Company in connection
with the procurement of any such insurance, and any claims thereunder.
11. Confidentiality; Books and Records; Company Property. Except in
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accordance with the provisions of this Agreement, during the Employment Period
and thereafter, Executive shall keep secret and retain in strictest confidence,
and shall not use for the benefit of Executive or others, all confidential
matters and affairs relating to the Company. Upon any termination of this
Agreement, Executive shall promptly deliver to the Company all confidential
information theretofore supplied to him, and each copy thereof, whether in his
possession or otherwise available to him, and shall certify in writing to the
Company that all analysis, studies and other documents that discuss or analyze
the business of the Company have been destroyed. All papers, books and records
of every kind and description relating to the business and affairs of the
Company, whether or not prepared by Executive, and all property owned by the
Company shall be the sole and exclusive property of the Company and Executive
shall surrender them to the Company upon request, during and after the
Employment Period.
12. Miscellaneous.
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12.1 Notices. All notices, requests, demands and other communications
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which are required to be or may be given under this Agreement to any of the
other parties shall be in writing and shall be deemed to have been duly given
when (a) delivered in person, the day following dispatch by an overnight courier
service (such as Federal Express or UPS, etc.) or (b) five days after dispatch
by certified or registered first class mail, postage prepaid, return receipt
requested, to the party to whom the same is so given or made:
If to the Company,
addressed to:
U.S. Audiotex Corporation
00 Xxxx Xxxxxx Xxxxx
Xxxxx 000
Xxx Xxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attn:
If to Executive,
addressed to him at: [ ]
Telephone:
Facsimile:
12.2 Amendments. This Agreement cannot be altered or otherwise
----------
amended except pursuant to an instrument in writing signed by each of the
parties.
12.3 Assignment. Executive acknowledges that the services required of
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Executive hereunder are personal and that Executive may not assign this
Agreement or any rights or duties under this Agreement. The Company may not
assign or otherwise transfer this
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Agreement to any other entity without the prior written consent of Executive,
which consent shall not be unreasonably withheld.
12.4 Entire Agreement. This Agreement contains the entire agreement
----------------
between the parties with respect to the transactions contemplated herein and
supersedes all previous written or oral negotiations, commitments and
understandings.
12.5 Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
12.6 Headings. All headings are inserted for convenience of
--------
reference only and shall not affect the meaning or interpretation of any such
provisions or of this Agreement, taken as an entirety.
12.7 Severability. If and to the extent that any court of competent
------------
jurisdiction holds any provision (or any part thereof) of this Agreement to be
invalid or unenforceable, such holding shall in no way affect the validity or
enforceability of the remainder of this Agreement, but shall be confined in its
operation to the jurisdiction in which made and to the provisions of this
Agreement directly involved in the controversy in which such judgment shall have
been rendered.
12.8 Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of New York without reference
to the conflicts of laws principles thereof.
12.9 Binding Effects. This Agreement shall be binding upon and inure
---------------
to the benefit of the parties hereto and their respective successors, legal
representatives and assigns.
12.10 Acquisitions, Mergers, Etc. Nothing herein contained shall be
--------------------------
construed to prevent or limit any acquisition, consolidation, or merger of the
Company.
12.11 Covenants, Etc. Executive hereby covenants, warrants and
---------------
represents that (i) the execution of this Agreement and the discharge of his
obligations hereunder will not breach or conflict with any other contract,
agreement or understanding between Executive and any other party or parties;
(ii) there are no agreements or arrangements, whether written or oral, in effect
which would prevent Executive from rendering services to the Company during the
term of this Agreement; (iii) Executive has not made and will not make any
commitment to do any act in conflict with this Agreement; and (iv) the terms of
this Agreement have been fully explained to him, that he understands the nature
and extent of the rights and obligations provided under this Agreement, and that
he has been given the opportunity to be represented by legal counsel in the
negotiation and preparation of this Agreement. The Company hereby covenants,
warrants and represents that (i) the execution of this Agreement and the
discharge of its obligations hereunder will not breach or conflict with any
other contract, agreement or understanding between the Company and any other
party or parties; (ii) the execution and delivery of this Agreement have been
duly and validly authorized by the Company; and (iii) this Agreement is binding
upon and enforceable against the Company in accordance with its terms.
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12.12 Waiver. No consent or waiver, express or implied, by any party
------
to or of any breach or default by another party in performance by the breaching
party of its obligations under this Agreement shall be deemed or construed to be
a consent or waiver to or of any breach or default by the breaching party in the
performance by such breaching party of any other obligations of such breaching
party under this Agreement. Failure on the part of any party to object to or
complain of any act or failure to act of any of the other parties or to declare
any of the other parties in default shall not constitute a waiver of any right
or remedy or the ability to object or complain or to declare any default at any
time in the future.
12.13 Survival. The provisions of Sections 5, 6, 7, 8, 11 and 12
--------
shall survive the termination of this Agreement.
12.14 Legal Fees. Each party will be responsible for their own legal
----------
fees and costs of counsel incurred in connection with negotiation and
preparation of this Agreement.
12.15 Other Employment. Executive hereby represents and warrants to
----------------
the Company that Executive is not prohibited from accepting employment with the
Company by any non-competition or other restriction contained in any employment
agreement with any other entity. Executive understands and agrees that any
breach of this representation or warranty that results in Executive being
prohibited from performing his duties under this Agreement will constitute a
material breach for purposes of Section 8.4 (i) of this Agreement, and on or at
any time after it is determined that Executive is so prohibited, the Company
will be permitted to terminate Executive's employment pursuant to Section 8.4.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement on the day and year first above written.
U.S. AUDIOTEX CORPORATION
By:________________________________
Name:
Title:
IMPERIAL BANK
By:________________________________
Name:
Title:
________________________________
Xxxxxx X. Xxxxx
