Exhibit 10.2
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of January 19, 1998, between
INFORMATION VENTURES LLC, a limited liability company (the "Company"), and
Xxxxxxx X. Xxxxxxxx (the "Executive").
R E C I T A L S:
WHEREAS, the Company recognizes that the future growth,
profitability and success of the Company's business will be substantially and
materially enhanced by the employment of the Executive by the Company;
WHEREAS, the Company desires to employ the Executive and the
Executive has indicated his willingness to provide his services, on the terms
and conditions set forth herein;
NOW, THEREFORE, on the basis of the foregoing premises and in
consideration of the mutual covenants and agreements contained herein, the
parties hereto agree as follows:
Section 1. Employment.
(a) Duties. The Company hereby agrees to employ the Executive and
the Executive hereby accepts employment with the Company, on the terms and
subject to the conditions hereinafter set forth. Subject to the terms and
conditions contained herein, the Executive shall serve as Executive Vice
President and Chief Financial Officer of the Company and, in such capacity,
shall report to the President of the Company and shall have such duties as are
typically performed by a Chief Financial Officer of a corporation, together with
such additional duties, commensurate with the Executive's position as Executive
Vice President and Chief Financial Officer of the Company, as may be assigned to
the Executive from time to time by the President or Board of Directors of the
Company (the "Board of Directors"). Notwithstanding anything herein to the
contrary, the Executive shall have no involvement in the business of the
Company's MicroPatent subsidiaries during the six-month period commencing on the
date hereof.
(b) Location. The principal location of the Executive's employment
initially shall be in Boston, Massachusetts. At the request of the Company, the
principal location of the Executive's employment shall be in Fairfield County,
Connecticut, or such other place that the Company and the Executive shall
mutually deem appropriate, provided that in the event the Executive relocates at
the Company's request, the Company shall reimburse the Executive for his
reasonable moving expenses incurred in connection with such relocation
(including, without limitation, customary fees or commissions payable to
Executive's real estate sales agent and up to one point for mortgage financing),
as well as up to $10,000 for miscellaneous
expenses (including, without limitation, decorating expenses). The Executive
understands and agrees that he may be required to travel for business reasons.
Section 2. Term. Unless terminated pursuant to Section 6 hereof, the
Executive's employment hereunder shall commence on the date hereof and shall
continue during the initial period ending on the third anniversary of the date
hereof (the "Initial Term"). Thereafter, the Executive's term of employment
shall extend automatically for consecutive periods of one (1) year unless either
party shall provide notice of termination not less than one hundred and twenty
(120) days prior to the end of the Employment Term. The Initial Term, together
with any extension pursuant to this Section 2, is referred to herein as the
"Employment Term."
Section 3. Compensation.
(a) Salary. As compensation for the performance of the Executive's
services hereunder, the Company shall pay to the Executive a salary (the
"Salary") of $200,000 per annum, increased annually to the extent of any net
increase over the applicable one-year period in the Consumer Price Index for all
Urban Consumers (CPI-U), as published by the Bureau of Labor Statistics of the
U.S. Department of Labor. The Salary shall be payable in accordance with the
payroll practices of the Company as the same shall exist from time to time. In
no event shall the Salary be decreased during the Employment Term.
(b) Bonus Plan. The Executive shall be eligible to receive an annual
cash bonus ("Bonus") in an amount up to 50% of the Salary, based upon meeting
objectives mutually determined by the Executive and the Board of Directors,
pursuant to a written objective plan which would be prepared annually, provided,
however, that the Bonus for the first year of the Employment Term shall equal at
least $50,000.
(c) Benefits. In addition to the Salary and Bonus, if any, the
Executive shall be entitled to participate in health, insurance, pension and
other benefits provided to other senior executives of the Company on terms no
less favorable than those available to such senior executives of the Company.
The Executive shall also be entitled to the same number of vacation days,
holidays, sick days and other benefits as are generally allowed to other senior
executives of businesses of comparable size and geography as the Company.
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Section 4. Exclusivity. During the Employment Term, the Executive
shall devote his full time to the business of the Company, shall faithfully
serve the Company, shall in all respects conform to and comply with the lawful
and reasonable directions and instructions given to him by the President and
Board of Directors in accordance with the terms of this Agreement, shall use his
best efforts to promote and serve the interests of the Company and shall not
engage in any other business activity, whether or not such activity shall be
engaged in for pecuniary profit, except that the Executive may (i) participate
in the activities of professional trade organizations related to the business of
the Company and (ii) engage in personal investing activities, provided that
activities set forth in these clauses (i) and (ii), either singly or in the
aggregate, do not interfere in any material respect with the services to be
provided by the Executive hereunder.
Section 5. Reimbursement for Expenses. The Executive is authorized
to incur reasonable expenses in the discharge of the services to be performed
hereunder, including expenses for travel, entertainment, lodging and similar
items in accordance with the Company's expense reimbursement policy, as the same
may be modified by the Board of Directors from time to time. The Company shall
reimburse the Executive for all such proper expenses upon presentation by the
Executive of itemized accounts of such expenditures in accordance with the
financial policy of the Company, as in effect from time to time.
Section 6. Termination.
(a) Death. This Agreement shall automatically terminate upon the
death of the Executive, and upon such event, the Executive's estate shall be
entitled to receive the amounts specified in Section 6(e) below as if
termination had occurred without Cause (as defined below).
(b) Disability. If the Executive is fully unable to perform the
duties required of him under this Agreement because of illness, incapacity, or
physical or mental disability, this Agreement shall remain in full force and
effect and the Company shall pay all compensation required to be paid to the
Executive hereunder, unless the Executive is fully unable to perform the duties
required of him under this Agreement for an aggregate of 180 days (whether or
not consecutive) during any 12-month period during the term of this Agreement,
in which event this Agreement (other than Sections 6(e), 7, 8, 9, 10, 11 and 12
hereof), including, but not limited to, the Company's obligations to pay any
Salary or to provide any privileges under this Agreement, shall terminate at the
end of the 180 days of complete disability.
(c) Cause. The Company may terminate the Executive's employment
during the Employment Term only for "Cause" as that term is defined below. In
the event of termination pursuant to
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this Section 6(c) for Cause, the Company shall deliver to the Executive written
notice setting forth the basis for such termination, which notice shall
specifically set forth the nature of the Cause which is the reason for such
termination. Termination of the Executive's employment hereunder shall be
effective upon delivery of such notice of termination. For purposes of this
Agreement, "Cause" shall mean: (i) the Executive's failure (except where due to
a disability contemplated by Section 6(b) hereof), neglect or refusal to perform
the essential duties of his position hereunder which failure, neglect or refusal
shall not have been corrected by the Executive within 30 days of receipt by the
Executive of written notice from the Company of such failure, neglect or
refusal, which notice shall specifically and in detail set forth the nature of
said failure, neglect or refusal; (ii) any willful or intentional act of the
Executive that has the effect of injuring the reputation or business of the
Company or its affiliates in any material respect; (iii) any continued or
repeated absence from the Company, unless such absence is (A) approved or
excused by the Board of Directors or (B) is the result of the Executive's
illness, or incapacity (in which event the provisions of Section 6(b) hereof
shall control); (iv) use of illegal drugs by the Executive or repeated
drunkenness; (v) conviction of the Executive for the commission of a felony or
(vi) the commission by the Executive of an act of fraud or embezzlement against
the Company.
(d) Resignation. The Executive shall have the right to terminate his
employment at any time by giving notice of his resignation.
(e) Payments. In the event that the Executive resigns or the
Executive's employment hereunder terminates for Cause, the Company shall pay to
the Executive all amounts accrued but unpaid hereunder through the date of
termination in respect of Salary, unused vacation or unreimbursed expenses. In
the event the Executive's employment hereunder is terminated by the Company
without Cause, in addition to the amounts specified in the foregoing sentence,
(i) the Executive shall continue to receive the Salary (less any applicable
withholding or similar taxes) at the rate in effect hereunder on the date of
such termination periodically, in accordance with the Company's prevailing
payroll practices, for a period of one year following the date of such
termination (the "Severance Term") and (ii) the Executive (and/or his covered
dependents) shall continue to receive any health or insurance benefits provided
to him as of the date of such termination in accordance with Section 3(c) hereof
during the Severance Term. Amounts owed by the Company in respect of the Salary
or reimbursement for expenses under the provisions of Section 5 hereof shall,
except as otherwise set forth in this Section 6(e), be paid promptly upon any
termination. Upon any termination of this Agreement, all of the rights,
privileges and duties of the Executive hereunder shall cease, except for his
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rights under this Section 6(e) and his obligations under Sections 7, 8, 9, 10,
11 and 12 hereunder.
Section 7. Non-Disclosure, Non-Interference and Inventions.
(a) No Competing Employment. The Executive acknowledges that the
agreements and covenants contained in this Section 7 are essential to protect
the value of the Company's business and assets and by his current employment
with the Company and its subsidiaries, the Executive has obtained and will
obtain such knowledge, contacts, know-how, training and experience and there is
a substantial probability that such knowledge, know-how, contacts, training and
experience could be used to the substantial advantage of a competitor of the
Company and to the Company's substantial detriment. Therefore, the Executive
agrees that for the period commencing on the date of this Agreement and ending
on the first anniversary of the termination of the Executive's employment
hereunder (such period is hereinafter referred to as the "Restricted Period"),
the Executive shall not engage, directly or indirectly, for himself or on behalf
of any person or entity, in any business activities which directly compete with
the business of the Company; provided, however, that the foregoing shall not
preclude the Executive from owning less than 1% of the shares of a public
company.
(b) Nondisclosure of Confidential Information. The Executive, except
in connection with his employment hereunder, shall not disclose to any person or
entity or use, either during the Employment Term or at any time thereafter, any
proprietary information not in the public domain or generally known in the
industry, in any form, acquired by the Executive while employed by the Company
or any predecessor to the Company's business or, if acquired following the
Employment Term, such information which, to the Executive's knowledge, has been
acquired, directly or indirectly, from any person or entity owing a duty of
confidentiality to the Company or any of its subsidiaries or affiliates,
relating to the Company, its subsidiaries or affiliates. The Executive agrees
and acknowledges that all of such information, in any form, and copies and
extracts thereof, are and shall remain the sole and exclusive property of the
Company, and upon termination of his employment with the Company, the Executive
shall return to the Company the originals and all copies of any such information
provided to or acquired by the Executive in connection with the performance of
his duties for the Company, and shall return to the Company all files,
correspondence and/or other communications received, maintained and/or
originated by the Executive during the course of his employment.
(c) No Interference. During the Restricted Period, the Executive
shall not, whether for his own account or for the account of any other
individual, partnership, firm, corporation
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or other business organization (other than the Company), directly or indirectly
solicit, endeavor to entice away from the Company or its subsidiaries, or
otherwise directly interfere with the relationship of the Company or its
subsidiaries with, any person who, to the knowledge of the Executive, is
employed by or otherwise engaged to perform services for the Company or its
subsidiaries (including, but not limited to, any independent sales
representatives or organizations) or who is, or was within the then most recent
twelve-month period, a customer or client, of the Company, its predecessors or
any of its subsidiaries. The placement of any general classified or "help
wanted" advertisements and/or general solicitations to the public at large shall
not constitute a violation of this Section 7(c) unless the Executive's name is
contained in such advertisements or solicitations.
(d) Inventions, etc. The Executive hereby sells, transfers and
assigns to the Company or to any person or entity designated by the Company all
of the entire right, title and interest of the Executive in and to all
inventions, ideas, disclosures and improvements, whether patented or unpatented,
and copyrightable material, made or conceived by the Executive, solely or
jointly, during his employment by the Company which relate to methods,
apparatus, designs, products, processes or devices, sold, leased, used or under
consideration or development by the Company, or which otherwise relate to or
pertain to the business, functions or operations of the Company or which arise
from the efforts of the Executive during the course of his employment for the
Company. The Executive shall communicate promptly and disclose to the Company,
in such form as the Company requests, all information, details and data
pertaining to the aforementioned inventions, ideas, disclosures and
improvements; and the Executive shall execute and deliver to the Company such
formal transfers and assignments and such other papers and documents as may be
necessary or required of the Executive to permit the Company or any person or
entity designated by the Company to file and prosecute the patent applications
and, as to copyrightable material, to obtain copyright thereof. Any invention
relating to the business of the Company and disclosed by the Executive within
one year following the termination of his employment with the Company shall be
deemed to fall within the provisions of this paragraph unless proved to have
been first conceived and made following such termination.
Section 8. Injunctive Relief. Without intending to limit the
remedies available to the Company, the Executive acknowledges that a breach of
any of the covenants contained in Section 7 hereof may result in material
irreparable injury to the Company or its subsidiaries or affiliates for which
there is no adequate remedy at law, that it will not be possible to measure
damages for such injuries precisely and that, in the event of such a breach or
threat thereof, the Company shall be entitled to obtain a temporary restraining
order and/or a preliminary or permanent injunction, without the necessity of
proving
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irreparable harm or injury as a result of such breach or threatened breach of
Section 7 hereof, restraining the Executive from engaging in activities
prohibited by Section 7 hereof or such other relief as may be required
specifically to enforce any of the covenants in Section 7 hereof.
Section 9. Representations and Warranties of the Executive. The
Executive represents and warrants to the Company as follows:
(a) This Agreement, upon execution and delivery by the Executive,
will be duly executed and delivered by the Executive and (assuming due execution
and delivery hereof by the Company) will be the valid and binding obligation of
the Executive enforceable against the Executive in accordance with its terms.
(b) Neither the execution and delivery of this Agreement nor the
performance of this Agreement in accordance with its terms and conditions by the
Executive (i) requires the approval or consent of any governmental body or of
any other person or (ii) conflicts with or results in any breach or violation
of, or constitutes (or with notice or lapse of time or both would constitute) a
default under, any agreement, instrument, judgment, decree, order, statute,
rule, permit or governmental regulation applicable to the Executive. Without
limiting the generality of the foregoing, except for the Separation Agreement
that the Executive has with the Xxxxxxxx Corporation (a true and complete copy
of which has been furnished to the Company), the Executive is not a party to any
non-competition, non-solicitation, no hire or similar agreement that restricts
in any way the Executive's ability to engage in any business or to solicit or
hire the employees of any person.
The representations and warranties of the Executive contained in
this Section 9 shall survive the execution, delivery and performance of this
Agreement.
Section 10. Successors and Assigns; No Third-Party Beneficiaries.
This Agreement shall inure to the benefit of, and be binding upon, the
successors and assigns of each of the parties, including, but not limited to,
the Executive's heirs and the personal representatives of the Executive's
estate; provided, however, that neither party shall assign or delegate any of
the obligations created under this Agreement without the prior written consent
of the other party. Notwithstanding the foregoing, the Company shall have the
unrestricted right to assign this Agreement and to delegate all or any part of
its obligations hereunder to any of its subsidiaries or affiliates, but in such
event such assignee shall expressly assume all obligations of the Company
hereunder and the Company shall remain fully liable for the performance of all
of such obligations in the manner prescribed in this Agreement. Nothing in this
Agreement shall confer upon any person or entity not a party to this Agreement,
or the legal representatives of such person or
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entity, any rights or remedies of any nature or kind whatsoever under or by
reason of this Agreement.
Section 11. Waiver and Amendments. Any waiver, alteration, amendment
or modification of any of the terms of this Agreement shall be valid only if
made in writing and signed by the parties hereto; provided, however, that any
such waiver, alteration, amendment or modification is consented to on the
Company's behalf by the Board of Directors. No waiver by either of the parties
hereto of their rights hereunder shall be deemed to constitute a waiver with
respect to any subsequent occurrences or transactions hereunder unless such
waiver specifically states that it is to be construed as a continuing waiver.
Section 12. Severability and Governing Law. The Executive
acknowledges and agrees that the covenants set forth in Section 7 hereof are
reasonable and valid in geographical and temporal scope and in all other
respects. If any of such covenants or such other provisions of this Agreement
are found to be invalid or unenforceable by a final determination of a court of
competent jurisdiction (a) the remaining terms and provisions hereof shall be
unimpaired and (b) the invalid or unenforceable term or provision shall be
deemed replaced by a term or provision that is valid and enforceable and that
comes closest to expressing the intention of the invalid or unenforceable term
or provision. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE.
Section 13. Notices.
(i) All communications under this Agreement shall be in writing and
shall be delivered by hand or mailed by overnight courier or by registered or
certified mail, postage prepaid:
(1) if to the Executive such address as the Executive may have furnished
the Company in writing,
(2) if to the Company, at c/o Warburg, Xxxxxx Ventures, L.P., 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, marked for the attention of the
Board of Directors, or at such other address as it may have furnished in writing
to the Executive, or
(ii) Any notice so addressed shall be deemed to be given: if delivered by
hand, on the date of such delivery; if mailed by courier, on the first business
day following the date of such mailing; and if mailed by registered or certified
mail, on the third business day after the date of such mailing.
Section 14. Section Headings. The headings of the sections and
subsections of this Agreement are inserted for convenience only and shall not be
deemed to constitute a part thereof, affect the meaning or interpretation of
this Agreement or of any term or provision hereof.
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Section 15. Entire Agreement. This Agreement constitutes the entire
understanding and agreement of the parties hereto regarding the employment of
the Executive. This Agreement supersedes all prior negotiations, discussions,
correspondence, communications, understandings and agreements between the
parties relating to the subject matter of this Agreement.
Section 16. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original and all of which
together shall be considered one and the same agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above written.
INFORMATION VENTURES LLC
By: /s/ Xxxxx Xxxxxx
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Xxxxx Xxxxxx
President
By: /s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx
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