EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this "Agreement") is made as of May 13,
1998 by and between InterOffice (Holdings) Corporation, a Virginia corporation
(the "Company"), and X.X. XXXXX, an individual with an address at 0 Xxxxxxxx
Xxx, Xxxxxxxxx, Xxxxxxxxxx 00000 (the "Employee").
W I T N E S S E T H:
WHEREAS, the Company, together with its subsidiaries, is engaged in
the Business;
WHEREAS, the Company is a wholly-owned subsidiary of Interoffice
Superholdings Corporation, a Delaware corporation ("Superholdings");
WHEREAS, the Company desires to employ the Employee, and the
Employee desires to accept such employment, on the terms and conditions herein
set forth.
NOW, THEREFORE, in consideration of the mutual covenants and
conditions provided herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and intending to be
legally bound hereby, the parties hereto hereby agree as follows:
1. Employment, Duties and Authority.
1.1. Exclusive Devotion of Business Time. The Company agrees to
employ the Employee and the Employee agrees to devote his full business time,
effort, skills and loyalty to the business of the Company to effectively carry
out his responsibilities to the Company hereunder and to the render his services
and skills in the furtherance of the business of the Company; provided, that
this provision shall not prevent the Employee from: (i) serving on civil and
charitable boards, subject to the Company's policies and standards; and (ii)
managing his investments and the investments of his immediate family, subject to
the Company's policies and standards; provided that the activities referenced in
clauses (i) and (ii) above do not, individually or in the aggregate, interfere
with the performance of the Employee's duties under this Agreement.
1.2. Title; Position. The Company agrees to employ the Employee as
its Chief Investment Officer. The primary responsibility of the Employee shall
be the development, direction, implementation and management of the investment
strategy of the Company for the acquisition, site selection and initial
development of domestic and international executive office suite centers.
Without limiting the foregoing, the Employee shall serve at the request of the
Board of Directors of the Company (the "Board") as a director or officer of any
corporation of any type or kind, domestic or foreign, or any partnership,
limited liability company, joint venture, trust, employee benefit plan or other
enterprise in the furtherance of the Business and shall otherwise assist in the
preparation of, and implementation of, the strategic business plans and
developments of the Company.
1.3. Reporting. The Employee shall report to the chief executive
officer of the Company, the Board and to each other senior executive of
Superholdings or the Company from time to time designated by the Board
(collectively, the "Management Team") in the manner from time to time determined
by the Board.
1.4. Cooperation. During the term of this Agreement and any time
thereafter, the Employee agrees to give prompt written notice to the Company of
any claim or injury relating to the Company, and to fully cooperate in good
faith and to the best of his ability with the Company in connection with all
pending, potential or future claims, investigations or actions which directly or
indirectly relate to any transaction, event or activity about which the Employee
may have knowledge because of his employment with the Company. Such cooperation
shall include all assistance that the Company, its counsel, or its
representatives may reasonably request, including reviewing and interpreting
documents, meeting with counsel, providing factual information and material, and
appearing or testifying as a witness.
1.5. Primary Office Location; Travel Commitment. The Employee shall
perform his duties primarily from a home office or office location provided by
the Company in Marin County or such other location agreeable to the Company and
Employee; provided, that the Employee shall be available and shall travel from
such location from time to time as is necessary or desirable in furtherance of
the Business, specifically the acquisition, site selection and initial
development of executive office suite centers and meetings of management, the
Board or any committee thereof; provided, further, that it is acknowledged and
agreed that such annual travel commitment is expected to be approximately 50% of
his annual commitment of business time hereunder. It is acknowledged and agreed
that: (i) the Employee shall not be required to maintain a home office after 120
days after the date hereof, unless extended by the mutual agreement of the
Company and the Employee; and (ii) the Employee will require an office facility
currently anticipated to be approximately 1,500 square feet with reasonable and
customary furnishings, equipment and facilities.
1.6. Performance of Duties. During the term of this Agreement, the
Employee shall perform the duties assigned to him, which duties shall be
consistent with the duties described above in this Section 1, and shall observe
and carry out such rules, regulations, policies, directions and restrictions as
the Management Team shall from time to time establish. In performance of his
duties hereunder, the Employee shall comply in each and every respect with
applicable laws, rules and regulations applicable to the Company and the
Business. The Employee shall from time to time request from the Company the
administrative and personnel support services necessary or desirable for the
performance of his duties. The Management Team shall consider such requests in
good faith and provide the Employee (without cost to the Employee) with such
administrative and personnel support services as approved from time to
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time by the Management Team in accordance with the Company's policies and
consistent with the Company's financial budget. It is the presently anticipated
that during the first two to three years of the Term, that the Employee shall
require the services of two management level employees who will have their
principal office locations outside the United States and two to three
secretarial/administrative level employees.
1.7. Certain Defined Terms. For the purposes of this Agreement, the
following terms shall have the respective meanings ascribed thereto in this
Section:
1.7.1. "Annual EBITDA" means, as of any specified date, the
consolidated earnings of the Company before interest, taxes, depreciation and
amortization, computed for the twelve (12) full calendar months immediately
preceding such specified date.
1.7.2. "Business" means the executive suite business, to wit:
providing lessees with furnished separate office space and use of on-site
administrative support services, such as receptionists, word processing or
secretarial assistance, office management, mail and courier facilities,
conference facilities, telecommunication services and sundries, as such business
is conducted by the Company on the date hereof and as planned or projected to be
conducted during the term of this Agreement.
1.7.3. "Cause" shall mean any of the following conditions:
(i) The Employee has engaged in conduct which: (A) is a
misdemeanor and involves moral turpitude or the property of the Company
that has a material adverse effect on the reputation, business or
prospects of the Company, or (B) is a felony under the laws of the United
States or any state or political subdivision thereof,
(ii) The Employee commits (A) self-dealing or conflict
of interest in which the Employee received a benefit equal to or in excess
of (x) $250, in any transaction, or (y) $2,000 in the aggregate during any
fiscal year of the Company, (B) a breach of his fiduciary duty to the
Company or any of its affiliates, (C) gross negligence or (D) willful
misconduct or;
(iii) The Employee violates the internal procedures or
policies of the Company in a manner which has a material adverse effect on
the reputation, business or prospects of the Company such as conduct
constituting employment discrimination or sexual harassment;
(iv) The Employee breaches any of his material
obligations hereunder and fails to remedy such breach within thirty (30)
days after notice thereof; or
(v) The Employee fails to satisfactorily perform his
duties hereunder after notice from the Company of such unsatisfactory
performance and a reasonable period of time to remedy the deficiency
described in such notice. The
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Company and the Employee shall each in good faith discuss the appropriate
standard of performance and goals of the Employee to on or prior to
December 31, 1998 determine the mutually agreeable parameters of the
Employee's standard of performance (the "Performance Goals").
1.7.4. "Confidential Information" means all confidential and
proprietary information of the Company, including, without limitation,
information relating to or concerning Proprietary Products (as defined below)
and the exploitation of proprietary rights relating thereto; the Business; trade
secret information; client, investor, customer and supplier lists, identities
and contracts or arrangements; financial information (including financial
statements, budgets and projections); market research and development
procedures, processes, techniques, plans and results (including inconclusive
results); all information which may be included in any patent or copyright
application or amendment thereof or defense or litigation with respect thereto;
marketing, licensing and distribution or franchising strategies, plans or
projections; investment or acquisition opportunities, plans or strategies;
products and asset composition; pricing information or policies; royalty,
franchising or licensing arrangements; computer software, passwords, programs or
data; and all other business related information which has not been publicly
disclosed by the Company or its affiliates, whether such information is in
written, graphic, recorded, photographic, data or any machine readable form or
is orally conveyed to, or memorized by, or developed by the Employee; provided,
that Confidential Information shall not include information which: (i) at the
time of disclosure is generally known in the business and industry in which the
Company is engaged; or (ii) after disclosure is published or otherwise becomes
generally known in such business or industry through no fault of the Employee.
1.7.5. "Developments" means discoveries, concepts, ideas,
designs, methods, formulas, know-how, techniques, systems or any improvements or
enhancements thereon, whether or not patentable or copyrightable, made,
conceived, improved or developed, in whole or in part, by the Employee during
the term of this Agreement relating to: (i) any of the Company's or its
affiliates' products or services, potential products or services, developments
or techniques; or (ii) any work in which the Employee is or may be engaged on
behalf of the Company or its affiliates.
1.7.6. "Disability" means the Employee's physical or mental
incapacity which: (i) actually renders the Employee incapable of performing the
essential functions of his duties under this Agreement for any consecutive
forty-five (45) day period or for any sixty (60) days within any period of one
hundred and twenty (120) days; or (ii) in the opinion of a licensed medical
physician selected by the Company (who is reasonably acceptable to the Employee)
would render the Employee so disabled.
1.7.7. "Documents" means any and all books, textbooks,
letters, pamphlets, drafts, memoranda, notes, records, drawings, files,
documents, manuals, compilations of information, correspondence or other
writings of any kind and all copies, abstracts and summaries of any of the
foregoing, whether in printed, written or electronic data or any machine
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readable form: (i) of the Company or its affiliates; or (ii) in the possession
or control of the Employee and pertaining to, and used in the furtherance of,
the Business.
1.7.8. "Employee Shares" means the shares of common stock
which may be purchased by the Employee pursuant to the Employee Options
described in Section 2.7, which such shares, prior to the date of an IPO, shall
be shares of non-voting common stock, par value $0.001 per share, of the Company
and from and after the date of an IPO shall be shares of voting common stock,
par value $0.001 per share, of the Company. Employee Shares shall include any
shares of non-voting common stock converted into shares of voting common stock
pursuant to Section 2.8.
1.7.9. "Fair Market Value" means the value of the Company and
its subsidiaries as of any specified date computed as follows: (i) on or prior
to an IPO, the Fair Market Value shall equal (A) six (6) multiplied by; (B) the
Annual EBITDA as of such date (less consolidated debt of the Company but adding
consolidated cash); or (ii) after an IPO, the Fair Market Value shall equal the
closing price per share of the voting common stock of the Company as reported on
the applicable exchange or trading market on such specified date multiplied by
the total number of issued and outstanding shares of such common stock on such
date.
1.7.10. "Good Reason" means: (i) a material adverse change in
the duties or responsibilities of Employee that Company fails to remedy within
thirty (30) days after notice thereof by the Employee; (ii) the failure to pay
in a timely manner any compensation due to Employee hereunder that Company fails
to remedy within thirty (30) days after notice thereof by the Employee; and
(iii) a material breach by the Company of any provision of this Agreement that
the Company fails to remedy or cease within thirty (30) days after notice
thereof by the Employee.
1.7.11. "IPO" means the closing of an initial public offering
pursuant to an effective registration statement filed by the Company with the
Securities and Exchange Commission for the registration of shares of voting
common stock of the Company under the Securities Act of 1933, as amended.
1.7.12. "Proprietary Products" means collectively Documents,
Developments and Related Property.
1.7.13. "Related Property" means all tangible and intangible
property owned by, or licensed to, or otherwise used by the Company or its
affiliates including, without limitation, ideas, concepts, projects, programs,
computer software or hardware, data bases, specifications, documentation,
algorithms, source codes, object codes, program listings, product platforms and
architectures, concepts, screens, formats, technology, know-how, Developments,
research and development and patents, copyrights, trademarks, trade names,
service names, service marks, logos and designs and other proprietary rights and
registrations and applications and the rights to apply therefor.
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2. Compensation and Benefits.
2.1. Annual Salary and Covenant Payment. From the date hereof until
termination of the Employee's employment hereunder in accordance with Section 3,
the Company shall pay to the Employee (i) a fixed base salary at an annual rate
of $130,000 (the "Salary") and (ii) in addition to the Salary, a fixed base
salary at an annual rate of $45,000 (the "Covenant Payment" and, together with
the Salary, the "Annual Payments") as separate consideration for the Employee's
covenants and agreements provided in Section 8. The Annual Payments shall be
paid to the Employee in accordance with the normal payroll practices of the
Company as in effect from time to time. The aggregate amount of the Annual
Payments shall be increased effective the end of each annual anniversary of this
Agreement in proportion to the proportionate annual increase in the Consumer
Price Index -- All Urban Consumers - National Area, 1997 being the base year
plus a margin of 1%.
2.2. Performance Bonus. The Employee shall be eligible to receive an
annual performance bonus in such amounts as determined by the Board, in its sole
discretion considering, among other factors, the Employee's actual achievements
relative to the Performance Goals; provided, that such performance bonus shall
not exceed 50% of the Annual Payments of the Employee.
2.3. Reimbursement of Expenses. The Company shall reimburse the
Employee for reasonable out-of-pocket expenses incurred by the Employee for the
benefit of the Company upon presentation of appropriate documentation in
accordance with Company policy in effect from time to time.
2.4. Vacation Time. The Employee shall be entitled to paid vacation
at the rate of three (3) weeks per year during the term of this Agreement.
Vacation days shall begin to accrue from and after the date hereof ratably
during each fiscal quarter (or pro rata for any partial quarter) the Employee
actually works. Vacation shall be taken at times when reasonably appropriate
given the Employee's responsibilities and consistent with the needs of the
Company and shall not be for a period greater than two weeks at a time without
the consent of the Company, which consent shall not be unreasonably withheld.
2.5. Car Allowance. The Company shall pay to the Employee an
additional monthly amount sufficient for the Employee to lease an automobile
selected by the Employee for by the Employee. The Company shall also pay the
total amount of automobile reasonable and customary related expenses for the
business use of the automobile, including, without limitation, sales taxes,
registration fees, gas, repairs and insurance but excluding: (i) fines,
penalties, fees, judgement or liabilities (whether civil or criminal) arising
from or related to the operation of the automobile; and (ii) infractions of law,
e.g. parking or speeding tickets (collectively the "Car Allowance"); provided,
that the Company's obligation to pay the Car Allowance shall be limited to
$1,200 per month during the term of this Agreement.
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2.6. Benefits. During the period that the Employee is employed by
the Company and for such longer period as required by applicable law, the
Employee shall be entitled to participate in the employee benefit plans,
policies and programs, including health and disability insurance (collectively,
"Benefits"), on the same terms and conditions made available to other senior
employees of the Company.
2.7. Employee Stock Options.
2.7.1. Subject to the terms and conditions of this Agreement,
the Employee is hereby awarded options (the "Employee Options") to
purchase an amount of shares equal to 1.5% of the aggregate issued and
outstanding shares of voting and nonvoting common stock of the Company on
the date of this Agreement at an aggregate purchase price per share (the
"Option Purchase Price Per Share") equal to 52.2 million dollars divided
by the number of shares outstanding.
2.7.2. The right of the Employee to purchase the Employee
Shares under the Employee Options granted herein shall vest in equal
annual installments over a three (3) year period commencing on the date
hereof and ending on the expiration of the Initial Term (such vested
amount being referred herein as the "Vested Employee Options" and the
amount of the Employee Options which are not Vested Employee Options being
referred herein as the "Unvested Employee Options"). A temporary
disability of the Employee shall not delay such vesting of the unvested
Employee Options.
2.7.3. The Employee may, in his sole discretion but subject to
the terms and provisions of Section 3, exercise all or any part of the
Vested Employee Options upon notice to the Company to such effect at any
time on or prior to the date that is seven (7) years after the date hereof
provided that if the Employee is no longer in the employ of the Company he
must exercise the Vested Employee Options no later than ninety (90) days
after termination of his employment, subject, however, in all events to
the last sentence of this Section 2.7.3 and to the provisions of Section 3
of this Agreement. Subject to the terms and provisions of Section 3, upon
exercise of the Vested Employee Options and receipt by the Company of the
aggregate Option Purchase Price Per Share for such Vested Employee
Options, the Company shall issue and deliver to the Employee the Employee
Shares represented by such Vested Employee Options and, on such date, such
shares shall be duly authorized and issued, fully paid and nonassessable
and free and clear of any liens but subject to the terms and provisions of
this Agreement, provided, that if the Employee breaches his covenants and
agreements provided in Section 8 in any material respect or is terminated
for Cause, (other than Cause as defined in Section 1.7.3 (v)), then in
either said event, the Employee shall no longer be entitled to any
Employee Options nor to exercise the Vested Employee Options.
2.8. Conversion of Non-Voting Shares. The Company hereby agrees that
on the date of any IPO, the Company shall, without cost to the Employee,
exchange all issued and outstanding shares of non-voting common stock issued and
delivered pursuant to the exercise
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of any Employee Options for an equivalent number of shares of voting common
stock of the Company.
2.9. Withholding. All payments of compensation shall be subject to
all applicable withholding taxes and other legally required payroll deductions.
The Employee shall provide the Company with all information reasonably requested
by the Company with respect to such deductions and withholdings.
3. Term and Termination.
3.1. Term. Subject to Section 3.2, this Agreement shall have a term
of three (3) years commencing on the date hereof (the "Term"). The term of
employment may be further extended or renewed upon the mutual agreement of the
Company and the Employee.
3.2. Termination. Notwithstanding any provision in this Agreement to
the contrary, the Employee's employment hereunder shall be terminated upon any
of the following events: (i) the death or Disability of the Employee; (ii) the
termination of the Employee by the Company; or (iii) the termination by the
Employee, provided that any termination hereunder, other than as a result of
death, shall be communicated by a notice from the party terminating the
employment to the other party and such termination shall be effective on the
date such notice is deemed given by such party in accordance with Section 14,
except that in the event of termination by the Employee, the Employee shall give
the Company prior written notice of his intention to terminate his employment
not later than sixty (60) days prior to the date of such resignation. In the
event of the Disability or temporary disability of the Employee, the Company
shall have the right to appoint: (i) a temporary replacement to assume some or
all of the Employee's duties, if the Company, in its sole discretion, determines
that the Employee's condition may render him incapable of effectively performing
some or all of his essential duties as the Chief Investment Officer; and (ii) a
permanent replacement if the Employee's employment hereunder is terminated
because of such Disability. During any period the Employee is temporarily
disabled, the Company will continue, on the same terms and conditions, the
Employee's Annual Payments, Benefits and Performance Bonus (or prorated amount
of the Performance Bonus). Any period of paid disability leave under this
Section shall be counted against any period of unpaid leave to which the
Employee may be entitled under any federal, state or local family and medical
leave laws.
3.3. Payments Upon Termination of Employment. In the event of
termination of the Employee's employment under this Agreement:
3.3.1. The Employee (or his heirs, legatees or personal
representatives) shall be entitled to receive all compensation and
benefits specified in this Agreement which shall have accrued prior to the
date of such termination and the obligation of the Company for the payment
of compensation, and the right of the Employee to receive any further
compensation or benefit, except as provided by applicable law or otherwise
provided herein, shall terminate as at the date of such termination.
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3.3.2. All rights of the Company or the Employee which shall
have accrued hereunder prior to the date of the Employee's termination,
and the provisions of this Agreement which are stated herein to survive
termination, shall survive such termination and the Company and the
Employee shall continue to be bound by such provisions in accordance with
the terms hereof.
3.3.3. If the employment hereunder is terminated because of
the Employee's death or Disability, then the Company shall: (i) pay any
benefits which are expressly provided to the Employee upon his death or
Disability under the terms of any benefit plan, policy or program in
effect at the time of such death or Disability; (ii) shall pay the
Employee (or his heirs, legatees or personal representatives) a lump sum
benefit equal to 50% of the then effective amount of Annual Payments and
the prorated annualized amount of the Performance Bonus for such year; and
(iii) on or prior to one hundred eighty (180) days after the Determination
Date (provided there has been no IPO) redeem all of the Employee Shares
issued to the Employee and repurchase all of the Vested Employee Options
(exercised and unexercised) for an aggregate price equal to the aggregate
Fair Market Value of the (x) Employee Shares issued and outstanding on
each date and (y) Employee Shares represented by the Vested Employee
Options (less the Option Purchase Price Per Share).
3.3.4. If the employment hereunder is terminated by the
Company for Cause (as limited to the conduct described in Section
1.7.3(v)), then (A) the Company shall have the option, but not the
obligation, to redeem and repurchase; and (B) the Employee shall have the
right, but not the obligation, to sell, in each case, all of the Employee
Shares issued to the Employee and all of the Vested Employee Options
(exercised and unexercised) for an aggregate price equal to: (i) the
aggregate Fair Market Value of the (x) Employee Shares issued and
outstanding on such date and (y) Employee Shares represented by the Vested
Employee Options exercised on or prior to the Determination Date; less
(ii) the aggregate Option Purchase Price Per Share for the Employee Shares
which may be purchased by such vested Employee Options and which have not
on such date been issued and delivered. The Company's option to so redeem
and repurchase the Employee Shares and Employee Options may be exercised
by the Company, and the Employee's option to so sell the Employee Shares
and Employee Options, may be exercised by the Employee, in each case, on
or prior to the date that is one (1) year after the Determination Date by
notice to such effect.
3.3.5. If the employment hereunder is terminated by the
Company for Cause (as limited to the conduct described in Section 1.7.3
(i) through (iv)) or by the Employee other than for Good Reason, death or
Disability, then the Company shall have the option, but not the
obligation, to redeem all of the Employee Shares issued to the Employee
and repurchase all of the Vested Employee Options (exercised and
unexercised) for an aggregate price equal to: (i) the paid in capital of
the issued and outstanding Employee Shares; less (ii) the amount of
damages to the Company or its affiliates by the Employee arising from or
related to the Employee's conduct or resignation. The Company's option to
so redeem and repurchase the Employee Shares
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and Employee Options may be exercised by the Company on or prior to the
date that is one (1) year after the Determination Date by notice to such
effect to the Employee by the Company. Notwithstanding anything to the
contrary contained in this Agreement, if the Employee is terminated by the
Company for Cause (as limited to the conduct described in Section 1.7.3
(i) through (iv)) or by the Employee other than for Good Reason, death or
Disability, then the Employee shall have no further right to exercise any
Employee Options, whether Vested or Unvested.
3.3.6. If the employment hereunder is terminated by the
Company for any reason other than for Cause or the death or Disability of
the Employee or by the Employee for Good Reason, then the Company shall,
subject to the terms and provisions of Section 3.5:
(i) pay to the Employee all Annual Payments to which the
Employee would have been entitled had the Employee continued working
through the remainder of the term of this Agreement, excluding the
period of any period which this Agreement may be extended or renewed
(payable on the dates such amounts would have been otherwise payable
to the Employee);
(ii) continue through the end of the term of this
Agreement, excluding the period of any period which this Agreement
may be, but as of the Determination Date has not been, extended or
renewed, any benefits to which the Employee is entitled, subject to
the terms (including cost-sharing by the Employee) of any such
benefit plan, policy or program in effect on the date of such
termination, and only to the extent benefit continuation is
permitted by those benefit plans, policies and programs; and
(iii) on or prior to the date that is sixty (60) days
after the Determination Date redeem all of the Employee Shares
issued to the Employee and repurchase all of the Vested Employee
Options (exercised and unexercised) and Unvested Employee Options
for an aggregate price equal to (A) the aggregate Fair Market Value
of the Employee Shares issued and outstanding and Employee Shares
represented by the Vested Employee Options exercised on or prior to
the Determination Date; less (B) the aggregate Option Purchase Price
Per Share for the Employee Shares which may be purchased by such
Vested Employee Options and which have not on such date been issued
and delivered.
With respect to continuation of retirement and health
insurance benefits, the Company at its election, in its sole discretion,
may provide the Employee with either: (A) benefits substantially similar
to those which the Employee was entitled to receive under the health
insurance and retirement programs of the Company in effect on the date of
termination, at a cost to the Employee which is no greater than the cost
to the Employee at the date of termination; or (B) the cost to replace
those benefits at substantially the same level or value.
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3.4. Determination Date. As used herein, the term "Determination
Date" shall mean the date the Employee exercises the Vested Employee Options
unless the employment of the Employee is terminated pursuant to Section 3, in
which case the Determination Date shall be the date of such termination of
employment.
3.5. Mitigation. Subject to the provisions of Section 8, unless the
employment hereunder is terminated by the Company because the essential duties
performed by the Employee are eliminated because they are no longer required
(including such elimination resulting from the change in the strategic direction
of the Company), the Employee shall use his best efforts to seek comparable
employment and to otherwise mitigate any amounts payable, or any benefits
continued, pursuant to this Section 3. If the Employee obtains other comparable
employment, or has the right to receive any compensation, income or benefits
from comparable services rendered to any person or entity during the remaining
term of this Agreement, the payments and benefits due under this Section 3 will
be reduced by the amount of such compensation, income, or benefits. The Employee
shall give prompt notice to the Company of any employment undertaken or services
rendered by him, which notice shall include a description of the compensation,
income or benefits receivable by or available to him. The Employee shall also
give prompt notice to the Company of any changes in such employment, benefits or
income.
3.6. Exclusive Benefits. Except as so provided in this Section 3, no
further benefits, compensation or rights of the Employee shall continue to
accrue after the date of the termination of the employment of the Employee
hereunder.
3.7. Unvested and Vested Employee Options. All of Employee's rights
in and to Unvested Employee Options shall terminate thirty (30) days after
termination of the Employee's employment. Except as expressly otherwise provided
in this Agreement, all of Employee's rights to exercise a Vested Employee Option
shall terminate ninety (90) days after termination of the Employee's employment.
4. Ownership of Rights to Proprietary Products.
4.1. The Employee acknowledges and agrees that the Proprietary
Products, are and shall be the exclusive and valuable property of the Company
and its affiliates, as the case may be, and the Employee shall neither have, nor
claim to have, any right, title or interest therein or thereto. All
opportunities relating to the Proprietary Products whether or not involving
third parties shall belong to and be carried out for the account of the Company.
4.2. Any and all Developments shall be deemed work specifically
ordered or commissioned by the Company and each such work shall be considered a
"work made for hire" within the meaning of 17 U.S.C. ss.101 of the United States
Copyright Act and all rights to such work shall belong entirely to the Company.
The Employee shall from time to time upon the request of the Company promptly
execute and deliver to the Company any instruments necessary to effect the
irrevocable assignment of all of his right, title and interest, including
copyright and author rights, in such works to the Company and for the Company to
obtain proprietary rights in connection therewith.
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4.3. The Employee's covenants under this Section 4 of this Agreement
shall survive the expiration or termination of this Agreement.
5. Confidentiality. The Employee acknowledges and agrees that it is
imperative to the success of the Company and its affiliates that all
Confidential Information be maintained in strict confidence at all times. The
Employee shall therefore retain in strict confidence and not, directly or
indirectly, copy or disclose or transfer to any third party any Confidential
Information except in the furtherance of the Business for the benefit of the
Company; nor shall he use Confidential Information for any purpose except for
the benefit of the Company or its affiliates. The Employee's covenants under
this Section 5 of this Agreement shall survive the expiration or termination of
this Agreement.
6. Documents. The Employee agrees that any and all Documents made or kept
by him shall be and are the sole and exclusive property of the Company. The
Employee agrees to execute and deliver to the Company or its affiliates, as the
case may be, any and all agreements or instruments of any nature which the
Company or its affiliates deem necessary or appropriate to acquire, enhance,
protect, perfect, assign, sell or transfer his rights under this Section. The
Employee also agrees that upon request he will place all Documents in the
Company's possession and will not remove or cause to be removed any Documents or
reproductions thereof, except as is necessary and customary to directly further
the Business for the benefit of the Company or with the prior consent of the
Management Team. Upon the expiration or termination of the employment of the
Employee hereunder, all Documents shall remain in the possession or control of
the Company and any Documents within the possession or control of the Employee
or any of his affiliates shall be promptly returned to the Company at its
principal office. The Employee's covenants under this Section 6 of this
Agreement shall survive the expiration or termination of this Agreement.
7. Developments.
7.1. The Employee shall communicate and fully disclose to the
Company any and all Developments made or conceived by him during his employment
with the Company, and any and all Developments which he may conceive or make,
during his employment with the Company, shall be at all times and for all
purposes regarded as acquired and held by him in a fiduciary capacity and solely
for the benefit of the Company and shall be the sole and exclusive property of
the Company.
7.2. The Employee shall assist the Company in every proper way upon
request to obtain for its benefit patents, copyrights, trade names, trademarks,
service names, service marks for any and all Proprietary Products and
Developments in the United States and all foreign countries. All such patents,
copyrights, trade names, trademarks, service names, service marks and any
registrations and applications therefor are to be, and remain, the exclusive
property of the Company and the Employee agrees that he will, whenever so
requested by the Company or its duly authorized agent, make, execute and deliver
to the Company its affiliates, successors, assigns, or nominees, without charge,
any and all applications, assignments and all other instruments which the
Company or its affiliates shall deem necessary or appropriate in order to
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apply for and obtain such patents, copyrights, trade names, trademarks, service
names, and service marks or in order to assign and convey to the Company or its
affiliates, their successors, assigns or nominees, the sole and exclusive right,
title and interest therein and thereto. The Employee's obligations to execute
any such instruments shall continue notwithstanding the termination or
expiration of this Agreement.
8. Covenant Not to Compete. The Employee acknowledges and agrees that the
Proprietary Products are the exclusive and valuable property of the Company and
may not be used by the Employee for any purpose of any kind, directly or
indirectly, except during the term of this Agreement for the sole and exclusive
benefit of the Company in his capacity as an employee of the Company and that
the success of the Company depends on the Employee's observance of his covenants
in this Section 8.
8.1. In consideration of the rights and benefits hereunder including
the Covenant Payments, the Employee agrees that so long as he is an employee or
consultant of the Company and for a period of one (1) year thereafter, if the
employment of the Employee is terminated by the Company for Cause (as limited to
the conduct described in Section 1.7.3(i) through (iv)) or by the Employee
without Good Reason, he shall not directly or indirectly:
8.1.1. Engage or participate in any business or line of
business that competes with the Business (or any line of business) conducted by
the Company or under consideration by the Company; or perform any research or
development or distribution or marketing services for any Proprietary Product or
any product which is related to the Business that could be, directly or
indirectly, developed, marketed or otherwise exploited by the Company.
8.1.2. Engage in business with, or provide advice or services
to, any person or entity which directly or indirectly competes with the Business
(or any line of business) of the Company.
8.2. In consideration of the rights and benefits hereunder including
the Covenant Payments, the Employee agrees that so long as he is an employee or
consultant of the Company and for a period of one (1) year thereafter he shall
not directly or indirectly:
8.2.1. Solicit, hire or retain any employee or consultant of
the Company or persuade or entice any such employee or consultant to terminate
or lessen the extent of his, her or its relationship with the Company.
8.2.2. Engage in any activity to interfere with, disrupt or
damage the Business of the Company or its relationships with any of its clients,
customers, distributors, suppliers, investors or other financial co-venturer or
other business relationship.
8.3. In the event the employment of the Employee is terminated by
the Company without Cause or by the Employee for Good Reason, the Restrictive
Period shall be for so long as the Company continues to be obligated to pay the
Employee in accordance with
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the terms of Section 3 of this Agreement, but in no event less than one (1) year
after termination of employment.
8.4. Following termination of the Employee's employment by the
Company for any reason, the Employee shall continue to observe and be bound by
his covenants under Sections 8.1 and 8.2 for the period provided in such
Sections.
8.5. For purposes of this Section 8, the term "Company" shall
include the Company and its affiliates, including any entity that directly or
indirectly controls the business and affairs of the Company.
8.6. Notwithstanding anything to the contrary in this Agreement, in
the event the Employee violates the provisions of this Section 8, then, in
addition to all other rights and remedies available to the Company, the Company
shall have no further obligation to pay Employee any money or to provide
Employee with any rights or benefits to which Employee would have been entitled
pursuant to this Agreement had Employee not breached this Section 8.
9. Specific Enforcement.
9.1. The Employee is obligated under this Agreement to render
services and comply with covenants of a special, unique, unusual and
extraordinary character, thereby giving this Agreement peculiar value so that
the loss of such service or violation by the Employee of this Agreement could
not reasonably or adequately be compensated in damages in an action at law.
Therefore, in addition to any other remedies or sanctions provided by law,
whether criminal or civil, and without limiting the right of the Company and
successors or assigns to pursue all other legal and equitable rights available
to them, the Company shall have the right during the Employee's employment
hereunder (or thereafter with respect to obligations continuing after the
termination of this Agreement) to compel specific performance hereof by the
Employee or to obtain temporary and permanent injunctive relief against
violations hereof by the Employee, and, in furtherance thereof, to apply to any
court with jurisdiction over the parties hereto in accordance with Section 18 to
enforce the provisions hereof.
9.2. The Employee waives any requirement for security or the posting
of any bond or other surety and proof of damages in connection with any
temporary or permanent award of injunctive, mandatory or other equitable relief
and further agrees to waive the defense in any action for specific performance
that a remedy at law would be adequate.
10. Legal Costs and Expenses. If any party hereto prevails in any
proceedings, legal or equitable, to enforce any obligations under this
Agreement, such party shall also be entitled to recover all costs and expenses
incurred by such party in connection therewith, including reasonable attorneys'
and accountants' fees and disbursements.
11. Assignment. The rights and duties of the Employee hereunder are not
assignable. The Company may assign this Agreement and all rights and obligations
hereunder to any third
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party who becomes a successor to the Company's Business. Upon any such
assignment by the Company, the term "Company" as used herein shall be deemed to
include any such assignee of the Company, and the assignee shall have the right
to enforce all of the Company's rights and remedies hereunder in its own name as
if a party hereto in the place and stead of the Company. The Employee agrees to
confirm his obligations to any assignee, transferee, licensee or sublicensee of
the Company or their successors and assigns (a "Successor Employer") by
executing a new contract with such Successor Employer containing substantially
the same terms and conditions as herein provided; provided that such Successor
Employer also confirms to the Employee all of the Company's obligations as
herein provided.
12. Binding Effect. This Agreement shall be binding upon the parties
hereto and their respective successors-in-interest, heirs and personal
representatives and, to the extent permitted herein, the assigns of the Company.
13. Severability. If any provision of this Agreement or any part hereof or
the application hereof to any person or circumstance shall be finally determined
by a court of competent jurisdiction or by any arbitration panel to be invalid
or unenforceable to any extent, the remainder of this Agreement, or the
remainder of such provision or the application of such provision to persons or
circumstances other than those as to which it has been held invalid or
unenforceable, shall not be affected thereby and each provision of this
Agreement shall remain in full force and effect to the fullest extent permitted
by law. The parties also agree that if any portion of this Agreement, or any
part hereof or application hereof, to any person or circumstance shall be
finally determined by a court of competent jurisdiction or arbitration panel to
be invalid or unenforceable to any extent, then such objectionable provision
shall be deemed modified to the extent necessary so as to make it valid,
reasonable and enforceable including, without limitation, modification of the
restrictive covenants of Section 8 with respect to geography, time or scope of
business.
14. Notices. Wherever provision is made in this Agreement for the giving
of any notice, such notice shall be in writing and shall be deemed to have been
duly given if mailed by first class United States mail, postage prepaid,
addressed to the party entitled to receive the same or if delivered personally,
telegraphed, telexed, sent by facsimile transmission or sent by overnight
courier to such party at the address specified below or to such other address,
in any such case, as any party hereto shall have last designated by notice to
each other party:
If to the Company:
INTEROFFICE (HOLDINGS) CORPORATION
00000 Xxxxxx Xxxxx Xxxx
Xxxxx 000
Xxxxxxx, XX 00000
Attn: Chief Executive Officer
Telecopy: (000) 000-0000
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With a copy to: (i) Xxxxxxx, Xxxxxxxxx LLP, 0 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attn: Xxxxx X. Xxxxxxx, Esq., Telecopy:
000-000-0000; and (ii) Xxxxx Xxxxxxx, Esq., General Counsel,
Reckson Realty Associates Corp., 000 Xxxxxxxxxxx Xxxx,
Xxxxxxxx, Xxx Xxxx 00000, Telecopy: 000-000-0000
If to the Employee:
X.X. XXXXX
at the address set forth in the recitals
Telecopy: 000-000-0000
With a copy to: Xxxxxxx, Xxxxxx & Xxxxxxx, 0 Xxxxxxxxxxx
Xxxxxx, Xxxxx 000, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, Attn:
Xxxxx X. Xxxxx, Esq., Telecopy: 000-000-0000.
All such notices, requests and other communications will: (i) if
delivered personally to the address as provided in this Section, be deemed given
upon delivery; (ii) if delivered by facsimile transmission to the facsimile
number as provided in this Section, be deemed given upon the completion of the
facsimile transmission, if the receipt is confirmed by the telefax machine;
(iii) if delivered by overnight courier, be deemed given upon the first business
day after such notice, request or other communication is given to such courier
with all charges and fees prepaid and any required signature of the deliveree is
waived; and (iv) if delivered by mail in the manner described above to the
address as provided in this Section, be deemed given upon receipt (in each case
regardless of whether such notice, request or other communication is received by
any other person to whom a copy of such notice, request or other communication
is to be delivered pursuant to this Section).
15. Entire Agreement; Amendment. This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof
and supersedes all prior written or oral negotiations, representations,
agreements, commitments, contracts or understandings with respect thereto and no
modification, alteration or amendment to this Agreement may be made unless the
same shall be in writing and signed by both of the parties hereto.
16. Waivers. No failure by either party to exercise any of such party's
rights hereunder or to insist upon strict compliance with respect to any
obligation hereunder, and no custom or practice of the parties at variance with
the terms hereof, shall constitute a waiver by either party to demand exact
compliance with the terms hereof. Waiver by either party of any particular
default by the other party shall not affect or impair such party's rights in
respect to any subsequent default of the same or a different nature, nor shall
any delay or omission of either party to exercise any rights arising from any
default by the other party affect or impair such party's rights as to such
default or any subsequent default.
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17. Governing Law. For purposes of construction, interpretation and
enforcement, this Agreement shall be deemed to have been entered into under the
laws of the State of New York and its validity, effect, performance,
interpretation, construction and enforcement shall be governed by and subject to
the laws of the State of New York without reference to its choice of law rules.
18. Exclusive Jurisdiction. All actions and proceedings arising out of, or
relating to, this Agreement shall be heard and determined in any state or
federal court sitting in the county of New York, New York. Each of the Company
and the Employee, by execution and delivery of this Agreement: (i) expressly and
irrevocably consent and submit to the personal jurisdiction of any of such
courts in any such action or proceeding; (ii) consent to the service of any
complaint, summons, notice or other process relating to any such action or
proceeding by delivery thereof to such party by hand or by U.S. certified mail
without return receipt requested, delivered or addressed as set forth in Section
14 of this Agreement; and (iii) waive any claim or defense in any such action or
proceeding based on any alleged lack of personal jurisdiction, improper venue or
forum non conveniens or any similar basis.
19. Interpretation. Section titles and headings to sections herein are
inserted for convenience of reference only and are not intended to be a part of
or to affect the meaning or interpretation of this Agreement.
20. Expenses. Each of the Company, on the one hand, and the Employee, on
the other, will pay all of their own costs and expenses incident to the
negotiation and preparation of this Agreement.
21. Miscellaneous.
21.1. This Agreement may be executed in one or more counterparts,
each of which shall be considered an original instrument, but all of which shall
be considered one and the same agreement.
21.2. The Section headings herein are for convenience of reference
only and shall not be used to construe the meaning of any provision of this
Agreement.
21.3. Any word or term used in this Agreement in any form shall be
masculine, feminine, neuter, singular or plural, as proper reading requires. The
words "herein", "hereof", "hereby" or "hereto" shall refer to this Agreement
unless otherwise expressly provided. Any reference herein to a Section or any
exhibit or schedule shall be a reference to a Section of, and an exhibit or
schedule to, this Agreement unless the context otherwise requires.
[THE NEXT PAGE IS THE SIGNATURE PAGE]
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IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the date first written above.
COMPANY:
INTEROFFICE (HOLDINGS) CORPORATION
By: /s/ Xxxxx Xxxxxxx
-----------------------------------------
Name: Xxxxx Xxxxxxx
Title: Co-Chairman
EMPLOYEE:
/s/ X.X. Xxxxx
--------------------------------------------
X.X. XXXXX, Individually
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