Exhibit 10.31
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EMPLOYMENT AGREEMENT
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This Employment Agreement (the "Agreement"), made this 31 day of December
1999 is entered into by and between Switchboard Incorporated, a Delaware
corporation (the "Company"), and Xxxxx X. Canon (the "Employee").
1. Title; Capacity. The Employee shall serve as Vice President of
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Business Development, or in such other position as the Company or its Board of
Directors (the "Board") may determine from time to time. The Employee shall be
subject to the supervision of, and shall have such authority as is delegated to
him by, the Board or such officer of the Company as may be designated by the
Board.
The Employee hereby accepts such employment and agrees to undertake the
duties and responsibilities inherent in such position and such other duties and
responsibilities as the Board or its designee shall from time to time reasonably
assign to him. The Employee agrees to devote his entire business time,
attention and energies to the business and interests of the Company while
employed by the Company.
2. At-Will Employment. The Employee shall be employed on an at-will
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basis, which means either party may terminate the employment relationship at any
time, for any reason or no reason, and with or without notice.
3. Compensation and Benefits.
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3.1 Salary. The Company shall pay the Employee a base salary at the
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annualized rate of one-hundred and thirty thousand dollars ($130,000), in equal
bi-weekly
installments, consistent with the Company's regular payroll procedures.
Employee's salary shall be subject to adjustment, as determined by the Board.
3.2 Bonus. The Employee shall be eligible to receive an annual bonus
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of up to thirty-two thousand and five-hundred dollars ($32,500) for the one-year
period beginning on January 1, 1999, in the event that certain criteria are met,
as specifically set forth in the Employee's 1999 Executive Incentive Plan. Such
bonus shall be subject to adjustment thereafter as determined by the Board.
3.3 Benefits. The Employee shall be entitled to participate in all
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benefit programs that the Company establishes and makes available to its
employees, if any, to the extent that Employee's position, tenure, salary, age,
health and other qualifications make him eligible to participate.
4. Change in Control.
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4.1 Stock Options. In the event of a Change in Control, fifty
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percent (50%) of the Employee's outstanding unvested stock options shall
immediately vest and become exercisable in full, if:
(i) the Employee remains employed by the Company for a continuous
period of six (6) months after the effective Change in Control date; or
(ii) the Employee elects to resign within six (6) months of the
effective Change in Control date because (a) the Employee's job is relocated
more than 35 miles from Westboro, Massachusetts or (b) the Employee's job title
and/or overall targeted cash compensation are materially reduced from levels in
effect immediately prior to the Change in Control.
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4.2 "Change in Control" means an event or occurrence set forth in
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any one or more of subsections (a) through (d) below (including an event or
occurrence that constitutes a Change in Control under one of such subsections
but is specifically exempted from another such subsection):
(a) the acquisition by an individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) (a "Person"), other than Banyan Worldwide or
CBS Corporation, of beneficial ownership of any capital stock of the Company if,
after such acquisition, such Person beneficially owns (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) 20% or more of either (i) the
then-outstanding shares of common stock of the Company (the "Outstanding Company
Common Stock") or (ii) the combined voting power of the then-outstanding
securities of the Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities"); provided, however, that
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for purposes of this subsection (a), the following acquisitions shall not
constitute a Change in Control: (i) any acquisition directly from the Company
(excluding an acquisition pursuant to the exercise, conversion or exchange of
any security exercisable for, convertible into or exchangeable for common stock
or voting securities of the Company, unless the Person exercising, converting or
exchanging such security acquired such security directly from the Company or an
underwriter or agent of the Company), (ii) any acquisition by the Company, (iii)
any acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company, or (iv)
any acquisition by any corporation pursuant to a transaction which complies with
clauses (i) and (ii) of subsection (c) of this Section 1.1; or
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(b) such time as the Continuing Directors (as defined below) do not
constitute a majority of the Board (or, if applicable, the Board of Directors of
a successor corporation to the Company), where the term "Continuing Director"
means at any date a member of the Board (i) who was a member of the Board on
the date of the execution of this Agreement or (ii) who was nominated or elected
subsequent to such date by at least a majority of the directors who were
Continuing Directors at the time of such nomination or election or whose
election to the Board was recommended or endorsed by at least a majority of the
directors who were Continuing Directors at the time of such nomination or
election; provided, however, that there shall be excluded from this clause (ii)
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any individual whose initial assumption of office occurred as a result of an
actual or threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or consents, by
or on behalf of a person other than the Board; or
(c) the consummation of a merger, consolidation, reorganization,
recapitalization or statutory share exchange involving the Company or a sale or
other disposition of all or substantially all of the assets of the Company (a
"Business Combination"), unless, immediately following such Business
Combination, each of the following two conditions is satisfied: (i) all or
substantially all of the individuals and entities who were the beneficial owners
of the Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such Business Combination beneficially own,
directly or indirectly, more than 50% of the then-outstanding shares of common
stock and the combined voting power of the then-outstanding securities entitled
to vote generally in the election of directors, respectively, of the resulting
or acquiring corporation in such Business Combination (which shall include,
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without limitation, a corporation which as a result of such transaction owns the
Company or substantially all of the Company's assets either directly or through
one or more subsidiaries) (such resulting or acquiring corporation is referred
to herein as the "Acquiring Corporation") in substantially the same proportions
as their ownership, immediately prior to such Business Combination, of the
Outstanding Company Common Stock and Outstanding Company Voting Securities,
respectively; and (ii) no Person (excluding the Acquiring Corporation or any
employee benefit plan (or related trust) maintained or sponsored by the Company
or by the Acquiring Corporation) beneficially owns, directly or indirectly, 20%
or more of the then outstanding shares of common stock of the Acquiring
Corporation, or of the combined voting power of the then-outstanding securities
of such corporation entitled to vote generally in the election of directors
(except to the extent that such ownership existed prior to the Business
Combination); or
(d) approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.
5. Circumstances Triggering Receipt of Termination Benefits.
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5.1 Termination by Switchboard. Switchboard shall provide the
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Employee with the benefits set forth in Section 6 upon termination by
Switchboard of the Employee's employment at any time during the term of this
Agreement for reasons other than termination for "cause." For the purposes
hereof, "cause" shall be defined as the willful and repeated failure of the
Employee to perform substantially his duties, or action by the Employee
involving willful misfeasance, gross negligence or the commission of any
felonious action; provided, however, that termination for cause shall not be
effective unless the Employee shall have received written
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notice from Switchboard of such failure (specifying in detail the facts and
circumstances on which Switchboard is relying) and a demand for substantial
performance thirty (30) days prior to such termination, and Switchboard
determines that the Employee shall have failed during such thirty (30) day
period to resume the diligent performance of his duties. If Employee, in good
faith, disputes Switchboard's determination that he has not so resumed the
diligent performance of his duties, the parties agree to submit such dispute to
arbitration in accordance with the provisions of Section 12 below.
5.2 Termination by Employee. Switchboard shall provide the Employee
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with the benefits set forth in Section 6 upon termination by the Employee of the
Employee's employment with Switchboard at any time during the term of this
Agreement if the Employee elects to resign within 90 days of either of the
following events:
(i) The Employee's job is relocated more than 35 miles from
Westboro, Massachusetts; or
(ii) The Employee's job title and/or overall targeted cash
compensation are materially reduced from levels in effect at the
commencement of the initial or any renewal term of this Agreement.
5.3 Notice of Termination. Any termination of the Employee's
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employment by Switchboard or by the Employee as referred to in this Section
shall be communicated by written notice of termination to the other party.
6. Termination Benefits. Subject to and in accordance with the
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provisions set forth in Section 5, and further subject to the execution of a
mutually agreeable release agreement, the following benefits (subject to any
applicable taxes required to be withheld) shall be paid to the
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Employee as follows:
(a) Compensation. The Employee will be paid his base salary for a
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period of six months from the effective date of his termination (the
"Continuation Period"), in the event that the Employee remains unemployed during
the Continuation Period. If the Employee obtains other employment during the
Continuation Period, any salary continuation will cease unless the Employee's
new employment is at a base salary lower than his base salary under Section 3.1,
in which case the Company will pay the Employee the difference between his base
salary under Section 3.1 and his new base salary during the Continuation Period.
(b) Insurance Benefits, etc. The Employee's participation (including
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dependent coverage) in the life, health and dental insurance plans (excluding
further participation in the existing 401K Plan) of Switchboard in effect
immediately prior to the effective date of Employee's termination shall be
continued, or equivalent benefits provided, by Switchboard, at the Employee's
then current contribution rate for such benefits for a period of up to six
months commencing on the effective date of Employee's termination in the event
that the Employee remains unemployed during the Continuation Period. If
Employee obtains other employment during the Continuation Period, any continuing
benefits will cease.
7. Continuing Obligations. In order to induce Switchboard to enter into
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this Agreement, the Employee hereby ratifies and confirms his Invention and Non-
Disclosure Agreement with Switchboard. Without limiting the generality of the
foregoing, the Employee agrees that all documents, records, techniques, business
secrets and other information which have come into his possession from time to
time during his employment hereunder shall be deemed to be confidential and
proprietary to Switchboard and he shall retain in confidence any confidential
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information known to him concerning Switchboard and its parent and/or
subsidiaries and their respective businesses and such information shall not be
disclosed.
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8. Other Agreements. Employee hereby represents that he is not bound by
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the terms of any agreement with any previous employer or other party to refrain
from using or disclosing any trade secret or confidential or proprietary
information in the course of his employment with the Company or to refrain from
competing, directly or indirectly, with the business of such previous employer
or any other party. Employee further represents that his performance of all the
terms of this Agreement and as an employee of the Company does not and will not
breach any agreement to keep in confidence proprietary information, knowledge or
data acquired by him in confidence or in trust prior to his employment with the
Company.
9. Notices. All notices required or permitted under this Agreement shall
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be in writing and shall be deemed effective upon personal delivery or upon
deposit in the United States Post Office, by registered or certified mail,
postage prepaid, addressed to the other party at the address shown above, or at
such other address or addresses as either party shall designate to the other in
accordance with this Section 8.
10. Pronouns. Whenever the context may require, any pronouns used in this
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Agreement shall include the corresponding masculine, feminine or neuter forms,
and the singular forms of nouns and pronouns shall include the plural, and vice
versa.
11. Entire Agreement. This Agreement constitutes the entire agreement
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between the parties and supersedes all prior agreements and understandings,
whether written or oral, relating to the subject matter of this Agreement,
including but not limited to the May 8, 1997 Senior Executive Termination
Benefits Agreement and any other employment-related agreements or benefits
agreements between the Employee and Switchboard, except as otherwise specified
in this Agreement. Employee's December 27, 1996 Invention and Non-Disclosure
Agreement;
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December 17, 1996 Incentive Stock Option Agreement, as amended; March 26, 1998
Incentive Stock Option Agreement; April 22, 1999 Incentive Stock Option
Agreement; and October 18, 1999 Incentive Stock Option Agreement will remain in
full force and effect, except that any provisions relating to adjustment of
options upon a change in control of the Company in the aforementioned stock
option agreements are hereby deleted and replaced by the language contained in
Section 4 of this Agreement. Employee's stock option agreements with Banyan
Worldwide will remain in full force and effect.
12. Arbitration. Any controversy or claim arising out of or relating to
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this Agreement or the breach thereof shall be settled by arbitration to be
conducted in Boston, Massachusetts, in accordance with the rules of the American
Arbitration Association, and judgment upon the award rendered by the arbitrators
may be entered in any court having jurisdiction thereof.
13. Amendment. This Agreement may be amended or modified only by a
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written instrument executed by both the Company and the Employee.
14. Governing Law. This Agreement shall be construed, interpreted and
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enforced in accordance with the laws of the Commonwealth of Massachusetts.
15. Successors and Assigns. This Agreement shall be binding upon and
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inure to the benefit of both parties and their respective successors and
assigns, including any corporation with which or into which the Company may be
merged or which may succeed to its assets or business, provided, however, that
the obligations of the Employee are personal and shall not be assigned by him.
16. Term. The initial term of this Agreement shall be for a period of
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twelve (12) months commencing on the effective date of this Agreement.
Thereafter, this Agreement shall be automatically renewed for successive twelve
(12) month periods unless either party indicates its
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intent not to renew by giving at least sixty (60) days written notice prior to
the expiration of the then-current term.
17. Miscellaneous.
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17.1 No delay or omission by the Company in exercising any right
under this Agreement shall operate as a waiver of that or any other right. A
waiver or consent given by the Company on any one occasion shall be effective
only in that instance and shall not be construed as a bar or waiver of any right
on any other occasion.
17.2 The captions of the sections of this Agreement are for
convenience of reference only and in no way define, limit or affect the scope or
substance of any section of this Agreement.
17.3 In case any provision of this Agreement shall be invalid,
illegal or otherwise unenforceable, the validity, legality and enforceability of
the remaining provisions shall in no way be affected or impaired thereby.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year set forth above.
SWITCHBOARD INCORPORATED
/s/ Xxxx Xxxxxx
By: Xxxx Xxxxxx
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Title: Vice President and CFO
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XXXXX X. CANON
/s/ Xxxxx X. Canon
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Vice President Business Development
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