EXHIBIT 10.5
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT is made this 28th
day of May, 1999 and is effective as of the 31st day of December 1998, by and
between Xxxxxxxx.xxx, Inc., a Delaware corporation (the "Company"), and Xxx X.
Xxxxxxx (the "Employee").
EXPLANATORY STATEMENT
WHEREAS, the Company and the Employee had entered into an original
employment agreement dated May 31, 1997 and now desire to amend and restate such
original employment agreement in its entirety; and
WHEREAS, the Company desires to employ the Employee on the terms
and conditions herein set forth, and the Employee has agreed to accept
employment with the Company on the terms and conditions herein set forth.
NOW, THEREFORE, in consideration of the premises and the mutual
promises made herein, the parties agree as follows:
1. EMPLOYMENT. The Company hereby employs the Employee as its
Executive Vice President and Chief Financial Officer, and agrees to continue the
Employee in that position (or in any other position approved by the Employee)
during the term of this Agreement.
2. TERM. This Agreement shall begin December 31, 1998 and shall
continue until December 31, 2001. Thereafter, this Agreement shall renew
automatically from year to year, subject to the right of either party to
terminate this Agreement at any time during the initial term or during any
renewal term upon sixty (60) days' prior written notice to the other party.
3. COMPENSATION.
A. The Employee's compensation under this Agreement shall be as set
forth in Schedule A attached hereto and made a part hereof.
B. Such salary shall be subject to normal periodic reviews based on
the policies and practices of the Company.
4. BONUSES; EQUITY PLANS. In addition to his salary, during the
term of this Agreement, the Employee shall be entitled to participate in any
bonus, stock and option plans, programs, arrangements and practices sponsored by
the Company for the benefit of its employees serving in similar capacities with
the Company (and/or its affiliates) as may be established from time to time by
the Company for the benefit of such employees, in accordance with the terms of
such plans, as amended by the Company from time to time. Bonuses will be paid to
the Employee as described in Schedule A hereto when the Company achieves its
revenues and
earnings objectives and when the Employee satisfies reasonable performance
standards set by management.
5. OTHER BENEFITS. During the term of this Agreement, the Employee
shall also be entitled to participate in or receive benefits under all of the
Company's benefit plans, programs, arrangements and practices, including
pension, disability, and group life, sickness, accident or health insurance
programs, if any, as may be established from time to time by the Company for the
benefit of employees serving in similar capacities with the Company (and/or its
affiliates), in accordance with the terms of such plans, as amended by the
Company from time to time; it being understood that there is no assurance with
respect to the establishment of such plans or, if established, the continuation
of such plans during the term of this Agreement.
6. DUTIES.
A. During the term of this Agreement, the Employee shall serve as
the Executive Vice President and Chief Financial Officer and shall have such
powers and shall perform such duties as are incident and customary to his
office, and shall perform such other additional duties and functions
commensurate with such position as from time to time shall be assigned to him by
the Company. Such duties shall include but not be limited to managing
engineering, customer support and other staff, development and business
functions as needed. The Employee shall perform such additional duties and
functions without separate compensation, unless otherwise authorized by the
Company.
B. The Employee shall devote his full time, attention, skill, and
energy to the performance of his duties under this Agreement, and shall comply
with all reasonable requests of the Company; provided, however, that the
Employee will be permitted to engage in and manage personal investments and to
participate in community and charitable affairs, so long as such activities do
not interfere with his duties under this Agreement.
C. The Employee shall immediately notify the Company of (i) his own
illness and consequent absence from work, or (ii) any intended significant
change in his plans to work for the Company.
7. VACATION AND SICK LEAVE.
A. The Employee shall be entitled to a total of three (3) weeks of
vacation for each year in which he works at least 1,950 hours (including
vacation hours) for the Company. Vacation leave shall accrue during the work
year. Up to one (1) week of unused vacation time shall accumulate from year to
year. The Employee may take his vacation at such time or times as shall not
interfere with the performance of his duties under this Agreement.
B. The Employee shall be entitled to paid sick leave and holidays
in accordance with the Company's announced policy for employees, as in effect
from time to time.
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8. EXPENSES. The Company shall reimburse the Employee for all
reasonable expenses incurred in connection with his duties on behalf of the
Company, provided that the Employee shall keep, and present to the Company,
records and receipts relating to reimbursable expenses incurred by him. Such
records and receipts shall be maintained and presented in a format, and with
such regularity, as the Company reasonably may require in order to substantiate
the Company's right to claim income tax deductions for such expenses. Without
limiting the generality of the foregoing, the Employee shall be entitled to
reimbursement for any business-related travel, business-related entertainment
whether at his residence or otherwise, and other costs and expenses reasonably
incident to the performance of his duties on behalf of the Company. Reimbursable
business-related expenses incurred at the Employee's home will include telephone
charges and out-of-pocket expenses but shall exclude office space reimbursement.
9. TERMINATION OF EMPLOYMENT FOR CAUSE. Notwithstanding the provisions
of Paragraph 2 of this Agreement, the Employee's employment (and all of his
rights and benefits under this Agreement) shall terminate immediately and
without further notice upon the happening of any one or more of the following
events:
A. The Employee has been or is guilty of (i) a criminal
offense involving moral turpitude, (ii) criminal or dishonest conduct pertaining
to the business or affairs of the Company (including, without limitation, fraud
and misappropriation), (iii) any act or omission the intended or likely
consequence of which is material injury to the Company's business, property or
reputation, which act or omission continues uncured for a period of ten (10)
days after the Employee has received written notice from the Board of Directors,
and (iv) gross negligence or willful misconduct which continues uncured for a
period of ten (10) days after the Employee has received written notice from the
Board of Directors;
B. The Employee persists, for a period of ten (10) days after
written notice from the Board of Directors, in a course of conduct reasonably
determined by the Board of Directors to be in material violation of his duties
to the Company under this Agreement or otherwise in violation of the covenants,
agreements or obligations under the terms of this Agreement;
C. The Employee's death; or
D. The continuous and uninterrupted inability to perform the
Employee's duties on behalf of the Company, by reason of accident, illness, or
disease, for a period of sixty (60) days from the first day of such inability to
perform his duties.
Subsections A, B, C, & D of this Section 9 are hereinafter referred to
collectively and individually as "Cause". In the event of a termination for
Cause, the Company shall pay the Employee his base salary through the effective
date of the employment termination, and the Employee shall immediately
thereafter forfeit all rights and benefits (other than vested benefits),
including but not limited to any right to compensation pursuant to Section 4 or
5 of this
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Agreement, he would otherwise have been entitled to receive under this
Agreement. The Company and the Employee thereafter shall have no further
obligations under this Agreement except as otherwise provided in Sections 12, 13
and 14 of this Agreement.
10. CHANGE OF CONTROL; TERMINATION OF EMPLOYMENT BY THE COMPANY WITHOUT
CAUSE. Notwithstanding the provisions of Section 2 of this Agreement, the Board
of Directors may terminate the Employee's employment at any time, for reasons
other than for Cause by notifying the Employee in writing of such termination.
If (A) the Employee is terminated pursuant to this Section 10 for reasons other
than for Cause, or (B) if a Change of Control (as defined below) occurs and,
within two (2) years thereafter, the Employee is terminated without Cause, or
the Employee's duties and responsibilities are materially changed and the
Employee determines to terminate his employment, the Company shall pay the
Employee, in a lump sum, (i) an amount equal to two (2) year's worth of his base
salary at the rate in effect immediately prior to the date of termination but,
in the case of item (B), less the amount of base salary the Employee has
received since the Change of Control and (ii) the unpaid balance of any deferred
compensation owed to the Employee. Employee shall immediately thereafter forfeit
all rights and benefits (other than vested benefits), including but not limited
to any right to compensation pursuant to Section 4 or 5 of this Agreement he
would otherwise have been entitled to receive under this Agreement.
Notwithstanding the foregoing, should the Board of Directors terminate the
Employee without cause all unvested options shall immediately accelerate. The
Company and the Employee thereafter shall have no further obligations under this
Agreement except as otherwise provided in Sections 12, 13 and 14 of this
Agreement.
For purposes of this Agreement, a "Change in Control" shall be deemed
to have occurred if, in a single transaction or series of transactions, (a) the
Company merges or consolidates with another entity (other than an affiliated
entity) and the Company is not the surviving entity, (b) the Company sells
substantially all of its assets to any person (other than an to an affiliated
entity) or (c) the Company sells more than fifty percent (50%) of its capital
stock to another person or entity.
11. TERMINATION OF EMPLOYMENT BY THE EMPLOYEE. Notwithstanding the
provisions of Section 2 of this Agreement, the Employee may terminate this
Agreement at any time by giving the Board of Directors written notice of his
intent to terminate, delivered at least sixty (60) days prior to the effective
date of such termination.
Upon expiration of the sixty (60) day notice period (or such earlier
date as may be approved by the Board of Directors), the termination by the
Employee shall become effective. Upon the effective date the Employee shall
immediately thereafter forfeit all rights and benefits (other than vested
benefits), including but not limited to any right to compensation pursuant to
Section 4 or 5 of this Agreement, he would otherwise have been entitled to
receive under this Agreement. The Company and the Employee thereafter shall have
no further obligations under this Agreement except as otherwise provided in
Sections 12, 13 and 14 of this Agreement..
This Section 11 shall not apply to a termination by the Employee
following a Changer of Control, as described in Section 10.
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12. NON-COMPETITION. The Employee and the Company recognize that due to
the nature of his employment, and his relationship with the Company, the
Employee has had and will have access to, and has acquired and will acquire, and
has assisted and will assist in developing, confidential and proprietary
information relating to the business and operations of the Company including,
without limitation, information with respect to its present and prospective
services, technologies, systems, clients, customers, agents, and sales and
marketing methods. The Employee acknowledges that such information has been and
will be of central importance to the Company's business and that disclosure of
it to or its use by others could cause substantial loss to the Company. The
Employee and the Company also recognize that an important part of the Employee's
duties will be to develop good will for the Company through his personal contact
with the Company's clients, and that there is a danger that this good will, a
proprietary asset of the Company, may follow the Employee if and when his
relationship with the Company is terminated.
A. The Employee agrees that, during the term of his employment
with the Company, and for a period of one (1) year after the termination of his
employment for any reason whatsoever (including the non-renewal of this
Agreement by either party):
(i) The Employee will not directly or indirectly, in
any jurisdiction where the Company is operating on the date of
such termination, whether as a partner, proprietor, employee,
consultant, agent or otherwise, participate or engage in any
business that competes with, restricts, or interferes with the
business of the Company including but not limited to working
with any of the following companies without the prior written
consent of the Company:
a. Northern Light
b. xxxxxxxx.xxx
c. xxxxxx.xxx
d. Lexis Nexis
e. Hoovers
f. Excite
(ii) The Employee will not directly or indirectly
(for his own account, or for the account of others) interfere
with, solicit, or accept for himself, his benefit, or for
anyone other than the Company, any of the clients or customers
of the Company, at the time of said termination, or any
potential clients or customers solicited or being solicited by
the
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Company at the time of such termination or within the
period one (1) year prior thereto, or perform any services of
any competitive nature in connection with said clients or
customers for anyone other than the Company.
(iii) The Employee further agrees that he shall not,
at any time, directly or indirectly, urge any client (or
customer) or potential client (or potential customer) of the
Company to discontinue business, in whole or in part, or not
to do business, with the Company.
(vi) The Employee further agrees that he shall not,
at any time, directly or indirectly, solicit, hire or arrange
to hire any person who at the time of such hire or within six
(6) months prior to the time of such hire was an employee of
the Company, or for himself or for any business entity with
which he may be, or may be planning to be, affiliated or
associated with, or otherwise interfere with the retention of
employees that the Company desires to retain as such.
B. The Employee expressly acknowledges and agrees (i) that the
restrictions set forth herein are reasonable, in terms of scope, duration,
geographic area, and otherwise, (ii) that the protections afforded to the
Company hereunder are necessary to protect its legitimate business interests,
and (iii) that the agreement to observe such restrictions form a material part
of the consideration for this Agreement and the Employee's employment by the
Company.
13. OWNERSHIP OF INFORMATION, IDEAS AND PRODUCTS. The Employee agrees
that, during the term of his employment with the Company, any invention,
modification, discovery, design, development, improvement, process, software
program, work of authorship, documentation, formula, data, technique, know-how,
secret or intellectual property right whatsoever or any interest therein
(whether or not patentable or registrable under copyright or similar statutes or
subject to analogous protection) (herein called "Developments") that he develops
or conceives, individually or in conjunction with others, shall be and remain
the sole and exclusive property of the Company and that immediately upon the
termination of his employment he shall deliver all of the foregoing, and all
copies or reproductions thereof, to the Company, at its main office. If at any
time or times during his employment with the Company the Employee shall (either
alone or with others) make, conceive, discover or reduce to practice any
Development that (a) relates to the business of the Company or any customer of
or supplier to the Company or any of the products or services being developed,
manufactured or sold or developed by the Company or which may be used in
relation therewith, (b) results from tasks assigned to the Employee by the
Company or (c) results from the use of premises or personal property (whether
tangible or intangible) owned, leased or contracted for by the Company, such
Developments and the benefits thereof shall immediately become the sole and
absolute property of the Company and its assigns, and the Employee shall
promptly disclose to the Company (or any persons designated by it) each such
Development and hereby assign any rights Employee
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may have or acquire in the Developments and benefits and/or rights resulting
therefrom to the Company and its assigns without further compensation and shall
communicate, without cost or delay, and without publishing the same, all
available information relating thereto (with all necessary plans and models) to
the Company.
Upon disclosure of each Development to the Company, Employee
will, during his employment and at any time thereafter, at the request and cost
of the Company, sign, execute, make and do all such deeds, documents, acts and
things as the Company and its duly authorized agents may reasonably require:
(a) to apply for, obtain and vest in the name of the
Company alone (unless the Company otherwise directs) letters
patent, copyrights or other analogous protection in any
country throughout the world and when so obtained or vested to
renew and restore the same; and
(b) to defend any opposition proceedings in respect
of such applications and any opposition proceedings or
petitions or applications for evocation of such letters
patent, copyright or other analogous protection.
If the Company is unable, after reasonable effort, to secure Employee's
signature on any letters, patent, copyright or other analogous protection
relating to a Development, whether because of his physical or mental incapacity
or for any other reason whatsoever, Employee hereby irrevocably designate and
appoint the Company and its duly authorized officers and agents as his agent and
attorney-in-fact, to act for and in my behalf and stead to execute and file any
such application or applications and to do all other lawfully permitted acts to
further the prosecution and issuance of letters patent, copyright or other
analogous protection thereon with the same legal force and effect as if executed
by Employee.
14. CONFIDENTIAL INFORMATION. The Employee agrees that, during the term
of his employment with the Company, and for a period of two (2) years after the
termination of his employment for any reason whatsoever, he shall not disclose
to any person or use the same in any way in direct or indirect competition with
the Company, other than in the discharge of his duties under this Agreement in
connection with the business of the Company, any trade secrets or confidential
or proprietary information of the Company, including, without limitation, any
information or knowledge relating to (i) trade secrets, inventions, products,
designs, methods, know-how, techniques, systems, processes, software programs,
works of authorship, projects, plans, proposals, business, finances, operations
or internal structure of the Company, (ii) the clients (or customers) or
potential clients (or potential customers) of the Company, (iii) any method
and/or procedure (such as records, programs, systems, correspondence, or other
documents), relating or pertaining to the foregoing, or (iv) the Company's
business, which information or knowledge the Employee shall have obtained during
the term of this Agreement. Further, upon leaving the employ of the Company for
any reason whatsoever, the Employee shall not take with him, without prior
written consent of the Company, any documents, forms, or other reproductions of
any data or any information relating to or pertaining to the Company, any
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clients (or customers) or potential clients (or potential customers) of the
Company, or any other confidential information or trade secrets.
15. ENTIRE AGREEMENT; AMENDMENTS, OTHER AGREEMENTS. This Agreement
contains the entire understanding of the Employee and the Company with respect
to employment of the Employee and supersedes any and all prior understandings,
written or oral. This Agreement may not be amended, waived, discharged or
terminated orally, but only by an instrument in writing executed by the Company
and the Employee.
16. MISCELLANEOUS.
A. Any notices required by this Agreement shall (i) be made in
writing and mailed by certified mail, return receipt requested, with adequate
postage prepaid; (ii) be deemed given when so mailed; (iii) be deemed received
by the addressee within ten (10) days after given or when the certified mail
receipt for such mail is executed, whichever if earlier; and (iv) in the case of
the Company, be mailed to its principal office, or in the case of the Employee,
be mailed to the last address that the Employee has given to the Company.
B. This Agreement shall be binding upon and inure to the
benefit of, the parties, their successors, assigns, personal representatives,
distributees, heirs, and legatees.
C. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of Maryland, without giving
effect to the principles of conflicts of law thereof. For the purpose of
expediting the resolution of any such claim or dispute, the parties hereby waive
trial by jury.
D. Any failure by the Company to insist upon strict compliance
with any term or provision of this Agreement, to exercise any option, to enforce
any right, or to seek any remedy upon any breach by the Employee shall not
affect, or constitute a waiver of, the Company's right to insist upon such
strict compliance, exercise such option, enforce such right, or seek such remedy
with respect to such breach or any prior, contemporaneous, or subsequent breach.
No custom or practice of the Company at variance with any provision of this
Agreement shall affect or constitute a waiver of, the Company's right to demand
strict compliance with all provisions of this Agreement.
E. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be deemed
severable from the remainder of this Agreement, and the remaining provisions
contained in this Agreement shall be construed to preserve to the maximum
permissible extent the intent and purposes of this Agreement. Any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
F. In the event that the Employee violates the provisions of
Sections 12, 13 or 14 above, upon notice from the Company informing him of the
nature of such violation, the
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Employee shall immediately terminate any actions which constitute such
violation. The existence of this right shall not preclude any other rights and
remedies at law or in equity which the Company may have.
G. It is recognized that damages in the event of breach of any
provision of Sections 12, 13 or 14 above by the Employee would be difficult, if
not impossible, to ascertain, and it is therefore agreed that the Company, in
addition to and without limiting any other remedy or right it may have, shall
have the right to an injunction or other equitable relief in any court of
competent jurisdiction, enjoining any such breach; and the Employee hereby
waives any and all defenses he may have on the ground of the lack of
jurisdiction or competence of the court to grant such an injunction or other
equitable relief. The existence of this right shall not preclude any other
rights and remedies at law or in equity which the Company may have.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first hereinabove written.
ATTEST: XXXXXXXX.XXX, INC.
/s/ Xxx X. Xxxxxxx By: /s/ Xxxxx X. Xxxxxxx
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Xxx X. Xxxxxxx Xxxxx X. Xxxxxxx
Executive Vice President and Chief Executive Officer
Chief Financial Officer
WITNESS: EMPLOYEE:
/s/ Xxxx X. Xxxxxxxx /s/ Xxx X. Xxxxxxx
------------------------------ ----------------------------------
Xxx X. Xxxxxxx
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SCHEDULE A
COMPENSATION
XXX X. XXXXXXX, EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
TIME PERIOD SALARY PER MONTH ANNUAL BONUS ELIGIBILITY*
January 1, 1999 and thereafter $10,417 $62,500
(full time)
*Annual Bonus Eligibility represents amount payable if the Company meets its
revenue budget and the Employee achieves certain objectives established by the
Company. Annual Bonus will be paid 25% each fiscal quarter in which such results
are achieved.
