EXHIBIT 10.37
EMPLOYMENT AGREEMENT
AGREEMENT made as of the first day of February, 2002 (the "Effective
Date"), between XXXXX Online, Inc. with its principal office at 00 Xxxxxxxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxxxxx ("Company" or "Employer"), and Xxxx Xxxxx having an
address at 00 Xxxxxxxx Xx, Xxxxxxxx XX ("Employee").
W I T N E S S E T H:
WHEREAS, the Company operates an Internet financial information
business; and
WHEREAS, the Company desires to employ the Employee as Chief Financial
Officer and to be assured of his services as such on the terms and conditions
set forth herein; and
WHEREAS, the Employee is willing to accept such employment on such
terms and conditions.
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements hereinafter set forth, the parties agree as follows:
1. Employment. The Company shall employ the Employee and the Employee
shall serve the Company, upon the terms and conditions hereinafter set forth.
2. Term. The term of the Employee's employment shall commence on the
Effective Date and unless terminated earlier or extended as provided below,
shall continue for a period of three years from the Effective Date (the
"Employment Term"). Upon the expiration of the initial employment term and on
each anniversary date thereafter, the employment of Employee shall be renewed
and extended for an additional
year unless either party provides written notice to the other party, of his or
its, as the case may be, desire to terminate this Agreement at least thirty (30)
days prior to the renewal date.
3. Duties. During the Employment Term, the Employee shall have such
duties, functions, authority and responsibilities normally associated with the
positions of Chief Financial Officer. During the Employment Term, the Employee
shall devote his full attention and business time to the business and affairs of
the Company and the Employee will use his best efforts to perform faithfully and
efficiently, and to discharge, the Employee's responsibilities and duties under
this Agreement. Notwithstanding the foregoing, the Employee may devote such time
to manage his personal affairs and to serve on community, corporate, civic,
professional or charitable boards or committees, so long as such activities do
not unreasonably interfere with the performance of the Employee's duties and
responsibilities under this Agreement.
4. Compensation and Employee Benefits.
The Employee's base salary during the initial term of
employment shall be no less than $150,000 per year unless mutually agreed upon
by the parties, payable in accordance with the Company's payroll practices as in
effect from time to time. The Employee's base salary will be reviewed annually
by the Company's Board of Directors (the "Board") to determine whether an
increase is warranted or appropriate. The Employee also will be entitled to be
considered for awards each year under the Company's then existing incentive
bonus program, which may take into account individual and Company-wide
performance, or such other performance criteria as the Board may from time to
time apply.
5. Benefits. During the Employment Term, the Employee shall have the
right to participate in such health and disability insurance plans which the
Company may provide to its senior Employee officers and for which the Employee
is eligible, (e.g. long term disability, life insurance and medical insurance
for the Employee and his dependents). During the Employment term, the Employee
will be entitled to four weeks of paid vacation in accordance with the Company's
policy. Such vacation may be taken in the Employee's discretion with the prior
approval of the Company, and at such time or times as are not inconsistent with
the reasonable business needs of the Company.
6. Business Expenses. All reasonable travel, entertainment, and other
expenses including a commutation allowance, incident to the performance of the
Employee's duties or the rendering of services incurred on behalf of the Company
by the Employee during the Employment Term shall be paid by the Company.
7. Termination. Notwithstanding the provisions of Section 2 hereof, the
Employee's employment with the Company may be earlier terminated as follows:
By action taken by the Board, the Employee may be discharged for cause
(as defined below), effective as of such time as the Board shall determine. Upon
discharge of the Employee pursuant to this Section 7(a), the Company shall have
no further obligation or duties to the Employee, except for payment of base
salary and bonus through the effective date of termination. The Employee shall
have no further obligations or duties to the Company, except as provided in
Section 8.
In the event of (i) the death of the Employee or (ii) by action of the
Board in the event of the inability of the Employee,
by reason of physical or mental disability, to continue substantially to perform
his duties hereunder for an aggregate period of 180 days during the Employment
Term, during which 180 day period salary and any other benefits hereunder shall
not be suspended or diminished. Upon any termination of the Employee's
employment under this Section 7(b), the Company shall have no further
obligations or duties to the Employee, and the Employee shall have no further
obligations or duties to the Company, except as provided in Sections and 8.
(c) In the event that there is a change of control of the
Company (as defined below), and the Agreement is terminated by either the
Employee or the Company for whatever reason within one year of such a change of
control, the Company shall pay to the Employee, in addition to accrued salary
and benefits payable to the Employee through the date of termination of
employment, (i) the cost of outplacement counseling for a period of up to one
year with the maximum cost to the Company not to exceed $25,000, (ii) a
severance payment from the Company equal to 2.99 times the sum of (x) the
Employee's then applicable base salary and (y) the average of the last two
year's cash bonuses paid by the Company to the Employee, (iii) shall continue
the Employee's medical benefits at the same rate applicable to an Active
employee, for the 2.99 year period or until Employee obtains full time
employment with an employer that provides comparable heath coverage, and (iv)
shall continue other benefit payments, including the commutation allowance, for
a period of 2.99 years. In addition, all stock options, and other awards issued
to the Employee under any and all of the Company's stock option plans shall
immediately vest and remain exercisable for a period of the lesser of (i) the
original term of the stock option and (ii) five years. During
this period of 2.99 years, the Employee may continue to elect to make
contributions to the Company's 401k plan, however, such contribution will not
receive any Company Matching Contribution in effect at that time.
(d) For purposes of this Agreement, the Company shall have
"cause" to terminate the Employee's employment under this Agreement upon (i) the
failure by the Employee to substantially perform his duties under this Agreement
except for those reasons covered by Section 7(b), (ii) the conviction of the
Employee in criminal misconduct (including embezzlement and criminal fraud)
which is materially injurious to the Company, monetarily or otherwise, (iii) the
conviction of the Employee of a felony, or (iv) gross negligence on the part of
the Employee. The Company shall give written notice to the Employee, which
notice shall specify the grounds for the proposed termination and the Employee
shall be given thirty (30) days to cure if the grounds arise under clauses (i)
or (iv) above.
(e) For purposes of this Agreement, a "change of control of
the Company" shall mean the occurrence of (i) the acquisition by an individual,
entity, or group of the beneficial ownership of 50% or more (other than by Marc
and Xxxxx Xxxxxxxxxx and their affiliates) of (1) the outstanding common stock,
or (2) the combined voting power of the Company's voting securities; provided,
however, that the following acquisitions will not constitute a "change of
control": (x) any acquisition by any employee benefit plan of the Company or any
affiliate or (y) any acquisition by any Company if, immediately following such
acquisition, more than 50% of the outstanding common stock and the outstanding
voting securities of such Company is beneficially owned by all or substantially
all of those who, immediately prior to such acquisition,
were the beneficial owners of the common stock and the Company's voting
securities (in substantially similar proportions as their ownership of such
Company securities immediately prior thereto); or (ii) the approval by the
Company's stockholders of a reorganization, merger or consolidation, other than
one with respect to which all or substantially all of those who were the
beneficial owners, immediately prior to such reorganization, merger or
consolidation, of the Common Stock and the Company's voting securities
beneficially own, immediately after such transaction, more than 50% of the
outstanding common stock and voting securities of the Company resulting from
such transaction (in substantially the same proportions as their ownership,
immediately prior thereto, of the Common Stock and the Company's voting
securities); or (iii) the approval by the Company's stockholders of the sale or
other disposition of all or substantially all of the assets of the Company,
other than to a subsidiary of the Company.
(f) If the Company terminates this Agreement prior to the
third anniversary of the effective date for any reason other than that covered
by Section 7(d), the Company will pay the Employee (v) 2.99 times the sum of (x)
the Employee's then applicable base salary and (w) the average of the last two
cash bonuses paid to employee. In addition the Company shall provide Employee
with the benefits listed in Sections 7(c)(i), 7(c)(iii) and 7(c)(iv), all stock
options issued to the Employee under any and all of the Company's stock option
plans shall immediately vest and remain exercisable for the period of the lesser
of (x) the original term of the stock option or (y) five years
8. Confidentiality; Noncom petition.
The Company and the Employee acknowledge that the services to be
performed by the Employee under this Agreement are unique and extraordinary and,
as a result of such employment, the Employee will be in possession of
confidential information relating to the business practices of the Company. The
term "confidential information" shall mean any and all information (oral or
written) relating to the Company or any of its affiliates, or any of their
respective activities, other than such information which can be shown by the
Employee to be in the public domain (such information not being deemed to be in
the public domain merely because it is embraced by more general information
which is in the public domain) other than as the result of breach of the
provisions of this Section 9(a), including, but not limited to, information
relating to: trade secrets, proprietary information, personnel lists, financial
information, research projects, services used, pricing, customers, customer
lists and prospects, product sourcing, marketing and selling and servicing. The
Employee agrees that he will not, during his employment or subsequent to the
termination of employment, directly or indirectly, use, communicate, disclose or
disseminate to any person, firm or Company any confidential information
regarding the clients, customers or business practices of the Company acquired
by the Employee during his employment by Company, without the prior written
consent of Company; provided, however, that the Employee understands that
Employee will be prohibited from misappropriating any trade secret at any time
during or after the termination of employment. At no time during the Employment
Term, or thereafter shall the Employee directly or indirectly, disparage the
commercial, business or financial reputation of the Company.
In consideration of Company's hiring Employee, the payment by the
Company to the Employee as described herein and for other good and valuable
consideration, the Employee hereby agrees that he shall not, during the
Employment Term and for a period of one (1) year following such employment (the
"Restrictive Period"), directly or indirectly, take any action which constitutes
an interference with or a disruption of any of the Company's business
activities.
For purposes of clarification, but not of limitation, the Employee
hereby acknowledges and agrees that the provisions of subparagraph 9(b) above
shall serve as a prohibition against him, during the Restrictive Period:
(1) Directly or indirectly, contacting, soliciting or
directing any person, firm, or Company to contact or solicit,
any of the Company's customers, prospective customers, or
business partners for the purpose of selling or attempting to
sell, any products and/or services that are the same as or
similar to the products and services provided by the Company
to its customers during the Restrictive Period. In addition,
the Employee will not disclose the identity of any such
business partners, customers, or prospective customers, or any
part thereof, to any person, firm, Company, association, or
other entity for any reason or purpose whatsoever; and
(2) Directly or indirectly, engaging or carrying on
in any manner (including, without limitation, as principal,
shareholder, partner,
lender, agent, employee, consultant, or investor (other than a
passive investor with less than a five percent (5%) interest)
trustee or through the agency of any Company, partnership,
limited liability company, or association) in any business
that is in competition with the engaged in any business in
competition with the business of the Company; and
(3) Soliciting on his own behalf or on behalf of any
other person, the services of any person who is an employee of
the Employer, and soliciting any of the Employer's employees
to terminate employment with the Employer.
Upon the termination of the Employee's employment for any
reason whatsoever, all documents, records, notebooks, equipment, price lists,
specifications, programs, customer and prospective customer lists and other
materials which refer or relate to any aspect of the business of the Company
which are in the possession or under the control of the Employee including all
copies thereof, shall be promptly returned to the Company, except for the
Employee's lap top computer.
The parties hereto hereby acknowledge and agree that (i) the
Company would be irreparably injured in the event of a breach by the Employee of
any of his obligations under this Section 9, (ii) monetary damages would not be
an adequate remedy for any such breach, and (iii) the Company shall be entitled
to injunctive relief, in addition to any other remedy which it may have, in the
event of any such breach.
(f) The rights and remedies enumerated in Section 9(e) shall
be independent of the other, and shall be enforceable, and all of such rights
and remedies shall be in addition to, and not in lieu of, any other rights and
remedies available to the Company under law or in equity.
(g) If any provision contained in this Section 8 is hereafter
construed to be invalid or unenforceable, the same shall not affect the
remainder of the covenant or covenants, which shall be given full effect,
without regard to the invalid portions.
(h) If any provision contained in this Section 8 is found to
be unenforceable by reason of the extent, duration or scope thereof, or
otherwise, then the court making such determination shall have the right to
reduce such extent, duration, scope or other provision and in its reduced form
any such restriction shall thereafter be enforceable as contemplated hereby.
(i) It is the intent of the parties hereto that the covenants
contained in this Section 8 shall be enforced to the fullest extent permissible
under the laws and public policies of each jurisdiction in which enforcement is
sought (the Employee hereby acknowledging that said restrictions are reasonably
necessary for the protection of the Company). Accordingly, it is hereby agreed
that if any of the provisions of this Section 8 shall be adjudicated to be
invalid or unenforceable for any reason whatsoever, said provision shall be
(only with respect to the operation thereof in the particular jurisdiction in
which such adjudication is made) construed by limiting and reducing it so as to
be enforceable to the extent permissible, without invalidating the
remaining provisions of this Agreement or affecting the validity or
enforceability of said provision in any other jurisdiction.
9. Prior Agreements. This Agreement cancels and supersedes any and all
prior agreements and understandings between the parties hereto respecting the
employment of Employee by the Company.
10. Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be delivered personally or sent by
registered or certified mail, return receipt requested, to the other party
hereto at his or its address as set forth in the beginning of this Agreement.
Either party may change the address to which notices, requests, demands and
other communications hereunder shall be sent by sending written notice of such
change of address to the other party in the manner above provided.
11. Assignability and Binding Effect. This Agreement shall inure to the
benefit of and shall be binding upon the executors, administrators, successors
and legal representatives of Employee and shall inure to the benefit of and be
binding upon the Company and its successors and assigns. The Employee may not
delegate or assign his duties or rights under this Agreement.
12. Waiver. Waiver by either party hereto of any breach or default by
the other party in respect of any of the terms and conditions of this Agreement
shall not operate as a waiver of any other breach or default, whether similar to
or different from the breach or default waived.
13. Complete Understanding: Amendment and Termination. This Agreement
constitutes the complete understanding between the parties with respect to the
employment of Employee hereunder and no statement, representation, warranty or
covenant has been made by either party with respect thereto except as expressly
set forth herein. This Agreement shall not be altered, modified, amended or
terminated except by written instrument signed by each of the parties hereto
provided, however, that the waiver by either party hereto of compliance with any
provision hereof or of any breach or default by the other party hereto need be
signed only by the party waiving such provision, breach or default.
14. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which taken together
shall constitute one and the same Agreement.
15. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Connecticut.
16. Paragraph Headings. The paragraph headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
17. Consideration. Employee hereby acknowledges and agrees that the
employment opportunity encompassed in this Agreement is contingent upon the
execution of this Agreement and that such employment, in addition to the mutual
promises herein, constitutes adequate consideration for this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
XXXXX ONLINE, INC.
By
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Its:
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Date:
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Xxxx Xxxxx
Date:
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