EXHIBIT 10.20
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement"), dated as of May 20, 2005
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(the "Effective Date"), is by and between Comtex News Network, Inc., a Delaware
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corporation (the "Company"), and E.W. "Chip" Xxxxx, III (the "Employee").
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RECITALS
A. The Company desires to employ the Employee in the position of
President and Chief Operating Officer for the Company and its affiliates.
B. The Employee desires to accept employment on the terms herein set
forth.
NOW, THEREFORE, in consideration of the premises and of the covenants
herein contained, the parties hereto agree as follows:
1. Employment. The Company hereby agrees to employ the Employee, and the
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Employee hereby accepts such employment by the Company, upon the terms and
conditions set forth in this Agreement. The Employee acknowledges that his
employment may be terminated by the Company for any reason, with or without
Cause.
2. Term. The term of this Agreement will be the two-year period commencing May
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20, 2005 and ending on May 19, 2007 (the "Term"), unless terminated earlier
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pursuant to Section 7. The Term may also be extended by the written
agreement of the parties.
3. Position and Duties of the Employee.
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(a) The Employee will serve as the President and Chief Operating Officer
of the Company, and agrees to serve as an officer and/or an employee
of such other affiliates of the Company as may be requested from time
to time by the Board of Directors of the Company (the "Board"), any
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committee or person delegated by the Board or the Chairman and Chief
Executive Officer of the Company. In such capacity, the Employee will
report directly to the Chairman and Chief Executive Officer of the
Company. The Employee will perform such duties commensurate with the
Employee's title and position or as may be assigned to the Employee
from time to time by the Chairman and Chief Executive Officer.
(b) During the Term, the Employee will, except as may from time to time be
otherwise agreed in writing by the Company and during reasonable
vacations as set forth in Section 6 hereof and authorized leave,
devote his best efforts, full attention and energies during his normal
working time to the business of the Company, any duties customary for
the Employee's position and title and such other related duties and
responsibilities as may from time to time be reasonably prescribed by
the Board, any committee or person delegated by the Board or the
Chairman and Chief Executive Officer, in each case, within the
framework of the Company's policies and objectives.
4. Compensation.
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(a) Annual Base Salary. During the Term, the Company will pay to the
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Employee an annual base salary of $160,000 (the "Annual Base Salary"),
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payable at the times and in the manner consistent with the customary
payroll practices of the Company, with merit increases as may be
determined by the Company in its sole and absolute discretion.
(b) Annual Bonus. As may be determined by the Company in its sole and
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absolute discretion, during the Term the Employee will be eligible for
an annual bonus equal to the sum of an amount not to exceed 25% of the
Annual Base Salary.
(c) Benefits. During the Term, the Employee will be eligible to
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participate in any employee benefit plans sponsored by the Company for
the benefit of its employees (the "Employee Plans"), upon the same
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terms and conditions as other employees of the Company. The Employee
acknowledges that the Company may change its benefit programs from
time to time, which may result in certain benefit programs being
amended or terminated.
(d) Stock Options. Within 30 calendar days of the Effective Date, the
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Company will award the Employee an option to acquire 250,000 shares of
common stock, par value $0.01 ("Common Stock"), of the Company under
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the terms and conditions of the Comtex News Network, Inc. 1995 Stock
Option Plan, as amended and restated, effective as of January 1, 2003
(the "Stock Option Plan"); provided, that, such option will (i) be for
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an exercise price per share of Common Stock equal to the average of
the closing bid and ask for the ten (10) days prior to the date of the
contract, and (ii) vest in equal quarterly installments over the Term,
the first vesting occurring on July 1, 2005.
5. Reimbursement of Expenses. The Company will pay or reimburse the Employee
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for reasonable and necessary business expenses incurred by the Employee in
connection with his duties on behalf of the Company in accordance with the
policies and directives of the Company, including lodging expenses in
Alexandria, Virginia and the travel expenses associated with the Employee's
delivery of the services contemplated by this Agreement, following
submission by the Employee of reimbursement expense forms in a form
consistent with such expense policies.
6. Vacations. The Employee will be entitled to four weeks of vacation per year
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and subject to the terms and conditions of the Company's vacation policy.
Unused vacation for any year during the Term may be accumulated for use in
subsequent years. The duration of such vacations and the time or times they
will be taken will be determined by the Employee in consultation with the
Company.
7. Termination.
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(a) Events of Termination. Notwithstanding any other provision of this
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Agreement to the contrary, this Agreement and the Employee's
employment under
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the terms of this Agreement will terminate immediately and without
notice upon the first of the following events to occur:
(i) the Employee's death;
(ii) a Disability (as defined in Section 7(c) below) of the Employee
lasting six months or more; provided, that such Disability is not
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due to an injury incurred by the Employee in the line of duty
while performing company business hereunder;
(iii) termination for Cause (as defined in Section 7(d) below) by the
Company;
(iv) the end of the Term;
(v) termination without Cause by the Company;
(vi) termination for Good Reason (as defined in Section 7(e) below) by
the Employee.
(b) Compensation Upon Termination.
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(i) If, prior to the expiration of the Term, the Employee's
employment is terminated by the Company due to an event of
termination pursuant to Section 7(a)(i)-(iv) above, the Employee
will not be eligible to receive his Annual Base Salary or to
participate in any Employee Plans or bonus plans with respect to
future periods after the date of such termination or resignation
except for the right to receive accrued but unpaid Annual Base
Salary and vested benefits under any Employee Plan, including any
unused vacation time earned, in accordance with the terms of such
Employee Plan.
(ii) If, prior to the expiration of the Term, the Employee's
employment is terminated pursuant to Section 7(a)(v) or 7(a)(vi),
conditioned upon the Employee delivering to the Company a release
in a form reasonably satisfactory to the Company with all periods
for revocation expired, notwithstanding any provision in the
terms of any Employee Plans or agreements to the contrary, (A)
the Company will pay the Employee in lump sum within 30 calendar
days following the termination of the Employee's employment his
Annual Base Salary then in effect for the greater of (x) 12
months or (y) the remainder of the Term (the "Severance Period"),
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(B) all stock options granted to Employee under the Stock Option
Plan will vest and become exercisable in full as of the date of
such termination, and (C) Employee will be entitled to
participate in the Employee Plans at Employee's expense for a
period not to exceed 18 months following the date of such
termination at the same cost, terms and conditions available to
other employees of the Company.
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(c) Disability. For purposes of this Agreement, "Disability" will mean:
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(i) the Employee's incapacity due to accident or physical or mental
illness to substantially perform his duties and the essential
functions of his position that the Employee was performing for
the Company before the accident or illness, with or without
reasonable accommodation, on a full-time basis for at least six
months in any 12-month period as determined by the Company in its
reasonable discretion, and within 30 days after a notice of
termination is thereafter given by the Company, the Employee will
not have returned to the full-time performance of the Employee's
duties; or
(ii) the Employee becomes eligible to receive benefits under the
Company's long-term disability plan; provided, however, if the
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Employee will not agree with a determination to terminate his
employment because of Disability, the question of the Employee's
disability will be subject to the certification of a qualified
medical doctor agreed to by the Company and the Employee.
(d) Cause. For purposes of this Agreement, "Cause" will mean:
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(i) any act or omission constituting a material breach by the
Employee of any provisions of this Agreement or the substantial
failure by the Employee to perform his duties hereunder (other
than any such failure resulting from the Employee's Disability);
(ii) any act or misconduct materially injurious to the Company or any
affiliate, financial or otherwise, or the misappropriation,
fraud, embezzlement or conversion by the Employee of the
Company's or any of its affiliate's property in connection with
the Employee's duties or in the course of the Employee's
employment with the Company; or
(iii) the conviction or plea of no contest of the Employee for any
felony or the indictment of the Employee for any felony involving
fraud, moral turpitude, embezzlement or theft in connection with
the Employee's duties or in the course of the Employee's
employment with the Company.
(e) Good Reason. For purposes of this Agreement, "Good Reason" will mean:
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(i) the Company's requirement that the Employee be based or perform
his duties anywhere other than (A) at Employee's current
employment location on the date of this Agreement or (B) if
Employee's current employment location is moved after the date of
this Agreement, at a new location that is no more than 20 miles
from such prior location;
(ii) the failure of the Company to comply with any material provision
of this Agreement, and the Company has not cured such failure
within 30 calendar days after notice of such noncompliance has
been given by the
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Employee to the Company, or if such failure is not capable of
being cured in such time, a cure shall not have been diligently
initiated by the Company within such 30 calendar day period and
the Company shall not have cured such failure within 60 calendar
days; or
(iii) a material adverse change or reduction in the nature or scope of
the authorities, powers, functions, responsibilities or duties
attached to the position with the Company which the Employee held
on the Effective Date.
(f) Change of Control. In the event that the Employee's employment
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hereunder is terminated for any reason other than by the Company for
Cause or voluntarily by Employee without Good Reason during the
one-year period subsequent to a Change of Control, (A) the Company
will pay the Employee his Annual Base Salary then in effect for the
greater of (x) 12 months or (y) the Severance Period, (B) all stock
options granted to Employee under the Stock Option Plan will vest and
become exercisable in accordance with the Stock Option Plan, and (C)
Employee will be entitled to participate in the Employee Plans at
Employee's expense for a period not to exceed one year following the
date of such termination at the same cost, terms and conditions
available to other employees of the Company. For purposes of this
Agreement, "Change of Control" means if:
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(i) any "person" (as such term is used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange
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Act")), who is not on the date hereof a "beneficial owner" (as
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defined in Rule 13d-3 under the Exchange Act) of at least 10% of
the voting capital stock of the Company becomes the beneficial
owner (as so defined), directly or indirectly, of securities of
the Company representing 50% or more of the total voting power
represented by the Company's then outstanding voting securities;
(ii) the Company consummates a merger or consolidation with or into
another company, other than a merger or consolidation which would
result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting
securities of the surviving entity) at least 51% of the total
voting power represented by the voting securities of the Company
or such surviving entity outstanding immediately after such
merger or consolidation; or
(iii) the sale or disposition by the Company of all or substantially
all of the Company's assets, in one or a series of transactions,
to persons other than persons who on the date hereof were
beneficial owners of 10% or more of the Company's then
outstanding voting securities.
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(g) No Mitigation Obligation. The Employee will not be required to
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mitigate the amount of any payment made pursuant to Section 7 of this
Agreement by seeking other employment or otherwise.
8. Non-Competition. In consideration of the Company entering into this
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Agreement, for a period commencing on the Effective Date until one year
after termination of employment (the "Non-Compete Period"), the Employee
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covenants and agrees that the Employee will not, directly or indirectly,
individually or on behalf of any other person, group or entity do or suffer
any of the following: engage or be interested in (whether as owner,
stockholder, investor, partner, lender, consultant, employee, agent,
director or otherwise) (a) any business, activity or enterprise which is
then competing with or planning to compete with the business of any
division or operation of the Company, any of its subsidiaries or any
affiliate of the Company or its subsidiaries (collectively the "Company
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Group") or (b) any activity in which the Employee participated or had
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responsibility during the term of the Employee's employment with the
Company Group within the United States or any foreign jurisdiction in which
the Company conducts its business, (the "Territory"); provided, however,
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that the Employee's ownership of less than 1% of any class of stock in a
publicly traded corporation will not be deemed a breach of this Agreement.
9. Non-Solicitation and Non-Employment. In consideration of the Company
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entering into this Agreement, the Employee covenants and agrees that the
Employee will not, without the prior written consent of the Company,
directly or indirectly, individually or on behalf of any other person or
entity do or suffer any of the following for a period commencing on the
Effective Date until the expiration of the Severance Period or until one
year after termination of employment, whichever is greater (the
"Non-Solicitation Period"): (a) hire or employ or assist in hiring or
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employing any person who is or had been an employee, representative or
agent of any member of the Company Group at any time during the 6-month
period prior to termination of the Employee's employment or solicit, aid,
induce or attempt to solicit, aid, induce or persuade, directly or
indirectly, such person to leave his or her employment with any member of
the Company Group to terminate such relationship and/or to accept
employment with any other person or entity; or (b) solicit any client of
the Company Group, or any person or entity whose business the Company Group
had solicited during the 6-month period prior to termination of the
Employee's employment, within the Territory for purposes of business which
is competitive to the Company Group.
10. Disclosure of Information. The Employee acknowledges and agrees that due to
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the Employee's unique and special contributions to the Company Group in the
Employee's position, the Employee is and will continue to be privy to and
ultimately responsible for every type of information generated by the
Company Group (whether reduced to writing or in a form from which
information can be derived into reasonably usable form), maintained in the
Employee's memory or created by the Company, which derives independent
economic value from not being readily known by proper means by others who
can obtain economic value from the disclosure or use of such information,
of a proprietary, secret or confidential nature concerning the Company's
business, relationships or financial affairs (collectively, "Confidential
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Information") so that the
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Employee's employment in any capacity for a competing business will create
an unreasonable and real risk of disclosure, inevitable or otherwise, of
all Confidential Information. During the Employee's employment and on a
permanent basis following termination of the Employee's employment, the
Employee covenants and agrees to keep in strict confidence and not disclose
in any manner, without written approval of the Company, any Confidential
Information to any person, group or entity other than appropriate employees
of the Company or use such information for any purposes other than in
connection with the performance of the Employee's duties, either during or
after the Employee's employment with the Company.
11. Representations.
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(a) The Employee hereby represents that he is not subject to any
restriction of any nature whatsoever on his ability to enter into this
Agreement or to perform his duties and responsibilities hereunder,
including, but not limited to, any covenant not to compete with any
former employer, any covenant not to disclose or use any non-public
information acquired during the course of any former employment or any
covenant not to solicit any customer of any former employer.
(b) The Employee hereby represents that, except as he has disclosed in
writing to the Company, he is not bound by 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 the Employee's employment with the Company or to
refrain from competing, directly or indirectly, with the business of
such previous employer or any other party.
(c) The Employee hereby represents that, to the best of his knowledge, his
performance of all the terms of this Agreement and as an employee of
the Company does not and will not breach any agreement with another
party, including without limitation any agreement to keep in
confidence proprietary information, knowledge or data the Employee
acquired in confidence or in trust prior to his employment with the
Company, and that he will not knowingly disclose to the Company or
induce the Company to use any confidential or proprietary information
or material belonging to any previous employer or others.
12. Assignment. The services to be rendered by the Employee under this
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Agreement are unique and personal, and the Employee may not assign any of
his rights or delegate any of his duties under this Agreement. Except as
provided in the immediately preceding sentence, this Agreement will benefit
the Employee and his heirs and personal representatives.
13. Validity/Severability. If any provision of this Agreement or the
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application of any provision hereof to any person or circumstances is held
invalid, unenforceable or otherwise illegal, the remainder of this
Agreement and the application of such provision to any other person or
circumstances will not be affected, and the provision so held to be
invalid, unenforceable or otherwise illegal will be reformed to the extent
(and only to the extent) necessary to make it enforceable, valid or legal.
To the extent any provision is
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held to be invalid, unenforceable or otherwise illegal and cannot be
reformed, such provision is to be stricken herefrom and the remainder of
this Agreement will be binding on the parties and their successors and
assigns as if such invalid or illegal provisions were never included in
this Agreement from the first instance.
14. Arbitration.
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(a) Any dispute, claim or controversy arising out of or relating to this
Agreement, including without limitation any dispute, claim or
controversy concerning validity, enforceability, breach or termination
hereof, will be finally settled through arbitration by a single
arbitrator selected under the rules of the American Arbitration
Association for arbitration of employment disputes conducted in
Virginia. Each party will be entitled to present evidence and argument
to the arbitrator. The arbitrator will have the right only to
interpret and apply the provisions of this Agreement and may not
change any of its provisions, except as expressly provided in Section
13. The arbitrator will permit reasonable pre-hearing discovery of
facts, to the extent necessary to establish a claim or a defense to a
claim, subject to supervision by the arbitrator. The determination of
the arbitrator will be conclusive and binding upon the parties and
judgment upon the same may be entered in any court having jurisdiction
thereof. The expenses of arbitration will be borne equally by the
Company and the Employee
(b) Notwithstanding Section 14(a), the Company will not be required to
seek or participate in arbitration regarding any actual or threatened
breach of the Employee's covenants in Sections 8, 9 and 10, but may
pursue its remedies, including injunctive relief, for such breach in a
court of competent jurisdiction in Virginia, or in the sole discretion
of the Company, in a court of competent jurisdiction where the
Employee has committed or is threatening to commit a breach of the
Employee's covenants in Sections 8, 9 and 10, and no arbitrator may
make any ruling inconsistent with the findings or rulings of such
court.
15. Nondisparagement. While employed by the Company and for the duration of the
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Severance Period, the Employee agrees that the Employee will not, directly
or indirectly, make or cause to be made any statement or criticism which is
adverse to the interests of the Company Group or its clients; nor will the
Employee take any action that may reasonably cause the Company Group or its
clients significant embarrassment, humiliation, or otherwise cause or
contribute to the Company Group or their clients being held in disrepute by
the public or the Company Group's clients, customers, or employees, except
as required by law; provided, however, that nothing herein will be
interpreted to preclude the Employee's honest and good faith reporting to
the Company, its counsel, or appropriate legal enforcement authorities.
16. Survival. The Employee and the Company agree that for the Severance Period
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the Employee's covenants set forth in Sections 8, 9 and 10 will survive any
termination or expiration of this Agreement.
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17. Notice. Any notice required or permitted to be given hereunder will be
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deemed sufficiently given if sent by registered or certified mail, postage
prepaid, addressed to the addressee at the Employee's or the Company's
address last provided to the sender in writing by the addressee for
purposes of receiving notices hereunder or, unless or until such address
will be so furnished, to the address indicated opposite the Employee's or
the Company's signature to this Agreement. Each party may also provide
notice by sending the other party a facsimile at a number provided by such
other party.
18. Governing Law. The validity, interpretation, construction and performance
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of this Agreement will be governed by and construed in accordance with the
substantive laws of Virginia, without giving effect to the principles of
conflict of laws of such State.
19. Amendment; Waiver. This Agreement may not be modified, amended or waived in
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any manner except by an instrument in writing, specifically referring to
this Agreement and signed by both parties hereto. No waiver by either party
hereto at any time of any breach by the other party hereto or compliance
with any condition or provision of this Agreement to be performed by such
other party will be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time.
20. Counterparts. This Agreement may be executed in two or more counterparts,
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each of which will be deemed an original but all of which together will
constitute one and the same Agreement.
21. Entire Contract. This Agreement constitutes the entire understanding and
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agreement between the Company and the Employee with regard to all matters
herein and supersedes any prior agreements, including any employment
agreements and discussions between the parties. There are no other
agreements, conditions or representations, oral or written, expressed or
implied with regard thereto.
22. Headings. Unless otherwise noted, the headings of sections in this
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Agreement are included solely for convenience of reference and will not
control the meaning or the interpretation of any provisions of this
Agreement.
[Signature page to follow]
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IN WITNESS WHEREOF, the Company has caused this Agreement to be signed by
an officer pursuant to the authority of its Board, and the Employee has executed
this Agreement, as of the day and year first written above.
COMTEX NEWS NETWORK, INC.
By: /s/ X.X. Xxxxxxx
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X.X. Xxxxxxx
Chairman and Chief Executive Officer
/s/ E.W. "Chip" Xxxxx, III
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E.W. "Chip" Xxxxx, III
