EXHIBIT 10.9
EXECUTIVE SEVERANCE AGREEMENT
THIS EXECUTIVE SEVERANCE AGREEMENT ("Agreement") by and between uBid, Inc., a
Delaware corporation (the "Company"), headquartered at 0000 X. Xxxx Xxxx Xxxx,
Xxxxx 000, Xxxxxxx, Xxxxxxxx and Xxxxxxxxx Xxxxx (the "Executive"), is made as
of April 15, 2002.
WHEREAS, the Board of Directors of the Company (the "Board") has determined
that Executive will play a critical role in the operations of the Company; and
WHEREAS, the Board has determined that appropriate steps should be taken to
reinforce and encourage the continued employment and dedication of the
Executive.
NOW, THEREFORE, as an inducement for and in consideration of the Executive
remaining in its employ, the Company agrees that the Executive shall receive the
severance benefits set forth in this Agreement in the event the Executive's
employment with the Company is terminated under the circumstances described
below.
1. Not an Employment Contract. The Executive acknowledges that this Agreement
does not constitute a contract of employment or impose on the Company any
obligation to retain the Executive as an employee and that this Agreement does
not prevent the Executive from terminating his employment. Executive understands
and acknowledges that he is an employee at will and that either he or the
Company may terminate the employment relationship between them at any time and
for any reason.
2. Severance Pay.
(a) Severance Pay Following a Change in Control. In the event a Change in
Control (as defined below) occurs and, within one (1) year thereafter, the
employment of the Executive is terminated by the Company for a reason other than
for Cause (as defined below) or by the Executive for Good Reason (as defined
below), then the Company shall pay to the Executive (as severance pay) a lump
sum payment equal to six (6) months base salary. The Executive agrees that after
the Termination Date (as defined below), but prior to payment of the severance
pay pursuant to this paragraph, he shall execute a copy of the Company's form of
general release of any and all claims he may have against the Company and its
officers, employees, directors, parents and affiliates. Executive understands
and agrees that the payment of the severance pay pursuant to this paragraph is
contingent on his execution of the previously described release of claims.
(b) Severance Pay Absent a Change in Control. In the event the employment of
the Executive is terminated by the Company for a reason other than for Cause (as
defined below), then the Company shall continue to pay to the Executive (as
severance pay) his regular base salary as in effect on the Executive's last day
of employment (exclusive of bonus or any other compensation), for six (6) months
following the Termination Date. Unless the parties agree otherwise, the
severance pay provided for in this Section 2(b) shall be paid in installments,
in accordance with the Company's regular payroll practices. The Executive agrees
that after the Termination Date, but prior to payment of the severance pay
pursuant to this paragraph, he shall
execute a copy of the Company's form of general release of any and all claims he
may have against the Company and its officers, employees, directors, parents and
affiliates. Executive understands and agrees that the payment of the severance
pay pursuant to this paragraph is contingent on his execution of the previously
described release of claims.
(c) Sole Remedy. The payment to the Executive of the amounts payable under this
Section 2 shall constitute the sole remedy of the Executive in the event of a
termination of the Executive's employment by the Company or a resignation by the
Executive that results in payment of benefits under this Section 2.
3. Definitions. For purposes of this Agreement, the following terms shall have
the following meanings:
(a) "Cause" shall mean a good faith finding by the Company of: (i) gross
negligence or willful misconduct by Executive in connection with his employment
duties, (ii) failure by Executive to perform his duties or responsibilities
required pursuant to his employment, after written notice and an opportunity to
cure, (iii) misappropriation by Executive of the assets or business
opportunities of the Company, or its affiliates, (iv) embezzlement or other
financial fraud committed by Executive, (v) the Executive knowingly allowing any
third party to commit any of the acts described in any of the preceding clauses
(iii) or (iv), or (vi) the Executive's indictment for, conviction of, or entry
of a plea of no contest with respect to, any felony.
(b) "Good Reason" shall mean: (i) the unilateral relocation by the Company of
the Executive's principal work place for the Company to a site more than 60
miles from the location of Executive's principal work place at the time of the
Change in Control; (ii) a reduction in the Executive's then current base salary,
without the Executive's consent; or (iii) the Executive's assignment to a
position where the duties of the position are outside his area of professional
competence.
(c) "Change in Control" shall mean the consummation of any of the following
events: (i) a sale, lease or disposition of all or substantially all of the
assets of the Company, or (ii) a sale, merger, consolidation, reorganization,
recapitalization, sale of assets, stock purchase, contribution or other similar
transaction (in a single transaction or a series of related transactions) of the
Company with or into any other corporation or corporations or other entity, or
any other corporate reorganization, where the stockholders of the Company
immediately prior to such event do not retain (in substantially the same
percentages) beneficial ownership, directly or indirectly, of more than fifty
percent (50%) of the voting power of and interest in the successor entity or the
entity that controls the successor entity, provided, however, that a Change in
Control shall not include a sale, lease, transfer or other disposition of all or
substantially all of the capital stock, assets, properties or business of the
Company (by way of merger, consolidation, reorganization, recapitalization, sale
of assets, stock purchase, contribution or other similar transaction) that
involves the Company, on the one hand, and CMGI, Inc. or any CMGI Subsidiary (as
defined below), on the other hand.
(d) "Termination Date" shall mean the Executive's last day on the payroll of
the Company.
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(e) "CMGI Subsidiary" shall mean any corporation or other entity that is
controlled, directly or indirectly, by CMGI, Inc.
4. Miscellaneous.
(a) Notices. Any notices delivered under this Agreement shall be deemed duly
delivered four business days after it is sent by registered or certified mail,
return receipt requested, postage prepaid, or one business day after it is sent
for next-business day delivery via a reputable nationwide overnight courier
service, in each case to the address of the recipient set forth in the
introductory paragraph hereto. Either party may change the address to which
notices are to be delivered by giving notice of such change to the other party.
All notices to the Company shall also be addressed to the Company's General
Counsel.
(b) Pronouns. Whenever the context may require, any pronouns used in this
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.
(c) Entire Agreement. This Agreement constitutes the entire agreement between
the parties and supersedes all prior agreements and understandings, whether
written or oral, relating to the subject matter of this Agreement.
(d) Amendment. This Agreement may be amended or modified only by a written
instrument executed by both the Company and the Executive.
(e) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Illinois. Any action, suit or other
legal arising under or relating to any provision of this Agreement shall be
commenced only in a court of the State of Illinois (or, if appropriate, a
federal court located within Illinois), and the Company and the Executive each
consents to the jurisdiction of such a court. The Company and the Executive each
hereby irrevocably waive any right to a trial by jury in any action, suit or
other legal proceeding arising under or relating to any provision of this
Agreement.
(f) Successors and Assigns. This Agreement shall be binding upon and 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 Executive are personal and shall not be assigned by him.
(g) Waivers. 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.
(h) Captions. 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.
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(i) Severability. 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.
THE EXECUTIVE ACKNOWLEDGES THAT HE HAS CAREFULLY READ THIS AGREEMENT AND
UNDERSTANDS AND AGREES TO ALL OF THE PROVISIONS IN THIS AGREEMENT.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year set forth above.
uBid, Inc.
By: /s/ Xxxxxx X. XxXxxxxx
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Title: Treasurer
/s/ Xxxxxxxxx Xxxxx
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Xxxxxxxxx Xxxxx
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