Exhibit 10.19
EMPLOYMENT, CONFIDENTIALITY AND
NON-COMPETITION AGREEMENT
THIS EMPLOYMENT, CONFIDENTIALITY AND NON-COMPETITION AGREEMENT (the
"Agreement") dated as of May 8, 2000 is made and entered into by and between
XxxxxxxxXxxxxx.xxx, Inc., a Delaware corporation (the "Company"), and Xxxx Xxxxx
(the "Executive").
WHEREAS, the Company wishes to retain the services of the Executive as
a key employee of the Company who is expected to make major contributions to the
short- and long-term profitability, growth and financial strength of the
Company; and
WHEREAS, Company and Executive believe that it is in their respective
best interests to enter into and deliver this Agreement; and
WHEREAS, the Executive acknowledges that in the course of his
employment by the Company, he will or may have access to and become informed of
the Company's confidential information and will frequently come into contact
with the Company's customers (including, without limitation, its investigative
research sites) and accounts such that the Executive will influence the business
and relationships between the Company and its customers and accounts; and
WHEREAS, the Executive has agreed to certain confidentiality, non-
solicitation and non-competition agreements; and in consideration for such
agreements, the Company has agreed to pay the Executive termination payments
upon severance of the Executive's employment hereunder; and
NOW, THEREFORE, the Company and the Executive agree as follows:
1. Certain Defined Terms. In addition to terms defined elsewhere herein, the
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following terms have the following meanings when used in this Agreement
with initial capital letters:
(a) "Board" means the Board of Directors of the Company.
(b) "Cause," when used in the phrase "for cause" or "without cause" means:
(i) the willful and continued failure by Executive to substantially
perform his duties hereunder (other than any such failure
resulting from Executive's incapacity due to Disability);
(ii) engagement by the Executive in misconduct or gross negligence
which is materially injurious to the Company, monetarily or
otherwise;
(iii) a willful act by the Executive of dishonesty, fraud,
embezzlement or theft in connection with his duties or in the
course of his employment with the Company or any Subsidiary;
(iv) a willful appropriation of a material business opportunity of
the Company or any Subsidiary, including securing any personal
profit in connection with any transaction entered into on
behalf of the Company or any Subsidiary, and which
appropriation causes the Company or any Subsidiary to incur
ascertainable damages;
(v) willful damage by the Executive to property of the Company or
any Subsidiary;
(vi) breach of Section 11, 12 or Section 13 hereof;
(vii) material breach of this Agreement;
(viii) the conviction of, or the entering of a guilty plea or plea of
no contest with respect to, a felony involving fraud, theft or
the equivalent thereof, or any other crime involving fraud or
theft (but in each case only if such fraud, theft or similar
crime relates to the business of the Company or a Subsidiary)
with respect to which imprisonment for more than one (1) year
is a possible punishment.
(c) "Change in Control" means the occurrence during the term of this
Agreement of any of the following events:
(i) the acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a
"Person") of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 15% or more of the
combined voting power of the then outstanding Voting Stock;
provided, however, that for purposes of this Section 1(c)(i),
the following acquisitions shall not constitute a Change in
Control: (A) any acquisition (including, without limitation, a
financing) directly from the Company that is approved by the
Incumbent Board (as defined below), (B) any acquisition by the
Company, (C) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any
Subsidiary or (D) any acquisition by any Person pursuant to a
Business Combination (as defined below) that complies with
clauses (I), (II) and (III) of subsection (iii) of this Section
1(c);
(ii) individuals who, as of the date hereof, constitute the Board
(the "Incumbent Board") cease for any reason to constitute at
least a majority of the Board except that any individual
becoming a Director subsequent to the date hereof whose
election, or nomination for election by the Company's
stockholders, was approved by a vote of at least two-thirds of
the Directors then comprising the Incumbent Board (either by a
specific vote or by approval of the proxy statement of the
Company in which such person is named as a nominee for
director, without objection to such nomination) shall be deemed
to have been a member of the Incumbent
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Board, but excluding, for this purpose, any such individual
whose initial assumption of office occurs as a result of an
actual or threatened election contest (within the meaning of
Rule 14a-11 of the Exchange Act) 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;
(iii) consummation of (A) a reorganization, merger or consolidation
or (B) a sale or other disposition of all or substantially all
of the assets of the Company (each, a "Business Combination"),
unless, in each case, immediately following such Business
Combination, (I) all or substantially all of the individuals
and entities who were the beneficial owners of Voting Stock of
the Company 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 voting securities entitled to
vote generally in the election of Directors of the entity
resulting from such Business Combination (including, without
limitation, an entity which as a result of such transaction
owns the Company or all or substantially all of the Company's
assets either directly or through one or more subsidiaries) in
substantially the same proportions relative to each other as
their ownership, immediately prior to such Business
Combination, of the Voting Stock of the Company, (II) no Person
(other than the Company or such entity resulting from such
Business Combination or any employee benefit plan (or related
trust) sponsored or maintained by the Company, any Subsidiary
or such entity resulting from such Business Combination)
beneficially owns, directly or indirectly, 15% or more of the
then outstanding shares of common stock of the entity resulting
from such Business Combination or the combined voting power of
the then outstanding voting securities entitled to vote
generally in the election of directors of such entity and (III)
at least a majority of the members of the Board of Directors of
the entity resulting from such Business Combination were
members of the Incumbent Board at the time of the execution of
the initial agreement or of the action of the Board providing
for such Business Combination; or
(iv) approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company, except pursuant to a
Business Combination that complies with clauses (I), (II) and
(III) of subsection (iii) of this Section 1(c);
(c) "Disabled" means the Executive's incapacity due to physical or mental
condition to perform the essential functions of Executive's duties,
with or without reasonable accommodation, on a full-time basis for six
consecutive months unless the Executive returns to the full-time
performance of the Executive's duties for a period of at least three
consecutive months no later than 30 days after the Company has given
the Executive a notice of termination. If the Executive
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disagrees with a determination to terminate him because the Company
believes he is Disabled, the Company and the Executive, or in the
event of the Executive's incapacity to designate a doctor, the
Executive's legal representative, together shall choose a qualified
medical doctor who shall determine whether the Executive is Disabled.
If the Company and the Executive cannot agree on the choice of a
qualified medical doctor, then the Company and the Executive each
shall choose a qualified medical doctor and the two doctors together
shall choose a third qualified medical doctor, who shall determine
whether the Executive is Disabled. The determination of the chosen
qualified medical doctor as to whether the Executive is Disabled shall
be binding upon the Company and the Executive unless such
determination is clearly made in bad faith.
(d) "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time.
(e) "Involuntary Termination" means the occurrence of any of the
following: (i) the Company gives written notice to the Executive that
the Company intends to terminate the Agreement, (ii) the Company
reduces the Executive's base salary as set forth in Section 5, unless
such reduction in base salary is part of a reduction applicable
generally to senior executives of the Company, or (iii) unless
otherwise agreed by the Executive, the Company relocates the Executive
or his offices or the principal place where he is required to perform
his duties hereunder farther than 50 miles from Gurnee, Illinois or
such other place as the Company's principal executive offices may,
from time to time, be located.
(f) "Restricted Business" means (i) any business or division of a business
which consists of providing services to investigative sites and to
their customers in connection with clinical research and development,
(ii) any business or division of a business which provides marketing
or clinical research services to pharmaceutical companies, (iii) any
business of a kind in whole or in part similar to that heretofore or
hereafter engaged in by the Company or any Subsidiary, and (iv) any
other principal line of business developed or acquired by the Company
or its affiliates.
(g) "Subsidiary" means an entity in which the Company directly or
indirectly beneficially owns 50% or more of the outstanding Voting
Stock.
(h) "Termination Date" means the date on which the Executive's employment
is terminated (the effective date of which shall be the date of
termination).
(i) "Voluntary Termination" means the occurrence of any of the following:
(i) the date two weeks after the Executive gives written notice to the
Company that the Executive intends to terminate this Agreement or if
later, the date specified in such written notice, (ii) the Executive
dies or (iii) the Executive becomes Disabled.
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(j) "Voting Stock" means securities entitled to vote generally in the
election of directors.
2. Term.
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(a) This Agreement shall be for a term that commences on the date this
Agreement is approved by the Board ("Effective Date") and, subject to
any benefit continuation requirements of applicable laws, expires on
the earliest of (i) an Involuntary Termination, (ii) a Voluntary
Termination or (iii) three (3) years from the Effective Date, except
that the Agreement shall automatically renew for successive one-year
periods upon the terms and conditions set forth herein, commencing on
the third anniversary of the Effective Date, and on each anniversary
date thereafter, unless the Company gives thirty (30) days' written
notice to Executive prior to an anniversary date of its intention to
not extend this Agreement. For purposes of this Agreement, any
reference to the "term" of this Agreement includes the original term
and any extension thereof.
(b) The provisions of Sections 11, 12, 13 and 16 survive termination of
this Agreement for any reason, unless otherwise agreed to in a writing
signed by Executive and the Chief Executive Officer of the Company.
3. Employment. The Company hereby agrees to employ the Executive, and the
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Executive hereby agrees to be employed by the Company, upon the terms and
conditions herein set forth.
4. Duties of the Executive. The Executive shall serve as the Company's Vice
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President, Information Technology. The Executive shall report directly to
the Company's Chief Executive Officer and have such duties as the Chief
Executive Officer and the Board may from time to time prescribe. The
Executive shall devote his full time and best efforts to the Company's
business of providing services to investigative sites and to their
customers in connection with clinical research and development and
providing services to sponsor hospitals and consumers in connection with
the Company's interactive Internet healthcare information site and any
other related duties and responsibilities that may from time to time be
prescribed by the Chief Executive Officer or the Board; so long as it does
not interfere with the Executive's employment hereunder, the Executive may
serve as an officer, director or otherwise participate in educational,
welfare, social, religious and civic organizations. On or about the dates
that are six, twelve and eighteen months after the date hereof, the Company
will evaluate the Executive's performance and consider, in its sole and
absolute discretion, whether to promote the Executive to the position of
Chief Technology Officer of the Company. The Company will keep the
position of Chief Technology Officer vacant for a period of at least
eighteen months following the date hereof. The Executive represents that
he is not under a restrictive covenant, non-competition agreement,
confidentiality agreement or other agreement or obligation that might
prohibit Executive from being employed by the Company or from performing
the duties contemplated in this Section 4.
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5. Compensation.
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(a) The Company shall pay the Executive a gross base salary of $140,000.00
per annum, which base salary the Board may adjust from time to time,
payable at the times and in the manner consistent with the Company's
general policies regarding compensation of senior executives. Such
base salary includes any salary reduction contributions to (i) any
Company-sponsored plan (the "401(k) Plan") that includes a cash-or-
deferred arrangement under Section 401(k) of the Internal Revenue Code
of 1986, as amended (the "Code"), (ii) any other Company-sponsored
plan of deferred compensation or (iii) any Company-sponsored
"cafeteria plan" under Section 125 of the Code.
(b) The Company shall pay to Executive a one-time cash signing bonus of
$10,000, to be paid at the end of the first payroll period following
Executive's start date.
(c) To the extent the Board authorizes cash incentive compensation under
the Company's executive incentive compensation plan, Executive shall
be eligible to participate in such plan and shall be eligible to
receive an annual cash incentive bonus in an amount up to 30% of
Executive's base salary for such fiscal year. The actual bonus will be
based on the achievement of certain performance objectives determined
by the Board in its sole discretion. Pursuant to the Company's
applicable incentive or bonus plan as in effect from time to time,
Executive's cash incentive compensation for fiscal 2000 and succeeding
fiscal years during the term of this Agreement may be determined
according to criteria intended to qualify under Section 162(m) of the
Code.
(d) Subject to the requirements of applicable law, the Company will grant
to Executive under the Company's Amended and Restated 1996 Employee
Stock Option Plan (the "Plan") stock options exercisable to purchase
up to 40,000 shares of the Company's Class A Common Stock, par value
$.001 per share (the "Class A Common Stock") at an exercise price
equal to the fair market value of the stock on the date of grant. If
the Executive is promoted to the position of Chief Technology Officer
during the Term, at the time of such promotion and subject to the
requirements of applicable law, the Company will grant to the
Executive under the Plan stock options having an aggregate exercise
price equal to $200,000 and an exercise price per share equal to the
fair market value of a share of Class A Common Stock on the date of
grant. All of the foregoing options would become exercisable to the
extent of 25% of the shares covered by the option on the first
anniversary of the date of grant and the remaining 75% of the shares
covered by the option would vest in equal installments at the end of
each of the following twelve fiscal quarters of the Company. To the
extent permitted by applicable law and the terms and conditions of the
Plan, the above-referenced stock options shall be "incentive stock
options" as that term is defined under Section 422 of the Code and any
remaining stock options shall be non-qualified stock options.
6. Benefits. The Company shall make available to the Executive, subject to
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the terms and conditions of the applicable plans, including without
limitation the eligibility rules,
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participation for the Executive and his eligible dependents in the Company-
sponsored employee benefit plans or arrangements and such other usual and
customary benefits now or hereafter generally available to employees of the
Company and such benefits and perquisites as may be from time to time made
available to executives of the Company.
7. Expenses. The Company shall pay or reimburse the Executive, in accordance
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with the general policies of the Company, for reasonable and necessary
expenses incurred by the Executive in connection with his duties on behalf
of the Company.
8. Place of Performance. In connection with his employment by the Company,
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unless otherwise agreed by the Executive, the Executive shall be based at
offices located in Gurnee, Illinois or, at the Company's request, such
other place as the Company's principal executive offices may, from time to
time, be located, except for travel reasonably required for Company
business.
9. Termination Payments, Vesting and Exercise of Stock Options.
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(a) If an Involuntary Termination occurs other than for Cause and the
Executive enters into an agreed-upon general release and settlement
agreement with the Company:
(i) for a period of three months thereafter (the "Payment Period"),
the Company shall pay the Executive, in accordance with the
Company's regular payroll schedule, termination payments that
in the aggregate equal the sum of (A) 25% of the Executive's
highest annual base salary during the three-year period prior
to the Executive's termination plus (B) 25% of the Executive's
average annual cash and equity incentive compensation award
during the three-year period prior to the Termination Date;
provided, however, that in the event of an Involuntary
Termination other than for Cause within two years following a
Change in Control, the Executive may elect to receive such
payments in the form of a lump-sum payable within 30 days of
the Termination Date;
(ii) during the Payment Period, the Company will use its best
efforts to maintain in full force and effect for the continued
benefit of the Executive all welfare benefit plans in which the
Executive was entitled to participate immediately prior to the
Termination Date. Any such welfare benefits will be provided to
the Executive on substantially the same terms and conditions
(including employee contributions toward premiums, if any)
under which the Executive was entitled to participate
immediately prior to the Termination Date. The Company does not
guarantee a favorable tax consequence to Executive for
continued coverage under Company-sponsored plans nor will it
indemnify the Executive for such results.
(iii) during the Payment Period, the Company shall (A) to the extent
permitted under the 401(k) Plan, permit the Executive to
continue to participate in the 401(k) Plan and receive the
maximum matching contribution
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thereunder as if such Involuntary Termination had not occurred,
or (B) if continued participation in the 401(k) Plan is not
permitted under the 401(k) Plan, pay to the Executive an amount
equal to the maximum matching contribution to which he would
have been entitled under the Company's 401(k) Plan as if such
Involuntary Termination had not occurred; and
(iv) notwithstanding anything to the contrary in the Executive's
stock option agreement(s) or certificate(s) or in the stock
option plan(s) under which Executive's stock options were
granted, (A) all of the Executive's stock options shall cease
vesting as of the Termination Date, (B) Executive shall have
the right to exercise any and all vested stock options at any
time not later than 90 days after the Termination Date and (C)
all unvested stock options shall be canceled on the Termination
Date. Notwithstanding the foregoing or anything to the contrary
in the Executive's stock option agreement(s) or certificate(s)
or in the stock option plan(s) under which Executive's stock
options were granted, in the event of an Involuntary
Termination other than for Cause within two years following a
Change in Control, all of Executive's stock options shall
immediately become 100% vested and exercisable.
(v) any termination payments hereunder shall not be taken into
account for purposes of any retirement plan or other benefit
plan sponsored by the Company, except as otherwise set forth
herein or as expressly required by such plans or applicable
law.
(b) If (i) a Voluntary Termination other than due to Executive's death or
Disability occurs or (ii) an Involuntary Termination for Cause occurs,
Executive will be entitled to receive his base salary then in effect
only through the last day of the payroll period in which the
Termination Date occurs and he will not be entitled to any bonus for
the fiscal year during which such termination occurs or any subsequent
fiscal year. Notwithstanding anything to the contrary in the
Executive's stock option agreement(s) or certificate(s) or in the
stock option plan(s) under which Executive's stock options were
granted, all of Executive's stock options shall immediately be
canceled; provided, however, that if a Voluntary Termination occurs
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within 18 months following the Effective Date as a direct result of
the fact that (A) Executive has been informed by the Company that he
will not be promoted to the position of Chief Technology Officer or
(B) the Company fills the position of Chief Technology Officer with
another person, Executive's stock options shall automatically be
vested to the extent of 50% of the options and Executive shall have a
period of ninety days following the Termination Date in which to
exercise such options.
(c) If a Voluntary Termination due to Executive's death during the term of
this Agreement occurs, Executive will be entitled to receive his base
salary through the end of the calendar month in which his death occurs
and, notwithstanding anything to the contrary in the Executive's stock
option agreement(s) or
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certificate(s) or in the stock option plan(s) under which Executive's
stock options were granted, Executive's estate shall have a period of
one year following Executive's death to exercise any vested stock
options and all other stock options shall be immediately canceled. If
the Executive dies while any amounts are payable to him hereunder, all
such amounts, unless otherwise provided herein, shall be paid to the
Executive's designated beneficiary, or, if none, then to the
Executive's estate.
(d) If a Voluntary Termination due to Executive's becoming Disabled during
the term of this Agreement occurs, then notwithstanding anything to
the contrary in the Executive's stock option agreement(s) or
certificate(s) or in the stock option plan(s) under which Executive's
stock options were granted, Executive shall have a period of one year
following Executive's Disability to exercise any vested stock options
and all other stock options shall be immediately canceled.
(e) Notwithstanding the foregoing, if the Executive breaches Section 11,
12 or 13 hereof, any right of the Executive to receive termination
payments, to have the vesting of his options accelerated or to have
the period during which he may exercise his options extended under
this Section 9 shall be forfeited, but without prejudice to any
exercise of options that may have occurred prior to such forfeit, and
the Executive shall reimburse the Company in full for all termination
payments made to the Executive under this Section 9 no later than 30
days after the Company gives notice of such breach to the Executive.
10. Limitation on Payments and Benefits. Notwithstanding any provision of this
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Agreement to the contrary, if any amount or benefit to be paid or provided
under this Agreement would be an "Excess Parachute Payment," within the
meaning of Section 280G of the Internal Revenue Code of 1986, as amended
(the "Code"), or any successor provision thereto, but for the application
of this sentence, then the payments and benefits to be paid or provided
under this Agreement shall be reduced to the minimum extent necessary (but
in no event to less than zero) so that no portion of any such payment or
benefit, as so reduced, constitutes an Excess Parachute Payment. The
determination of whether any reduction in such payments or benefits to be
provided under this Agreement or otherwise that is required pursuant to the
preceding sentence shall be made at the expense of the Company, if
requested by the Executive or the Company, by the Company's independent
accountants. The fact that the Executive's right to payments or benefits
may be reduced by reason of the limitations contained in this Section 10
shall not of itself limit or otherwise affect any other rights of the
Executive other than pursuant to this Agreement. In the event that any
payment or benefit intended to be provided under this Agreement or
otherwise is required to be reduced pursuant to this Section 10, the
Executive shall be entitled to designate the payments and/or benefits to be
so reduced in order to give effect to this Section 10. The Company shall
provide the Executive with all information reasonably requested by the
Executive to permit the Executive to make such designation. In the event
that the Executive fails to make such designation within 10 business days
of the Termination Date, the Company may effect such reduction in any
manner it deems appropriate.
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11. Confidentiality Agreement.
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(a) The Executive acknowledges that in the course of his employment by the
Company, he will or may have access to and become informed of
confidential and secret information that is a competitive asset of the
Company ("Confidential Information"), including, without limitation,
(i) the terms of agreements between the Company and its employees,
customers (including, without limitation, its investigative research
sites) and suppliers, (ii) pricing strategy, (iii) sales and marketing
methods, (iv) product development ideas and strategies, (v) personnel
training and development programs, (vi) financial results, (vii)
strategic plans and demographic analyses, (viii) proprietary computer
and systems software and (ix) any non-public information concerning
the Company, its employees, suppliers and customers. Regardless of
any actual or alleged breach by the Company of this Agreement, the
Executive shall keep all Confidential Information in strict confidence
and shall not directly or indirectly make known, divulge, reveal,
furnish, make available or use any Confidential Information (except in
the course of his regular authorized duties on behalf of the Company)
until and unless such Confidential Information becomes, through no
fault of the Executive, generally known to the public or the Executive
is required by law to make disclosure (after giving the Company
reasonable notice and an opportunity to contest such requirement).
The Executive's obligations under this Section 11 are in addition to,
and not in limitation or preemption of, all other obligations of
confidentiality which the Executive may have to the Company under
general legal or equitable principles.
(b) Except in the ordinary course of the Company's business, the Executive
has not made and shall never make or cause to be made, any copies,
pictures, duplicates, facsimiles or other reproductions or recordings
or any abstracts or summaries including or reflecting Confidential
Information. All such documents and other property furnished to the
Executive by the Company or otherwise acquired or developed by the
Company shall at all times be the property of the Company. Upon a
Voluntary Termination or Involuntary Termination, the Executive shall
return to the Company any such documents or other property of the
Company which are in the possession, custody or control of the
Executive.
12. Ownership of Inventions, Discoveries, Improvements, Etc.
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(a) Executive shall promptly disclose and describe to the Company all
inventions, improvements, discoveries and technical developments,
whether or not patentable, made or conceived by Executive, either
alone or with others, during the term of this Agreement and for a
period of one (1) year following the Termination Date, and that (i)
are based in whole or in part upon Confidential Information, or (ii)
are along the lines of, useful in or related to the Company's
business, or (iii) result from, or are suggested by, any work that may
be done by Executive for or on behalf of the Company ("Inventions").
Executive hereby assigns and agrees to assign to the Company
Executive's entire right, title and interest in and to such
Inventions, and agrees to cooperate with the Company both
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during and after the term of this Agreement in the procurement and
maintenance, at the Company's expense and at its direction, of
patents, copyright registrations and/or protection of the Company's
rights in such Inventions. Executive shall keep and maintain adequate
and current written records of all such Inventions, which shall be and
remain the property of the Company.
(b) If a patent application or copyright registration is filed by
Executive or on Executive's behalf, or a copyright notice indicating
Executive's authorship is used by Executive or on Executive's behalf,
within one (1) year after the Termination Date, that describes or
identifies any Invention within the scope of Executive's work for the
Company or that otherwise related to a portion of the Company's
business (or any division or Subsidiary thereof) of which Executive
had knowledge during the term of this Agreement, it is to be
conclusively presumed that the Invention was conceived by the
Executive during the term of this Agreement. Executive agrees to
notify the Company promptly of any such application or registration
and to assign to the Company Executive's entire right, title and
interest in such Invention and in such application or registration.
(c) There is no contract or duty on Executive's part now is existence to
assign Inventions except in favor of the Company. Executive shall not
disclose or induce the Company to use any confidential information
that Executive is either now aware of, or shall become aware of, that
belongs to a former employer or anyone other than the Company or a
Subsidiary.
13. Covenant not to Compete; No Inducement; No Solicitation. In consideration
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for the Executive's employment hereunder and the Company's providing the
Executive with confidential information and contacts with the Company's
customers and accounts, during the term of the Employment Provisions and
for a period of one year after the Termination Date,
(a) the Executive shall not, without the prior written consent of the
Company (which consent may be withheld for any reason or no reason),
directly or indirectly or by action in concert with others, own,
manage, operate, join, control, perform consulting services for, be
employed by, participate in or be connected with any business,
enterprise or other entity (or the ownership, management, operation,
or control of any such business, enterprise or other entity) (a
"Competing Enterprise") engaged anywhere in the United States or
Canada in the Restricted Business. Notwithstanding the foregoing,
Executive may make purely passive investments on behalf of himself,
his immediate family or any trust in public companies engaged in a
Competing Enterprise so long as the aggregate interest represented by
such investments does not exceed 1% of any class of the outstanding
debt or equity securities of any Competing Enterprise.
(b) the Executive shall not, directly or indirectly, in any capacity, on
his own behalf or on behalf of any other firm, person or entity,
induce or attempt to induce any customer of the Company (including,
without limitation, any investigative research site) to cease doing
business in whole or in part with the Company,
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solicit the business of any such customer for any Restricted Business
or otherwise create any ill will or negative publicity with respect to
the Company.
(c) the Executive shall not, directly or indirectly, in any capacity, on
his own behalf or on behalf of any other firm, person or entity,
undertake or assist in the solicitation of any Company employee,
including, without limitation, solicitation of any employee to
terminate his or her employment with the Company.
Executive and the Company acknowledge that the nature of the foregoing
prohibited activities is geographically broad as a result of the expansive
geographic scope of the Restricted Business and the national scope of
Executive's duties hereunder.
14. Post-termination Assistance. Executive shall provide such information and
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assistance to the Company as the Company may reasonably request, upon
reasonable notice, in connection with any litigation in which it or any of
its affiliates is or may become a party. The Company shall reimburse the
Executive for any expenses, including travel expenses, incurred by the
Executive in connection with providing such information and assistance.
15. Withholding of Taxes. The Company may withhold from any amounts payable
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under this Agreement all federal, state, city or other taxes as the Company
is required to withhold pursuant to any law or government regulation or
ruling.
16. Specific Enforcement. The Executive acknowledges and agrees that a
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violation of Sections 11, 12 or 13 hereof that results in material
detriment to the Company would cause irreparable harm to the Company, and
that the Company's remedy at law for any such violation would be
inadequate. In recognition of the foregoing, the Company shall have the
right, in addition to any other relief afforded by law or this Agreement,
including damages sustained by a breach of this Agreement and any
forfeitures under Section 9, and without any necessity or proof of actual
damages, to enforce this Agreement by specific remedies, including, among
other things, temporary and permanent injunctions, it being the
understanding of the Company and the Executive that damages, the
forfeitures described above and injunctions shall all be proper modes of
relief and shall not be considered alternative remedies.
17. Arbitration. Any dispute between the parties (except as provided below)
-----------
under this Agreement shall be resolved through informal arbitration by an
arbitrator selected under the rules of the American Arbitration Association
(located in Chicago, Illinois) and the arbitration shall be conducted in
that location under the rules of said Association. Each party shall be
entitled to present evidence and argument to the arbitrator. The
arbitrator shall have the right only to interpret and apply the provisions
of this Agreement and may not change any of its provisions. The arbitrator
shall 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 shall
be conclusive and binding upon the parties and judgment upon the same may
be entered in any court having jurisdiction thereof. The arbitrator shall
give written notice to the Company and the Executive stating its
determination, and shall furnish to each party a
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signed copy of such determination. The expenses of arbitration shall be
borne equally by the Executive and the Company or as the arbitrator shall
otherwise equitably determine.
Notwithstanding the foregoing, the Company shall not be required to seek or
participate in arbitration regarding any breach of Sections 11, 12 or 13,
but may pursue its remedies for such breach in any court of competent
jurisdiction in the State of Illinois. Any arbitration or action pursuant
to this Section 17 shall be governed by and construed in accordance with
the substantive laws of the State of Illinois, without giving effect to the
principles of conflict of laws of such State.
18. Notices. For all purposes of this Agreement, all communications, including
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without limitation notices, consents, requests or approvals, required or
permitted to be given hereunder shall be in writing and shall be deemed to
have been duly given when hand delivered or dispatched by electronic
facsimile transmission (with receipt thereof confirmed), or five business
days after having been mailed by United States registered or certified
mail, return receipt requested, postage prepaid, or three business days
after having been sent by a nationally recognized overnight courier service
(such as Federal Express or UPS) addressed to the Company (to the attention
of the Secretary of the Company) at its principal executive office and to
the Executive at his principal residence, or to such other address as
either party may have furnished to the other in writing and in accordance
herewith, except that notices of changes of address shall be effective only
upon receipt.
19. Governing Law. The validity, interpretation, construction and performance
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of this Agreement shall be governed by and construed in accordance with the
substantive laws of the State of Illinois, without giving effect to the
principles of conflict of laws of such State.
20. Agreement. This Agreement contains all of the covenants and agreements
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between the parties with respect to such subject matter. Each party to
this Agreement acknowledges that no representations, inducements, promises,
or other agreements, orally or otherwise, have been made by any party, or
anyone acting on behalf of any party, pertaining to the subject matter
hereof, that are not embodied herein, and that no other agreement,
statement or promise pertaining to the subject matter hereof that is not
contained in this Agreement shall be valid or binding on either party.
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21. Successors and Binding Agreement.
--------------------------------
(a) The Company shall require any successor (whether direct or indirect,
by purchase, merger, consolidation, reorganization or otherwise) to
all or substantially all of the business or assets of the Company, by
agreement in form and substance satisfactory to the Executive,
expressly to assume and agree to perform this Agreement in the same
manner and to the same extent the Company would be required to perform
if no such succession had taken place. This Agreement shall be
binding upon and inure to the benefit of the Company and any successor
to the Company, including without limitation any persons acquiring
directly or indirectly all or substantially all of the business or
assets of the Company whether by purchase, merger, consolidation,
reorganization or otherwise (and such successor shall thereafter be
deemed the "Company" for the purposes of this Agreement), but will not
otherwise be assignable, transferable or delegable by the Company.
(b) This Agreement will inure to the benefit of and be enforceable by the
Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees and legatees.
(c) This Agreement is personal in nature and neither the Company nor the
Executive shall, without the consent of the other, assign, transfer or
delegate this Agreement or any rights or obligations hereunder except
as expressly provided in Sections 21(a) and 21(b). Without limiting
the generality or effect of the foregoing, the Executive's right to
receive payments hereunder will not be assignable, transferable or
delegable, whether by pledge, creation of a security interest, or
otherwise other than by a transfer by the Executive's will or by the
laws of descent and distribution and, in the event of any attempted
assignment or transfer contrary to this Section 21(c), the Company
shall have no liability to pay any amount so attempted to be assigned,
transferred or delegated.
22. Validity. If any provision of this Agreement or the application of any
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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 shall
not be affected, and the provision so held to be invalid, unenforceable or
otherwise illegal shall be reformed to the extent (and only to the extent)
necessary to make it enforceable, valid or legal.
23. Miscellaneous. No provision of this Agreement may be modified, waived or
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discharged unless such waiver, modification or discharge is agreed to in
writing signed by the Executive and the Company. 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 shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. Unless
otherwise noted, references to "Sections" are to sections of this
Agreement. The captions used in this Agreement are designed for convenient
reference only and are not to be used for the purpose of interpreting any
provision of this Agreement.
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24. Counterparts. This Agreement may be executed in one or more counterparts,
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each of which shall be deemed to be an original but all of which together
shall constitute one and the same agreement.
25. Effective Date. Notwithstanding anything to the contrary herein, this
--------------
Agreement shall not become effective unless and until the Board approves
this Agreement. Upon receipt of such approval, this Agreement shall become
immediately effective.
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IN WITNESS WHEREOF, the Company and the Executive have executed this
Agreement as of the date first above written/1/.
XXXXXXXXXXXXXX.XXX, INC.
/s/ Xxxxxx X. Xxxxxxxx
----------------------------------------
By: Xxxxxx X. Xxxxxxxx
Its: Chief Executive Officer
/s/ Xxxx Xxxxx
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Xxxx Xxxxx
___________________
/1/ The validity of execution of this Agreement on behalf of the Company is
subject to the approval of this Agreement by the Board.
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