Exhibit 10.11
EMPLOYMENT AGREEMENT
AGREEMENT made and entered into in New York, New York by and between
Razorfish, Inc. (the "Company"), a Delaware corporation with its principal place
of business at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000 and Xxxxxxx Xxxx 00
Xxxx Xxxx, Xxxxxxx, Xxxxxxxxxxxxx 00000 (the "Executive"). This Agreement shall
be effective on the Closing Date, as defined in that certain Agreement and Plan
of Merger (the "Agreement and Plan of Merger") dated as of August 10, 1999,
among the Company, Razorfish Merger Sub, Inc. and International Integration
Incorporated a/k/a i-Cube (the "Effective Date").
WHEREAS, subject to the terms and conditions hereinafter set forth, the
Company wishes to employ the Executive as its Chief Operating Officer and the
Executive wishes to accept such employment;
NOW, THEREFORE, in consideration of the foregoing premise and the mutual
promises, terms, provisions and conditions set forth in this Agreement, the
parties hereby agree:
1. Employment. Subject to the terms and conditions set forth in this
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Agreement, the Company hereby offers, and the Executive hereby accepts,
employment.
2. Term. Subject to earlier termination as hereafter provided, the
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Executive's employment hereunder shall be for a term of one (1) year, commencing
as of the Effective Date of this Agreement, and shall automatically renew
thereafter for successive periods of one (1) year each unless either party
notifies the other in writing at least sixty (60) days prior to the end of the
then-current term that this Agreement is no longer to be extended. The term of
this Agreement, as from time to time the same may be renewed, is hereafter
referred to as "the term of this Agreement" or "the term hereof".
3. Capacity and Performance.
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a. During the term hereof, the Executive shall serve the Company as its
Chief Operating Officer, reporting to the Chief Executive Officer of the Company
(the "CEO").
b. During the term hereof, the Executive shall be employed by the
Company on a full-time basis and shall perform such duties as are intrinsic to
his position and such other duties and responsibilities consistent with his
position as may reasonably be designated from time to time by the CEO.
c. During the term hereof, the parties acknowledge that it is
anticipated that the Executive shall work in New York City, on average,
approximately two (2) days of each business week.
d. During the term hereof, the Executive shall devote substantially all
of his business time and his best efforts, business judgment, skill and
knowledge exclusively to the advancement of the business and interests of the
Company and to the discharge of his duties and responsibilities hereunder.
4. Compensation and Benefits. As compensation for all services performed by
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the Executive during his employment:
a. Base Salary. During the term hereof, the Company shall pay the
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Executive a base salary at the rate of not less than Three Hundred Thousand
Dollars ($300,000) per annum, payable in accordance with the payroll practices
of the Company for its executives and subject to increase from time to time by
the Board of Directors of the Company (the "Board"), in its sole discretion.
Such base salary, as from time to time increased, is hereafter referred to as
the "Base Salary".
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b. Bonus Compensation.
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(i) In the event that the Effective Date occurs prior to December
31, 1999, the Executive will be deemed to have earned an annual bonus for 1999
equal to that portion of his target of seventy-five percent (75%) of the Base
Salary as is determined in accordance with the terms and conditions of the
International Integration Inc. ("i-Cube") bonus plan in effect immediately prior
to the Effective Date (the "i-Cube Plan") to have accrued in accordance with
such i-Cube Plan.
(ii) During the term hereof after 1999, the Executive shall be
eligible from time to time to receive bonuses or to participate in profit
sharing in such amounts as are determined by the Compensation Committee of the
Board to be appropriate for similarly situated executives of the Company.
Eligibility will be determined through a review process that will consider
Executive's work performance and contribution to the Company, and the Company's
performance, as determined by, and at the discretion of the Board. The Company
will conduct Executive performance reviews in accordance with the Company policy
in effect from time to time.
c. Stock Options.
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(i) The Company hereby acknowledges that the Executive has been
granted by i-Cube options (the "Executive Options") to purchase one million four
hundred ninety-one thousand five hundred (1,491,500) shares of i-Cube common
stock (the "Common Stock").
(ii) The Executive Options held by the Executive as of the Closing
Date shall be converted at the Exchange Ratio (as such term is defined in the
Agreement and Plan of Merger) into options to purchase shares of Razorfish
common stock in accordance with the terms and conditions of the Agreement and
Plan of Merger.
(iii) The following sets forth the vesting schedule of the Executive
Options:
(A) one million one hundred ninety-three (1,193,376) Executive
Options are vested as of the Effective Date;
(B) two hundred twenty-three thousand one hundred twenty-four
(223,124) Executive Options shall vest as of the Effective Date; and
(C) seventy-five thousand (75,000) Executive Options shall vest
in equal ratable installments of nine thousand three hundred seventy-five
(9,375) Executive Options every six (6) months for the period of four (4) years
immediately following the Effective Date.
(iv) Except as expressly set forth in this paragraph 4.c, the
Executive Options shall be subject to all terms and conditions of the i-Cube
stock option plan as the same shall be adopted and implemented by the Company.
d. Vacations. During the term hereof, the Executive shall be entitled to
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four (4) weeks of paid vacation per annum accrued in accordance with and
otherwise subject to the Company's vacation policies for similarly situated
executives, to be taken at such times and intervals as shall be determined by
the Executive, subject to the reasonable business needs of the Company. In the
event of any termination of this Agreement for any reason, the Executive shall
be entitled to cash compensation for vacation time not used as of the date of
termination ("Final Vacation Pay").
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e. Other Benefits. During the term hereof and subject to any
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contribution therefor generally required of executives of the Company, the
Executive shall be entitled to participate in any and all employee benefit plans
from time to time in effect for executives of the Company generally. Such
participation shall be subject to the terms of the applicable plan documents and
generally applicable Company policies.
f. Business Expenses. The Company shall pay or reimburse the Executive
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for all reasonable business expenses incurred or paid by the Executive in the
performance of his duties and responsibilities hereunder, subject to any expense
policies adopted by the Company with respect to similarly situated executives
and further subject to such reasonable substantiation and documentation as may
be specified by the Company from time to time. The Company shall pay or
reimburse the Executive for all reasonable travel expenses associated with his
travel between Boston and other cities, and New York City, to enable him to
attend to his duties or responsibilities at the Company's offices in New York
City, and the Company shall also maintain, and pay or reimburse the Executive
for all expenses associated with locating and renting a furnished apartment in
New York City (including reasonable brokerage fees, rental and security
deposits) for his use during the term of his employment with the Company,
provided, however, that monthly rent expenses associated therewith, in the
aggregate shall not exceed Four Thousand Dollars ($4,000) per month without the
prior approval of the Company.
5. Termination of Employment and Severance Benefits. Notwithstanding the
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provisions of Section 2 hereof, the Executive's employment hereunder shall
terminate under the following circumstances:
a. Death. In the event of the Executive's death during the term hereof,
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the Executive's employment hereunder shall immediately and automatically
terminate. In that event, the Company shall pay to the Executive's designated
beneficiary or, if no beneficiary has been designated by the Executive, to his
estate, any earned and unpaid Base Salary, any Final Vacation Pay, reimbursement
for any documented business expenses reimbursable under Section 4.f above, and
any bonus compensation that is earned but unpaid, pro-rated through the date of
his death.
b. Disability.
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(i) The Company may terminate the Executive's employment hereunder,
upon notice to the Executive, in the event that the Executive becomes
disabled during his employment hereunder through any illness, injury,
accident or condition of either a physical or psychological nature and, as a
result, is unable to perform substantially all of his duties and
responsibilities hereunder for one hundred and eighty (180) days during any
period of three hundred and sixty-five (365) consecutive days. If the
Company terminates the Executive's employment pursuant to this Section 5.b,
the Executive shall receive any Base Salary earned and unpaid through the
date of termination, any Final Vacation Pay, reimbursement for any
documented business expenses reimbursable under Section 4.f above, and any
bonus compensation that is earned but unpaid, pro-rated through the date of
termination.
(ii) The Board may designate another employee to act in the
Executive's place during any period of the Executive's disability.
Notwithstanding any such designation, the Executive shall continue to
receive the Base Salary in accordance with Section 4.a and benefits in
accordance with Section 4.d, to the extent permitted by the then-current
terms of the applicable benefit plans, until the Executive becomes eligible
for disability income benefits under the Company's disability income plan,
if any, or until the termination of his employment, whichever shall first
occur.
(iii) While receiving disability income payments under the Company's
disability income plan, if any, the Executive shall be entitled to receive
the difference between the Base Salary
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and such disability income payments and shall continue to participate in
Company benefit plans in accordance with Section 4.d, until the termination
of his employment.
(iv) If any question shall arise as to whether during any period the
Executive is disabled through any illness, injury, accident or condition of
either a physical or psychological nature so as to be unable to perform
substantially all of his duties and responsibilities hereunder, the
Executive may, and at the request of the Company shall, submit to a medical
examination by a physician selected by mutual agreement of the Company and
the Executive or his duly appointed guardian, if any, to determine whether
the Executive is so disabled and such determination shall for the purposes
of this Agreement be conclusive of the issue.
c. By the Company for Cause. The Company may terminate the Executive's
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employment hereunder for Cause at any time upon notice to the Executive setting
forth in reasonable detail the nature of such Cause. The following, as
determined by the Board in its reasonable judgment, shall constitute Cause for
termination: (i) the Executive's conviction of or plea of nolo contendere to a
felony or other crime involving moral turpitude; (ii) the Executive's fraud,
theft, embezzlement, other material dishonesty or a material breach of a
fiduciary duty owed to the Company; (iii) the Executive's willful failure to
perform (other than by reason of disability), or gross neglect in the
performance of, his duties and responsibilities to the Company hereunder;
provided, however, that the Company may terminate Executive's employment
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hereunder for "Cause" within the meaning of clauses (iii) above only upon thirty
(30) days' prior written notice to the Executive during which period the
Executive may cure the breach or neglect provided that such breach or neglect is
reasonably capable of being cured. Upon termination of Executive's employment
for Cause in accordance with this Section 5.c, the Company shall have no further
obligation or liability to the Executive, other than for Base Salary earned and
unpaid at the date of termination, any Final Vacation Pay, and reimbursement for
documented business expenses reimbursable under Section 4.f above.
d. By the Company Other than for Cause. The Company may terminate the
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Executive's employment hereunder other than for Cause at any time upon notice to
the Executive. In the event of such termination, then for a period of one (1)
year following the date of termination, the Company shall continue to pay the
Executive the Base Salary at the rate in effect on the date of termination (the
"Severance Payments") and shall continue to pay the cost of the Executive's
participation and that of his eligible dependents in its group health and any
other health-related plans, provided that the Executive is entitled to continue
such participation under applicable law and plan terms. In the event of
termination under this Section 5.d, the Company also shall pay the Executive a
lump sum payment equal to the sum of any Final Vacation Pay, any documented
business expenses reimbursable under Section 4.f above, and any bonus
compensation that is earned and unpaid, pro-rated through the date of
termination. All Severance Payments under this Section 5.d will be in the form
of salary continuation, payable in accordance with the normal payroll practices
of the Company, and will begin at the Company's next regular payroll period
following the date of termination of the Executive's employment.
e. By the Executive for Good Reason. The Executive may terminate his
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employment hereunder for Good Reason, upon notice to the Company setting forth
in reasonable detail the nature of such Good Reason. The following shall
constitute Good Reason for termination by the Executive: (i) failure of the
Company to continue the Executive in the position of Chief Operating Officer;
(ii) substantive diminution in the nature or scope of the Executive's
responsibilities, duties or authority; (iii) willful failure of the Company to
provide the Executive all compensation and other benefits and perquisites set
forth in Section 4 hereof, and (iv) any requirement by the Company that the
Executive work in New York City, on average, more than two days each business
week; provided, however, that the Executive shall only be entitled to terminate
his employment hereunder for Good Reason after providing the Company thirty (30)
days' notice during which the Company may endeavor to cure any such failure
described in paragraphs 5(e)(i), 5(e)(ii), 5(e)(iii) and 5(e)(iv) above and
which failure is capable of cure. In the event of termination in accordance with
this Section 5.e, the Executive shall be entitled to receive all pay and
benefits to which he would have been entitled had his employment terminated in
accordance with Section 5.d hereof.
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6. Survival of Provisions. Provisions of this Agreement shall survive
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termination if so provided herein or if necessary or desirable to accomplish the
purposes of other surviving provisions, including without limitation the
obligations of the Executive under Sections 7, 8 and 9 hereof.
7. Confidential Information.
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a. The Executive shall never use or disclose to any Person (except as
required by applicable law or for the proper performance of his duties and
responsibilities to the Company) any Confidential Information obtained by the
Executive incident to his employment with the Company. The Executive understands
that this restriction shall continue to apply after his employment terminates,
regardless of the reason for such termination.
b. All documents, records, tapes and other media of every kind and
description relating to the business, present or otherwise, of the Company and
any copies, in whole or in part, thereof (the "Documents"), whether or not
prepared by the Executive, shall be the sole and exclusive property of the
Company. The Executive shall safeguard all Documents and shall surrender to the
Company at the time his employment terminates, or at such earlier time or times
as the Board or its designee may specify, all Documents then in the Executive's
possession or control.
8. Assignment of Rights to Intellectual Property. The Executive shall
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promptly and fully disclose all Intellectual Property to the Company. The
Executive hereby assigns and agrees to assign to the Company (or as otherwise
directed by the Company) the Executive's full right, title and interest in and
to all Intellectual Property. The Executive agrees to execute any and all
applications for domestic and foreign patents, copyrights or other proprietary
rights and to do such other acts (including without limitation the execution and
delivery of instruments of further assurance or confirmation) requested by the
Company to assign the Intellectual Property to the Company and to permit the
Company to enforce any patents, copyrights or other proprietary rights to the
Intellectual Property. All copyrightable works that the Executive creates shall
be considered "work made for hire".
9. Restricted Activities. The Executive agrees that some restrictions on his
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activities during and after his employment are necessary to protect the
goodwill, Confidential Information and other legitimate interests of the
Company:
a. While the Executive is employed by the Company and for six (6) months
after his employment terminates (the "Non-Competition Period"), the Executive
shall not, directly or indirectly, whether as owner, partner, investor,
consultant, agent, employee, co-venturer or otherwise, compete with the business
of the Company throughout the world. For purposes of this Section 9, the
business of the Company shall mean the Products of the Company at the time the
Executive's employment terminates.
b. The Executive further agrees that while he is employed by the Company
and during the Non-Competition Period, the Executive will not solicit for hire
any employee of the Company; assist in such solicitation by any Person;
encourage any such employee to terminate his or her relationship with the
Company; or solicit or encourage any customer of the Company to terminate its
relationship with the Company.
10.Enforcement of Covenants. The Executive acknowledges that he has
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carefully read and considered all the terms and conditions of this Agreement,
including the restraints imposed upon him pursuant to Sections 7, 8 and 9
hereof. The Executive agrees that said restraints are necessary for the
reasonable and proper protection of the Company and that each of the restraints
is reasonable in respect to subject matter, length of time and geographic area.
The Executive further acknowledges that, were he to breach any of the covenants
contained in Sections 7, 8 or 9 hereof, the damage to the Company would be
irreparable. The Executive therefore agrees that the Company, in addition to any
other remedies available to it, shall be entitled to
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preliminary and permanent injunctive relief against any breach by the Executive
of any of said covenants, without having to post bond. The parties further agree
that, in the event that any provision of Section 7, 8 or 9 hereof shall be
determined by any court of competent jurisdiction to be unenforceable by reason
of its being extended over too great a time, too large a geographic area or too
great a range of activities, such provision shall be deemed to be modified to
permit its enforcement to the maximum extent permitted by law.
11. Conflicting Agreements. The Executive hereby represents and warrants
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that the execution of this Agreement and the performance of his obligations
hereunder will not breach or be in conflict with any other agreement to which
the Executive is a party or is bound and that the Executive is not now subject
to any covenants against competition or similar covenants that would affect the
performance of his obligations hereunder. The Executive will not disclose to or
use on behalf of the Company any proprietary information of a third party
without such party's consent.
12. Indemnification. The Company shall indemnify the Executive to the extent
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provided in its then current Articles or By-Laws. The Executive agrees to
promptly notify the Company of any actual or threatened claim arising out of or
as a result of his employment with the Company.
13. Definitions. Words or phrases which are initially capitalized or are
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within quotation marks shall have the meanings provided in this Section 13 and
as provided elsewhere herein. For purposes of this Agreement, the following
definitions apply:
a. "Confidential Information" means any and all information of the
Company that is not generally known by others with whom it competes or does
business, or with whom it plans to compete or do business. Confidential
Information includes without limitation such information relating to (i) the
development, research, testing, manufacturing, marketing and financial
activities of the Company, (ii) the Products, (iii) the costs, sources of
supply, financial performance and strategic plans of the Company, (iv) the
identity and special needs of the customers of the Company and (v) the people
and organizations with whom the Company has business relationships and those
relationships. Confidential Information also includes comparable information
that the Company has received from customers and others under an understanding
that it would not be disclosed.
c. "Intellectual Property" means inventions, discoveries, developments,
methods, processes, compositions, works, concepts and ideas (whether or not
patentable or copyrightable or constituting trade secrets) conceived, made,
created, developed or reduced to practice by the Executive (whether alone or
with others, whether or not during normal business hours or on or off Company
premises) during the Executive's employment that relate to either the Products
or any prospective activity of the Company in active development.
d. "Person" means an individual, a corporation, an association, a
partnership, an estate, a trust and any other entity or organization, other than
the Company.
e. "Products" mean all products planned, researched, developed, tested,
manufactured, sold, licensed, leased or otherwise distributed or put into use by
the Company, together with all services provided or in active planning (if such
planning is known to the Executive) by the Company, during the Executive's
employment.
14. Withholding. All payments made by the Company under this Agreement shall
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be reduced by any tax or other amounts required to be withheld by the Company
under applicable law.
15. Assignment. Neither the Company nor the Executive may make any
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assignment of this Agreement or any interest herein, by operation of law or
otherwise, without the prior written consent of the other; provided, however,
that the Company may assign its rights and obligations under this Agreement
without the consent of the Executive to a Person with whom the Company shall
hereafter affect a reorganization, consolidation or merger or to whom the
Company transfers all or substantially all of its properties or assets.
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This Agreement shall inure to the benefit of and be binding upon the Company and
the Executive, their respective successors, executors, administrators, heirs and
permitted assigns.
16. Severability. If any portion or provision of this Agreement shall to any
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extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the application of such
portion or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, shall not be affected thereby, and each
portion and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
17. Waiver. No waiver of any provision hereof shall be effective unless
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made in writing and signed by the waiving party. The failure of either party to
require the performance of any term or obligation of this Agreement, or the
waiver by either party of any breach of this Agreement, shall not prevent any
subsequent enforcement of such term or obligation or be deemed a waiver of any
subsequent breach.
18. Notices. Any and all notices, requests, demands and other
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communications provided for by this Agreement shall be in writing and shall be
effective when delivered in person or deposited in the United States mail,
postage prepaid, registered or certified, and addressed to the Executive at his
last known address on the books of the Company or, in the case of the Company,
at its principal place of business, attention of the CEO, or to such other
address as either party may specify by notice to the other actually received.
19. Entire Agreement. This Agreement constitutes the entire agreement
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between the parties and supersedes all prior communications, agreements and
understandings, written or oral, with respect to the terms and conditions of the
Executive's employment.
20. Amendment. This Agreement may be amended or modified only by a written
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instrument signed by the Executive and by an authorized representative of the
Company.
21. Arbitration. Any dispute, controversy or claim between the parties
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arising out of this Agreement shall be settled by expedited arbitration
conducted in New York City in accordance with the American Arbitration
Association National Rules for the Resolution of Employment Disputes (the
"Rules") and the laws of the State of New York. In the event that a party
requests arbitration, it shall serve on the other party (the "Non-Requesting
Party") a written demand for arbitration stating the substance of the
controversy, dispute or claim, the contention of the party requesting
arbitration and the name and address of the arbitrator appointed by it. The
Non-Requesting Party, within twenty (20) days of such demand, shall accept the
arbitrator or appoint a second arbitrator and notify the other party of the name
and address of this second arbitrator so selected, in which case the two
arbitrators shall appoint a third. The decision or award of the single
arbitrator or, in the case of three arbitrators, the decision or award of any
two arbitrators, shall be final and binding upon the parties. In the event that
the two arbitrators fail in any instance to appoint a third arbitrator within
twenty (20) days of the appointment of the second arbitrator, either arbitrator
or any party to the arbitration may apply to the American Arbitration
Association for appointment of the third arbitrator in accordance with the
Rules. Should the Non-Requesting Party (upon whom a demand for arbitration has
been served) fail or refuse to accept the arbitrator appointed by the other
party or to appoint an arbitrator within twenty (20) days, the single arbitrator
shall have the right to decide alone, and such arbitrator's decision or award
shall be final and binding upon the parties. The decision of the arbitrator or
arbitrators shall be in writing and shall set forth the basis therefor. The
parties shall abide by all awards rendered in the arbitration proceedings, and
all such awards may be enforced and executed upon in any court having
jurisdiction over the party against whom enforcement of such award is sought.
The parties involved in the dispute shall divide equally the administrative
charges, arbitrator's fees and related expenses of the arbitration, but each
party shall pay its own legal fees incurred in connection with such arbitration.
The foregoing, however, shall not limit the right of either party to seek
equitable relief from any court of competent jurisdiction. For the purposes
hereof, the Executive hereby submits to the jurisdiction of the federal and
state courts in New York and notice of demand, process and/or summons in
connection with legal
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proceedings, may be served upon Employee by registered or certified mail in
accordance with paragraph 18 with the same effect as if personally served.
22. Headings. The headings and captions in this Agreement are for
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convenience only and in no way define or describe the scope or content of any
provision of this Agreement.
23. Counterparts. This Agreement may be executed in two or more
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counterparts, each of which shall be an original and all of which together shall
constitute one and the same instrument.
24. Governing Law. This Agreement shall be construed and enforced under, and
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be governed in all respects by, the laws of the State of New York, without
regard to the conflict of laws principles thereof.
IN WITNESS WHEREOF, this Agreement has been executed as a sealed instrument
by the Company, by its duly authorized representative, and by the Executive, as
of the effective date hereof
THE EXECUTIVE THE COMPANY
/s/ Xxxxxxx Xxxx /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx Xxxx By: Xxxxxxx X. Xxxxxx
Its: Chief Executive Officer
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