EXHIBIT 10.10
Form 10-K for Year Ended December 31, 2000
EMPLOYMENT AGREEMENT
The Chicago Mercantile Exchange ("CME") and Xxxxx Xxxxxxxx ("Employee")
have entered into this Employment Agreement (the "Agreement") as of April 27,
2000.
WHEREAS, CME desires to employ Employee and Employee desires to be
employed by CME, upon the terms and subject to the conditions set forth herein;
and
WHEREAS, CME's market is worldwide and Employee will be given access to
CME's customers, trade secrets, and confidential and proprietary information;
NOW, THEREFORE, in consideration of the agreements and covenants
contained herein, the parties agree as follows:
1. EMPLOYMENT. CME hereby agrees to employ Employee and Employee
hereby agrees to be employed by CME upon the terms and subject to the conditions
contained in this Agreement. The term of employment of Employee by CME pursuant
to the Agreement (the "Employment Period") shall commence on April 27, 2000 (the
"Effective Date") and shall end on April 26, 2001, unless earlier terminated
pursuant to Section 6 hereof. The CME will give Employee written notice of its
intention to renew or not renew or to renegotiate the terms of the Agreement at
least sixty (60) days prior to expiration. The employment period may be extended
only by mutual agreement, in writing, between CME and Employee.
2. POSITION AND DUTIES. Employee shall have the title of Managing
Director, Chief Information Officer. Employee shall perform those duties as
determined by CME's Chief Executive Officer, including having overall
responsibility for the operation of the Management Information Systems
Department at the CME. During the Employment Period, Employee shall perform
faithfully and loyally and to the best of his abilities the duties assigned to
him hereunder and shall devote his full business time, attention and effort to
the affairs of CME. Employee may serve as a board member of a non-CME entity
only with the written permission of the President of the CME. Employee shall be
subject to CME's employment policies in effect or as modified.
3. COMPENSATION.
(a) BASE SALARY. During the Employment Period, the CME
shall pay to Employee a base salary at a rate of
$250,000.00 per annum ("Base Salary"), payable in
accordance with CME's normal payment schedule.
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(b) BONUSES. Employee shall receive a guaranteed bonus of
$800,000.00 for the 2000 calendar year, payable no
later than January 31, 2001. Any other bonus during
the term of this Agreement shall be provided at the
sole discretion of the CME.
4. BENEFITS. Employee shall be entitled to insurance and other
employee benefits commensurate with his position in accordance with CME's
policies for executives in effect from time to time, including four (4) weeks of
vacation per annum. Employee acknowledges receipt of a summary of CME's employee
benefits policies in effect as the date of this Agreement.
5. EXPENSE REIMBURSEMENT. During the Employment Period, CME shall
reimburse Employee, in accordance with the CME's policies and procedures, for
all proper expenses incurred by him in the performance of his duties hereunder.
6. TERMINATION.
(a) DEATH. Upon the death of Employee, this Agreement
shall automatically terminate and all rights of
Employee and his heirs, executors and administrators
to compensation and other benefits under this
Agreement shall cease, except for compensation which
shall have accrued to the date of death, including
accrued Base Salary and a proportionate share of his
unpaid guaranteed bonus.
(b) DISABILITY. CME may, at its option, terminate this
Agreement upon written notice to Employee if
Employee, because of physical or mental incapacity or
disability, fails to perform the essential functions
of his position, with or without reasonable
accommodation, required of him hereunder for a
continuous period of 90 days or any 120 days within
any 12-month period. Upon such termination, all
obligations of CME hereunder shall cease, except for
payment of accrued Base Salary and the proportionate
share, as defined above, of the guaranteed bonus. In
the event of any dispute regarding the existence of
Employee's incapacity hereunder, the matter shall be
resolved by the determination of a physician selected
by the Chief Executive Officer of CME. Employee shall
have the right to challenge that determination by
presenting a contrary determination from a physician
of his choice. In such event, a physician selected by
agreement of Employee and CME will make the final
determination. The Employee shall submit to
appropriate medical examinations for purposes of
making the medical determinations hereunder.
(c) CAUSE.
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(i) CME may, at its option, terminate Employee's
employment under this Agreement for Cause.
As used in this Agreement, the term "Cause"
shall mean any one or more of the following:
(A) any refusal by Employee to perform
his duties and responsibilities
under this Agreement or violation
of any rule, policy, regulation or
guideline imposed by the CME or a
regulatory or self regulatory body
having jurisdiction over CME, after
having been given written notice by
CME and seven (7) days to cure such
refusal or violation;
(B) any intentional act of fraud,
embezzlement, theft or
misappropriation of CME funds by
Employee or Employee's admission or
conviction of a felony or of any
crime involving moral turpitude,
fraud, embezzlement, theft or
misrepresentation;
(C) any gross negligence or willful
misconduct of Employee resulting in
a financial loss or liability to
CME or damage to the reputation of
CME;
(D) any breach by Employee of any one
or more of the covenants contained
in Section 7, 8 or 9 hereof.
(ii) The exercise of the right of CME to
terminate this Agreement pursuant to this
Section 6(c) shall not abrogate any other
rights or remedies of CME in respect of the
breach giving rise to such termination.
(iii) If CME terminates Employee's employment for
Cause, he shall be entitled to accrued Base
Salary through the date of the termination
of his employment and other employee
benefits to which Employee is entitled upon
his termination of employment with CME, in
accordance with the terms of the plans and
programs of CME.
(d) TERMINATION WITHOUT CAUSE. If, during the Employment
Period, CME terminates the employment of Employee
hereunder for any reason other than a reason set
forth in subsections (a), (b) or (c) of this Section
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(i) Employee shall be entitled to receive
accrued Base Salary through the date of the
termination of his employment, and other
employee benefits to which Employee is
entitled upon his termination of employment
with CME, in accordance with the terms of
the plans and programs of CME; and
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(A) should such termination occur
between April 27, 2000 and December
31, 2000, a one time lump sum
severance payment, equal to the
amount of Base Salary which
Employee would earn through the
termination date of this Agreement,
and the bonus which would be paid
for calendar year 2000, if not
already paid at the time of such
termination; or,
(B) should such termination occur
between January 1, 2001 and April
26, 2001, a one time lump sum
severance payment, equal to the
amount of Base Salary which
Employee would earn through the
termination date of this Agreement,
and a pro-rated bonus which would
be paid for the time worked during
2001 based on a estimated annual
bonus of $832,000.00 (i.e., $16,000
per week). This estimated bonus is
only valid for purposes of
determining Employee's severance
payment under this section. Should
Employee remain employed with CME
beyond the Employment Period,
Employee's bonus, if any, shall be
the subject of future negotiations
between CME and Employee.
(e) VOLUNTARY TERMINATION. Upon sixty (60) days
prior written notice to CME (or such shorter
period as may be permitted by CME), Employee
may voluntarily terminate his employment
with CME prior to the end of the Employment
Period for any reason. Should Employee
voluntarily terminate his employment with
the CME, he agrees that during the sixty day
notice period he shall provide all
designated CME employees with knowledge
transfer as to any and all CME-related
projects and/or work for which he is
currently engaged. If Employee voluntarily
terminates his employment pursuant to this
subsection (e), he shall be entitled to
receive accrued Base Salary through the date
of the termination of his employment and
other employee benefits to which Employee is
entitled upon his termination of employment
with CME, in accordance with the terms of
the plans and programs of CME.
7. CONFIDENTIAL INFORMATION. Employee acknowledges that in the
course of his employment with CME he has and will become familiar with valuable
and proprietary information ("Confidential Information") concerning CME and that
this information is of special, unique and extraordinary value to CME. Such
Confidential Information gives CME a business advantage over others who do not
have such information. Furthermore, Employee acknowledges that the successful
development of CME's services and products, including CME's trading programs and
systems, current and potential customer and business relationships, and business
strategies and plans requires substantial time and expense. Such efforts
generate Confidential Information for CME. Confidential Information includes,
but is not limited to the following: trade secrets, technical, business,
proprietary
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or financial information of CME not generally known to the public, business
plans, proposals, past and current prospect and customer lists, trading
methodologies, systems and programs, training materials, research data bases and
computer software; but shall not include information or ideas acquired by
Employee prior to his employment with CME if such pre-existing information is
generally known in the industry and is not proprietary to CME.
(a) Employee shall not at anytime during the Employment
Period or thereafter, make use of or disclose,
directly or indirectly to any competitor or potential
competitor of CME, or divulge, disclose or
communicate to any person, firm, corporation, or
other legal entity in any manner whatsoever, or for
his own benefit and that of any person or entity
other than CME, any Confidential Information;
(b) Upon termination for any reason, Employee shall
return to CME all records, memoranda, notes, plans,
reports, computer tapes and equipment, software and
other documents or data which constitute Confidential
Information which he may then possess or have under
his control (together with all copies thereof) and
all credit cards, keys and other materials and
equipment which are CME's property that he has in his
possession or control.
8. NON-SOLICITATION.
(a) NON-SOLICITATION. Employee agrees that during the
period of employment with CME and for a period of one
year after the termination of his employment for any
reason, he shall not (i) in any manner, directly or
indirectly, induce or attempt to induce any employee
of CME to terminate or abandon his or her employment
for any purpose whatsoever or (ii) call on, service,
solicit or otherwise do business with any customer of
CME or any potential customer whose business CME has
solicited during the period of Employee's employment
hereunder.
(b) REFORMATION. If, at any time of enforcement of this
Section 8, a court holds that the restrictions stated
herein are unreasonable, the parties hereto agree
that the maximum period, scope or geographical area
reasonable under the circumstances shall be
substituted for the stated period, scope or area and
that the court shall be allowed to revise the
restrictions contained herein to cover the maximum
period, scope and area permitted by law.
9. INTELLECTUAL PROPERTY. During the Employment Period, Employee
shall disclose to CME and treat as confidential information all ideas,
methodologies, product and technology applications that he develops during the
course of his employment with CME that relates directly or indirectly to CME's
Management Information Systems Department or any other CME business. Employee
hereby assigns to CME his entire right, title and interest in and to all
discoveries and
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improvements, patentable or otherwise, trade secrets and ideas, writings and
copyrightable material, which may be conceived by Employee or developed or
acquired by him during the Employment Period, which may pertain directly or
indirectly to the business of the CME. Employee shall at any time during or
after the Employment Period, upon CME's request, execute, acknowledge and
deliver to CME all instruments and do all other acts which are necessary or
desirable to enable CME to file and prosecute applications for, and to acquire,
maintain and enforce, all patents, trademarks and copyrights in all countries
with respect to intellectual property developed or which was being developed
during the Employment Period.
10. REMEDIES. EMPLOYEE AGREES THAT GIVEN THE NATURE OF CME'S
BUSINESS, THE SCOPE AND DURATION OF THE RESTRICTIONS IN PARAGRAPHS 7, 8 AND 9
ARE REASONABLE AND NECESSARY TO PROTECT THE LEGITIMATE BUSINESS INTERESTS OF CME
AND DO NOT UNDULY INTERFERE WITH EMPLOYEE'S CAREER OR ECONOMIC PURSUITS.
Employee recognizes and agrees that a breach of any or all of the provisions of
Sections 7, 8 and 9 will constitute immediate and irreparable harm to CME's
business advantage, for which damages cannot be readily calculated and for which
damages are an inadequate remedy. Accordingly, Employee acknowledges that CME
shall therefore be entitled to an injunction or injunctions to prevent any
breach or threatened breach of any such section.
11. SURVIVAL. Sections 7, 8, 9 and 10 of this Agreement shall
survive and continue in full force and effect in accordance with their
respective terms, notwithstanding any termination of the Employment Period.
12. ARBITRATION. Except with respect to Sections 7, 8, and 9, any
dispute or controversy between CME and Employee, whether arising out of or
relating to this Agreement, the breach of this Agreement, or otherwise, shall be
settled by arbitration in Chicago, Illinois, in accordance with the applicable
arbitration rules of the American Arbitration Association and judgment on the
award rendered by the arbitrator may be entered in any court having jurisdiction
thereof. The arbitrator shall have the authority to award any remedy or relief
that a court of competent jurisdiction could order. Except as necessary in court
proceedings to enforce this arbitration provision or an award rendered
hereunder, or to obtain interim relief, neither a party nor an arbitrator may
disclose the existence, content or results of any arbitration hereunder without
the prior written consent of CME and Employee.
13. NOTICES. All notices and other communications required or
permitted hereunder shall be in writing and shall be deemed given when (i)
delivered personally or by overnight courier to the following address of the
other party hereto (or such other address for such party as shall be specified
by notice given pursuant to this Section) or (ii) sent by facsimile to the
following facsimile number of the other party hereto (or such other facsimile
number for such party as shall be specified by notice given pursuant to this
Section), with the confirmatory copy delivered by overnight courier to the
address of such party pursuant to this Section 13:
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If to CME, to:
Xxxxx Xxxxxxx
Senior Vice President and General Counsel
Chicago Mercantile Exchange
00 X. Xxxxxx
Xxxxxxx, XX 00000
(fax) (000) 000-0000
If to Employee, to:
Xxxxx Xxxxxxxx
0000 Xxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
14. SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
the validity, legality or enforceability of any other provision of this
Agreement or the validity, legality or enforceability of such provision in any
other jurisdiction, but this Agreement shall be reformed, construed and enforced
in such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.
15. ENTIRE AGREEMENT. This Agreement constitutes the entire
Agreement and understanding between the parties with respect to the subject
matter hereof and supersedes and preempts any prior understandings, agreements
or representations by or between the parties, written or oral, which may have
related in any manner to the subject matter hereof.
16. SUCCESSORS AND ASSIGNS. This Agreement shall be enforceable by
Employee and his heirs, executors, administrators and legal representatives, and
by CME and its successors and assigns.
17. GOVERNING LAW. This Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of
Illinois without regard to principles of conflict of laws.
18. ACKNOWLEDGMENT. Employee acknowledges that he has read,
understood, and accepts the provisions of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
CHICAGO MERCANTILE EXCHANGE XXXXX XXXXXXXX
BY: BY:
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Date: Date:
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