Exhibit 10.10
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (this "Agreement") is effective as of April 1,
2001 (the "Effective Date'), by and between xxxxxxxxxxx.xxx inc., a Michigan
corporation (the "Company"), and Xxxxxx X. Xxxxxx ("Golden").
RECITALS:
The Company desires to continue the employment of Golden and Golden desires
to continue to be employed by the Company, on the terms and subject to the
conditions set forth below.
NOW, THEREFORE, in consideration of the mutual promises contained in this
Agreement, the parties agree as follows:
1. Employment.
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a. The Company agrees to employ Golden and Golden accepts the employment,
on the terms and subject to the conditions set forth below. During the term
of employment hereunder, Golden shall at all times serve as Chairman of the
Board and Chief Executive Officer of the Company, and shall have the
responsibilities and authorities to do and perform diligently all such
services, acts and things as are customarily done and performed by the
Chairman of the Board and Chief Executive Officer of companies in similar
business and size to the Company, including but not limited to those
authorities and responsibilities not specifically withheld by the Board or
shareholders in the Articles of Incorporation, as amended (the "Articles"),
Bylaws or other agreements executed by the Company of which Golden has
knowledge, together with such other duties as may reasonably be requested
from time to time by the Board of Directors of the Company (the "Board"),
which duties shall be consistent with Golden's positions as set forth
above.
b. Golden shall report directly to the Board throughout the term of this
Agreement.
c. For service as an officer and employee of the Company, Golden
shall be entitled to the full protection of the applicable indemnification
provisions of the Articles and Bylaws of the Company, as they may be
amended from time to time, and as provided by law.
2. Term and Location of Employment.
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Subject to the provisions for termination provided below, the term of
Golden's employment under this Agreement shall commence on the Effective
Date and shall continue thereafter for a period of three (3) years after
the Effective Date. For the term of this Agreement, Golden's employment
shall be within the immediate vicinity of Chicago,
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Illinois.
3. Devotion to the Company's Business.
Golden shall devote his best efforts, knowledge, and skill, to the business
of the Company during the term of this Agreement.
4. Compensation.
a. During the term of this Agreement, the Company shall pay
or provide, as the case may be, to Golden the compensation and other
benefits and rights set forth in this Agreement, including but not limited
to, those set forth in paragraphs 4, 5, 6, and 7 of this Agreement.
b. Base Compensation. As compensation for the services to be performed
hereafter, the Company shall pay to Golden, for each calendar year of this
Agreement, a base salary (the "Base Salary") , payable in twenty-four (24)
equal semi-monthly payments. The Base Salary for calendar year 2001 shall
be Three Hundred Forty Five Thousand Dollars ($345,000.00), and for each
calendar year thereafter, it shall not be less than Three Hundred Forty
Five Thousand Dollars ($345,000.00).
c. Annual Salary Increase. Golden's salary shall be reviewed at least
once annually by the Compensation Committee or the Board of Directors,
either of which may elect in its discretion to increase Golden's Base
Salary at any time.
d. Bonuses. Golden shall be eligible for annual performance bonuses,
in cash and in stock options in the Company, in amounts, and payable at
such times, as determined in the discretion of the Compensation Committee
or the Board of Directors.
e. Disability. During any period that Golden fails to perform his duties
hereunder as a result of incapacity due to physical or mental illness (the
"Disability Period"), Golden shall continue to receive his full Base
Salary, bonuses and other benefits at the rate in effect for such period
until his employment is terminated by the Company pursuant to Section 8a(5)
hereof; provided, however, that payments so made to Golden during the
Disability Period shall be reduced by the amounts, if any, which are paid
to Golden at or prior to the time of any such payment under disability
benefit plans of the Company.
5. Benefits.
a. Insurance. The Company shall provide to Golden all benefits normally
provided to employees of the Company, including life, medical, dental and
long term and short term disability insurance for himself, his spouse and
eligible family members as may be determined by the Board to be consistent
with the Company's standard policies. Additionally, the Company shall
compensate Golden in an amount that, net of all applicable taxes, is
sufficient to pay the premiums on a term life insurance policy on his life
in the
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amount of two times the Base Salary then in effect or Seven Hundred
Fifty Thousand Dollars ($750,000.00), whichever is greater. The Company
shall procure such policy and pay the premium amounts directly to the
insurer for the benefit of Golden, pay the amounts owing on such
compensation to the appropriate taxing authorities as and when due, and
include the gross amount paid for Golden's benefit hereunder in Golden's W2
income. Golden shall be the owner of such policy. Golden shall cooperate
with the Company in securing the term life insurance policy as set forth
above.
b. Benefit Plans. Golden, at his election, may participate, during his
employment hereunder, in all retirement plans, 401(K) plans and other
benefit plans of the Company generally available from time to time to other
executive employees of the Company and for which Golden qualifies under the
terms of the plans, and nothing in this Agreement shall or shall be deemed
to in any way affect Golden's right and benefits under any such plan except
as expressly provided herein. Golden shall also be entitled to participate
in any equity, stock option or other employee benefit plan that is
generally available to senior executives. Golden's participation in and
benefits under any such plan shall be on the terms and subject to the
conditions specified in the governing document of the particular plan.
c. Annual Vacation. Effective as of January 1 of each employment year
hereunder, Golden shall be entitled to four (4) weeks of paid vacation time
for such year, and up to two (2) weeks of unused vacation time in such year
may be carried over into the next year. Upon any termination of this
Agreement for any reason whatsoever, unused paid vacation time to which
Golden is entitled to in that year (including "carried over" vacation time,
if any) shall be paid to Golden within ten (10) days of such termination
based on the Base Salary in effect on the effective date of such
termination.
d. Disability Policy. The Company shall compensate Golden in an amount
that, net of all applicable taxes, is sufficient to pay the premiums on a
disability insurance policy ("Disability Policy"). The Disability Policy
shall, at a minimum, provide for the payment of 70% of Golden's Base Salary
until he reaches the age of sixty-five (65), after a 180 day waiting
period. The Company shall procure such policy and pay the premium amounts
directly to the insurer for the benefit of Golden, pay the amounts owing on
such compensation to the appropriate taxing authorities as and when due,
and include the gross amount paid for Golden's benefit hereunder in
Golden's W2 income. Golden shall be the owner of such policy. Golden shall
cooperate with the Company in securing the Disability Policy as set forth
above.
e. Car/Insurance. The Company shall provide Golden with a car of the same
quality/level he currently drives (i.e. a Jaguar) and pay all insurance
thereon. Golden shall be entitled to replace each said vehicle when such
vehicle is two (2) years old.
f. Settlement of Litigation: The Company acknowledges that: (i) it and
Golden are joint Defendants in Case No. 1999-017678-CB in the State of
Michigan in the Circuit Court for the County of Oakland; (ii) it desired to
accept the Mediation Award in such case in favor of Plaintiff, and it
desired Golden to similarly accept said Mediation Award, in order to
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terminate said case and avoid further loss of time and expenses in
defending such litigation; and (iii) it and Golden resultantly accepted
said Mediation Award thereby obligating them to jointly pay the amount of
such award. Accordingly, to the extent the Company is not already obligated
to Golden under its existing indemnity obligations to its officers and
directors, the Company hereby agrees to pay all damages, costs and expenses
arising out of said litigation, including but not limited to the Mediation
Award and all attorney fees incurred, and to indemnify and hold harmless
Golden from any and all liability whatsoever (including all costs,
expenses, and the Mediation Award) arising out of said case. Provided
however, Golden hereby agrees that the Company may elect in its sole
discretion to apportion to Golden part (but not in excess of 50%) of said
award and expenses paid by it in the event (and only in the event) it
simultaneously compensates Golden in an amount that, net of all applicable
taxes, is sufficient to pay the amounts so apportioned to him. The Company
shall pay directly to the third parties entitled to receive the Mediation
Award and said expenses the amounts owing to them. In the event the Company
elects to so apportion as provided herein, the Company shall (x) include
the "grossed-up" amount apportioned to Golden in Golden's W2 income, and
(y) pay the amounts owing on such "grossed-up" compensation to the
appropriate taxing authorities as and when due.
6. Reimbursement of Business Expenses.
The Company shall reimburse Golden or provide him with an expense allowance
during the term of this Agreement for travel, mobile telephone, and other
expenses reasonably and necessarily incurred by Golden in connection with
the Company's business. Golden shall furnish such documentation with
respect to reimbursement to be paid hereunder as the Company shall
reasonably request.
7. Issuance of Stock Options/Vesting of Current Options.
a. Upon execution of this Agreement, the Company shall enter into an
award agreement with Golden granting Golden an option to purchase One
Hundred Fifty Thousand (150,000) shares of the Company's common stock at an
exercise price equal to the average closing price of the stock on the
Nasdaq stock exchange during the five (5) trading days immediately
preceding the date of execution of this Agreement (as set forth on the last
page of this Agreement). Said options shall immediately be fully vested and
immediately exercisable until the expiration of five (5) years after the
date of vesting .
b. Upon execution of this Agreement, all stock options in the Company
previously issued to Golden which have not vested as of such date shall
immediately and fully vest and become immediately exercisable.
8. Termination of Employment.
a. Golden's employment under this Agreement may be terminated prior to
the date ending three (3) years after the Effective Date under the
following circumstances only:
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(1) by the Company, at any time other than during a Disability Period
under Section 4e, for any reason whatsoever or for no reason, upon not less
than ninety (90) calendar days written notice to Golden;
(2) by the Company, at any time for "cause" as defined below, but
only after written notice to Golden, and Golden's failure to cure within
thirty (30) calendar days of receipt of such notice;
(3) by Golden, at any time for any reason whatsoever or for no
reason, upon not less than ninety (90) calendar days written notice to the
Company.
(4) by Golden, upon the occurrence of: (i) a failure to pay to Golden
any monies, when due under the terms of this Agreement, within five (5)
business days after Golden has provided written notice of such failure to
pay; or (ii) a material breach of this Agreement by the Company that is not
cured within thirty (30) calendar days after Golden has provided written
notice that a breach has occurred;
(5) by the Company upon Golden's "permanent disability" as defined in
Section 8c below, without prior notice; and
(6) automatically upon Golden's death.
b. For purposes hereof, for "cause" shall mean the material breach of any
provision of this Agreement by Golden (including but not limited to a
material breach of Section 13), or any action of Golden (or Golden's
failure to act), which involves malfeasance, fraud, or moral turpitude, or
which, if generally known, would or might reasonably have a material
adverse effect on the Company and/or its reputation.
c. For purposes hereof, Golden's "permanent disability" shall be deemed
to have occurred after one hundred eighty (180) consecutive days during
which Golden, by reason of his physical or mental disability or illness,
shall have been unable to discharge his duties under this Agreement. The
date of permanent disability shall be the one hundred eighty first (181st)
day. In the event either the Company or Golden, after receipt of notice of
Golden's permanent disability from the other, disputes that Golden's
permanent disability shall have occurred, Golden shall promptly submit to a
physical examination by the chief of medicine of any major accredited
hospital in Illinois and, unless such physician shall issue his written
statement to the effect that, in his opinion, based on his diagnosis,
Golden is capable of resuming his employment and devoting his full time and
energy to discharging his duties within thirty (30) days after the date of
such written statement, such permanent disability shall be deemed to have
occurred.
d. No termination of employment under this Agreement shall be effective
until the terminating party has delivered to the other party written notice
of such termination setting
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forth the specific subsection of this Section 8 upon which such termination
is based. Said written notice shall be delivered to the other party as soon
as reasonably possible after the decision to terminate has been made, but
in no event later that the number of days required by the applicable
subsection of this Section 8.
Upon the effective date of any termination of Golden's employment under
this Agreement, Golden shall be deemed to have resigned from any and all
offices and directorships held by Golden in the Company and any entities
controlled by the Company (the "Affiliates").
9. Compensation Upon Termination.
a. In the event that the Company terminates Golden's employment pursuant
to Section 8a(1) hereof, or if Golden terminates his employment pursuant to
Section 8a(4), the Company shall promptly pay Golden the sum of: (i) all
accrued compensation (including vacation time) and bonus earned through the
effective date of termination and (ii) an amount equal to the greater of
the present value (determined as of the effective date of termination) of
the compensation owed Golden for the remainder of the original 3 year term
of this Agreement or the present value (determined as of the effective date
of termination) of Golden's Base Salary then in effect. Additionally, the
Company shall continue to pay and provide Golden all other benefits under
this Agreement for the remainder of the original 3 year term of this
Agreement or one (1) year after the effective date of termination,
whichever is later. Notwithstanding anything contained herein to the
contrary, in the event of such termination of employment, the gross amounts
necessary to cover the premiums on the life insurance and disability
insurance policies under Sections 5a and 5d, and the applicable taxes
thereon referenced in such Sections, shall be paid directly to Golden and
he shall be responsible for the payment of the applicable taxes on all such
gross amounts received.
b. In the event that the Company terminates Golden's employment pursuant
to Section 8a(2), or if Golden terminates his employment pursuant to
Section 8a(3), Golden shall be entitled to no further compensation or other
benefits under this Agreement, except for any unpaid salary (including
vacation time), bonus and benefits accrued and earned by him hereunder up
to and including the effective date of such termination.
c. In the event of termination of Golden's employment under this
Agreement due to Golden's permanent disability or death (Sections 8a(5) or
(6)), Golden (or his successors and assigns in the event of his death)
shall be entitled to that portion of any unpaid salary (including vacation
time), bonus and benefits accrued and earned by him hereunder up to and
including the effective date of such termination.
10. Effect of Termination Upon Company Stock Options. In the event of
termination of Golden's employment by the Company under this Agreement for
"cause" pursuant to Section 8a(2) or by Golden pursuant to Section 8a(3)
hereof, all unvested stock options or other
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stock based compensation awarded to Golden that has not vested shall lapse
in accordance with the terms of the plan or agreement under which such
options were granted. In all other events of termination, including but not
limited to the Company's termination of Golden's employment under this
Agreement without "cause" or upon the death or permanent disability of
Golden, all stock options and other stock based compensation awarded to
Golden that have not vested shall immediately become fully vested and
immediately exercisable. Any Stock Option Agreements between the Company
and Golden shall be amended to conform to the provisions of this Section
12.
11. Covenant Not To Compete. During the course of Golden's employment, and for
the following periods after the effective date of termination of Golden's
employment:
(i) if Golden's employment is terminated pursuant to Sections 8a(1) or
8a(4) of this Agreement: for a period of one (1) year from the
effective date of termination;
(ii) if Golden's employment is terminated pursuant to Sections 8a(2) or
8a(3) of this Agreement: for a period of two (2) years from the
effective date of termination; and
(iii) if Golden's employment is not renewed upon expiration of this
Agreement or is terminated pursuant to Section 8a(5) of this
Agreement: for a period of one (1) year from the expiration of this
Agreement or the effective date of termination;
Golden shall not, (i) directly or indirectly, individually or on behalf of
any person, company, enterprise or entity not now parties to this
Agreement, or as a sole proprietor, partner, stockholder, director,
officer, principal, agent, executive, or in any other capacity or
relationship, engage in the Business (as defined herein), or aid or
endeavor to assist any person, business, enterprise or legal entity, which
is engaged or is seeking to engage in the Business, (a "Competitor"),
except for the ownership of less than 5% of the securities of a Competitor
which is a publicly traded company, which ownership shall not violate this
Section; or (ii) solicit any person who is an employee of the Company to
terminate his or her participation in the Business or to engage or
otherwise participate in any activity which is competitive with the
Business. For purposes of this Agreement, "Business" shall mean the direct
marketing of promotional incentives to consumers over the Internet. Golden
may accept employment with a Competitor provided that he does not, directly
or indirectly, render services or assistance to any part of the business of
the Competitor that is in any way engaged in the Business.
12. Registration Rights. Golden shall be granted unlimited "piggyback" rights
to the extent permissible under the Company's current Articles and Bylaws,
and to the maximum extent possible without breaching the terms of any
agreement to which the Company is currently a party. To effectuate the
foregoing, at a minimum the Company shall use its best efforts to add
Golden's shares covered under this Agreement to existing piggy back rights
under Registration Agreements the Company currently has outstanding.
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13. Confidentiality.
a. Golden agrees that:
(1). Except pursuant to, and in accordance with the terms of, any
confidentiality and nondisclosure agreements which from time to time may be
entered into by the Company in pursuing financing, acquisitions or other
transactions, Golden will not at any time, for so long as any Confidential
Information (as defined below) shall remain confidential or otherwise
remain wholly or partially protectable, either during the term of this
Agreement or thereafter, use or disclose, directly or indirectly, to any
person outside of the Company or any Affiliate any Confidential
Information, except as may be required for the performance of his duties
for the benefit of the Company; and
(2). promptly upon the termination of this Agreement for any reason, Golden
(or in the event of Golden's death, his personal representative) shall: (i)
return to the Company any and all copies (whether prepared by or at the
direction of the Company or Golden) of all records, drawings, materials,
memoranda and other data constituting or pertaining to Confidential
Information in Golden's possession; or (ii) certify in writing to the
Company the destruction of, and/or his lack of possession of, all such
materials described in subsection (1) herein.
b. As used in this Agreement, the term "Confidential Information" shall
mean all business information of any nature and in any form which at the
time or times concerned is not generally known to those persons engaged in
business similar to that conducted or contemplated by the Company or any
Affiliate (other than by the act or acts of an employee not authorized by
the Company or any Affiliate to disclose such information) and which
relates to any one or more of the aspects of the present or past business
of the Company or any of the Affiliates or any of their respective
predecessors. Confidential Information may include but may not be limited
to, patents and patent applications, inventions and improvements (whether
or not patentable), development projects, policies, processes, formulas,
techniques, know-how, and other facts relating to sales, advertising,
promotions, financial matters, customers, customer lists, customer
purchases or requirements, and other trade secrets.
x. Xxxxxx agrees and understands that the remedy at law for any breach by
him of this Section 13 will be inadequate and that the damages flowing from
such breach are not readily susceptible to being measured in monetary
terms. Accordingly, it is acknowledged that, upon adequate proof of
Golden's violation of any legally enforceable provision of this Section 13,
the Company shall be entitled to immediate injunctive relief and may obtain
a temporary order restraining any threatened or further breach. Nothing in
this Section 13 shall be deemed to limit the Company's remedies at law or
in equity for any breach by Golden of any of the provisions of this Section
13 that may be pursued or availed of by the Company.
14. Arbitration. Any dispute or controversy arising out of or relaving to this
Agreement shall be
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settled finally and exclusively by arbitration held in Chicago, IL in
accordance with the Expedited Employment Arbitration Rules of the American
Arbitration Association then in effect. Such arbitration shall be conducted
by an arbitrator(s) appointed by the American Arbitration Association in
accordance with its rules and any finding by such arbitrator(s) shall be
final and binding upon the parties. Judgment upon any award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof, and
the parties' consent to the jurisdiction of the courts of the State of
Illinois for this purpose. Nothing contained in this Section 14 shall be
construed to preclude the Company from obtaining injunctive or other
equitable relief to secure specific performance or to otherwise prevent a
breach or contemplated breach of this Agreement by Golden as provided in
Section 13 hereof.
15. Notices. All notices, requests, consents and other communications,
required or permitted to be given hereunder to be given under this
Agreement shall be given in writing and shall be deemed sufficiently given,
served and received for all purposes upon the first to occur of actual
receipt, or delivery by generally recognized overnight courier service, or
three (3) days after deposit in the United States mail, postage prepaid,
registered or certified, return receipt requested addressed, to the
following address (or to a revised address provided to the other party):
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If to the Company:
xxxxxxxxxxx.xxx.
360. X. Xxxxxxxx Xxx.
00xx Xxxxx
Xxxxxxx, XX 00000
with a copy to:
Xxxxxxx X. Xxxxx
X.X. Xxx 0000
Xxxx XX 00000-0000
If to Golden:
Xxxxxx X. Xxxxxx
000 X. Xxxxx Xxxxx Xxxxxx
Xxxx X
Xxxxxxx, XX 00000
In all events, with a copy to:
Xxxxxxx X. Xxxxxx P.C.
000 X. Xxxxx Xx.
Xxx. 000
Xxxxxxxxxx, XX 00000
Attn.: Xxxxxxx X. Xxxxxx
16. Miscellaneous.
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a. The provisions of this Agreement are severable and if any
one or more provisions are determined to be illegal or otherwise
unenforceable, in whole or in part, the remaining provisions and any
partially unenforceable provision to the extent enforceable in any
jurisdiction nevertheless shall be binding and enforceable.
b. The rights and obligations of the Company under this Agreement shall
inure to the benefit of, and shall be binding on, the Company and its
successors and assigns, and the rights and obligations (other than
obligations to perform services) of Golden under this Agreement shall inure
to the benefit of, and shall be binding upon, Golden and his heirs,
personal representatives and assigns. This Agreement is personal to Golden
and he may not assign his obligations under this Agreement in any manner
whatsoever.
c. The failure of either party to enforce any provision or protections of
this Agreement shall not in any way be construed as a waiver of any such
provision or provisions, or as to
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any future violations thereof, nor prevent that party thereafter from
enforcing each and every other provision of this Agreement. The rights
granted the parties herein are cumulative and the waiver of any single
remedy shall not constitute a waiver of such party's right to assert all
other legal remedies available to it under the circumstances.
d. This Agreement supersedes all agreements and understandings between
the parties and may not be modified or terminated orally. No modification,
termination, waiver, or attempted waiver shall be valid unless in writing
and signed by the party against whom the same is sought to be enforced.
e. This Agreement shall be governed by and construed according to the
laws of the State of Illinois.
f. Captions and paragraph headings used herein are for convenience and
are not a part of this Agreement and shall not be used in construing it.
g. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall
constitute one and the same instrument. Copies (facsimile, photostatic or
otherwise) of signatures to this Agreement will be deemed to be originals
and may be relied on to the same extent as the originals.
h. The Company hereby represents and warrants unto Golden as follows: (i)
the Company has the requisite corporate power and authority to enter into
this Agreement and carry out the transactions contemplated hereby; (ii) the
execution, delivery, and performance of this Agreement and consummation of
the transactions contemplated hereby have been duly authorized by all
requisite corporate action and do not violate any agreement by which the
Company is bound, or any law, rule, or regulation to which the Company is
subject; and (iii) the person executing this Agreement on behalf of the
Company has the requisite authority to execute this Agreement, has been
duly authorized to do so, and upon his execution, this Agreement shall be
binding upon the Company in accordance with its terms and conditions.
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IN WITNESS WHEREOF, the parties have executed this Employment Agreement on
the ___ day of May, 2001.
COMPANY:
xxxxxxxxxxx.xxx inc.
a Michigan corporation
______________________________________
Xxxxxxx X. Xxxxx, Director and
Chairman of the Compensation Committee
GOLDEN:
______________________________________
Xxxxxx X. Xxxxxx
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