Employment Agreement Net Perceptions, Inc., with Nigel P. Ekern
Net
Perceptions, Inc., with Xxxxx X. Xxxxx
This
Employment Agreement
(the
"Agreement"), dated as of January 1, 2006, is entered into between Net
Perceptions, Inc.,
a
Delaware corporation (the "Company") and Xxxxx
X. Xxxxx
(the
"Employee").
WITNESSETH:
Whereas,
the
Company desires to employ the Employee and to be assured of his services on
the
terms and conditions hereinafter set forth; and
Whereas,
the
Employee is willing to accept such employment on such terms and
conditions.
Now,
Therefore,
in
consideration of the mutual covenants and agreements set forth in this
Agreement, the Company and the Employee hereby agree as follows:
1. Employment.
The
Company hereby employs the Employee on the terms set forth below, and the
Employee accepts such employment, upon the terms and subject to the conditions
set forth in this Agreement.
2. Term.
The
term of this Agreement shall commence as of January 1, 2006 (the "Commencement
Date") and continue until termination by the Company or the Employee by delivery
of written notice of termination (the date of such termination being the
"Expiration Date"), or until otherwise terminated pursuant to the provisions
of
Section 10 hereof, whichever first occurs (the "Term").
3. Duties.
(a)
During the Term of this Agreement, the Employee shall serve as the Chief
Administrative Officer and Secretary of the Company, or in such other executive
capacity as may be assigned to him, and shall perform all duties commensurate
with his position and as may be assigned to him by the Executive Chairman of
the
Company or such other person(s) as may be designated by the Board of Directors
of the Company. The Employee shall devote as much time as is necessary to
perform his duties hereunder and shall use his best efforts, skills and
abilities to promote the interests of the Company and to diligently and
competently perform the duties of his position. The Employee’s performance shall
be subject to annual review.
(b) The
Employee shall report to the Executive Chairman of the Company or such other
person(s) as may be designated by the Board of Directors of the Company and
shall at all times keep the such persons promptly and fully informed (in writing
if so requested) of his conduct of the business or affairs of the Company,
and
provide such explanations of his conduct as may be required.
(c) The
Employee’s duties shall be performed at the Corporation’s offices in Stamford,
Connecticut. The Employee shall travel to other locations as may be necessary
for Employee to perform his duties.
4. Compensation
and Benefits.
(a)
During the term of this Agreement, the Company shall pay to the Employee, and
the Employee shall accept from the Company, as compensation for the performance
of services under this Agreement and the Employee's observance and performance
of all of the provisions hereof, a salary of $75,000 per year (the "Base
Compensation"). The Employee's salary shall be payable in accordance with the
normal payroll practices of the Company and shall be subject to withholding
for
applicable taxes and other amounts. In addition to the Base Compensation, the
Employee may, in the sole and absolute discretion of the Board of Directors
of
the Company, be entitled to performance bonuses which may be based upon a
variety of factors, including the Employee’s performance and the achievement of
Company goals, all as determined in the sole and absolute discretion of the
Board of Directors of the Company.
(b) During
the term of this Agreement, the Employee shall be entitled to participate in
or
benefit from, in accordance with the eligibility and other provisions thereof,
the Company's medical insurance and other fringe benefit plans or policies
as
the Company may make available to, or have in effect for, its personnel with
commensurate duties from time to time. The Company retains the right to
terminate or alter any such plans or policies from time to time. The Employee
shall also be entitled to four weeks paid vacation each year, sick leave and
other similar benefits in accordance with policies of the Company from time
to
time in effect for personnel with commensurate duties.
(c) The
Employee shall also be entitled to participate, at the sole and absolute
discretion of the Board of Directors of the Company, in the Company's incentive
stock option plan. Such participation shall be based upon, among other things,
the Employee's performance and the Company's performance. In addition, the
Employee may be entitled, during the term of this Agreement, to receive such
additional options, at such exercise prices and other terms, and/or to
participate in such other bonus plans, whether during the term of this Agreement
or upon termination pursuant to Section 10 hereof, as the Board of Directors
of
the Company may, in its sole and absolute discretion, determine.
5. Reimbursement
of Business Expenses.
During
the term of this Agreement, upon submission of proper invoices, receipts or
other supporting documentation satisfactory to the Company and in specific
accordance with such guidelines as may be established from time to time by
the
Company’s Board of Directors, the Employee shall be reimbursed by the Company
for all reasonable business expenses actually and necessarily incurred by the
Employee on behalf of the Company in connection with the performance of services
under this Agreement.
6. Representation
of Employee; Restrictions on Sale.
(a) The
Employee represents and warrants that he is not party to, or bound by, any
agreement or commitment, or subject to any restriction, including but not
limited to agreements related to previous employment containing confidentiality
or noncompete covenants, which in the future may have a possibility of adversely
affecting the business of the Company or the performance by the Employee of
his
duties under this Agreement.
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(b) The
Employee further covenants and agrees that he will not sell, transfer, assign,
pledge or otherwise dispose of any shares of capital stock or securities
convertible into capital stock of the Company granted pursuant to any stock
incentive or similar plan of the Company until the Expiration Date and such
restrictions on dispositions shall apply upon a termination of this Agreement
for cause as described in Section 10(c) hereof; provided, however, that the
restrictions with respect to such dispositions as set forth in this sentence
shall not apply to the Employee in the event of a termination of this Agreement
pursuant to Sections 10(a), 10(b) or 10(d) hereof. With respect to any shares
of
capital stock or securities convertible into capital stock of the Company that
are owned by Employee other than those granted to Employee pursuant to this
Agreement, the Employee shall give to the Company's Executive Chairman or such
other designated member of the Board of Directors of the Company five business
days advance written notice of any intent to sell such securities. Such
restrictions on disposition may also be waived from time to time in the sole
and
absolute discretion of the Company’s Board of Directors. Notwithstanding the
foregoing, Employee shall, to the extent permitted under applicable law, rule
or
regulation, be permitted to transfer shares of capital stock or securities
convertible into capital stock of the Company to his immediate family members
or
trusts for the benefit of his immediate family members for estate planning
purposes; provided that any such transferees shall be subject to the
restrictions applicable to Employee set forth herein.
7. Confidentiality.
For
purposes of this Section 7, all references to the Company shall be deemed to
include all of the Company's affiliates and subsidiaries.
(a) Confidential
Information.
The
Employee acknowledges that as a result of his employment with the Company,
the
Employee has and will continue to have knowledge of, and access to, proprietary
and confidential information of the Company, including, without limitation,
inventions, trade secrets, technical information, know-how, plans,
specifications, methods of operations, financial and marketing information,
information with respect to business and product development, including, without
limitation, acquisitions and new lines of business, and the identity of
customers and suppliers (collectively, the "Confidential Information"), and
that
such information, even though it may be contributed, developed or acquired
by
the Employee, constitutes valuable, special and unique assets of the Company
developed at great expense which are the exclusive property of the Company.
Accordingly, the Employee shall not, at any time, either during or subsequent
to
the Term of this Agreement, use (whether for personal gain or otherwise),
reveal, report, publish, transfer or otherwise disclose to any person,
corporation or other entity, any of the Confidential Information without the
prior written consent of the Company, except (i) to responsible officers and
employees of the Company and other responsible persons who are in a contractual
or fiduciary relationship with the Company and who have a need for such
information for purposes in the best interests of the Company, (ii) for such
information which is or becomes of general public knowledge from authorized
sources other than the Employee, and (iii) for such disclosure as is required
by
law or legal process and then only with as much prior written notice to the
Company as is practical under the circumstances and only to the extent required
by such law or legal process. The Employee acknowledges that the Company would
not enter into this Agreement without the assurance that all such Confidential
Information will be used for the exclusive benefit of the Company.
3
(b) Return
of Confidential Information.
Upon
the termination of Employee's employment with the Company, the Employee shall
promptly deliver to the Company all drawings, manuals, letters, notes,
notebooks, reports and copies thereof and all other materials relating to the
Company's business, including without limitation any materials incorporating
Confidential Information, which are in the Employee's possession or
control.
(c) Inventions,
etc.
The
Employee will promptly disclose to the Company all designs, processes,
inventions, improvements, discoveries and other information related to the
business of the Company (collectively "developments") conceived, developed
or
acquired by him alone or with others during the term of this Agreement, whether
or not conceived during regular working hours, through the use of Company time,
material or facilities or otherwise. All such developments shall be the sole
and
exclusive property of the Company, and upon request the Employee shall deliver
to the Company all drawings, models and other data and records relating to
such
developments. In the event any such developments shall be deemed by the Company
to be patentable or copyrightable, the Employee shall, at the expense of the
Company, assist the Company in obtaining any patents or copyrights thereon
and
execute all documents and do all other things necessary or proper to obtain
letters patent and copyrights and to vest the Company with full title
thereto.
8. Non-competition.
For
purposes of this Section 8, all references to the Company shall be deemed to
include all of the Company's affiliates and subsidiaries. The Employee will
not
utilize his special knowledge of the business operations of the Company and
his
relationships with customers, suppliers of the Company and others to compete
with the Company. During the Term of this Agreement and for a period of two
(2)
years after the Expiration Date, the Employee shall not engage, directly or
indirectly, or have an interest, directly or indirectly, anywhere in the United
States of America or any other geographic area where the Company does business
or in which its products or services are marketed, alone or in association
with
others, as principal, officer, agent, employee, director, partner or stockholder
(except with respect to his employment by the Company), or through the
investment of capital, lending of money or property, rendering of services
or
otherwise, in any business competitive with or substantially similar to that
engaged in by the Company during the Term of this Agreement, or any line of
business or acquisition that the Company either (i) contemplates entering
into, whether or not actually entered into, or (ii) has obtained due
diligence or other information on during Employee’s employment with the Company
(it being understood hereby, that the ownership by the Employee of five percent
(5%) or less of the stock of any company listed on a national securities
exchange shall not be deemed a violation of this Section 8 and it being further
understood that nothing herein shall prevent the Employee from engaging in
the
business of investing, reinvesting, or trading in securities or other financial
instruments). During the same period, the Employee shall not, and shall not
permit any of his employees, agents or others under his control to, directly
or
indirectly, on behalf of himself or any other person, (i) call upon, accept
competitive business from, or solicit the competitive business of any person
who
is, or who had been at any time during the preceding two (2) years, a customer
of the Company or any successor to the business of the Company, or otherwise
divert or attempt to divert any business from the Company or any such successor,
or (ii) directly or indirectly recruit or otherwise solicit or induce any
person who is an employee of, or otherwise engaged by, the Company or any
successor to the business of the Company to terminate his or her employment
or
other relationship with the Company or such successor, or hire any person who
has left the employ of the Company or any such successor during the preceding
two (2) years. The Employee shall not at any time, directly or indirectly,
use
or purport to authorize any person to use any name, xxxx, logo, trade dress
or
other identifying words or images which are the same as or similar to those
used
at any time by the Company in connection with any product or service, whether
or
not such use would be in a business competitive with that of the Company. Any
breach or violation by the Employee of the provisions of this Section 8 shall
toll the running of any time periods set forth in this Section 8 for the
duration of any such breach or violation.
4
9. Remedies.
The
restrictions set forth in Sections 7 and 8 are considered by the parties to
be
fair and reasonable. The Employee acknowledges that the restrictions contained
in Section 7 and 8 will not prevent him from earning a livelihood. The Employee
further acknowledges that the Company would be irreparably harmed and that
monetary damages would not provide an adequate remedy in the event of a breach
of the provisions of Sections 7 or 8. Accordingly, the Employee agrees that,
in
addition to any other remedies available to the Company, the Company
(i) shall be entitled to specific performance, injunction, and other
equitable relief to secure the enforcement of such provisions and
(ii) shall not be required to post bond in connection with seeking any such
equitable remedies. If any provisions of Sections 7, 8, or 9 relating to the
time period, scope of activities or geographic area of restrictions is declared
by a court of competent jurisdiction to exceed the maximum permissible time
period, scope of activities or geographic area, the maximum time period, scope
of activities or geographic area, as the case may be, shall be reduced to the
maximum which such court deems enforceable. If any provisions of Sections 7,
8,
or 9 other than those described in the preceding sentence are adjudicated to
be
invalid or unenforceable, the invalid or unenforceable provisions shall be
deemed amended (with respect only to the jurisdiction in which adjudication
is
made) in such manner as to render them enforceable and to effectuate as nearly
as possible the original intentions and agreement of the parties.
10. Termination.
This
Agreement may be terminated prior to the expiration of the Term set forth in
Section 2 upon the occurrence of any of the events set forth in, and subject
to
the terms of, this Section 10.
(a) Death.
This
Agreement will terminate immediately and automatically upon the death of the
Employee. If this Agreement is terminated on account of the death of the
Employee, then the Employee's estate shall be entitled to receive accrued Base
Compensation through the date of such termination, and the Employee and the
Employee’s estate shall have no further entitlement to Base Compensation, bonus,
or benefits from the Company following the effective date of such
termination.
(b) Disability.
This
Agreement may be terminated at the Company's option, immediately upon notice
to
the Employee, if the Employee shall suffer a permanent disability. For the
purposes of this Agreement, the term "permanent disability" shall mean the
Employee's inability to perform his duties under this Agreement for a period
of
sixty (60) consecutive days or for an aggregate of ninety (90) days, whether
or
not consecutive, in any twelve (12) month period, due to illness, accident
or
any other physical or mental incapacity, as reasonably determined by the Board
of Directors of the Company. In the event that a dispute arises with respect
to
the disability of the Employee, the parties shall each select a physician
licensed to practice in the State of Connecticut to make such a determination.
If the two (2) physicians selected cannot agree on a determination, they will
mutually select a third physician and the decision of the majority of the three
(3) physicians will be binding. If this Agreement is terminated on account
of
the permanent disability of the Employee, then the Employee shall be entitled
to
receive accrued Base Compensation through the date of such termination, and
the
Employee shall have no further entitlement to Base Compensation, bonus, or
benefits from the Company following the effective date of such
termination.
5
(c) Cause.
This
Agreement may be terminated at the Company's option, immediately upon notice
to
the Employee, and solely with respect to clauses (i) and (iii) below, after
the
expiration of a 10-day cure period after written notice thereof to the Employee,
upon: (i) breach by the Employee of any material provision of this
Agreement; (ii) gross negligence or willful misconduct of the Employee in
connection with the performance of his duties under this Agreement;
(iii) Employee's failure to perform any reasonable directive of the
Executive Chairman or the Board of Directors of the Company; (iv) fraud,
criminal conduct, dishonesty or embezzlement by the Employee; or
(v) Employee's misappropriation for personal use of any assets (having in
excess of nominal value) or business opportunities of the Company. If this
Agreement is terminated by the Company for cause, then the Employee shall be
entitled to receive accrued Base Compensation through the date of such
termination, and the Employee shall have no further entitlement to Base
Compensation, bonus, or benefits from the Company following the effective date
of such termination.
(d) Without
Cause.
This
Agreement may be terminated, other than upon a Change in Control, at any time
by
the Company without cause immediately upon giving written notice to the Employee
of such termination. In such event, Company shall pay to the Employee his Base
Compensation in accordance with the normal payroll practices of the Company
through the 12-month anniversary of the date of termination.
(e) Change
in Control.
(i)
This Agreement may be terminated by the Company upon the effectiveness of a
Change in Control. If this Agreement is terminated by the Company upon a Change
in Control, then the Employee shall be entitled to receive accrued Base
Compensation through the date of such termination, and the Employee shall have
no further entitlement to Base Compensation, bonus, or benefits from the Company
following the effective date of such termination.
(ii) As
used
herein, “Change in Control” shall mean any of the following:
(A) The
date
any entity or person other than Xxxxxx Xxxxxxx or his affiliates shall have
become the beneficial owner of, or shall have obtained voting control over,
fifty percent (50%) or more of the outstanding Common Stock of the Company;
6
(B) The
date
there shall have been a change in a majority of the Board of Directors of the
Company within a 12-month period (not including any period prior to the
execution of this Agreement) unless the nomination for election by the Company’s
stockholders of each new director was approved by the vote of a majority of
the
directors then still in office who were in office at the beginning of the
12-month period;
(C)
The
date
the Company consummates (x) a merger or consolidation of the Company with or
into another corporation, in which the Company is not the continuing or
surviving corporation or pursuant to which any shares of Common Stock of the
Company would be converted into cash, securities or other property of another
corporation, other than (i) a merger or consolidation of the Company in which
holders of Common Stock immediately prior to such merger or consolidation have
the same proportionate ownership of Common Stock of the surviving corporation
immediately after such merger or consolidation as immediately before such merger
or consolidation and (ii) a merger or consolidation of the Company in which
holders of Common Stock immediately prior to such merger or consolidation
continue to own at least a majority of the combined voting securities of the
Company (or the surviving entity) outstanding immediately after such merger
or
consolidation, or (y) the sale or other disposition of all or substantially
all
of the assets of the Company.
(f) By
the
Employee. This
Agreement may be terminated at the Employee's option upon thirty (30) days’
notice to the Company. If this Agreement is terminated by the Employee, then
the
Employee shall be entitled to receive accrued Base Compensation through the
date
of such termination, and the Employee shall have no further entitlement to
Base
Compensation, bonus, or benefits from the Company following the effective date
of such termination.
(g) Other
Actions Upon Termination.
(i)
Upon the termination or expiration of this Agreement, the Employee shall be
deemed to have immediately resigned as an officer and director of the Company
(if he then holds such offices). The Employee shall take such other actions
and
execute such other documents or instruments as may be required or advisable
to
document and confirm his resignation and ensure its effectiveness.
(ii) The
Employee shall not at any time following the termination or expiration of this
Agreement make any public statements relating to the Company or any of its
subsidiaries or affiliates or such entities' directors, officers or executives,
except as required by law or legal process or in connection with litigation
commenced to enforce the terms of this Agreement.
(h) No
Other Liabilities.
Upon
the termination or expiration of this Agreement, the Company shall have no
liability except as specifically set forth in this Section 10.
11. Tax
Effect.
If the
compensation payable under this Agreement, either alone or together with other
payments to the Employee from the Company or one of its subsidiaries would
constitute a “parachute payment” (as defined in Section 280G of the Internal
Revenue Code of 1986, as amended (the “Code”)), such severance compensation may
be reduced to the largest amount as will result in no portion of the severance
compensation payments hereunder being subject to the excise tax imposed by
Section 4999 of the Code or being disallowed as deductions to the Company under
Section 280G of the Code. The determination of whether any reduction shall
be
made in the severance compensation payments hereunder pursuant to the foregoing
provision shall be made jointly by the Employee and the Company. The Employee
shall be liable for the payment of income and excise taxes, if any, applicable
to him on such severance compensation.
7
12. Miscellaneous.
(a) Survival.
The
provisions of Sections 7, 8, and 9 shall survive the termination of this
Agreement.
(b) Entire
Agreement.
This
Agreement sets forth the entire understanding of the parties and merges and
supersedes any prior or contemporaneous agreements between the parties
pertaining to the subject matter hereof.
(c) Modification.
This
Agreement may not be modified or terminated orally, and no modification or
waiver of any of the provisions hereof shall be binding unless in writing and
signed by the party against whom the same is sought to be enforced.
(d) Waiver.
Failure
of a party to enforce one or more of the provisions of this Agreement or to
require at any time performance of any of the obligations hereof shall not
be
construed to be a waiver of such provisions by such party nor to in any way
affect the validity of this Agreement or such party's right thereafter to
enforce any provision of this Agreement, nor to preclude such party from taking
any other action at any time which it would legally be entitled to
take.
(e) Successors
and Assigns.
Neither
party shall have the right to assign this Agreement, or any rights or
obligations hereunder, without the consent of the other party; provided,
however, that upon the sale of all or substantially all of the assets, business
and goodwill of the Company to another company, or upon the merger or
consolidation of the Company with another company, this Agreement shall inure
to
the benefit of, and be binding upon, both Employee and the company purchasing
such assets, business and goodwill, or surviving such merger or consolidation,
as the case may be, in the same manner and to the same extent as though such
other company were the Company; and provided, further, that the Company shall
have the right to assign this Agreement to any affiliate or subsidiary of the
Company. Subject to the foregoing, this Agreement shall inure to the benefit
of,
and be binding upon, the parties hereto and their legal representatives, heirs,
successors and permitted assigns.
(f) Communications.
All
notices, requests, demands and other communications under this Agreement shall
be in writing and shall be deemed to have been given at the time personally
delivered or when mailed in any United States post office enclosed in a
registered or certified postage prepaid envelope and addressed to the addresses
set forth below, or to such other address as any party may specify by notice
to
the other party; provided, however, that any notice of change of address shall
be effective only upon receipt.
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|
To
the Company:
|
Net
Perceptions, Inc.
|
|
Xxx
Xxxxxxxx Xxxxxx
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|
Xxxxxxxx,
Xxxxxxxxxxx 00000
|
|
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Attention:
Xxxxxx X. Xxxxxxx, Executive Chairman
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With
a copy to:
|
Xxxx
Xxxxxxx, P.C.
|
|
0000
Xxxxxx xx xxx Xxxxxxxx
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|
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Xxx
Xxxx, Xxx Xxxx 00000
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Attention:
Xxxxxx X. Xxxxxxxx, Esq.
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|
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To
the Employee:
|
Xxxxx
X. Xxxxx
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|
000
Xxxxxx Xxxx Xxxxx Xxxx
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|
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Xxxxxx,
XX 00000
|
(g) Severability.
If any
provision of this Agreement is held to be invalid or unenforceable by a court
of
competent jurisdiction, such invalidity or unenforceability shall not affect
the
validity and enforceability of the other provisions of this Agreement and the
provision held to be invalid or unenforceable shall be enforced as nearly as
possible according to its original terms and intent to eliminate such invalidity
or unenforceability.
(h) Jurisdiction;
Venue.
This
Agreement shall be subject to the exclusive jurisdiction of the courts located
in New York County, New York. Any breach of any provisions of this Agreement
shall be deemed to be a breach occurring in the State of New York by virtue
of a
failure to perform an act required to be performed in the State of New York,
and
the parties irrevocably and expressly agree to submit to the jurisdiction of
the
courts located in New York County, New York for the purpose of resolving any
disputes among them relating to this Agreement or the transactions contemplated
by this Agreement and waive any objections on the grounds of forum non
conveniens or otherwise. The parties hereto agree to service of process by
certified or registered United States mail, postage prepaid, addressed to the
party in question.
(i) Governing
Law.
This
Agreement is made and executed and shall be governed by the laws of the State
of
New York, without regard to the conflicts of law principles
thereof.
(j) No
Third-Party Beneficiaries.
Each of
the provisions of this Agreement is for the sole and exclusive benefit of the
parties hereto and shall not be deemed for the benefit of any other person
or
entity.
[Signature
page follows:]
9
In
Witness Whereof,
each of
the parties hereto has duly executed this Employment Agreement as of the date
set forth above.
| Net Perceptions, Inc. | |
|
By:
|
|
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Xxxxxx
X. Xxxxxxx, Executive
Chairman
|
|
| Xxxxx X. Xxxxx |
