Exhibit 10.3
EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement (this "AGREEMENT") is entered into
as of June 1, 2004 (the "EFFECTIVE DATE"), by and between Ramp Corporation, a
Delaware corporation (the "COMPANY"), and Xxxxxx Xxxxx ("EXECUTIVE").
WHEREAS, Executive has been employed by the Company as President and
has served as a member of the Board of Directors of the Company (the "BOARD")
since October 10, 2003;
WHEREAS, the Company desires to continue to employ Executive pursuant
to this Employment Agreement as of the Effective Date and Executive desires to
continue such employment with the Company on the terms and conditions set forth
below.
NOW, THEREFORE, in consideration of the foregoing recitals and the
respective covenants and agreements of the parties contained in this Agreement,
the Company and Executive agree as follows:
1. Title; Duties, Authorities and Responsibilities.
(a) During the Employment Period (as defined in Section 2 below),
Executive will serve as Chief Executive Officer and President of the Company and
shall report to the Board. In addition, Executive shall serve as Chairman of the
Board unless and until another Chairman of the Board shall be elected or
appointed by the Board to such office with the advice and consent of Executive,
which shall not be unreasonably withheld or delayed. The duties, authority and
responsibilities of Executive shall be commensurate with the duties, authority
and responsibilities customarily accorded the Chief Executive Officer and
President of a publicly traded company, and shall include such duties and
responsibilities consistent with his position as the Board may from time to time
assign in good faith to Executive. Executive, to the best of his ability, shall
perform faithfully and competently such duties and responsibilities.
(b) Executive shall devote substantially all of his working time and
efforts to the business and affairs of the Company and its subsidiaries, except
for vacations, holidays, sickness and other excused absences; provided, however,
Executive may devote a reasonable amount of time to (i) the management of his
personal investments, (ii) the continuing liquidation of the CounterPoint Funds,
(iii) civic, community, and/or charitable activities, and (iv) with the prior
written consent of the Board, which shall not be unreasonably withheld, to serve
as a director of other companies.
2. Employment Period. The term of this Agreement and Executive's employment
hereunder shall begin on the Effective Date and shall continue thereafter until
the close of business on June 30, 2006, unless sooner terminated pursuant to
Section 10 below (the "EMPLOYMENT PERIOD").
3. Base Salary. For all services rendered by Executive pursuant to this
Agreement, Executive shall receive a base salary ("BASE SALARY") at an annual
rate of $240,000, less
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applicable deductions. During the six (6) month period ending November 30, 2004,
Executive shall be paid Base Salary at the rate of $120,000 per year, with the
$60,000 balance of Base Salary being replaced with a Retention Bonus payable in
shares of Common Stock of the Company if the Executive shall remain employed by
the Company as its Chief Executive Officer and President on November 30, 2004;
provided, however, that if, prior to November 30, 2004, Executive's employment
shall be terminated by the Company for any reason other than Cause or Executive
shall terminate his employment for Good Reason, the Retention Bonus shall be
payable nevertheless as if the Executive had remained employed by the Company as
its Chief Executive Officer and President on November 30, 2004. The number of
shares of Common Stock to be included in Executive's Retention Bonus will be
specified in a separate contractual agreement between the Company and Executive
relating to the Retention Period. Executive's Base Salary may be increased, but
in no event shall it be decreased, during the Employment Period. Executive's
Base Salary, less applicable deductions, shall be paid in periodic installments
in accordance with the Company's regular payroll practices.
4. Performance Bonuses.
(a) If Executive is employed by the Company on June 30, 2005, the
Company shall pay Executive on or before July 15, 2005 a performance period
bonus payable in cash for the performance period July 1, 2004 through June 30,
2005 (the "FIRST PERFORMANCE PERIOD") based on the following formula:
$360,000 X A = First Performance Period Bonus
------------
$5,000,000
where A equals the amount of the Company's Gross Revenues (as defined below) for
the First Performance Period; provided, however, A shall not be greater than
$5,000,000.
(b) If Executive's employment with the Company has been terminated by
the Company without Cause (as defined below) or has been terminated by Executive
for Good Reason (as defined below), the Company shall pay Executive within 30
days of the termination of his employment a performance period bonus payable in
cash for the performance period ending on the Termination Date (as defined
below) based on the formula:
$360,000 X A = First Performance Period Bonus
-----------
$5,000,000
where A equals the Company's Gross Revenues for the period July 1, 2004 through
the Termination Date annualized to the period ended June 30, 2005; provided,
however, A shall not be greater than $5,000,000.
(c) If Executive's employment with the Company has been terminated by
the Company for Cause before the end of the First Performance Period, Executive
shall not be entitled to the First Performance Period Bonus for the First
Performance Period.
(d) If Executive's employment with the Company has been terminated as a
result of Executive's death or Disability (as defined in Section 10 below), or
by Executive not for
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Good Reason, the Company shall pay Executive within 30 days of the Termination
Date a performance period bonus payable in cash for the performance period
ending on the Termination Date based on the formula:
$360,000 X A X B = First Performance Period Bonus
---------- -------
$5,000,000 365
where A equals the Company's Gross Revenues for the period July 1, 2004 through
the Termination Date as annualized to the period ended June 30, 2005 and B is
the number of days commencing on July 1, 2004 and ending on the Termination
Date; provided, however, A shall not be greater than $5,000,000.
(e) If Executive is employed by the Company on June 30, 2006, the
Company shall pay Executive on or before July 15, 2006 a performance period
bonus payable in cash for the performance period July 1, 2005 through June 30,
2006 (the "SECOND PERFORMANCE PERIOD") based on the following formula:
$460,000 X A = Second Performance Period Bonus
-----------
$18,000,000
where A equals the amount of the Company's Gross Revenues for the Second
Performance Period; provided, however, A shall not be greater than $18,000,000.
(f) If Executive's employment with the Company has been terminated by
the Company without Cause or has been terminated by Executive for Good Reason,
the Company shall pay Executive within 30 days of the termination of his
employment a performance period bonus payable in cash for the performance period
ending on the Termination Date based on the formula:
$460,000 X A = Second Performance Period Bonus
-----------
$18,000,000
where A equals the Company's Gross Revenues for the period July 1, 2005 through
the Termination Date annualized to the period ended June 30, 2006; provided,
however, A shall not be greater than $18,000,000.
(g) If Executive's employment with the Company has been terminated by
the Company for Cause before the end of the Second Performance Period, Executive
shall not be entitled to the Second Performance Period Bonus for the Second
Performance Period.
(h) If Executive's employment with the Company has been terminated as a
result of Executive's death or Disability, or by Executive not for Good Reason,
the Company shall pay Executive within 30 days of the Termination Date a
performance period bonus payable in cash for the performance period ending on
the Termination Date based on the formula:
$460,000 X A X B = Second Performance Period Bonus
----------- -------
$18,000,000 365
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where A equals the Company's Gross Revenues for the period July 1, 2005 through
the Termination Date as annualized to the period ended June 30, 2006 and B is
the number of days commencing on July 1, 2005 and ending on the Termination
Date; provided, however, A shall not be greater than $15,000,000.
(i) If Executive is employed by the Company on June 30, 2004, a
retention performance bonus to be paid to Executive, on or before July 15, 2004
with respect to the period July 1, 2003 through June 30, 2004 (the "PREEXISTING
PERFORMANCE PERIOD"), based on the following formula:
$275,000 X A = Preexisting Performance Period Bonus
-----------
$1,500,000
where A equals the amount of the Company's Gross Revenues for the Preexisting
Performance Period; provided, however, A shall not be greater than $1,500,000.
(j) As used in this Agreement, the following terms shall have the
following meanings:
(i) "GROSS REVENUES" means (A) for purposes of any provision of this
Agreement other than Section 4(i), for any period mean the "revenues" line of
the Company's income statement for such period excluding any revenues
attributable to the operations of the Company's OnRamp Division or (B) for
purposes of Section 4(i) only, the "revenues" line of the Company's income
statement for the Preexisting Performance Period, including any revenues of
businesses acquired during the Preexisting Performance Period, but excluding, in
the case of clause (A) and Clause (B) of this Section 4(j)(i), any extraordinary
items such as proceeds from the sale of assets, recoveries from litigation or
settlement of any disputed amount other than accounts receivable, or repayment
of indebtedness owed to the Company.
(ii) "CAUSE" means :
(1) a material breach by Executive of any material provision of
this Agreement;
(2) the conviction of Executive or a plea of guilty or nolo
contendere with respect to a crime constituting a felony; and
(3) gross neglect of Executive's material duties hereunder or
willful misconduct in the performance of his material responsibilities
hereunder;
provided, however, the Company shall not be entitled to terminate Executive's
employment for Cause under clause (1) or (3) above unless the Company shall have
provided Executive with written notice of the facts and circumstances giving
rise to Cause within 90 days of the occurrence of such facts and circumstance
and Executive fails to cure the situation within 15 days after receipt of such
notice.
(iii) "GOOD REASON" shall mean the occurrence or worsening of a
significant health condition with respect to a member of Executive's immediate
family that is
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expected to be of a prolonged duration and requires such attention from
Executive that he cannot reasonably be expected to continue performing his
duties and responsibilities hereunder or a material breach by the Company of any
material provision of this Agreement, including but not limited to, any of the
following:
(1) a material diminution in Executive's authority, duties or
responsibilities as normally associated with the position of Chief Executive
Officer and President in a company the size and nature of the Company;
(2) a reduction in Executive's Base Salary or bonuses, or any
failure by the Company to grant the First Option or the Second Option (as
defined below) or issue the shares of Common Stock (as defined below) issuable
upon exercise of the First Option or the Second Option in accordance with
Section 5 below or any material reduction in any of the benefits or perquisites
accorded Executive pursuant to Section 9 below;
(3) a failure to pay in a timely manner any compensation
(including benefits) owed to Executive, unless Executive agrees to defer any
such unpaid compensation or benefits;
(4) a change in reporting structure so that Executive reports
to someone other than the Board;
(5) the failure by the Company to nominate or renominate
Executive as President and Chief Executive Officer, or the removal by the
Company of Executive as chief executive officer of the Company; or
(6) a Change in Control (as defined below) shall have occurred
and Executive shall have elected to terminate his employment hereunder within
180 days after the effective date of such Change in Control; provided, however,
Executive shall not be entitled to resign for Good Reason unless Executive
provides the Company with written notice of the event constituting "Good Reason"
within 45 days of the occurrence of such event and, if such event is curable,
the Company fails to cure such event within 15 days after receipt of such
notice.
(iv) "TERMINATION DATE" means the effective date of the termination
of the Executive's employment with the Company in accordance with Section 10.
(v) "CHANGE IN CONTROL" means (A) the direct or indirect
acquisition, whether in one or a series of transactions by any person (as such
term is used in Section 13(d) and Section 14(d)(2) of the Securities Exchange
Act of 1934, as amended (the "EXCHANGE ACT")), or related persons (such person
or persons, an "ACQUIRER") constituting a group (as such term is used in Rule
13d-5 under the Exchange Act), of (1) beneficial ownership (as defined in the
Exchange Act) of issued and outstanding shares of stock of the Company, the
result of which acquisition is that such person or such group possesses in
excess of 25% of the combined voting power of all then-issued and outstanding
capital stock of the Company, or (2) the power to elect, appoint, or cause the
election or appointment of at least a majority of the members of the Board (or
such other governing body in the event the Company or any successor entity is
not a
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corporation); (B) a merger or consolidation of the Company with a person or a
direct or indirect subsidiary of such person, provided that the result of such
merger or consolidation, whether in one or a series of related transactions, is
that the holders of the outstanding voting stock of the Company immediately
prior to the consummation of such transaction do not possess, whether directly
or indirectly, immediately after the consummation of such merger or
consolidation, in excess of 25% of the combined voting power of all then-issued
and outstanding capital stock of the merged or consolidated person, its direct
or indirect parent, or the surviving person of such merger or consolidation; or
(C) a sale or disposition, whether in one or a series of transactions, of all or
substantially all of the Company's assets.
(vi) "COMMON STOCK" means the Common Stock, par value $.001 per
share, of the Company.
(vii) "REVERSE STOCK SPLIT" means an amendment of the Restated
Certificate of Incorporation of the Company that combines the outstanding shares
of Common Stock into a lesser number of outstanding shares.
(viii) "RETENTION PERIOD" means the period commencing on June 1,
2004 and ending on November 30, 2004.
(ix) "RETENTION BONUS" means a bonus payable in shares of Common
Stock to an employee of the Company who remains employed by the Company during
the Retention Period in consideration of such employee accepting a reduction in
salary during the Retention Period.
(x) "RECAPITALIZATION INVESTOR" means an investor or investors that
purchase convertible securities of the Company in contemplation of the Reverse
Stock Split, which securities have a conversion price (the "RECAPITALIZATION
INVESTOR CONVERSION PRICE") based on the market price of the Company's Common
Stock at some future point in time after the effective date of the Reverse Stock
Split.
(xi) "PRO FORMA PERIOD" means the period commencing on June 1, 2004
and ending on May 31, 2005.
(xii) "PRO FORMA COMMON STOCK" means the highest number of shares
of Common Stock outstanding on a fully diluted basis at any time during the Pro
Forma Period; provided, however, if there shall be a Reverse Stock Split during
the Pro Forma Period, "Pro Forma Common Stock" shall mean the pro forma number
of shares of Common Stock that would be outstanding on a fully diluted basis
after giving effect to: (A) the Reverse Stock Split; (B) the conversion of the
convertible securities issued to Recapitalization Investor; (C) the issuance of
all shares of Common Stock issued to employees of the Company as Retention
Bonuses; and (D) the issuance of all options and warrants to purchase shares of
Common Stock issued to employees of the Company and its subsidiaries within
sixty (60) days of the conversion of the convertible securities issued to the
Recapitalization Investor.
(xiii) "WARRANT" means the five-year warrant issued to Executive
pursuant to Section 5(a) hereof.
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(xiv) "WARRANT EXERCISE PRICE" means the the average closing price
of the Common Stock on the American Stock Exchange during the twenty (20)
trading days immediately preceding the date of issuance of the Warrant (the
"INITIAL EXERCISE PRICE"); provided, however, if there shall be a Reverse Stock
Split during the Pro Forma Period, the exercise price of the Warrant shall be
equal to the Recapitalization Investor Conversion Price unless the Initial
Exercise Price as adjusted to take account of the Reverse Stock Split shall be
lower, in which case the Initial Exercise Price, as so adjusted, shall remain
the Warrant Exercise Price.
(xv) "WARRANT SHARES" means, at any time, the maximum number of
shares of Common Stock then issuable pursuant to the Warrant, which shall be
determined by dividing Pro Forma Common Stock as of such time by 19.
5. Option and Warrant Grants.
(a) In addition to all other compensation and benefits provided
hereunder, the Company, as an inducement to Executive to accept the position of
Chairman of the Board and Chief Executive Officer and to remain as President,
shall grant Executive: (A) promptly after the execution and delivery of this
Agreement, a five (5) year non-qualified stock option (the "FIRST OPTION") under
the Company's 2004 Stock Incentive Plan (the "PLAN") to purchase 3,000,000
shares of Common Stock at an exercise price of $0.18 per share; (B) promptly
after the execution and delivery of this Agreement, the Warrant to purchase the
Warrant Shares at the Warrant Exercise Price; and (C) if Executive is employed
by the Company on June 30, 2005, in July 2005, a five (5) year non-qualified
stock option (the "SECOND OPTION") under the Company's Plan to purchase
3,000,000 shares of Common Stock at an exercise price of $0.18 per share
(i) The First Option shall vest (i.e., become nonforfeitable and
exercisable), with respect to 500,000 shares on each of September 30, 2004,
December 31, 2004, March 31, 2005 and June 30, 2005 if Executive is employed by
the Company on the respective days. The portion of the First Option to the
extent of the 2,000,000 shares vesting pursuant to the immediately preceeding
sentence shall be referred to as the "NON-PERFORMANCE BASED FIRST OPTION".
(ii) If Executive is employed by the Company on June 30, 2005, the
First Option shall vest with respect to 1,000,000 shares on June 30, 2005 to the
extent determined under the following formula:
1,000,000 X A = Shares Vesting
-----------
$5,000,000
where A equals the amount of the Company's Gross Revenues for the First
Performance Period; provided, however, A shall not be greater than $5,000,000.
The portion of the First Option to the extent of the 1,000,000 shares vesting
pursuant to the foregoing formula shall be referred to as the "FIRST PERFORMANCE
BASED OPTION".
(iii) The Second Option shall vest (i.e., become nonforfeitable and
exercisable), with respect to 500,000 shares on each of September 30, 2005,
December 31, 2005,
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March 31, 2006 and June 30, 2006 if Executive is employed by the Company on the
respective days. The portion of the Second Option to the extent of the 2,000,000
shares vesting pursuant to the immediately preceeding sentence shall be referred
to as the "NON-PERFORMANCE BASED SECOND OPTION".
(iv) If Executive is employed by the Company on June 30, 2006, the
Second Option shall vest with respect to 1,000,000 shares on June 30, 2006 to
the extent determined under the following formula:
1,000,000 X A = Shares Vesting
-----------
$18,000,000
where A equals the amount of the Company's Gross Revenues for the Second
Performance Period; provided, however, A shall not be greater than $18,000,000.
The portion of the Second Option to the extent of the 1,000,000 shares vesting
pursuant to the foregoing formula shall be referred to as the "SECOND
PERFORMANCE BASED OPTION".
(v) The Warrant shall vest (i.e. become nonforfeitable and
exercisable) upon the earliest to occur of (A) the effective date of the Reverse
Stock Split, if the Reverse Stock Split capitalized by the Recapitalization
Investor shall become effective during the Pro Forma Period and if the option
pool for Company employees shall be adjusted to the satisfaction of the
Compensation Committee of the Board; or (B) May 31, 2005; or (C) the sale of the
Company for more that Thirty One Million Dollars ($31,000,000). Unless
Executive's employment shall be terminated for Cause or without Good Reason, the
Warrant shall remain exercisable in accordance with its terms after the
termination of Executive's employment. If Executive's employment shall be
terminated for Cause or without Good Reason, the Warrant shall remain
exercisable only to the extent vested in accordance with its terms on the date
of termination of Executive's employment
(b) Executive shall be entitled to receive further options and/or other
grants of equity in the Company from time to time during the Employment Period
as determined by the Board in its sole and absolute discretion; provided,
however, that each such grant shall comply with Article 3 of the Plan.
(c) Notwithstanding anything herein to the contrary,
(i) if Executive's employment with the Company has been terminated
by the Company without Cause or is terminated by Executive for Good Reason:
(1) the Non-Performance Based First Option shall immediately
vest and remain exercisable for the remaining original term of the First Option;
(2) the Non-Performance Based Second Option shall immediately
vest and remain exercisable for the remaining original term of the Second
Option;
(3) the First Performance Based Option shall vest and remain
exercisable for the remaining original term of the First Option to the extent
determined under the following formula:
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1,000,000 X A = Shares Vesting
-----------
$5,000,000
where A is the Company's Gross Revenues for the First Performance Period through
the Termination Date annualized to the period ended June 30, 2005; provided,
however, A shall not be greater than $5,000,000; and
(4) the Second Performance Based Option shall vest and remain
exercisable for the remaining original term of the Second Option to the extent
determined under the following formula:
1,000,000 X A = Shares Vesting
-----------
$18,000,000
where A is the Company's Gross Revenues for the Second Performance Period
through the Termination Date annualized to the period ended June 30, 2006;
provided, however, A shall not be greater than $18,000,000
(ii) if Executive's employment with the Company has been terminated
by the Company for Cause, the Non-Performance Based First Option, the
Non-Performance Based Second Option, the First Performance Based Option and the
Second Performance Based Option, in each case to the extent, if any, not then
vested, shall be immediately forfeited.
(iii) if Executive's employment with the Company has been
terminated as a result of Executive's death or Disability or by Executive not
for Good Reason;
(1) the First Performance Based Option shall vest to the extent
determined under the following formula:
1,000,000 X A X B = Shares Vesting
----------- ------
$5,000,000 365
where A is the Company's Gross Revenue for the First Performance Period through
the Termination Date annualized to the period ended June 30, 2005 and B is the
number of days commencing on July 1, 2004 and ending on the Termination Date;
provided, however, A shall not be greater than $5,000,000;
(2) the Second Performance Based Option shall vest to the
extent determined under the following formula:
1,000,000 X A X B = Shares Vesting
----------- ------
$18,000,000 365
where A is the Company's Gross Revenue for the Second Performance Period through
the Termination Date annualized to the period ended June 30, 2006 and B is the
number of days commencing on July 1, 2005 and ending on the Termination Date;
provided, however, A shall not be greater than $18,000,000; and
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(3) in the case of Executive's death or Disability, the vested
portions of the Non-Performance Based First Option and the Non-Performance Based
Second Option shall be exercisable to the extent so vested on the date of death
or Disability by the estate or personal representative of Executive.
(d) Registration Right. The Company shall use its best efforts
to file a registration statement on Form S-8 with the Securities and Exchange
Commission (including a resale prospectus on Form S-3 registering the resale of
shares of Common Stock by Executive and other affiliates of the Company)
registering all of the shares of Common Stock issuable under this Section 5, or
any other equity awards that may be granted to Executive. The Company shall use
its best efforts to keep such Form S-8 registration statement effective for so
long as any Options, shares of Common Stock or other equity awards granted under
the Plan, or any other plan under which options, shares of Common Stock or other
equity awards shall have been granted to Executive, remain outstanding.
6. Change in Control Provisions. If a Change in Control occurs and if: (i)
within 180 days thereafter Executive's employment hereunder shall be terminated
by Executive for Good Reason; or (ii) within 365 days thereafter Executive's
employment shall be terminated by the Company without Cause, then, in either
such case, in addition to all other payments and benefits provided for elsewhere
in this Agreement:
(a) The Company shall pay or cause to be paid to the Executive, cash
compensation in an amount equal to twice the Executive's then current Base
Salary on the date of such termination of Executive's employment.
(b) The Company shall pay or cause to be paid to Executive, a cash
performance bonus in an amount equal to twice the aggregate amount of cash which
Executive was entitled to receive from the Company as bonus compensation with
respect to the twelve-month period immediately preceding the date of termination
of Executive's employment hereunder.
(c) Any unvested Options described in Section 5 hereof shall vest and
become exercisable immediately and remain exercisable for the remaining original
term of the Options.
(d) Notwithstanding Section 9 hereof, Executive shall continue to be
entitled to all benefits to which Executive shall be entitled under Section 9
hereof immediately prior to a Change in Control of the Company for a period of
two years after such Change in Control.
(e) Notwithstanding subsections (a) and (b) of this Section 6, if the
Change in Control shall result from the sale of the Company for less than Thirty
One Million Dollars ($31,000,000), each such subsection shall be interpreted as
if the word "twice" had been omitted.
7. Indemnification. As an employee, officer and director of the Company,
Executive shall be fully indemnified by the Company, to the maximum extent
permitted by Delaware law, while employed and thereafter to the fullest extent
permitted by law. The Company shall advance to Executive any expense incurred by
Executive which is subject to such indemnification by the Company. To implement
this provision, during the Employment Period, the Company shall maintain
directors and officers liability insurance providing at least the same
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level of coverage as was maintained by the Company on the Effective Date, and
shall name Executive as an insured under all such policies. The Company also
shall execute and deliver to Executive an indemnification agreement for officers
and directors in the form attached hereto as EXHIBIT A.
8. Expenses. In the performance of his duties and responsibilities to the
Company under this Agreement, Executive shall be entitled to reimbursement by
the Company for all reasonable travel, entertainment, and other expenses
incurred by him in performing his duties hereunder upon furnishing to the Chief
Financial Officer of the Company or his designee the documentation of such
expenses customarily required by the Company's expense reimbursement policies.
9. Vacations and Holidays; Benefits.
(a) Executive shall be entitled to such annual vacation and holiday
time off with full pay as the Company may provide in its standard policies and
practices for other senior executives; provided, however, that in no event shall
Executive be entitled to less than four (4) weeks annual paid vacation time.
(b) The Executive shall be entitled to such health benefits, group
insurance, hospital, dental, major medical and disability benefits and
retirement benefits and other similar benefits as are currently offered or
hereafter may be offered during the Employment Period to other similarly
situated executives of the Company.
10. Termination. This Agreement may be terminated by the applicable party
and under the circumstances set forth below:
(a) By the Company without Cause. The Company may terminate Executive's
employment hereunder at any time without Cause upon 180 days' prior written
notice.
(b) Disability. If Executive becomes incapacitated or disabled at any
time during the Employment Period so as to be unable (either mentally or
physically) to substantially perform the services required of Executive pursuant
to this Agreement for a period of 120 or more consecutive days, or 180 or more
non-consecutive days, in any 12 month period ("DISABILITY"), unless otherwise
required by law, the Company may, at its option, terminate Executive's
employment hereunder effective immediately upon giving Executive written notice
of such termination. In the event of a dispute as to Executive's ability to
perform Executive's duties, the Company may refer the same to a licensed
practicing physician of the Company's choice, and Executive agrees to submit to
such tests and examination as such physician shall deem appropriate, provided
that Executive's physician may be present.
(c) Death. If Executive dies during the Employment Period, the
employment of Executive hereunder shall be deemed to be terminated as of the
date of Executive's death.
(d) Termination for Cause. The Company may terminate the employment of
Executive hereunder at any time during the Employment Period for Cause (as
defined in Section 4(j)(ii)) effective upon written notice to Executive of such
termination and after expiration of any applicable cure period. Any such notice
of termination shall provide sufficient detail so as to
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enable Executive to determine the subsection of Section 4(j)(ii) relied upon by
the Company in terminating this Agreement for Cause.
(e) Termination without Good Reason. Executive may terminate his
employment hereunder, upon not less than 180 days' prior written notice to the
Company.
(f) Termination for Good Reason. The Executive may terminate his
employment with the Company for Good Reason (as defined in Section 4(j)(iii)).
Any such notice of termination shall specify the acts or omissions of the
Company in sufficient detail so as to enable the Company to determine the
provision of Section 4(j)(iii) relied upon by the Executive in terminating his
employment with the Company for Good Reason.
11. Effect of Termination.
(a) In the event Executive's employment with the Company has been
terminated by the Company without Cause or is terminated by Executive for Good
Reason, Executive shall be entitled to the following:
(i) the Executive's Base Salary provided for in Section 3 until June
30, 2006;
(ii) payment for all accrued, unused vacations and other personal
holidays as described in Section 9;
(iii) reimbursement for expenses for which Executive has not yet
been reimbursed, as provided in Section 8;
(iv) all vested benefits provided in Section 9 or as otherwise
required by applicable law;
(v) if not yet paid, any payments, grants or issuances due Executive
pursuant to Sections 4 and 5;
(vi) the Performance Bonus, Warrant and Options determined in
accordance with, and to the extent, if any, provided in, Sections 4 and 5; and
(vii) if Section 6 is applicable, the amounts payable pursuant
thereto.
(b) In the event the Executive's employment with the Company has been
terminated by Executive's death or Disability, by Executive without Good Reason
or by the Company for Cause, Executive (or Executive's heirs, beneficiaries or
representatives) shall be entitled to the following:
(i) the unpaid portion of Executive's Base Salary provided for in
Section 3, computed on a pro rata basis to the date of termination;
(ii) payment for all accrued, unused vacations and other personal
holidays as described in Section 9;
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(iii) reimbursement for expenses for which Executive has not yet
been reimbursed, as provided in Section 8;
(iv) all vested benefits provided in Section 9 or as otherwise
required by applicable law;
(v) if not yet paid, any payments, grants or issuances due Executive
pursuant to Sections 4 and 5; and
(vi) the Performance Bonus, Warrant and Options determined in
accordance with Sections 4 and 5.
(c) Executive shall have no duty or obligation to mitigate and, except
as expressly set forth in this Section 11(c), the Company shall have no right of
set-off against or to withhold or reduce any amounts payable or options or
shares issuable to Executive under this Agreement. Notwithstanding the
foregoing, in the event Executive terminates his employment without Good Reason,
any sign-on bonus Executive may receive from a subsequent employer attributable
to services performed or to be performed for the subsequent employer during the
period between the effective date of the termination of employment and June 30,
2006 shall reduce the amount of any performance period bonus owed to Executive
pursuant to Section 4(d) above.
12. Non-Disclosure
(a) Executive shall not at any time during the Employment Period, or
thereafter, except in the good faith performance of Executive's duties
hereunder, use or disclose, directly or indirectly, for Executive's own behalf
or to any third person, any confidential or proprietary information
("CONFIDENTIAL INFORMATION"); and
(b) Executive shall return promptly on the termination of Executive's
employment for whatever reason (or in the event of Executive's death,
Executive's estate shall return) to the Company at its direction and expense any
and all copies of records, drawings, writings, computer disks, materials,
memoranda and other data pertaining to such Confidential Information (whatever
the storage medium, including but not limited to, electronic forms).
(c) Confidential Information shall not include (i) information that is
in the public domain through no fault of Executive, (ii) information published
or disseminated by the Company in the ordinary course of business without
restriction, (iii) information received from a third party not under an
obligation to keep such information confidential and without breach of this
Agreement by Executive, (iv) information developed independently by Executive
without reference to or use of any Confidential Information or (v) information
required to be disclosed by law or pursuant to any legal, administrative or
regulatory proceeding, action or investigation.
13. Miscellaneous.
(a) Absence of Conflict. Executive represents and warrants that his
employment by the Company, and the performance of his obligations as described
herein, shall not conflict with, and will not be constrained by, any prior
employment or consulting agreement
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or relationship, and that any limitations on Executive's ability to perform as
provided hereunder and as contemplated by the parties have been disclosed in
writing to the Company.
(b) Assignment. This Agreement, and all rights and obligations under
this Agreement, shall be binding upon and inure to the benefit of and be
enforceable by the parties hereto and their respective heirs, successors,
executors and administrators.
(c) Notices. For purposes of this Agreement, notices and other
communications provided for herein (each a "NOTICE"), shall be in writing and
shall be delivered personally or sent by United States certified mail, return
receipt requested, postage prepaid, addressed to each party's last known
address, or to such other address, or to the attention of such other persons, as
the recipient party has previously furnished to the other party in writing in
accordance with this paragraph. Such Notice shall be effective upon delivery, or
three days after it has been mailed as provided above, whichever occurs first.
(d) Integration. This Agreement and its EXHIBIT A represent the entire
agreement and understanding between the parties as to the subject matter hereof,
and supersede all prior or contemporaneous agreements, whether written or oral,
including, without limitation, all agreements and understandings between the
Company and External Affairs, LLC. Notwithstanding the foregoing, this Agreement
does not supersede any rights or benefits Executive may have accrued or vested
prior to the execution of this Agreement. No waiver, alteration, or modification
of any of the provisions of this Agreement or its EXHIBIT A shall be binding
unless in writing and signed by Executive and by an authorized member or
representative of the Board.
(e) Waiver. Failure or delay on the part of either party hereto to
enforce any right, power or privilege hereunder shall not be deemed to
constitute a waiver thereof. Additionally, a waiver by either party of a breach
of any promise herein by the other party shall not operate as, or be construed
to constitute, a waiver of any subsequent breach by such other party.
(f) Severability. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law. However, if any provision of this Agreement is held to be invalid, illegal
or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision, but this Agreement will be reformed, construed and enforced
in such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.
(g) Attorneys' Fees. In the event of any dispute, claim, case or
controversy arising under or relating to this Agreement (including enforcing
judgments and appeals), each party shall pay its or his own expenses, except (1)
in the case where Executive is the prevailing party, Executive shall be entitled
to reimbursement of his reasonable attorneys' fees and costs of suit, in
addition to such other relief as may be granted and (2) the Company shall
reimburse Executive for all of his reasonable legal and other professional
services fees and expenses related to the negotiation and execution of this
Agreement; provided, however, that the Company's reimbursement obligation shall
be limited to $5,000.
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(h) Headings. The headings of the paragraphs contained in this
Agreement are for reference purposes only, and shall not in any way affect the
meaning or interpretation of any provision of this Agreement.
(i) Applicable Law. This Agreement shall be governed by and construed
in accordance with the internal substantive laws, and not the choice of law
rules, of the State of New York.
(j) Dispute Resolution.
(i) Except as otherwise expressly provided herein, Executive and the
Company agree that any and all disputes between the Company and Executive, which
relate to, arise out of or pertain to Executive's employment, separation from
employment or the construction or interpretation of this Agreement shall be
submitted to and resolved by final and binding arbitration. The arbitration
shall be instead of any civil litigation. Executive and the Company acknowledge
and agree that each is expressly waiving any rights to a jury trial. Executive
and the Company expressly understand and agree that consistent with the
foregoing, no party to this Agreement shall institute a proceeding in any court
or administrative agency to resolve a dispute arising under or in connection
with this Agreement. Notwithstanding the foregoing, claims for unemployment
insurance benefits, for workers' compensation insurance benefits, and for
benefits under any ERISA-governed employee benefit plan(s), shall be resolved
pursuant to the claims procedures under such benefit plans.
(ii) All disputes between the parties that cannot be resolved within
two weeks after a demand for direct negotiation between the parties shall be
settled exclusively by binding arbitration in New York City, New York under the
National Rules for the Resolution of Employment Disputes of the American
Arbitration Association (the "AAA Rules") before a panel of three (3) neutral
arbitrators selected in accordance with the applicable rules. The arbitrators
shall award the prevailing party its attorney's fees, arbitration costs, expert
fees, and all other costs and expenses incurred in connection with the
arbitration, including any fees and costs incurred in confirming and enforcing
the award. Executive and the Company expressly understand and agree that any
limitations in the AAA Rules excluding statutory discrimination shall not apply
and that it is the parties' desire to include statutory discrimination claims
within the scope of arbitration. A decision in arbitration shall be final and
binding.
(iii) Judgment may be entered on the arbitrators' award in any court
having jurisdiction. The arbitration filing fee expenses shall be borne
according to the AAA Rules; provided that if and only if the arbitration
involves statutory discrimination claims, the Company shall pay all types of
costs that are unique to arbitration, such as the arbitrator's fees.
(k) Counterparts. This Agreement may be executed in one or more
counterparts, none of which need contain the signature of more than one party
hereto, and each of which shall be deemed to be an original, and all of which
together shall constitute a single agreement.
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IN WITNESS WHEREOF, each of the parties has executed this
Agreement, in the case of the Company by its duly authorized officer, as of the
day and year first above written.
RAMP CORPORATION
By: _________________________________ ___________________________
Name: Xxxxxxxx X. Xxxxx Xxxxxx Xxxxx
Title: Executive Vice President,
Chief Financial Officer and
Secretary
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EXHIBIT A
---------
INDEMNIFICATION AGREEMENT
This Indemnification Agreement ("INDEMNIFICATION AGREEMENT") is made as
of the 1st day of June, 2004, by and between Ramp Corporation, a Delaware
corporation (the "Company") and Xxxxxx Xxxxx (the "INDEMNITEE").
WHEREAS, the Company recognizes the Indemnitee's need for substantial
protection against personal liability in order to enhance Indemnitee's continued
effective service to the Company, and in order to induce Indemnitee to continue
provide services to the Company; and
WHEREAS, the Company wishes to provide this Agreement for
indemnification of and the advancing of expenses to Indemnitee to the fullest
extent (whether partial or complete) permitted by law and as set forth in this
Agreement;
NOW THEREFORE, the Company and the Indemnitee agree as follows:
1. The Company agrees that if the Indemnitee is made a party, or is
threatened to be made a party, to any action, suit or proceeding, whether civil,
criminal, administrative or investigative (a "PROCEEDING"), by reason of the
fact that he is or was a director, officer, employee or consultant (including,
but not limited to, any entity through which Indemnitee provided consulting
services, hereinafter collectively referred to as "CONSULTANT")) of the Company
or is or was serving at the request of the Company as a director, officer,
employee, Consultant, agent, trustee, fiduciary or administration of another
corporation, partnership, joint venture, trust or other enterprise, whether or
not the basis of such Proceeding is the Indemnitee's alleged action or inaction
in an official capacity while serving as a director, officer, employee,
Consultant, agent, trustee, fiduciary or administrator, the Indemnitee shall be
indemnified and held harmless by the Company to the fullest extent permitted or
authorized by the Company's Restated Certificate of Incorporation or By-laws or
by-laws or, if greater, by the laws of the State of Delaware, against all cost,
expense, liability and loss (including, without limitation, attorney's fees,
judgments, fines, excise taxes or penalties and amounts paid or to be paid in
settlement) (collectively "EXPENSES") reasonably incurred or suffered by the
Indemnitee in connection therewith (including but not limited to any
investigation, defense or appeal), and such indemnification shall continue as to
the Indemnitee even if he has ceases to be a director, officer, employee or
Consultant of Company or a director, officer, employee, Consultant, agent,
trustee, fiduciary or administration of another entity shall inure to the
benefit of the Indemnitee's heirs, executors and administrators. The
Indemnitee's entitlement to Expenses shall include those incurred in connection
with any proceeding seeking any adjudication under this Indemnification
Agreement.
2. The Company shall advance to the Indemnitee to the fullest extent
permitted by law all reasonable costs and expenses incurred by him in connection
with a
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Proceeding within 30 days after receipt by the Company of a written request from
the Indemnitee, with appropriate documentation, for such advance. Such request
shall include an undertaking by Indemnitee to repay the amount of such advance
if it shall ultimately be determined that he is not entitled to be indemnified
against such costs and expenses.
3. Promptly after receipt by the Indemnitee of notice of any claim or
the commencement of any Proceeding with respect to which the Indemnitee is
entitled to indemnity hereunder, the Indemnitee shall notify the Company in
writing of such claim or the commencement of such action or proceeding, and the
Company shall (i) assume the defense of such Proceeding, (ii) employ counsel
reasonably satisfactory to the Indemnitee and (iii) pay the reasonable fees and
expenses of such counsel. Notwithstanding the preceding sentence, the
Indemnitee, at his own expense, shall have the right to participate in the
defense and to employ counsel separate from counsel for the Company and from any
other party in such action; provided, however, if the Indemnitee reasonably
determines that a conflict of interest exists which makes representation by
counsel chosen by the Company not advisable or if the Company fails to employ
counsel to assume the defense of such Proceeding and to take steps to defend
diligently all claims against the Indemnitee, the reasonable fees and
disbursements of such separate counsel for the Indemnitee shall be paid by the
Company to the extent permitted by law. In addition, the Indemnitee shall give
the Company such information and cooperation with regard to such Proceeding as
it may reasonably require and as shall be in the Indemnitee's power.
4. The Company shall not be required to indemnify the Indemnitee
against settlements entered into without the consent of the Company. The Company
shall not settle any Proceeding in any manner that would impose any penalty,
fines, damages, limitation or admission on the Indemnitee without the
Indemnitee's written consent. Neither the Company nor the Indemnitee shall
unreasonably withhold its or his consent to any proposed settlement, which would
result in a general release of all claims against such party.
5. If the Indemnitee is entitled under any provision of this Agreement
to indemnification by the Company for some or a portion of the Expenses, but
not, however, for the total amount thereof, the Company shall nevertheless
indemnify Indemnitee for the portion thereof to which the Indemnitee is
entitled. Both the Company and the Indemnitee acknowledge that in certain
instances, federal or state law or applicable public policy may prohibit the
Company from indemnifying the Indemnitee under this Agreement or otherwise.
6. If the Indemnitee has not received full indemnification within 30
days after making a written demand on the Company for indemnification, the
Indemnitee shall have the right to enforce his indemnification rights under this
Agreement by commencing litigation in any court in the State of New York having
subject matter jurisdiction thereof and in which venue is proper seeking an
initial determination by the court. The Company hereby consents to service of
process and to appear in any such proceeding. The remedy provided for in this
Section 6 shall be in addition to any other remedies available to the Indemnitee
in law or equity.
7. It shall be a defense to any action brought by the Indemnitee
against the Company to enforce this Agreement for Expenses incurred in defending
a Proceeding in advance
- 2 -
of its final disposition that it is not permissible under applicable law or
under this Agreement for the Company to indemnify the Indemnitee for the amount
claimed as determined by a court of competent jurisdiction. In connection with
any such action or any determination by the Company as to whether the Indemnitee
is entitled to be indemnified hereunder, the burden of proving such a defense or
determination shall be on the Company. Neither the failure of the Company
(including its Board, independent legal counsel, or its stockholders) to have
made a determination prior to the commencement of such action by the Indemnitee
that indemnification of the claimant is proper under the circumstances because
he has met the standard of conduct set forth in applicable law, nor an actual
determination by the Company (including its Board, independent legal counsel, or
its stockholders) that the Indemnitee had not met such applicable standard of
conduct, shall be a defense to the action or create a presumption that the
Indemnitee has not met the applicable standard of conduct. For purposes of this
Agreement, the termination of any claim, action, suit, or proceeding, by
judgment, order, settlement (whether with or without court approval),
conviction, or upon a plea of nolo contendere, or its equivalent, shall not
create a presumption that the Indemnitee did not meet any particular standard of
conduct or have any particular belief or that a court has determined that
indemnification is not permitted by applicable law.
8. The Company shall indemnify the Indemnitee against any and all
Expenses that are incurred by the Indemnitee in connection with any action
brought by the Indemnitee for (i) indemnification of Expenses by the Company
under this Agreement or any other agreement or under applicable law or the
Company's Restated Certificate of Incorporation or By-laws now or hereafter in
effect; and/or (ii) recovery under directors' and officers' liability insurance
policies maintained by the Company, but only in the event that the Indemnitee
ultimately is determined to be entitled to such indemnification or insurance
recovery, as the case may be. In addition, the Company shall, if so requested by
the Indemnitee, advance the foregoing Expenses to the Indemnitee.
9. The rights of the Indemnitee hereunder shall be in addition to any
other rights the Indemnitee may have under the Company's Restated Certificate of
Incorporation, By-laws, applicable law, or otherwise. To the extent that a
change in applicable law (whether by statute or judicial decision) permits
greater indemnification by agreement than would be afforded currently under the
Company's Restated Certificate of Incorporation, By-laws, applicable law, or
this Agreement, it is the intent of the parties that the Indemnitee enjoy by
this Agreement the greater benefits so afforded by such change. The
indemnification rights afforded to the Indemnitee under this Agreement are
contract rights and may not be diminished, eliminated or otherwise affected by
amendments to the Restated Certificate of Incorporation or By-Laws of the
Company or by other agreements.
10. To the extent the Company maintains an insurance policy or policies
providing directors' and officers' and/or fiduciaries' liability insurance,
Indemnitee shall be covered by such policy or policies, in accordance with its
or their terms, to the maximum extent of the coverage available for any Company
director or officer.
11. This Agreement shall be deemed to have been in effect during all
periods that the Indemnitee was an officer, director, employee or Consultant of
the Company or, at the
- 3 -
Company's request, a director, officer, employee, agent, trustee, fiduciary or
administrator of another entity, regardless of the date of this Agreement.
12. No supplement, modification, or amendment of this Agreement shall
be binding unless executed in writing by both of the parties hereto. No waiver
of any of the provisions of this Agreement shall be binding unless in the form
of a writing signed by the party against whom enforcement of the waiver is
sought, and no such waiver shall operate as a waiver of any other provisions
hereof (whether or not similar), nor shall such waiver constitute a continuing
waiver. Except as specifically provided herein, no failure to exercise or any
delay in exercising any right or remedy hereunder shall constitute a waiver
thereof.
13. In the event of payment under this Agreement, the Company shall be
subrogated to the extent of such payment to all of the rights of recovery of the
Indemnitee, who shall execute all papers reasonably required and shall do
everything that may be reasonably necessary to secure such rights, including the
execution of such documents necessary to enable the Company effectively to bring
suit to enforce such rights.
14. The Company shall not be liable under this Agreement to make any
payment in connection with any claim made against the Indemnitee to the extent
the Indemnitee has otherwise received payment (under any insurance policy,
By-law, or otherwise) of all amounts otherwise indemnifiable hereunder with
respect to such claim.
15. This Agreement shall be binding upon and inure to the benefit of
and be enforceable by the parties hereto and their respective successors
(including any direct or indirect successor by purchase, merger, consolidation,
or otherwise to all or substantially all of the business and/or assets of the
Company), assigns, spouses, heirs, and personal and legal representatives. The
Company shall require and cause any successor (whether direct or indirect by
purchase, merger, consolidation, or otherwise) to all, substantially all, or a
substantial part, of the business and/or assets of the Company, by written
agreement in form and substance satisfactory to the Indemnitee, expressly to
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform if no such succession had
taken place. The indemnification provided under this Agreement shall continue as
to the Indemnitee for any action taken or not taken while serving in an
indemnified capacity even though he may have ceased to serve in such capacity at
the time of any Proceeding.
16. If any provision (or portion thereof) of this Agreement shall be
held by a court of competent jurisdiction to be invalid, void, or otherwise
unenforceable, the remaining provisions shall remain enforceable to the fullest
extent permitted by law. Furthermore, to the fullest extent possible, the
provisions of this Agreement (including, without limitation, each portion of
this Agreement containing a provision held to be invalid, void, or otherwise
unenforceable that is not itself invalid, void, or unenforceable) shall be
construed so as to give effect to the intent manifested by the provision held
invalid, void, or unenforceable.
17. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware applicable to contracts made
and to be performed in such State without giving effect to the principles of
conflicts of laws.
- 4 -
18. This Agreement may be executed in one or more counterparts, all of
which shall be deemed to constitute one and the same instrument.
19. All notices, demands, and other communications required or
permitted hereunder shall be made in writing and shall be deemed to have been
duly given if delivered by hand, against receipt, or mailed, postage prepaid,
certified or registered mail, return receipt requested, and addressed as
follows:
IF TO THE COMPANY, TO:
Ramp Corporation
00 Xxxxxx Xxxx
0xx Xxxxx
Xxx Xxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attention: Secretary
WITH A COPY TO:
Xxxxxx Xxxxxxxx Frome Xxxxxxxxxx & Xxxxxxx LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxxxx, Esq.
Phone: (000) 000-0000
Fax: (000) 000-0000
IF TO THE INDEMNITEE, TO:
Xxxxxx Xxxxx
00 Xxxxx Xxxxxx
Xxx. 0X
Xxx Xxxx, Xxx Xxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Notice of change of address shall be effective only when done in
accordance with this Section. All notices complying with this Section shall be
deemed to have been received on the earlier of the date of delivery or on the
third business day after mailing.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and signed as of the day and year first above written.
- 5 -
RAMP CORPORATION
By:_________________________________
Name: Xxxxxxxx X. Xxxxx
Title: Executive Vice President,
Chief Financial Officer and Secretary
___________________________________
Xxxxxx Xxxxx
- 6 -
