EXHIBIT 10.3
XXXXXXXXXXXXXX.XXX, INC.
00 Xxxx Xxxx
Xxxxxxxxxx, XX 00000
January 24, 2000
Xxxxxxxx Xxxxxxxxx
Dear Sir:
This letter will confirm your employment agreement with XxxxxxxxXxxxxx.xxx,
Inc. ("SupplierMarket", which term shall where appropriate include any
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affiliates of SupplierMarket for which you perform services) under the terms and
conditions that follow. This letter agreement supersedes the Key Employee
Agreement dated as of June 28, 1999 between SupplierMarket and you. In
addition, in connection with the execution of this agreement, you and
SupplierMarket will execute an Amended and Restated Stock Restriction Agreement
dated as of January 24, 2000 (the "Amended Stock Restriction Agreement") which
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will supersede the Stock Restriction Agreement dated June 28, 1999.
1. Position and Duties.
a. Effective as of the date hereof, you will be employed by
SupplierMarket, on a full-time basis as its Executive Vice President or such
other more senior position as determined by SupplierMarket's Board of Directors
(the "Board"). You will directly report to the Board or SupplierMarket's Chief
Executive Officer (the "CEO"), if someone is appointed to that position other
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than you or Xxxx Xxxxxx.
b. You agree to perform the duties of your position and such other
duties as may reasonably be assigned to you from time to time. You also agree
that, while employed by SupplierMarket, you will devote your full business time
and your best efforts, business judgment, skill and knowledge exclusively to the
advancement of the business and interests of SupplierMarket and to the discharge
of your duties and responsibilities to them. You further agree not to engage in
any other business activity or serve in any industry, trade, professional,
governmental or academic position during your employment with SupplierMarket
that materially interferes with your ability to discharge your duties and
responsibilities to SupplierMarket, without first receiving the express written
approval of the Board or the CEO or his or her designee.
2. Compensation and Benefits. During your employment, as compensation
for all services performed by you for SupplierMarket and subject to your
performance of your duties and obligations, SupplierMarket will provide you the
following pay and benefits:
a. Base Salary. SupplierMarket will pay you a base salary at the
rate of $150,000 per year, payable in accordance with the regular payroll
practices of SupplierMarket and subject to adjustment from time to time by the
Board in its discretion.
b. Bonus Compensation. During each year of your employment, you
will be eligible to earn a bonus in accordance with a bonus plan established by
the Board.
c. Participation in Employee Benefit Plans. You will be entitled to
participate in all employee benefit plans from time to time in effect for
employees of SupplierMarket generally, except to the extent such plans are
duplicative of benefits otherwise provided to you under this agreement. Your
participation will be subject to (i) the terms of the applicable plan documents,
(ii) generally applicable Company policies and (iii) the discretion of the Board
or any administrative or other committee provided for in or contemplated by such
plan, as each is in effect from time to time.
d. Vacations. You will be entitled to earn up to four weeks of
vacation per year, in addition to holidays observed by SupplierMarket. Vacation
may be taken at such times and intervals as you shall determine, subject to the
business needs of SupplierMarket and the prior approval of the CEO. Vacation
time may not be carried forward from one year to the next.
e. Business Expenses. SupplierMarket will pay or reimburse you for
all reasonable business expenses incurred or paid by you in the performance of
your duties and responsibilities for SupplierMarket, subject to any maximum
annual limit and other restrictions on such expenses set by the Board and
subject to your providing such reasonable substantiation and documentation as
may be specified by SupplierMarket from time to time.
3. Confidential Information and Restricted Activities.
a. Confidential Information. During and after your employment with
SupplierMarket, you will hold in confidence and not use, disclose or allow
disclosure of Confidential Information (as defined below) except in the proper
performance of your duties to SupplierMarket. Upon termination of your
employment, you will immediately deliver to SupplierMarket all Confidential
Materials and destroy all electronic embodiments of Confidential Information.
b. Ownership of Work Product and Intellectual Property.
(i) You are performing services and creating Work Product
hereunder at the instance of SupplierMarket. It is therefore the parties'
intention that SupplierMarket is to own exclusively all rights and economic
interests in the Work Product and all Intellectual Property embodied therein or
related thereto, including without limitation any invention or discovery made or
reduced to practice in the process of performing the services. This agreement is
to be construed to the maximum extent possible to produce the foregoing result,
including but not limited to the construction of any ambiguities so as to
achieve said result.
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(ii) Accordingly, you agree as follows:
(A) All tangible Work Product which is a copyrightable work of
authorship will be deemed a work made for hire owned by
SupplierMarket under United States copyright laws; if an
invention, Work Product is deemed to be owned by
SupplierMarket upon creation.
(B) You will make reasonable efforts to maintain adequate and
current written records of all Work Product, which shall be
available to and remain the property of SupplierMarket at
all times.
(C) You shall promptly and fully disclose in writing to
SupplierMarket all Trade Secrets, including without
limitation inventions and works of authorship, which are
related to the business activities of SupplierMarket
authorized, conceived, created or reduced to practice by you
(whether alone or jointly with others, whether during or
outside the hours you are providing services, and whether or
not by the use of SupplierMarket's equipment or other
resources) during the term of this agreement or within six
months thereafter, whether or not patentable or
copyrightable.
(D) You hereby assign irrevocably and unconditionally, to the
fullest extent permitted by law under any interpretation of
the relationship between the parties, all right, title and
interest (including without limitation all Intellectual
Property rights) embodied in or associated with the Work
Product which are related to the business activities of
SupplierMarket and are authorized, conceived, created or
reduced to practice by you during the term of this agreement
or which result within six months thereafter from
Confidential Information disclosed by SupplierMarket.
(E) Promptly upon request by SupplierMarket and at
SupplierMarket's expense, you shall execute and deliver to
SupplierMarket all applications, assignments, agreements and
other instruments and take such reasonable actions as
SupplierMarket may deem helpful to fully vest the foregoing
rights in SupplierMarket or to evidence such vesting. If
SupplierMarket is unable, after reasonable effort, to secure
your signature on any patent application, copyright
registration or other similar document, you hereby
irrevocably designate and
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appoint SupplierMarket and its duly authorized
representatives as your agent and attorney-in-fact to
execute and file any such application or registration and to
do all other lawfully permitted acts to further the
prosecution and issuance of letters patent, copyright
registration and other forms of intellectual property
protection with the same legal force and effect as if
executed by you.
(F) You hereby waive in favor of SupplierMarket and its assigns
and licensees any and all artist's or moral rights you may
have pursuant to any state, provincial or federal laws or
statutes of the United States in respect of any Work
Product, and all similar rights under the laws of all
jurisdictions.
c. Publication. During your employment, you will not publish
anything relating to SupplierMarket's area of business (including without
limitation Inventions and Work Product) without its prior written consent, which
shall not be unreasonably held.
d. Covenants Regarding Employees and Customers. For a period of two
years after the termination of your employment with SupplierMarket for any
reason, you will not:
(i) recruit or solicit, offer employment to, or employ any
person who was an employee or independent contractor of SupplierMarket on or
within six months before the termination of your employment;
(ii) work for, or solicit or accept business from, any person
or entity that was a customer of SupplierMarket on or within six months before
the date of termination of your employment; or
(iii) compete with SupplierMarket directly or indirectly
anywhere in the United States or anywhere else that SupplierMarket offers its
services in the development, marketing, sale or distribution of an Internet-
based business engage in (A) matching potential buyers and sellers of custom or
semi-custom manufactured products, or (B) any other business engaged in by
SupplierMarket at the time of your termination, or contemplated as part of
SupplierMarket's business plan at the time of your termination. You will not
engage in the actions prohibited in clauses (A) or (B) directly or indirectly,
or by being associated with any person or entity as customer, partner, employee,
agent, consultant, director, officer, stockholder (other than as the owner of
less than 2% of the outstanding stock of a publicly-traded corporation) or in
any other capacity or manner whatever.
e. Specific Performance. In signing this agreement, you give
SupplierMarket assurance that you have carefully read and considered all the
terms and conditions of this agreement, including the restraints imposed on you
under this Section 3. You agree without reservation that these restraints are
necessary for the reasonable and proper protection of
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SupplierMarket. You further agree that, were you to breach any of the covenants
contained in this Section 3, the damage to SupplierMarket and its affiliates
would be irreparable. You therefore agree that SupplierMarket, in addition to
any other remedies available to it, shall be entitled to preliminary and
permanent injunctive relief against any breach or threatened breach by you of
any of those covenants, without having to post bond, and that you will not take,
and you will not permit anyone else to take on your behalf, any position in a
court or any other forum inconsistent with any of your covenants and agreements
herein.
4. Termination of Employment. Unless your employment is terminated
earlier pursuant to this Section 4, the initial term (the "Initial Term") of
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your employment under the terms of this agreement shall continue until January
24, 2003. After the Initial Term, this agreement shall be automatically
extended for successive one year periods unless terminated earlier in accordance
with its terms. Notwithstanding the foregoing, it is expressly understood and
agreed that your employment may be terminated by SupplierMarket in accordance
with the procedures set forth below regardless of when such termination may
occur during the Initial Term or any successive term.
a. By SupplierMarket
(i) SupplierMarket may terminate your employment at any time,
other than for Cause, upon 30 days notice to you.
(ii) SupplierMarket may terminate your employment for Cause
upon notice to you setting forth in reasonable detail the nature of the Cause.
The following, as determined by SupplierMarket in its reasonable judgment, shall
constitute Cause for termination: (A) the commission by you of any embezzlement
or other deliberate and premeditated act of dishonesty against the financial or
business interests of SupplierMarket; (B) the habitual drug addiction or
intoxification of you; (C) the conviction of you, or the pleading by you, of
nolo contendere to, a felony; (D) the willful failure or refusal of you to carry
out your duties or to follow reasonable directives of the Board, which failure
or refusal is not cured within 30 days subsequent to written notice from
SupplierMarket to you; or (E) the material breach by you of this Agreement or
the Amended Stock Restriction Agreement.
b. By the Executive.
(i) You may terminate your employment at any time, other than
for Good Reason, upon 30 days' notice to SupplierMarket.
(ii) You may terminate your employment for Good Reason upon
notice to SupplierMarket setting forth in reasonable detail the nature of the
Good Reason. The following shall constitute Good Reason for termination: (A) a
material diminution in your responsibilities, duties or authority, which shall
include but not be limited to the demotion of you below the level of Executive
Vice President, to which you have not consented and which remains unremedied for
10 days after the receipt by the Board of written notice thereof from you (it
being understood that SupplierMarket's demotion of you from the position of CEO
as a
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result of the hiring of another CEO shall not by itself be considered a
"material diminution" in your responsibilities); (B) any other action taken in
bad faith by SupplierMarket for the purpose of interfering with the performance
of your responsibilities, if such action in fact materially and adversely
affects the performance of such responsibilities, and which remains unremedied
for 10 days after the receipt by the Board of written notice thereof from you;
(C) the relocation of you by SupplierMarket outside SupplierMarket's main office
without your written consent; or (D) a decrease in your compensation without
your written consent.
c. By Reason of Death or Disability. This agreement shall
automatically terminate in the event of your death during employment. In the
event you become disabled during employment and, as a result, are unable to
continue to perform substantially all of your duties and responsibilities under
this agreement, SupplierMarket will continue to pay you your base salary and to
provide you benefits in accordance with Section 2c above for up to 12 weeks of
disability during any period of 365 consecutive calendar days. If you are
unable to return to work after 12 weeks of disability, SupplierMarket may
terminate your employment, upon notice to you. If any question shall arise as
to whether you are disabled to the extent that you are unable to perform
substantially all of your duties and responsibilities for SupplierMarket, you
shall, at SupplierMarket's request, submit to a medical examination by a
physician selected by SupplierMarket to whom you or your guardian, if any, has
no reasonable objection to determine whether you are so disabled and such
determination shall for the purposes of this agreement be conclusive of the
issue. If such a question arises and you fail to submit to the requested
medical examination, SupplierMarket's determination of the issue shall be
binding on you.
d. By Reason of Retirement. This agreement shall automatically
terminate in the event of your retirement, whether such retirement is initiated
by you or is required by SupplierMarket in accordance with Section 12(c)(1) of
the Age Discrimination in Employment Act of 1967, as amended, or any successor
law, and any applicable state statute.
5. Severance Payments and Other Matters Related to Termination.
a. Other than for Cause or with Good Reason. In the event of
termination of your employment by SupplierMarket other than for Cause or your
termination of your employment for Good Reason in accordance with Section 4b,
SupplierMarket will continue to pay you your base salary until the conclusion of
a period of 12 months following the date of termination. SupplierMarket will
also pay you on the date of termination any base salary earned but not paid
through the date of termination and pay for any vacation time accrued but not
used to that date. In addition, SupplierMarket will pay you any bonus to which
you are entitled in accordance with Section 2b above, prorated to the date of
termination and payable at the time such bonuses are payable to Company
executives generally. In addition, you will receive 12 month's of accelerated
vesting (i) in accordance with the Amended Stock Restriction Agreement, of any
shares of restricted stock that do not constitute, as of the date of
termination, "Vested Shares" as defined in the Amended Stock Restriction
Agreement and (ii) of any unvested stock options granted to you by
SupplierMarket after the date hereof.
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b. For Cause or Without Good Reason. In the event of termination of
your employment by SupplierMarket for Cause or your termination of your
employment other than for Good Reason, SupplierMarket will pay you any base
salary earned but not paid through the date of termination and pay for any
vacation time accrued but not used to that date. SupplierMarket shall have no
obligation to you for bonus or severance payments. As in the case of any other
termination, your obligations under Section 3 will remain in full force and
effect in accordance with their terms.
c. Retirement. In the event of your retirement, SupplierMarket will
pay you any base salary earned but not paid through the date of termination and
pay for any vacation time accrued but not used to that date. In addition,
SupplierMarket will pay you any bonus to which you are entitled in accordance
with Section 2b above, prorated to the date of termination and payable at the
time such bonuses are payable to Company executives generally. SupplierMarket
shall have no obligation to you for severance payments. As in the case of any
other termination, your obligations under Section 3 will remain in full force
and effect in accordance with their terms.
d. Employee Release. Any obligation of SupplierMarket to provide
you severance pay or bonus payments under any provision of this Section 5 is
conditioned upon your signing a release of claims in the form attached hereto as
"Annex A" (the "Employee Release") within 21 days of the date on which you give
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or receive, as applicable, notice of termination of your employment and upon
your not revoking the Employee Release thereafter. All severance payments under
this Section 5 will be in the form of salary continuation, payable in accordance
with the normal payroll practices of SupplierMarket, and will begin at
SupplierMarket's next regular payroll period following the effective date of the
Employee Release, but shall be retroactive to the date of termination.
Notwithstanding anything else contained in this agreement, no bonus payment will
be due and payable under any provision of this Section 5 until the next regular
Company payday following the effective date of the Employee Release. Payment by
SupplierMarket of any severance pay and other payments due you under the
applicable provision of this Section 5 shall constitute the entire obligation of
SupplierMarket to you. Except for any right you may have under the federal law
known as "COBRA" to continue participation in SupplierMarket's group health plan
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at your cost, benefits shall terminate in accordance with the terms of the
applicable benefit plans based on the date of termination of your employment,
without regard to any continuation of base salary or other payment to you
following termination.
e. Survival. Provisions of this agreement shall survive any
termination if so provided in this agreement or if necessary or desirable to
accomplish the purpose of other surviving provisions, including without
limitation your obligations under Section 3 of this agreement. The obligation
of SupplierMarket to make payments to you under this Section 5 is expressly
conditioned upon your continued full performance of obligations under Section 3
hereof. Upon termination by either you or SupplierMarket, all rights, duties
and obligations of you and SupplierMarket to each other shall cease, except as
otherwise expressly provided in this agreement.
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6. Definitions. For purposes of this agreement, the following definitions
apply:
"Confidential Information" means Trade Secrets and other information
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of SupplierMarket identified as confidential and all Work Product, whether
disclosed in tangible form (including without limitation written documents,
photographs, drawings, models, prototypes, samples, and magnetic and/or
electronic media), or orally or visually or in other non-tangible form
(including without limitation presentations, displays or inspections of tangible
media or facilities). Confidential Information shall also include information
received by SupplierMarket from third parties under an obligation of
confidentiality. Confidential Information does not include information which:
(i) was known to you prior to disclosure by SupplierMarket; (ii) is or becomes
public knowledge without breach of this agreement; or (iii) is received by you
from a third party without any violation of any obligation of confidentiality
and without confidentiality restrictions; or (iv) is independently developed by
you without use of or reference to Confidential Information.
"Confidential Materials" means tangible objects, materials or media in
----------------------
which Confidential Information is embodied, including all copies, excerpts,
modifications, translations, enhancements and adaptations of the foregoing.
"Intellectual Property" means all rights of every nature relating to
---------------------
intellectual property, including without limitation (i) all United States and
foreign patents and patent applications now or hereafter filed (including
continuations, continuations-in-part, divisionals, reissues, reexaminations and
foreign counterparts thereof), and all rights with respect thereto, (ii) all
Trade Secrets, (iii) all United States and foreign semiconductor mask work
rights and registrations for such rights, and (iv) all copyrights and renewals
thereof and other rights relating to literary or artistic works and data
compilations (including without limitation author's and moral rights and rights
of publicity and privacy).
"Trade Secrets" means all trade secrets under the laws of any
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jurisdiction, including but not limited to ideas, inventions, discoveries,
developments, designs, improvements, prototypes, know-how, methods, processes,
techniques, product specification and performance data, computer programs, and
other data, in each case whether or not patentable, copyrightable or within any
particular definition of trade secret; unpublished proprietary information
relating to SupplierMarket's Intellectual Property; and business, marketing,
sales, research, development, manufacturing, production and other plans and
strategies; forecasts; financial statements, budgets and projections, licenses,
prices and costs; customer and supplier lists and terms of customer and supplier
contracts; personnel information; compilations of such information; and the
existence and terms of this agreement. Your Work Product is a Trade Secret of
SupplierMarket.
"Work Product" means the direct or indirect results of any services
------------
rendered for SupplierMarket by you.
7. Conflicting Agreements. You hereby represent and warrant that your
signing of this agreement and the performance of your obligations under it will
not breach or be in
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conflict with any other agreement to which you are a party or are bound and that
you are not now subject to any covenants against competition or similar
covenants that would affect the performance of your obligations under this
agreement. You agree that you will not disclose to or use on behalf of
SupplierMarket any proprietary information of a third party without that party's
consent.
8. Withholding. All payments made by SupplierMarket under this agreement
shall be reduced by any tax or other amounts required to be withheld by
SupplierMarket under applicable law.
9. Assignment. Neither you nor SupplierMarket may make any assignment of
this agreement or any interest in it, by operation of law or otherwise, without
the prior written consent of the other; provided, however, that SupplierMarket
may assign its rights and obligations under this agreement without your consent
(a) in the event that you are transferred to an executive position with one of
SupplierMarket's affiliates or (b) in the event that SupplierMarket shall
hereafter affect a reorganization, consolidate with, or merge into any person or
transfer all or substantially all of its properties or assets to any person.
This Agreement shall inure to the benefit of and be binding upon you and
SupplierMarket, and each of our respective successors, executors,
administrators, heirs and permitted assigns.
10. Severability. If any portion or provision of this agreement shall to
any extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this agreement, or the application of such
portion or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, shall not be affected thereby, and each
portion and provision of this agreement shall be valid and enforceable to the
fullest extent permitted by law.
11. Dispute Resolution. Any controversy or claim arising out of or
relating to this Agreement, or the breach thereof, shall be submitted to and
determined by a single arbitrator in the city of Boston, Massachusetts in
accordance with the rules of the American Arbitration Association, and judgment
upon the award shall be final, binding, and conclusive upon you and
SupplierMarket and may be entered in any court having competent jurisdiction
thereof.
12. Miscellaneous. This agreement sets forth the entire agreement
between you and SupplierMarket and replaces all prior and contemporaneous
communications, agreements and understandings, written or oral, with respect to
the terms and conditions of your employment. This agreement may not be modified
or amended, and no breach shall be deemed to be waived, unless agreed to in
writing by you and an expressly authorized representative of the Board. The
headings and captions in this agreement are for convenience only and in no way
define or describe the scope or content of any provision of this Agreement.
This Agreement may be executed in two or more counterparts, each of which shall
be an original and all of which together shall constitute one and the same
instrument. This Agreement shall be governed by the laws of The Commonwealth of
Massachusetts, without regard to the conflicts of laws principles thereof.
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13. Notices. Any notices provided for in this agreement shall be in
writing and shall be effective when delivered in person or deposited in the
United States mail, postage prepaid, and addressed to you at your last known
address on the books of SupplierMarket or, in the case of SupplierMarket, to it
at the address set forth on the first page of this letter, attention of the
Board or the CEO, or to such other address as either party may specify by notice
to the other actually received.
[Remainder of page intentionally left blank.]
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[Employment Agreement]
If the foregoing is acceptable to you, please sign the enclosed copy of
this letter in the space provided at which time this letter and that copy will
take effect as a binding agreement between you and SupplierMarket on the basis
set forth above.
Sincerely yours,
XxxxxxxxXxxxxx.xxx, Inc.
By: /s/ Xxxx Xxxxxx
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Name: Xxxx Xxxxxx
Title: President
Accepted and Agreed:
/s/ Xxxxxxxx Xxxxxxxxx
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Name: Xxxxxxxx Xxxxxxxxx
Date: 1/24/2000
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"A"
RELEASE OF CLAIMS
FOR AND IN CONSIDERATION OF the special payments and benefits to be
provided to me in connection with the termination of my employment in accordance
with the terms of the letter agreement between me and XxxxxxxxXxxxxx.xxx, Inc.
("SupplierMarket") dated as of January ___, 2000 (the "Employment Agreement"),
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I, on my own behalf and on behalf of my heirs, beneficiaries and representatives
and all others connected with me, hereby release and forever discharge
SupplierMarket and its affiliates (as that term is defined in the Employment
Agreement) and all of their respective officers, directors, employees, agents,
representatives, successors and assigns and all others connected with any of
them (all collectively, the "Released"), both individually and in their official
capacities, from any and all rights, liabilities, claims, demands and causes of
action of any type (all collectively "Claims") which I have had in the past, now
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have, or might now have, through the date of my signing of this Release of
Claims, in any way resulting from, arising out of or connected with my
employment or its termination or pursuant to any federal, state or local
employment law, regulation or other requirement (including without limitation
Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment
Act, the Americans with Disabilities Act, and the fair employment practices laws
of the state or states in which I have been employed by SupplierMarket, each as
amended from time to time). Expressly excluded from this Release of Claims are
any claims I might have in respect of (i) any vested rights under any stock
option agreements between myself and SupplierMarket, (ii) any vested retirement
rights, including any rights under any 401(k) plans, and (iii) any continuing
rights I may have under any applicable insurance plans.
In signing this Release of Claims, I acknowledge that I have had at least
21 days from the date of my sending or receipt of notice of termination of my
employment, as applicable, to consider the terms of this Release of Claims and
that such time has been sufficient; that I am encouraged by SupplierMarket to
seek the advice of an attorney prior to signing this Release of Claims; and that
I am signing this Release of Claims voluntarily and with a full understanding of
its terms.
I understand that I may revoke this Release of Claims at any time within
seven days of the date of my signing by written notice to the Chief Executive
Officer of SupplierMarket and that this Release of Claims will take effect only
upon the expiration of such seven-day revocation period and only if I have not
timely revoked it.
IN WITNESS WHEREOF, I have set my hand and seal on the date written below.
Signature: _________________________________
Date Signed: _______________________________
