Exhibit 10.7
Employment Agreement - ▇▇▇▇ ▇. ▇▇▇▇▇
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of the 13th day of May, 1998 between
RARE MEDIUM, INC; a New York corporation with its principal offices at ▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Company") and ▇▇▇▇ ▇▇▇▇▇,
an individual (the "Employee").
In consideration of their mutual promises and covenants set forth
herein, and intending to be legally bound hereby, Company and Employee agree as
follows:
1. Employment. The Company hereby employs the Employee and the Employee
accepts such employment on the terms and conditions hereinafter set forth.
2. Term. The term of this Agreement shall begin on May 13, 1998 and
shall terminate on May 12, 2001, unless sooner terminated in accordance with
Paragraph 6 hereof.
3. Duties. The Employee is engaged hereunder as Senior Vice President
and Chief Financial Officer of the Company and he agrees to perform the duties
and services incident to that position, or such other or further duties and
services of a similar nature as may reasonably be required of him by the Board
of Directors of the Company or the Board's designee. Employee shall at all times
be subject to the supervision of the President and CEO of the Company and of
such other persons as the President may designate.
The Employee shall devote his full business time, attention,
energies and best efforts to the performance of his duties hereunder and to the
promotion of the business and interests of the Company and of any corporate
subsidiaries or affiliated companies. The foregoing shall not be construed,
however, as preventing the Employee from investing his assets in such form or
manner as will not require services on the part of the Employee in the
operations of the business in which such investment is made and provided such
business is not in competition with the Company or, if in competition, such
business has a class of securities registered under the Securities Exchange Act
of 1934 and the interest of Employee therein is solely that of an investor
owning not more than 3% of any class of the outstanding equity securities of
such business.
The Employee recognizes that he may be required by the Company to
travel outside of the New York metropolitan area in order to perform a portion
of the services to be rendered hereunder, but the nature or extent of such
travelling shall not be such as to make it reasonably necessary for the Employee
to relocate his permanent residence from the New York metropolitan area.
4. Compensation: Expenses.
(a) Base Salary. The Employee shall be paid a salary at the rate of
not less than $175,000 per year (the "Base Salary"). The Base Salary shall be
paid in installments in arrears in accordance with the Company's regular payroll
practices. The Company may, in its discretion, increase the Employee's Base
Salary and his other compensation provided for herein. Employee shall be
entitled to annual increases in Base Salary and incentive bonus compensation as
determined by the Board of Directors in its discretion.
(b) Stock Options.
(i) Concurrently with the execution of this Agreement, the
Company shall grant to Employee Incentive Stock Options and Non-Statutory Stock
Options to purchase an aggregate of 100,000 shares of Common Stock of ICC
Technologies, Inc., a Delaware corporation ("ICC") (collectively the "Stock
Options") in such proportions which will enable Employee to take full advantage
of the benefits afforded Incentive Stock Options
at exercise prices equal to the fair market value of the Common Stock of ICC as
of the date of this Agreement, which shall become exercisable ratably on a
yearly basis over a three year period from the date of grant commencing on the
first anniversary of the date hereof and shall expire ten years from the date of
grant. Such options shall entitle the Holder to exercise them with cashless
exercise and the Option Agreement shall so provide.
(ii) In addition to the Stock Options referred to in clause (i)
above, the Company shall grant to Employee Incentive Stock Options and
Non-Statutory Stock Options to purchase an additional aggregate 50,000 shares of
Common Stock of ICC ("Additional Stock Options") in the event of, and effective
upon, the first to occur during the first year of the term of employment
hereunder of any of the following: (1) the closing of a secondary offering or
other financing by ICC or the Company which results in the net proceeds to ICC
or the Company of at least $20 million, (2) the closing on at lease five (5)
Acquisitions (as such term is hereinafter defined) or such number of
Acquisitions which achieve an aggregate Run Rate in Revenue (as such term in
hereinafter defined) of $25 million, or (3) a daily closing price per share of
Common Stock of ICC as reported by The Wall Street Journal of at least $10.00
for a period of 30 consecutive trading days. The exercise prices of such
Additional Stock Options shall be equal to the market price per share as of the
effective date of grant and such Additional Stock Options shall become
exercisable ratably on a yearly basis over a three year period from the date of
this Agreement commencing on the first anniversary of the date hereof and shall
otherwise be on terms consistent with the Stock Options described above.
(iii) As used in this Agreement (1) the term "Acquisition" shall
mean the acquisition by ICC or the Company of a business, through asset or stock
purchase or merger, which is engaged in web site services or such other related
businesses, and (2) the term "Run Rate in Revenue" shall mean the annualized
revenues of the entity acquired from the beginning of the most recent fiscal
year of such entity.
(c) Fringe Benefits.
(i) The Employee shall be entitled to participate in all
insurance, vacation and other fringe benefit programs of the Company to the
extent and on the same terms and conditions as are accorded to other senior
management employees of the Company, provided, however, that nothing herein
shall be deemed to require grants or awards to Employee under any benefit plans
which provide for awards or grants at the discretion of the Board of Directors
or of any committee or administrator , and that entitlement to vacations shall
be governed solely by clause (ii) of this subparagraph (c).
(ii) The Employee shall be entitled in each calendar year
commencing with 1998 to a vacation of four (4) weeks, without loss of or
reduction in his compensation. Each vacation shall be taken by the Employee at
such time or times as agreed upon by the Company and Employee. Any portion of
Employee's vacation not used during any calendar year shall be carried forward,
provided that Employee may not take more than six (6) weeks vacation during any
calendar year.
(d) Business Expenses. The Company will pay, or reimburse the
Employee for, all ordinary and reasonable out-of-pocket business expenses
incurred by Employee in connection with his performance of services hereunder
during the Employment Term in accordance with the Company's expense
authorization and approval procedures then in effect upon presentation to the
Company of an itemized account and written proof of such expenses, provided,
however, that Employee shall be entitled to, and such expense reimbursement
shall include, a monthly non-accountable expense allowance of $500.
(e) Entire Compensation. The compensation provided for in this
Agreement is in full payment of the services to be rendered by the Employee to
the Company hereunder.
5. Death or Total Disability of the Employee.
(a) Death. In the event of the death of the Employee during the term
of this Agreement, this Agreement shall terminate effective as of the date of
the Employee's death, and the Company shall not have any further obligation or
liability hereunder except that the Company shall pay to Employee's designated
beneficiary or, if none, his estate the portion, if any, of the Employee's Base
Salary for the period up to the Employee's date of death which remains unpaid.
(b) Total Disability. In the event of the Total Disability (as that
term is hereinafter defined) of the Employee, the Company shall have the right
to terminate the Employee's employment hereunder by giving the Employee 10 days'
written notice thereof and, upon expiration of such 10-day period, the Company
shall not have any further obligation or liability under this Agreement except
that the Company shall pay to the Employee the portion, if any, of the
Employee's Base Salary for the period up to the date of termination which
remains unpaid, provided that if the Employee, during any period of disability,
receives any periodic payments representing lost compensation under any health
and accident policy or under any salary continuation insurance policy, the
premiums for which have been paid by the Company, the amount of Base Salary that
the Employee would be entitled to receive from the Company during such period of
disability shall be decreased by the amounts of such payments.
The term "Total Disability," when used herein, shall mean a
mental, emotional or physical condition which either (i) has rendered the
Employee for a period of 90 consecutive days, or for a total of 150 days during
any period of 24 consecutive months, during the term of this Agreement, or (ii)
in the reasonable opinion of the Company is expected to render the Employee, for
a period of 3 months, unable or incompetent to carry out, on a substantially
full-time basis, the job responsibilities he held or tasks that he was assigned
at the time the disability was incurred. The Employee agrees, in the event of
any dispute as to the determination made pursuant to this paragraph, to submit
to a physical or other examination by a licensed physician selected by the
Company, the cost of which examination shall be paid by the Company.
6. Termination of Employment.
(a) In addition to termination pursuant to paragraph 5, the Company
may discharge the Employee and thereby terminate his employment hereunder for
the following reasons ("for cause"): (i) habitual intoxication which materially
affects the Employee's performance; (ii) drug addiction; (iii) conviction of a
felony materially adversely affecting the Company or the Employee's ability to
perform his duties hereunder; (iv) adjudication as an incompetent; (v)
misappropriation of corporate funds or other acts of dishonesty; or (vi) the
Employee's breach of this Agreement in any other material respect.
In the event that the Company shall discharge the Employee
pursuant to this paragraph 6(a), the Company shall not have any further
obligations or liability under this Agreement.
(b) In the event of either a breach of this Agreement by the Company
or a "Change in Control" of the Company, as defined below, at Employee's option,
Employee shall have the right to terminate this Agreement. Upon such election to
terminate by Employee: (a) Employee shall receive a lump sum payment from the
Company within 10 days of said election which shall be equal to (i) one year's
Base Salary, in effect at the date immediately preceding the Change of Control
or breach, plus (ii) the cash value of all benefits which would have been
received by Employee for a one year period, and (b) all unvested Stock Options
and Additional Stock Options, if any, shall become immediately exercisable.
For purposes of this Agreement, a "Change of Control" means the
happening of any of the following: When any "person" as defined in Section
3(a)(9) of the Securities Exchange Act of 1934 ("Exchange Act") and as used in
Section 13(d) and 14(d) thereof, including a "group" as defined in Section13(d)
of the Exchange Act but excluding the Company and any Subsidiary and any
employee benefit plan sponsored or
maintained by the Company or any Subsidiary (including any trustee of such plan
acting as trustee), directly or indirectly becomes the "beneficial owner" (as
defined in Rul3e 13d-3 under the Exchange Act, as amended from time to time), of
securities of the Company representing 30 percent or more of the combined voting
power of the Company's then outstanding securities excluding the options written
relating to the financing by the Company.
7. Non-Disclosure.
(a) Non-Disclosure. The Employee recognizes and acknowledges that he
will have access to certain confidential information of the Company and that
such information constitutes valuable, special and unique property of the
Company. The Employee agrees that he will not, for any reason or purpose
whatsoever, during or after the term of his employment, use any of such
confidential information or disclose any of such confidential information to any
party without express authorization of the Company, except as necessary in the
ordinary course of performing his duties hereunder. The obligation of
confidentiality imposed by this subparagraph shall not apply to information
which appears in issued patents or printed publications or which otherwise
becomes generally known in the industry through no act of the Employee in breach
of this Agreement.
(b) Inventions, Designs and Product Developments. All inventions,
discoveries, concepts, improvements, formulas, processes, devices, methods,
innovations, designs, ideas and product developments (collectively, the
"Developments"), developed or conceived by Employee, solely or jointly with
others, whether or not patentable or copyrightable, at any time during the
Employment Term or within one year after the termination hereof and which relate
to the actual or planned business activities of the Company and all of the
Employee's right, title and interest therein, shall be the exclusive property of
the Company. The Employee hereby assigns, transfers and conveys to the Company
all of his right, title and interest in and to any and all such Developments.
Employee shall disclose fully, as soon as practicable and in writing, all
Developments to the Board of Directors of the Company. At any time and from time
to time, upon the request of the Company, the Employee shall execute and deliver
to the Company any and all instruments, documents and papers, give evidence and
do any and all other acts which, in the opinion of counsel for the Company, are
or may be necessary or desirable to document such transfer or to enable the
Company to file and prosecute applications for and to acquire, maintain and
enforce any and all patents, trademark registrations or copyrights under United
States or foreign law with respect to any such Developments or to obtain any
extension, validation, reissue, continuance or renewal of any such patent,
trademark or copyright. The Company will be responsible for the preparation of
any such instruments, documents and papers and for the prosecution of any such
proceedings and will reimburse the Employee for all reasonable expenses the
Employee incurs upon authorization of the Board of Directors of the Company.
8. Noncompetition. The Employee agrees that during the term of this
agreement and for a period of one (1) year thereafter, the Employee shall not,
unless acting pursuant hereto or with the prior written consent of the Board of
Directors of the Company, directly or indirectly:
(a) solicit business from or perform services for, any persons,
company or other entity which at any time during the Employee's employment by
the Company is a client or customer of the Company if such business or services
are of the same general character as those engaged in or performed by the
Company;
(b) solicit for employment or in any other fashion hire any of the
employees of the Company;
(c) own, manage, operate, finance, join, control or participate in
the ownership, management, operation, financing or control of, or be connected
as an officer, director, employee, partner, principal, agent, representative,
consultant or otherwise with any business or enterprise engaged in the business
of designing, developing, and implementing Internet web site applications and
strategies, or any other business engaged in by the Company for which Employee
had primary responsibility, or any of its affiliates (collectively, the
"Business")
within a radius of 20 miles from Company's or any of Company's affiliates
principal places of business (the "Restricted Area");
(d) use or permit his name to be used in connection with, any
business or enterprise engaged in the Business within the Restricted Area; or
(e) use the name of the Company or any name similar thereto, but
nothing in this clause shall be deemed, by implication, to authorize or permit
use of such name after expiration of such period;
provided, however, that this provision shall not be-construed to prohibit the
ownership by the Employee of not more than 3% of any class of the outstanding
equity securities of any corporation which is engaged in any of the foregoing
businesses having a class of securities registered pursuant to the Securities
Exchange Act of 1934. In the event that the provisions of this Section should
ever be adjudicated to exceed the time, geographic, service or product
limitations permitted by applicable law in any jurisdiction, then such
provisions shall be deemed reformed in such jurisdiction to the maximum time,
geographic, service or product limitations permitted by applicable law.
9. Equitable Relief; Survival.
(a) The Employee acknowledges that the restrictions contained in
paragraphs 7(a), 7(b) and 8 hereof are, in view of the nature of the business of
the Company, reasonable and necessary to protect the legitimate interests of the
Company, and that any violation of any provisions of those Sections will result
in irreparable injury to the Company. The Employee also acknowledges that the
Company shall be entitled to temporary and permanent injunctive relief, without
the necessity of proving actual damages, and to an equitable accounting of all
earnings, profits and other benefits arising from any such violation, which
rights shall be cumulative and in addition to any other rights or remedies to
which the Company may be entitled. In the event of any such violation, the
Company shall be entitled to commence an action for temporary and permanent
injunctive relief and other equitable relief in any court of competent
jurisdiction and Employee further irrevocably submits to the jurisdiction of any
New York State court or Federal court sitting in the Southern District of New
York over any suit, action or proceeding arising out of or relating to paragraph
7 or 8. The Employee hereby waives, to the fullest extent permitted by law, any
objection that he may now or hereafter have to such jurisdiction or to the venue
of any such suit, action or proceeding brought in such a court and any claim
that such suit, action or proceeding has been brought in any inconvenient forum.
Effective service of process may be made upon the Employee by mail under the
notice provisions contained in paragraph 12 hereof.
(b) Survival of Covenants. The provisions of paragraphs 7 and 8
shall survive the termination of this Agreement.
10. Remedies Cumulative; No Waiver. No remedy conferred upon the
Company by this Employment Agreement is intended to be exclusive of any other
remedy, and each and every such remedy shall be cumulative and shall be in
addition to any other remedy given hereunder or now or hereafter existing at law
or in equity. No delay or omission by the Company in exercising any right,
remedy or power hereunder or existing at law or in equity shall be construed as
a waiver thereof-, and any such right, remedy or power may be exercised by the
Company from time to time and as often as may be deemed expedient or necessary
by the Company in its sole discretion.
11. Enforceability. If any provision of this Agreement shall be invalid
or unenforceable, in whole or in part, then such provision shall be deemed to be
modified or restricted to the extent and in the manner necessary to render the
same valid and enforceable, or shall be deemed excised from this Agreement, as
the case may require, and this Agreement shall be construed and enforced to the
maximum extent permitted by law, as if such provision had been originally
incorporated herein as so modified or restricted, or as if such provision had
not been originally incorporated herein, as the case may be.
12. Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if (and then two
business days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:
If to Company: Copy to:
RareMedium, Inc. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Mesirov ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to ▇▇▇▇ ▇▇▇▇▇ Copy to:
Any party hereto may give any notice, request, demand, claim or other
communication hereunder using any other means (including personal delivery,
expedited courier, messenger service, telecopy, telex, ordinary mail, or
electronic mail), but no such notice, request, demand, claim, or other
communication shall be deemed to have been duly given unless and until it
actually is received by the individual for whom it is intended. Any party hereto
may change the address to which notices, requests, demands, claims, and other
communications hereunder are to be delivered by giving the other parties hereto
notice in the manner herein set forth.
13. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws (and not the law of conflicts) of the State of
New York.
14. Contents of Agreement: Amendment and Assignment. This Agreement
sets forth the entire understanding between the parties hereto with respect to
the subject matter hereof and supersedes and is instead of all other employment
arrangement between the Employee and the Company. This agreement cannot be
changed, modified or terminated except upon written amendment duly executed by
the parties hereto. All of the terms and provisions of this Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
heirs, representatives, successors and assigns of the parties hereto, except
that the duties and responsibilities of the Employee hereunder are of a personal
nature and shall not be assignable in whole or in part by the Employee.
IN WITNESS WHEREOF, this Agreement has been executed by the parties on
the date first above written.
RARE MEDIUM, INC.
By:____________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
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▇▇▇▇ ▇▇▇▇▇, Employee