EXHIBIT 10.10
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") made and entered into as of
November 15, 2004, by and between KNOBIAS, INC. (the "Company"), a Delaware
corporation, and E. Key ▇▇▇▇▇▇ (the "Executive");
WHEREAS, the Executive is currently serving as President of the Company;
WHEREAS, the Company desires to secure the continued employment of the
Executive as President and Chief Executive Officer in accordance herewith and
the Executive is willing to commit himself to be employed by the Company on the
terms and conditions herein set forth and thus to forego opportunities
elsewhere; and
WHEREAS, the parties desire to enter into this Agreement, as of the
Effective Date (as defined below), setting forth the terms and conditions for
the employment relationship of the Executive with the Company during the
Employment Period (as defined below);
NOW, THEREFORE, IN CONSIDERATION of the mutual premises, covenants and
agreements set forth below, it is hereby agreed as follows:
1. Employment and Term.
(a) Employment. The Company agrees to employ the Executive, and the
Executive agrees to be employed by the Company, in accordance with the terms and
provisions of this Agreement during the Employment Period (as defined below).
(b) Term. The term of the Executive's employment under this
Agreement shall commence on the date hereof (the "Effective Date") and shall
continue until the third anniversary of the Effective Date (such term being
referred to hereinafter as the "Employment Period"); provided, however, that
commencing on the second anniversary of the Effective Date (and each anniversary
of the Effective Date thereafter) the Employment Period shall automatically be
extended for one additional year, unless, 90 days prior to such date, the
Company or the Executive shall give written notice to the other party that it or
he, as the case may be, does not wish to so extend this Agreement.
2. Duties and Powers of Executive.
(a) Position. During the Employment Period, the Executive shall
serve as President and Chief Executive Officer of the Company with such
authority, duties and responsibilities with respect to such position as set
forth in subsection (b) hereof.
(b) Duties. The Executive shall perform such reasonable duties as
may be delineated in the Company's By-laws, as the same may be amended from time
to time, or as may be determined by the Board of Directors of the Company (the
"Board") from time to time. In such capacity, the Executive shall report
directly to the Board.
(c) Attention. Except as provided below, during the Employment
Period, and excluding any periods of vacation and sick leave to which the
Executive is entitled, the Executive shall devote full attention and time during
normal business hours to the business and affairs of the Company and, to the
extent necessary to discharge the responsibilities assigned to the Executive
under this Agreement, use the Executive's best efforts to carry out such
responsibilities faithfully and efficiently. The Executive shall be entitled to
fulfill his duties under this Agreement from the Company's offices in Ridgeland,
Mississippi, or such other location as shall be the Company's principal
executive office. It shall not be considered a violation of the foregoing for
the Executive to serve on corporate, industry, civic or charitable boards or
committees, as long as such activities do not interfere with the performance of
the Executive's responsibilities as an employee of the Company in accordance
with this Agreement.
3. Compensation.
(a) Base Salary. During the Employment Period, the Executive's
annual base salary ("Annual Base Salary") shall be payable in accordance with
the Company's general payroll practices. The Executive's Annual Base Salary
shall be at least $175,000. The Executive's Annual Base Salary (as increased
from time to time) may not be decreased during the Employment Period. Any
increase in Annual Base Salary shall not serve to limit or reduce any other
obligation of the Company under this Agreement.
(b) Initial Bonus. Upon the Effective Date the Executive shall be
paid a bonus of $50,000 in recognition of his past services rendered to the
Company.
(c) Annual Bonus. During the Employment Period, the Executive shall
participate in the Company's annual bonus plans and shall be awarded bonuses
thereunder that provide him, on a year-by-year basis, an annual bonus (the
"Annual Bonus"). The Company's annual bonus plans shall, as necessary, be
amended to provide that Executive may earn an Annual Bonus of up to one-half
(1/2) his Annual Base Salary.
(d) Existing Options. All of the Executive's existing options, if
any, to purchase shares of the Company's common stock shall remain outstanding
and shall be exercisable as originally granted.
(e) Retirement and Welfare Benefit Plans. During the Employment
Period, the Executive shall be eligible to participate in all savings,
retirement and welfare plans, practices, policies and programs applicable
generally to employees and/or senior executive officers of the Company.
(f) Expenses. The Company shall reimburse the Executive for all
expenses, including those for travel and entertainment, properly incurred by him
in the performance of his duties hereunder in accordance with policies
established from time to time by the Company.
2
(g) Fringe Benefits and Perquisites. During the Employment Period,
the Executive shall be entitled to receive fringe benefits and perquisites in
accordance with the plans, practices, programs and policies of the Company from
time to time in effect, commensurate with his position.
4. Termination of Employment.
(a) Death or Disability. The Executive's employment shall terminate
upon the Executive's death or, at the election of the Board of Directors of the
Company ("Board") or the Executive, by reason of Disability (as defined below)
during the Employment Period; provided, however, that the Board may not
terminate the Executive's employment hereunder by reason of Disability unless at
the time of such termination there is no reasonable expectation that the
Executive will return to work within the next one hundred eighty (180) day
period. For purposes of this Agreement, disability ("Disability") shall have the
same meaning as set forth in the current insurance policy providing long-term
disability coverage, if any, or its successor. If there is no such policy in
existence at the time of the determination of Disability, then the definition
used by the United States Social Security Administration shall be used to define
Disability under this Agreement.
(b) By the Company for Cause. The Company may terminate the
Executive's employment during the Employment Period for Cause (as defined
below). For purposes of this Agreement, "Cause" shall mean (i) the Executive's
gross negligence in the performance or intentional nonperformance (continuing
for ten days after receipt of written notice of need to cure) of any of the
Executive's material duties hereunder (other than such failure resulting from
the Executive's incapacity due to physical or mental illness or any such actual
or anticipated failure after the issuance of a Notice of Termination for Good
Reason by the Executive pursuant to Section 4(d)) or (ii) the Executive's
commission of one or more acts of moral turpitude that constitutes a felony,
which have or result in an adverse effect on the Company, monetarily or
otherwise or one or more significant acts of dishonesty, fraud or misconduct
with respect to the business or affairs of the Company which materially and
adversely affects the operations or reputation of the Company. The determination
of whether Cause exists must be made by a resolution that is passed upon the
affirmative vote of at least two-thirds (2/3) of the membership of the Board.
(c) By the Company without Cause. Notwithstanding any other
provision of this Agreement, the Company may terminate the Executive's
employment other than by a termination for Cause during the Employment Period,
but only upon the affirmative vote of at least two-thirds (2/3) of the
membership of the Board.
(d) By the Executive for Good Reason. The Executive may terminate
his employment during the Employment Period for Good Reason (as defined below).
For purposes of this Agreement, "Good Reason" shall mean the occurrence without
the written consent of the Executive of any one of the following acts by the
Company, or failures by the Company to act, unless such act or failure to act is
corrected prior to the Date of Termination (as defined below) specified in the
Notice of Termination (as defined below) given in respect thereof:
3
(i) an adverse change in the Executive's title, authority,
duties, responsibilities or reporting lines as specified in Sections
2(a) and 2(b) of this Agreement;
(ii) a reduction by the Company in the Executive's Annual Base
Salary below the amounts set forth in Section 3(a) above;
(iii) any failure by the Company to continue in effect any
benefit plan or arrangement in which the Executive participates, at
any time, during the Employment Period (including, without
limitation, any tax-qualified and supplemental retirement plans,
deferred compensation plans, group life insurance plan, and medical,
dental, accident and disability plans or any other plans providing
the Executive with similar benefits (herein referred to as "Benefit
Plans")) without replacing such Benefit Plan with a plan providing
for substantially similar benefits or the taking of any action by
the Company that would adversely affect the Executive's
participation in any Benefit Plan or deprive the Executive of any
material fringe benefit enjoyed by the Executive;
(iv) any failure by the Company to continue in effect any
incentive plan or arrangement, as amended and supplemented, in which
the Executive is participating from time to time without replacing
such incentive plan with a plan providing for substantially similar
benefits, or the taking of any action by the Company that would
adversely affect the Executive's opportunity to participate in any
such plan or reduce the Executive's ability to obtain benefits under
any such plan, expressed as a percentage of Annual Base Salary, in
any fiscal year as compared to the immediately preceding fiscal
year;
(v) any failure by the Company to continue in effect any plan
or arrangement to receive securities of the Company without
replacing such plan with a plan providing for substantially similar
benefits or the taking of any action by the Company that would
adversely affect the Executive's opportunity to participate in or
materially reduce the Executive's ability to obtain benefits under
any such plan;
(vi) any failure by the Company to provide the Executive with
the number of paid vacation days to which he is entitled under the
Company's vacation policies as in effect from time to time;
(vii) the relocation of the Company's principal executive
offices to a location outside of Ridgeland, Mississippi, unless the
Company's principal executive offices are relocated outside of
Ridgeland, Mississippi, for a valid business reason. In the event
the Company's principal executive offices are so relocated, the
Company will, at the option of the Executive, either (A) provide an
apartment for the Executive in the new location and will reimburse
the Executive for his reasonable costs in commuting from Ridgeland,
Mississippi, to such new location or (B) allow the Executive to work
out of the Company's Ridgeland, Mississippi, offices. If the Company
does not provide the Executive with such option, any such relocation
shall constitute Good Reason;
4
(viii) the failure by the Company to pay to the Executive any
portion of the Executive's current compensation and benefits or to
pay to the Executive any portion of an installment of deferred
compensation under any deferred compensation program of the Company
within thirty (30) days of the date such compensation is due;
(ix) any purported termination of the Executive's employment
that is not effected pursuant to a Notice of Termination satisfying
the requirements of Section 4(f); for purposes of this Agreement, no
such purported termination shall be effective;
(x) the failure of the Company to obtain a satisfactory
agreement from any successor of the Company requiring such successor
to assume and agree to perform the Company's obligations under this
Agreement, as contemplated in Section 14(c); or
(xi) the failure by the Company to comply with any material
provision of this Agreement.
(e) Determination of Good Reason Upon a Change in Control. Following
a Change in Control (as defined in Exhibit A hereto), the Executive's
determination that an act or failure to act constitutes Good Reason shall be
presumed to be valid unless such determination is deemed to be unreasonable by
an arbitrator. The Executive's right to terminate the Executive's employment for
Good Reason shall not be affected by the Executive's incapacity due to physical
or mental illness. The Executive's continued employment shall not constitute
consent to, or a waiver of rights with respect to, any act or failure to act
constituting Good Reason hereunder.
(f) Notice of Termination. During the Employment Period, any
purported termination of the Executive's employment (other than by reason of
death) shall be communicated by written Notice of Termination from one party
hereto to the other party hereto in accordance with Section 15(b). For purposes
of this Agreement, a "Notice of Termination" shall mean a notice that shall
indicate the specific termination provision in this Agreement relied upon, if
any, and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's employment under
the provision so indicated. Further, a Notice of Termination for Cause is
required to include a copy of a resolution duly adopted by the affirmative vote
of not less than two-thirds (2/3) of the entire membership of the Board at a
meeting of the Board that was called and held no more than ninety (90) days
after the date the Board had knowledge of the most recent act or omission giving
rise to such breach for the purpose of considering such termination (after
reasonable notice to the Executive and an opportunity for the Executive,
together with the Executive's counsel, to be heard before the Board and, if
possible, to cure the breach that was the basis for the Notice of Termination
for Cause) finding that, in the good faith opinion of the Board, the Executive
was guilty of conduct set forth in clause (i) or (ii) of the definition of
Cause, and specifying the particulars thereof in detail. Unless the Board
determines otherwise, a Notice of Termination by the Executive alleging a
termination for Good Reason must be made within thirty (30) days of the act or
failure to act that the Executive alleges to constitute Good Reason.
5
(g) Date of Termination. "Date of Termination" with respect to any
purported termination of the Executive's employment during the Employment
Period, shall mean the date specified in the Notice of Termination (which, in
the case of a termination by the Company, for reasons other than Cause, shall
not be less than thirty days and, in the case of a termination by the Executive,
shall not be less than thirty (30) days nor more than sixty (60) days, from the
date such Notice of Termination is given).
5. Obligations of the Company Upon Termination.
(a) Termination other than for Cause, Death or Disability. During
the Employment Period, if the Company shall terminate the Executive's employment
(other than for Cause, death or Disability) or the Executive shall terminate his
employment for Good Reason (termination in any such case being referred to as
"Termination") the Company shall pay to the Executive the amounts, and provide
the Executive with the benefits, described in this Section 5 (hereinafter
referred to as the "Severance Payments"). The amounts specified in this Section
5(a) shall be paid within thirty (30) days after the Date of Termination. Such
payments shall be in addition to those rights and benefits to which the
Executive may be entitled under the relevant Company employee benefit plans or
programs.
(i) Lump Sum Payment. The Company shall pay to the Executive a
lump sum cash payment of $100,000.00.
(ii) Accrued Obligations. The Company shall pay the Executive
a lump sum amount in cash equal to the sum of (A) the Executive's
Annual Base Salary through the Date of Termination to the extent not
theretofore paid, (B) an amount equal to any Annual Bonus earned
with respect to fiscal years ended prior to the year that includes
the Date of Termination to the extent not theretofore paid and (C)
an amount equal to the target amount payable under any Annual Bonus
for the fiscal year that includes the Date of Termination or, if
greater, the average of the three years' highest gross bonus awards,
not necessarily consecutive, paid by the Company to the Executive in
the five years preceding the year of Termination multiplied by a
fraction the numerator of which shall be the number of days from the
beginning of such fiscal year to and including the Date of
Termination and the denominator of which shall be 365, in each case
to the extent not theretofore paid. (The amounts specified in
clauses (A), (B) and (C) shall be hereinafter referred to as the
"Accrued Obligations.")
(iii) Continuation of Welfare Benefits. For three years
following the Date of Termination, the Company shall provide or
arrange to provide the Executive and his dependants with life,
disability, accident and health insurance benefits substantially
similar to those provided to similarly situated senior executive
officers of the Company during such period, with the Executive
charged a monthly premium(s) for such coverage(s) that does not
exceed the premium(s) charged to a similarly situated senior
6
executive officers of the Company for such coverage(s); provided,
however, the Executive must elect continuation coverage under such
group health plans in accordance with COBRA, effective as of the
Date of Termination; provided, further, benefits otherwise
receivable by the Executive pursuant to this Section 5(a)(iii) shall
be reduced to the extent other comparable benefits are actually
received by the Executive and his dependants during the three-year
period following the Date of Termination, and any such benefits
actually received by the Executive or his dependants shall be
reported to the Company.
(b) Failure of the Company to Renew the Agreement. Subject to the
provisions of Section 7 of this Agreement, in the event that the Company
notifies the Executive that it does not intend to extend the Employment Period,
as contemplated in Section 1(b), the Executive shall be entitled to receive all
of the Severance Payments described in Section 5(a) above, except that the
period of continuation of welfare benefits in Section 5(a)(iii) shall be for two
years instead of three. Such payments shall be in addition to those rights and
benefits to which the Executive may be entitled under the relevant Company
employee benefit plans or programs.
(c) Termination by the Company for Cause or by the Executive Other
than for Good Reason. Subject to the provisions of Section 7 of this Agreement,
if the Executive's employment shall be terminated for Cause during the
Employment Period, or if the Executive terminates employment during the
Employment Period other than for Good Reason, the Company shall have no further
obligations to the Executive under this Agreement other than the Accrued
Obligations and deferred compensation and such rights and benefits to which the
Executive may be entitled under the relevant Company employee benefit plans or
programs. The Company hereby agrees to provide the Executive with an additional
180-day period following the Date of Termination in which to exercise any
options that were vested as of his Date of Termination. Such 180-day period
shall be extended by a number of days equal to the number of days in any
"blackout" periods, if any, imposed by the Company during which such options are
unexercisable.
(d) Termination due to Death and Disability. If the Executive's
employment shall terminate by reason of death or Disability, the Company shall
pay the Executive or his estate, as the case may be, the Accrued Obligations and
deferred compensation. Such payments shall be in addition to those rights and
benefits to which the Executive or his estate may be entitled under the relevant
Company employee benefit plans or programs.
(e) Gross-Up Payment. In the event that any payment or benefit
received or to be received by the Executive (whether pursuant to the terms of
this Agreement or any other plan, arrangement or agreement with (A) the Company
or (B) any Person (as defined in Exhibit "A") whose actions result in a Change
in Control or (C) any Person affiliated with the Company or such Person) (all
such payments and benefits, including the Severance Payments, being hereinafter
called "Total Payments") would not be deductible (in whole or in part) by the
Company, an affiliate or Person making such payment or providing such benefit as
a result of Section 280G of the Code, then, the Company shall pay to the
Executive such additional amounts (the "Gross-Up Payment") such that the net
7
amount retained by the Executive, after deduction of any excise tax imposed
under Section 4999 of the Code (the "Excise Tax") on the Total Payments and any
federal, state and local income and employment taxes and Excise Tax upon the
Gross-Up Payment, shall be equal to the Total Payments. For purposes of
determining the amount of the Gross-Up Payment, the Executive shall be deemed to
pay federal income tax at the highest marginal rate of federal income taxation
in the calendar year in which the Gross-Up Payment is to be made and state and
local income taxes at the highest marginal rate of taxation in the state and
locality of the Executive's residence on the date on which the Gross-Up Payment
is calculated for purposes of this Section 5(e), net of the maximum reduction in
federal income taxes which could be obtained from deduction of such state and
local taxes. In the event that the Excise Tax is subsequently determined to be
less than the amount taken into account hereunder, the Executive shall repay to
the Company, at the time that the amount of such reduction in Excise Tax is
finally determined, the portion of the Gross-Up Payment attributable to such
reduction (plus that portion of the Gross-Up Payment attributable to the Excise
Tax and federal, state and local income tax imposed on the Gross-Up Payment
being repaid by the Executive to the extent that such repayment results in a
reduction in Excise Tax and/or a federal, state or local income tax deduction)
plus interest on the amount of such repayment at the rate provided in Section
1274(b)(2)(B) of the Code. In the event that the Excise Tax is determined to
exceed the amount taken into account hereunder (including by reason of any
payment the existence or amount of which cannot be determined at the time of the
Gross-Up Payment), the Company shall make an additional Gross-Up Payment in
respect of such excess (plus any interest, penalties or additions payable by the
Executive with respect to such excess) at the time that the amount of such
excess is finally determined. The Executive and the Company shall each
reasonably cooperate with the other in connection with any administrative or
judicial proceedings concerning the existence or amount of liability for Excise
Tax with respect to the Total Payments.
6. Indemnification. In the event the Executive is made party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by the Company
against the Executive), by reason of the fact that he is or was performing
services under this Agreement, then the Company shall indemnify the Executive
against all expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement, as actually and reasonably incurred by the Executive in
connection therewith. In the event that both the Executive and the Company are
made a party to the same third-party action, complaint, suit or proceeding, the
Company agrees to engage competent legal representation, and the Executive
agrees to use the same representation, provided that if counsel selected by the
Company shall have a conflict of interest that prevents such counsel from
representing the Executive, the Executive may engage separate counsel and the
Company shall pay all attorneys' fees of such separate counsel. Further, while
the Executive is expected at all times to use his best efforts to faithfully
discharge his duties under this Agreement, the Executive cannot be held liable
to the Company for errors or omissions made in good faith where the Executive
has not exhibited gross, willful and wanton negligence and misconduct or
performed criminal and fraudulent acts which materially damage the business and
the Company.
8
7. Nonexclusivity of Rights. Nothing in this Agreement shall prevent or
limit the Executive's continuing or future participation in any benefit, plan,
program, policy or practice provided by the Company and for which the Executive
may qualify (except with respect to any benefit to which the Executive has
waived his rights in writing), nor shall anything herein limit or otherwise
affect such rights as the Executive may have under any other contract or
agreement entered into after the Effective Date with the Company. Amounts which
are vested benefits or which the Executive is otherwise entitled to receive
under any benefit, plan, policy, practice or program of, or any contract or
agreement entered into with, the Company shall be payable in accordance with
such benefit, plan, policy, practice or program or contract or agreement except
as explicitly modified by this Agreement.
8. Full Settlement; Mitigation. The Company's obligation to make the
payments provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against the
Executive or others, provided that nothing herein shall preclude the Company
from separately pursuing recovery from the Executive based on any such claim. In
no event shall the executive be obligated to seek other employment or take any
other action by way of mitigation of the amounts (including amounts for damages
for breach) payable to the Executive under any of the provisions of this
Agreement and such amounts shall not be reduced whether or not the Executive
obtains other employment.
9. Arbitration. Any dispute or controversy about the validity,
interpretation, effect or alleged violation of this Agreement (an "arbitrable
dispute") must be submitted to confidential arbitration at the locale of
Company's principal executive offices. Arbitration shall take place before an
experienced employment arbitrator licensed to practice law in such state and
selected in accordance with the Model Employment Arbitration Procedures of the
American Arbitration Association. Arbitration shall be the exclusive remedy of
any arbitrable dispute. Judgement may be entered on the arbitrator's award in
any court having jurisdiction. The parties hereby agree that the arbitrator
shall be empowered to enter an equitable decree mandating specific enforcement
of the terms of this Agreement. Should any party to this Agreement pursue any
arbitrable dispute by any method other than arbitration, the other party shall
be entitled to recover from the party initiating the use of such method all
damages, costs, expenses and attorneys' fees incurred as a result of the use of
such method. Notwithstanding anything herein to the contrary, nothing in this
Agreement shall purport to waive or in any way limit the right of any party to
seek to enforce any judgment or decision on an arbitrable dispute in a court of
competent jurisdiction.
10. Non-competition Agreement.
(a) The Executive recognizes that the willingness of the Company to
enter into this Agreement is based in material part on the Executive's agreement
to the provisions of this Section 10, and that Executive's breach of the
provisions of this Section 10 could materially damage the Company and its
subsidiaries (the Company and its subsidiaries are hereinafter collectively
referred to as the "Affiliates" and individually as an "Affiliate"). Therefore,
in consideration of the benefits to be received by Executive as a result of this
employment with the Company, Executive agrees that Executive shall not, for a
period of one year immediately following the Date of Termination, for any reason
whatsoever, directly or indirectly, for himself or on behalf of or in
conjunction with any other person, persons, company, partnership, corporation or
business of whatever nature:
9
(i) contact any customer of any Affiliate or other person for
the purpose of including or attempting to induce such customer or
other person to cease doing business with any Affiliate;
(ii) induce or attempt to trade any agent or employee of any
Affiliate to terminate employment with an Affiliate or to commence
work with any competitor of any Affiliate;
(iii) call on, solicit, attempt to obtain, accept, or in any
way secure business from any of the customers of any Affiliate for
purposes of competing with the Affiliate in the United States, nor,
directly or indirectly, aid or assist any other person, firm or
corporation in the solicitation of such customer for purposes of
competing with the Affiliate in the United States; and
(iv) engage, as an officer, director, shareholder, owner,
partner, joint venture, or in a managerial capacity, whether as an
employee, independent contractor, consultant or advisor, or as a
sales representative, in any business selling any products or
services in direct competition with any Affiliate in the United
States.
(b) Because of the difficulty of measuring economic losses to the
Affiliates as a result of a breach of the foregoing covenant and because of the
immediate and irreparable damage that could be caused to the Affiliates for
which they would have no other adequate remedy, the Executive agrees that the
foregoing covenant may be enforced by the Affiliates, or any of them, in the
event of breach by him, by injunctions and restraining orders without the
necessity of posting any bond or other security therefore.
(c) The covenants in this Section 10 are severable and separate, and
the unenforceability of any specific covenant shall not affect the provisions of
any other covenant. Moreover, in the event any court of competent jurisdiction
shall determine that any restrictions set forth in this Section 10 are
unreasonable, then it is the intention of the parties that such restrictions be
enforced to the fullest extent which the court deems reasonable, and this
Agreement shall thereby be reformed.
(d) Each of the covenants in this Section 10 shall be construed as
an agreement independent of any other provision in this Agreement, and the
existence of any claim or cause of action of the Executive against the Company
or any Affiliate, whether predicated on this Agreement or otherwise shall not
constitute defense to the enforcement by the Company or any Affiliate of such
covenants.
10
11. Confidentiality.
(a) The Executive acknowledges and agrees that all Confidential
Information (as defined below) of the Company and any Affiliate is confidential
and a valuable, special, and unique asset of the Company that gives the Company
an advantage over its actual and potential, current, and future competitors. The
Executive further acknowledges and agrees that the Executive owes the Company
and any Affiliate a fiduciary duty to preserve and to protect all Confidential
Information from unauthorized disclosure or unauthorized use, certain
Confidential Information constitutes "trade secrets" under the laws of the state
of Mississippi; and unauthorized disclosure or unauthorized use of the Company's
or any Affiliate's Confidential Information would irreparably injure the Company
and its Affiliates.
(b) Both during the term of the Executive's employment and after the
termination of the Executive's employment for any reason (including wrongful
termination), the Executive shall hold all Confidential Information in strict
confidence, and shall not use any Confidential Information except for the
benefit of the Company, in accordance with the duties assigned to the Executive.
The Executive shall not at any time (either during or after the term of the
Executive's employment), disclose any Confidential Information to any person or
entity (except other employees of the Company who have a need to know the
information in connection with the performance of their employment duties), or
copy, reproduce, modify, decompile, or reverse engineer any Confidential
Information, or remove any Confidential Information from the Company's premises,
without the prior written consent of the Board of Directors of the Company or
permit any other person to do so, except as may otherwise be required by law or
legal process. The Executive shall take reasonable precautions to protect the
physical security of all documents and other material containing Confidential
Information (regardless of the medium on which the Confidential Information is
stored). This Agreement applies to all Confidential Information, whether now
known or later to become known to the Executive.
(c) Upon the termination of the Executive's employment with the
Company for any reason, and upon request of the Company at any other time, the
Executive shall promptly surrender and deliver to the Company all documents and
other written material regardless of the form or medium of any nature containing
or pertaining to any Confidential Information and shall not retain any such
document or other material. Within five days of any such request, the Executive
shall certify to the Company in writing that all such materials have been
returned.
(d) As used in this Agreement, the term "Confidential Information"
shall mean any information or material known to or used by or for the Company or
any Affiliate (whether or not owned or developed by the Company or any Affiliate
and whether or not developed by the Executive) that is not generally known to
the public. Confidential Information includes, without limitation, the
following: all trade secrets of the Company or any Affiliate; all information
that the Company or any Affiliate has marked as confidential or has otherwise
described to the Executive (either in writing or orally) as confidential; all
non-public information concerning the Company's or any Affiliate's products,
services, prospective products or services, research, product designs, prices,
discounts, costs, marketing plans, marketing techniques, market studies test
11
data, customers, customer lists and records, suppliers and contracts; all
Company and Affiliate business records and plans; all Company and Affiliate
personnel files; all financial information of or concerning the Company or any
Affiliate; all information relating to operating system software, applications
software, software and system methodology, hardware platforms, technical
information, inventions, computer programs and listings, source codes, object
codes, copyrights, patents, trademarks, service marks, and other intellectual
property; all technical specifications; any proprietary information belonging to
the Company or any Affiliate; all computer hardware or software manuals; all
training or instruction manuals; all data and all computer system passwords and
user codes.
12. Cooperation of the Executive. During and after the Executive's
employment with the Company, the Executive shall reasonably cooperate with the
Company in the defense or prosecution of any claims or actions now in existence
or which may be brought in the future against or on behalf of the Company and in
connection with any investigation or review of any federal, state or local
regulatory authority as any such investigation or review relates to events or
occurrences that transpired while the Executive was employed by the Company. The
Company shall reimburse the Executive for all reasonable costs and expenses
incurred in connection with his performance under this Section 12, including,
without limitation, all reasonable attorneys' fees and costs.
13. Legal Fees. Subject to Section 9 and Section 12, the Company shall
pay to the Executive all legal fees and expenses (including, without limitation,
fees and expenses in connection with any arbitration) incurred by the Executive
in disputing in good faith any issue arising under this Agreement relating to
the Termination of the Executive's employment or in seeking in good faith to
obtain or enforce any benefit or right provided by this Agreement.
Notwithstanding the foregoing, in the event that any arbitrator or court
determines that the legal fees incurred by the Executive are not payable by the
Company, the Company shall not be obligated with respect thereto.
14. Successors.
(a) Assignment by Executive. This Agreement is personal to the
Executive and without the prior written consent of the Company shall not be
assignable by the Executive otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable by
the Executive's legal representative.
(b) Successors and Assigns of Company. This Agreement shall inure to
the benefit of and be binding upon the Company, its successors and assigns.
(c) Assumption. The Company shall require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its businesses and/or assets as
aforesaid that assumes and agrees to perform this Agreement by operation of law
or otherwise.
12
15. Miscellaneous.
(a) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Mississippi, without reference to
its principles of conflict of laws. The captions of this Agreement are not part
of the provisions hereof and shall have no force or effect. This Agreement may
not be amended, modified, repealed, waived, extended or discharged, except by an
agreement in writing signed by the party against whom enforcement of such
amendment, modification, repeal, waiver, extension or discharge is being sought.
No person, other than pursuant to a resolution of the Board or a committee
thereof, shall have authority on behalf of the Company to agree to amend,
modify, repeal, waive, extend or discharge any provision of this Agreement or
anything in reference thereto.
(b) Notices. All notices and other communications hereunder shall be
in writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed, in either case, to the Company's headquarters or to such other
address as either party shall have furnished to the other in writing in
accordance herewith. Notices and communications shall be effective when actually
received by the addressee.
(c) Severability. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.
(d) Taxes. The Company may withhold from any amounts payable under
this Agreement such federal, state or local taxes as shall be required to be
withheld pursuant to any applicable law or regulation.
(e) No Waiver. The Executive's or the Company's failure to insist
upon strict compliance with any provision hereof or any other provision of this
Agreement or the failure to assert any right that the Executive or the Company
may have hereunder, including, without limitation, the right of the Executive to
terminate employment for Good Reason pursuant to Section 4 of this Agreement, or
the right of the Company to terminate the Executive's employment for Cause
pursuant to Section 4 of this Agreement, shall not be deemed to be a waiver of
such provision or right or any other provision or right of this Agreement.
(f) Entire Agreement. This instrument contains the entire agreement
of the Executive, the Company or any predecessor or subsidiary thereof, with
respect to the subject matter hereof, and all promises, representations,
understandings, arrangements and prior agreements are merged herein and
superseded hereby.
* * * * *
13
IN WITNESS WHEREOF, the Executive and, pursuant to due authorization from
its Board of Directors, the Company have caused this Agreement to be executed as
of the day and year first above written.
KNOBIAS, INC.
By: /s/ E. KEY ▇▇▇▇▇▇
-------------------------------
Name: E. Key ▇▇▇▇▇▇
Title: President
EXECUTIVE
/s/ E. KEY ▇▇▇▇▇▇
---------------------------------
E. Key ▇▇▇▇▇▇
14