Employment Agreement - Avenue A Inc. and Michael Cohen
Employment Agreement
between
Avenue A, Inc.
and
Michael Cohen
Dated as of September 2, 1999
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Employment Agreement
This Employment Agreement (this "Agreement"), dated as of September 2,
1999, between Avenue A, Inc., a Washington corporation ("Employer"), and Michael
Cohen ("Employee");
W I T N E S S E T H:
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WHEREAS, Employer has entered into a Purchase Agreement (the "Purchase
Agreement"), dated the date hereof, with the members of I-Balls LLC, a New York
limited liability company (the "Company"), to purchase all of the outstanding
limited liability company membership interests of the Company; and
WHEREAS, Employee has been serving as a manager of the Company; and
Employer desires to retain the services of Employee upon the terms and
conditions set forth herein; and
WHEREAS, Employee is willing to provide services to Employer upon the terms
and conditions set forth herein;
A G R E E M E N T S:
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NOW, THEREFORE, for and in consideration of the mutual promises contained
herein and for other good and valuable consideration, the sufficiency and
receipt of which are hereby acknowledged, Employer and Employee hereby agree as
follows:
1. EMPLOYMENT
Employer will employ Employee and Employee will accept employment by
Employer as the President of the Company. Employee will perform the duties
customarily performed by the president of a corporation which is, in all
material respects, similar to the Company and such other duties as may
reasonably be assigned from time to time by Employer's management, which relate
to the business of the Company, Employer, its subsidiaries, or any business
ventures in which the Company, Employer or its subsidiaries may participate.
Employee shall perform his duties at Employer's facility located at 487
Greenwich Street, New York City, New York (the "Facility"), or such other
similarly located location of Employer to which Employee may be assigned from
time to time by Employer, provided that nothing herein shall be
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construed to require Employee to perform his duties at a facility located more
than five miles from the Facility.
2. ATTENTION AND EFFORT
Except for during periods of illness, vacation periods aggregating three
weeks per year (not including holidays recognized by Employer) and leaves of
absence (in each case, consistent with Employer's policy with respect to such
matters), Employee will devote all of his entire productive time, ability,
attention and effort to the Company's business and will skillfully serve its
interests during the term of this Agreement; provided, however, that Employee
may devote reasonable periods of time to (a) serving on the Board of Directors
of other corporations, if such service would not otherwise be prohibited by
paragraph 8 hereof, and (b) engaging in charitable or community service
activities, so long as none of the foregoing additional activities materially
interfere with Employee's duties under this Agreement. Employee shall have
three weeks of paid vacation per full calendar year (not including holidays
recognized by Employer).
3. TERM
Unless otherwise terminated pursuant to paragraph 6 of this Agreement,
Employee's initial term of employment under this Agreement shall expire two
years from the date of this Agreement (the "Initial Term"). After the Initial
Term, Employee's employment shall continue for successive one year terms unless
either party provides written notice at least 120 days prior to the end of a
term of such party's intention not to renew. Prior to each one-year renewal
period, Employer and Employee shall mutually agree on Employee's compensation.
4. COMPENSATION
4.1 Base Salary
Employee's compensation shall consist, in part, of an annual base salary of
$150,000 before all customary payroll deductions, for the period from the date
hereof through September __, 2001. Such base salary shall be paid in
substantially equal installments and at the same intervals as other employees of
the Company are paid.
4.2 Bonus
Employee shall be entitled to receive, in addition to the annual base
salary described above, a signing bonus of $50,000 before all customary payroll
deductions, to be awarded as of the date hereof, and an additional bonus of
$50,000 before all
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customary payroll deductions, if he is employed by the Company through the one-
year anniversary of this Agreement.
4.3 Additional Compensation
On the date hereof, Employer shall grant to Employee nonqualified options
to purchase 75,000 shares of common stock, par value $0.01 per share (the
"Common Stock"), of Employer, at an exercise price equal to the fair market
value of a share of Common Stock of Employer on such date, as determined in
accordance with a stock option letter agreement in substantially the form
attached hereto as Exhibit A (the "Option Letter Agreement"). Such options
shall be subject to the terms and conditions of, and shall vest in accordance
with, the Option Letter Agreement. In addition, during the term of this
Agreement, Employer agrees to pay or cause to be paid to Employee, and Employee
agrees to accept in exchange for the services rendered hereunder by him,
incentive payments of up to an aggregate of $250,000 for 1999 and $250,000 for
2000 (the "Incentive Payments") in accordance with the following tables. The
Incentive Payments will be made to Employee if and only if the Company achieves
annual gross income targets in accordance with the following tables. In
addition, on the date hereof Employer shall grant to Employee, and Employee
agrees to accept in exchange for the services rendered hereunder by him,
nonqualified options to purchase an aggregate of 200,000 shares of Common Stock
of Employer, at an exercise price of $2.50 per share (the "Options"). The
Options shall vest six years from the date of grant unless sooner vested in
accordance with the following tables or unless earlier terminated. The Options
shall be subject to the terms and conditions of a stock option letter agreement
in substantially the form attached hereto as Exhibit B.
1999 Targets and Incentives
1999 Annual "Gross Income" Amount of Incentive Payment Number of Options Which
Target of Company Paid Within 90 days after Vest at 90 days after
December 31, 1999 December 31, 1999
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Less than $1.95 million None None
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At least $1.95 million but $83,334 33,334
less than $2.4 million
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At least $2.4 million but An additional $83,333 An additional 33,333
less than $3 million
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$3 million or greater An additional $83,333 An additional 33,333
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If the Company's 1999 Annual Gross Income Target of $1.95 million is not met for
the 12 months ended December 31, 1999, Employee may elect to seek to have the
Company meet the Annual Gross Income Target set forth in the table above for the
12-month period ending March 31, 2000 (the "Revised Period"), and if such
election
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is made and such targets are met for the Revised Period, the Incentive Payments
shall be paid and the Options shall vest in accordance with the table above,
except that the date December 31, 1999 shall be deemed to be replaced with the
date March 31, 2000 wherever it appears in such table.
2000 Targets and Incentives
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2000 Annual "Gross Amount of Incentive Number of Options
Income" Target of Payment Paid Within 90 Which Vest at 90 days
Company days after December 31, 2000 after December 31, 2000
Less than $3.45 million None None
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At least $3.45 million but $83,334 33,334
less than $4.2 million
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At least $4.2 million but An additional $83,333 An additional 33,333
less than $5.25 million
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$5.25 million or greater An additional $83,333 An additional 33,333
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For purposes of this Section 4.3, "Gross Income" means gross ad buy income, plus
commissions, less site payout, as reflected on the Company's financial
statements.
5. BENEFITS AND REIMBURSEMENT OF EXPENSES
5.1 General
During the term of this Agreement, Employee will be entitled to
participate, subject to and in accordance with applicable eligibility
requirements, in fringe benefit programs generally available to other members of
Employer's management. Employer shall pay or reimburse Employee for all
reasonable travel and other expenses incurred by Employee in performing his
obligations under this Agreement.
5.2 Benefits Payable Upon Disability
5.2.1 In General
If Employee shall be prevented during the term of this Agreement from
properly performing services hereunder by reason of illness or other physical or
mental incapacity, Employer shall continue to pay Employee his then-current base
salary, any accrued or earned incentive payments and any bonus or additional
compensation as set forth in Sections 4.1, 4.2 and 4.3 of this Agreement and
reimbursement for any unreimbursed business expenses hereunder during the period
of Employee's disability.
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5.2.2 Limitation on Benefits
Notwithstanding any other provision of Section 5.2,(a) Employee shall
not receive such payments under Section 5.2.1 after the end of the term of this
Agreement, and (b) if Employee is disabled for a period or periods aggregating
90 calendar days, then Employee shall receive the greater of (i) the payments as
set forth under Section 5.2.1 for such 90-day period, provided, however, that
Employer's obligations hereunder shall cease and terminate at the end of such
90-day period, or (ii) any amounts Employee is entitled to receive pursuant to
any Employer-sponsored benefit plans by virtue of his disability or inability to
perform his duties as described in Section 1 herein ("Disability Plans").
5.3 Benefits Payable Upon Death
In the event of the death of Employee during the term of this Agreement,
Employee shall be entitled to receive the greater of (i) Employee's base salary,
any accrued or earned incentive payments and any bonus or additional
compensation due under Sections 4.1, 4.2 or 4.3 of this Agreement and
reimbursement for any unreimbursed business expenses payable hereunder or (ii)
any amount Employee may be entitled to receive pursuant to any Disability Plan
as a result of Employee's death during the term of this Agreement. Any such
amount payable under this Section 5.3 shall be paid to Employee's surviving
spouse, or if there is no spouse surviving, then to Employee's designee or
representative as the case may be through the six-month period following the end
of the calendar month in which death occurs
6. TERMINATION
Employment of Employee pursuant to this Agreement may be terminated as
follows, but in any case, the provisions of the Confidentiality Agreement
referenced in paragraph 8 hereof shall survive the termination of this Agreement
and the termination of Employee's employment hereunder:
6.1 By Employer
6.1.1 For Cause
Notwithstanding anything herein to the contrary, the Employer may,
without liability, terminate Employee's employment hereunder for Cause at any
time immediately upon written notice from the Board of Directors of the
Employer. As used herein the term "Cause" shall mean, without limitation, the
occurrence of one or more of the following events: (i) Employee's material
misconduct or dishonesty in the performance of Employee's duties or other
knowing and material violation of Employer's policies and procedures in effect
from time to time; (ii) actions (or failures
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to act) by Employee in bad faith with respect to Employer or that materially
impair Employer's business, goodwill or reputation; (iii) the conviction of
Employee for a felony involving an act of dishonesty, moral turpitude, deceit or
fraud; (iv) any breach of Section 8 of this Agreement; (v) a material breach by
Employee of one or more terms of this Agreement, other than Section 8, which
breach Employee has not cured within thirty days of Employee's receipt of
written notice from Employer of such breach; or (vi) Employee's failure to
perform his duties hereunder in a manner reasonably satisfactory to the Board of
Directors or senior management of Employer, provided that Employee shall first
be given written notice specifically describing such unsatisfactory performance
and recommending actions to be taken to cure such failure, and Employee shall
not have cured such failure within sixty days of receipt of such notice.
6.1.2 Other Than for Cause
Notwithstanding anything herein to the contrary, Employer may also
terminate Employee's employment hereunder without Cause at any time, for any
reason.
6.2 By Employee
Employee may terminate his employment at any time, for any reason, upon
giving Notice of Termination (as defined below).
6.3 Automatic Termination
Subject to the provisions of Section 5 herein, this Agreement and
Employee's employment hereunder shall terminate automatically upon the death or
total disability of Employee. The term "total disability" as used herein shall
mean Employee's inability to perform the duties set forth in paragraph 1 hereof
for a period or periods aggregating 90 calendar days in any 12-month period as a
result of physical or mental illness, loss of legal capacity or any other cause
beyond Employee's control, unless Employee is granted a leave of absence by the
Board of Directors of Employer. Employee and Employer hereby acknowledge that
Employee's ability to perform the duties specified in paragraph 1 hereof is of
the essence of this Agreement. Subject to the provisions of Section 5 herein,
termination hereunder shall be deemed to be effective (a) at the end of the
calendar month in which Employee's death occurs or (b) immediately upon a
determination by the Board of Directors of Employer of Employee's total
disability, as defined herein.
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6.4 Notice
The term "Notice of Termination" shall mean at least 14 days' written
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notice of termination of Employee's employment, during which period Employee's
employment and performance of services will continue; provided, however, that
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Employer may, upon notice to Employee and without reducing Employee's
compensation during such period, excuse Employee from any or all of his duties
during such period. The effective date of the termination of Employee's
employment hereunder shall be the date on which such 14-day period expires.
6.5 Termination of Compensation and Benefits
6.5.1 Termination by Employer
If the Employer terminates Employee's employment other than for Cause
then, notwithstanding anything herein to the contrary, and in complete
satisfaction and discharge of all its obligations to Employee hereunder,
Employer shall (i) continue Employee's base salary, without increase, for the
balance of the period specified in Section 3 of this Agreement; (ii) pay
Employee any bonus due under Section 4.2 of this Agreement; and (iii) pay
Employee any incentive payments earned under Section 4.3 of this Agreement for
the balance of the period specified in Section 3 of this Agreement. In addition,
the Options shall continue to vest in accordance with the tables set forth in
Section 4.3 of this Agreement, and any unvested Options as of 91 days after
December 31, 2000 shall be terminated. If the Employer terminates Employee's
employment for Cause then, notwithstanding anything herein to the contrary, and
in complete satisfaction and discharge of all its obligations to Employee
hereunder, Employer shall (i) pay Employee the pro rata portion of Employee's
base salary specified in Section 4.1 of this Agreement based on the period of
time actually spent by Employee as an employee of Employer; (ii) pay Employee
the pro rata portion of any bonus due under Section 4.2 of this Agreement based
on the period of time actually spent by Employee as an employee of Employer;
(iii) pay Employee the pro rata portion of any incentive payments for 1999 or
2000 (as applicable) earned under Section 4.3 of this Agreement based on the
period of time actually spent by Employee as an employee of Employer during such
year; and (iv) make to Employee a one-time severance payment equal to one
month's base salary. In addition, the Options shall continue to vest in
accordance with the tables set forth in Section 4.3 of this Agreement, and
Employee shall retain the pro rata portion of any such vested Options for 1999
or 2000 (as applicable) based on the period of time actually spent as an
employee of Employer during such year, and any other Options (vested or
unvested) shall be terminated.
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6.5.2 Termination by Employee
If Employee resigns or otherwise voluntarily leaves Employer's
employment prior to the expiration of this Agreement, then, notwithstanding
anything herein to the contrary, and in complete satisfaction and discharge of
all its obligations to Employee hereunder, Employer shall (i) pay Employee the
pro rata portion of Employee's base salary specified in Section 4.1 of this
Agreement based on the period of time actually spent by Employee as an employee
of Employer; (ii) pay Employee the pro rata portion of any bonus due under
Section 4.2 of this Agreement based on the period of time actually spent by
Employee as an employee of Employer; (iii) pay Employee the pro rata portion of
any incentive payments for 1999 or 2000 (as applicable) earned under Section 4.3
of this Agreement based on the period of time actually spent by Employee as an
employee of Employer during such year; and (iv) make to Employee a one-time
severance payment equal to one month's base salary. In addition, the Options
shall continue to vest in accordance with the tables set forth in Section 4.3 of
this Agreement, and Employee shall retain the pro rata portion of any such
vested Options for 1999 or 2000 (as applicable) based on the period of time
actually spent as an employee of Employer during such year, and any other
Options (vested or unvested) shall be terminated. Employee shall have no further
obligations under this Agreement except as set forth in Sections 7 and 8.
6.5.3. Change of Control
If there is a "Change of Control" of Employer (as such term is defined
below), Employee may, at his option, terminate his employment with the Company
and Employer shall (i) continue Employee's then base salary, without increase,
for the balance of the period specified in Section 3 of this Agreement; (ii) pay
Employee any bonus due under Section 4.2 of this Agreement; and (iii) pay
Employee any incentive payments earned under Section 4.3 of this Agreement for
the balance of the period specified in Section 3 of this Agreement. In
addition, the Options shall continue to vest in accordance with the tables set
forth in Section 4.3 of this Agreement, and any unvested Options as of 91 days
after December 31, 2000 shall be terminated. For purposes of this Agreement,
"Change of Control" means (i) an event following the date of this Agreement in
which any sole person or entity, together with all "affiliates" and "associates"
of such person or entity (as such terms are defined in Rule 12b-2 of the General
Rules and Regulations under the Securities Exchange Act of 1934, as amended),
shall become the beneficial owner, directly or indirectly, of a majority of the
voting power of the capital stock of the Employer then outstanding; (ii) the
sale of all or substantially all of the Employer's assets; or (iii) the merger
or consolidation of the Employer with any other corporation or entity (other
than a wholly-owned subsidiary) where the Employer is not the surviving
corporation or survives only as a subsidiary of another corporation.
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7. LIMITATION ON DISPOSITION OF SHARES; RIGHT OF FIRST REFUSAL
Any shares of Common Stock issued upon exercise of the options described in
subparagraph 4.3 shall be subject to the limitations on disposition of shares
set forth in Section 5.3 of the Purchase Agreement, including, but not limited
to, Employer's right of first refusal with respect to such shares.
Notwithstanding anything herein to the contrary, such limitations shall survive
the termination of Employee's employment with Employer and the expiration of the
term of this Agreement.
8. NONCOMPETITION AND NONSOLICITATION
Employee agrees to enter into a Confidentiality, Inventions Assignment,
Noncompetition and Nonsolicitation Agreement (the "Confidentiality Agreement")
in substantially the form attached as Exhibit C hereto. The Confidentiality
Agreement shall survive the termination of Employee's employment with Employer
and the expiration of the term of this Agreement. Employee and Employer
acknowledge and agree that consideration has been given for Employee entering
into the Confidentiality Agreement, such consideration including, without
limitation, the Incentive Payments. Violation by Employee of the Confidentiality
Agreement shall relieve Employer of any obligation it may have to make the
Incentive Payments, but shall not relieve Employee of his obligations, as
required under the Confidentiality Agreement, not to compete or solicit.
9. REPRESENTATIONS AND WARRANTIES; NO VIOLATION
In order to induce Employer to enter into this Agreement, Employee
represents and warrants to Employer that neither the execution nor the
performance of this Agreement by Employee will violate or conflict in any way
with any other agreement by which Employee may be bound, or with any other
duties imposed upon Employee by corporate or other statutory or common law.
10. INDEMNIFICATION
Employee shall be indemnified by Employer to the extent permitted by
applicable law and as provided by Section 10 of Employer's Bylaws. Employee
shall be entitled to coverage under Employer's director and officer insurance
policy to the extent that such coverage is provided to other officers of
Employer.
11. NOTICE AND CURE OF BREACH
Whenever a breach of this Agreement by either party is relied upon as
justification for any action taken by the other party pursuant to any provision
of this
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Agreement, before such action is taken, the party asserting the breach of this
Agreement shall give the other party at least 14 days' prior written notice of
the existence and the nature of such breach before taking further action
hereunder and shall give the party purportedly in breach of this Agreement the
opportunity to correct such breach during the 14-day period, unless a longer
period to correct such breach is specifically provided hereunder.
12. FORM OF NOTICE
All notices given hereunder shall be given in writing, shall specifically
refer to this Agreement and shall be personally delivered or sent by telecopy or
other electronic facsimile transmission, by nationally recognized overnight
courier or by registered or certified mail, return receipt requested, at the
address set forth below or at such other address as may hereafter be designated
by notice given in compliance with the terms hereof:
If to Employee: Michael Cohen
88 Jane Street, Apt. 1BW
New York, NY 10014
Copy to: Pelino & Lentz, P.C.
One Liberty Place, 32/nd/ Floor
1650 Market Street
Philadelphia, PA 19103
Facsimile: (215) 665-1536
Attention: John W. Pelino, Esq.
If to Employer: Avenue A, Inc.
1100 Olive Way, Suite 1270
Seattle, WA 98101
Facsimile: (206) 521-8808
Attention: Robert M. Littauer
Copy to: Perkins Coie LLP
1201 Third Avenue, 48/th/ Floor
Seattle, WA 98101-3099
Facsimile: (206) 583-8500
Attention: David F. McShea
If notice is mailed, such notice shall be effective three business days after
mailing, or if notice is personally delivered or sent by telecopy or other
electronic facsimile transmission or by overnight courier, it shall be effective
upon receipt.
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13. ASSIGNMENT
This Agreement is personal to Employee and shall not be assignable by
Employee. Employer may assign its rights hereunder to (a) any corporation
resulting from any merger, consolidation or other reorganization to which
Employer is a party or (b) any corporation, partnership, association or other
person to which Employer may transfer all or substantially all of the assets and
business of Employer existing at such time. All of the terms and provisions of
this Agreement shall be binding upon and shall inure to the benefit of and be
enforceable by the parties hereto and their respective successors and permitted
assigns.
14. WAIVERS
No delay or failure by any party hereto in exercising, protecting or
enforcing any of its rights, titles, interests or remedies hereunder, and no
course of dealing or performance with respect thereto, shall constitute a waiver
thereof. The express waiver by a party hereto of any right, title, interest or
remedy in a particular instance or circumstance shall not constitute a waiver
thereof in any other instance or circumstance. All rights and remedies shall be
cumulative and not exclusive of any other rights or remedies.
15. ARBITRATION
Subject to the provisions of the Confidentiality Agreement, any
controversies or claims arising out of or relating to this Agreement shall be
fully and finally settled by arbitration in New York City, New York in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association then in effect (the "AAA Rules"), conducted by one arbitrator either
mutually agreed upon by Employer and Employee or chosen in accordance with the
AAA Rules, except that the parties thereto shall have any right to discovery as
would be permitted by the Federal Rules of Civil Procedure for a period of 90
days following the commencement of such arbitration and the arbitrator thereof
shall resolve any dispute which arises in connection with such discovery. The
prevailing party shall be entitled to costs, expenses and reasonable attorneys'
fees, and judgment upon the award rendered by the arbitrator may be entered in
any court having jurisdiction thereof.
16. AMENDMENTS IN WRITING
No amendment, modification, waiver, termination or discharge of any
provision of this Agreement, nor consent to any departure therefrom by either
party hereto, shall in any event be effective unless the same shall be in
writing, specifically identifying this Agreement and the provision intended to
be amended, modified, waived, terminated or discharged and signed by Employer
and Employee, and each
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such amendment, modification, waiver, termination or discharge shall be
effective only in the specific instance and for the specific purpose for which
given. No provision of this Agreement shall be varied, contradicted or explained
by any oral agreement, course of dealing or performance or any other matter not
set forth in an agreement in writing and signed by Employer and Employee.
17. APPLICABLE LAW
This Agreement shall in all respects, including all matters of
construction, validity and performance, be governed by, and construed and
enforced in accordance with, the laws of the state of Washington, without regard
to any rules governing conflicts of laws.
18. SEVERABILITY
If any provision of this Agreement shall be held invalid, illegal or
unenforceable in any jurisdiction, for any reason, including, without
limitation, the duration of such provision, its geographical scope or the extent
of the activities prohibited or required by it, then, to the full extent
permitted by law (a) all other provisions hereof shall remain in full force and
effect in such jurisdiction and shall be liberally construed in order to carry
out the intent of the parties hereto as nearly as may be possible, (b) such
invalidity, illegality or unenforceability shall not affect the validity,
legality or enforceability of any other provision hereof, and (c) any court or
arbitrator having jurisdiction thereover shall have the power to reform such
provision to the extent necessary for such provision to be enforceable under
applicable law.
19. HEADINGS
All headings used herein are for convenience only and shall not in any way
affect the construction of, or be taken into consideration in interpreting, this
Agreement.
20. COUNTERPARTS
This Agreement, and any amendment or modification entered into pursuant to
paragraph 16 hereof, may be executed in any number of counterparts, each of
which counterparts, when so executed and delivered, shall be deemed to be an
original and all of which counterparts, taken together, shall constitute one and
the same instrument.
21. ENTIRE AGREEMENT
This Agreement on and as of the date hereof constitutes the entire
agreement between Employer and Employee with respect to the subject matter
hereof and all prior or contemporaneous oral or written communications,
understandings or
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agreements between Employer and Employee with respect to such subject matter are
hereby superseded and nullified in their entireties.
IN WITNESS WHEREOF, the parties have executed and entered into this
Agreement on the date set forth above.
EMPLOYEE:
Michael Cohen
/s/ MICHAEL COHEN
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EMPLOYER:
AVENUE A, INC.
By: /s/ ROBERT M. LITTAUER
--------------------------------
Robert M. Littauer
Vice President, Finance &
Administration, and Secretary
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AVENUE A, INC.
CONFIDENTIALITY, INVENTIONS ASSIGNMENT,
NONCOMPETITION AND NONSOLICITATION AGREEMENT
In consideration of my employment as an employee or independent contractor
with Avenue A, Inc., a Washington corporation, or any subsidiary of Avenue A,
Inc. (the "Company"), the compensation paid to me by the Company and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, I agree as follows:
Section 1. Definitions
Whenever used in this Agreement, the following terms will have the
following specified meanings:
1.1 "Competing Business" means any business that provides Internet or on-
line media planning or buying services to third parties. Competing
Business does not include a Person who engages in Internet or on-line
media planning or buying for its own account.
1.2 "Confidential Information" means any information that (a) relates to
the business of the Company or the prospective business of the
Company, (b) is not generally available to the public, and (c) is or
was conceived, compiled, developed, discovered or received by, or made
available to, me during the Term, whether solely or jointly with
others, and whether or not while engaged in performing work for the
Company. Without limiting the generality of the foregoing,
Confidential Information includes information relating to Inventions,
trade secrets, products, services, finances, business plans, marketing
plans, legal affairs, suppliers, clients, potential clients,
prospects, opportunities, contracts or assets of the Company.
Confidential Information also includes any information which has been
made available to the Company by or with respect to another Person and
which the Company is obligated to keep confidential. Confidential
Information does not include information which (a) becomes available
to the public other than as a result of a disclosure by me; (b) was
available to me on a non-confidential basis outside of my employment
with the Company; or (c) becomes available to me on a non-confidential
basis from a source other than the Company or any of its officers,
directors, employees, agents, creditors, suppliers, lessors, lessees
or customers.
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1.3 "Invention" means any product, computer program, device, technique,
know-how, algorithm, method, process, procedure, improvement,
discovery, design, development, new concept, new idea, or invention,
whether or not patentable or copyrightable and whether or not reduced
to practice, that (a) is within the scope of the Company's business,
research or investigations or results from or is derived from or is
suggested by any work performed by me for the Company and (b) is
created, conceived, reduced to practice, developed, discovered,
invented or made by me during the Term, whether solely or jointly with
others, and whether or not while engaged in performing work for the
Company.
1.4 "Material" means any product, prototype, model, document, diskette,
tape, picture, drawing, design, recording, report, proposal, paper,
note, writing or other tangible item which contains or manifests,
whether in printed, handwritten, coded, magnetic or other form, any
Confidential Information or Invention.
1.5 "Person" means any corporation, partnership, trust, association,
governmental authority, educational institution, individual or other
entity.
1.6 "Propriety Right" means any patent, copyright, mask work, trade
secret, trademark, trade name, service mark or other protected or
protectable intellectual property right in any Confidential
Information, Invention or Material.
1.7 "Term" means the term of my employment with the Company, whether on a
full-time, part-time or consulting basis.
Section 2. Confidential Information, Inventions and Materials
2.1 The Company will be the exclusive owner of all Confidential
Information, Inventions, Materials and Proprietary Rights. To the
extent applicable, all Materials will constitute "works for hire"
under applicable copyright laws.
2.2 I hereby assign and transfer, and agree to assign and transfer, to the
Company all right, title and interest that I may now or hereafter have
in the Confidential Information, Inventions, Materials and Proprietary
Rights, subject to the limitations set forth in the Notice below.
Additionally, I hereby waive any moral rights that I may have in or to
any Confidential Information, Inventions, Materials and Proprietary
Rights. I will take such action (including, but not limited to, the
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execution, acknowledgment, delivery and assistance in preparation of
documents or giving of testimony) as may be requested by the Company
to evidence, transfer, vest or confirm the Company's right, title and
interest in the Confidential Information, Inventions, Materials and
Proprietary Rights. I will not contest the validity of any Proprietary
Rights.
2.3 Except as required for performance of my work for the Company or as
authorized in writing by the Company, I will not (a) use, disclose,
publish or distribute any Confidential Information, Inventions or
Materials or (b) remove any Materials from the Company's premises. I
will hold all Materials in trust for the Company and I will delivery
them to the Company upon request and in any event at the end of the
Term. In the event that I am required by legal process to disclose any
Confidential Information, I shall provide the Company with prompt
notice of such requirement so that the Company may obtain a protective
order or other appropriate remedy. If a protective order is obtained,
I shall use reasonable efforts to assure that all such information
disclosed will be covered by such order or remedy. If a protective
order is not obtained, the Company shall waive compliance with the
non-disclosure provisions of this Agreement. Whether or not such order
or remedy is obtained, I will disclose only that portion of such
information which I am legally required to disclose.
2.4 I will promptly disclose to the Company all Confidential Information,
Inventions and Materials, as well as any business opportunity which
comes to my attention during the Term and which relates to the
business or prospective business of the Company or which arises in
connection with my employment of the Company. I will not take
advantage of or divert any such opportunity for the benefit of myself
or anyone else either during or after the Term without the prior
written consent of the Company.
NOTICE: Notwithstanding any other provision of this Agreement to the
contrary, this Agreement does not obligate me to assign or offer to the
Company any of my rights in any invention for which no equipment, supplies,
facilities, or trade secret information of the Company was used and which
was developed entirely on my own time, unless (a) the invention relates (i)
directly to the business of the Company or (ii) to the Company's actual or
demonstrably anticipated research or development, or (b) the invention
results from any work performed by me for the Company. This satisfies the
written notice and other requirements of RCW 49.44.140.
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Section 3. Non-competition and Non-solicitation
3.1 During the Term and for a period of two (2) years after the Term, I
will not directly or indirectly, and whether or not for compensation,
either on my own behalf or in any other capacity, be employed by,
consult with, or otherwise perform services for, own, manage, operate,
join, control or participate in the ownership, management, operation
or control of, or be connected with, in any manner, any Competing
Business.
3.2 During the Term and for a period of two (2) years after the Term, I
will not directly or indirectly solicit, induce, influence or entice,
or attempt to solicit, induce, influence or entice any employee,
consultant, customer, supplier, distributor, joint venturer or
contractor of the Company (a) to cease his, her or its relationship
with the Company or (b) to engage in, be employed by, consult with, or
otherwise perform services for, own, manage, operate, join, control or
participate in the ownership, management, operation or control of, or
be connected with, in any manner, any Competing Business.
Section 4. No Conflicting Obligations
4.1 My execution, delivery and performance of this Agreement and the
performance of my other obligations and duties to the Company will not
violate any other employment, nondisclosure, confidentiality,
consulting or other agreement to which I am a party or by which I may
be bound.
4.2 I will not use in performance of my work for the Company or disclose
to the Company any trade secret, confidential or proprietary
information of any prior employer or other Person if and to the extent
that such use or disclosure may violate any obligation or duty that I
owe to such other Person (e.g., under any agreement or applicable
law). My compliance with this paragraph will not prohibit, restrict or
impair the performance of my work, obligations and duties to the
Company.
Section 5. Non-disparagement
5.1 During my employment with the Company and for a period of two (2)
years thereafter, I will not (a) make any false, misleading or
disparaging representations or statements with regard to the Company
or the products or services of the Company or (b) make any statement
that may impair or otherwise adversely affect the goodwill or
reputation of the Company.
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Section 6. Miscellaneous
6.1 This Agreement is not a contract of employment and no rights of
employment are hereby created. The Company and I have entered into a
written employment agreement dated the date hereof (the "Employment
Agreement"). This Agreement will survive any termination of my
employment.
6.2 In the event of any breach of or default under this Agreement by me,
the Company may suffer irreparable harm and have no adequate remedy at
law. In the event of any such breach or default, or any threat of such
breach or default, the Company will be entitled to injunctive relief,
specific performance and other equitable relief. Further, in any legal
action or other proceeding in connection with this Agreement (e.g., to
recover damages or other relief), the prevailing party will be
entitled to recover, in addition to any other relief to which it may
be entitled, its reasonable attorneys' fees and other costs incurred
in that action or proceeding. The rights and remedies of the Company
under this paragraph are in addition to, and not in lieu of, any other
right or remedy afforded to the Company under any other provision of
this Agreement, by law or otherwise.
6.3 This Agreement will be enforced to the fullest extent permitted by
applicable law. If for any reason any provision of this Agreement is
held to be invalid or unenforceable to any extent, then (a) such
provision will be interpreted, construed or reformed to the extent
reasonably required to render the same valid, enforceable and
consistent with the original intent underlying such provision, and (b)
such invalidity or unenforceability will not affect any other
provision of this Agreement or any other agreement between the Company
and me. If the invalidity or unenforceability is due to the
unreasonableness of the scope or duration of the provision, the
provision will remain effective for such scope and duration as may be
determined to be reasonable.
6.4 The failure of the Company to insist upon or enforce strict
performance of any other provisions of this Agreement or to exercise
any of its rights and remedies under this Agreement will not be
construed as a waiver or a relinquishment to any extent of the
Company's rights to assert or rely on any such provision, right, or
remedy in that or any instance; rather, the same will be and remain in
full force and effect.
6.5 This Agreement is personal to the Employee and shall not be assignable
by the Employee. Subject to Section 6.5.3 of the Employment
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Agreement, the Company may assign its rights hereunder to (a) any
corporation resulting from any merger, consolidation or other re-
organization to which the Company is a party or (b) any corporation,
partnership, association or other person to which the Company may
transfer all or substantially all of the assets and business of the
Company existing at such time. All of the terms and provisions of this
Agreement shall be binding upon and shall inure to the benefit of and
be enforceable by the parties hereto and their respective heirs,
executors, personal representatives, successors and permitted assigns.
6.6 This Agreement sets forth the entire Agreement, and supersedes any and
all prior agreements, between me and the Company with regard to any of
the following: the Confidential Information, Inventions, Materials and
Proprietary Rights of the Company, noncompetition, nonsolicitation and
nondisparagement. This Agreement may not be amended, except by a
writing signed by the party against whom such amendment is sought to
be enforced.
6.7 This Agreement will be governed by the laws of the State of Washington
without regard to its choice of law provisions, provided however, that
any action, suit or proceeding to enforce the terms of this Agreement
shall be brought in the state or federal courts located in the state
of New York and all applicable appellate courts, in connection with
any action relating to this Agreement. Further, I will not bring any
action relating to this Agreement other than in the courts specified
in this paragraph.
6.8 I have carefully read all of the provisions of this Agreement and
agree that (a) the same are necessary for the reasonable and proper
protection of the Company's business, (b) the Company has been induced
to enter into and continue its relationship with me in reliance upon
my compliance with the provisions of this Agreement, (c) every
provision of this Agreement is reasonable with respect to its scope
and duration, and (d) I have received a copy of this Agreement.
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This Agreement shall be effective as of September 2, 1999.
/s/ MICHAEL COHEN
---------------------------------------------
Signature
MICHAEL COHEN
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FULL NAME (print or type)
Soc. Sec. No.
--------------------------------
ACCEPTED:
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AVENUE A, INC.
By: /s/ ROBERT M. LITTAUER
-----------------------------------------
Robert M. Littauer
Vice President, Finance & Administration,
and Secretary
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