Employment Agreement - EDGAR Online Inc. and Susan Strausberg
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "Agreement") made as of the 26th day of April,
2004 (the "Effective Date"), between EDGAR Online, Inc. with its principal
office at 50 Washington Street, Norwalk, Connecticut ("Company"), and Susan
Strausberg having an address at 126 Old Church Lane, Pound Ridge, NY 10576
("Employee").
W I T N E S S E T H:
WHEREAS, the Company is a financial and business information company; and
WHEREAS, the Company and the Employee previously entered into an Amended
and Restated Employment Agreement dated as of May 6, 1999, as amended March 19,
2003 (the "Original Agreement"); and
WHEREAS, the Company and the Employee desire to replace and supersede the
Original Agreement by entering into a new Employment Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements hereinafter set forth, the parties agree as follows:
1. Employment. The Company shall employ the Employee and the Employee
shall serve the Company, upon the terms and conditions hereinafter set forth.
5. Term. The term of the Employee's employment shall commence on the
Effective Date and unless terminated earlier or extended as provided below,
shall continue for a period of two years from the Effective Date (the
"Employment Term"). Upon the expiration of the initial employment term and on
each anniversary date thereafter, the employment of Employee shall be renewed
and extended for additional successive one year terms unless either party
provides written notice to the other party, of her or its, as the case may be,
desire to terminate the Agreement at least thirty (30) days prior to each
renewal date.
6. Duties. During the Employment Term, the Employee shall have such
duties, functions, authority and responsibilities normally associated with the
positions and offices of Chief Executive Officer, President and Secretary.
During the Employment Term, the Employee shall devote her full attention and
business time to the business and affairs of the Company and the Employee will
use her best efforts to perform faithfully and efficiently, and to discharge,
the Employee's responsibilities and duties under the Agreement. Notwithstanding
the foregoing, the Employee may devote such time to manage her personal affairs
and to serve on community, corporate, civic, professional or charitable boards
or committees, so long as such activities do not unreasonably interfere with the
performance of the Employee's duties and responsibilities under the Agreement.
7. Compensation and Employee Benefits.
(a) The Employee's base salary during the initial term of employment shall
be no less than $220,000 commencing on the Effective Date payable in accordance
with the Company's payroll practices as in effect from time to time. The
Employee's base salary will be reviewed annually by the Compensation Committee
of the Board (the "Committee") and/or by the Company's Board of Directors (the
"Board") to determine whether an increase is
1
<PAGE>
warranted or appropriate. The Employee also will be entitled to be considered
for awards each year under the Company's then existing incentive compensation
program, which may take into account individual and Company-wide performance, or
such other performance criteria as the "Committee" and/or the Board may from
time to time apply.
(b) The Employee hereby waives any and all rights that she may have had to
annual salary increases for years 2000, 2001, 2002, 2003, and 2004 up to the
Effective Date under the terms and conditions of the Original Agreement.
5. Benefits. During the Employment Term, the Employee shall have the right
to participate in such health and disability insurance plans which the Company
may provide to its senior executive officers and for which the Employee is
eligible, the premiums of which shall be paid by the Company (e.g., long term
disability, life insurance and medical insurance for the Employee and her
dependents). During the Employment Term, the Employee will be entitled to four
weeks of paid vacation per annum in accordance with the Company's policy. Such
vacation may be taken in the Employee's discretion with the prior approval of
the Company, and at such time or times as are not inconsistent with the
reasonable business needs of the Company.
8. Business Expenses. The Company will provide the Employee a Commutation
Allowance of $1750 per month. This Commutation Allowance shall continue to be
provided to the Employee through the Severance Period (as defined in Section
7(c) hereof). In addition, all reasonable travel, entertainment and other
expenses incident to the performance of the Employee's duties or the rendering
of services incurred on behalf of the Company by the Employee during the
Employment Term shall be paid by the Company.
9. Termination. Notwithstanding the provisions of Section 2 hereof, the
Employee's employment with the Company may be earlier terminated as follows:
(a) By action taken by the Board, the Employee may be discharged for cause
(as defined below), effective as of such time as the Board shall determine. Upon
discharge of the Employee pursuant to this Section 7(a), the Company shall have
no further obligation or duties to the Employee, except for payment of accrued
salary, bonus and benefits payable to the Employee through the date of
termination of employment, and the Employee shall have no further obligations or
duties to the Company, except as provided in Section 8.
(b) In the event of (i) the death of the Employee or (ii) by action of the
Board in the event of the inability of the Employee, by reason of physical or
mental disability, to continue substantially to perform her duties hereunder for
an aggregate period of 180 days during the Employment Term, during which 180 day
period salary and any other benefits hereunder shall not be suspended or
diminished. Upon any termination of the Employee's employment under this Section
7(b), the Company shall have no further obligations or duties to the Employee,
except for payment of accrued salary, bonus and benefits payable to the Employee
through the date of termination of employment, and the Employee shall have no
further obligations or duties to the Company, except as provided in Section 8.
(c) In the event that there is a change of control of the Company (as
defined below), and the Agreement is terminated by either the Employee or the
Company for whatever reason (other than for the reasons specified in Section
7(a) and (b) hereof) within the Employment Term, the Company shall pay to the
Employee, in
2
<PAGE>
addition to the payment of accrued salary, bonus and benefits payable to the
Employee through the date of termination of employment, a payment equal to (x)
the Employee's then applicable base salary and (y) the average of the last two
cash bonuses paid to the Employee. Such payments shall continue for the greater
of (i) the balance of the remaining term of this Agreement or (ii) one year from
the date of such termination (whichever is applicable, the "Severance Period").
Furthermore, the Company shall maintain benefits for the Employee through the
Severance Period. All such monies and benefits set forth in this Section 7(c)
shall be known hereinafter as the "Severance Payment." The cash portion of the
Severance Payment made pursuant to this Section 7(c) shall be paid to Employee
in equal monthly installments over a one-year period. In addition, all stock
options and other awards under the Company's stock option plans shall
immediately vest and remain exercisable for the a period of the lesser of (i)
the original term of the stock option and (ii) five years.
(d) For purposes of this Agreement, the Company shall have "cause" to
terminate the Employee's employment under this Agreement upon (i) the failure by
the Employee to substantially perform her duties under the Agreement, (ii) the
engaging by the Employee in criminal misconduct (including embezzlement and
criminal fraud) which is materially injurious to the Company, monetarily or
otherwise, (iii) the conviction of the Employee of a felony, or (iv) gross
negligence on the part of the Employee. The Company shall give written notice to
the Employee, which notice shall specify the grounds for the proposed
termination and the Employee shall be given thirty (30) days to cure if the
grounds arise under clauses (i) or (iv) above.
(f) For purposes of this Agreement, a "change of control of the Company"
shall mean the occurrence of (i) the acquisition by an individual, entity, or
group of the beneficial ownership of 50% or more of (1) the outstanding common
stock, or (2) the combined voting power of the Company's voting securities;
provided, however, that the following acquisitions will not constitute a "change
of control": (x) any acquisition by any employee benefit plan of the Company or
any affiliate or (y) any acquisition by any corporation if, immediately
following such acquisition, more than 50% of the outstanding common stock and
the outstanding voting securities of such corporation is beneficially owned by
all or substantially all of those who, immediately prior to such acquisition,
were the beneficial owners of the common stock and the Company's voting
securities (in substantially similar proportions as their ownership of such
Company securities immediately prior thereto); or (ii) the approval by the
Company's stockholders of a reorganization, merger or consolidation, other than
one with respect to which all or substantially all of those who were the
beneficial owners, immediately prior to such reorganization, merger or
consolidation, of the Common Stock and the Company's voting securities
beneficially own, immediately after such transaction, more than 50% of the
outstanding common stock and voting securities of the corporation resulting from
such transaction (in substantially the same proportions as their ownership,
immediately prior thereto, of the Common Stock and the Company's voting
securities); or (iii) the approval by the Company's stockholders of the sale or
other disposition of all or substantially all of the assets of the Company,
other than to a subsidiary of the Company.
(f) In the event that (i) the Company terminates this Agreement during the
Employment Term for any reason other than those covered by Section 7(a) - (c),
(ii) the Company decides not to renew the Agreement pursuant to Section 2
hereof, or (iii) the Employee terminates the Agreement for "Good Reason" (as
defined herein), the Company will pay the Employee the cash portion of Severance
Payment in 12 monthly installments over a one
3
<PAGE>
year period and will maintain the benefits as described in Section 7(c) during
the Severance Period. Good Reason, for purposes of this Agreement, shall mean
either (i) a material breach of the Agreement by the Company, (ii) removal of
the Employee by the Company from the Board or the failure of the Company to
nominate Employee as a Board member for any reason other than those specified in
Section 7(a) and (b) hereof or due to Employee's request, (iii) a material
reduction in Employee's duties or the assignment of duties to Employee that are
materially inconsistent with the duties and positions set forth in Section 3
hereof; or (iv) the relocation of the Company's offices more than 45 miles from
its current location. The Employee shall give written notice to the Company,
which notice shall specify the grounds for the proposed "Good Reason" and the
Company shall be given thirty (30) days to cure if the grounds arise under
clauses (i) or (iii) above.
17. Confidentiality; Noncompetition.
(a) The Company and the Employee acknowledge that the services to be
performed by the Employee under the Agreement are unique and extraordinary and,
as a result of such employment, the Employee will be in possession of
confidential information relating to the business practices of the Company. The
term "confidential information" shall mean any and all information (oral or
written) relating to the Company or any of its affiliates, or any of their
respective activities, other than such information which can be shown by the
Employee to be in the public domain (such information not being deemed to be in
the public domain merely because it is embraced by more general information
which is in the public domain) other than as the result of breach of the
provisions of this Section 8(a), including, but not limited to, information
relating to: trade secrets, proprietary information, personnel lists, financial
information, research projects, services used, pricing, customers, customer
lists and prospects, product sourcing, marketing and selling and servicing. The
Employee agrees that she will not, during her employment or subsequent to the
termination of employment, directly or indirectly, use, communicate, disclose or
disseminate to any person, firm or corporation any confidential information
regarding the clients, customers or business practices of the Company acquired
by the Employee during her employment by Company, without the prior written
consent of Company; provided, however, that the Employee understands that
Employee will be prohibited from misappropriating any trade secret at any time
during or after the termination of employment. At no time during the Employment
Term or thereafter shall the Employee directly or indirectly, disparage the
commercial, business or financial reputation of the Company.
(b) In consideration of Company's hiring Employee, the payment by the
Company to the Employee as described below and for other good and valuable
consideration, the Employee hereby agrees that she shall not, during the
Employment Term and for a period of one (1) year following such employment (the
"Restrictive Period"), directly or indirectly, take any action which constitutes
an interference with or a disruption of any of the Company's business
activities.
(c) For purposes of clarification, but not of limitation, the Employee
hereby acknowledges and agrees that the provisions of subparagraph 8(b) above
shall serve as a prohibition against her, during the Restrictive Period, from:
(4) directly or indirectly, contacting, soliciting or directing any
person, firm, or corporation to contact or solicit, any of the Company's
customers, prospective customers, or business partners for the purpose of
4
<PAGE>
selling or attempting to sell, any products and/or services that are the same as
or similar to the products and services provided by the Company to its customers
during the Restrictive Period. In addition, the Employee will not disclose the
identity of any such business partners, customers, or prospective customers, or
any part thereof, to any person, firm, corporation, association, or other entity
for any reason or purpose whatsoever;
(5) directly or indirectly, engaging or carrying on in any manner
(including, without limitation, as principal, shareholder, partner, lender,
agent, employee, consultant, or investor (other than a passive investor with
less than a five percent (5%) interest) trustee or through the agency of any
corporation, partnership, limited liability company, or association) in any
business that is in competition with the engaged in any business in competition
with the business of the Company; or
(6) soliciting on her own behalf or on behalf of any other person,
the services of any person who is an employee of the Company, or soliciting any
of the Company's employees to terminate employment with the Company.
(d) Upon the termination of the Employee's employment for any reason
whatsoever, all documents, records, notebooks, equipment, price lists,
specifications, programs, customer and prospective customer lists and other
materials which refer or relate to any aspect of the business of the Company
which are in the possession or under the control of the Employee including all
copies thereof, shall be promptly returned to the Company.
(e) The parties hereto hereby acknowledge and agree that (i) the Company
would be irreparably injured in the event of a breach by the Employee of any of
her obligations under this Section 8, (ii) monetary damages would not be an
adequate remedy for any such breach, and (iii) the Company shall be entitled to
injunctive relief, in addition to any other remedy which it may have, in the
event of any such breach .
(j) The rights and remedies enumerated in Section 8(e) shall be
independent of the other, and shall be enforceable, and all of such rights and
remedies shall be in addition to, and not in lieu of, any other rights and
remedies available to the Company under law or in equity.
(k) If any provision contained in this Section 8 is hereafter construed to
be invalid or unenforceable, the same shall not affect the remainder of the
covenant or covenants, which shall be given full effect, without regard to the
invalid portions.
(l) This Section 8 shall survive the termination of this Agreement.
(m) It is the intent of the parties hereto that the covenants contained in
this Section 8 shall be enforced to the fullest extent permissible under the
laws and public policies of each jurisdiction in which enforcement is sought
(the Employee hereby acknowledging that said restrictions are reasonably
necessary for the protection of the Company). Accordingly, it is hereby agreed
that if any of the provisions of this Section 8 shall be adjudicated to be
invalid or unenforceable for any reason whatsoever, said provision shall be
(only with respect to the operation thereof in the particular jurisdiction in
which such adjudication is made) construed by limiting and reducing it so as to
be enforceable to the extent permissible, without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of said
provision in any other jurisdiction.
5
<PAGE>
18. Prior Agreements. This Agreement cancels and supersedes any and all
prior agreements and understandings between the parties hereto respecting the
employment of Employee by the Company, including, without limitation, the
Original Agreement.
19. Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be delivered personally or sent by
registered or certified mail, return receipt requested, to the other party
hereto at her or its address as set forth in the beginning of this Agreement.
Either party may change the address to which notices, requests, demands and
other communications hereunder shall be sent by sending written notice of such
change of address to the other party in the manner above provided.
20. Assignability and Binding Effect. This Agreement shall inure to the
benefit of and shall be binding upon the executors, administrators, successors
and legal representatives of Employee and shall inure to the benefit of and be
binding upon the Company and its successors and assigns. The Employee may not
delegate or assign her duties or rights under this Agreement.
21. Waiver. Waiver by either party hereto of any breach or default by the
other party in respect of any of the terms and conditions of this Agreement
shall not operate as a waiver of any other breach or default, whether similar to
or different from the breach or default waived.
22. Complete Understanding: Amendment and Termination. This Agreement
constitutes the complete understanding between the parties with respect to the
employment of Employee hereunder and no statement, representation, warranty or
covenant has been made by either party with respect thereto except as expressly
set froth herein. This Agreement shall not be altered, modified, amended or
terminated except by written instrument signed by each of the parties hereto
provided, however, that the waiver by either party hereto of compliance with any
provision hereof or of any breach or default by the other party hereto need be
signed only by the party waiving such provision, breach or default.
23. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which taken together
shall constitute one and the same Agreement.
24. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Connecticut.
25. Paragraph Headings. The paragraph headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
17. Consideration. Employee hereby acknowledges and agrees that the
employment opportunity encompassed in this Agreement is contingent upon the
execution of this Agreement and that such employment, in addition to the mutual
promises herein, constitutes adequate consideration for this Agreement.
6
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
EDGAR ONLINE, INC.
By:_______________________________
Its:
Date:
---------------------------
Susan Strausberg
Date:
7