Employment Agreement - InPhonic.com Inc. and David A. Steinberg
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made and entered into as
of February ___, 2000, by and between InPhonic.com, Inc., a Delaware corporation
(the "Company"), and David A. Steinberg (the "Executive").
In consideration of the mutual promises and covenants contained herein,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto, intending to be legally
bound, agree as follows:
1. Term of Employment. The Company hereby agrees to continue to
employ the Executive and the Executive hereby accepts continued employment by
the Company, in accordance with the terms and conditions set forth herein. The
Executive's employment, for the purposes of this Agreement, shall commence on
the date of this Agreement (the "Effective Date") and shall continue thereafter
unabated until terminated by either party pursuant to Section 5 hereof (the
"Employment Period").
2. Position. During the Employment Period the Executive shall be
employed as President and Chief Executive Officer of the Company and shall
oversee, direct and manage all operations of the Company. The Executive shall
report directly to the Board of Directors (the "Board"). Pursuant to the terms
of that certain Voting Agreement, by and among the Key Holders (as defined
therein), the Series A Investors (as defined therein) and the Series B Investors
(as defined therein), dated as of the date hereof, the Executive shall be
elected to serve as Chairman of the Board of Directors.
3. Duties and Functions.
3.1 The Executive agrees to undertake the duties and
responsibilities inherent in the position of President and Chief Executive
Officer, which may encompass different or additional duties as may, from time to
time, be assigned, altered or modified by the Board. The Executive agrees to
abide by the rules, regulations, instructions, personnel practices and policies
of the Company and any change thereof that may be adopted at any time by the
Board.
3.2 The Executive shall provide such financial information,
including monthly financial summaries, annual financial statements, annual
budgets and reports regarding events which may materially adversely affect the
Company's financial results or operations, to certain of the holders of the
capital stock of the Company, as set forth in Section 3.1 of that certain
Investor's Rights Agreement, by and among the Company, the Series A Investors
(as defined therein), the Series B Investors (as defined therein), the Founder
(as defined therein), Davidson Capital Group, LLC, and John Sculley, dated as of
the date hereof.
3.3 During the Employment Period, the Executive shall devote
his full time and attention to performing his duties hereunder and shall use his
best efforts to further the business of the Company. The Executive shall not
engage in consulting work or any trade or business for his own account or for or
on behalf of any other person, firm or corporation that
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competes, conflicts or interferes with the performance of his duties hereunder
in any way. The Company acknowledges that the Executive shall, during the
Employment Period, continue to be involved in the business and operations of
Sterling Cellular, Inc., a Maryland corporation ("Sterling Cellular") for so
long as such involvement does not interfere with the Executive's performance of
his duties hereunder. Such involvement shall be deemed to be non-competitive and
shall not constitute a breach of this Section 3.3 or Section 9.1, provided that
Sterling Cellular is not and does not engage in performance based Internet
direct marketing activities during the term of this Agreement and for one (1)
year thereafter. The Executive may engage in non-competitive business or
charitable activities for reasonable periods of time each month so long as such
activities do not interfere with the Executive's responsibilities under this
Employment Agreement.
4. Compensation. As remuneration for all services to be rendered by
the Executive during the Employment Period, and as consideration for complying
with the covenants contained herein, the Company shall pay and provide to the
Executive the following compensation:
4.1 Base Salary. The Company shall pay to the Executive a base
salary in an amount which shall be established from time to time by the Board,
provided that such Salary shall not be less than One Hundred Twenty Thousand
Dollars ($120,000) per annum (the "Salary"). The Salary shall be payable in
accordance with the Company's normal payroll schedule, or on such other periodic
basis as may be mutually agreed upon. Such salary shall be reviewed at least
annually to ascertain whether, in the judgment of the Compensation Committee of
the Board, such Salary should be increased, based on the performance of and
contributions made by the Executive during the preceding year, inflation,
corporate policy and other factors deemed appropriate by such committee. The
Company may withhold such federal, state or local taxes as shall be required to
be withheld pursuant to any applicable law or regulation from any amounts
payable under this Agreement.
4.2 Incentive Plans. The Executive shall be eligible to
participate in such profit-sharing, stock option, bonus, incentive and
performance based award programs as are made available generally to executive
employees of the Company and members of the Board, provided, however, that
options granted pursuant to the Company's 1999 Stock Incentive Plan to purchase
shares of the common stock, par value $0.01 per share (the "Common Stock"), of
the Company shall not vest at a rate in excess of twenty-five percent (25%) per
annum without the approval of a majority of the Board (which shall include at
least one (1) director designated by the holders of the Company's Series B
Convertible Preferred Stock, par value $0.01 per share).
4.3 Other Benefits. The Executive shall be entitled to the
benefits available generally to the executive employees of the Company and/or
members of the Board, pursuant to Company programs, including, by way of
illustration, but not limitation, parking, personal leave, paid holidays, sick
leave, retirement, disability, dental, vision, group sickness, accident or
health insurance programs of the Company, as and to the extent that any such
programs are or may from time to time be in effect. Notwithstanding anything to
the contrary contained herein, the Executive shall be entitled to up to four (4)
weeks of paid vacation per year, and shall be provided with an automobile for
use in connection with the performance of his duties hereunder
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during the Employment Period. The Executive shall be solely responsible for all
payments that become due subsequent to the Employment Period pursuant to the
lease agreement covering such automobile.
4.4 Expenses. The Company shall reimburse the Executive
during the Employment Period for all reasonable, ordinary and necessary,
client-related business or entertainment expenses incurred in the performance of
his services hereunder in accordance with Company policy in effect from time to
time, provided, however, that the amount available to the Executive for such
travel, entertainment and other expenses may require advance approval by the
Board. The Executive shall submit vouchers and receipts for all expenses for
which reimbursement is sought.
4.5 Right to Modify, Amend and Discontinue Plans and Programs.
The Company shall not be obligated to institute, maintain, or refrain from
changing, amending or discontinuing any benefit plan, program or perquisite, so
long as such changes are similarly applicable to executive employees or members
of the Board, as the case may be, generally.
5. Employment Period; Termination.
5.1 Employment Period. The Employment Period shall commence
on the Effective Date and shall continue until the earlier to occur of the
following: (i) the close of business on the fourth (4/th/) anniversary of this
Agreement; (ii) the death, Permanent Disability (as hereinafter defined), or
Retirement (as hereinafter defined) of the Executive; or (iii) as otherwise
provided herein. Unless terminated earlier as otherwise provided herein, the
Employment Period may be extended by the mutual agreement of the Company and the
Executive within thirty (30) days prior to such anniversary.
5.2 Voluntary Resignation. The Executive may resign and
terminate this Agreement at any time for any reason by giving the Board written
notice of his intention to do so at least ninety (90) days prior to the
effective date of such resignation. The Company and the Executive shall have no
further obligations under this Agreement after the effective date of such
resignation, except as set forth in Sections 9 and 10 hereof. Such provisions
shall remain in full force and effect for the twelve (12) month period
subsequent to the effective date of the resignation of the Executive.
In the event that the Executive resigns pursuant to this Section
5.2, the Executive shall be entitled to (i) the Salary at the rate in effect at
such time through the effective date of such resignation; (ii) any options or
stock equivalents granted to the Executive pursuant to Section 4.2, to the
extent that such options or stock equivalents have vested in accordance with the
terms of the agreements to which such options or stock equivalents are subject,
if any; (iii) any rights or benefits available under applicable employee benefit
programs then in effect and in which the Executive was a participant at the time
of such resignation, to the extent that such rights or benefits have vested in
accordance with the terms of such programs; and (iv) any common stock held by
the Executive that is subject to the Stock Restriction Agreement (as
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defined in Section 6 hereof), to the extent that such shares have vested (and
are no longer subject to repurchase) in accordance with the terms of such Stock
Restriction Agreement.
5.3 Resignation for Good Reason. At any time during the
Employment Period, the Executive may terminate this Agreement for Good Reason
(as defined below) by giving the Board of Directors of the Company thirty (30)
calendar days written notice of intent to terminate, which notice sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
such resignation. The resignation of the Executive shall be effective upon the
expiration of such notice period and the Executive shall be entitled to: (i) the
Salary at the rate then in effect, payable at the discretion of the Board, in
one (1) lump sum on the effective date of such resignation or in twelve (12)
equal monthly installments, commencing on the effective date of such
resignation; and (ii) any rights or benefits available under any applicable
employee benefit programs then in effect and in which the Executive was a
participant at the time of such resignation, to the extent that such rights or
benefits have vested.
Any options granted to the Executive pursuant to Section 4.2
shall immediately become vested and exercisable by the Executive on the
effective date of the Executive's resignation for Good Reason. Any agreements
pursuant to which such options are granted to the Executive shall contain
provisions providing for such acceleration of vesting and shall be approved by
the Compensation Committee of the Board of Directors of the Company. Any common
stock held by the Executive that is subject to the Stock Restriction Agreement
(as defined in Section 6 hereof) on the effective date of the Executive's
resignation for Good Reason shall vest in accordance with the terms of such
Stock Restriction Agreement.
The Company and the Executive shall have no further obligations
under this Agreement after the effective date of such termination, except as set
forth in Sections 7, 8, 9 or 10 hereof.
"Good Reason" shall mean, without the Executive's express written
consent, the occurrence of any one or more of the following:
(a) the assignment of the Executive to duties of a substantial nature
that are materially inconsistent with the duties and responsibilities of the
Executive during the immediately preceding fiscal year, other than an assignment
that is withdrawn by the Company within thirty (30) days of its receipt of
written notice thereof provided by the Executive, or his representative,
provided, however, that an assignment of the type described in this Section
5.3(a) shall not constitute Good Reason in the event that the Executive retains
his position as Chairman of the Board for the duration of the Employment Period;
(b) the Company's requiring the Executive to be based at a location
which is at least fifty (50) miles further from the Executive's current primary
residence than is such residence from the Company's current headquarters, except
for required travel on the Company's business;
(c) a reduction by the Company in the Executive's Salary as in effect
on the Effective Date, as provided in Section 4.1 herein, or as the same shall
be increased from time to time;
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(d) the failure of the Company to make reasonable efforts to obtain a
satisfactory agreement from any successor to the Company to assume and agree to
perform this Agreement, as contemplated in Section 5.8.
The Executive's continued employment shall not constitute consent
to, or a waiver of rights with respect to, any circumstance constituting Good
Reason herein.
5.4 Termination For Cause. Nothing in this Agreement shall be
construed to prevent the Board from terminating the Executive's employment under
this Agreement for Cause (as hereinafter defined). The Company and the Executive
shall have no further obligations under this Agreement after the effective date
of such termination, except as set forth in Sections 9 and 10 hereof. Such
provisions shall remain in full force and effect for the twelve (12) month
period subsequent to the effective date of the termination of the Executive.
In the event that the Executive's employment is terminated by the
Board for Cause, the Executive shall be entitled to (i) the Salary at the rate
in effect at such time through the effective date of such termination; (ii) any
options or stock equivalents granted to the Executive pursuant to Section 4.2,
to the extent that such options or stock equivalents have vested in accordance
with the terms of the agreements to which such options or stock equivalents are
subject, if any; (iii) any rights or benefits available under applicable
employee benefit programs then in effect and in which the Executive was a
participant at the time of such termination, to the extent that such rights or
benefits have vested in accordance with the terms of such programs; and (iv) any
common stock held by the Executive that is subject to the Stock Restriction
Agreement (as defined in Section 6 hereof), to the extent that such shares have
vested (and are no longer subject to repurchase) in accordance with the terms of
such Stock Restriction Agreement.
The term "Cause" as used in this Agreement shall mean (i) the
indictment or conviction of, or the plea of non contendere by, the Executive for
any felony or other crime involving fraud or moral turpitude; (ii) any act or
omission constituting a material dereliction of the fiduciary obligations of the
Executive; or (iii) any breach by the Executive of the provisions of Section 7,
8, 9, or 10 hereof.
5.5 Termination Without Cause. The Company shall retain the
right to terminate the Executive without Cause at any time during the Employment
Period. The Executive acknowledges and agrees that the non-compete and
non-disclosure restrictions set forth in Sections 9 and 10 of this Agreement
will remain in full force and effect for the twelve (12) month period subsequent
to the termination of the Executive without Cause.
In the event that the Executive's employment is terminated by the
Board without Cause pursuant to this Section 5.5, the Executive shall be
entitled to: (i) the Salary at the rate then in effect, payable, at the
discretion of the Board, in one (1) lump sum on the effective date of such
termination or in twelve (12) equal monthly installments, commencing on the
effective date of such termination; and (ii) any rights or benefits available
under applicable employee
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benefit programs then in effect and in which the Executive was a participant at
the time of such resignation, to the extent that such rights or benefits have
vested in accordance with the terms of such programs.
Any options granted to the Executive pursuant to Section 4.2 shall
immediately become vested and exercisable by the Executive on the effective date
of the termination of the Executive without Cause. Any agreements pursuant to
which such options are granted to the Executive shall contain provisions
providing for such acceleration of vesting and shall be approved by the
Compensation Committee of the Board of Directors of the Company. Any common
stock held by the Executive that is subject to the Stock Restriction Agreement
(as defined in Section 6 hereof) on the effective date of the termination of the
Executive without Cause shall vest in accordance with the terms of such Stock
Restriction Agreement.
5.6 Termination Due to Permanent Disability. In the event that
the Executive suffers a Permanently Disability (as hereinafter defined) during
the Employment Period, the Company may terminate this Agreement by providing at
least thirty (30) days written notice to the Executive of its intention to do
so. This effective date of such termination shall be the last day of such thirty
(30) notice period.
In the event that the Executive's employment is terminated by the Board
due to the Permanent Disability (as hereinafter defined) of the Executive, the
Executive or his legal representative or court appointed guardian shall be
entitled to: (i) the Salary at the rate in effect at such time through the
effective date of such termination; (ii) any options or stock equivalents
granted to the Executive pursuant to Section 4.2, to the extent that such
options or stock equivalents have vested in accordance with the terms of the
agreements to which such options or stock equivalents are subject, if any; (iii)
any rights or benefits available under applicable employee benefit programs then
in effect and in which the Executive was a participant at the time of such
termination, to the extent that such rights or benefits have vested in
accordance with the terms of such programs; and (iv) any common stock held by
the Executive that is subject to the Stock Restriction Agreement (as defined in
Section 6 hereof), to the extent that such shares have vested (and are no longer
subject to repurchase) in accordance with the terms of such Stock Restriction
Agreement.
"Permanent Disability" for the purposes of this Agreement shall mean
the inability of the Executive to render full and effective services hereunder
by reason of permanent physical or mental infirmity, resulting from illness,
accident or otherwise, for more than one hundred and twenty (120) consecutive
calendar days during any twelve (12) month period.
5.7 Termination Due to Death or Retirement. This Agreement shall
terminate immediately upon the Executive's death or the effective date of the
Executive's Retirement (as defined under the then established rules of the
Company's retirement plans), provided, however, that in the event that the
Executive's employment terminates upon his Retirement, the provisions of
Sections 9 and 10 will remain in full force and effect for the twelve (12) month
period subsequent to such termination.
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In the event that the Executive's employment is terminated due
to the death or Retirement of the Executive, the Executive, or his estate or
legal representative shall be entitled to: (i) the Salary at the rate in effect
at such time through the effective date of such termination; (ii) any options or
stock equivalents granted to the Executive pursuant to Section 4.2, to the
extent that such options or stock equivalents have vested in accordance with the
terms of the agreements to which such options or stock equivalents are subject,
if any; (iii) any rights or benefits available under applicable employee benefit
programs then in effect and in which the Executive was a participant at the time
of such termination, to the extent that such rights or benefits have vested in
accordance with the terms of such programs; and (iv) any common stock held by
the Executive that is subject to the Stock Restriction Agreement (as defined in
Section 6 hereof), to the extent that such shares have vested (and are no longer
subject to repurchase) in accordance with the terms of such Stock Restriction
Agreement.
Notwithstanding the foregoing, during the Employment Period,
the Company shall obtain and maintain in full force and effect, two (2) life
insurance policies in the aggregate amount of four million dollars ($4,000,000)
on the life of the Executive, the first being a term life insurance policy in
the amount of two million dollars ($2,000,000), which such policy shall be owned
by the Company, with proceeds payable to or for the benefit of the Company, and
the second being a whole life insurance policy in the amount of two million
dollars ($2,000,000), which such policy shall be owned by the Executive, with
proceeds payable to or for the benefit of the estate of the Executive.
5.8 Termination Upon a Change in Control. In the event that
the Company (or its successor) terminates the employment of the Executive
without Cause, or the Executive resigns from his position for Good Reason,
subsequent to a Change in Control (as hereinafter defined), the Executive shall
be entitled to: (i) the Salary at the rate then in effect, payable, at the
discretion of the Board, in one (1) lump sum on the effective date of such
termination or in twelve (12) equal monthly installments, commencing on the
effective date of such termination; and (ii) any rights or benefits available
under applicable employee benefit programs then in effect and in which the
Executive was a participant at the time of such termination, to the extent that
such rights or benefits have vested in accordance with the terms of such
programs.
Any options granted to the Executive pursuant to Section 4.2
shall immediately become vested and exercisable by the Executive on the
effective date of the termination of the Executive without Cause, or the
resignation of the Executive for Good Reason. Any agreements pursuant to which
such options are granted to the Executive shall contain provisions providing for
such acceleration of vesting and shall be approved by the Compensation Committee
of the Board of Directors of the Company. Any common stock held by the Executive
that is subject to the Stock Restriction Agreement (as defined in Section 6
hereof) on the effective date of the termination of the Executive without Cause,
or the resignation of the Executive for Good Reason, subsequent to a Change in
Control, shall vest in accordance with the terms of such Stock Restriction
Agreement.
The term "Change in Control" shall mean (i) the sale of all or
substantially all of the assets of the Company or (ii) any merger, share
exchange, consolidation or other
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reorganization or business combination of the Company immediately after which a
majority of the directors of the surviving entity is not comprised of persons
who were directors of the Company immediately prior to such transaction or after
which persons who hold a majority of the voting capital stock of the surviving
entity are not persons who held a majority of the voting capital stock of the
Company immediately prior to such transaction.
6. Restrictions Upon Common Stock Held by Executive. The Executive
purchased 4,500,000 shares of Common Stock for the purchase price of $0.01 per
share on January 27, 1997, and received a stock dividend of .8888889 shares in
respect of each such share on December 1, 1999. The Company shall have the right
to repurchase up to 6,800,000 shares of Common Stock held by the Executive on
the terms and subject to the conditions set forth in that certain Stock
Restriction Agreement by and between the Company and the Executive, dated as of
the date hereof and attached hereto as Exhibit A (the "Stock Restriction
Agreement").
7. Representations and Warranties. The Executive represents and
warrants to the Company that Executive is not bound by any restrictive covenants
and has no prior obligations or commitments of any kind that would in any way
prevent, restrict, hinder or interfere with Executive's acceptance of continued
employment with the Company or the Executive's ability to fully perform his
duties and services hereunder. The Executive agrees to indemnify and hold the
Company harmless for any liability the Company may incur as the result of the
existence of any such covenants, obligations or commitments.
8. Company Property. The Executive acknowledges and agrees that all
correspondence, records, documents, software, promotional materials, and other
Company property (including all copies, abstracts, extracts, or portions
thereof) that comes into the Executive's possession by, through or during the
Employment Period, regardless of the source and whether or not created by the
Executive, are the sole and exclusive property of the Company. Immediately upon
the termination of the Executive's employment with the Company, the Executive
shall return to the Company all such property.
9. Non-Competition; Non-Solicitation of Employees.
9.1 Prohibition on Competitive Activities and the Solicitation of
Company Employees. In consideration of the Salary provided for herein, and as a
term and condition of his employment with the Company under this Agreement, the
Executive agrees that, during the Employment Period and for one (1) year
thereafter, the Executive shall not, either on his own behalf or on behalf of
any third party:
(a) be connected with any business or enterprise in the United
States which is in direct competition with the Company at the time of the
Executive's termination, resignation, or Retirement as an individual proprietor,
partner, stockholder, officer, employee, director, joint venturer, investor,
lender, or in any other capacity whatsoever (other than as the holder of not
more than three percent (3%) of the then outstanding capital stock of a publicly
held company); or
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(b) attempt in any manner, directly or indirectly, to (i)
solicit the business of any client, customer or business partner of the Company
existing as of the date of the termination of the Executive, or (ii) persuade
any such client, customer, or business partner of the Company to cease to do
business with or reduce the amount of business that any such client, customer,
or business partner has customarily done or actively contemplates doing with the
Company, including in each such case, but not limited to, the wireless
communications service and product providers with which the Company does
business as of the Effective Date of this Agreement; or
(c) recruit, solicit or induce, or attempt to induce, any
employee or employees of the Company or its affiliates to terminate their
employment with, or otherwise cease their relationship with the Company or its
affiliates.
Notwithstanding the foregoing, nothing in this Section 9.1
shall preclude the Executive from providing services that are similar to those
provided by the Executive to the Company during the Employment Period to any
Internet based business or enterprise, for so long as such business or
enterprise does not engage in performance-based Internet direct marketing
activities. Furthermore, Sterling Cellular is deemed not to be and shall not be
deemed to be "in direct competition" with the Company, for so long as Sterling
Cellular is not engaged in and does not engage in performance-based Internet
direct marketing activities.
9.2 The parties agree that the relevant public policy aspects
of covenants not to compete have been discussed, and that every effort has been
made to limit the restrictions placed upon the Executive to those that are
reasonable and necessary to protect the Company's legitimate interests.
9.3 In the event that any restriction set forth in this
Section 9 is found by any court of competent jurisdiction to be unenforceable
because it extends for too long a period of time or over too great a range of
activities or geographic area, it shall be interpreted to extend over the
maximum period of time, range of activities or geographic areas as to which it
may be enforceable.
9.4 Specific Performance. The restrictions contained in this
Section 9 are necessary for the protection of the business and goodwill of the
Company and/or its affiliates and are considered by the Executive to be
reasonable for such purposes. The Executive agrees that any material breach of
this Section 9 will cause the Company and/or its affiliates substantial and
irreparable damage and therefore, in the event of any such breach, in addition
to such other remedies which may be available, the Company shall have the right
to seek specific performance and injunctive relief to enforce the performance of
this Section 9. This provision is not a waiver of any other rights the Company
may have under this Agreement, including the right to recover money damages.
9.5 Survival. The provisions of this Section 9 shall survive
the termination of this Agreement.
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10. Non-Disclosure of Proprietary Information.
10.1 Proprietary Information Defined. The Executive acknowledges
and agrees that all information, whether or not in writing, of a private,
secret, trade secret, confidential, or proprietary nature concerning the
business, business relationships, technical affairs, or financial affairs of the
Company or any affiliate or related company (collectively, "Proprietary
Information") is and shall be the exclusive property of the Company. By way of
illustration, but not limitation, Proprietary Information includes information
regarding the back-end order fulfillment processes developed and utilized by the
Company in connection with the fulfillment of purchase orders for private label
products, information concerning the terms of the Company's strategic
partnerships with wireless communications product and service providers, the
Company's methodologies, vendor relationships, marketing and branding
relationships with third parties, and all information and know-how (whether or
not patentable or copyrightable) owned, possessed or used by the Company,
including, without limitation, any invention, existing or future product,
formula, method, manufacturing techniques and procedures, composition, compound,
project, development, plan, market research, vendor information, supplier
information, customer lists or information, contacts at or knowledge of
customers, prospective customers, business partners of the Company or the
wireless communications service and product providers with which it has
established relationships, apparatus, equipment, trade secret, process,
research, reports, clinical data, financial data, technical data, test data,
know-how, computer program, software, software documentation, source code,
hardware design, technology, marketing or business plan, forecast, unpublished
financial statement, budget, license, patent applications, contracts, joint
ventures, price, cost and personnel data, but shall not include information that
(i) is or becomes public knowledge through legal means without fault by the
Executive, (ii) is already public knowledge, or known to the Executive, prior to
the execution and delivery of this Agreement, (iii) was available to the
Executive on a non-confidential basis prior to its disclosure by the Company,
(iv) was disclosed by the Executive in the performance of his duties hereunder,
or (v) must be disclosed pursuant to applicable law or court order.
10.2 Company Property. The Executive agrees that all files,
letters, memoranda, reports, records, data, sketches, drawings, diskettes,
notebooks, programs, drafts, notes, or other written, electronic, digital,
photographic, or other tangible records or material (whether complete or
partial) containing Proprietary Information (and any copies, abstracts,
extracts, or portions thereof), whether created by the Executive or others, that
shall come into the Executive's custody or possession, shall be and are the
exclusive property of Company to be used by Executive only in the performance of
Executive's duties for Company. All such materials or copies thereof and all
tangible property of Company in the Executive's custody or possession shall be
delivered to Company, upon the earlier of (i) a request by Company, or (ii) the
termination of the Executive's employment. After such delivery, the Executive
shall not retain any such materials or copies thereof or any such tangible
property.
10.3 Disclosure of Proprietary Information Prohibited. The
Executive recognizes, acknowledges and agrees that, during the Employment Period
and following the termination thereof, whether voluntarily or involuntarily,
whether with or without Cause, the Executive shall not, on his own behalf or as
a partner, officer, director, employee, agent, advisor
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or consultant of any other person or entity, directly or indirectly, (i)
disclose Proprietary Information to any person or entity other than agents of
the Company; or (ii) use or aid others in obtaining or using any such
Proprietary Information without the prior written consent of the President of
the Company or his or her designee. The Executive agrees that his obligation not
to disclose or to use information and materials of the types set forth in
Sections 10.1 and 10.2 hereof, and his obligation to return all such materials
and tangible property, also extends to such types of information, materials and
tangible property of customers or business partners of the Company, suppliers to
the Company and other third parties who may have disclosed or entrusted the same
to the Company or the Executive. The Company agrees that any Proprietary
Information utilized by the Executive in connection with the business and
operations of Sterling Cellular is deemed not to be and shall not be deemed to
be a breach of this Section 10.3, for so long as Sterling Cellular is not
engaged in and does not engage in performance-based Internet direct marketing
activities.
10.4 Survival. The obligations of this Section 10 will survive
the termination of Executive's employment relationship with the Company unless
or until the Proprietary Information subject to this Section 10 (i) is or
becomes public knowledge through legal means without fault by the Executive, or
(ii) was disclosed by the Executive in the performance of his duties hereunder.
10.5 Disclosure Mandated by Law. In the event that the
Executive is required to disclose to a third party any Proprietary Information
(either during the Employment Period or at any time thereafter) by law or
pursuant to a subpoena or other judicial or governmental order, the Executive
shall provide the Company with prior notice of such requirement, and shall
cooperate with lawful efforts made by the Company to seek a protective order
prohibiting or limiting such disclosure. In the absence of a protective order,
any disclosure by the Executive pursuant to a subpoena or other lawful judicial
or governmental order shall not constitute a violation of this Agreement.
10.6 Specific Performance. The Executive acknowledges and
agrees that any breach by the Executive of any of the provisions contained in
this Section 10 will cause the Company immediate and irreparable damage, and
there is no adequate remedy at law for such breach. Accordingly, in addition to
such other remedies which may be available, the Company shall have the right to
seek specific performance and injunctive relief to enforce the performance of
this Section 10. This provision is not a waiver of any other rights the Company
may have under this Agreement, including the right to recover money damages.
11. Intellectual Property. During the Employment Period, the
Executive shall disclose to the Company all ideas, concepts, inventions, product
ideas, new products, discoveries, methods, software, business plans and business
opportunities, which may or may not be patentable or copyrightable, or otherwise
protected by then-applicable laws governing intellectual property and
intellectual property rights, that are developed by the Executive through the
use of Company resources that relate directly to the Company's business. The
Executive agrees that such will be the property of the Company and that, at the
Company's request and cost, he will do whatever is necessary to secure for the
Company the rights thereto by patent,
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copyright or otherwise. Executive acknowledges and agrees that his obligations
with respect to Company property discussed in this paragraph shall survive the
termination of this Agreement.
12. Publicity. Neither party shall issue, without the prior consent of
the other party, any press release or make any public announcement with respect
to this Agreement or the employment relationship between the Company and the
Executive. Following the Effective Date of this Agreement and regardless of any
dispute that may arise in the future, the Executive and the Company jointly and
mutually agree that neither party shall disparage, criticize or make statements
which are negative, detrimental or injurious to the other party.
13. Binding Agreement. This Agreement shall be binding upon and inure
to the benefit of the parties hereto, their heirs, personal representatives,
successors and assigns. The parties understand that the obligations of the
Executive are personal and may not be assigned by him.
14. Entire Agreement. This Agreement contains the entire understanding
of the Executive and the Company with respect to the employment of the Executive
by the Company and supersedes any and all prior understandings of the parties
hereto, whether written or oral. This Agreement may not be amended, waived,
discharged or terminated orally, but only by a written instrument, specifically
identified as an amendment to this Agreement, and executed by the parties
hereto.
15. Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be deemed
severable from the remainder of this Agreement, and the remaining provisions
contained in this Agreement shall be construed to preserve to the maximum extent
permissible the intent and purposes of this Agreement. Any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
16. Governing Law. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the District of Columbia, without
giving effect to the principles of conflicts of law thereof.
17. Notices. Any notice provided for in this Agreement shall be
provided in writing. Notices shall be effective from the date of service, if
served personally on the party to whom notice is to be given, or on the second
day after mailing, if mailed by first class mail, postage prepaid. Notices shall
be properly addressed to the parties at their respective addresses or to such
other address as either party may later specify by notice to the other.
18. Miscellaneous.
18.1 No delay or omission by the Company in exercising any right
under this Agreement shall operate as a waiver of that or any other right. A
waiver or consent given by the Company on any one occasion shall be effective
only in that instance and shall not be construed as a bar or waiver of any right
on any other occasion.
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18.2 The captions of the sections of this Agreement are for convenience
of reference only and in no way define, limit or affect the scope or substance
of any section of this Agreement.
[Signature Page Follows]
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed and delivered under seal, by its authorized
officers or individually, on the 4th day of February, 2000.
InPhonic.com, Inc.
By: /s/ John Sculley
______________________________________
Name: John Sculley
Title: Member of the Compensation
Committee of the Board of
Directors of InPhonic.com, Inc.
/s/ David A. Steinberg
_________________________________________
David A. Steinberg, an individual
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