Employment Agreement - IntraLinks Inc. and Mark Adams
EXECUTION COPY
EMPLOYMENT AGREEMENT
This Agreement is made as of this 1st day of January, 2000 by and
between IntraLinks, Inc., a Delaware corporation (the "Company") and Mark Adams
(the "Executive"), an individual residing at [Address].
1. Term. Executive shall be employed by the Company for a period
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commencing on January 1, 2000 and, except as provided herein, ending three (3)
years from such date (the "Initial Term"). The Initial Term and each successive
term thereafter shall automatically renew for successive one (1) year periods
unless either party provides one hundred and twenty (120) days prior written
notice of its intention not to renew (the Initial Term and any subsequent
renewal term, the "Term").
2. Position; Duties. Executive shall serve as the Chief Executive Officer
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of the Company reporting to the Board of Directors of the Company and shall
perform such duties as requested by the Board of Directors of the Company and as
are normally assigned to a person of the Executive's title and position at a
corporation of the size and nature of the Company. During the Term hereof, (i)
Executive shall devote substantially all of his business time and attention to
the business and affairs of the Company and use his best efforts to promote the
business, affairs and reputation of the Company and (ii) prior to date on which
the Company becomes a "reporting company" pursuant to the Securities Exchange
Act of 1934, as amended, the Company shall include Executive as a designee for
the board of directors of the Company and shall use its best efforts to cause
the shareholders of the Company to elect Executive a director of the Company.
3. Compensation.
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i. Base Salary. For services rendered to the Company hereunder,
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the Company shall pay Executive a salary equal to $275,000 per year (the "Base
Salary"). Annually, commencing one (1) year from the date of this Agreement,
Executive will be entitled to a salary review by the Board of Directors, or a
committee designated by the Board of Directors, for purposes of determining any
increase to the Base Salary.
ii. Bonus. Executive shall also be eligible for an annual bonus
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in an amount up to 50% of the Base Salary, which annual bonus shall be awarded
based on criteria as determined at the discretion of the Board of Directors of
the Company at the beginning of each calendar year during the Term of this
Agreement.
4. Stock Options. Executive may be granted, from time to time, incentive
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stock options of the Company based on the achievement of certain performance
criteria
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to be determined at the discretion of the Board of Directors of the Company at
the beginning of each calendar year during the Term of this Agreement.
5. Benefits. Executive shall be eligible to participate in all benefit
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plans, on the same terms and conditions, as those benefit plans available to
other Senior Executives of the Company including, without limitation, retirement
and savings plans, medical/dental and hospitalization plans and life insurance.
Executive shall also be entitled to four (4) weeks per annum vacation with full
pay.
6. Expense Reimbursement. The Company shall reimburse Executive for all
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reasonable out-of-pocket expenses incurred in the performance of his services
hereunder in accordance with the Company's applicable expense reimbursement and
related policies and procedures as in effect from time to time and subject to
submission by Executive of appropriate documentation reflecting the incurrence
of such expenses. The Company shall also reimburse Executive for reasonable
legal fees incurred in connection with the negotiation and review of this
Agreement.
7. Termination of Employment.
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a. Termination for Cause. Executive's employment under this
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Agreement may be terminated For Cause at any time, effective upon written notice
after formal action by the Board of Directors at a special meeting duly called
for the purpose of considering the termination of Executive. "For Cause" shall
be deemed to mean one or more of the following: (i) Executive's embezzlement or
misappropriation of funds, (ii) Executive's conviction of a felony involving
moral turpitude, (iii) Executive's commission of material acts of dishonesty,
fraud, or deceit, (iv) Executive's habitual or willful neglect of duties (after
notice and 30 days' opportunity to cure) or breach of the terms and provisions
of this Agreement, the Agreements to be executed in connection herewith attached
as Exhibit 7(a) hereto, or the policies of the Company known to Executive, or
(v) Executive's engagement in conduct that constitutes willful gross misconduct
in the carrying out of his duties under this Agreement, resulting, in material
economic harm to the Company, unless Executive believed in good faith that such
conduct was in, or not opposed to, the best interest of the Company. In the
event that Executive is terminated For Cause, Executive shall (i) be paid all
Base Salary earned, accrued or owing to him under this Agreement through the
date of termination, but not yet paid, (ii) forfeit all rights to all unvested
stock options granted to Executive, and (iii) no longer be entitled to receive
any other compensation or benefits thereafter.
b. Termination without Cause; Non-Renewal by the Company.
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i. The Company may, at any time, terminate this Agreement at any
time without Cause on written notice to Executive. For purposes hereof, the
termination of this Agreement by Executive at his initiative following the date
on which
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he learns of the occurrence of any of the following events shall constitute
termination without Cause:
A) a reduction in Executive's then current Base Salary or in his
target bonus opportunity as a percentage of Base Salary, which reduction is not
the result of across-the-board Company action reducing current Base Salary or
targeted bonuses for all Senior Executives of the Company;
B) the termination of, or a material reduction in, any material
employee benefit or perquisite enjoyed by Executive (other than as part of an
across-the-board reduction applying to all senior executives of the Company);
C) the removal of Executive as Chief Executive Officer of the
Company;
D) a material diminution in Executive's duties or the assignment
to Executive of duties that materially impair his ability to perform the duties
normally assigned to a person of his title and position at a corporation of the
size and nature of the Company;
E) the relocation of the Company's principal office, or of
Executive's own office as assigned to Executive by the Company, to a location
more than fifty (50) miles from New York, New York; and
F) the failure of the Company to obtain by operation of law or
otherwise the assumption of its obligations to perform this Agreement from any
successor to all or substantially all of the assets of the Company within forty-
five (45) days after a merger, consolidation, sale or similar transaction.
ii. If Executive's employment is terminated without Cause, for any
reason other than termination following Change of Control as defined in Section
7(d) hereof or the Company gives notice of non-renewal,
A) the Company shall pay to Executive as liquidated damages an
amount equal to two (2) years Base Salary; and, at the time of payment of
bonuses to other officers of the Company, a pro-rata portion of any annual bonus
earned by Executive (and not yet paid) provided that any targets or other
requirements set by the Board of Directors in connection with the grant of such
bonus have been met;
B) the Company shall pay to Executive any other amount (including
any portion of Base Salary) earned, accrued or owing to Executive through the
date of such termination but not yet paid; and
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C) if permitted by Company plans, the Company shall continue
any benefits to which Executive was entitled immediately prior to such
termination for a period equal to the lesser of twelve (12) months or the date
Executive receives other coverages and benefits from a subsequent employer;
provided, however, that notwithstanding the foregoing, in the event the
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Company's medical plan does not permit any such contribution, the Company shall
bear the cost of COBRA coverage for the lesser of two (2) years or the period of
COBRA coverage permitted by law; and
D) vested stock options shall remain exercisable for the
remainder of their terms and upon termination without cause (other than
termination following a Change of Control as defined in Section 7(d) hereof)
stock options granted but not yet vested shall immediately vest and remain
exercisable for the remainder of their terms.
Amounts payable hereunder shall be paid in a maximum of twelve (12)
equal monthly installments or, at the option of the Company, in a lump sum.
c. Termination Upon Death or Disability. This Agreement shall
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terminate automatically upon Executive's death. In the event of termination of
Executive's employment as a result of death, the Company shall (i) continue to
pay to Executive's estate, on a monthly basis, his Base Salary for a period of
one (1) year from the date of death; (ii) pay to Executive's estate, at the time
of payment of bonuses to other officers of the Company, a pro-rata amount of any
bonus earned by Executive (and not yet paid) provided that any targets or other
requirements set by the Board of Directors of the Company in connection with the
grant of such bonus have been met; (iii) any other amounts earned, accrued or
owing to Executive under this Agreement through the date of death but not yet
paid. Furthermore, all stock options vested at the time of death shall remain
exercisable for the remainder of the terms relating to such stock options and,
in the event Executive dies while performing his duties hereunder, stock options
granted but not yet vested shall immediately vest and remain exercisable for the
remainder of their terms.
This Agreement shall terminate at the option of the Company or the
Executive if Executive shall suffer "disability." For purpose hereof,
"disability" shall be defined to mean Executive's inability, due to physical or
mental incapacity, to substantially perform his duties and responsibilities
under this Agreement for a period of one hundred eighty (180) days from the date
of such disability as determined by an approved medical doctor selected by the
mutual agreement of the parties hereto. In the event that the parties hereto
cannot agree on an approved medical doctor, each party shall select a medical
doctor and the two doctors shall select a third medical doctor who shall serve
as the approved medical doctor hereunder. The party terminating this Agreement
shall notify the other party in writing of its decision to so terminate due to
Executive's disability. In the event of termination of Executive's employment as
a result of
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"disability," the Company shall (i) pay to Executive on a monthly basis, for a
period of two (2) years from the date of disability, an amount equal to his
monthly Base Salary minus any monthly payment received by Executive from any
Company purchased disability policy; (ii) at the time of the payment of bonuses
to other officers of the Company, pay to Executive his pro-rata portion of any
bonus earned by Executive (and not yet paid) provided that any targets or
requirements set by the Board of Directors in connection with the grant of such
bonus have been met; and (iii) continue Executive's participation in Company
benefit plans in which he participated immediately prior to such termination for
a period equal to the lesser of (A) twenty-four (24) months or (B) the remainder
of the term of this Agreement. Furthermore, (i) upon any such termination by
reason of "disability," all vested stock options shall remain exercisable for
the remainder of their respective terms and (ii) in the event such disability
occurs while performing his duties hereunder, stock options granted but not yet
vested shall immediately vest and remain exercisable for the remainder of their
terms.
d. Change of Control. If, within twelve (12) months after a Change of
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Control of the Company (as hereinafter defined) (i) Executive is no longer Chief
Executive of the Company, or the surviving entity of such transaction (without
regard to any parent/subsidiary relationship), (for any reason other than
expiration of this Agreement), (ii) Executive's duties or responsibilities are
substantially and materially diminished, (iii) Executive's current position in
the chain of command of the Company or surviving entity of such transactions
(without regard to any parent/subsidiary relationship) is materially diminished,
or (iv) Executive's benefits, access to benefits, or compensation are materially
diminished, Executive may be conclusively deemed, in the sole discretion of
Executive, to have been terminated without cause and shall therefore be entitled
to the benefits set forth in Sections 7(b)(ii)(B), 7(b)(ii)(C) and 7(b)(ii)(D)
hereof. Executive shall give the Board of Directors of the Company or any
surviving entity, written notice of his termination without cause hereunder and
exercise of his rights under Section 7(b)(ii) as provided hereunder.
For purposes of this Agreement, "Change of Control" shall be deemed to
occur if any of the following have occurred:
i. any "person," as such term is currently used in Section
13(d) of the Securities Exchange Act of 1934, becomes a "beneficial owner," as
such term is currently used in Rule 13d-3 promulgated under that Act of fifty
percent (50%) or more of the Voting Stock of the Company. For purposes of this
Agreement, Voting Stock shall mean the issued and outstanding capital stock or
other securities of any class or classes having general voting power under
ordinary circumstances, in the absence of contingencies, to elect the directors
of a corporation.
ii. a majority of the Board of Directors of the Company consists
of individuals other than Incumbent Directors, which term means the members of
the
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Board on the date hereof; provided that any individual becoming a director
subsequent to such date whose election or nomination for election was supported
by two-thirds of the directors who then comprised the Incumbent Directors shall
be considered to be an Incumbent Director;
iii. the Board of Directors of the Company adopts any plan of
liquidation providing for the distribution of all or substantially all of the
Company's assets;
iv. all or substantially all of the assets or business of the
Company are disposed of in any one or more transactions pursuant to a merger,
consolidation or other transaction (unless the shareholders of the Company
immediately prior to such merger, consolidation or other transaction
beneficially own, directly or indirectly, in substantially the same proportion
as they owned the Voting Stock of the Company, all of the Voting Stock or other
ownership interests of the entity or entities, if any, that succeed to the
business of the Company); or
v. the Company combines with another company and is the
surviving corporation but, immediately after the combination, the shareholders
of the Company immediately prior to the combination hold, directly or
indirectly, fifty percent (50%) or less of the Voting Stock of the combined
company, (there being excluded from the number of shares held by such
shareholders, but not from the Voting Stock of the combined company, any shares
received by affiliates of such other company in exchange for securities of such
other company).
8. Non-Competition, etc.
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a. Executive covenants and agrees that during the Term plus two (2)
years after termination or expiration hereof, he will not, either directly or
indirectly (as agent, employee, advisor (whether or not paid), director,
officer, stockholder, partner or individual proprietor, or as an investor who
has made an advance, loan or contribution to capital), compete in the geographic
area of North America with the Company or with any subsidiary affiliated company
or division of the Company in the Company's business, of providing services that
allow companies to manage, through the internet, business processes generally
characterized by multiple collaborating parties, volumes of information,
repeated cycles of revision or review of documents or information and a need for
high levels of security, or any other commercially viable product developed
during Executive's employment with the Company.
b. Executive covenants and agrees that during the Term plus two (2)
years after any termination under this Agreement, he will not contact or solicit
business that competes with the Company's business from persons who, during the
Term, were customers of the Company or its subsidiaries, affiliated companies or
divisions, or induce such persons to do business with any person other than the
Company or its affiliated
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subsidiaries, companies or divisions. Executive also agrees that during the Term
plus two (2) years after any termination under this Agreement, he will not
solicit or encourage any person who, on the date of the end of the Term or the
date of termination under this Agreement, was an employee of the Company (or its
subsidiaries, affiliated companies or divisions) to:
i. terminate his employment with the Company (or any of its
subsidiaries, affiliated companies or divisions); or
ii. become affiliated with any company or business which is in a
similar business to that of the Company (or any of its subsidiaries, affiliated
companies or divisions) or in which Executive, either directly or indirectly (as
an agent, employee, director, officer, stockholder, partner or individual
proprietor, or as an investor who has made advances on loans or contributions to
capital), has an interest.
9. Indemnification. The Company will indemnify Executive to the fullest
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extent permitted (including payment of legal expenses as incurred) by law or the
Company's by-laws. Executive shall be entitled to the protection of any
insurance policies the Company may elect to maintain generally for the benefit
of its directors and officers.
10. Compliance with Laws. Executive hereby covenants and agrees to comply
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with all federal and state laws and regulations relating to or arising out of
his employment hereunder, including, without limitation, any and all federal and
state securities laws.
11. Confidentiality and Other Agreements. As a condition to the Company's
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performance of its obligations hereunder, Executive shall enter into and execute
contemporaneously with the execution hereof, those agreements attached hereto as
Exhibit 7(a).
12. No Mitigation and No Offset. In the event Executive's employment is
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terminated hereunder, Executive shall have no duty to mitigate the Company's
financial obligations to him hereunder and there shall be no offsets of any
amounts due to him by the Company for amounts received from any future employer.
13. Remedies for Breach. Executive acknowledges that his violation of the
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provisions of Section 8 of this Agreement or the provisions of any of the
related agreements set out in Schedule 7.1(a) hereof will cause irreparable
injury to the Company and that Executive agrees that, in any case, the Company
shall be entitled in addition to any other rights and remedies the Company may
have at law or in equity, to an injunction enjoining and restraining Executive
from doing or continuing to do any act which violates any provision of this
Agreement.
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14. Miscellaneous. This Agreement shall be governed by and construed in
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accordance with the laws of the State of New York without regard to any conflict
of laws provisions thereof.
a. Any notices required shall be in writing and shall be deemed to
be duly made or given when mailed by registered or certified mail, return
receipt requested to:
Mr. Mark Adams
118 East 93rd Street
New York, New York 10128
IntraLinks, Inc.
1372 Broadway, Suite 12A
New York, New York 10018
Attn: Mr. Mark Adams
b. This Agreement shall not be amended except by a writing signed by
both parties hereof. This Agreement may be executed in counterpart signature
pages, which when taken together with signature of all parties, shall constitute
a complete original.
c. In the event of a Change of Control, the Company will require the
successor to the Company as Executive's employer to expressly assume and agree
to perform this Agreement in the same manner and to the same extent that the
Company would have been required to perform. This Agreement shall inure to the
benefit of Executive's personal or legal representatives, executors,
administrators, heirs, and successors. This Agreement shall not be assignable by
Executive. The Company may, at its sole option, transfer the Company's business
to a subsidiary or similar entity and assign this Agreement in its entirety to
such entity, which shall thereafter have the rights and obligations of the
Company hereunder. Subject to the provisions of Section 7(d) hereof, such an
assignment shall not constitute a termination of Executive's employment or
trigger any other rights or remedies of Executive. Each of the parties hereto
agrees to execute all documents and instruments and to take or cause to be taken
all actions which are necessary or appropriate to facilitate such an assignment
by the Company.
d. Each party shall pay its own expenses in connection with the
negotiation, preparation and execution of this Agreement.
e. Each party hereto represents and warrants that they are not party
to any other agreement which would conflict with or interfere with the terms and
conditions of this Agreement.
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f. No waiver of any breach of any terms hereof shall be effective
unless made in writing signed by the party against whom enforcement of the
waiver is sought, and such waiver shall not be construed as a waiver of any
subsequent breach of that term or of any other term of the same or different
nature.
g. This Agreement and the related agreements set forth in Exhibit
7(a) hereto contains the entire understanding and agreement between the parties
hereto with respect to the subject matter hereof and supersedes all prior oral
or written understandings and agreements relating hereto, including, but not
limited to, that certain Employment Agreement by and between Executive and the
Company dated as of the 7th day of July, 1997, as amended on December 15, 1997.
h. The parties agree to submit all controversies, claims and matters
of difference in any way related to this Agreement or the performance or breach
of the whole or any part hereof, to arbitration in New York, New York, according
to the rules and practices of the American Arbitration Association. Any such
dispute shall be decided by three (3) arbitrators. Arbitration of any such
controversy, claim or matter of difference shall be a condition precedent to any
legal action thereon. Awards shall be final and binding on all parties to the
extent and in the manner provided by the laws of the State of New York.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the first date above written.
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Mark Adams
INTRALINKS, INC.
By: ___________________________
Name:
Title:
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