Employment Agreement - Lifeminders Inc. and Allison Abraham
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement"), made and entered into this
23rd day of June, 2000, by and between LifeMinders, Inc. (the "Company"), and
Allison Abraham (the "Executive").
1. Position.
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The Company hereby agrees to employ the Executive to serve in the role of
President of the Company, subject to the limitation set forth herein. The
Executive accepts such employment upon the terms and conditions set forth
herein, and further agrees to perform to the best of her abilities the duties
generally associated with her position, as well as such other duties
commensurate with her position as President as may be reasonably assigned by the
Company. The Executive shall perform her duties diligently and faithfully and
shall devote her full business time and attention to such duties.
2. Term of Employment and Renewal.
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The term of Executive's employment under this Agreement will commence on
the date of this Agreement (the "Effective Date"). Subject to the provisions of
Section 10 of this Agreement, the term of Executive's employment hereunder shall
be for an initial term of three (3) years from the Effective Date (the "Initial
Term"). The Initial Term of this Agreement shall be automatically extended for
successive one (1) year periods (each a "Renewal Period") unless the Company or
the Executive gives written notice to the other at least thirty (30) days prior
to the expiration of the Initial Term, or a Renewal Period, of such party's
election not to extend this Agreement. References herein to the "Term" shall
mean the Initial Term as it may be so extended by one or more Renewal Periods.
The last day of the Term is the "Expiration Date."
3. Compensation and Benefits.
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(a) Salary. Commencing on the Effective Date, the Company shall pay the
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Executive a base salary at a gross annual rate of One Hundred Ninety Thousand
Dollars ($190,000), payable in such installments as is the policy of the Company
(the "Salary"), but no less frequently than monthly.
(b) Bonus. The Executive shall be eligible to receive annual bonuses at
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the discretion of the Company.
(c) Benefits. The Executive shall be entitled to participate in all
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employee benefit plans which the Company provides or may establish from time to
time for the benefit of its employees or executives, including, without
limitation, group life, medical, surgical, dental and other health insurance,
short and long-term disability, deferred compensation, profit-sharing, paid
vacation and sick leave. The Company may purchase one or more "key man"
insurance policies on the Executive's life, each of which will be payable to and
owned by the Company. The Company, in its sole discretion, may select the amount
and type of key man life insurance
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purchased, and the Executive will have no interest in any such policy. The
Executive will cooperate with the Company in securing this key man insurance, by
submitting to all required medical examinations, supplying all information and
executing all documents required in order for the Company to secure the
insurance. The Company shall pay the Executive Seventy Five Thousand Dollars
($75,000), less all required withholding, on or about the Effective Date, as
compensation for the costs of relocating her residence.
(d) Stock Options. Upon approval by the Board of Directors of the Company
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(the "Board"), the Company shall grant the Executive, as of the Effective Date,
pursuant to the Company's 2000 Stock Incentive Plan, an option (the "Stock
Option") to purchase Five Hundred Seventy Five Thousand (575,000) shares (the
"Option Shares") of the Company's common stock at a purchase price equal to the
fair market value of the shares at the time of the grant, under the terms and
conditions set forth in the Company's standard Notice Of Grant of Stock Options,
and the exhibits thereto, which shall be provided to the Executive upon the date
of the stock option grant provided for herein. The Stock Option shall vest and
become exercisable, as long as the Executive is employed by the Company, as
follows: as to One Hundred Fifty Thousand (150,000) of the Option Shares, upon
the Effective Date; as to One Hundred Six Thousand Two Hundred Fifty (106,250)
of the Option Shares, upon the first anniversary of the Effective Date; and, as
to the remaining Three Hundred Eighteen Thousand Seven Hundred Fifty (318,750)
of the Option Shares, in thirty six equal monthly installments beginning on the
first anniversary of the Effective Date. Notwithstanding the foregoing, if,
within eighteen (18) months after a Change of Control of the Company, as defined
herein, a successor of the Company terminates the Executive's employment without
Cause, as defined below, or the Executive terminates her employment for Good
Reason, as defined below, then the vesting of the Stock Option shall accelerate
and vest in full. As used herein, a "Change of Control" shall be deemed to occur
if: there shall be consummated (x) any consolidation or merger of the Company in
which the Company is not the continuing or surviving corporation or pursuant to
which the stock of the Company would be converted into cash, securities or other
property, other than a merger or consolidation of the Company in which the
holders of the Company's stock immediately prior to the merger or consolidation
hold more than fifty percent (50%) of the stock or other forms of equity of the
surviving corporation immediately after the merger, or (y) any sale, lease,
exchange or other transfer (in one transaction or a series of related
transactions) of all, or substantially all, the assets of the Company.
Upon approval of the Board, the Executive shall also be given the right to
buy stock in the Company's subsidiaries, if any, based in Europe, Latin America
and Asia, in the form of stock options or direct purchases of stock, under such
terms and in such amounts as agreed to by the parties in good faith at such
times as these subsidiaries may be incorporated, as long as the Executive is
employed by the Company at such times.
(e) Expenses. The Company shall pay or reimburse the Executive for all
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reasonable out-of-pocket expenses actually incurred by her during the Term in
performing services hereunder, provided that the Executive properly accounts for
such expenses in accordance with the Company's policies.
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4. Confidentiality, Disclosure of Information.
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(a) The Executive recognizes and acknowledges that the Executive will have
access to Confidential Information (as defined below) relating to the business
or interests of the Company or of persons with whom the Company may have
business relationships. Except as permitted herein, the Executive will not
during the Term, or at any time thereafter, use, disclose or permit to be known
by any other person or entity, any Confidential Information of the Company
(except as required by applicable law or in connection with the performance of
the Executive's duties and responsibilities hereunder). The term "Confidential
Information" means information relating to the Company's business affairs,
proprietary technology, trade secrets, patented processes, research and
development data, know-how, market studies and forecasts, competitive analyses,
pricing policies, employee lists, employment agreements (other than this
Agreement), personnel policies, the substance of agreements with customers,
suppliers and others, marketing arrangements, customer lists, commercial
arrangements, or any other information relating to the Company's business that
is not generally known to the public or to actual or potential competitors of
the Company (other than through a breach of this Agreement). This obligation
shall continue until such Confidential Information becomes publicly available,
other than pursuant to a breach of this Section 4 by the Executive, regardless
of whether the Executive continues to be employed by the Company.
(b) It is further agreed and understood by and between the parties to this
Agreement that all "Company Materials," which include, but are not limited to,
computers, computer software, computer disks, tapes, printouts, source, HTML and
other code, flowcharts, schematics, designs, graphics, drawings, photographs,
charts, graphs, notebooks, customer lists, sound recordings, other tangible or
intangible manifestation of content, and all other documents whether printed,
typewritten, handwritten, electronic, or stored on computer disks, tapes, hard
drives, or any other tangible medium, as well as samples, prototypes, models,
products and the like, shall be the exclusive property of the Company and, upon
termination of Executive's employment with the Company, and/or upon the request
of the Company, all Company Materials, including copies thereof, as well as all
other Company property then in the Executive's possession or control, shall be
returned to and left with the Company. In addition, the Executive shall provide
to the Company, upon termination of employment and/or upon the request of the
Company, all information necessary for the use of any Company Materials, such as
passwords or codes.
5. Inventions Discovered by Executive.
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The Executive shall promptly disclose to the Company any invention,
improvement, discovery, process, formula, or method or other intellectual
property, whether or not patentable or copyrightable (collectively,
"Inventions"), conceived or first reduced to practice by the Executive, either
alone or jointly with others, while performing services hereunder (or, if based
on any Confidential Information, at any time during or after the Term), (a)
which pertain to any line of business activity of the Company, whether then
conducted or then being actively planned by the Company, with which the
Executive was or is involved, (b) which is developed using
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time, material or facilities of the Company, whether or not during working hours
or on the Company premises, or (c) which directly relates to any of the
Executive's work during the Term, whether or not during normal working hours.
The Executive hereby assigns to the Company all of the Executive's right, title
and interest in and to any such Inventions. During and after the Term, the
Executive shall execute any documents necessary to perfect the assignment of
such Inventions to the Company and to enable the Company to apply for, obtain
and enforce patents, trademarks and copyrights in any and all countries on such
Inventions, including, without limitation, the execution of any instruments and
the giving of evidence and testimony, without further compensation beyond the
Executive's agreed compensation during the course of the Executive's employment.
Without limiting the foregoing, the Executive further acknowledges that all
original works of authorship by the Executive, whether created alone or jointly
with others, related to the Executive's employment with the Company and which
are protectable by copyright, are "works made for hire" within the meaning of
the United States Copyright Act, 17 U.S.C. (S) 101, as amended, and the
copyright of which shall be owned solely, completely and exclusively by the
Company. If any Invention is considered to be work not included in the
categories of work covered by the United States Copyright Act, 17 U.S.C. (S)
101, as amended, such work is hereby assigned or transferred completely and
exclusively to the Company. The Executive hereby irrevocably designates counsel
to the Company as the Executive's agent and attorney-in-fact to do all lawful
acts necessary to apply for and obtain patents and copyrights and to enforce the
Company's rights under this Section. This Section 5 shall survive the
termination of this Agreement. Any assignment of copyright hereunder includes
all rights of paternity, integrity, disclosure and withdrawal and any other
rights that may be known as or referred to as "moral rights" (collectively
"Moral Rights"). To the extent such Moral Rights cannot be assigned under
applicable law and to the extent the following is allowed by the laws in the
various countries where Moral Rights exist, the Executive hereby waives such
Moral Rights and consents to any action of the Company that would violate such
Moral Rights in the absence of such consent. The Executive agrees to confirm any
such waivers and consents from time to time as requested by the Company.
6. Non-Competition and Non-Solicitation.
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The Executive acknowledges that the Company has invested substantial time,
money and resources in the development and retention of its Inventions,
Confidential Information (including trade secrets), customers, accounts and
business partners, and further acknowledges that during the course of the
Executive's employment with the Company the Executive will have access to the
Company's Inventions and Confidential Information (including trade secrets), and
will be introduced to existing and prospective customers, accounts and business
partners of the Company. The Executive acknowledges and agrees that any and all
"goodwill" associated with any existing or prospective customer, account or
business partner belongs exclusively to the Company, including, but not limited
to, any goodwill created as a result of direct or indirect contacts or
relationships between the Executive and any existing or prospective customers,
accounts or business partners. The Executive further acknowledges and agrees
that the Company's business is conducted worldwide. Additionally, the parties
acknowledge and agree that Executive possesses skills that are special, unique
or extraordinary and that the value of the Company depends upon her use of such
skills on its behalf.
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In recognition of this, the Executive covenants and agrees that:
(a) During the Term, and for a period of one (1) year thereafter, the
Executive may not, without the prior written consent of the Board, (whether as
an employee, agent, servant, owner, partner, consultant, independent contractor,
representative, stockholder or in any other capacity whatsoever), participate in
any business that offers products or services directly competitive in any way to
the products or services offered by the Company or under active development by
the Company during the Term.
(b) During the Term, and for a period of one (1) year thereafter, the
Executive may not entice, solicit or encourage any Company employee to leave the
employ of the Company or any independent contractor to sever its engagement with
the Company, absent prior written consent to do so from the Board.
(c) During the Term, and for a period of one (1) year thereafter, the
Executive may not, directly or indirectly, entice, solicit or encourage any
customer or prospective customer of the Company to cease doing business with the
Company, reduce its relationship with the Company or refrain from establishing
or expanding a relationship with the Company.
7. Non-Disparagement.
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The Executive hereby agrees that during the Term she will not make any
statement that is disparaging about the Company, any of its officers, directors,
or shareholders, including, but not limited to, any statement that disparages
the products, services, finances, financial condition, capabilities or other
aspect of the business of the Company. The Executive further agrees that during
the Term she will not engage in any conduct that is intended to inflict harm
upon the professional or personal reputation of the Company or any of its
officers, directors, shareholders or employees.
8. Provisions Necessary and Reasonable.
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(a) The Executive agrees that (i) the provisions of Sections 4, 5, 6 and 7
of this Agreement are necessary and reasonable to protect the Company's
Confidential Information, Inventions, and goodwill; (ii) the specific temporal,
geographic and substantive provisions set forth in Section 6 of this Agreement
are reasonable and necessary to protect the Company's business interests; and
(iii) in the event of any breach of any of the covenants set forth herein, the
Company would suffer substantial irreparable harm and would not have an adequate
remedy at law for such breach. In recognition of the foregoing, the Executive
agrees that in the event of a breach or threatened breach of any of these
covenants, in addition to such other remedies as the Company may have at law,
without posting any bond or security, the Company shall be entitled to seek and
obtain equitable relief, in the form of specific performance, and/or temporary,
preliminary or permanent injunctive relief, or any other equitable remedy which
then may be available. The seeking of such injunction or order shall not affect
the Company's right to seek and obtain damages or other equitable relief on
account of any such actual or threatened breach.
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(b) If any of the covenants contained in Sections 4, 5, 6 and 7 hereof, or
any part thereof, are 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.
(c) If any of the covenants contained in Sections 4, 5, 6 and 7 hereof, or
any part thereof, are held to be unenforceable by a court of competent
jurisdiction because of the temporal or geographic scope of such provision or
the area covered thereby, the parties agree that the court making such
determination shall have the power to reduce the duration and/or geographic area
of such provision and, in its reduced form, such provision shall be enforceable.
9. Representations Regarding Prior Work and Legal Obligations.
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(a) The Executive represents that the Executive has no agreement or other
legal obligation with any prior employer, or any other person or entity, that
restricts the Executive's ability to accept employment with, or to perform any
function for, the Company.
(b) The Executive has been advised by the Company that at no time should
the Executive divulge to or use for the benefit of the Company any trade secret
or confidential or proprietary information of any previous employer. The
Executive expressly acknowledges that the Executive has not divulged or used any
such information for the benefit of the Company.
(c) The Executive acknowledges that the Executive has not and will not
misappropriate any Invention that the Executive played any part in creating
while working for any former employer.
(d) The Executive acknowledges that the Company is basing important
business decisions on these representations, and affirms that all of the
statements included herein are true.
10. Termination and Severance.
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Notwithstanding the provisions of Section 2 of this Agreement, the
Executive's employment hereunder may terminate under the following
circumstances:
(a) Termination by the Company for Cause. The Company may terminate this
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Agreement for Cause at any time, upon written notice to the Executive setting
forth in reasonable detail the nature of such Cause. For purposes of this
Agreement, Cause is defined as (i) the Executive's willful and material breach
of the terms of this Agreement; (ii) the Executive's commission of any felony or
any crime involving moral turpitude; (iii) gross negligence or willful
misconduct by the Executive; or (iv) the Executive's willful refusal to perform
her job duties, other than due to a Disability, as defined below, or approved
leave of absence. Upon the termination for Cause of Executive's employment, the
Company shall have no further obligation or liability to the Executive other
than for salary earned under this Agreement prior to the date of termination,
and any accrued but unused vacation.
(b) Termination by the Company Without Cause. The Executive's employment
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hereunder may be terminated without Cause by the Company upon written notice to
the
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Executive, provided, however, that if the Company terminates the Executive's
employment without Cause, the Company shall continue to pay the Executive the
Salary and shall provide health coverage, under the same conditions as exist at
the time of termination, for a one (1) year period commencing on the effective
date of the termination. If the Executive is terminated without Cause more than
eighteen (18) months after a Change of Control, in addition to the payments and
benefits provided for in the preceding sentence, any unvested stock options held
by the Executive shall vest and become exercisable as if she had continued to be
employed by the Company for a period of one (1) year after the effective date of
the termination. As a condition of receiving severance benefits pursuant to this
Agreement, the Executive shall execute and deliver to the Company prior to her
receipt of such benefits a general release substantially in the form attached
hereto as Exhibit A.
(c) Termination by the Executive. The Executive may terminate her
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employment hereunder upon one (1) month's written notice to the Company. In the
event of termination by the Executive pursuant to this subsection 10(c), the
Company may elect to pay the Executive during the notice period (or for any
remaining portion of that period) the Salary and benefits at the rate of
compensation the Executive was receiving immediately before such notice of
termination was tendered in lieu of actual notice. The Executive shall be
considered to have terminated her employment hereunder for "Good Reason" if she
resigns within ninety (90) days after the occurrence of any of the following:
(i) the material breach by the Company of any material covenant or agreement
contained in this Agreement, including, without limitation, a material reduction
in the Executive's Salary or bonus compensation, unless such reduction is part
of a general cost-reduction effort in which the Executive's peer executives
undergo comparable reductions; (ii) any requirement by the Company that the
Executive be based more than thirty-five (35) miles from her then-current
primary work location; or (iii) the significant reduction of the Employee's
duties, responsibilities or authority to a level substantially inconsistent with
her position. In the event that the Executive desires to terminate her
employment for Good Reason, she shall provide the Company with thirty (30) days'
written notice and opportunity to cure prior to the effective date of such
termination, which period may be reduced or waived by the Company in its sole
discretion.
(d) Death. In the event of the Executive's death during the Term of this
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Agreement, the Executive's employment hereunder shall immediately and
automatically terminate, and the Company shall have no further obligation or
duty to the Executive or his estate or beneficiaries other than for the Salary
earned under this Agreement to the date of termination and any payments or
benefits due under Company policies or benefit plans.
(e) Disability. The Company may terminate the Executive's employment
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hereunder, upon written notice to the Executive, in the event that the Executive
becomes disabled during the Term through any condition of either a physical or
psychological nature (other than pregnancy) and, as a result, is, with or
without reasonable accommodation, unable to perform the essential functions of
the services contemplated hereunder for (a) a period of ninety (90) consecutive
days, or (b) for shorter periods aggregating one hundred twenty (120) days
during any twelve (12) month period during the Term. Any such termination shall
become effective upon mailing or hand delivery of notice that the Company has
elected its right to terminate under this subsection 10(e), and the Company
shall have no further obligation or duty to the Executive other than for
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salary earned under this Agreement prior to the date of termination and any
payments or benefits due under Company policies or benefit plans.
(f) Effect of Non-Renewal. In the event that the Company gives notice of
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its election not to extend the Term of the Agreement for a Renewal Period
pursuant to Section 2 above, the Company shall continue to pay the Executive
full compensation as defined in Section 3 of this Agreement from the date the
Executive receives such notice through the Expiration Date. The Executive shall
not be entitled to any additional compensation other than any payments or
benefits due under Company policies or benefit plans.
11. Choice of Law.
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The validity, interpretation and performance of this Agreement shall be
governed by, and construed in accordance with, the internal law of the
Commonwealth of Virginia, without giving effect to conflict of law principles.
Both parties agree that the exclusive venue for any action, demand, claim or
counterclaim relating to the terms and provisions of Sections 4, 5, 6 and 7 of
this Agreement, or to their breach, shall be in the state or federal courts
located in Virginia and that such courts shall have personal jurisdiction over
the parties to this Agreement.
12. Miscellaneous.
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(a) Assignment. The Executive acknowledges and agrees that the rights and
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obligations of the Company under this Agreement may be assigned by the Company
to any successors in interest. The Executive further acknowledges and agrees
that this Agreement is personal to the Executive and that the Executive may not
assign any rights or obligations hereunder.
(b) Withholding. All salary and bonus payments required to be made by the
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Company to the Executive under this Agreement shall be subject to withholding
taxes, social security and other payroll deductions in accordance with the
Company's policies applicable to employees of the Company at the Executive's
level.
(c) Entire Agreement. This Agreement sets forth the entire agreement
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between the parties and supersedes any prior communications, agreements and
understandings, written or oral, with respect to the terms and conditions of the
Executive's employment.
(d) Amendments. Any attempted modification of this Agreement will not be
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effective unless signed by an officer of the Company and the Executive.
(e) Waiver of Breach. The Executive understands that a breach of any
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provision of this Agreement may only be waived by an officer of the Company. The
waiver by the Company of a breach of any provision of this Agreement shall not
operate or be construed as a waiver of any subsequent breach.
(f) Severability. If any provision of this Agreement should, for any
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reason, be held invalid or unenforceable in any respect by a court of competent
jurisdiction, then the remainder
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of this Agreement, and the application of such provision in circumstances other
than those as to which it is so declared invalid or unenforceable, shall not be
affected thereby, and each such provision of this Agreement shall be valid and
enforceable to the fullest extent permitted by law.
(g) Notices. Any notices, requests, demands and other communications
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provided for by this Agreement shall be in writing and shall be effective when
delivered by private messenger, private overnight mail service, or facsimile as
follows (or to such other address as either party shall designate by notice in
writing to the other in accordance herewith):
If to the Company:
1110 Herndon Parkway
Herndon, VA 20170
With a copy to:
Brobeck, Phleger & Harrison LLP
701 Pennsylvania Avenue, NW
Washington, D.C. 20004
Attn: Stephen A. Riddick, Esq.
If to Executive:
(h) Survival. The Executive and the Company agree that certain provisions
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of this Agreement shall survive the expiration or termination of this Agreement
and the termination of the Executive's employment with the Company. Such
provisions shall be limited to those within this Agreement which, by their
express and implied terms, obligate either party to perform beyond the
termination of the Executive's employment or termination of this Agreement.
(i) Disclosure and Confidentiality. The Executive agrees to provide, and
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agrees that the Company similarly may provide in its discretion, a copy of the
covenants contained in this Agreement to any business or enterprise which the
Company may directly or indirectly own, manage, operate, finance, join, control
or in which the Company participates in the ownership, management, operation,
financing or control, or with which the Company may be connected or may become
connected as an officer, director, executive, partner, principal, agent,
representative, consultant or otherwise. The Executive also agrees that the
Company may disclose a copy of this Agreement if legally required to do so, and
in connection with a partnering transaction or financing, assuming that an
appropriate confidentiality agreement is in place. The Executive further agrees
not to disclose the existence or terms of this Agreement to any person other
than the Executive's immediate family and legal, financial or accounting
professional.
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(j) Arbitration of Disputes. Any controversy or claim arising out of this
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Agreement or any aspect of the Executive's relationship with the Company
including the cessation thereof (other than disputes with respect to alleged
violations of the covenants contained in Sections 4, 5, 6 or 7 hereof, and the
Company's pursuit of the remedies described in Section 8 hereof in connection
therewith) shall be resolved by arbitration in accordance with the then existing
Employment Dispute Resolution Rules of the American Arbitration Association, in
Washington, D.C., and judgment upon the award rendered may be entered in any
court having jurisdiction thereof. The parties shall split equally the costs of
arbitration, except that each party shall pay its own attorneys' fees. The
parties agree that the award of the arbitrator shall be final and binding.
(k) Rights of Other Individuals. This Agreement confers rights solely on
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the Executive and the Company. This Agreement is not a benefit plan and confers
no rights on any individual or entity other than the undersigned.
(l) Headings. The parties acknowledge that the headings in this Agreement
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are for convenience of reference only and shall not control or affect the
meaning or construction of this Agreement.
(m) Advice of Counsel. The Executive and the Company hereby acknowledge
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that each party has had adequate opportunity to review this Agreement, to obtain
the advice of counsel with respect to this Agreement, and to reflect upon and
consider the terms and conditions of this Agreement. The parties further
acknowledge that each party fully understands the terms of this Agreement and
has voluntarily executed this Agreement. The Company shall pay the legal fees
and costs incurred by the Executive in connection with the negotiation and
preparation of this Agreement, upon the presentation of invoices in appropriate
form.
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as of
the day and year set forth below.
EXECUTIVE LIFEMINDERS, INC.
/s/ /s/
_____________________________________ By:________________________________
ALLISON ABRAHAM
Title:_____________________________
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