Employment Agreement - MessageMedia Inc. and Dennis Cagan
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement") is made and entered
into effective as of January 11, 1999, by and between MESSAGEMEDIA, INC.
(the "Company"), and DENNIS CAGAN ("Executive"). The Company and
Executive are hereinafter collectively referred to as the "Parties," and
individually referred to as a "Party."
RECITALS
A. The Company is desirous of engaging the services of Executive
as Interim Chief Executive Officer ("Interim CEO") of the Company, on
the terms and conditions set forth in this Agreement;
B. Executive is desirous of accepting such interim employment,
title, and attendant responsibilities on the terms and conditions set
forth in this Agreement; and
C. Executive previously provided services to the Company as a
consultant pursuant to a Consulting Agreement dated December 22, 1998.
The Company and Executive desire to terminate the Consulting Agreement
and enter into this Agreement.
AGREEMENT
In consideration of the foregoing promises and the mutual
covenants herein contained, and for other good and valuable
consideration, the Parties, intending to be legally bound, agree as
follows:
I. EMPLOYMENT.
A. The Company hereby employs Executive as Interim CEO, and Executive
hereby accepts employment by the Company, upon the terms and conditions set
forth in this Agreement, effective as of January 11, 1999 (the "Hire Date").
B. Executive shall do and perform all services, acts, or things
necessary or advisable to manage and conduct the business of the Company which
are normally associated with the position of CEO. However, at all times during
his employment, Executive shall be subject to the direction and policies from
time to time established by the Board of Directors (the "Board").
C. The Company's employment of Executive as Interim CEO shall commence
on January 11, 1999 and shall continue for an indefinite period of time to be
determined at the sole discretion of the Board (the "Interim Period"). The
Parties understand and agree that upon the conclusion of the Interim Period,
Executive shall remain employed with the Company on a part-time basis in a
position to be determined by the Board. Executive's compensation as a part-time
employee shall be a pro-rata portion of his compensation as Interim CEO, to be
calculated based on the percentage of time that Executive devotes to the Company
in the part-time position as determined and agreed to by Executive and the
Board. Notwithstanding anything herein to the contrary, the Parties agree
Executive is an at-will employee and either
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Party may terminate Executive's employment under this Agreement at any time,
with or without cause.
D. As Interim CEO, Executive shall be permitted to perform the services
he is required to perform pursuant to this Agreement at whatever location he
elects, including his residence in Santa Barbara; provided, however, that the
Company may from time to time require Executive to travel temporarily to other
locations in connection with the Company's business.
II. LOYAL AND CONSCIENTIOUS PERFORMANCE; NONCOMPETITION.
A. During his employment by the Company, Executive shall devote his full
business energies, interest, abilities and productive time to the proper and
efficient performance of his duties under this Agreement.
B. During his employment by the Company, Executive shall not engage in
competition with the Company, either directly or indirectly, in any manner or
capacity, as adviser, principal, agent, partner, officer, director, employee,
member of any association or otherwise, in any phase of the business of
developing, manufacturing and marketing of products which are in the same field
of use or which otherwise compete with the products or proposed products of the
Company.
III. COMPENSATION OF EXECUTIVE.
A. While employed by the Company as Interim CEO, the Company shall pay
Executive a base salary of Two Hundred Fifty Thousand Dollars ($250,000.00) per
year, payable in regular periodic payments in accordance with Company policy.
Such salary shall be prorated for any partial year of employment on the basis of
a 365-day fiscal year.
B. All of Executive's compensation shall be subject to customary
withholding taxes and any other employment taxes as are commonly required to be
collected or withheld by the Company.
C. As Interim CEO, Executive shall be entitled to four (4) weeks of paid
vacation in each twelve (12) month period during Executive's employment
hereunder which shall accrue on a monthly basis during Executives employment
hereunder.
D. As Interim CEO, Executive shall, in the discretion of the Board and
in accordance with Company policy, be eligible to participate in benefits under
any employee benefit plan or arrangement made available by the Company now or in
the future to its executives and its employees.
E. Executive shall also be entitled to a term life insurance policy in
the amount of One Million Dollars ($1,000,000.00) at the Company's sole cost and
expense during the entire period of his continuous employment with the Company
regardless of his position or title.
F. As Interim CEO, Executive's performance shall be reviewed by the
Board on a periodic basis (not less than once each fiscal year) and the Board
may, in its sole discretion, award such bonuses to Executive as shall be
appropriate or desirable based on Executive's
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performance. The Company agrees that Executive shall be reviewed within twelve
(12) months of commencing employment hereunder. The Company agrees that
Executive shall be eligible to earn a performance bonus of up to One Hundred
Thousand Dollars ($100,000.00), less applicable taxes, based upon certain
performance targets to be granted at the sole election of the Board (the "First
Year Bonus"). Executive's eligibility for the First Year Bonus shall be
evaluated based upon the following criteria: (i) successful relocation of the
Company's headquarters to Boulder, Colorado, (ii) stabilize and integrate the
Company's operations in Boulder, (iii) build and increase the Company's gross
revenues, and (iv) identify and successfully recruit a new Chief Executive
Officer, who is acceptable to the Board.
IV. STOCK OPTIONS.
A. The Parties intend and agree that Executive will be granted an
incentive stock option to purchase Fifteen Thousand (15,000) shares of the
Company's Common Stock (the "Option") under the Company's 1995 Stock Plan. The
exercise price per share shall be equal to the fair market value of the
Company's Common Stock on the closing of the market on January 28, 1999. One
fourth of the shares subject to the Option shall vest upon the first day of each
quarter beginning on January 1, 1999, such that the Option is fully vested on
October 1, 1999. The Option shall have a term of ten (10) years.
B. The Parties intend and agree that Executive will be granted a
non-qualified stock option to purchase One Hundred Thirty Five Thousand
(135,000) shares of the Company's Common Stock (the "Supplemental Option"). The
exercise price of the Supplemental Option shall be equal to the fair market
value of the Company's Common Stock on the closing of the market on January 28,
1999. One-fourth of the shares subject to the Supplemental Option shall vest
upon the first day of each quarter in 1999 beginning on January 1, 1999, such
that the Supplemental Option is fully vested on October 1, 1999. The
Supplemental Option shall have a term of ten (10) years.
C. Executive shall also be entitled during the Interim Period to
continue to vest in the grant of non-statutory stock options (the "Nonstatutory
Option") that he received under the 1995 Stock Option Plan as a consultant to
the Company. A copy of the Nonstatutory Option Agreement is attached hereto as
Exhibit A.
V. CONFIDENTIAL INFORMATION; NONSOLICITATION.
A. Executive recognizes that his employment with the Company will
involve contact with information of substantial value to the Company, which is
not old and generally known in the trade, and which gives the Company an
advantage over its competitors who do not know or use it, including but not
limited to, techniques, designs, drawings, processes, inventions, developments,
equipment, prototypes, sales and customer information, and business and
financial information relating to the business, products, practices and
techniques of the Company, (hereinafter referred to as "Confidential
Information"). Executive will at all times regard and preserve as confidential
such Confidential Information obtained by Executive from whatever source and
will not, either during his employment with the Company or thereafter, publish
or disclose any part of such Confidential Information in any manner at any time,
or use the same except on behalf of the Company, without the prior written
consent of the Company.
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As a condition of this Agreement, Executive will sign and return a copy of the
Company's Proprietary Information and Inventions Agreement, attached as Exhibit
B.
VI. ASSIGNMENT AND BINDING EFFECT.
A. This Agreement shall be binding upon and inure to the benefit of
Executive and Executive's heirs, executors, personal representatives, assigns,
administrators and legal representatives. Because of the unique and personal
nature of Executive's duties under this Agreement, neither this Agreement nor
any rights or obligations under this Agreement shall be assignable by Executive.
This Agreement shall be binding upon and inure to the benefit of the Company and
its successors, assigns and legal representatives.
VII. NOTICES.
A. All notices or demands of any kind required or permitted to be given
by the Company or Executive under this Agreement shall be given in writing and
shall be personally delivered (and receipted for) or mailed by certified mail,
return receipt requested, postage prepaid, addressed as follows:
1. If to the Company:
MessageMedia, Inc.
6685 Gunpark Drive East
Suite 240
Boulder, CO 80301
Attn: Chairman of the Board of Directors
2. If to Executive:
Dennis Cagan
Any such written notice shall be deemed received when personally
delivered or three (3) days after its deposit in the United States mail as
specified above. Either Party may change its address for notices by giving
notice to the other Party in the manner specified in this section.
VIII. CHOICE OF LAW.
A. This Agreement is made in San Diego, California. This Agreement shall
be construed and interpreted in accordance with the laws of the State of
California.
IX. INTEGRATION.
A. This Agreement contains the complete, final and exclusive agreement
of the Parties relating to the subject matter of this Agreement, and supersedes
all prior oral and written employment agreements or arrangements between the
Parties.
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X. AMENDMENT.
A. This Agreement cannot be amended or modified except by a written
agreement signed by Executive and the Company.
XI. WAIVER.
A. No term, covenant or condition of this Agreement or any breach
thereof shall be deemed waived, except with the written consent of the Party
against whom the wavier in claimed, and any waiver or any such term, covenant,
condition or breach shall not be deemed to be a waiver of any preceding or
succeeding breach of the same or any other term, covenant, condition or breach.
XII. SEVERABILITY.
A. The finding by a court of competent jurisdiction of the
unenforceability, invalidity or illegality of any provision of this Agreement
shall not render any other provision of this Agreement unenforceable, invalid or
illegal. Such court shall have the authority to modify or replace the invalid or
unenforceable term or provision with a valid and enforceable term or provision
which most accurately represents the parties' intention with respect to the
invalid or unenforceable term or provision.
XIII. INTERPRETATION; CONSTRUCTION.
A. The headings set forth in this Agreement are for convenience of
reference only and shall not be used in interpreting this Agreement. This
Agreement has been drafted by legal counsel representing the Company, but
Executive has been encouraged, and has consulted with, his own independent
counsel and tax advisors with respect to the terms of this Agreement. The
Parties acknowledge that each Party and its counsel has reviewed and revised, or
had an opportunity to review and revise, this Agreement, and the normal rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement.
XIV. REPRESENTATIONS AND WARRANTIES.
A. Executive represents and warrants that he is not restricted or
prohibited, contractually or otherwise, from entering into and performing each
of the terms and covenants contained in this Agreement, and that his execution
and performance of this Agreement will not violate or breach any other
agreements between Executive and any other person or entity.
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XV. COUNTERPARTS.
A. This Agreement may be executed in two counterparts, each of which
shall be deemed an original, all of which together shall contribute one and the
same instrument.
IN WITNESS WHEREOF, the Parties have executed this Agreement as
of the date first above written.
Dated: ______________ THE COMPANY:
MESSAGEMEDIA, INC.
By:_____________________________________
Its:____________________________________
Dated: ______________ EXECUTIVE:
__________________________________
Dennis Cagan
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TABLE OF CONTENTS
PAGE
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I. Employment.............................................................1
II. Loyal and Conscientious Performance; Noncompetition....................2
III. Compensation of Executive..............................................2
IV. Stock Options..........................................................3
V. Confidential Information; Nonsolicitation..............................3
VI. Assignment and Binding Effect..........................................4
VII. Notices................................................................4
VIII. Choice of Law..........................................................4
IX. Integration............................................................4
X. Amendment..............................................................4
XI. Waiver.................................................................5
XII. Severability...........................................................5
XIII. Interpretation; Construction...........................................5
XIV. Representations and Warranties.........................................5
XV. Counterparts...........................................................6
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EMPLOYMENT AGREEMENT
BY AND BETWEEN
MESSAGEMEDIA, INC.
AND
DENNIS CAGAN
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EXHIBIT A
NONSTATUTORY OPTION AGREEMENT
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EXHIBIT B
PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT