Employment Agreement - Quotesmith.com Inc. and Thomas A. Munro
EMPLOYMENT AGREEMENT
Quotesmith.com, Inc., a Delaware corporation (the "Company") and Thomas
A. Munro ("Executive") enter into this Employment Agreement as of ______________
____, 1999 (the "Agreement"), effective as of the Effective Date.
WHEREAS, Company is planning an initial public offering of its stock,
and has begun to take the necessary steps in furtherance of this course of
action;
WHEREAS, as a condition to taking the Company public, the parties have
agreed to enter into a new Employment Agreement;
WHEREAS, the Company desires to employ Executive upon the terms and
subject to the conditions of this Agreement; and
WHEREAS, Executive desires to be employed by the Company upon the terms
and subject to the conditions of this Agreement.
NOW THEREFORE, in consideration of the mutual covenants and agreements
set forth below, and for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Company and Executive hereby
covenant and agree as follows:
1. Definitions. For purposes of this Agreement, the following
capitalized terms shall have the following meanings, and all other capitalized
terms used in this Agreement but not defined in this paragraph 1 shall have the
meanings assigned elsewhere in this Agreement:
"Base Salary" means $_______.
"Cause" means:
(i) Executive's conviction of (or plea of no contest or
similar plea to) a felony; or
(ii) Executive's intentional continuing refusal to
substantially perform his obligations and duties under this
Agreement (except by reason of incapacity due to illness or
accident) if he (a) shall have failed to remedy the alleged
breach caused by such conduct within 30 days from the date
written notice is given by the Company demanding that he
remedy the alleged breach caused by such conduct, or (b) shall
have failed to take reasonable steps in good faith to that end
during such 30-day period, provided that after the end of such
30-day period there shall have been delivered to Executive a
certified copy of a resolution of the Board of Directors of
the Company, taken at a meeting of the Board of Directors at
which Executive, together with his counsel, is given the
opportunity to be heard, finding that Executive was guilty of
intentionally refusing to substantially perform his
obligations and duties
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under this Agreement and specifying the details thereof, and
that Executive has failed to take reasonable steps in good
faith to remedy the alleged breach caused by such conduct,
(iii) upon a finding that Executive engaged in willful
fraud or defalcation, either of which involved funds or other
assets of the Company; or
(iv) upon Executive's breach of any material term of
this Agreement (including, but not limited to, the noncompete
and confidentiality provisions in paragraphs 7 and 8).
"Change in Control" means and shall be deemed to occur:
(i) in the event any "person" (as such term is used in
paragraphs 13(d) and 14(d) of the Exchange Act) (other than
Robert S. Bland and his affiliates) or more than one such
person acting as a group, other than a trustee or other
fiduciary holding securities under an employee benefit plan of
the Company, is or becomes the "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly,
of the securities of the Company, in a transaction or a series
of transactions, representing thirty percent (30%) or more of
the combined voting power of the Company's then outstanding
securities ordinarily having the right to vote for the
election of directors of the Company;
(ii) during any period of two consecutive years during
the Employment Period, individuals who at the beginning of the
Employment Period constitute the Board of Directors of the
Company cease for any reason to constitute at least a majority
thereof, unless the election, or the nomination for election
by the Company's stockholders, of each director who was not a
director at the beginning of the Employment Period has been
approved in advance by directors representing at least
two-thirds of the directors then in office who were (A)
directors at the beginning of the Employment Period, or (B)
previously approved in accordance with this subparagraph (ii);
(iii) the Company sells or otherwise disposes of all or
substantially all of its assets; and
(iv) the Company participates in a merger or
consolidation and, immediately following the consummation of
such merger or consolidation, the Company's stockholders prior
to such merger or consolidation do not own 50% or more of the
voting shares of stock of the surviving or successor
corporation.
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor thereto.
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"Compensation Committee" means the applicable compensation committee of
the Board of Directors of the Company.
"Disabled" or "Disability" means a determination, made at the request
of Executive or upon the reasonable request of the Company set forth in
a notice to Executive, by a physician selected by the Company and
Executive, that Executive is unable to perform his duties as specified
in this Agreement and in all reasonable medical likelihood such
inability will continue for a period in excess of 180 days, or for
shorter periods aggregating to more than 180 days in any consecutive
nine-month period.
"Effective Date" shall be the closing date of the Company's initial
public offering pursuant to the S-1 Registration Statement with the
Securities and Exchange Commission on May ____, 1999.
"Employment Period" means the term of Executive's employment pursuant
to the provisions of this Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and any successor thereto.
"Good Reason" means:
(i) a Change in Control of the Company;
(ii) a decrease in the total amount of Executive's Base
Salary below the amount in effect on the date hereof;
(iii) a reduction in Executive's title, a material
reduction in his authority, duties or job responsibilities, a
material adverse change in his working conditions (including
the relocation of Executive's office more than 40 miles from
the Company's present executive offices), without Executive's
consent, as determined by Executive in his reasonable
judgment;
(iv) a failure by the Company to comply with any material
provision of this Agreement if the Company shall have failed
to remedy the alleged breach within 60 days from the date
written notice of such noncompliance is given by Executive to
the Company; or
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(v) any purported termination of Executive's employment
which is not effected pursuant to a proper Notice of
Termination (and for purposes of this Agreement no such
purported termination shall be effective).
"Notice of Termination" means a written notice of either the Company or
Executive, as applicable, setting forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination.
"Termination Date" means the effective date of employment termination.
2. Term of Employment. The Company shall employ Executive, and
Executive shall be employed by the Company and shall provide services to the
Company upon the terms and conditions hereinafter set forth. The initial term of
Executive's employment with the Company shall continue, unless earlier
terminated pursuant to Section 5 hereof, through December 31, 2001 (the
"Employment Period"); provided, however, that after expiration of the initial
term, the Employment Period shall automatically be renewed each January 1 for
successive one-year terms unless the Company or Executive delivers written
notice to the other party at least sixty (60) days preceding the expiration of
the initial term or any one-year extension date of the intention not to extend
the term of this Agreement.
3. Performance of Duties. Executive shall have the titles of Vice
President and Chief Financial Officer of the Company, and he shall possess such
powers and perform such duties as are normally incident to such position, as
provided in the By-laws of the Company and in accordance with the General
Corporation Law of the State of Delaware. During this period, Executive agrees
that he shall perform his duties faithfully and efficiently subject to the
direction of the President and the Board of Directors of the Company, and the
Company agrees that Executive shall be required to report to the President and
to the Board of Directors.
Executive agrees that during the Employment Period he shall devote substantially
his full business time to business affairs of the Company, provided, however,
that notwithstanding any other provision hereof, Executive may serve in any
capacity with any civic, educational and charitable organization provided, in
each case, such activities do not materially interfere with the performance of
his duties hereunder, and such service is consistent with all Company policies
and procedures regarding such service. Executive shall be entitled to retain all
compensation (whether in the form of cash, equity securities or perquisites)
paid or delivered to Executive in connection with such civic, educational or
charitable activities. Executive agrees that Executive shall not, without the
prior consent of the Board of Directors of the Company (which consent shall not
be unreasonably withheld), agree to serve on any boards of directors other than
the boards of directors upon which Executive presently serves.
4. Compensation. For services rendered by Executive, and upon the
condition that Executive fully and faithfully perform all of his duties and
obligations set forth herein, Executive shall be compensated for his services as
follows:
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1. Base Salary. Executive shall receive an annual salary,
payable in monthly or more frequent installments, in accordance with
the usual payroll practice of the Company, in an amount equal to
$________ (the "Base Salary"), less income tax withholdings and other
normal employee deductions. The Base Salary shall be reviewed annually
as of the end of each fiscal year commencing January 1, 2002 by the
Compensation Committee, and may, at the sole discretion of the
Compensation Committee, be increased by an amount that it deems
appropriate. If the Base Salary is increased by the Compensation
Committee, it shall not be decreased thereafter during the Employment
Period.
2. Bonus. Executive shall receive bonus payments in
accordance with any arrangements or bonus plans established by the
Company, in such amounts and upon such terms as are determined by the
Compensation Committee.
(c) Management Stock Option Plan. Should the Company
establish a stock option plan or plans with respect to which senior
executives of the Company participate and which excepts other employees
of the Company generally, Executive shall be entitled to participate in
such plans in the same manner as other senior executives of the
Company.
(d) Benefits. During his employment with the Company,
Executive shall be entitled to participate, to the extent he meets all
eligibility requirements of general application, in any and all
employee benefit plans, programs and arrangements which are now or
hereafter adopted by the Company to provide benefits for its employees,
including, but not limited to, medical and hospitalization, group term
life insurance, disability, and retirement plans. Additionally,
Executive shall receive such other benefits as Company may make
generally available to its senior executive officers.
(e) Vacation. Executive shall be entitled to _______weeks
of paid vacation, in accordance with the policy of the Company in
effect from time to time, to be taken at times agreeable to both the
Executive and the Company.
(f) Travel and Expenses. The Company shall reimburse
Executive for the reasonable and necessary business expenses incurred
by him in connection with the performance of his duties and obligations
as set forth herein consistent with any existent Company policy with
respect to same. Reimbursement shall be made upon the presentation by
Executive to the Company of reasonably detailed statements of such
expenses.
Payment of the Base Salary shall not in any way limit or reduce any other
obligation of the Company pursuant to this Agreement, and no other compensation,
benefit, or payment hereunder shall in any way limit or reduce the obligation of
the Company to pay Executive's Base Salary, except that, for the period
commencing on the date Executive becomes Disabled and ending on the Termination
Date, the Base Salary shall be reduced by any amounts that are payable to
Executive prior to or during such period under any disability benefit plan of
the Company in which Executive participates.
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5. Termination. Executive's employment hereunder shall terminate
at the end of the Employment Period. In addition, the Employment Period may be
terminated at any time as provided herein. After Notice of Termination has been
delivered, and prior to the Termination Date, Executive shall make reasonable
efforts to cooperate with Company in achieving a transition of Executive's
duties and responsibilities.
1. Cause. The Employment Period may be terminated at the
option of the Company for Cause effective upon the date stated in the
Notice of Termination to Executive.
2. Death. The Employment Period will terminate
automatically effective upon Executive's death.
3. Disability. In the event Executive becomes Disabled (as
such term is hereinafter defined) during the Employment Period, and the
Company is unable to make a reasonable accommodation which would enable
Executive to continue to perform the essential functions of his
employment position with the Company, the Employment Period may be
terminated at the option of Executive or the Company effective 30 days
after a Notice of Termination is given (provided that Executive shall
not have returned to the performance of his duties on a full-time basis
during such 30-day period). Unless otherwise agreed by Executive and
the Board of Directors, the determination by the physician selected by
Company and Executive that Executive is Disabled shall be binding upon
the Company and Executive.
4. Voluntary Resignation. Executive may resign his
employment at any time with or without Good Reason, effective upon
Notice of Termination (which shall state whether such resignation is
with Good Reason) given by Executive to the Company.
5. Termination without Cause by the Company. The Company
may terminate Executive's employment at any time, effective upon Notice
of Termination (which shall state that such termination is without
Cause) given by the Company to Executive.
If, within 30 days after any Notice of Termination for Cause is given by the
Company, Executive notifies the Company that a dispute exists concerning the
termination, then the Termination Date shall be the date (the "Final
Determination") as determined either by mutual written agreement of the parties,
by a binding and final arbitration award or by a final judgment, order or decree
of a court of competent jurisdiction (the time for appeal therefrom having
expired and no appeal having been perfected). Notwithstanding the foregoing, the
Company shall not be prohibited from removing Executive from his position with
the Company pending the Final Determination provided that such removal is
without prejudice to Executive's rights to receive all benefits from the Company
to which he may be entitled upon the Final Determination.
6. Separation Benefits. Executive shall be entitled to receive
separation benefits upon such events and in such amounts as are set forth in
this Section 6.
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1. Termination Without Cause or for Good Reason. In the
event that Executive's employment with the Company is terminated at any
time during the Employment Period by the Company without Cause, or by
Executive for Good Reason, then Executive (or if he shall have died
after termination but prior to payment, his surviving spouse, or if he
leaves no spouse, his personal representative, as successor in
interest) shall be paid by the Company an amount equal to the product
of Executive's Base Salary in effect as of the Date of Termination,
multiplied by two, payable in cash in a lump sum on or before the
fifteenth day following the Date of Termination.
2. Termination Upon Death. If the Employment Period is
terminated by Executive's death, the Company shall pay Executive's
surviving spouse, or if he leaves no spouse, his personal
representative, as successor in interest, (i) an amount equal to the
then current Base Salary (paid in one lump sum payment on or before the
fifteenth day following the date of Executive's death), and (ii) any
death benefit payable under any employee benefit plans, programs and
arrangements of the Company in which Executive is a participant on the
date of his death.
3. Termination Upon Disability. If the Employment Period
is terminated in accordance with the terms of paragraph 5(c) because of
Executive's Disability, the Company shall pay to Executive (or in the
event of Executive's death after finding of Disability, his surviving
spouse, or if he leaves no spouse, his personal representative, as
successor in interest) all compensation and benefits specified under
paragraph 4 herein, for a period of one year from the Date of
Termination, payable in the same manner as if the Employment Period had
not been terminated.
4. Additional Separation Benefit. For a period of three
years following (i) the full completion of the Employment Period or
(ii) following the Date of Termination of the Employment Period for any
reason other than termination by the Company for Cause or termination
by Executive for other than Good Reason, the Company shall permit, at
the Company's expense, Executive, his spouse and dependents, as
applicable (the "Benefit Participants"), to participate in all group
medical health insurance plans and employee benefit plans, programs and
arrangements now or hereafter made available to the senior executive
employees of the Company (the "Plans") (including but not limited to
such Plans in which Executive was entitled to participate immediately
prior to the Date of Termination), in the same manner provided to its
other senior executive employees; provided, however, that this
paragraph 6(d) shall not apply in the event that (i) the Company shall
hereafter terminate the applicable Plan, or (ii) the participation of
the Benefit Participants in such Plan is prohibited by law or, if
applicable, would disqualify such Plan as a tax qualified plan pursuant
to the Code, or (iii) the participation of the Benefit Participants
violates the general terms and provisions of such applicable Plan. In
the event that any of the Benefit Participants' participation in such
Plans is prohibited by law or, if applicable, would disqualify the Plan
as a tax qualified plan, or the participation of the Benefit
Participants violates the general terms
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and provisions of such applicable Plan, the Company shall permit the
Benefit Participants to acquire substantially comparable coverage or
benefits, at the Company's expense, from a source of Executive's or his
spouse's choosing, provided, however, that if provision of such
coverage or benefit would result in a cost of excess of 130% of the
cost to the Company if provided under a Company Plan, the Company may
satisfy its obligations under this paragraph 6(d) by contributing to
the Benefit Participants 130% of the cost to the Company under the
Company Plans. Notwithstanding the foregoing, in no event will the
Benefit Participants receive from the Company the coverage and benefits
contemplated by this paragraph 6(d) if the Benefit Participants receive
such coverage and benefits from any other source.
5. Excise Tax Gross-Up. If Executive becomes entitled to
one or more payments (with a "payment" including, but not limited to,
the vesting of an option or other non-cash benefit or property),
whether pursuant to the terms of this Agreement or any other plan,
arrangement, or agreement with the Company or any affiliated company
(the "Total Payments"), which are or become subject to the tax imposed
by Section 4999 of the Code (or any similar tax that may hereafter be
imposed) (the "Excise Tax"), the Company shall pay to Executive at the
time specified below an additional amount (the "Gross-Up Payment")
(which shall include, but not be limited to, reimbursement for any
penalties and interest that may accrue in respect of such Excise Tax)
such that the net amount retained by Executive, after reduction for any
Excise Tax (including any penalties or interest thereon) on the Total
Payments and any federal, state and local income or employment tax and
Excise Tax on the Gross-Up Payment provided for by this subparagraph
(e), but before reduction for any federal, state, or local income or
employment tax on the Total Payments, shall be equal to the sum of (a)
the Total Payments, and (b) an amount equal to the product of any
deductions disallowed to Executive for federal, state, or local income
tax purposes because of the inclusion of the Gross-Up Payment in
Executive's adjusted gross income multiplied by the highest applicable
marginal rate of federal, state, or local income taxation,
respectively, for the calendar year in which the Gross-Up Payment is to
be made.
For purposes of determining whether any of the Total
Payments will be subject to the Excise Tax and the amount of such
Excise Tax:
1. The Total Payments shall be treated as
"parachute payments" within the meaning of Section 280G(b)(2)
of the Code, and all "excess parachute payments" within the
meaning of Section 280G(b)(1) of the Code shall be treated as
subject to the Excise Tax, unless, and except to the extent
that, in the written opinion of independent compensation
consultants or auditors of nationally recognized standing
("Independent Advisors") selected by the Company and
reasonably acceptable to Executive, the Total Payments (in
whole or in part) do not constitute parachute payments, or
such excess parachute payments (in whole or in part) represent
reasonable compensation for services actually rendered within
the meaning of Section
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280G(b)(4) of the Code in excess of the base amount within the
meaning of Section 280G(b)(3) of the Code or are otherwise not
subject to the Excise Tax;
2. The amount of the Total Payments which shall
be treated as subject to the Excise Tax shall be equal to the
lesser of (A) the total amount of the Total Payments or (B)
the total amount of excess parachute payments within the
meaning of Section 280G(b)(1) of the Code (after applying
clause (i) above); and
3. The value of any non-cash benefits or any
deferred payment or benefit shall be determined by the
Independent Advisors in accordance with the principles of
Sections 280G(d)(3) and (4) of the Code.
For purposes of determining the amount of the Gross-Up
Payment, Executive shall be deemed (A) to pay federal income taxes at
the highest marginal rate of federal income taxation for the calendar
year in which the Gross-Up Payment is to be made; (B) to pay any
applicable state and local income taxes at the highest marginal rate of
taxation for the calendar year in which the Gross-Up Payment is to be
made, net of the maximum reduction in federal income taxes which could
be obtained from deduction of such state and local taxes if paid in
such year (determined without regard to limitations on deductions based
upon the amount of Executive's adjusted gross income); and (C) to have
otherwise allowable deductions for federal, state, and local income tax
purposes at least equal to those disallowed because of the inclusion of
the Gross-Up Payment in Executive's adjusted gross income. In the event
that the Excise Tax is subsequently determined to be less than the
amount taken into account hereunder at the time the Gross-Up Payment is
made, Executive shall repay to the Company at the time that the amount
of such reduction in Excise Tax is finally determined (but, if
previously paid to the taxing authorities, not prior to the time the
amount of such reduction is refunded to Executive or otherwise realized
as a benefit of Executive) the portion of the Gross-Up Payment that
would not have been paid if such Excise Tax had been applied in
initially calculating the Gross-Up Payment, plus interest on the amount
of such repayment at the rate provided in Section 1274(b)(2)(B) of the
Code. In the event that the Excise Tax is determined to exceed the
amount taken into account hereunder at the time the Gross-Up Payment is
made (including by reason of any payment the existence or amount of
which cannot be determined at the time of the Gross-Up Payment), the
Company shall make an additional Gross-Up Payment in respect of such
excess (plus any interest and penalties payable with respect to such
excess) at the time that the amount of such excess is finally
determined.
The Gross-Up Payment provided for above shall be paid
on the 30th day (or such earlier date as the Excise Tax becomes due and
payable to the taxing authorities) after it has been determined that
the Total Payments (or any portion thereof) are subject to the Excise
Tax; provided, however, that if the amount of such Gross-Up Payment or
portion thereof cannot be finally determined on or before such day, the
Company shall pay to Executive on such day an estimate, as determined
by he Independent Advisors, of the
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minimum amount of such payments and shall pay the remainder of such
payments (together with interest at the rate provided in Section
1274(b)(2)(B) of the Code), as soon as the amount thereof can be
determined. In the event that the amount of the estimated payments
exceeds the amount subsequently determined to have been due, such
excess shall constitute a loan by the Company to Executive, payable on
the fifth day after demand by the Company (together with interest at
the rate provided in Section 1274(b)(2)(B) of the Code). If more than
one Gross-Up Payment is made, the amount of each Gross-Up Payment shall
be computed so as not to duplicate any prior Gross-Up Payment. The
Company shall have the right to control all proceedings with the
Internal Revenue Service that may arise in connection with the
determination and assessment of any Excise Tax and, at its sole option,
the Company may pursue or forego any and all administrative appeals,
proceedings, hearings, and conferences with any taxing authority in
respect of such Excise Tax (including any interest or penalties
thereon); provided, however, that the Company's control over any such
proceedings shall be limited to issues with respect to which a Gross-Up
Payment would be payable hereunder, and Executive shall be entitled to
settle or contest any other issue raised by the Internal Revenue
Service or any other taxing authority. Executive shall cooperate with
the Company in any proceedings relating to the determination and
assessment of any Excise Tax and shall not take any position or action
that would materially increase the amount of any Gross-Up Payment
hereunder.
7. Noncompetition. During the Employment Period and continuing
until the second anniversary thereof, Executive shall not, without the prior
written authorization of the Board of Directors of the Company, (i) directly or
indirectly render services of a business, professional or commercial nature
(whether for compensation or otherwise) to any person or entity competitive or
adverse to the Company's business welfare, (ii) engage in any activity, whether
alone, as a partner, or as an officer, director, employee, consultant,
independent contractor, or stockholder in any other corporation, person, or
entity which is competitive with or adverse to the Company's business welfare,
(iii) hire or solicit for hire any of the Company's employees, prospective
employees or consultants (iv) solicit the business of any client of the Company,
or any prospective client of the Company that had been serviced or solicited by
the Company during the two (2) years preceding Executive's termination, or (v)
enter into any agreements with any supplier of the Company regarding the sale or
distribution of products of the supplier.
In the event that Executive's employment with the Company is terminated by
Executive or the Company at any time, for any reason whatsoever, the Company
shall have the right to inform any of Executive's future employers or
prospective employers of the existence of this Section 7 of the Agreement. This
Section 7 shall not, however, prevent Executive from investing in securities
issued by any such competitive or adverse corporation provided the holdings
thereof by Executive do not constitute more than three percent of any one class
of such securities.
8. Confidentiality.
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1. Disclosure and Use. Executive shall not disclose or
use, or authorize anyone else to disclose or use, at any time, either
during or after the Employment Period, any trade secrets or other
confidential information of the Company of which Executive is or
becomes informed or aware of prior to or during the Employment Period,
except (i) as may be required for Executive to perform his duties and
obligations under this Agreement, (ii) to the extent such information
has been disclosed to Executive by a third party who is not affiliated
with the Company or which otherwise becomes generally available to the
public, (iii) information which must be disclosed as a result of a
subpoena or other legal process, provided that the Company is given
reasonable notice and an opportunity to obtain a protective order, or
(iv) unless Executive shall first secure the Company's prior written
authorization. This paragraph shall survive the termination of this
Employment Period, whether by lapse of time or otherwise, and shall
remain in effect and be enforceable against Executive for as long as
any such Company trade secrets or confidential information retains
commercial value. Executive shall execute additional agreements and
confirmations of his obligations to the Company concerning such
non-disclosure of Company trade secrets and other confidential
information as the Company may require from time to time, provided that
the execution of such additional agreements and confirmations are (i)
reasonable and (ii) are required of all other senior executive
employees of the Company under similar circumstances.
2. Return of Materials. Upon termination of his employment
for any reason, Executive (or in the event of termination due to
Executive's death, his surviving spouse or personal representative, as
applicable) shall promptly deliver to the Company all materials of a
secret or confidential nature relating to the Company's business, which
are in the possession or under the control of Executive.
9. Inventions. Executive hereby assigns to the Company all of his
rights, title, and interest in and to all inventions, discoveries, processes,
designs, and other intellectual property, including but not limited to trade
secrets, copyrights, patents, trademarks and trade names (collectively
hereinafter referred to as "Inventions"), and all improvements on existing
Inventions made or discovered by Executive during the term of his employment by
the Company. Promptly upon the development or making of any such Invention or
improvement thereon, Executive shall disclose the same to the Company and shall
execute and deliver to it such reasonable documents as it may request to confirm
the assignment of Executive's rights therein and, if requested, shall assist the
Company in applying for copyright, patent or trademark protection and
prosecuting any patents which may be available in respect thereof. The Company
acknowledges and hereby notifies Executive that this paragraph 9 does not apply
to an Invention for which no equipment, supplies, facility or trade secret
information of the Company was used and which was developed entirely on
Executive's own time, unless (a) the Invention relates to (i) the business of
the Company, or (ii) the Company's actual or demonstrably anticipated research
or development, or (b) the Invention results from any work performed by
Executive for the Company.
10. Remedies. If, at any time, Executive violates to any material
extent any of the covenants or agreements set forth in paragraphs 7, 8 or 9, the
Company shall have the right to
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terminate all of its obligations to make further payments under this Agreement.
Executive acknowledges that the Company would be irreparably injured by a
violation of paragraphs 7, 8 or 9, that damages for such a breach are not easily
calculated, and that any remedy at law would be inadequate. Therefore, Executive
agrees that the Company shall be entitled to an injunction restraining Executive
from any actual or threatened breach of paragraphs 7, 8 or 9 or to any other
appropriate equitable remedy without any bond or other security being required.
It is expressly understood between the parties that this injunctive or equitable
relief shall not be Employer's exclusive remedy for breach of this Agreement.
Without limitation, in the event of any breach by Executive of paragraphs 7, 8
or 9 of this Agreement, such Executive shall not be entitled to receive any
salary payments or any other compensation beyond the date of such breach to
which he would otherwise be entitled, and Executive shall be obligated to repay
to Employer salary payments received by him at any time after the occurrence of
such breach.
11. Resolution of Disputes.
1. In the event of any controversy among the parties
hereto arising out of, or relating to, this Agreement (other than a
controversy arising out of or relating to paragraphs 7, 8 or 9 hereof),
which cannot be settled amicably by the parties, such controversy shall
be finally settled by arbitration conducted expeditiously in accordance
with the American Arbitration Association Commercial Arbitration Rules
and the Supplementary Procedures for Large, Complex Disputes, by an
independent arbitrator. Either the Company or Executive may institute
such arbitration proceeding by giving written notice to the other
party. A hearing shall be held by the arbitrator in the City of
Chicago, Illinois, and a decision of the matter submitted to the
arbitrator shall be rendered promptly in accordance with the rules of
the American Arbitration Association. The prevailing party shall be
entitled to all costs and expenses with respect to such arbitration,
including reasonable attorneys' fees. The decision of the arbitrator
shall be final and binding upon all parties hereto. Judgment upon the
award rendered may be entered in any court having jurisdiction thereof.
2. Notwithstanding the foregoing, Executive acknowledges
and agrees that the Company may seek in a court of competent
jurisdiction an injunction prohibiting Executive's breach or alleged
breach of paragraphs 7, 8 and 9.
12. Legal Fees. Should any litigation or arbitration be commenced
concerning any provision of this Agreement or Executive's employment or
termination of employment, the prevailing party shall be entitled, in addition
to such other relief as may be granted, to its attorneys' fees and costs
incurred by reason of such litigation or arbitration.
13. Executive's Representations and Warranties. Executive hereby
represents, warrants, and covenants that:
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(a) Executive has no actual or potential conflict of
interest performing Executive's obligations and duties hereunder, will
avoid any such conflict during the Employment Period and will
immediately report any such conflict to the Company;
(b) the execution, delivery, and performance of this
Agreement by Executive will not violate any law, order, regulation,
agreement, contract, promise or duty by which Executive is bound;
(c) this Agreement is duly executed and is valid and
binding on Executive in accordance with its terms; and
(d) the Inventions developed by Executive for, or
delivered by Executive to, the Company do not and will not infringe
upon any third party trade secrets, copyrights, patents, trademarks or
similar proprietary rights. Executive hereby indemnifies and holds
harmless the Company and its directors, officers, employees,
affiliates, agents, representatives, successors and assigns for any
breach of the foregoing representation and warranty. The foregoing
indemnity shall survive any termination of this Agreement or the
Employment Period for any reason.
14. Amendment and Termination. This Agreement may not be amended
or canceled except by written instrument signed by both parties and approved by
the Board of Directors or a committee thereof.
15. Modification and Waiver of Breach. No waiver or modification
of this Agreement shall be binding unless it is in writing, signed by the
parties hereto. The waiver by Company or Executive of any term or breach of this
Agreement shall not prevent a subsequent enforcement of such term or any other
term and shall not be deemed to be a waiver of any subsequent breach.
16. Notice. Any notice required or permitted to be given under
this Agreement shall be in writing and shall be deemed given or delivered and
received (i) when delivered personally (which shall be deemed to include
delivery via express courier such as Federal Express), or (ii) three days after
having been sent by registered or certified mail, return receipt requested, or
(iii) upon receipt when sent by facsimile, telegram or telex followed by a
confirmation letter sent by registered or certified mail, return receipt
requested, addressed as follows:
If to the Company: Quotesmith.com, Inc.
8205 South Cass Avenue
Suite 102
Darien, IL 60561
Facsimile: (800) 515-0270
Attention: President
With a Copy to: Craig C. Bradley, Esq.
Freeborn & Peters
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311 South Wacker Drive
Suite 3000
Chicago, IL 60606
Facsimile: (312) 360-6573
If to Executive: Thomas A. Munro
8205 South Cass Avenue
Suite 102
Darien, IL 60561
Facsimile: (800) 515-0270
Either the Company or Executive may, at any time, by notice to the other,
designate another address for service of notice on such party.
17. Non-assignment. The interests of Executive under this
Agreement are not subject to the claims of his creditors and may not be
voluntarily or involuntarily assigned, alienated or encumbered. Company may
assign its rights, duties or obligations under this Agreement to any person with
whom it has merged or consolidated, or to whom it has transferred all, or
substantially all, of its assets.
18. Severability. If any provision of this Agreement is held
invalid or unenforceable, either in its entirety or by virtue of its scope or
application to given circumstances, such provision shall thereupon be deemed (i)
modified only to the extent necessary to render such provision valid, or (ii)
not applicable to given circumstances, or (iii) excised from this Agreement, as
the situation may require, and this Agreement shall be construed and enforced as
if such provision had been included herein as so modified in scope or
application, or had not been included herein, as the case may be. Should this
Agreement, or any one of more of the provisions hereof, be held to be invalid,
illegal or unenforceable within any governmental jurisdiction or subdivision
thereof, the Agreement or any such provision or provisions shall not as a
consequence thereof be deemed to be invalid, illegal or unenforceable in any
other governmental jurisdiction or subdivision thereof.
19. Successors. This Agreement shall be binding upon, and inure to
the benefit of the parties and their permitted successors and assigns. Nothing
in this Agreement, express or implied, is intended or shall be construed to
confer upon any person, other than the parties and their respective successors
and assigns permitted by this Agreement, any right, remedy or claim under, or by
reason of, this Agreement.
20. Entire Agreement. This Agreement constitutes the entire
agreement between Company and Executive with respect to the subject matter
hereof. This Agreement supersedes any prior agreement made between the parties.
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21. Counterparts. The Agreement may be executed in two or more
counterparts, any one of which shall be deemed an original and all of which
taken together shall constitute a single instrument.
22. Governing Law. This Agreement, and all matters or disputes
relating to the validity, construction, performance or enforcement hereof, shall
be governed, construed and controlled by and under the laws of the State of
Illinois without regard to principles of conflicts of law.
23. Effective Date. This Agreement shall be effective on the
Effective Date. If the initial public offering is not consummated, this
Agreement shall be null and void.
24. EXECUTIVE ACKNOWLEDGES THAT HE HAS READ, UNDERSTOOD AND
ACCEPTS THE PROVISIONS OF THIS AGREEMENT. HE ALSO ACKNOWLEDGES THAT HE HAS HAD
THE OPPORTUNITY TO AND HAS REVIEWED THE TERMS AND CONDITIONS OF THIS AGREEMENT.
[Signature page follows]
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IN WITNESS WHEREOF, the parties have executed this Employment Agreement
as of the date written above.
QUOTESMITH.COM, INC.
By:
-----------------------------------
Robert S. Bland
President and Chief Executive
Officer
EXECUTIVE
By:
-----------------------------------
Thomas A. Munro
Vice President and Chief
Financial Officer
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