Employment Agreement - Infonautics Inc. and William R. Burger
EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated as of January 2, 1997 is by and
between INFONAUTICS, INC., a Pennsylvania corporation
("Corporation"), and WILLIAM R. BURGER an individual
residing at 9 Edgehill Avenue, Chatham, New Jersey 07928
("Employee"). In consideration of the mutual promises
contained herein, and specifically the Corporation's
promise to pay Employee a lump-sum severance payment in the
event Employee's employment is terminated without cause,
which the Corporation had not previously agreed to do,
Corporation and Employee agree as follows:
1. Employment
The Corporation hereby employs Employee as Vice
President-Content of the Corporation, and Employee hereby
accepts such employment on the terms set forth in this
Agreement.
2. Compensation
In consideration of the services rendered by
Employee to the Corporation hereunder, the Corporation shall
pay to Employee a salary at the annual rate of $120,000,
payable semi-monthly or as otherwise agreed by the
Corporation and Employee. Employee's performance salary
will be subject to periodic review.
3. Expenses
The Corporation shall reimburse Employee for all
ordinary and necessary expenses reasonably incurred by him
in carrying out his duties hereunder, upon presentation to
the Corporation by Employee, from time to time, of an
itemized account of such expenses together with such
receipts and forms as are required pursuant to the
Corporation's normal policies and practices.
4. Duties
During the term of his employment hereunder,
Employee shall perform duties as assigned to him by the
President of the Corporation. Employee shall devote his
full time, energy, skill and best efforts to promote the
business and affairs of the Corporation. Except as herein
provided, Employee agrees that during his employment
hereunder he will not be employed by, participate or engage
in or be a part of in any manner, directly or indirectly, in
the affairs of any other business enterprise or occupation
without approval of the Corporation's Board of Directors.
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5. At-will Employment
(a) Employee's employment hereunder shall be
"at will" and either party shall have the rights to
terminate this Agreement at any time, pursuant to the
following terms and conditions:
(i) Termination by Employee. Employee shall
have the right to terminate his employment hereunder by
providing thirty (30) days' prior written notice to
the President of the Corporation. Upon the
effectiveness of such notice, this Agreement shall
terminate except for the provisions that expressly
survive termination.
(ii) Termination for Cause. The Corporation shall
have the right to terminate Employee's employment by the
Corporation at any time for "Cause." For purposes of this
Agreement, "Cause" shall mean (a) dishonesty, misconduct,
conviction of a crime involving moral turpitude, use of alcohol or
drugs in such a manner or to an extent that job performance is
impaired, drug abuse, misappropriation of funds, disparagement
of the Corporation (or its management or employees),
or (b) failure of Employee to perform or observe any of the terms
or provisions of this Agreement or to comply fully with the lawful
directives of the Board of Directors of the Corporation or any
other proper cause determined in good faith by the Board of
Directors of the Corporation; provided, however, that Employee's conduct
shall not constitute "Cause" within the
meaning of (b) above unless and until (i) the Corporation shall
have provided Employee with notice setting forth with specificity (A)
the conduct deemed to constitute such "Cause," (B) reasonable
action that would remedy the objectionable conduct, and (C) a
reasonable time (not less than 15 days) within which Employee may
take such remedial action, and (ii) Employee shall not have taken such
specified remedial action within such specified reasonable time.
In the event of a termination for Cause, this Agreement shall
terminate except for the provisions which expressly survive terminations,
and Employee shall vacate the offices of the Corporation.
(iii) Termination without Cause. The
Corporation shall have the right to terminate
Employee's employment by the Corporation at any time
without cause. Under such circumstances, the
Corporation shall pay to the Employee in a lump sum
in cash within 30 days of such termination an amount
equal to Employee's annual base salary as of the
termination date. Notwithstanding the foregoing,
payments to be provided pursuant to this Section
shall in all respects be conditioned upon (i) the
prior receipt by the Corporation from Employee of a
general release of all claims of any nature whatsoever
which Employee had, has or may have against the
Corporation and related parties relating to his
employment by the Corporation (other than his
entitlement under any employee benefit plan or program
sponsored by the Corporation in which he participated
and under which he has accrued a benefit) or the
termination thereof and (ii) continued compliance by
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Employee with the provisions of this Agreement that
expressly survive termination.
(b) Notwithstanding anything in this Agreement to the
contrary, if it shall be determined that any payment or
distribution by the Corporation to or for the benefit of
Employee pursuant to the terms of this Agreement or
otherwise (a "Payment") would constitute an "excess
parachute payment" within the meaning of Section 280G of the
Internal Revenue Code of 1986, as amended (the
"Code"), as a result of a "Change of Control" of
the Corporation as defined in Section 11 of the
Corporation's 1996 Equity Compensation Plan and that it
would be economically advantageous to the Corporation to
reduce the Payment to avoid or reduce the taxation of excess
parachute payments under Section 4999 of the Code, the
aggregate present value of the amounts payable or
distributable to or for the benefit of Employee pursuant to
this Agreement (such payments or distributions pursuant to
this Agreement are hereinafter referred to as "Agreement
Payments") shall be reduced (but not below zero) to the
Reduced Amount. The "Reduced Amount" shall be an amount
expressed in present value which maximizes the aggregate
present value of Agreement Payments without causing any
Payment to be subject to taxation under Section 4999 of the
Code. For purposes of this Paragraph 5, present value shall
be determined in accordance with Section 280G(d)(4) of the
Code. The calculations under Paragraph 5(a) shall be made
as follows:
(i) All determinations to be made under this
Paragraph 5(b) shall be made by the
Corporation's independent public accounting
firm (the "Accounting Firm"), which firm shall
provide its determinations and any supporting
calculations to the Corporation and Employee
within 10 business days of the event that gives
rise to the "excess parachute payment." Any such
determination by the Accounting Firm shall be
binding upon the Corporation and Employee.
Employee shall in his sole discretion determine
which and how much of the Agreement Payments shall
be eliminated or reduced consistent with the
requirements of this Paragraph 5(b). Within five
business days after Employee's determination,
the Corporation shall pay (or cause to be paid) or
distribute (or cause to be distributed) to or for
the benefit of Employee such amounts as are then
due to Employee under this Agreement.
(ii) As a result of the uncertainty in the
application of Section 280G of the Code at the
time of the initial determination by the
Accounting Firm hereunder, it is possible that
Agreement Payments will have been made by the
Corporation which should not have been made
("Overpayment") or that additional Agreement
Payments which have not been made by the
Corporation could have been made ("Underpayment"),
in each case, consistent with the calculations
required to be made hereunder. Within two years
after the event that gives rise to the "excess
parachute payment," the Accounting Firm shall
review the determination made by it pursuant to
the preceding paragraph. If the Accounting Firm
determines that an Overpayment has been made, any
such Overpayment shall be treated for all purposes
as a loan to Employee which Employee shall
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repay to the Corporation, together with interest at the
applicable Federal rate provided for in Section
7872(f)(2) of the Code (the "Federal Rate");
provided, however, that no amount shall be payable
by Employee to the Corporation if and to the
extent such payment would not reduce the amount
which is subject to taxation under Section 4999 of
the Code. In the event that the Accounting Firm
determines that an Underpayment has occurred, any
such Underpayment shall be promptly paid by the
Corporation to or for the benefit of Employee,
together with interest at the Federal Rate.
(iii) All of the fees and expenses of the
Accounting Firm in performing the determinations
referred to in Paragraphs 5(b)(i) and 5(b)(ii)
above shall be borne solely by the Corporation.
The Corporation agrees to indemnify and hold
harmless the Accounting Firm from any and all
claims, damages and expenses resulting from or
relating to its determinations pursuant to
Paragraphs 5(b)(i) and 5(b) (ii) above, except for
claims, damages or expenses resulting from the
gross negligence or willful misconduct of the
Accounting Firm.
(iv) The limitations of this Paragraph 5(b)
shall only apply if payments under this Agreement
are subject to Section 280G at the time of the
Change of Control.
(c) This Agreement and all of Employee's rights
hereunder shall terminate upon the death of Employee, and
neither Employee nor his estate shall have any further
rights hereunder, except for any unpaid compensation, unpaid
benefits (including but not limited to unpaid vacation, if
any) and expense reimbursements through the date of death
and except to the extent otherwise provided in any
applicable welfare or benefit plan of the Corporation in
which Employee is a participant at the date of death.
(d) Following termination of this Agreement,
neither the Corporation nor Employee shall direct any
disparaging statements against the other party.
6. Benefits; Vacation
The Corporation shall provide and Employee shall
be entitled to participate in all benefit plans and programs
generally available to the officers of the Corporation upon
their adoption and implementation. It is the
Corporation's intention, but not its obligation, to adopt
and make available to Employee (a) a bonus plan based on his
and the Corporation's performance and (b) a stock option or
similar plan or plans relating to the Corporation or an
affiliate of Corporation, all on such terms and with such
conditions and restrictions as may be determined by
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the Board of Directors of the Corporation in its sole
discretion. Employee shall be entitled to vacation in
accordance with the Corporation's policies, to be scheduled
after consultation with and as approved by the President of
the Corporation.
7. Intellectual Property
(a) Employee represents and warrants that Exhibit
A attached hereto and incorporated herein, is a true and
complete list of (i) all inventions of Employee, whether
patented or unpatented, which Employee has made, conceived,
reduced to practice or acquired prior to employment by the
Corporation, and (ii) all agreements to which Employee is a
party which obligate Employee to license, grant or assign
any interest in any ideas, inventions or confidential
information, and (iii) all agreements which restrict the
activities of Employee in competition with any other Person.
If there are no such inventions or agreements, Employee has
marked Exhibit A with "None."
(b) Employee agrees to disclose promptly to the
Corporation any and all ideas, conceptions, inventions and
discoveries, whether patentable or not, discovered,
acquired, conceived, reduced to practice or made by
Employee, alone or jointly with others. Employee agrees to
assign to the Corporation his entire right, title and
interest in and to all copyrightable works and all ideas,
conceptions, discoveries and inventions, whether patentable
or not, which relate in any way to the research, development
or business of the Corporation or which are suggested as a
result of any work Employee performs on behalf of the
Corporation. Employee also agrees to execute at any time
during or after the term of this Agreement an assignment for
any such works or ideas, conceptions, discoveries or
inventions.
(c) Employee agrees that any ideas, inventions or
confidential information relating to Employee's work with
the Corporation and conceived, reduced to practice or made
by Employee, either alone or jointly with others, during the
term of this Agreement are the property of the Corporation
and Employee agrees to assign them to the Corporation, or if
conceived, reduced to practice or made by Employee within
one year after termination of this Agreement, the same shall
be presumed to have been made during employment and shall be
assigned to the Corporation. Employee agrees to execute,
acknowledge and deliver at the request of the Corporation
all papers including patent applications which may be
required for obtaining patents on any such ideas or
inventions in any and all countries and to vest title
thereof in the Corporation, and do all other acts and things
which may be necessary or desirable to carry out such
purpose.
(d) Employee agrees that the Corporation is
entitled to shop rights granting the Corporation a
nontransferable, nonexclusive, royalty-free and irrevocable
license to make, use and sell any invention, whether
patentable or not, which is conceived, reduced to practice
or made by Employee outside the scope of employment for the
Corporation, but on Corporation time or with the use of
facilities or materials of the Corporation or with the use
of proprietary information of the Corporation.
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8. Confidentiality; Non-Solicitation; Non-Competition
(a) At all times after the date hereof, including
after termination of this Agreement for any or no reason,
Employee shall not, except with the express prior written
consent of the Board of Directors of the Corporation,
directly or indirectly:
(i) communicate, disclose or divulge to any
Person, or use for his own benefit or the benefit of
any Person, any knowledge or information which he may
have acquired, no matter from whom or in what manner
such knowledge or information may have been acquired,
heretofore or hereafter, concerning the conduct and
details of the business of the Corporation or its
shareholders, including, but not limited to, products
and services offered or being considered, information
and knowledge pertaining to research activities,
mergers and other corporate transactions being
considered, software, pricing, royalties, operations,
policies, inventions, innovations, designs, ideas,
plans, trade secrets, proprietary information,
packaging, advertising, distribution and sales methods
and systems, sales and profit figures, customer and
clients lists and relationships between the Corporation
and its subsidiaries and affiliates and employees,
consultants, dealers, collaborators, distributors,
wholesalers, customers, clients, suppliers and others
who have had or will have business dealings with the
Corporation and its subsidiaries and affiliates.
(ii) for a period of one (1) year after
termination, solicit or induce, directly or indirectly,
any employee, consultant or other agent of the
Corporation or any affiliate to leave the employ of the
Corporation or otherwise terminate the relationship
with the Corporation.
(b) (i) During Employee's employment by the
Corporation and for a period of one (1) year after
employment terminates, Employee will not, unless acting
with the prior written consent of the President of the
Corporation, directly or indirectly, own, manage,
operate, gain control of, finance or participate in the
ownership, management, operation, control or financing
of, or be connected as an officer, director, advisor,
employee, partner, principal, agent, representative,
consultant or otherwise with, or use or permit his name
to be used in connection with, any business or
enterprise engaged or contemplating engagement in the
design, development, marketing or sale of any product,
service or system that directly competes with or is
intended to directly compete with any product, service
or system currently being sold by the Corporation or
currently being developed by the Corporation.
(ii) The restrictions set forth in Paragraph
8(b)(i) above shall not be construed to prohibit the
ownership by Employee of not more than 5% in the
aggregate of any class of securities of any corporation
which is engaged in the business of the Corporation as
set forth in Paragraph 8(b)(i) above, having a class of
securities registered pursuant to the Securities
Exchange Act of 1934, as amended, provided that such
ownership represents a passive investment and that
neither the Employee nor any group
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of persons including the Employee in any way, either directly
or indirectly, manages or exercises control of any such corporation,
guarantees any of its financial obligations, otherwise
takes any part in its business other than exercising
his rights as a shareholder, or seeks to do any of the
foregoing. It is recognized by Employee that the
business as engaged in by the Corporation, as set forth
in Paragraph 8(b)(i) above, is and will continue to be
international in scope, and that geographical
limitations on this non-competition covenant are
therefore not appropriate.
(c) Employee hereby acknowledges that the
requirements and restrictions in this Paragraph 8 (the
"Covenants") are reasonable and necessary to protect
the legitimate interests of the Corporation and its
subsidiaries and affiliates and that any breach or violation
by him of any of the Covenants will result in irreparable
injury to the Corporation, its subsidiaries and affiliates,
for which money damages could not adequately compensate
Corporation. In the event of any such breach or violation,
the Corporation shall be entitled to preliminary and
permanent injunctive relief without the necessity or proving
actual damages, as well as to an equitable accounting of all
earnings, profits and other benefits arising from any breach
or violation of the Covenants, which rights shall be
cumulative and in addition to any other rights or remedies
to which the Corporation may be entitled. The existence of
any claim or cause of action which Employee or any such
other Person may have against the Corporation shall not
constitute a defense or bar to the enforcement of any of the
Covenants. If the Corporation must resort to the courts for
enforcement of any of the Covenants, or if any of the
Covenants is otherwise the subject of litigation between
Corporation and Employee or any such other Person, then the
term of any such Covenant which has fixed term shall be
extended for a period of time equal to the period of such
breach, commencing on the date of a final court order
(without further right of appeal) acknowledging the validity
of such Covenant.
(d) If any portion of the Covenants or the
application thereof is construed to be invalid or
unenforceable, then the other portions of the Covenants, and
of all other terms of this Agreement, or the application
thereof shall not be affected thereby and shall be given
full force and effect without regard to the invalid or
unenforceable portions. If any of the Covenants is
determined to be unenforceable because of the geographical
area covered thereby, the duration thereof or the scope
thereof, then the court making such determination shall have
the power to reduce such area or duration, or to limit such
scope, and such Covenant shall then be enforceable in its
reduced form.
(e) Employee irrevocably and unconditionally (i)
agrees that any suit, action or other legal proceeding
arising out of this Agreement, including, without
limitation, any action commenced by the Corporation for
preliminary and permanent injunctive relief and other
equitable relief, may be brought in any court of competent
jurisdiction in the Commonwealth of Pennsylvania or any
other court of competent jurisdiction, provided that any
suit, action or other legal proceeding brought against the
Corporation shall be brought and adjudicated in the United
States District Court for the Eastern District of
Pennsylvania, or, if such court will not accept
jurisdiction, in any court of competent civil jurisdiction
sitting in Chester County, Pennsylvania;
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(ii) consents to the non-exclusive jurisdiction of any such
court in any such suit, action or proceeding; and (iii)
waives any objection which Employee may have to the laying
of venue of any such suit, action or proceeding in any such
court. Employee also irrevocably and unconditionally
consents to the service of any process, pleading, notices or
other papers in any manner permitted by the notice
provisions of Paragraph 9 hereof.
(f) Employee agrees that he will provide, and
that the Corporation may similarly provide, a copy of
Paragraph 8 of this Agreement to any business or enterprise
(i) which he may directly or indirectly own, manage, advise,
operate, finance, join, control or participate in the
ownership, management, operation, financing, or control of
or (ii) with which he may be connected with as an officer,
director, advisor, employee, partner, principal, agent,
representative, consultant or otherwise, or in connection
with which he may use or permit his name to be used;
provided, however, that this provision shall not apply in
respect of Paragraphs 8(a)(ii) and 8(b)(i) of this Agreement
after expiration of the time periods set forth therein.
9. Notices
All notices and other communication which are
required or permitted hereunder shall be given in writing
and either delivered by hand or mailed by certified mail,
return receipt requested, postage prepaid, as follows or to
such other address as a party may specify in a written
notice given hereunder:
(a) If to Employee, to:
William R. Burger
9 Edgehill Avenue
Chatham, NJ 07928
with a required copy to:
Joan H. Burger
Meites, Frackman, Mulder & Burger
208 South LaSalle Street
Suite 1410
Chicago, IL 60604
(b) If to the Corporation, to:
Infonautics, Inc.
900 West Valley Road, Suite 1000
Wayne, PA 19087
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with a required copy to:
David R. King, Esquire
Morgan, Lewis & Bockius LLP
2000 One Logan Square
Philadelphia, PA 19103
A notice shall be effective upon receipt, or if delivery is
refused, an the third business day after the attempted
delivery.
10. Miscellaneous
(a) This Agreement shall be binding upon, inure
to the benefit of, and be enforceable by the successors and
assigns of Corporation and the heirs, estate, personal
representatives and beneficiaries of Employee. The rights,
obligations and duties of the Employee hereunder shall be
personal and are not assignable or delegable by him in any
manner whatsoever.
(b) This Agreement constitutes the entire
understanding of the parties with respect to the subject
matter hereof, supersedes all prior discussions, promises,
and representations between the parties, and shall not be
modified, terminated or any provisions waived orally,
including this clause.
(c) No failure to exercise, delay in exercising,
or single or partial exercise of any right, power or remedy
hereunder shall preclude any other or further exercise of
the same or any other right, power or remedy.
(d) The headings of the paragraphs of this
Agreement have been inserted for convenience of reference
only and shall not constitute a part of this Agreement.
(e) This Agreement shall be construed and
enforced in accordance with the laws of the Commonwealth of
Pennsylvania, notwithstanding choice of law principles,
applicable to contracts made and to be performed solely
therein, and each party consents to the exclusive
jurisdiction and venue of the state and Federal courts of
Pennsylvania to resolve any disputes between the parties.
(f) As used herein, "Person" shall mean a natural
person, sole proprietorship, joint venture, partnership,
corporation, association, cooperative, trust, estate,
government (or any branch, subdivision or agency thereof),
or any other entity.
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IN WITNESS WHEREOF, the parties have executed this
Agreement on the date first written above.
INFONAUTICS, INC. EMPLOYEE:
By: /s/ Ronald A. Berg /s/ William R. Burger
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Name: Ronald A. Berg William R. Burger
Title: Vice President - Finance
and Administration
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Exhibit A
Inventions and Agreements
None
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