Employment Agreement - Juno Online Services Inc. and Robert Cherins
EMPLOYMENT AGREEMENT
AGREEMENT dated as of this 10th day of June, 1998, by and between
Juno Online Services, Inc., a Delaware corporation, and Robert Cherins (the
"Employee").
For purposes of this Agreement, the term "D. E. Shaw Group" shall
include, individually and/or collectively, (a) Juno Online Services, Inc. and
Juno Online Services, L.P. (the sole shareholder of Juno Online Services, Inc.);
(b) D. E. Shaw & Co., L.P. and D. E. Shaw & Co., Inc. (D. E. Shaw & Co., L.P.'s
general partner); (c) any partnership, other entity or account that D. E. Shaw &
Co., L.P. or D. E. Shaw & Co., Inc. owns, in whole or in part, or for which they
act, directly or indirectly, as general partner, investment manager, or
management company, along with their respective subsidiaries; (d) any other
affiliate of D. E. Shaw & Co., L.P. or of D. E. Shaw & Co., Inc. for which the
Employee provides services in his capacity as an employee of Juno Online
Services, Inc.; and (e) any predecessor or successor entity to (i) Juno Online
Services, Inc. or (ii) any partnership, entity, or account described in (c) and
(d) above. The term "Company" shall include Juno Online Services, Inc., Juno
Online Services, L.P. and, as applicable, any predecessor or successor companies
in the D. E. Shaw Group that have served, serve, or may in the future serve as
the employer of the Employee. The term "Management Company" means D. E. Shaw &
Co., Inc. and its successor. References in this Agreement to any entity also
refer to any successor to that entity. The term "Capital" means (A) equity
financing, and/or (B) certain debt financing (other than bank financing, than
equipment leasing and than ordinary trade payables incurred in connection with
the purchase of goods or services by Juno Online Services, L.P. or its
subsidiaries), as identified by the Management Company in its sole discretion.
WHEREAS, the Company desires to retain (or to continue to retain) the
Employee on the terms and conditions hereinafter set forth, and the Employee is
willing to undertake (or to continue) employment by the Company upon such terms
and conditions;
NOW, THEREFORE, in consideration of the foregoing and in consideration
of their mutual promises and agreements contained herein, the parties hereto
agree as follows:
1. EMPLOYMENT
Employment shall commence (or has commenced) on December 2, 1996, and
may be terminated by either party at any time, for any reason, upon 30 days
notice (the "Notice Period"), which notice may be given either verbally or in
writing. Notwithstanding the foregoing, the Company may elect to terminate
immediately upon notice, except that in this event, the compensation and
benefits set forth in Section 2 shall be continued for the duration of the
Notice Period. The Employee acknowledges and agrees that he is an employee at
will, and that just as the Employee is free to resign at any time, the Company
has the right to terminate the employment relationship at any time for any
lawful reason. The Employee acknowledges and agrees that no representative of
the Company may verbally change the at will employment relationship between the
Employee and the Company. References to time periods in this Agreement shall not
be construed or interpreted as promising or guaranteeing employment for any
specific duration or until any specific date.
2. COMPENSATION
(a) BASE SALARY DURING THE COMPENSATION PERIOD. As compensation for the
Employee's services during the period beginning January 1, 1998 and ending on
December 31, 1998 (the "Compensation Period"), the Company shall pay the
Employee a base salary computed at an annual rate of $150,000 per year, prorated
to correspond to that portion of the Compensation Period during which the
Employee is actually employed with the Company, such base salary to be paid
semi-monthly.
(b) BASE SALARY AFTER THE COMPENSATION PERIOD. As of the end of the
Compensation Period, or as of the end of any subsequent calendar year, the
Employee's base salary may be increased or decreased, or the manner in which the
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Employee is compensated may be changed, in the sole discretion of the President
of Juno Online Services, Inc., expressed in writing by the President of Juno
Online Services, Inc. Any such change in compensation shall be deemed to modify
only this Section 2 of this Agreement, and all other provisions of this
Agreement shall remain in effect following such change in compensation. In the
absence of any such change, the Employee's base salary shall remain the same as
it was during the Compensation Period.
(c) YEAR-END BONUS. At the end of each calendar year that includes one
or more days falling within the Compensation Period, and provided that the
Employee remains employed by the Company as of the end of such calendar year,
the Company shall pay the Employee a guaranteed year-end bonus computed at an
annual rate of no less than $300,000 per year, prorated to correspond to that
portion of the Compensation Period during which the Employee is actually
employed with the Company. The Company may (or may not), in the sole discretion
of the President of Juno Online Services, Inc., also pay the Employee an
additional discretionary year-end bonus. Any such bonus(es) relating to the
Compensation Period shall be paid to the Employee on a date to be determined by
the President of Juno Online Services, Inc., which date shall ordinarily be no
later than March 15th of the following calendar year, or as soon thereafter as
is practicable.
(d) NON-REFUNDABLE ADVANCE AGAINST BONUS. In addition to the base
salary specified in Section 2(a)the Employee shall, during the Compensation
Period, receive a non-refundable advance against the bonus specified in Section
2(c) computed at an annual rate of $200,000 per year, prorated to correspond to
that portion of the Compensation Period during which the Employee is actually
employed with the Company, such advance to be paid semi-monthly. In the event
that a year-end bonus is paid pursuant to the terms of Section 2(c), the amount
of such advance shall be deducted from such year-end bonus payment. The Employee
shall under no circumstances be required to repay any correctly computed sum
that has already been paid to the Employee as a non-refundable advance against
bonus pursuant to the terms of this Section 2(d).
(e) YEAR-END BONUS AFTER THE COMPENSATION PERIOD. As of the end of the
Compensation Period, or as of the end of any subsequent calendar year, the
Employee's year-end bonus, if any, and/or the non refundable advance against
such year-end bonus, if any, may be increased, decreased, or eliminated, or the
manner in which the Employee is compensated may be changed, in the sole
discretion of the President of Juno Online Services, Inc., expressed in writing
by the President of Juno Online Services, Inc. Any such change in compensation
shall be deemed to modify only this Section 2 of this Agreement, and all other
provisions of this Agreement shall remain in effect following such change in the
Compensation Period, the Company shall not have any obligation to continue to
pay a year-end bonus to the Employee unless such an arrangement is explicitly
agreed to in writing by the President of Juno Online Services, Inc.
(f) STANDARD COMPANY BENEFITS. In addition to the compensation outlined
elsewhere in this Section 2, the Company shall provide to the Employee all of
the benefits included in the Company's standard benefit package, which currently
include medical (hospitalization and major medical), dental, disability, life,
and accidental death and dismemberment insurance. Most of the cost of such
benefits shall be borne by the Company. However, in the case of coverage for the
Employee himself, the Employee contributes a nominal pre-tax amount to the cost
of the medical insurance; if the Employee wishes to obtain coverage for other
qualified family members, and arranges with the Company's insurance providers
(through the Company's Human Resources staff) to obtain such additional
coverage, the Employee will also be required to contribute part of the
incremental cost of such coverage. Individual and dependent medical insurance
contribution amounts are determined on a set scale, based on both the actual
cost of the insurance and on the Employee's base salary. The required
contribution will be borne by the Employee by means of a voluntary salary
reduction in the amount of the contribution implemented by the Company at the
request of the Employee.
The standard benefit package also currently includes a flexible
spending account plan and a 401(k) retirement plan, available to all qualified
full-time employees after a certain period of employment with the Company. The
401(k) retirement plan currently includes a matching program and a graded
vesting schedule; the Company does not contribute to the flexible spending
account plan, but the Employee may contribute pre-tax dollars. The Employee
agrees that the composition, providers, and all other aspects of the Company's
standard benefit package may be changed from time to time in the sole discretion
of the Management Company.
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(g) EXCLUSIVE COMPENSATION. The compensation and benefits described in
this Section 2 shall be the exclusive compensation due to the Employee from the
Company or any of its affiliates during or on account of the services of the
Employee. If directed by the Company, the Employee shall provide the services
described in this Agreement to one or more affiliates of the Company without
compensation other than as specified in this Section 2.
3. DISCLOSURE TO THE COMPANY
(a) DISCLOSURE OF INFORMATION TO THE COMPANY. The Employee shall
promptly disclose and deliver over to the Company, without additional
compensation, to the extent that such disclosure could reasonably be expected to
be of interest to the D. E. Shaw Group, in writing, or in such form and manner
as the Company may reasonably require:
(i) any and all algorithms, procedures, methods or techniques
directly related to electronic communication and/or commerce or to the
Employee's work with the Company, and the essential ideas and principles
underlying such algorithms, procedures, methods or techniques, conceived,
originated, discovered, developed, evaluated, tested, or applied by the Employee
while employed by the Company, whether or not such algorithms, procedures,
methods or techniques are embodied in a computer program;
(ii) any and all programming, marketing, advertising, or
financing strategies, the essential ideas and principles on which such
strategies are based, and any information that might reasonably be expected to
lead to the development of such strategies, conceived, originated, discovered,
developed, evaluated, tested, or employed by the Employee while employed by the
Company, whether or not such strategies are embodied in a computer program;
(iii) any and all Internet-related and other products and
services, and the essential ideas and principles underlying such products and
services, conceived, originated, adapted, developed, evaluated, tested, or
applied by the Employee while employed by the Company, whether or not such
products or services are embodied in a computer program, and whether or not
marketed, sold, or provided by the D. E. Shaw Group;
(iv) such information and data pertaining to the business,
operations, personnel, activities, financial status and affairs, current or
anticipated business or investment objectives or practices, current or
anticipated requirements for Internet-related or other products or services, and
other information relating to current or prospective investors, other current or
prospective funding sources, limited partners, shareholders, clients, customers,
accounts, joint venturers, or other business affiliates of the D. E. Shaw Group,
and of the officers, partners, principals, employees, and other persons
affiliated with such current or prospective investors, limited partners,
shareholders, clients, customers, accounts, joint venturers, or other business
affiliates, as is known to the Employee and as might reasonably be expected to
be of value to the D. E. Shaw Group in developing, maintaining, or expanding its
current or prospective business relationships with such current or prospective
investors, limited partners, shareholders, clients, customers, accounts, joint
venturers, or other business affiliates.
(b) PERIOD COVERED; INFORMATION EXCLUDED. The provisions of this
Section 3 shall apply to information acquired by the Employee at any time during
his employment with the Company, whether prior to or subsequent to the execution
of this Agreement.
The Employee agrees not to disclose to the D. E. Shaw Group any
confidential or proprietary information belonging to any previous employer of
the Employee that is not part of the D. E. Shaw Group, or belonging to any other
party, without first securing the written permission of such previous employer
or other party.
(c) DISCLOSURE UPON TERMINATION. Any information required to be
disclosed under this Section 3 that has not yet been disclosed by the Employee
to the Company at the time of the termination of the Employee's employment with
the Company, without regard to when or for what reason, if any, such employment
shall terminate, shall be disclosed to the Company in writing, or in such form
and manner as the Company may reasonably require, within 10 days of the
termination of the Employee's employment with the Company.
4. CONFIDENTIAL INFORMATION
(a) DEFINITION. The parties acknowledge that, in order to permit the
Employee to successfully perform and/or continue to perform the duties
associated with his employment with the Company, it is necessary for the Company
to entrust the Employee with certain valuable proprietary information and
knowledge of certain modes of business operation ("Confidential Information")
which are essential to the profitable operation of the D. E. Shaw Group, and
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which give the D. E. Shaw Group a competitive advantage over other firms
pursuing related business activities. In the context of this Agreement, the term
"Confidential Information" shall be deemed to include
(i) computer software or data of any sort developed (in the
case of software) or compiled (in the case of data) by the D. E. Shaw Group;
(ii) the fact that the D. E. Shaw Group uses, has used, or has
evaluated for potential use a particular computer program or system, if the
disclosure of such fact to a competitor of the D. E. Shaw Group might reasonably
be expected to adversely affect the competitive position of the D. E. Shaw Group
relative to that of such a competitor; provided, however, that information about
the type of computers, computer peripherals, operating systems, database
systems, or other systems software which the D. E. Shaw Group uses, has used, or
has evaluated for potential use, but which is not specific to any financial or
Internet related application, shall not by reason of this Section 4(a)(ii) be
considered Confidential Information;
(iii) algorithms, procedures, methods, or techniques, or the
essential ideas and principles underlying such algorithms, procedures, methods,
or techniques, developed by the D. E. Shaw Group (but excluding any public
domain algorithm, procedure, or technique), whether or not such algorithms,
procedures, methods, or techniques are embodied in a computer program;
(iv) the fact that the D. E. Shaw Group uses, has used, or has
evaluated for potential use any particular algorithm, procedure, or technique
developed by a party other than the D. E. Shaw Group, whether or not such
algorithm, procedure, or technique is embodied in a computer program, if the
disclosure of such information to a competitor of the D. E. Shaw Group might
reasonably be expected to adversely affect the competitive position of the D. E.
Shaw Group relative to that of such a competitor;
(v) the results of any programming, marketing, advertising,
financial, or other analysis conducted by the D. E. Shaw Group for its own
internal use (and not approved for dissemination to its customers, investors,
consultants, joint venturers, or other parties);
(vi) any information that would typically be included in the
D. E. Shaw Group's income statements, including, but not limited to the amount
of the D. E. Shaw Group's revenues, expenses, or net income;
(vii) any plans for the business of the Company or of other
members of the D. E. Shaw Group (whether or not such plans have been reduced to
writing); financial information concerning such plans (including without
limitation projected revenues, projected expenses, projected net income and
information concerning rates and costs of customer acquisition and retention);
descriptions of such business and technical aspects of or relating to the
operation of such business (including without limitation algorithms, computer
programs, processes or formulas that relate to computer and network security,
authentication, logging, accounting and distribution); and products and services
that the D. E. Shaw Group is considering offering to its subscribers and/or to
other persons;
(viii) any other information gained in the course of the
Employee's employment with the Company that could reasonably be expected to
prove deleterious to the D. E. Shaw Group if disclosed to third parties,
including without limitation any information that could reasonably be expected
to aid a competitor of the D. E. Shaw Group in making inferences regarding the
nature of the D. E. Shaw Group's proprietary and/or World Wide Web-related
activities, where such inferences could reasonably be expected to adversely
affect the competitive position of the D. E. Shaw Group relative to that of such
a competitor;
(ix) any other information gained in the course of or incident
to the Employee's employment with the Company that the D. E. Shaw Group has
received from a third party and is required to hold confidential in connection
with an agreement between the D. E. Shaw Group and such third party;
(x) any other information gained in the course of or incident
to the Employee's employment with the Company that the Company treats or
designates as Confidential Information and which is not publicly available.
(b) USE AND DISCLOSURE.
(i) The Employee acknowledges that he has acquired and/or will
acquire Confidential Information in the course of or incident to his employment
with the Company. Accordingly, the Employee agrees that he shall not, directly
or indirectly, at any time, during the term of his employment with the Company
or at any time thereafter, and without regard to when or for what reason, if
any, such employment shall terminate, use or cause to be used any such
Confidential Information, whether acquired prior to or subsequent to the
execution of this Agreement, in connection with any activity or business except
the business of the D. E. Shaw Group, and shall not disclose such Confidential
Information to any individual, partnership, corporation, or other entity unless
such disclosure has been authorized in writing by the Management Company, or
except as may be required by any applicable law or by order of a court of
competent jurisdiction, a regulatory or self-regulatory body, or a governmental
body.
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(ii) The provisions of Section 4(b)(i) notwithstanding, the
Employee shall be free to disclose any information contained in any
non-confidential brochure or other promotional material which the D. E. Shaw
Group routinely makes available to the press and/or the general public
(including, but not limited to (A) the Company's public site on the World Wide
Web (www.juno.com); (B) the official "Company Profile," of the D. E. Shaw Group;
(C) the general overview brochure describing the D. E. Shaw Group's Third Market
operation; and (D) the general overview brochure describing D. E. Shaw
Securities International), and shall be free to disclose or use any information
which is in or which enters the public domain prior to the time of such
disclosure or use (except where such information enters the public domain as a
result of unauthorized actions of the Employee). The Employee acknowledges,
however, that (A) a large number of market inefficiencies and trading
strategies, and a large number of analyses, observations, and findings from
which such market inefficiencies and trading strategies might be derived, and
(B) a large number of programming techniques and programming strategies, and a
large number of analyses, observations and findings from which such computer
programming techniques and strategies might be derived, have been or may be
reported in the open literature, or may otherwise have entered or may enter the
public domain, and that one of the Company's most valuable forms of Confidential
Information is its accumulated knowledge, based on research, analysis, and
experimentation not reported in the open literature or otherwise falling within
the public domain, of which of these market inefficiencies, trading strategies,
programming techniques, and programming strategies, and which of these analyses,
observations, and findings, are likely to form the basis for practical,
profitable business applications for the D. E. Shaw Group ("Confidential
Applicability Information"). The Employee thus agrees that he shall not,
directly or indirectly, at any time, during the term of his employment with the
Company, or at any time thereafter, and without regard to when or for what
reason, if any, such employment shall terminate, use or cause to be used any
Confidential Applicability Information in connection with any activity or
business except the business of the D. E. Shaw Group, and shall not disclose
such Confidential Applicability Information to any individual, partnership,
corporation, or other entity, unless what would otherwise be deemed to
constitute Confidential Applicability Information is itself in or itself enters
the public domain by some means other than as a result of unauthorized actions
of the Employee, or unless such disclosure has been authorized in writing by the
Management Company, or except as may be required by any applicable law or by
order of a court of competent jurisdiction, a regulatory or self-regulatory
body, or a governmental body.
(iii) In the event that the Employee is required to disclose
Confidential Information or Confidential Applicability Information pursuant to
judicial or administrative process or other requirements of law, the Employee
will (A) notify the Company of his receipt of such process within 24 hours of
such receipt, and prior to any disclosure being made, (B) to the extent
reasonably practicable, consult with the Company on the advisability of taking
steps to resist or narrow such request provided that the ultimate decision shall
be that of the Employee, and (C) if disclosure is required or deemed advisable,
cooperate with the Company in any attempt that it may make in order to obtain an
order or other reliable assurance that confidential treatment will be accorded
to designated portions of such information. If no such order is obtained by the
Company, disclosure of such information by the Employee shall not be deemed a
violation of this Agreement. If such an order is obtained, then disclosure of
the information covered by such order in the manner described in the order shall
not be deemed a violation of this Agreement. The Employee shall be entitled to
reimbursement for his reasonable expenses, including the fees and expenses of
his counsel, in connection with action taken pursuant to this paragraph.
(iv) The provisions of Sections 4(b)(i), 4(b)(ii), and
4(b)(iii) notwithstanding, the Employee shall be free to disclose or use any
information which was obtained by the Employee prior to his employment with the
Company, or which is obtained by the Employee subsequent to and independent of
his relationship with the D. E. Shaw Group.
(v) The provisions of Section 4(b)(i), 4(b)(ii), and 4(b)(iii)
notwithstanding, the Employee shall, with the prior written permission of the
Management Company, be free to disclose selected Confidential Information and/or
Confidential Applicability Information to a limited number of parties for the
purpose of securing employment subsequent to the Employee's employment with the
Company or progressing professionally, provided further that where such
disclosure would not be harmful to the D. E. Shaw Group, such permission shall
not be unreasonably withheld. For purposes of this Section 4(b)(v), the
termination of the Employee's employment with the Company shall not in itself be
deemed harmful to the D. E. Shaw Group, even if such termination is voluntary.
(c) RETURN AND OWNERSHIP OF DOCUMENTS AND WORK PRODUCT. Upon the
termination of the Employee's employment with the Company for any reason, the
Employee promises and agrees to return immediately to the Company any and all
Confidential Information and all other materials or documents, including without
limitation mailing lists, rolodexes, computer print-outs, and computer disks and
tapes, belonging to the Company which contain information pertaining to the D.
E. Shaw Group's business, methods, clients, potential clients, customers,
potential
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customers, investors, potential investors, funding providers, potential funding
providers, or employees, unless the Company consents in writing to the
Employee's retention thereof.
(d) OWNERSHIP OF INTELLECTUAL PROPERTY. All right, title, and interest
of every kind and nature whatsoever, whether now known or unknown, in and to any
intellectual property ("Intellectual Property"), including without limitation
any ideas, inventions (whether or not patentable), designs, improvements,
discoveries, innovations, patents, trademarks, service marks, trade dress, trade
names, trade secrets, works of authorship, copyrights, films, audio and video
tapes, other audio and visual works of any kind, scripts, sketches, models,
formulas, tests, analyses, software, firmware, computer processes, computer and
other applications, creations, properties, and any documentation or other
memorialization containing or relating to the foregoing, in each case
discovered, invented, created, written, developed, taped, filmed, furnished,
produced, or disclosed by or to the Employee in the course of rendering services
to the Company shall, as between the parties hereto, be and remain the sole and
exclusive property of Juno Online Services, L.P. for any and all purposes and
uses whatsoever, and the Employee and his successors and assigns shall have no
right, title, or interest of any kind or nature therein or thereto, or in or to
any results and proceeds therefrom. Juno Online Services L.P. shall have all
right, title, and interest in such Intellectual Property, whether such
Intellectual Property is conceived by the Employee alone or with others and
whether conceived during regular working hours or other hours.
The Employee makes, and agrees to make and execute, any assignment
necessary to perfect Juno Online Services, L.P.'s right, title, and interest in
Intellectual Property, and agrees to perform any act reasonably requested by the
Company in furtherance of any such assignment, and/or of perfecting Juno Online
Services, L.P.'s rights in Intellectual Property.
(e) NO WAIVER OF TRADE SECRET PROTECTION. Nothing contained in this
Agreement shall be deemed to weaken or waive any rights related to the
protection of trade secrets or confidential business information that the
Company may have under common law or any applicable statutes or rules.
5. COMPETITION WHILE EMPLOYED
During the period of his employment with the Company, the Employee will
not, directly or indirectly, without the written consent of the President of
Juno Online Services, Inc., and whether or not for compensation, either for his
own account or as an employee, officer, agent, consultant, director, owner,
partner, joint venturer, shareholder, investor, or in any other capacity (except
in the capacity of an employee or officer of the Company acting for the benefit
of the D. E. Shaw Group):
(a) perform a function which is of the same nature as, or substantively
similar to, a function that the employee performs for the Company; or
(b) engage in any activity or business which is the same nature as, or
substantively similar to, an activity or business of the Company or an activity
or business which the Company is developing and of which the Employee has
knowledge.
(c)
6. INTERFERENCE WITH RELATIONSHIPS
(a) RESTRICTIONS ON INTERFERENCE. While employed by the Company, and
for a period of 18 months after the date the Employee ceases to be employed by
the Company, without regard to when or for what reason, if any, such employment
shall terminate (the "Termination Date"), the Employee shall not, directly or
indirectly, without the written consent of the President of Juno Online
Services, Inc., and whether or not for compensation, either on his own behalf or
as an employee, officer, agent, consultant, director, owner, partner, joint
venturer, shareholder, investor, or in any other capacity (except in the
capacity of an employee or officer of the Company acting for the benefit of the
Company or an employee or officer of another entity affiliated with David E.
Shaw), knowingly:
(i) interfere with an ongoing (as of the Termination Date)
relationship between the Company and one of its customers (except as permitted
under the provisions of Sections 6(b) and 6(c) below) by providing or offering
to provide a product or service to that customer which, as of the Termination
Date, was provided to that customer by a business unit of the Company in which
the Employee worked during his employment with the Company, if by so doing, the
Employee might reasonably be expected to cause the Company to suffer a loss of
profits from or other damage to its business relationship with that customer;
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(ii) interfere with an ongoing (as of the Termination Date)
joint venture, strategic alliance, licensing agreement, distribution
relationship, advertising relationship, or similar agreement or relationship
between the Company and another business entity (the "Joint Venture
Relationship") by entering into or proposing to enter into a substantially
similar business relationship with that entity, if the Employee was directly
involved in that Joint Venture Relationship during his employment with the
Company, and if by so doing, the Employee might reasonably be expected to cause
the Company to suffer a loss of profits that would otherwise accrue to the
Company in connection with that Joint Venture Relationship, or to suffer other
damage to that Joint Venture Relationship;
(iii) employ, or retain as a consultant or contractor, or
cause to be so employed or retained, or enter into a partnership or business
venture with, any person (a "Related Person") who at the time of such action (A)
is an employee of the D. E. Shaw Group; (B) has been employed by the D. E. Shaw
Group at any time within the previous 18 months; (C) is a consultant, sales
agent, contract programmer, or other independent agent who is retained on a
full-time or substantially full-time basis by the D. E. Shaw Group; or (D) has
been retained on a full-time or substantially full-time basis by the D. E. Shaw
Group as a consultant, sales agent, contract programmer, or other independent
agent at any time within the previous 18 months;
(iv) solicit, persuade, encourage, or induce any employee of
the D. E. Shaw Group (or any consultant, sales agent, contract programmer, or
other independent agent who is retained on a full-time or substantially
full-time basis by the D. E. Shaw Group) to cease his employment with or
retention by the D. E. Shaw Group; or
(v) accept or solicit investment capital or debt financing
(directly or indirectly) from, or accept or solicit employment with, or accept
or solicit a consulting assignment with, any individual or entity, or an
officer, partner, principal, or affiliate of any entity, or another entity
managed by or otherwise affiliated with an officer, partner, principal, or
affiliate of any entity, that, as of the Termination Date or at any time within
the 18 months immediately preceding the Termination Date, provided or arranged
for the provision of more than 20 percent of the Capital of Juno Online
Services, L.P., Juno Online Services, Inc., D. E. Shaw Development, L.P. or any
other subsidiary of D. E. Shaw Development, L.P.
(b) EXCEPTIONS TO PREVENT UNDUE HARDSHIP. In the event that the
application of Section 6(a)(i) and/or Section 6(a)(ii) would, in the Company's
judgment, cause undue hardship to the Employee, the Management Company shall,
upon written request by the Employee, provide to the Employee a written
instrument authorizing such specific exceptions to the provisions of Section
6(a)(i) and/or Section 6(a)(ii) as the President of Juno Online Services, Inc.
shall determine are reasonably necessary to prevent such undue hardship, the
provisions of which instrument shall thereafter be deemed to supersede the
corresponding provisions of Section 6(a)(i) and/or Section 6(a)(ii).
(c) PRIOR RELATIONSHIPS. The provisions of Section 6(a)
notwithstanding, the Employee shall not by reason of Section 6(a) be restricted
from resuming, after the termination of his employment with the Company, any
employment or business relationship that preceded his employment with the
Company, or from providing or offering to provide any product or service to a
customer which the Employee provided to that customer at any time prior to his
employment by the Company; provided, however, that Section 4 and the other
provisions of this Section 6 shall continue to apply.
(d) EXCEPTION FOR UNRELATED ACTIVITIES. The provisions of Section 6(a)
notwithstanding, the Employee shall become free nine months after the
Termination Date to employ, retain, cause to be employed or retained, or enter
into a business relationship with any Related Person provided that neither the
Employee nor any Related Person directly or indirectly engages in business
activities competitive with the business activities of the Company in the course
of such employment, retention, or business relationship.
(e) EXCEPTION FOR D. E. SHAW GROUP. Nothing contained in this Agreement
shall prohibit the Employee from (i) at any time accepting employment with, or
entering into a consultant or contractor arrangement with, or becoming an
officer, agent, owner, or partner of, or becoming an investor in, any entity in
the D. E. Shaw Group; or (ii) at any time soliciting, persuading, encouraging or
inducing any other person (including without limitation a present employee of
the Company) to enter into such a relationship with an entity in the D. E. Shaw
Group; and the Company agrees that it shall not interfere with, or seek to
enjoin, any such activity.
(f) NO WAIVER OF COMMON LAW OR STATUTORY PROTECTION. Nothing contained
in this Agreement shall be deemed to weaken or waive any of the Company's rights
or protections that may be accorded by statute or common law as regards the
conduct of the Employee with respect to the Company's business, investors,
customers, clients, joint venture
<PAGE>
partners, employees, consultants, or contractors. The Employee authorizes the
Company and other D. E. Shaw Group entities to disclose this Agreement to any
person at any time, including without limitation any employer or prospective
employer of the Employee.
7. REASONABLENESS OF COVENANTS
(a) CERTAIN RECOGNITIONS. The Employee acknowledges that the
restrictions specified in Sections 4, 5, and 6 of this Agreement are reasonable
in view of the nature of the business in which the Company and/or the D. E. Shaw
Group is engaged, the Employee's position with the Company, and the Employee's
knowledge of the Company's and/or the D. E. Shaw Group's business.
The Employee recognizes that the amount of his compensation reflects
his Agreement in Sections 4, 5, and 6, and acknowledges that he will not be
subject to undue hardship by reason of his agreements set forth in Sections 4,
5, and 6.
(b) MODIFICATION OF RESTRICTION. Notwithstanding anything contained in
Sections 4, 5, or 6 of this Agreement to the contrary, if a court of competent
jurisdiction should hold any restriction specified in Sections 4, 5, or 6 to be
unreasonable, unenforceable, illegal or invalid, then that restriction shall be
limited to the extent necessary to be enforceable, and only to that extent. In
particular, and without limitation on the foregoing, if any provision of
Sections 4, 5, or 6 should be held to be unenforceable as to scope or length of
time or geographical area involved, such provision shall be deemed to be
enforceable as to, and shall be deemed to be amended to cover, the maximum
scope, maximum length of time, or broadest area, as the case may be, which is
then lawful.
(c) SURVIVAL OF COVENANTS. The obligations of the Employee under
Sections 4 and 6 of this Agreement shall survive the termination of this
Agreement and of his employment with the Company.
8. REGULATORY COMPLIANCE
The Employee agrees to abide by all applicable securities laws and all
applicable rules and regulations of the Securities Exchange Commission, the
National Association of Securities Dealers, the Commodity Futures Trading
Commission, and all other applicable self-regulatory organizations, including
those regulations requiring the disclosure to the D. E. Shaw Group's management
of all securities transactions conducted for the Employee's own account.
9. REMEDIES/ARBITRATION
(a) INJUNCTIONS, RESTRAINING ORDERS, AND OTHER EQUITABLE RELIEF. The
Employee acknowledges that breach or threatened breach of Sections 4, 5, or 6 of
this Agreement will cause the D. E. Shaw Group irreparable harm for which there
is no adequate remedy at law, and as a result of this, the D. E. Shaw Group
shall be entitled to the issuance by a court of competent jurisdiction of an
injunction, restraining order, or other equitable relief in favor of itself,
without the necessity of posting a bond, restraining the Employee from
committing or continuing to commit any such violation. Any right to obtain an
injunction, restraining order, or other equitable relief hereunder shall not be
deemed a waiver of any right to assert any other remedy the D. E. Shaw Group may
have at law or in equity. The right of the D. E. Shaw Group to seek equitable
relief under this Agreement shall be in addition to (and not in derogation of)
the requirement imposed on each party hereto to arbitrate disputes as provided
in Section 9(b) below.
(b) MANDATORY ARBITRATION. The Employee and the Company agree that any
claim, controversy or dispute between the Employee and the Company (including
without limitation its affiliates, officers, employees, representatives, or
agents) arising out of or relating to this Agreement, the employment of the
Employee, the cessation of employment of the Employee, or any matter relating to
the foregoing shall be submitted to and settled by arbitration in a forum of the
American Arbitration Association ("AAA") located in New York County in the State
of New York and conducted in accordance with the National Rules for the
Resolution of Employment Disputes. In such arbitration: (i) each arbitrator
shall agree to treat as confidential evidence and other information presented by
the parties to the same extent as Confidential Information under this Agreement
must be held confidential by the Employee, (ii) the arbitrators shall have no
authority to amend or modify any of the terms of this Agreement, and (iii) the
arbitrators shall have ten
<PAGE>
business days from the closing statements or submission of post-hearing briefs
by the parties to render their decision. Any arbitration award shall be final
and binding upon the parties, and any court, state or federal, having
jurisdiction may enter a judgment on the award. The foregoing requirement to
arbitrate claims, controversies, and disputes applies to all claims or demands
by the Employee, including without limitation any rights or claims the Employee
may have under the Age Discrimination in Employment Act of 1967 (which prohibits
age discrimination in employment), Title VII of the Civil Rights Act of 1964
(which prohibits discrimination in employment based on race, color, national
origin, religion, sex, or pregnancy), the Americans with Disabilities Act of
1991 (which prohibits discrimination in employment against qualified persons
with a disability), the Equal Pay Act (which prohibits paying men and women
unequal pay for equal work) or any other federal, state, or local laws or
regulations pertaining to the Employee's employment or the termination of the
Employee's employment.
(c) RECOVERY OF LEGAL FEES. If one of the parties to this Agreement
(the "Plaintiff") should bring a proceeding against the other party (the
"Defendant") in connection with an alleged breach or threatened breach of this
Agreement, and if such proceeding is ultimately resolved by an order or a
judgment in favor of the Defendant, by a voluntary discontinuance with prejudice
by the Plaintiff, or by an arbitration decision wholly in favor of the
Defendant, the Plaintiff will, upon presentation by the Defendant of appropriate
evidence of the amount and nature of the expense incurred, reimburse the
Defendant in an amount equal to the lesser of:
(i) the cost of all reasonable legal fees actually incurred by
the Defendant in connection with such litigation or arbitration; or
(ii) $100,000.
(d) FORUM. Each party submits to the jurisdiction of the courts, state
and federal, and arbitration forums (set forth in Section 9(b)) located in the
State of New York.
10. RELATIONSHIP OF THE PARTIES
The relationship between the Company and the Employee hereunder is
agreed to be solely that of employee and employer. Nothing contained herein and
no modification of responsibility or compensation made hereafter shall be
construed so as to constitute the parties as partners or joint venturers.
11. AMENDMENT OR ALTERATION
No amendment or alteration of the terms of this Agreement shall be
valid unless made in writing and signed by both of the parties hereto.
12. GOVERNING LAW
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO CONFLICTS-OF-LAW
PRINCIPLES).
13. SEVERABILITY
The holding of any provision of this Agreement to be illegal, invalid,
or unenforceable by a court of competent jurisdiction shall not affect any other
provision of this Agreement, which shall remain in full force and effect.
14. WAIVER
The failure of a party to insist upon strict adherence to any term of
this Agreement on any occasion or occasions shall not be considered a waiver
thereof or deprive that party of the right thereafter to insist upon strict
adherence to that term or any other term of this Agreement.
<PAGE>
15. ENTIRE AGREEMENT
This Agreement contains the entire agreement of the parties and shall
supersede any prior verbal or written agreement or understanding between the
Employee and the Company. The Employee acknowledges that in choosing to accept
the Company's offer of employment (and/or to continue such employment), he has
not relied on any warranties, representations, or promises by the Company, its
employees, or any other parties except as specifically set forth herein.
16. ASSIGNMENT
Except as otherwise provided in this paragraph, this Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective heirs, representatives, successors, and assigns. Neither this
Agreement nor any right or interest hereunder shall be assignable by the
Employee, his beneficiaries, or legal representatives without the Company's
prior written consent; provided, however, that nothing in this Section 16 shall
preclude the Employee from designating a beneficiary to receive any benefit
payable hereunder upon his death, or the executors, administrators, or other
legal representatives of the Employee or his estate from assigning any rights
hereunder to the person or persons entitled thereunto. This agreement shall be
assignable by the Company to a subsidiary or affiliate of the Company; to any
corporation, partnership, or other entity that may be organized by the Company,
its general partners, or its officers, as a separate business unit in connection
with the business activities of the Company or of its general partners or
officers; or to any corporation, partnership, or other entity resulting from the
reorganization, merger, or consolidation of the Company with any other
corporation, partnership, or other entity, or any corporation, partnership, or
other entity to or with which all or any portion of the Company's business or
assets may be sold, exchanged, or transferred. The Management Company, Juno
Online Services, L.P., and other members of the D. E. Shaw Group are third-party
beneficiaries of this Agreement.
17. NO ATTACHMENT
Except as required by law, no right to receive payments under this
Agreement shall be subject to anticipation, commutation, alienation, sale,
assignment, encumbrance, charge, pledge, or hypothecation, or to execution,
attachment, levy, or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to effect any such action shall be null,
void, and of no effect.
18. NO COERCION OR DURESS
The Employee enters into this Agreement with full understanding of the
nature and extent of the restrictive covenants contained herein, and
acknowledges that because of the nature of the Company's business, this
Agreement would not be entered into without the restrictive covenants contained
herein.
The Employee acknowledges and agrees that he is entering into this
Agreement voluntarily and of his own free will in order to obtain the benefits
of employment, continued employment, and additional compensation by the Company.
The Employee acknowledges and agrees that he has not been coerced or suffered
any duress in order to induce him to enter into this Agreement.
19. HEADINGS
The Section headings appearing in this Agreement are used for
convenience of reference only and shall not be considered a part of this
Agreement or in any way modify, amend, or affect the meaning of any of its
provisions.
20. RULES OF CONSTRUCTION
Whenever the context so requires, the use of the masculine gender shall
be deemed to include the feminine and vice versa, and the use of the singular
shall be deemed to include the plural and vice versa. That this Agreement
<PAGE>
was drafted by the Company shall not be taken into account in interpreting or
construing any provision of this Agreement.
21. ACKNOWLEDGMENT OF RECEIPT
By signing below, the Employee acknowledges receiving a copy of this
Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date first
written above.
JUNO ONLINE SERVICES, INC.
By: /s/ CHARLES ARDAI
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Charles Ardai
President
Date: 6/10/98
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EMPLOYEE
Signature: /s/ ROBERT H. CHERINS
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Name: [FIRST NAME] [LAST NAME]
Address: 28 Ross Rd.
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Livingston, N.J. 07039
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Date: 6/10/98
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