EXHIBIT 10.20
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of December 28, 2000, by and
between StarMedia Network, Inc. (the "Company"), and Steven J. Heller (the
"Executive").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Company desires to continue the employment of the
Executive under the terms and conditions provided in this Agreement; and
WHEREAS, the Executive wishes to be so employed;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements hereinafter set forth, the parties hereto hereby agree as
follows:
1. EMPLOYMENT.
The Company agrees to employ the Executive, and the Executive
agrees to serve in the employ of the Company in the position and with the
responsibilities, duties and authority set forth in Section 2 and on the other
terms and conditions set forth in this Agreement. The Executive acknowledges and
agrees that he is an employee at will and that both the Executive and the
Company have the right to terminate the employment relationship at any time for
any lawful reason. The Executive acknowledges and agrees that no representative
of the Company may verbally change the at will employment relationship between
the Executive and the Company.
2. POSITION, DUTIES.
The Company shall employ the Executive as Chief Financial
Officer of the Company and the Executive will serve in the Company's employ in
that position. The Executive shall perform such duties, and have such powers,
authority, functions, duties and responsibilities for the Company as are
commensurate and consistent with his employment as Chief Financial Officer of
the Company. The Executive also shall have such additional powers, authority,
functions, duties and responsibilities as may reasonably be assigned to him by
the Company's Board of Directors (the "Board").
3. COMPENSATION.
3.1 SALARY. In consideration of the performance by the
Executive of the services set forth in Section 2 and his observance of the other
covenants set forth herein, the Company shall pay to the Executive, and the
Executive shall accept, a base salary (the "Base Salary") at an initial rate of
$200,000 per annum, payable on a semi-monthly basis in accordance with the
standard payroll practices of the Company, which amount shall be increased,
effective as of each January 1, by an amount equal to 10% of the immediately
preceding Base Salary, and
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from time to time by such additional amount, if any, that the Company shall, in
its sole discretion, determine.
3.2 TAX INDEMNITY. Should any of the payments of the Base
Salary, other incentive or supplemental compensation, benefits, allowances,
awards, payments (including the payment referred to in the following sentence),
reimbursements or other perquisites, or any other arrangement in the nature of
compensation (including the vesting of any awards or the acceleration of any
payments), singly, in any combination or in the aggregate, provided to the
Executive by the Company, whether or not provided for hereunder, be subject (as
determined below) to an excise or similar purpose tax pursuant to Section 4999
of the Code, or any successor or other comparable Federal, state or local tax
law by reason of being a "parachute payment" (within the meaning of Section 28OG
of the Code) ("excise tax"), the Company shall pay to the Executive such
additional compensation as is necessary (after taking into account all Federal,
state and local taxes, including excise taxes, payable by the Executive as a
result of the receipt of such additional compensation) to place the Executive in
the same after tax position he would have been in had no such excise tax (or
interest or penalties thereon) been paid or incurred; provided, however, that no
such additional compensation shall be payable with respect to the Retention
Bonus payable pursuant to Section 9.1 hereof. In addition, but without
duplication of the benefit provided under the previous sentence, should the
Executive recognize income on account of the making and/or forgiveness of the
Credit referred to in Section 3.3 hereof (or any installment thereof), the
Company shall pay to the Executive such additional compensation as is necessary
(after taking into account all Federal, state and local taxes payable by the
Executive as a result of the receipt of such additional compensation) to place
the Executive in the same after tax position he would have been in had the
making and forgiveness of the Credit not given rise to income recognition by the
Executive. In the case additional compensation is payable under either or both
of the preceding sentences, the Company shall pay such additional compensation
within the earliest to occur of:
(i) five (5) business days after the Executive notifies the
Company that the Executive intends to file a tax return taking the
position that such tax is due and payable in reliance on a written
opinion of the Executive's tax counsel (such tax counsel to be chosen
by the Executive and reasonably acceptable to the Company) that it is
more likely than not that such tax is due and payable; or
(ii) twenty-four (24) hours of any notice of or action by the
Company that it intends to take the position that such tax is due and
payable; or
(iii) five (5) business days after the Executive notifies the
Company that any federal, state or local tax authority has taken the
position that such tax is due and payable and that the Executive
intends to pay the tax.
The costs of obtaining the tax counsel opinion referred to in clause (i) of the
preceding sentence shall be borne by the Executive, and as long as such tax
counsel was chosen by the Executive in good faith and reasonably acceptable to
the Company, the conclusions reached in such opinion shall not be challenged or
disputed by the Company. Without limiting the obligation of the Company
hereunder, the Executive agrees, in the event the Company makes any payment
pursuant to clause (iii) above, to negotiate with the Company in good faith with
respect to
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procedures reasonably requested by the Company which would afford the Company
the ability to contest the imposition of such tax. If, after a payment of
additional compensation under this Section 3.2, it is subsequently determined
that all or some portion of the excise tax or income tax, as the case may be, is
not payable by the Executive, the Executive shall repay to the Company the
amount of any overpayment of additional compensation.
3.3 LINE OF CREDIT. During the employment relationship, the
Company shall make available to the Executive a revolving line of credit (the
"Credit") in an amount up to $2,000,000, which shall bear interest from the date
upon which the Credit is issued to the Executive until repaid by the Executive
at a rate of 7%. The Credit issued to the Executive will be secured to the
extent permitted by Regulation U by shares of Company common stock owned by the
Executive, and otherwise will be non-recourse to the Executive. Up to $500,000
of the Credit issued to the Executive and any interest thereon will be forgiven
by the Company, with one-third of such amount to be forgiven by the Company on
each of the first three anniversaries of the date hereof, provided the Executive
is in the employ of the Company on those dates. The Company and the Executive
shall enter into a loan agreement substantially in the form of Exhibit A
attached hereto setting forth the terms of the Credit.
4. EXPENSE REIMBURSEMENT.
During the employment relationship, the Company shall
reimburse the Executive for all reasonable and necessary out-of-pocket expenses
incurred by him in connection with the performance of his duties hereunder, upon
the presentation of proper accounts therefor in accordance with the Company's
policies.
5. BENEFITS.
During the employment relationship, the Executive will be
eligible to participate in all Executive benefit plans and programs offered by
the Company from time to time to its employees of comparable seniority, subject
to the provisions of such plans and programs as in effect from time to time.
6. TERMINATION OF EMPLOYMENT.
6.1 DEATH. In the event of the death of the Executive, the
Company shall, within five (5) business days following the date of termination,
pay to the estate or other legal representative of the Executive the Base Salary
provided for in Section 3.1, together with all other amounts payable to the
Executive hereunder, in each case to the extent accrued to the date of the
Executive's death and not theretofore paid. Rights and benefits of the estate or
other legal representative of the Executive under the benefit plans and programs
of the Company shall be determined in accordance with the terms and conditions
of such plans and programs. The estate or other legal representative will not be
required to repay any outstanding balance of the Credit issued to the Executive,
or any interest relating thereto, and shall be entitled to the tax indemnity
related to the Credit as described in Section 3.2. Neither the estate or other
legal representative of the Executive nor the Company shall have any further
rights or obligations under this Agreement.
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6.2 DISABILITY. If the Executive shall be unable to perform
the essential functions of his position, with or without reasonable
accommodation, by reason of a physical or mental impairment that is reasonably
expected to be permanent, this Agreement shall terminate immediately upon
written notice to the Executive. In the event of such termination, the Company
shall, within five (5) business days following the date of termination, pay to
the Executive the Base Salary provided for in Section 3.1, together with all
other amounts payable to the Executive hereunder, in each case to the extent
accrued to the date of such termination and not theretofore paid. Rights and
benefits of the Executive under the benefit plans and programs of the Company
shall be determined in accordance with the terms and conditions of such plans
and programs. If the Executive elects to continue participation in the Company's
health insurance coverage under the Consolidated Omnibus Budget Reconciliation
Act of 1986 ("COBRA"), the Company shall pay all premiums necessary to continue
the Executive's health insurance coverage for one (1) year after the date of the
Executive's termination of employment. The Executive will be required to repay
to the Company any outstanding balance of the Credit issued to the Executive,
and any interest related thereto, within sixty (60) days of such termination of
his employment. Neither the Executive nor the Company shall have any further
rights or obligations under this Agreement, except as provided in Section 7.
6.3 DUE CAUSE. (a) The employment of the Executive hereunder
may be terminated by the Company at any time for Due Cause (as hereinafter
defined) upon written notice to the Executive. If the Company terminates the
Executive's employment for Due Cause, the Executive shall have no further rights
hereunder after the date of termination, all obligations of the Company to
provide compensation and benefits (including, without limitation, the obligation
to pay the Base Salary) shall cease, effective as of the date of termination,
except that any Base Salary, together with all other amounts payable to the
Executive hereunder, accrued as of such date and not theretofore paid shall,
within five (5) business days following the date of termination, be paid to the
Executive. The Executive will be required to repay to the Company any
outstanding balance of the Credit issued to the Executive, and any interest
related thereto, within thirty (30) days of the termination of his employment
for Due Cause. Rights and benefits of the Executive under the benefit plans and
programs of the Company shall be determined in accordance with the terms and
conditions of such plans and programs. Neither the Executive nor the Company
shall have any further rights or obligations under this Agreement, except as
provided in Sections 7 and 8.
(b) For purposes hereof, "Due Cause" shall mean (i) the
Executive's final conviction of a felony; (ii) the Executive's continuing to
engage in conduct which has caused or is reasonably likely to cause,
demonstrable and serious injury to the Company after having been given written
notice of such determination by the Company and a reasonable opportunity to
cure, which curative period shall not be less than sixty (60) days; or (iii) the
Executive's continuing failure to substantially perform the lawful directives of
the President or Chief Executive Officer (consistent with the provisions of this
Agreement) or his duties and responsibilities in accordance with the provisions
of this Agreement (except by reason of the Executive's incapacity due to
physical or mental illness or injury) after having been given written notice of
such determination by the Company and a reasonable opportunity to cure, which
curative period shall not be less than sixty (60) days, which written notice
specifically identifies the provision of this Agreement which the Company
contends that the Executive has continually failed to substantially perform or
the directive that the Executive has not followed, the bases for the Company's
determination
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as set forth in the notice and the specific nature of the corrective action that
the Company proposes that the Executive take; provided, that for purposes of
this clause, the Company shall not have Due Cause to give such notice or
thereafter terminate the Executive's employment if such act or omission was
taken or omitted to be taken by an officer or employee of the Company other than
the Executive or the act or omission was taken or omitted by the Executive with
the concurrence of the President or Chief Executive Officer or the act or
omission was taken or omitted by the Executive in good faith with a reasonable
belief that the act or omission was authorized by the President or Chief
Executive Officer or otherwise in the interest of the Company.
6.4 TERMINATION BY THE COMPANY WITHOUT DUE CAUSE. (a) The
Company may terminate the Executive's employment at any time for whatever reason
it deems appropriate or without reason; provided, however, that in the event
that such termination is not pursuant to Section 6.1 (Death), 6.2 (Disability),
or 6.3 (Due Cause):
(i) The Company shall, within five (5) business days
following the date of termination, pay to the Executive the Base Salary provided
for in Section 3.1, together with all other amounts payable to the Executive
hereunder, in each case to the extent accrued to the date of termination and not
theretofore paid to the Executive;
(ii) The Executive will not be required to repay 50%
of any outstanding balance of the Credit issued to the Executive, or any
interest relating to such portion of the Credit, and the Company shall, within
five (5) business days following the date of termination, pay to the Executive
an amount equal to: 200% of the Executive's Base Salary applicable to the
calendar year in which such termination takes place; or 300% of the Executive's
Base Salary applicable to the calendar year in which such termination takes
place, if such termination occurs after a Change of Control; and
(iii) The Company shall permit the Executive to
exercise, for a period of not less than 12 months following the date of
termination, any vested stock options which have a strike price greater than 50
cents per share.
(b) For purposes hereof, "Change of Control" shall mean: (i)
The acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act")) (a "Person") of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of at least 25% by one Person,
or at least 35% by not more than four unrelated Persons within a ninety (90) day
period, (or greater than 50% by one Person when applicable to the Retention
Bonus defined in Section 9.1 herein or the stock option acceleration pursuant to
Section 9.3 herein) of either (A) the then outstanding shares of common stock of
the Company (the "Outstanding Company Common Stock") or (B) the combined voting
power of the then outstanding voting securities of the Company entitled to vote
generally in the election of directors (the "Outstanding Company Voting
Securities"), or the making of any agreement with the Company to effect the
foregoing; provided, however, that for purposes of this subsection (i), the
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company shall not
constitute a Change of Control; or
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(ii) Individuals who, as of the date hereof,
constitute the Board (the "Incumbent Board") cease for any reason to constitute
at least a majority of the Board; or
(iii) The Company enters into an agreement with
respect to a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the Company (a
"Business Combination"), in each case, unless, following such Business
Combination, (A) all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more than 50% of,
respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns all of the common stock
of the Company or all or substantially all of the Company's assets either
directly or through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such Business Combination
of the Outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be, (B) no person, company or other entity
(excluding any corporation resulting from such Business Combination or any
employee benefit plan (or related trust) of the Company or such corporation
resulting from such Business Combination) beneficially owns, directly or
indirectly, 20% or more of, respectively, the then outstanding shares of common
stock of the corporation resulting from such Business Combination or the
combined voting power of the then outstanding voting securities of such
corporation except to the extent that such ownership existed in the Company
prior to the Business Combination and (C) at least a majority of the members of
the board of directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time of the execution of
the initial agreement, or of the action of the Board, providing for such
Business Combination; or
(iv) Approval by the shareholders of the Company of a
complete liquidation or dissolution of the Company.
(c) If the Company terminates the Executive's employment in
accordance with this Section 6.4, the rights and benefits of the Executive under
the benefit plans and programs of the Company shall be determined in accordance
with the terms and conditions of such plans and programs. If the Executive
elects to continue participation in the Company's health insurance coverage
under the Consolidated Omnibus Budget Reconciliation Act of 1986 ("COBRA"), the
Company shall pay all premiums necessary to continue the Executive's health
insurance coverage for one (1) year after the date of the Executive's
termination of employment. Neither the Executive nor the Company shall have any
further rights or obligations under this Agreement, except as provided in
Section 7.
6.5 TERMINATION BY THE EXECUTIVE FOR GOOD REASON. (a) The
employment of the Executive hereunder may be terminated by the Executive for
Good Reason (as hereinafter defined) upon sixty (60) days written notice to the
Company; provided, however, that this Agreement may not be terminated by the
Executive for Good Reason, if the Company has cured the breach of which it has
been notified prior to the expiration of said sixty (60) days. If the Executive
terminates his employment for Good Reason:
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(i) The Company shall, within five (5) business days
following the date of termination, pay to the Executive the Base Salary provided
for in Section 3.1, together with all other amounts payable to the Executive
hereunder, in each case to the extent accrued to the date of termination and not
theretofore paid to the Executive;
(ii) The Executive will not be required to repay 50%
of any outstanding balance of the Credit issued to the Executive, or any
interest relating to such portion of the Credit, and the Company shall, within
five (5) business days following the date of termination, pay to the Executive
an amount equal to: 200% of the Executive's Base Salary applicable to the
calendar year in which such termination takes place; or 300% of the Executive's
Base Salary applicable to the calendar year in which such termination takes
place, if such termination occurs after a Change of Control; and
(iii) The Company shall permit the Executive to
exercise, for a period of not less than 12 months following the date of
termination, any vested stock options which have a strike price greater than 50
cents per share.
(b) If the Executive terminates his employment in accordance
with this Section 6.5, the rights and benefits of the Executive under the
benefit plans and programs of the Company shall be determined in accordance with
the terms and conditions of such plans and programs. If the Executive elects to
continue participation in the Company's health insurance coverage under the
Consolidated Omnibus Budget Reconciliation Act of 1986 ("COBRA"), the Company
shall pay all premiums necessary to continue the Executive's health insurance
coverage for one (1) year after the date of the Executive's termination of
employment. Neither the Executive nor the Company shall have any further rights
or obligations under this Agreement, except as provided in Section 7.
(c) For purposes hereof, "Good Reason" shall mean: (i) any
violation or breach by the Company, in any material respect, of the provisions
of Sections 3 or 9 of this Agreement; (ii) the assignment to the Executive of
duties inconsistent in any material respect with the Executive's role with the
Company (including titles, authority, duties or responsibilities inconsistent in
any material respect with such role) or the taking of any action that is the
equivalent of a constructive discharge; (iii) relocation of the Executive
outside of the New York metropolitan area; or (iv) a change in the Executive's
reporting relationships.
6.6 TERMINATION BY THE EXECUTIVE WITHOUT GOOD REASON. If the
Executive terminates his employment with the Company for a reason other than for
Good Reason, the Executive shall have no further rights hereunder after the date
of termination, all obligations of the Company to provide compensation and
benefits (including, without limitation, the obligation to pay the Base Salary)
shall cease, effective as of the date of termination, except that any Base
Salary, together with all other amounts payable to the Executive hereunder, in
each case to the extent accrued as of such date and not theretofore paid shall
be paid to the Executive within five (5) business days following such
termination. The Executive will be required to repay to the Company any
outstanding balance of the Credit issued to the Executive, and any interest
related thereto, within thirty (30) days of the termination of his employment.
Rights and benefits of the Executive under the benefit plans and programs of the
Company shall be determined in accordance with the terms and conditions of such
plans and programs. Neither the Executive nor
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the Company shall have any further rights or obligations under this Agreement,
except as provided in Section 7.
7. CONFIDENTIAL INFORMATION.
7.1 NONDISCLOSURE. The Executive acknowledges that the
Confidential Information was acquired and will continue to be acquired by the
Company at great expense and constitutes trade secrets of the Company, and that
irreparable injury will result to the Company from unauthorized disclosure of
Confidential Information. The Executive shall not use any Confidential
Information or disclose, publish or otherwise make available any Confidential
Information to third parties at any time during or after the term of the
Executive's employment, except in pursuance of the business of the Company. The
Executive further agrees that all Confidential Information, together with all
notes and records relating thereto, and all copies, duplicates, reproductions,
facsimiles or excerpts thereof in the Executive's possession, are the exclusive
property of the Company and will be returned promptly to the Company upon the
termination of the Executive's employment. In addition, the Executive agrees to
return promptly to the Company upon the conclusion of the Executive's employment
(or at the Company's option irretrievably destroy or erase) all reports, files,
memoranda, records and software, credit cards, cardkey passes, door and file
keys, computer access codes or disks, instructional material, and other physical
or personal property which the Executive received or prepared in connection with
the Executive's employment with the Company. The Executive's obligations of
confidentiality hereunder will survive the termination of this Agreement, until
and unless any such Confidential Information becomes, through no fault of the
Executive, generally known to the public or the Executive is required by law to
make disclosure (after giving the Company notice and an opportunity to contest
such requirement). The Executive's obligations under this Section are in
addition to, and not in limitation or preemption of, all other obligations of
confidentiality which the Executive may have to the Company under general legal
or equitable principles.
7.2 CONFIDENTIAL INFORMATION DEFINED. For the purposes hereof,
the term "Confidential Information" shall include, but is not limited to, all
information acquired by the Executive in the course of his employment in any way
concerning any existing services, hardware and software products and hardware
and software in various stages of research and development, plans, projects,
activities, research, know-how, trade secrets, trade practices, clients,
customers, specifications, drawings, sketches, models, samples, proprietary
data, client or customer lists, technology, documentation relating to software
or computer systems, source code, object code methodologies, product
development, distribution plans, contractual arrangements, profits, sales,
pricing policies, operational methods, technical processes, business policies,
practices and other business affairs and methods, plans for future developments
and other technical, business and financial information, and information
received from third parties that the Company is obligated to treat as
confidential or proprietary, which can be communicated by any means whatsoever,
including without limitation oral, visual, written and electronic transmission.
The Executive understands that the foregoing is not an exhaustive list and that
Confidential Information will also include any other information or materials
identified as confidential or proprietary or which the Executive knows or has
reason to know has such status; PROVIDED, HOWEVER, that Confidential Information
shall not include information that is or becomes publicly known through no
breach of this Agreement by the Executive, has been approved for release by
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prior written consent of the Company, or has been disclosed pursuant to a
requirement of a government agency or of law.
8. INTERFERENCE WITH THE COMPANY.
8.1 COMPETITION. The Executive agrees that during the
employment relationship with the Company, and for a period of one (1) year after
the termination of such employment if the Executive is terminated for Due Cause
(as provided in Section 6.3), the Executive will not, directly or indirectly,
engage in a competing business. For purposes of this Agreement, the Executive
shall be deemed to be engaged in a competing business only if the business is a
pan-regional, community based, consumer oriented, internet service focused
primarily on Latin America, and the Executive is an employee, officer, director,
partner or consultant of such competing business or has an impermissible
financial interest therein. For purposes of this Agreement, the Executive shall
be deemed to have an impermissible financial interest in a competing business
only if Executive is a partner or shareholder therein; PROVIDED, HOWEVER, that
the Executive shall not be deemed to have an impermissible financial interest in
a competing business if the Executive (i) during the employment relationship
with the Company, beneficially owns less than one percent (1%) of the voting
securities of such competing business and such business is publicly traded, and
(ii) following the termination of such employment relationship, beneficially
owns (A) less than five percent (5%) of the voting securities of such competing
business, if such business is publicly traded, or (B) less than three percent
(3%) of the voting securities of such competing business, if such business is
not publicly traded.
8.2 EXTENSION. In the event of the Executive's non-compliance
with any of the obligations under this Section, the duration of such obligations
shall be extended by the duration of the period of non-compliance.
8.3 REASONABLENESS OF COVENANTS. The Executive acknowledges
that the services to be rendered to the Company are of a special and unique
character and that the restrictions specified in Sections 7 and 8 of this
Agreement are reasonable. The Executive acknowledges that the amount of
compensation reflects the Executive's agreement in Sections 7 and 8, and
acknowledges that the Executive will not be subject to undue hardship by reason
of the agreements set forth in this Agreement.
8.4 REMEDIES. The Executive recognizes that a breach of his
obligations under Sections 7 or 8 of this Agreement would cause irreparable harm
to the Company and, provided that as a precondition the Company has complied
with all of its obligations under this Agreement, including, without limitation,
the payment of all sums that are due and payable to the Executive hereunder, the
Company shall be entitled to a preliminary injunction enjoining any violations
thereof as a non-exclusive remedy.
9. SPECIAL EVENT BONUSES.
9.1 CHANGE OF CONTROL RETENTION BONUS. In the event of a
Change of Control, the Executive shall receive a bonus (the "Retention Bonus")
in an amount equal to 100% of the Executive's Base Salary applicable to the
calendar year in which the Retention Bonus is paid,
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payable if the Executive remains in the active employ of the Company until the
first anniversary of the Change of Control.
9.2 INVESTMENT IN THE COMPANY. In the event that the Company
receives cash from any source, other than from sales in the ordinary course of
its business or from the incurrence of debt, in an amount of not less than
$50,000,000 in the aggregate, the Executive shall receive a bonus (the "Success
Bonus") in an amount of $50,000.
9.3 CHANGE OF CONTROL STOCK OPTION ACCELERATION. In the event
of a Change of Control, all of the Executive's outstanding stock options shall
become fully exercisable and vested, unless prior to such Change of Control, the
Company shall have received an opinion from its independent accountants to the
effect that the Executive's acceleration of such exercisability and/or vesting
would result in the loss of pooling of assets treatment (such that pooling would
be available in the absence of the Executive's acceleration) for a transaction
constituting or contemplated in connection with such Change of Control.
10. SUCCESSORS AND ASSIGNS.
10.1 ASSIGNMENT BY THE COMPANY. The Company may assign this
Agreement to any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company. As used in this Agreement, the "Company" shall mean the
Company as herein before defined and any successor to its business and/or assets
as aforesaid which otherwise becomes bound by all the terms and provisions of
this Agreement by operation of law and this Agreement shall be binding upon, and
inure to the benefit of, the Company, as so defined.
10.2 ASSIGNMENT BY THE EXECUTIVE. The Executive may not assign
this Agreement or any part hereof without the prior written consent of a
majority of the Board; provided, however, that nothing herein shall preclude one
or more beneficiaries of the Executive from receiving any amount that may be
payable following the occurrence of his legal incompetency or his death and
shall not preclude the legal representative of his estate from receiving such
amount or from assigning any right hereunder to the person or persons entitled
thereto under his will or, in the case of intestacy, to the person or persons
entitled thereto under the laws of intestacy applicable to his estate. The term
"beneficiaries", as used in this Agreement, shall mean a beneficiary or
beneficiaries so designated to receive any such amount or, if no beneficiary has
been so designated, the legal representative of the Executive (in the event of
his incompetency) or the Executive's estate.
11. GOVERNING LAW.
This Agreement shall be deemed a contract made under, and for
all purposes shall be construed in accordance with, the laws of the State of New
York. Any dispute, claim or controversy between the parties with respect to the
performance or interpretation of this Agreement or as regards matters which are
the subject of this Agreement shall be finally resolved by a binding arbitration
to be conducted by a single arbitrator under the auspices of and in accordance
with the Commercial Arbitration Rules of the American Arbitration Association at
a mutually acceptable place in New York, New York. The arbitrator shall be bound
by the terms
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and conditions of this Agreement and shall have no power, in rendering the
award, to alter or depart from any express provision of this Agreement. The
decision of the arbitrator shall be final, conclusive and binding on both
parties and enforceable in any court of competent jurisdiction. Each party shall
bear the expenses of its own attorneys and experts in connection with the
arbitration proceeding. The fees, costs, charges, and expenses of the arbitrator
and the arbitration association shall be borne by the parties equally.
12. ENTIRE AGREEMENT.
This Agreement contains all the understandings and
representations between the parties hereto pertaining to the subject matter
hereof and supersedes all undertakings and agreement, whether oral or in
writing, if any there be, previously entered into by them with respect thereto.
13. AMENDMENT, MODIFICATION, WAIVER.
No provision of this Agreement may be amended or modified
unless such amendment or modification is agreed to in writing and signed by the
Executive and by a duly authorized representative of the Company other than the
Executive. No waiver by either party hereto of any breach by the other party
hereto of any condition or provision of this Agreement to be performed by such
other party shall be deemed a waiver of a similar or dissimilar provision or
condition at the same or any prior or subsequent time, nor shall the failure of
or delay by either party hereto in exercising any right, power or privilege
hereunder operate as a waiver thereof to preclude any other or further exercise
thereof or the exercise of any other such right, power or privilege.
14. NOTICES.
Any notice to be given hereunder shall be in writing and
delivered via overnight courier or via facsimile (in which case with a copy sent
via overnight courier) addressed to the party concerned at the address indicated
below or at such other address as such party may subsequently designate by like
notice:
If to the Company:
StarMedia Network, Inc.
75 Varick Street
New York, NY 10013
Attention: President
If to the Executive:
StarMedia Network, Inc.
75 Varick Street
New York, NY 10013
Attention: Steven J. Heller
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15. SEVERABILITY.
Should any provision of this Agreement be held by a court of
competent jurisdiction to be enforceable only if modified, such holding shall
not affect the validity of the remainder of this Agreement, the balance of which
shall continue to be binding upon the parties hereto with any such modification
to become a part hereof and treated as though originally set forth in this
Agreement. The parties further agree that any such court is expressly authorized
to modify any such unenforceable provision of this Agreement in lieu of severing
such unenforceable provision from this Agreement in its entirety, whether by
rewriting the offending provision, deleting any or all of the offending
provision, adding additional language to this Agreement, or by making such other
modifications as it deems warranted to carry out the intent and agreement of the
parties as embodied herein to the maximum extent permitted by law. The parties
expressly agree that this Agreement as so modified by the court shall be binding
upon and enforceable against each of them. In any event, should one or more of
the provisions of this Agreement be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect
any other provisions hereof, and if such provision or provisions are not
modified as provided above, this Agreement shall be construed as if such
invalid, illegal or unenforceable provisions had never been set forth herein.
16. WITHHOLDING.
Anything to the contrary notwithstanding, all payments
required to be made by the Company hereunder to the Executive, his transferee or
his beneficiaries, including his estate, shall be subject to withholding of such
amounts relating to taxes as the Company may reasonably determine it must
withhold pursuant to any applicable law or regulation.
17. SURVIVORSHIP.
The respective rights and obligations of the parties hereunder
shall survive any termination of this Agreement to the extent necessary to the
intended preservation of such rights and obligations.
18. NO RESTRAINT.
In the event that the Executive is in possession of any
confidential non-public information by virtue of his prior employment, the
Executive represents and warrants that he will not engage in any activity that
is inconsistent with the rights of such prior employer which could subject the
Company to liability.
19. TITLES.
Titles of the sections and paragraphs of this Agreement are
intended solely for convenience and no provision of this Agreement is to be
construed by reference to the title of any section or paragraph.
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20. COUNTERPARTS.
This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which taken together shall constitute
one and the same instrument.
21. INDEMNIFICATION.
In furtherance of any other rights to indemnification and not
in limitation thereof, the Executive shall be indemnified by the Company for all
liabilities (including, without limitation, attorneys' fees and expenses)
relating to or arising from his status as an officer of the Company (or as an
officer, director, employee or agent of any other corporation or any
partnership, joint venture, trust or other enterprise, to the extent serving as
such at the request of the Company), and any actions committed or omitted by the
Executive in such capacity, to the maximum extent permitted by applicable law,
as the same may be in effect from time to time.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
StarMedia Network, Inc.
By: /s/ JACK C. CHEN
---------------------------
Name: Jack C. Chen
Title: President
/s/ STEVEN J. HELLER
---------------------------
Steven J. Heller