EXHIBIT 10.7
EMPLOYMENT AGREEMENT
AGREEMENT, effective as of the 10th day of December, 2001 by and between i3
MOBILE, INC., a Delaware corporation with principal executive offices at 181
Harbor Drive, Stamford, Connecticut 06902 ("i3 Mobile"), and ED FLETCHER,
residing at 5 Packer Road, Redding, CT 06896 ("Fletcher").
W I T N E S S E T H:
WHEREAS, i3 Mobile is desirous of employing Fletcher as Senior Vice President,
Finance and Fletcher is desirous of serving in such capacity for i3 Mobile, all
upon the terms and subject to the conditions hereinafter provided.
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained, the parties hereto, intending to be legally bound, agree as follows:
1. EMPLOYMENT
i3 Mobile agrees to employ Fletcher as Senior Vice President, Finance, and
Fletcher agrees to be employed by i3 Mobile in such capacity, upon the terms and
subject to the conditions of this Agreement.
2. TERM
The employment of Fletcher by i3 Mobile as provided in Section 1 will be for a
period of two (2) years commencing on the date hereof, unless sooner terminated
as hereinafter provided (the "Term"), and shall automatically renew from year to
year thereafter unless either party gives at least ninety (90) days prior
written notice of termination.
3. DUTIES; BEST EFFORTS; INDEMNIFICATION
Fletcher shall serve as Senior Vice President, Finance of i3 Mobile and shall
perform, subject to the policy directions of the President and Chief Executive
Officer and the Board of Directors of i3 Mobile, such duties as are customarily
performed by the Senior Vice President, Finance.
Fletcher shall devote his business time, attention and energies to the business
and affairs of i3 Mobile, shall use his best efforts to advance the best
interests of i3 Mobile and shall not, during the Term, be actively engaged in
any other business activity, whether or not such business activity is pursued
for gain, profit or other pecuniary advantage, that will interfere with the
performance by Fletcher of his duties hereunder or Fletcher's availability to
perform such duties or that will adversely affect, or negatively reflect upon,
i3 Mobile.
Subject to the provisions of i3 Mobile's Certificate of Incorporation and
Bylaws, each as amended from time to time, i3 Mobile shall indemnify Fletcher to
the fullest extent permitted by the General Corporation Law of the State of
Delaware, as amended from time to time, for all amounts (including, without
limitation, judgments, fines, settlement payments, expenses and attorney's fees)
actually and reasonably incurred or paid by Fletcher on a when- and as-incurred
basis in connection with any action, suit, investigation or proceeding arising
out of or relating to the performance by Fletcher of services for, or the acting
by Fletcher as a director, officer, or employee of, i3 Mobile, or any other
person or enterprise at i3 Mobile's request if Fletcher acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best interests
of i3 Mobile, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. i3 Mobile shall use its
best efforts to obtain and maintain in full force and effect during the Term
directors' and officers' liability insurance policies providing full and
adequate protection to Fletcher for his capacity, provided that the Board of
Directors of i3 Mobile shall have no obligation to purchase such insurance if,
in its opinion, coverage is available only on unreasonable terms. Fletcher
agrees that, if it is finally judicially determined or finally determined by an
arbitrator that he is not or was not entitled to any amounts paid on his behalf
or for which he has been reimbursed under this third paragraph of this Section 3
by virtue of having failed to have met the standards set forth in the first
sentence of this third paragraph of this section 3, Fletcher shall promptly
reimburse i3 Mobile for such amounts.
4. PLACE OF PERFORMANCE
In connection with his employment by i3 Mobile, Fletcher shall be based at the
principal executive offices of i3 Mobile, which shall be in the New York
Metropolitan area.
5. COMPENSATION
(a) Base Salary. i3 Mobile shall pay Fletcher a base salary (the "Base Salary")
at a rate of not less than $135,000 per annum, payable in equal semi-monthly
installments during the Term. The President and Chief Executive Officer of i3
Mobile at least annually will review the Base Salary and other compensation
during the Term with a view to increase thereof based upon then prevailing
industry salary scales for equivalently valued businesses for the Senior Vice
President, Finance position, Fletcher's performance, the performance of i3
Mobile, inflation and other relevant factors.
(b) Out-of-Pocket Expenses. i3 Mobile shall promptly pay to Fletcher the
reasonable expenses incurred by him in the performance of his duties hereunder,
including, without limitation, those incurred in connection with business
related travel or entertainment, or, if such expenses are paid directly by
Fletcher, shall promptly reimburse him for such payment, provided that Fletcher
properly accounts therefor in accordance with i3 Mobile's policy. i3 Mobile
shall provide Fletcher with a corporate credit card to be used with respect to
the foregoing expenses.
(c) Participation in Benefit Plans. Fletcher shall be eligible to participate in
the current i3 Mobile health, accident, life and disability insurance, pension,
profit sharing, stock option, stock purchase plans or arrangements. Fletcher
shall also be entitled to
participate in any other employee benefit plan or arrangement made available in
the future by i3 Mobile to its executives and key management employees.
(d) Vacation. Fletcher shall be entitled to fifteen (15) paid vacation days in
each calendar year determined by i3 Mobile from time to time, in accordance with
i3 Mobile's standard vacation policy, prorated in any calendar year during which
Fletcher is employed hereunder for less than an entire year in accordance with
the number of days in such year during which he is so employed. Fletcher shall
also be entitled to all paid holidays given by i3 Mobile to its executives and
key management employees
(e) Incentive Compensation. i3 Mobile agrees to pay Fletcher a bonus (the
"Bonus") which shall be determined by the President and Chief Executive Officer
of i3 Mobile, in addition to and separate from his Base Salary and subject to
the achievement of certain mutually agreed upon performance goals, in an amount
up to twenty-five percent (25%) of his Base Salary. Fletcher shall be entitled
to the Bonus on a pro-rata basis for partial achievement of the performance
goals.
6. TERMINATION
Fletcher's employment hereunder shall be terminated upon Fletcher's death and
may be terminated as follows:
(a) By i3 Mobile for "Cause." For purposes of this Agreement, a termination for
Cause shall occur if Fletcher has (i) willfully failed to comply with any of the
material terms of this Agreement, (ii) willfully and repeatedly failed to
perform his duties hereunder, (iii) engaged in gross misconduct materially
injurious to i3 Mobile or (iv) been convicted of, or pleaded nolo contendere to,
a felony or a crime of moral turpitude after having been given thirty days
written notice of any such failure and an opportunity to cure, provided,
however, that Fletcher shall receive thirty (30) days' advance written notice
specifying the actions constituting Cause and Fletcher shall not have cured the
actions constituting Cause during such thirty (30) day period.
(b) By i3 Mobile due to Fletcher's "Disability." For purposes of this Agreement,
a termination for Disability shall occur (i) upon the thirtieth (30th) day after
i3 Mobile has provided a written termination notice to Fletcher supported by a
written statement from a reputable independent physician to the effect that
Fletcher shall have become so incapacitated as to be unable to resume, within
the ensuing twelve (12) months, his employment hereunder by reason of physical
or mental illness or injury, or (ii) upon rendering of a written termination
notice by i3 Mobile after Fletcher has been unable to substantially perform his
duties hereunder for six (6) consecutive months or for nine (9) months in any
twelve (12) month period (exclusive of any vacation permitted under Section 5(f)
hereof) by reason of any physical or mental illness. For purposes of this
Section 6(b), Fletcher agrees to make himself available and to cooperate in any
reasonable examination by a reputable independent physician retained by i3
Mobile.
7. COMPENSATION UPON TERMINATION
(a) In the event of the termination of Fletcher's employment as a result of
Fletcher's death, i3 Mobile shall (i) pay to Fletcher's estate his Base Salary
and earned Bonus through the date of his death and (ii) for six (6) months
following his death (as if such termination had not occurred) provide
continuation coverage to the members of Fletcher's family under all major
medical and other health, accident, life or other disability plans and programs
in which such family members participated immediately prior to his death.
(b) In the event of the termination of Fletcher's employment by i3 Mobile for
Cause, i3 Mobile shall pay to Fletcher his Base Salary and earned Bonus through
the date of his termination, and Fletcher shall have no further entitlement to
any other compensation or benefits from i3 Mobile.
(c) In the event of the termination of Fletcher's employment by i3 Mobile due to
Disability, i3 Mobile shall pay to Fletcher his Base Salary and earned Bonus
through the date of his termination. In addition, for six (6) months following
any such termination, i3 Mobile shall (i) continue to pay Fletcher the Base
Salary in effect at the time of such termination less the amount, if any, then
payable to Fletcher under any disability benefits of i3 Mobile and (ii) provide
Fletcher continuation coverage under all major medical and other health,
accident, life or other disability plans and programs in which Fletcher
participated immediately prior to such termination.
(d) In the event that Fletcher's employment is terminated by i3 Mobile other
than (A) as a result of Fletcher's death or (B) for reasons specified in Section
6(a) or (b) i3 Mobile shall continue to pay to Fletcher his Base Salary for six
(6) months following any such termination and, provide Fletcher continuation
coverage under all major medical and other health, accident, life or other
disability plans or programs in which Fletcher participated immediately prior to
such termination. Notwithstanding the foregoing, the amounts otherwise payable
to Fletcher pursuant to this Section 7(d) shall be subject to reduction (but not
below zero) to the extent determined necessary by i3 Mobile to prevent any
payments or benefits to or for the benefit of Fletcher (whether pursuant to this
Agreement or any other plan, arrangement or agreement) from being treated as a
"parachute payment" under Section 280G of the Internal Revenue Code of 1986, as
amended.
(e) If Fletcher disputes the termination of his employment by i3 Mobile pursuant
to Section 6(a) or 6(b) herein and such dispute results in a final determination
to the effect that i3 Mobile did not have a proper basis for such termination,
i3 Mobile shall promptly pay to Fletcher all payments Fletcher would have been
entitled to receive had his employment hereunder had not been improperly
terminated; provided, however, that any payments or benefits under this Section
7(e) shall be reduced by the amount of any payments or benefits provided under
any other provision of Section 7 hereof.
(f) The continuation coverage under any major medical and other health,
accident, life or other disability plans and programs for the periods provided
in Section 7(a), 7(c) and 7(d) shall be provided (i) at the expense of i3 Mobile
and (ii) in satisfaction of i3 Mobile's obligation under Section 4980B of the
Internal Revenue Code (and any similar state law) with respect to the period of
time such benefits are continued hereunder.
(g) This Section 7 sets forth the only obligations of i3 Mobile with respect to
the termination of Fletcher's employment with i3 Mobile, and Fletcher
acknowledges that, upon the termination of his employment, he shall not be
entitled to any payments or benefits which are not explicitly provided herein.
8. COVENANT REGARDING INVENTIONS AND COPYRIGHTS
Fletcher shall disclose promptly to i3 Mobile any and all inventions,
discoveries, improvements and patentable or copyrightable works initiated,
conceived or made by him, either alone or in conjunction with others, during the
Term and related to the business or activities of i3 Mobile and he assigns all
of his interest therein to i3 Mobile or its nominee; whenever requested to do so
by i3 Mobile, Fletcher shall execute any and all applications, assignments or
other instruments which i3 Mobile shall deem necessary to apply for and obtain
letters patent or copyrights of the United States or any foreign country, or
otherwise protect i3 Mobile's interest therein. These obligations shall continue
beyond the conclusion of the Term with respect to inventions, discoveries,
improvements or copyrightable works initiated, conceived or made by Fletcher
during the Term and shall be binding upon Fletcher's assigns, executors,
administrators and other legal representatives.
9. PROTECTION OF CONFIDENTIAL INFORMATION
Fletcher acknowledges that he has been and will be provided with information
about, and his employment by i3 Mobile will, throughout the Term, bring him into
close contact with, many confidential affairs of i3 Mobile and its subsidiaries,
including proprietary information about costs, profits, markets, sales,
products, key personnel, pricing policies, operational methods, technical
processes and other business affairs and methods, plans for future developments
and other information not readily available to the public, all of which are
highly confidential and proprietary and all of which were developed by i3 Mobile
at great effort and expense. Fletcher further acknowledges that the services to
be performed by him under this Agreement are of a special, unique, unusual,
extraordinary and intellectual character, that the business of i3 Mobile will be
conducted throughout the world (the "Territory"), that its services will be
marketed throughout the Territory, that i3 Mobile competes and will compete in
all of its business activities with other organizations which are located in any
part of the Territory and that the nature of the relationship of Fletcher with
i3 Mobile is such that Fletcher is capable of competing with i3 Mobile from
nearly any location in the Territory. In recognition of the foregoing, Fletcher
covenants and agrees during the Term and for a period of five (5) years
thereafter:
(i) That he will keep secret all confidential matters of i3 Mobile and
not disclose them to anyone outside of i3 Mobile, either during or after the
Term, except with i3 Mobile's prior written consent or, if during the Term, in
the performance of his duties hereunder, Fletcher makes a good faith
determination that it is the best interest of i3 Mobile and to disclose such
matters;
(ii) That he will not make use of any such confidential matters for his
own purposes or the benefit of anyone other than i3 Mobile; and
(iii) That he will deliver promptly to i3 Mobile on termination of this
Agreement, or at any time i3 Mobile may so request, all confidential memoranda,
notes, records, reports and other confidential documents (and all copies
thereof) relating to the business of i3 Mobile, which he may then possess or
have under his control.
10. RESTRICTION ON COMPETITION, INTERFERENCE AND SOLICITATION
In recognition of the considerations described in Section 9 hereof, Fletcher
covenants and agrees that, during the Term and for a period of one (1) year or
such longer period of time during which Fletcher is continuing to receive
compensation from i3 Mobile after such termination, Fletcher will not, directly
or indirectly, (A) enter into the employ of, or render any services to, any
person, firm or corporation engaged in any business directly competitive with
the business of i3 Mobile in any part of the Territory in which i3 Mobile is
actively engaged in business on the date of termination; (B) engage in any such
business for his own account; (C) become interested in any such business as an
individual, partner, shareholder, creditor, director, officer, principal, agent,
employee, trustee, consultant, advisor, franchisee or in any other relationship
or capacity; or (D) interfere with i3 Mobile's relationship with, or endeavor to
employ or entice away from i3 Mobile any person, firm, corporation, governmental
entity or other business organization who or which is or was an employee,
customer or supplier of, or maintained a business relationship with, i3 Mobile
at any time (whether before or after the Term), or which i3 Mobile has solicited
or prepared to solicit; provided, however, that the provisions of clause (A)
shall not be deemed to preclude Fletcher from engagement by a corporation some
of the activities of which are competitive with the business of i3 Mobile if
Fletcher's engagement does not relate, directly or indirectly, to such
competitive business, and nothing contained in this Section 10 shall be deemed
to prohibit Fletcher from acquiring or holding, solely for investment, publicly
traded securities of any corporation some of the activities of which are
competitive with the business of i3 Mobile so long as such securities do not, in
the aggregate, constitute more than five percent (5%) of any class or series of
outstanding securities of such corporation.
11. SPECIFIC REMEDIES
For purposes of Sections 8, 9 and 10 of this Agreement, references to i3 Mobile
shall include all current and future majority-owned subsidiaries of i3 Mobile
and all current and future joint ventures in which i3 Mobile may from time to
time be involved. It is understood by Fletcher and i3 Mobile that the covenants
contained in this Section 11 and in Sections 8, 9 and 10 hereof are essential
elements of this Agreement and that, but for the agreement of Fletcher to comply
with such covenants, i3 Mobile would not have agreed to enter into this
Agreement. i3 Mobile and Fletcher have independently consulted with their
respective counsel and have been advised concerning the reasonableness and
propriety of such covenants with specific regard to the nature of the business
conducted by i3 Mobile and all interests of i3 Mobile. Fletcher agrees that the
covenants of Sections 8, 9 or 10 hereof are reasonable and valid. If Fletcher
commits a breach of any of the provisions of Sections 8, 9 or 10 hereof, such
breach shall be
deemed to be grounds for termination for Cause. In addition, Fletcher
acknowledges that i3 Mobile may have no adequate remedy at law if he violates
any of the terms hereof. Fletcher therefore understands and agrees that i3
Mobile shall have (i) the right to have such provisions specifically enforced by
any court having equity jurisdiction, it being acknowledged and agreed that any
such breach will cause irreparable injury to i3 Mobile and that money damages
will not provide an adequate remedy to i3 Mobile, and (ii) the right to require
Fletcher to account for and pay over to i3 Mobile all compensation, profits,
monies, accruals, increments and other benefits (collectively "Benefits")
derived or received by Fletcher as a result of any transaction constituting a
breach of any of the provisions of Sections 8, 9 or 10 and Fletcher hereby
agrees to account for and pay over such Benefits to i3 Mobile.
12. ABSENCE OF CONFLICT.
(a) Fletcher represents that Fletcher's performance of all the terms of this
Agreement as an employee of i3 Mobile does not and will not breach any agreement
to keep in confidence proprietary information acquired by Fletcher in confidence
prior to Fletcher's employment by i3 Mobile and Fletcher will not enter into,
any agreement, either written or oral, in conflict with this Agreement.
(b) Fletcher further represents that Fletcher has not brought, and Fletcher
agrees that Fletcher will not bring with Fletcher to i3 Mobile or use in the
performance of Fletcher's responsibilities at i3 Mobile, any materials or
documents of a former employer that are not generally available to the public,
unless Fletcher has obtained express written authorization from the former
employer for their possession and use. Fletcher represents that Fletcher has
delivered to i3 Mobile a true and correct copy of any employment, proprietary
information, confidentiality or non-competition or other material agreement to
which Fletcher is or was a party with any former employers which remains or may
remain in effect on the date hereof. Fletcher also understands that, during the
course of Fletcher's employment with i3 Mobile, Fletcher shall not breach any
obligation of confidentiality with such former employers, and that Fletcher
shall fulfill all such obligations during Fletcher's employment with i3 Mobile.
13. INDEPENDENCE, SEVERABILITY AND NON-EXCLUSIVITY
Each of the rights enumerated in Sections 8, 9 or 10 hereof and the remedies
enumerated in Section 11 hereof shall be independent of the others and shall be
in addition to and not in lieu of any other rights and remedies available to i3
Mobile at law or in equity. If any of the covenants contained in Sections 8, 9
or 10, or any part of any of them, is hereafter construed or adjudicated to be
invalid or unenforceable, the same shall not affect the remainder of the
covenant or covenants or right or remedies which shall be given full effect
without regard to the invalid portions. The parties intend to and do hereby
confer jurisdiction to enforce the covenants contained in Section 8, 9 or 10 and
the remedies enumerated in Section 11 upon the federal and state courts of
Connecticut sitting in Fairfield County. If any of the covenants contained in
Sections 8, 9 or 10 is held to be invalid or unenforceable because of the
duration of such provision or the area covered thereby, the parties agree that
the court making such determination shall be the power to reduce the duration
and/or area of such provision and in its
reduced from said provision shall then be enforceable. No such holding of
invalidity or unenforceability in one jurisdiction shall bar or in any way
affect i3 Mobile's right to the relief provided in Section 11 or otherwise in
the courts of any other state or jurisdiction within the geographical scope of
such covenants as to breaches of such covenants in such other respective states
or jurisdictions, such covenants being, for this purpose, severable into diverse
and independent covenants.
14. DISPUTES
If i3 Mobile or Fletcher shall dispute any termination of Fletcher's employment
hereunder or if a dispute concerning any payment hereunder shall exist either
party shall have the right (but not the obligation), in addition to all other
rights and remedies provided by law, to compel binding, enforceable and
non-appealable arbitration of the dispute in the City of New York under the
rules of the American Arbitration Association by giving written notice of
arbitration to the other party within thirty (30) days after notice of such
dispute has been received by the party to whom notice has been given.
15. SUCCESSORS; BINDING AGREEMENT
In the event of a future disposition by i3 Mobile (whether direct or indirect),
by sale of assets or stock, merger, consolidation or otherwise of all or
substantially all of its business and/or assets in a transaction to which
Fletcher consents, i3 Mobile will require any successor, by agreement in form
and substance satisfactory to Fletcher, to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that i3 Mobile would be
required to perform if no such disposition had taken place. This Agreement and
all rights of Fletcher hereunder shall inure to the benefit of, and be
enforceable by, Fletcher's personal or legal representatives, executors,
administrators, administrators cta, successors, heirs, distributees, devisees
and legatees. If Fletcher should die while any amount would still be payable to
him hereunder if he had continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement to
Fletcher's estate.
16. NOTICES
All notices, consents and other communications required or permitted to be given
by any party hereunder shall be in writing (including telecopy or other similar
writing) and shall be given be personal delivery, certified or registered mail,
postage prepaid, or telecopy (or other similar writing) as follows:
To i3 Mobile: 181 Harbor Drive
Stamford, CT 06902
Attn: President and Chief Executive Officer
Telecopy: (203) 428-3204
To Fletcher: Ed Fletcher
5 Packer Brook Road
Redding, CT 06896
or at such other address or telecopy number (or other similar number) as either
party may from time to time specify to the other. Any notice, consent or other
communication required or permitted to be given hereunder shall have been deemed
to be given on the date of mailing, personal delivery or telecopy or other
similar means (provided the appropriate answer back is received) thereof and
shall be conclusively presumed to have been received on the second business day
following the date of mailing or, in the case of personal delivery or telecopy
or other similar means, the day of delivery thereof, except that a change of
address shall not be effective until actually received.
17. MODIFICATIONS AND WAIVERS
No term, provision or condition of this Agreement may be modified or discharged
unless such modification or discharge is authorized by the President and Chief
Executive Officer or Board of Directors of i3 Mobile and is agreed to in writing
and signed by Fletcher. No waiver by either party hereto of any breach by the
other party hereto of any term, provision or condition of this Agreement to be
performed by such other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time.
18. ENTIRE AGREEMENT
This Agreement constitutes the entire understanding between the parties hereto
relating to the subject matter hereof, superseding all negotiations, prior
discussions, preliminary agreements and agreements relating to the subject
matter hereof made prior to the date hereof.
19. LAW GOVERNING
Except as otherwise explicitly noted, this Agreement shall be governed by and
construed in accordance with the laws of the State of Connecticut (without
giving effect to the principles of conflicts of law).
20. INVALIDITY
Except as otherwise specified herein, the invalidity or unenforceability of any
term or terms of this Agreement shall not invalidate, make unenforceable or
otherwise affect any other term of this Agreement which shall remain in full
force and effect.
21. HEADINGS
The headings contained in this Agreement are for reference purposes only and
shall not affect the meaning or interpretation of this Agreement.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day
and year set forth above.
I3 MOBILE, INC.
By: /s/ John A. Lack
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John A. Lack
President and Chief Executive Officer
/s/ Ed Fletcher
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Ed Fletcher