Exhibit 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement (the "AGREEMENT"), dated November 10, 2006
(the "EFFECTIVE DATE"), is by and between Comtex News Network, Inc., a Delaware
corporation (the "COMPANY"), and Chip Brian (the "EMPLOYEE").
RECITALS
A. The Company desires to employ the Employee in the position of
President and Chief Executive Officer for the Company and its affiliates.
B. The Employee desires to accept employment on the terms herein
set forth.
NOW, THEREFORE, in consideration of the premises and of the covenants
herein contained, the parties hereto agree as follows:
1. EMPLOYMENT. The Company hereby agrees to employ the Employee,
and the Employee hereby accepts such employment by the Company, upon the
terms and conditions set forth in this Agreement. The Employee
acknowledges that his employment may be terminated by the Company for
any reason, with or without Cause.
2. TERM. The term of this Agreement will be the two-year period
commencing November 10, 2006 and ending on October 31, 2008 (the
"TERM"), unless terminated earlier pursuant to Section 7. The Term may
also be extended by the written agreement of the parties.
3. POSITION AND DUTIES OF THE EMPLOYEE.
(a) The Employee will serve as the President and Chief
Executive Officer of the Company, and agrees to serve as an
officer and/or an employee of such other affiliates of the
Company as may be requested from time to time by the Board of
Directors of the Company (the "BOARD"). In such capacity, the
Employee will report directly to the Board of Directors of the
Company. The Employee will perform such duties commensurate with
the Employee's title and position as are usual and customary.
(b) During the Term, the Employee will, except as may from
time to time be otherwise agreed in writing by the Company or as
set forth herein and during reasonable vacations as set forth in
Section 6 hereof and authorized leave, devote his best efforts,
full attention and energies during his normal working time to
the business of the Company, any duties customary for the
Employee's position and title and such other related duties and
responsibilities as may from time to time be reasonably
prescribed by the Board.
4. COMPENSATION.
(a) ANNUAL BASE SALARY. During the Term, the Company will pay
to the Employee an annual base salary of $200,000 (the "ANNUAL
BASE SALARY"), payable at the times and in the manner consistent
with the customary payroll practices of the Company. Base salary
is to be increased to $220,000 on November 1, 2007 and will be
paid in accordance with customary payroll practices of the
Company.
(b) ANNUAL BONUS. As may be determined by the Board of
Directors in its sole and absolute discretion, during the Term
the Employee will be eligible for an annual bonus equal to the
sum of an amount not to exceed 25% of the Annual Base Salary to
be paid quarterly, once company financial filings have been
completed, if it has been determined by the Board that revenues,
expenses and EBITDA are equal to or greater than the quarterly
budgets prorated from the annual budgets previously approved by
the Board of Directors. In the event that quarterly results year
to date as each quarter passes, including audited results for
the fiscal year, aggregate less than the Board of Directors
approved annual budgets then each quarterly bonus to be paid
will be reduced proportionally.
(c) INCENTIVE BONUS. As may be determined by the Board of
Directors in its sole and absolute discretion, during the Term
the Employee will be eligible for an annual incentive bonus
equal to the sum of an amount not to exceed 10% of annual actual
audited EBITDA less the EBITDA of the Board-approved annual
budgets, calculated to include all legal expenses but excluding
up to $350,000 per year, not previously budgeted for the year
but spent to develop or promote a new line of business, as
approved by the Board. Any Incentive Bonus earned under this
paragraph is to be a bonus payable quarterly and progressively
adjusted to reflect any shortfalls in subsequent quarters and/or
FY audited numbers. Incentive bonus is to be paid within 30 days
of the filing of the Company's Annual Report on Form 10-K.
(d) BENEFITS. During the Term, the Employee will be eligible
to participate in any employee benefit plans sponsored by the
Company for the benefit of its employees (the "EMPLOYEE PLANS"),
upon the same terms and conditions as other employees of the
Company. The Employee acknowledges that the Company may change
its benefit programs from time to time, which may result in
certain benefit programs being amended or terminated.
(e) STOCK OPTIONS. No incentive stock options are to be
awarded at the execution of this employment agreement, but in
consideration of Employee performance the Board has decided to
convert the Employee's Stock Options to Direct Stock ownership
under a plan to be prepared by Employee in consultation with an
expert tax advisor and approved by the Board. The Board reserves
the right to grant additional stock based compensation as
determined in their sole discretion during this agreement.
5. REIMBURSEMENT OF EXPENSES. The Company will pay or reimburse the
Employee for reasonable and necessary business expenses incurred by the
Employee in connection with his duties on behalf of the Company in
accordance with the policies and directives of the Company, including
lodging expenses in Alexandria, Virginia and the travel expenses
associated with the Employee's delivery of the services contemplated by
this Agreement, following submission by the Employee of reimbursement
expense forms then certified by the Chief Financial Officer that such
expenses are in a form consistent with Company expense policies.
6. VACATIONS. The Employee will be entitled to four weeks of
vacation per year, subject to the terms and conditions of the Company's
vacation policy. Unused vacation for any year during the Term may be
accumulated for use in subsequent years up to a maximum of 4 weeks,
which maximum carryover of vacation days not to exceed one year's
allowed vacation is forthwith company policy for all employees, unless
otherwise approved by the Board in advance. The duration of such
vacations and the time or times they will be taken will be determined by
the Employee in consultation with the Board.
7. TERMINATION.
(a) EVENTS OF TERMINATION. Notwithstanding any other provision
of this Agreement to the contrary, this Agreement and the
Employee's employment under the terms of this Agreement will
terminate immediately and without notice upon the first of the
following events to occur:
(i) the Employee's death;
(ii) a Disability (as defined in Section 7(c) below) of
the Employee lasting six months or more; PROVIDED, THAT
such Disability is not due to an injury incurred by the
Employee in the line of duty while performing company
business hereunder;
(iii) termination for Cause (as defined in Section 7(d)
below) by the Company;
(iv) the end of the Term;
(v) termination without Cause by the Company;
(vi) termination for Good Reason (as defined in Section
7(e) below) by the Employee.
(b) COMPENSATION UPON TERMINATION.
(i) If, prior to the expiration of the Term, the
Employee's employment is terminated by the Company due
to an event of termination pursuant to Section
7(a)(i)-(iv) above, the Employee will not be eligible to
receive his Annual Base Salary or to participate in any
Employee Plans or bonus plans with respect to future
periods after the date of such termination or
resignation except for the right to receive accrued but
unpaid Annual Base Salary and vested benefits under any
Employee Plan, including any unused vacation time
earned, in accordance with the terms of such Employee
Plan.
(ii) If, prior to the expiration of the Term, the
Employee's employment is terminated pursuant to Section
7(a)(v) or 7(a)(vi), conditioned upon the Employee
delivering to the Company a release in a form reasonably
satisfactory to the Company with all periods for
revocation expired, notwithstanding any provision in the
terms of any Employee Plans or agreements to the
contrary, (A) the Company will pay the Employee in lump
sum within 30 calendar days following the termination of
the Employee's employment his Annual Base Salary then in
effect for the greater of (x) 12 months or (y) the
remainder of the Term (the "SEVERANCE PERIOD"), (B) all
stock options granted to Employee under the Stock Option
Plan will vest and become exercisable in full as of the
date of such termination, and (C) Employee will be
entitled to receive benefits in the Employee Plans at
Employer's expense for a period not to exceed 18 months.
(c) DISABILITY. For purposes of this Agreement, "DISABILITY"
will mean:
(i) the Employee's incapacity due to accident or physical
or mental illness to substantially perform his duties
and the essential functions of his position that the
Employee was performing for the Company before the
accident or illness, with or without reasonable
accommodation, on a full-time basis for at least six
months in any 12-month period as determined by the
Company in its reasonable discretion, and within 30 days
after a notice of termination is thereafter given by the
Company, the Employee will not have returned to the
full-time performance of the Employee's duties; or
(ii) the Employee becomes eligible to receive benefits
under the Company's long-term disability plan; provided,
HOWEVER, if the Employee will not agree with a
determination to terminate his employment because of
Disability, the question of the Employee's disability
will be subject to the certification of a qualified
medical doctor agreed to by the Company and the
Employee.
(d) CAUSE. For purposes of this Agreement, "CAUSE" will mean:
(i) any act or omission constituting a material breach by
the Employee of any provisions of this Agreement or the
substantial failure by the Employee to perform his
duties hereunder (other than any such failure resulting
from the Employee's Disability);
(ii) any act or misconduct materially injurious to the
Company or any affiliate, financial or otherwise, or the
misappropriation, fraud,
embezzlement or conversion by the Employee of the
Company's or any of its affiliate's property in
connection with the Employee's duties or in the course
of the Employee's employment with the Company; or
(iii) the conviction or plea of no contest of the Employee
for any felony involving fraud, moral turpitude,
embezzlement or theft in connection with the Employee's
duties or in the course of the Employee's employment
with the Company.
(e) GOOD REASON. For purposes of this Agreement, "GOOD REASON"
will mean:
(i) the Company's requirement that the Employee be based
or perform his duties anywhere other than (A) at
Employee's current employment location on the date of
this Agreement or (B) if Employee's current employment
location is moved after the date of this Agreement, at a
new location that is no more than 20 miles from such
prior location;
(ii) the failure of the Company to comply with any
material provision of this Agreement, and the Company
has not cured such failure within 30 calendar days after
notice of such noncompliance has been given by the
Employee to the Company, or if such failure is not
capable of being cured in such time, a cure shall not
have been diligently initiated by the Company within
such 30 calendar day period and the Company shall not
have cured such failure within 60 calendar days; or
(iii) a material adverse change or reduction in the nature
or scope of the authorities, powers, functions,
responsibilities or duties attached to the position with
the Company which the Employee held on the Effective
Date.
(f) CHANGE OF CONTROL. In the event that the Employee's
employment hereunder is terminated for any reason other than by
the Company for Cause or voluntarily by Employee without Good
Reason during the one-year period subsequent to a Change of
Control, (A) the Company will pay the Employee his Annual Base
Salary then in effect for the greater of (x) 12 months or (y)
the Severance Period, (B) all stock options granted to Employee
under the Stock Option Plan will vest and become exercisable in
accordance with the Stock Option Plan, and (C) Employee will be
entitled to participate in the Employee Plans at Employer's
expense for a period not to exceed one year following the date
of such termination.
For purposes of this Agreement, "CHANGE OF CONTROL" means if:
(i) any "person" (as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT")), who is not on the date
hereof a "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act) of at least 10% of the voting
capital stock of
the Company becomes the beneficial owner (as so
defined), directly or indirectly, of securities of the
Company representing 50% or more of the total voting
power represented by the Company's then outstanding
voting securities;
(ii) the Company consummates a merger or consolidation
with or into another company, other than a merger or
consolidation which would result in the voting
securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities
of the surviving entity) at least 51% of the total
voting power represented by the voting securities of the
Company or such surviving entity outstanding immediately
after such merger or consolidation; or
(iii) the sale or disposition by the Company of all or
substantially all of the Company's assets, in one or a
series of transactions, to persons other than persons
who on the date hereof were beneficial owners of 10% or
more of the Company's then outstanding voting
securities.
(g) NO MITIGATION OBLIGATION. The Employee will not be
required to mitigate the amount of any payment made pursuant to
Section 7 of this Agreement by seeking other employment or
otherwise.
8. NON-COMPETITION. In consideration of the Company entering into
this Agreement, for a period commencing on the Effective Date until one
year after termination of employment (the "NON-COMPETE PERIOD"), the
Employee covenants and agrees that the Employee will not, directly or
indirectly, individually or on behalf of any other person, group or
entity do or suffer any of the following: engage or be interested in
(whether as owner, stockholder, investor, partner, lender, consultant,
employee, agent, director or otherwise) (a) any business, activity or
enterprise which is then competing with or planning to compete with the
business of any division or operation of the Company, any of its
subsidiaries or any affiliate of the Company or its subsidiaries
(collectively the "COMPANY GROUP") or (b) any activity in which the
Employee participated or had responsibility during the term of the
Employee's employment with the Company Group within the United States or
any foreign jurisdiction in which the Company conducts its business,
(the "TERRITORY"); PROVIDED, HOWEVER, that the Employee's ownership of
less than 1% of any class of stock in a listed publicly traded
corporation will not be deemed a breach of this Agreement.
Notwithstanding any other provision of this agreement Employee shall not
be prohibited from owning any percent interest of any other non-public
business so long as that business does not compete with the Company nor
does Employee's ownership of a percentage interest in such business
cause the Employee to not "devote his best efforts, full attention and
energies during his normal working time to the business of the Company"
as provided in Section 3(b) hereinabove.
9. NON-SOLICITATION AND NON-EMPLOYMENT. In consideration of the
Company entering into this Agreement, the Employee covenants and agrees
that the Employee will not, without the prior written consent of the
Company, directly or indirectly, individually
or on behalf of any other person or entity do or suffer any of the
following for a period commencing on the Effective Date until the
expiration of the Severance Period or until one year after termination
of employment, whichever is greater (the "NON-SOLICITATION PERIOD"): (a)
hire or employ or assist in hiring or employing any person who is or had
been an employee, representative or agent of any member of the Company
Group at any time during the 6-month period prior to termination of the
Employee's employment or solicit, aid, induce or attempt to solicit,
aid, induce or persuade, directly or indirectly, such person to leave
his or her employment with any member of the Company Group to terminate
such relationship and/or to accept employment with any other person or
entity; or (b) solicit any client of the Company Group, or any person or
entity whose business the Company Group had solicited during the 6-month
period prior to termination of the Employee's employment, within the
Territory for purposes of business which is competitive to the Company
Group.
10. DISCLOSURE OF INFORMATION. The Employee acknowledges and agrees
that due to the Employee's unique and special contributions to the
Company Group in the Employee's position, the Employee is and will
continue to be privy to and ultimately responsible for every type of
information generated by the Company Group (whether reduced to writing
or in a form from which information can be derived into reasonably
usable form), maintained in the Employee's memory or created by the
Company, which derives independent economic value from not being readily
known by proper means by others who can obtain economic value from the
disclosure or use of such information, of a proprietary, secret or
confidential nature concerning the Company's business, relationships or
financial affairs (collectively, "CONFIDENTIAL INFORMATION") so that the
Employee's employment in any capacity for a competing business will
create an unreasonable and real risk of disclosure, inevitable or
otherwise, of all Confidential Information. During the Employee's
employment and on a permanent basis following termination of the
Employee's employment, the Employee covenants and agrees to keep in
strict confidence and not disclose in any manner, without written
approval of the Company, any Confidential Information to any person,
group or entity other than appropriate employees of the Company or use
such information for any purposes other than in connection with the
performance of the Employee's duties, either during or after the
Employee's employment with the Company.
11. REPRESENTATIONS.
(a) The Employee hereby represents that he is not subject to
any restriction of any nature whatsoever on his ability to enter
into this Agreement or to perform his duties and
responsibilities hereunder, including, but not limited to, any
covenant not to compete with any former employer, any covenant
not to disclose or use any non-public information acquired
during the course of any former employment or any covenant not
to solicit any customer of any former employer.
(b) The Employee hereby represents that, except as he has
disclosed in writing to the Company, he is not bound by the
terms of any agreement with any previous employer or other party
to refrain from using or disclosing any trade secret or
confidential or proprietary information in the course of the
Employee's
employment with the Company or to refrain from competing,
directly or indirectly, with the business of such previous
employer or any other party.
(c) The Employee hereby represents that, to the best of his
knowledge, his performance of all the terms of this Agreement
and as an employee of the Company does not and will not breach
any agreement with another party, including without limitation
any agreement to keep in confidence proprietary information,
knowledge or data the Employee acquired in confidence or in
trust prior to his employment with the Company, and that he will
not knowingly disclose to the Company or induce the Company to
use any confidential or proprietary information or material
belonging to any previous employer or others.
12. ASSIGNMENT. The services to be rendered by the Employee under
this Agreement are unique and personal, and the Employee may not assign
any of his rights or delegate any of his duties under this Agreement.
Except as provided in the immediately preceding sentence, this Agreement
will benefit the Employee and his heirs and personal representatives.
13. VALIDITY/SEVERABILITY. If any provision of this Agreement or the
application of any provision hereof to any person or circumstances is
held invalid, unenforceable or otherwise illegal, the remainder of this
Agreement and the application of such provision to any other person or
circumstances will not be affected, and the provision so held to be
invalid, unenforceable or otherwise illegal will be reformed to the
extent (and only to the extent) necessary to make it enforceable, valid
or legal. To the extent any provision is held to be invalid,
unenforceable or otherwise illegal and cannot be reformed, such
provision is to be stricken here from and the remainder of this
Agreement will be binding on the parties and their successors and
assigns as if such invalid or illegal provisions were never included in
this Agreement from the first instance.
14. ARBITRATION.
(a) Any dispute, claim or controversy arising out of or
relating to this Agreement, including without limitation any
dispute, claim or controversy concerning validity,
enforceability, breach or termination hereof, will be finally
settled through arbitration by a single arbitrator selected
under the rules of the American Arbitration Association for
arbitration of employment disputes conducted in New York State,
City of New York. Each party will be entitled to present
evidence and argument to the arbitrator. The arbitrator will
have the right only to interpret and apply the provisions of
this Agreement and may not change any of its provisions, except
as expressly provided in Section 13. The arbitrator will permit
reasonable pre-hearing discovery of facts, to the extent
necessary to establish a claim or a defense to a claim, subject
to supervision by the arbitrator. The determination of the
arbitrator will be conclusive and binding upon the parties and
judgment upon the same may be entered in any court having
jurisdiction thereof. The expenses of arbitration will be borne
equally by the Company and the employee.
(b) Notwithstanding Section 14(a), the Company will not be
required to seek or participate in arbitration regarding any
actual or threatened breach of the Employee's covenants in
Sections 8, 9 and 10, but may pursue its remedies, including
injunctive relief, for such breach in a court of competent
jurisdiction, and no arbitrator may make any ruling inconsistent
with the findings or rulings of such court.
15. NONDISPARAGEMENT. While employed by the Company and for the
duration of the Severance Period, the Employee agrees that the Employee
will not, directly or indirectly, make or cause to be made any statement
or criticism which is adverse to the interests of the Company Group or
its clients; nor will the Employee take any action that may reasonably
cause the Company Group or its clients significant embarrassment,
humiliation, or otherwise cause or contribute to the Company Group or
their clients being held in disrepute by the public or the Company
Group's clients, customers, or employees, except as required by law;
PROVIDED, HOWEVER, that nothing herein will be interpreted to preclude
the Employee's honest and good faith reporting to the Company, its
counsel, or appropriate legal enforcement authorities.
16. SURVIVAL. The Employee and the Company agree that for the
Severance Period the Employee's covenants set forth in Sections 8, 9 and
10 will survive any termination or expiration of this Agreement.
17. NOTICE. Any notice required or permitted to be given hereunder
will be deemed sufficiently given if sent by registered or certified
mail, postage prepaid, addressed to the addressee at the Employee's or
the Company's address last provided to the sender in writing by the
addressee for purposes of receiving notices hereunder or, unless or
until such address will be so furnished, to the address indicated
opposite the Employee's or the Company's signature to this Agreement.
Each party may also provide notice by sending the other party a
facsimile at a number provided by such other party.
18. GOVERNING LAW. The validity, interpretation, construction and
performance of this Agreement will be governed by and construed in
accordance with the substantive laws of New York State, without giving
effect to the principles of conflict of laws of such State.
19. AMENDMENT; WAIVER. This Agreement may not be modified, amended
or waived in any manner except by an instrument in writing, specifically
referring to this Agreement and signed by both parties hereto. No waiver
by either party hereto at any time of any breach by the other party
hereto or compliance with any condition or provision of this Agreement
to be performed by such other party will be deemed a waiver of similar
or dissimilar provisions or conditions at the same or at any prior or
subsequent time.
20. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original but all of which
together will constitute one and the same Agreement.
21. ENTIRE CONTRACT. This Agreement constitutes the entire
understanding and agreement between the Company and the Employee with
regard to all matters herein and supersedes any prior agreements,
including any employment agreements and discussions between the parties.
There are no other agreements, conditions or representations, oral or
written, expressed or implied with regard thereto.
22. HEADINGS. Unless otherwise noted, the headings of sections in
this Agreement are included solely for convenience of reference and will
not control the meaning or the interpretation of any provisions of this
Agreement.
IN WITNESS WHEREOF, the Company has caused this Agreement to be signed by an
officer pursuant to the authority of its Board, and the Employee has executed
this Agreement, as of the day and year first written above.
COMTEX NEWS NETWORK, INC.
By: /s/ C.W. Gilluly
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C.W. Gilluly
Chairman, Board of Directors
By: /s/ Chip Brian
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Chip Brian