Exhibit 10.4.2
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT
(“Agreement”) effective as of September 6, 2007
(the “ Effective Date ”) between HARRIS
INTERACTIVE INC., a Delaware corporation (“ Company
”), and DEE ALLSOP (“ Executive ”).
This Agreement amends, restates, and
replaces in its entirety (i) the Agreement dated June 7,
2005 between the Company and the Executive related to change in
control of the Company, and (ii) the Employment Agreement between
Company and Executive dated as of October 5, 1990, as amended
by letter dated September 9, 2004 (collectively, the “
Prior Agreement ”); provided, however, that all rights
of Executive to payments and benefits under the Prior Agreement
fully earned and accrued but unpaid as of the Effective Date shall
survive execution of this Agreement. This Agreement does not modify
the terms of any stock option agreements between the Company and
the Executive in effect on the Effective Date, which stock option
agreements shall remain unchanged and in full force according and
subject to the terms contained therein.
1.
CAPACITY AND DUTIES
1.1 Employment; Acceptance of
Employment . Company hereby employs Executive and Executive
hereby accepts employment by Company for the period and upon the
terms and conditions hereinafter set forth.
1.2 Capacity and Duties
.
(a) Executive
shall serve as the President, U.S. Solutions Research Groups.
Executive shall perform duties and shall have authority as may from
time to time be specified by the Chief Executive Officer and the
Board of Directors of Company (the “ Board ”).
Executive’s title and duties may be changed from time to time
by the Chief Executive Officer and the Board; provided, however,
that (i) Executive’s position, authority, duties, and
responsibilities shall be no less senior and executive in nature
than those of President of U.S. Solutions and Research Groups and
shall be consistent with those of an executive vice president of a
public company of the size and type similar to the Company, and
(ii) the duties assigned to the Executive shall be in all
respects consistent with all applicable laws and regulations.
Executive will report to the Chief Executive Officer of the
Company.
(b) Executive
shall devote full time efforts to the performance of
Executive’s duties hereunder, in a manner that will
faithfully and diligently further the business and interests of
Company.
(c) Executive
acknowledges that Company’s reputation is important in the
continued success of its business, and agrees that he will not
discuss or comment in such a manner as may adversely impact the
reputation or public perception, or otherwise disparage, Company or
its officers, employees, or directors in any manner; provided,
however, that Executive may make such disclosures as may be
required by law. Company acknowledges that Executive’s
reputation is important to his continued success. Company agrees
that it will not, and that it will use all reasonable efforts to
cause its officers, employees, and directors not to, defame,
disparage, or otherwise discuss or comment about Executive in such
a manner as may adversely impact his reputation or public
perception; provided, however, that Company may make such
disclosures as may be required by law.
2. TERM
OF EMPLOYMENT
2.1 Term .
(a) The
term of Executive’s employment hereunder, for all purposes of
this Agreement, shall commence on the Effective Date (the “
Commencement Date ”) and continue through and
including the earliest to occur of (i) June 30, 2008, if
and as further extended to subsequent June 30ths as provided
in Section 2.1(b), (ii) the date on which Executive dies,
and (iii) the date on which either the Company or Executive
terminates Executive’s employment for any reason
(collectively, the “ Termination Date ”).
(b) Except
as hereinafter provided, on each June 30 this Agreement shall
be automatically extended for an additional one-year term, and if
so extended shall be automatically extended for successive
additional one-year terms, unless either the Executive or Company
shall have given the other written notice of non-renewal of this
Agreement on or before the March 31 immediately prior to the
end of the initial one-year term, or if applicable any one-year
extension term then in effect. Executive’s employment under
this Agreement shall terminate on the June 30 immediately
following the date of any timely non-renewal notice.
3.
COMPENSATION
3.1 Base Compensation . As
compensation for Executive’s services, Company shall pay to
Executive base compensation in the form of salary (“ Base
Compensation ”) in the amount of $275,000 per annum. The
salary shall be payable in periodic installments in accordance
with
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Company’s regular payroll practices for its executive
personnel at the time of payment, but in no event less frequently
than monthly. The Compensation Committee of the Board shall review
Base Compensation periodically for the purpose of determining, in
its sole discretion, whether Base Compensation should be adjusted;
provided, however, that Executive’s Base Compensation shall
not be less than $275,000.
3.2 Performance Bonus . As
additional compensation for the services rendered by Executive to
Company Executive shall be paid a performance bonus (“
Performance Bonus ”) payable in full at the same time
as payment of other executive bonuses by the Company but no later
than two and one-half (2.5) months after the end of the applicable
fiscal year. The Performance Bonus award criteria and amounts shall
be those established on an annual basis by the Compensation
Committee of the Board of Directors of the Company based upon
performance guidelines established for executive officers of the
Company; provided, however, Executive’s target bonus shall
not be less than $75,000. No bonus will be due in the event that
award criteria established by the Compensation Committee are not
met.
3.3 Employee Benefits .
Executive shall be entitled to participate in such of
Company’s employee benefit plans and benefit programs as may
from time to time be provided by Company for its senior executives
generally. Company shall have no obligation, however, to maintain
any particular program or level of benefits referred to in this
Section 3.3.
3.4 Vacation . Executive shall
be entitled to the normal and customary amount of paid vacation
provided to senior executive officers of the Company, but in no
event less than 20 days during each calendar year. Any
vacation days that are not taken in a given calendar year period
shall accrue and carry over from year to year, or be paid or lost,
according to the Company’s standard vacation policies. The
Executive may be granted leaves of absence with or without pay for
such valid and legitimate reasons as the Chief Executive Officer in
his sole and absolute discretion may determine, and is entitled to
the same personal days and holidays provided to other senior
executives the of Company.
3.5 Expense Reimbursement
.
(a) Company
shall reimburse Executive for all reasonable and documented
expenses incurred by Executive in connection with the performance
of Executive’s duties hereunder in accordance with its
regular reimbursement policies as in effect from time to
time.
(b) The
Company shall reimburse the Executive for reasonable costs up to a
maximum of $2,500 incurred in the negotiation of this Employment
Agreement.
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3.6 Withholding . All payments
under this Agreement shall be subject to any required withholding
of Federal, state and local taxes pursuant to any applicable law or
regulation.
4.
TERMINATION OF EMPLOYMENT
4.1 Accrued Obligations . For
purposes of this Agreement:
(a)
“ Accrued Base Obligations ” shall mean amounts
for Base Compensation, expense reimbursement, and employee benefits
which have accrued, vested, and are unpaid as of the Termination
Date.
(b)
“ Accrued Bonus Obligations ” shall mean, for
the year in which the Termination Date occurs, a prorated
Performance Bonus for the partial-year period ending on the
Termination Date (the “ Partial Period ”). The
prorated Performance Bonus shall be based on the same metrics as
then in effect for calculation of bonuses on an annual basis (for
example, net earnings or revenues) and shall be calculated by
(1) dividing actual performance as of the end of the
Applicable Calculation Quarter (described below) by budgeted
performance (per the budget previously approved by the Board) for
the Applicable Calculation Quarter, and then (2) using the
resulting percentage in determining the dollar value bonus that
would have been paid under the Company’s executive
performance bonus plan had such percentage performance been
achieved for the full fiscal year, and then (3) multiplying the
result by a fraction, the numerator of which is the number of days
elapsed in the fiscal year prior to the Termination Date and the
denominator of which is 365. If the Termination Date is in the
first half of a fiscal quarter the “Applicable Calculation
Quarter” is the fiscal quarter most recently ended before the
Termination Date, and if the Termination Date is in the second half
of a fiscal quarter, the Applicable Calculation Quarter is the
first fiscal quarter ending after the Termination Date.
(c) Accrued
Base Obligations shall be paid within thirty (30) days after
the Termination Date. Accrued Bonus Obligations shall be paid on
the date on which they would have been paid under this Agreement
absent the occurrence of the Termination Date.
4.2 Termination Procedures .
Except as otherwise provided in this Agreement, any termination of
Executive’s employment by the Company or by Executive (other
than termination pursuant to death) shall be communicated by
written Notice of Termination to the other party hereto. For
purposes of this Agreement, a “ Notice of Termination
” shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and, if
applicable, shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of
Executive’s employment under the provision so
indicated.
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4.3 Death of Executive . If
Executive dies, Company shall not be obligated to make any further
payments under this Agreement except amounts for:
(a) Accrued
Base Obligations,
(b) earned
but unpaid Performance Bonus for fiscal years already ended,
payable on the date on which such Performance Bonus would be paid
absent Executive’s death, and,
(c) if
Executive’s death is in the Company’s third or fourth
fiscal quarter, Accrued Bonus Obligations.
4.4 Disability of Executive .
If Executive is permanently disabled (as defined in Company’s
long-term disability insurance policy then in effect), then the
Company shall have the right to terminate Executive’s
employment upon 15 days’ prior written notice to
Executive at any time during the continuation of such disability
(“ Disability ”). In the event Executive’s
employment is terminated for Disability in accordance with this
Section 4.4, Company shall not be obligated to make any
further payments under this Agreement except for:
(a) Accrued
Base Obligations,
(b) earned
but unpaid Performance Bonus for fiscal years ended prior to the
Termination Date, payable on the date on which such Performance
Bonus would be paid absent Executive’s Disability, and
(c) if
the Termination Date occurs in the Company’s third or fourth
fiscal quarter, Accrued Bonus Obligations.
4.5 Termination for Cause
.
(a) Executive’s
employment shall terminate immediately upon a Notice of Termination
from the Company that Executive is being terminated for Cause (as
defined herein), in which event Company shall not thereafter be
obligated to make any further payments under this Agreement except
for:
(i) Accrued
Base Obligations,
(ii) earned
but unpaid Performance Bonus for fiscal years ended prior to the
Termination Date, payable on the date on which such Performance
Bonus would be paid absent the termination of Executive, and
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(iii) if
the Termination Date occurs in the Company’s third or fourth
fiscal quarter, Accrued Bonus Obligations.
(b)
“ Cause ” shall be limited to the
following:
(i) willful
failure to substantially perform Executive’s duties as
described in Section 1.2 after demand for substantial
performance is delivered by Company in writing that specifically
identifies the manner in which Company believes Executive has not
substantially performed Executive’s duties and
Executive’s failure to cure such non-performance within
thirty (30) days after receipt of the Company’s written
demand; provided, however, that a failure to perform such duties
during the remedy period set forth in subsection (i) of the
definition of Good Reason set forth in Section 4.7 hereof,
following the issuance of a Notice of Termination (as herein
defined) by Executive for Good Reason, shall not be Cause unless an
arbitrator acting pursuant to Section 6.1 hereof finds
Executive to have acted in bad faith in issuing such Notice of
Termination;
(ii) willful
conduct that is materially and demonstrably injurious to Company or
any of its subsidiaries, but not including good faith conduct taken
without intention to injure the Company or its subsidiaries that,
at the time engaged in, could not reasonably be expected to be more
likely than not to be materially injurious to the Company; or
(iii) conviction
or plea of guilty or nolo contendere to a felony or to any other
crime which involves moral turpitude or, if not including moral
turpitude, arises from an act that is materially and demonstrably
injurious to the Company or any of its subsidiaries;
(iv) material
violation of Section 5 of this Agreement,
(v) or
material violation of Company polices set forth in Company manuals
or written statements of policy provided in the case of violation
of policy that such violation is either materially and demonstrably
injurious to Company or, if curable, continues for more then three
(3) days after written notice thereof is given to Executive by the
Company; and
(vi) material
breach of any material provision of this Agreement by Executive,
which breach continues for more than ten (10) days after
written notice thereof is given by the Company to Executive.
4.6 Termination Without Cause or
by Executive for Good Reason .
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(a) The
Company reserves the right to terminate Executive’s
employment at any time. If, however, a Termination Date occurs due
to Company terminating Executive without Cause or Executive
terminating for Good Reason, then Company shall have no further
obligations under this Agreement except that Company shall pay to
Executive the amounts shown in Section 4.6(c).
(b) For
the avoidance of doubt, Section 4.6(c) shall not apply to
(i) termination in the ordinary course on any applicable
June 30 if the term of this Agreement is not automatically
renewed, which circumstance is covered by Section 4.6(d),
(ii) termination for Cause which circumstance is covered by
Section 4.5, (iii) termination by Executive without Good
Reason which circumstance is covered by Section 4.7,
(iv) termination by reason of death which circumstance is
covered by Section 4.3, or (v) termination by reason of
Disability which circumstance is covered by Section 4.4.
(c) If
Company terminates Executive without Cause or Executive terminates
with Good Reason, then the Company shall pay to Executive:
(i) the
Accrued Base Obligations through the Termination Date, payable
promptly after the Termination Date,
(ii) any
unpaid Performance Bonus earned for any fiscal year ended on or
before the Termination Date payable on the date on which such
Performance Bonus would be paid absent termination,
(iii) Accrued
Bonus Obligations,
(iv) amounts
equal to Base Compensation through and including the date six
months after the Termination Date, and
(v) health
and medical benefits as required by Section 3.3 of this
Agreement during the same period that amounts equal to Base
Compensation are due under Section 4.6(c)(iv); provided,
however, if Executive, Executive’s spouse or
Executive’s dependents are ineligible to participate in the
Company benefit programs under Section 3.3, the Company shall
arrange to reimburse Executive for coverage reasonably comparable
to that previously provided under Section 3.3, and further
provided that such benefits shall become secondary to primary
coverage upon the date or dates Executive receives coverage and
benefits which are substantially similar, taken as a whole, without
waiting period or pre-existing condition limitations, under the
plans and programs of a subsequent employer.
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(d) If
this Agreement is terminated in the ordinary course on any
applicable June 30 because of a non-renewal notice given by
the Company under Section 2.1, then Company shall have no
further obligations under this Agreement except that Company shall
pay to Executive the same payments as to which the Executive would
be entitled under Section 4.6(c)(i), (ii), (iv), and (v). If
this Agreement is terminated in the ordinary course on any
applicable June 30 because of a non-renewal notice given by
the Executive under Section 2.1, then Company shall have no
further obligations under this Agreement except that Company shall
pay to Executive the payments to which the Executive would be
entitled under Section 4.6(c)(i) and (ii).
4.7 Termination by Executive
without Good Reason .
(a) Executive
may terminate this Agreement without Good Reason upon fifteen
(15) days prior notice. In the event Executive’s
employment is voluntarily terminated by Executive without Good
Reason, Company shall not be obligated to make any further payments
to Executive hereunder other than:
(i) Accrued
Base Obligations through the Termination Date,
(ii) earned
but unpaid Performance Bonus for fiscal years ended prior to the
Termination Date, payable on the date on which such Performance
Bonus would be paid absent Executive’s termination, and
(iii) if
the Termination Date occurs in the Company’s third or fourth
fiscal quarter, Accrued Bonus Obligations.
(b)
“ Good Reason ” shall mean the following:
(i) material
breach of Company’s obligations hereunder, including any
assignment of duties not included within the Executive’s
duties described in Section 1.2 unless previously agreed to in
writing by Executive, provided that Executive shall have given
reasonably specific written notice thereof to Company, and Company
shall have failed to remedy the circumstances within thirty (30)
days thereafter;
(ii) any
decrease in Executive’s salary as it may have increased
during the term of this Agreement, except for decreases that are in
conjunction with decreases in executive salaries by the Company
generally and that do not result in a decrease in Executive’s
annual salary below $275,000 per annum;
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(iii) any
decrease of Executive’s target Performance Bonus below
$75,000,
(iv) any
relocation of the principal office from which Executive’s
duties are performed to a location more than 50 miles outside of
Reston, Virginia, provided, however, that travel to Company’s
and its affiliates’ various offices and to other locations in
furtherance of Company’s business will be required in
connection with the performance of Executive’s duties
hereunder and requirements for such travel shall not constitute
Good Reason, or
(v) the
failure of any successor in interest of the Company to be bound by
the terms of this Agreement in accordance with Section 6.4
hereof.
Notwithstanding subsections (i) and (iii) above, after a
Change of Control, Good Reason shall not include a change of title,
reporting line, responsibilities, and duties so long as such
changed title, reporting line, and reassignment of executive duties
are at a level commensurate with the level of participation of the
Company in the controlling person (such as, for example, executive
duties at a divisional, subsidiary, or group level, if the Company
becomes a division, subsidiary, or group within the controlling
person), or assignment of other duties not materially inconsistent
with duties appropriate for a past executive vice president of a
public company of the size and type similar to the Company
officer.
(c) Executive
must provide a Notice of Termination to the Company that he is
intending to terminate his employment for Good Reason within one
hundred and eighty (180) days after Executive has actual
knowledge of the occurrence of the latest event he believes
constitutes Good Reason, which termination notice shall specify a
termination date within thirty (30) days after the date of
such notice except for termination under subsection (i) in
which case the termination date shall
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