Exhibit 10.5
EMPLOYMENT
AGREEMENT
In consideration of the mutual
covenants set forth herein and other good and valuable
consideration, the receipt and sufficiency of which the parties
acknowledge, Investools Inc., a corporation having an address of
13947 S. Minuteman Drive, Draper, UT, 84020, (the
“Company”) and Ainslie Simmonds, of 36 Glen Avenue,
Norwalk, CT, 06850, (“Employee”) intending to be
legally bound, hereby agree as follows:
1.
EMPLOYMENT. The Company agrees to
employ Employee and Employee hereby accepts such employment on an
at-will basis pursuant to the terms and conditions of this
Agreement on February 15, 2007 for an approximate two (2) year
period commencing on the date of this Agreement and terminating,
unless otherwise terminated earlier in accordance with Section 5
(“Employment Period”) on December 31, 2008.
Employee represents that she shall not disclose to the Company any
confidential information obtained from a third party or otherwise
violate any confidentiality obligations Employee may have incurred
with a third party.
2.
SERVICES. During
the Employment Period, Employee shall be employed as “Chief
Marketing/Product Development Officer and Senior Vice
President” with job responsibilities related thereto.
Employee shall report to the Chief Executive Officer and shall
devote her full time efforts to the faithful performance of her
duties on behalf of the Company. Employee shall also perform
such other duties, and may have job responsibilities modified from
time to time as may be requested by the Chief Executive Officer,
provided such duties are generally consistent with the level of
responsibility currently held by Employee. Employee’s
principal place of performance of her duties during the term of
this Agreement shall be the corporate offices located in 45
Rockefeller Center, New York City. Employee shall not engage
in additional gainful employment of any kind or undertake any role
or position which would affect her ability to perform her
responsibilities, whether or not for compensation, with any person
or entity during the term of this Agreement without advance written
approval of the Chief Executive Officer.
3.
ADHERENCE TO COMPANY RULES. Employee, at all times
during the Employment Period, shall strictly adhere to and obey all
of the Company’s written rules, regulations and policies,
including without limitation the Investools Code of Business Ethics
(attached hereto as Exhibit A), which will be provided to Employee
and are now in effect, or as subsequently adopted or modified by
the Company and provided to Employee which govern the operation of
the Company’s business and the conduct of employees of the
Company.
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4.
COMPENSATION.
a.
Salary. Employee shall receive
an annual base salary of $265,000 payable in bi-weekly gross
amounts of $10,192.31 Employee’s salary shall be
subject to all appropriate federal and state withholding taxes and
shall be payable in accordance with the normal payroll procedures
of the Company. Employee’s salary may be increased or
decreased by the Company at any time, in its sole discretion, upon
providing Employee thirty (30) days notice of such
change.
b.
Benefits. During the Employment
Period, Employee shall be entitled to participate in the employee
benefit plans provided by the Company for all employees generally,
subject to the terms and conditions of the applicable plan.
Additionally, Employee shall be entitled to additional travel
insurance (Accidental Life & Dismemberment). The Company
shall be entitled to change, amend or terminate such plans from
time to time in its sole discretion.
c.
Paid Time Off. During the Employment Period,
Employee shall be entitled to four (4) weeks of paid personal time
(PTO) off per year, which shall accrue at a rate of 6.1538 hours
per bi-weekly pay period. Employee shall take her PTO time in
accordance with Company policies and procedures.
d.
Expenses. Employee shall be
entitled to reimbursement of her ordinary and necessary business
expenses incurred in the performance of her duties in accordance
with Company policy.
e.
Discretionary Bonus. During the Employment
Period, Employee shall be entitled to an annual bonus up to maximum
of 35% of Employee’s base salary as determined in the sole
discretion of the Company, provided that Employee and/or the
Company meet performance goals as established by the Company in its
sole discretion.
f.
Stock Options.
Executive shall
be eligible to receive future additional stock option grants, as
determined by the Compensation Committee, in its sole
discretion.
g.
Restricted Shares . Executive shall be
eligible to receive future additional Restricted Shares, as
determined by the Compensation Committee, in its sole
discretion.
h.
During the
Employment Period, Executive shall be entitled to an annual
complete physical exam at Cooper Clinic or a medical equivalent,
and said annual benefit shall not exceed an amount equal to
$15,000.
5.
TERMINATION. The Company or
Employee may terminate this Agreement and Employee’s
employment as provided below:
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a.
Termination by the Company for Cause. The Company shall have the right to
immediately terminate Employee’s employment at any time for
any of the following reasons (each of which is referred to herein
as “Cause”) by giving Employee written notice of the
effective date of termination (which effective date may be the date
of such notice):
(i)
willful and material breach by
Employee of any provision of this Agreement;
(ii)
any act by Employee of fraud or
dishonesty including, but not limited to, stealing or falsification
of Company records, with respect to any aspect of the
Company’s business;
(iii)
failure by Employee to follow the
lawful instructions or directions from the Chief Executive Officer
of the Company;
(iv)
failure by Employee to perform in
any manner under this Agreement after being given reasonable notice
of such failure by the Company, along with an explanation of such
failure of performance;
(v)
misappropriation of Company funds
or of any corporate opportunity;
(vi)
conviction of Employee of a
felony, or of a crime that the Company, in its sole discretion,
determines involves a subject matter which may reflect negatively
on the Company’s reputation or business (or a plea of nolo
contendere thereto);
(vii)
acts by Employee attempting to
secure or securing any personal profit not fully disclosed to and
approved by the Chief Executive Officer and/or the Board of
Directors (“Board”) of the Company in connection with
any transaction entered into on behalf of the Company;
(viii)
gross, willful or wanton
negligence, misconduct, or conduct which constitutes a breach of
any fiduciary duty or duty of loyalty owed to the Company by
Employee;
(ix)
material violation of any lawful
Company policy, rule, regulation or directive;
(x)
conduct on the part of Employee,
even if not in connection with the performance of her duties
contemplated under this Agreement,
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that could result in serious
prejudice to the interests of the Company, as determined by the
Company in its sole discretion, and Employee fails to cease such
conduct immediately upon receipt of notice to cease such
conduct;
(xi)
acceptance by Employee of
employment with another employer; or
(xii)
violation of material federal or
state securities laws as determined in the sole discretion of the
Company.
If the Company terminates
Employee’s employment for any of the reasons set forth above,
the Company shall have no further obligations to Employee hereunder
from and after the effective date of termination and shall have all
other rights and remedies available under this or any other
agreement and at law or in equity and Employee receives nothing
else.
b.
Termination by the Company Without Cause. The Company shall have the right to
terminate Employee without Cause for any reason by providing thirty
(30) days’ written notice to Employee. If the Company
terminates Employee without Cause by providing thirty (30)
days’ notice and Employee is diligently and effectively
rendering services to the Company (as determined by the Company in
its sole discretion) as directed in Section 2 above at the time of
her termination, the Company shall pay Employee through the date of
termination and, subject to the limitations set forth below, the
Company shall provide Employee with severance compensation in an
amount equal to the greater of (i) six (6) month’s base
salary (based on Employee’s annual salary on the date of
termination), less applicable taxes or (ii) the severance pay to
which Employee would be entitled under a severance pay plan, if
any, in effect at the time of Employee’s termination without
Cause. Such severance compensation shall be paid in bi-weekly
installments (“Installment Severance Payments”) over
the following six months (referred to herein as the
“Severance Period”) in accordance with the
Company’s normal payroll practices and schedule.
Employee shall also be entitled to the full vesting of all options
granted to the termination date, subject to the terms and
conditions of the applicable plan and agreement. All other
provisions of the Stock Options Agreement will remain in
force. In the event Employee is in violation of
Sections 7, 8, 9, 10 or 12 of this Agreement at any time during the
Severance Period, the Company shall be entitled to immediately
cease the payment of the Installment Severance Payments, the
Company’s severance obligation shall terminate and expire,
and the Company shall have no further obligations hereunder from
and after the date of such other employment or violation and shall
have all other rights and remedies available under this Agreement
or any other agreement and at law or in equity.
c.
Voluntary Termination by Employee. In the event that
Employee’s employment with the Company is voluntarily
terminated by Employee for any reason, the Company shall have no
further obligations hereunder from and after the date of
such
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termination and
shall have all other rights and remedies available under this
Agreement or any other agreement and at law or in
equity.
d.
Termination Upon Death.
In the
event that Employee shall die during her employment by the Company,
the Company shall pay to Employee’s estate any compensation
due that would otherwise have been payable through the date of
death.
e.
Termination Upon Disability. In the event that
Employee shall become disabled during her employment by the
Company, Employee’s employment hereunder shall terminate and
the Company shall provide Employee with severance payments equal to
three (3) months’ salary (based on Employee’s monthly
salary on the date of termination), less applicable taxes.
Such severance payments shall be paid bi-weekly over a period of
three months in accordance with the Company’s normal payroll
practices and schedule. For purposes of this Agreement,
Employee shall become “disabled” if she shall become,
because of illness or incapacity, unable to perform the essential
functions of her job under this Agreement with or without
reasonable accommodation for a continuous period of one hundred and
eighty (180) days during the Employment Period. In addition,
she shall be conclusively deemed to be disabled if she is
determined eligible to receive disability benefits
from:
(i)
any policy of disability insurance
issued by a commercial insurer; or
(ii)
a waiver of premium benefit
forming a part of any policy of life insurance; or
(iii)
Social Security.
If there is a
dispute regarding the existence or continuation of a disability,
the Company may require the Employee to submit to an examination by
a medical doctor licensed to practice medicine at such reasonable
times as it may require but not more frequently than once in any
120 day period. The Company shall pay for such
examinations.
6.
CHANGE OF CONTROL.
a.
For purposes of this Agreement, a
“Change in Control” of the Company shall be deemed to
have occurred at such time as:
i.
any
“person” (as the term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)) is or becomes the “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of voting securities of the Company
representing more
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than 50% of the
Company’s outstanding voting securities or rights to acquire
such securities except for any voting securities issued or
purchased under any employee benefit plan of the Company or its
subsidiaries; or
ii.
a plan of
reorganization, merger, consolidation, sale of all or substantially
all of the assets of the Company or similar transaction occurs or
is effectuated in which the Company is not the resulting or
surviving entity; provided, however, that such an event listed
above will be deemed to have occurred or to have been effectuated
only upon receipt of all required regulatory approvals not
including the lapse of any required waiting periods; or
iii.
the Board
determines in its sole discretion that a Change in Control has
occurred.
b.
Benefits Upon Change in Control.
i.
Severance Benefits. If a Change of Control occurs within the
first two (2) years of Employee’s employment pursuant
to this Agreement, and Employee is terminated as a result of the
Change of Control event, Employee shall have the right to resign
within one hundred eighty (180) days following the Change of
Control and be entitled to receive a cash severance benefit in an
amount equal to twelve (12) month’s base salary (based on
Employee’s annual salary on the date of the Change of
Control), less applicable taxes. Such amount shall be paid in
bi-weekly installments in accordance with the Company’s
normal payroll practices and schedule. Employee shall
also be entitled to the full vesting of all options and restricted
shares granted to the termination date, subject to the terms and
conditions of the applicable plan and agree
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