EMPLOYMENT AGREEMENT
EMPLOYMENT
AGREEMENT (this “Employment Agreement”), dated as
of September ___, 2007 (the “Commencement Date”),
by and between TheStreet.com, Inc., a Delaware corporation
(the “Company” or “TheStreet.com”),
and Thomas J. Clarke, Jr. (“Clarke”).
WHEREAS,
the Company and Clarke previously entered into an employment
agreement dated as of January 1, 2006 (the “Prior
Employment Agreement”), and the Company and Clarke now
desire to revise the terms set forth in the Prior Employment
Agreement by entering into this Employment Agreement, on the
terms and conditions set forth herein; and
NOW
THEREFORE, the parties hereto agree as follows:
Section 1.
Duties; Term .
(a)
The Company agrees to employ Clarke, and Clarke agrees to be
so employed, in the position of Chairman and Chief Executive
Officer of the Company, reporting to the Board of Directors
(the “Board”) of the Company. Clarke agrees to
perform such duties, functions and responsibilities as are
generally incident to such positions, for a period commencing
on the Commencement Date and ending on September 30, 2009,
unless sooner terminated in accordance with Section 4 hereof
(the “Initial Term”). The Initial Term
automatically shall be extended for one (1) additional year at
the end of the Initial Term and then again after each
successive year thereafter (the “Term”). However,
either party may terminate this Employment Agreement at the
end of the Initial Term, or at the end of any successive one
(1) year term thereafter, by giving the other party written
notice of intent not to renew delivered at least 90 (ninety)
days prior to the end of such Initial Term or successive one
(1) year term. Clarke agrees to faithfully perform the lawful
duties assigned to him pursuant to this Employment Agreement
to the best of his abilities and to devote all of his business
time and attention to the Company’s business. Clarke
shall be subject to all laws, rules, regulations and policies
as are from time to time applicable to employees of the
Company and, in the case of rules or policies adopted by the
Company, communicated to him in writing, including
TheStreet.com’s Policy on Investments. Clarke will make
recommendations to the Compensation Committee of the Board
(the “Committee”) with regard to compensation
levels (including equity awards) for senior executive officers
and the Committee shall consider such
recommendations.
(
b)
Notwithstanding the foregoing, Clarke may (i) serve on
civic or charitable boards or not-for-profit industry related
organizations, (ii) engage in charitable, civic, educational,
professional, community and/or industry activities without
remuneration therefor and (iii) manage personal and
family investments, so long as such activities do not
interfere with performance of Clarke’s duties under the
Employment Agreement. Clarke also may serve on the board of
directors or advisory committee of other for-profit
enterprises subject to the consent of the Board, which shall
not unreasonably be withheld; provided, however, that Clarke
shall not serve on more than two such boards at the same
time.
Section 2 .
Compensation .
(a)
Annual Salary .
As compensation for his services hereunder, during the Term the
Company shall pay to Clarke a salary of Four Hundred and Ten
Thousand Dollars ($410,000) per annum, payable in accordance with
the Company’s standard payroll policies, and less all
applicable federal, state and local withholding taxes (the
“Annual Salary”). The Annual Salary shall be reviewed
at least annually during the Term, and may be increased in the sole
discretion of the Committee, taking into consideration both the
Company’s and Clarke’s performance during the preceding
year.
(b)
Annual Bonus .
Except as set forth in Section 4 hereof, in addition to the Annual
Salary, Clarke shall be entitled to receive an additional cash
bonus opportunity for his employment during calendar year 2007 (as
previously established in accordance with the terms of the
Agreement for Grant of Cash Performance Award granted to Clarke on
May 15, 2007 under the 2007 Performance Incentive Plan (the
“2007 Plan”), as well as Annual Bonus opportunities in
each subsequent calendar year during the Term in accordance with
the bonus plan for senior management of the Company (the
“Bonus Plan”) with an annualized target bonus of 75% of
his Annual Salary, and upon such terms as are established at the
sole discretion of the Committee (the amount earned under such
bonus opportunity referred to herein as the “Annual
Bonus”).
(c)
Long-term Equity Incentive Compensation .
The Company shall annually grant to Clarke on or about January 1 of
each year of his employment during the Term long-term equity
incentive compensation opportunities in such form as the Committee
may reasonably determine having a grant date economic value of not
less than three hundred thousand dollars ($300,000), as determined
by the Committee in its sole discretion (the “New
LTIs”).
In
the event such long-term equity incentive compensation award
is provided in a form other than stock options, stock
appreciation rights or restricted stock, payment of such award
shall be paid on or within sixty (60) days after the vesting
of the award.
Notwithstanding
any other provision hereof, following the termination of
Clarke’s employment by the Company without Cause, a
voluntary termination by Clarke for Good Reason, upon the
expiration of this Employment Agreement as a result of the
Company delivering notice of non-renewal pursuant to Section
1(a), or the upon the occurrence of a Change of Control (as
defined in the 2007 Plan) prior to the termination of
Clarke’s employment hereunder for any reason, the then
unvested portion of the New LTIs will immediately become
vested. The New LTIs shall also have such other terms not
inconsistent with the foregoing as shall be determined by the
Company and set forth in a grant agreement.
Section 3 .
Benefits; Expense Reimbursement .
During
the Term, Clarke shall participate in any group insurance,
accident, sickness and hospitalization insurance, and any
other employee benefit plans of the Company in effect during
the Term and available to the Company’s executive
officers. Without limiting the generality of the foregoing,
during the Term, the Company will provide Clarke at its
expense with a term life insurance policy with a death benefit
equal to two (2) times Clarke’s Annual Salary, the
beneficiary to be named by Clarke; provided that the Company
shall not be required to incur annual expense in excess of
$5,000 in connection with such term life insurance policy.
During the Term, Clarke shall annually receive a physical exam
at a distinguished medical facility (such as the Mayo Clinic
or the Cleveland Clinic). All reasonable expenses associated
with these annual physicals (including travel) shall be paid
by the Company.
Clarke
shall have the right to reimbursement, upon proper accounting,
of reasonable expenses and disbursements incurred by him in
the course of his duties hereunder. In addition, during each
year of the Term, Clarke shall be entitled to five (5) weeks
of paid vacation.
Section 4 .
Employment Termination .
(a)
At any time during the Term, and except as otherwise provided
in Sections 4(b) and 4(c) hereof, the Company shall only have
the right to terminate this Employment Agreement and
Clarke’s employment with the Company hereunder, upon
written notice to Clarke, in the event Clarke engages in
conduct which constitutes “Cause.” For purposes of
this Employment Agreement, Cause shall mean (i) Clarke’s
willful misconduct in the performance of his obligations under
this Employment Agreement or gross negligence in the
performance of his obligations under this Employment
Agreement, (ii) dishonesty or misappropriation by Clarke
relating to the Company or any of its funds, properties, or
other assets, (iii) inexcusable repeated or prolonged absence
from work by Clarke (other than as a result of, or in
connection with, a disability), (iv) any unauthorized
disclosure by Clarke of confidential or proprietary
information of the Company which is reasonably likely to
result in material harm to the Company, (v) a conviction of
Clarke (including entry of a guilty or nolo contendere plea)
involving fraud, dishonesty, or moral turpitude, or involving
a violation of federal or state securities laws, or (vi) the
failure by Clarke to attempt to perform faithfully his duties
hereunder, or other material breach by Clarke of this
Employment Agreement, and such failure or breach is not cured,
to the extent cure is possible, by Clarke within thirty (30)
days after written notice thereof from the Company to Clarke;
provided, however, that no event or condition described in
clauses (i), (ii), (iii), (iv) and (vi) shall constitute Cause
unless (x) the Company first gives Clarke written notice
of its intention to terminate his employment for Cause and the
grounds for such termination no fewer than ten (10) days prior
to the date of termination; and (y) Clarke is provided
the opportunity to appear before the Board, with or without
legal representation at his election to present arguments on
his own behalf; provided further, however, that
notwithstanding anything to the contrary in this Agreement and
subject to the other terms of this proviso, the Company may
take any and all actions, including without limitation
suspension (but not without pay), it deems appropriate with
respect to Clarke and his duties at the Company pending such
appearance. No act or failure to act on Clarke’s part
will be considered “willful” unless done, or
omitted to be done, by Clarke not in good faith and without
reasonable belief that his action or omission was in the best
interests of the Company. If this Employment Agreement and
Clarke’s employment with the Company hereunder is
terminated for Cause, or if Clarke voluntarily resigns from
the Company without Good Reason during the Term or gives
notice of non-renewal of this Employment Agreement as provided
by Section 1(a), except as otherwise required by Section 27
hereof the Company shall pay Clarke (i) a lump sum amount
within thirty (30) days of such termination, equal to the sum
of (A) all earned but unpaid portions of the Annual Salary,
(B) any earned but unpaid Annual Bonus for a previously
completed fiscal year of the Company, (C) reimbursement for
any unreimbursed business expenses incurred by Clarke prior to
the date of termination or resignation (the “Termination
Date”) subject to reimbursement pursuant to Section 3,
and (D) payment for any unused vacation days through the
Termination Date ((A) - (D) collectively the “Accrued
Amounts”), and (ii) any other amounts or benefits (other
than severance, termination or similar pay) required to be
paid or provided by law or under any plan, program or policy
of the Company (the “Accrued Benefits”) in
accordance with the terms thereof, and following any such
termination, Clarke shall not be entitled to receive any other
compensation or benefits from the Company hereunder,
including, without limitation, any portion of the Annual Bonus
for the year in which he is terminated.
(b)
This Employment Agreement and Clarke’s employment with
the Company hereunder may also be terminated by the Company
without Cause, or by Clarke upon the occurrence of an event
constituting Good Reason. For purposes of this Employment
Agreement, “Good Reason” shall mean (i) the
failure of the Company to cure a material adverse change made
by it in Clarke’s authority, functions, duties, or
responsibilities in his position with the Company as provided
in this Employment Agreement, or (ii) prior to a Change in
Control, any adverse change in Clarke’s positions,
titles or reporting responsibility (such that Clarke reports
to a person other than the Board), or (iii) the assignment of
duties to Clarke that are inconsistent with his position and
status as Chairman and Chief Executive Officer, or (iv) a
reduction in the Annual Salary during the Term, or (v) the
failure of the Company to cure any other material breach of
this Employment Agreement (as described below), or (vi) in
connection with the occurrence of a Change of Control, there
is a significant reduction of Clarke’s authority, duties
or responsibilities relative to his authority, duties or
responsibilities in effect immediately prior to such
reduction; provided, however, that the foregoing provision
shall not include a reduction in duties or responsibilities
solely by virtue of the Company being acquired and made part
of a larger entity (as, for example, if Clarke is not
appointed as Chief Executive Officer of the acquiring
corporation, but continues to have a substantially similar
level of responsibility over the affairs of the Company
following such Change of Control), or (vii) Clarke’s
relocation by the Company or a successor thereto to a location
more than fifty (50) miles from either the Company’s
current headquarters or Bridgewater, New Jersey; provided that
in the case of (i) through (v) above, the Company has failed
to cure the event constituting Good Reason within thirty (30)
days following written notice thereof from Clarke. In the
event that Clarke’s employment with the Company shall
terminate during the Term on account of termination by the
Company without Cause, or by Clarke with Good Reason, then the
Company shall pay or provide to Clarke, as his sole and
exclusive remedy hereunder, (A) the Accrued Amounts, (B) the
Accrued Benefits, (C) a pro rata (based on the number of days
employed in the year of termination or resignation) bonus for
the fiscal year in which such termination or resignation
occurs based on the average of the Annual Bonuses paid to
Clarke for the two (2) years immediately preceding such
termination or resignation (a “Pro Rated Bonus”),
(D) group life, disability, sickness, hospitalization and
accident insurance benefits equivalent to those to which
Clarke would have been entitled if he had continued working
for the Company for an additional twelve (12) month period
following the Termination Date, (E) 100% of the Annual Salary
to the same extent to which Clarke would have been entitled if
he had continued working for the Company for an additional
twelve (12) month period following the Termination Date, and
(F) 50% of the Annual Salary to the same extent to which
Clarke would have been entitled if he had continued working
for the Company for the period, if any, commencing on the
first anniversary of the Termination Date and ending on the
last day of the Term. The Accrued Benefits shall be provided
in accordance with their terms. Except as otherwise required
by Section 27, the payments provided for in (A), (C), (E) and
(F) above shall be made to Clarke in a lump sum payment within
thirty (30) days following such termination or resignation;
provided that the payments provided for in (E) and (F) shall
be contingent upon Clarke’s continued compliance with
Sections 5, 6, and 7 hereof (except that Clarke shall not be
deemed for purposes of this Section 4(b) not to have been in
compliance with Section 6 solely as a result of an
unintentional and immaterial disclosure of confidential
information) and Clarke shall be obligated to repay all such
payments upon determination by the Board that Clarke has
failed to comply as such with Sections 5, 6, or 7 hereof; and
provided further that the benefits continuation provided for
in (D) above shall terminate upon Clarke’s becoming
eligible for corresponding benefits in connection with new
employment.
(c)
This Employment Agreement and Clarke’s employment with
the Company hereunder shall terminate immediately and
automatically upon (i) the death or Disability (as defined
below) of Clarke or (ii) the expiration of the Term as a
result of the Company giving notice to Clarke to terminate
this Employment Agreement as provided by Section 1(a). For
purposes of this Employment Agreement,
“Disability” shall mean physical or mental
incapacity of a nature which prevents Clarke, in the good
faith judgment of the Company’s Board of Directors, from
performing his duties under this Employment Agreement for a
period of 90 consecutive days or 150 days during any year with
each year under this Employment Agreement commencing on each
anniversary of the date hereof. If this Employment Agreement
and Clarke’s employment with the Company hereunder is
terminated on account of (i) or (ii) above, then the Company
shall pay Clarke, or his estate, conservator or designated
beneficiary, as the case may be, an amount equal to (A) the
Accrued Amounts, (B) the Accrued Benefits and (C) a Pro Rated
Bonus, and following any such termination, neither Clarke, nor
his estate, conservator or designated beneficiary, as the case
may be, shall be entitled to receive any other compensation or
benefits from the Company hereunder, provided, however, that
if Clarke’s employment is terminated on account of (ii)
above, then the Company shall also pay or provide to Clarke
(D) group life, disability, sickness, hospitalization and
accident insurance benefits equivalent to those to which
Clarke would have been entitled if he had continued working
for the Company for an additional twelve (12) month period,
and (E) the Annual Salary to the same extent to which Clarke
would have been entitled if he had continued working for the
Company for an additional twelve (12) month period. The
Accrued Benefits shall be provided in accordance with their
terms. Except as otherwise required by Section 27, the
payments provided for in (A), (C) and (E) above shall be made
in a lump sum payment within thirty (30) days following such
termination; provided that the payments provided for in (E)
shall be contingent upon Clarke’s continued compliance
with Sections 5, 6, and 7 hereof (except that Clarke shall not
be deemed for purposes of this Section 4(c) not to have been
in compliance with Section 6 solely as a result of an
unintentional and immaterial disclosure of confidential
information) and Clarke shall be obligated to repay all such
payments upon determination by the Board that Clarke has
failed to comply as such with Sections 5, 6, or 7 hereof; and
provided further that the benefits continuation provided for
in (D) above shall terminate upon Clarke’s becoming
eligible for corresponding benefits in connection with new
employment.
(d)
This Employment Agreement and Clarke’s employment with
the Company hereunder shall terminate immediately and
automatically upon the final and complete liquidation or
dissolution of the Company or a final and complete shutdown of
the business then conducted by the Company (each, a
“Liquidation Event”). In the event that Clarke
remains employed by the Company under this Employment
Agreement until the time of any Liquidation Event, then the
Company shall pay to Clarke upon such Liquidation Event, as
his sole and exclusive remedy hereunder, an amount equal to
his then-current Annual Salary, the Accrued Amounts and the
Accrued Benefits, less any amounts required to be withheld by
law.
(e)
Upon the termination of this Employment Agreement pursuant to
Section 4 hereof, the Company shall have no further
obligations under this Employment Agreement; provided, (except
for amounts and benefits payable in Section 2 thru 4 above)
however, that Sections 5 through 27 hereof shall survive and
remain in full force and effect.
Section 5 .
Non-Competition .
(a)
Clarke hereby agrees that, during the period from the
Commencement Date through the end of the first twelve (12)
months after the cessation of Clarke’s employment with
the Company, he will not engage in “Competition”
with the Company. For purposes of this Employment Agreement,
Competition by Clarke shall mean Clarke’s engaging in,
or otherwise directly or indirectly being employed by or
acting as a consultant or lender to, or being a director,
officer, employee, principal, agent, stockholder, member,
owner or partner of, or permitting his name to be used in
connection with the activities of any other business or
organization anywhere in the United
States, or
in any other geographic area in which the Company operates or
with respect to which
the Company provides financial news and commentary coverage
(or from which such other business or organization provides
financial news and commentary coverage of the United
States), which
engages in a business that competes with any business in which
the Company or any subsidiary is engaged (a “Competing
Business
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