Exhibit 10.1
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 December 8, 2005. Employee’s employment
with the Company will continue hereunder until such time as it is
terminated pursuant to Section 5 (“Employment
Period”). 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 $200,000. payable in bi-weekly
gross amounts of $7,692.31 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.
Sign-on Bonus.
Upon signing this
Agreement, Employee shall be entitled to receive a one time sign-on
bonus of $35,000.
c.
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). Benefits
will commence on the first day of the month following
Employee’s first day of employment (January 1, 2006), except
that the 401(k) plan benefits will be available 90 days after
Employee’s employment begins. The Company shall be
entitled to change, amend or terminate such plans from time to time
in its sole discretion.
d.
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.
Upon
Employee’s employment under this Agreement, the Company shall
grant Employee 100,000 options to purchase common stock of the
Company at a strike price equal to the closing price of the stock
on December 8, 2005. Such options shall vest at a rate of 25%
per year. The applicable stock option agreement and plan
shall govern all other terms and conditions of Employee’s
options, except as described under section 5
(Termination).
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5.
TERMINATION. The Company or
Employee may terminate this Agreement and Employee’s
employment as provided below:
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;
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(x)
conduct on the part of Employee,
even if not in connection with the performance of her duties
contemplated under this Agreement, 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.
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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
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.
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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 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 three (3) years of
Employee’s employment pursuant to this Agreement, and
Employee is terminated as a result of the Change of Control event,
Employee shall be entitled to receive a cash severance benefit in
an amount equal to nine (9) 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 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. Provided however, the
Company shall have no obligation to provide Employee with any
severance compensation or options vesting under this Section 6 if
Employee is in breach or violation of any of the covenants
contained in Sections 7, 8, 9, 10 or 12, during the time period in
which the Company is making the severance payments.
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7.
NONDISCLOSURE.
During the Employment Period,
the Company agrees and promises to provide, and Employee will
acquire, knowledge with respect to the Company’s business
operations, including, by way of illustration, the Company’s
Work Product (as defined below), trade secrets, processes,
methodologies and methods for analyzing and investing in the stock
market, software, databases, and other technical information,
business information, customer lists and information, customer
preferences, promotional and marketing materials, marketing plans
and strategies, business planning, financial, and costing
information related thereto, regardless of the form or media
containing such information, and confidential information relating
to the Company’s policies and employees (all of such
information herein referred to as the “Confidential
Information”). The protection of the Confidential
Information against unauthorized disclosure or use is of critical
importance to the Company. Employee agrees that Employee will
not, during her employment, divulge to any person, directly or
indirectly, except to the Company or its officers and agents
(including Company attorneys or accountants) or as reasonably
required in connection with Employee’s duties on behalf of
the Company, or use, except on behalf of the Company, any
Confidential Information acquired by Employee during her
employment. Employee agrees that her confidentiality
obligation applies to all Confidential Information she has
received, learned or accessed, no matter when she accessed, learned
or received such information. Employee further agrees that
Employee will not, at any time after her employment has ended (for
whatever reason), use or divulge to any person directly or
indirectly any Confidential Information, or use any Confidential
Information in any subsequent employment or business of any nature;
provided however that Employee shall not be liable for disclosure
or use of any Confidential Information:
(i)
if it was disclosed after written
approval of the Company; or
(ii)
the Confidential Information is
required to be disclosed under applicable law or
regulation.
If
Employee is subpoenaed, or is otherwise required by law to testify
concerning Confidential Information, Employee agrees to immediately
notify Company upon receipt of a subpoena, or upon belief that such
testimony shall be required. Employee shall not copy or
remove from the Company’s places of business any of the of
the Company’s documents, materials or items containing
Confidential Information except with the express written permission
of the Company or in the normal course of employment.
8.
NON-INTERFERENCE OR
SOLICITATION. Employee agrees that
during the Employment Period, and for a period of six (6) months
following
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