Employment Agreement - The Street.com Inc. and James Cramer
EMPLOYMENT AGREEMENT, dated as of February 22, 1999 (the "Employment
Agreement"), by and between The Street.Com, Inc., a Delaware corporation (the
"Company"), and James Cramer ("Cramer").
WHEREAS, Cramer has been employed by the Company pursuant to an
employment agreement dated May 7, 1998 (the "Prior Agreement");
WHEREAS, the Company and Cramer wish to supersede the Prior Agreement
with this Employment Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
Section 1. Duties.
(a) The Company hereby appoints Cramer, and Cramer hereby accepts the
appointment, as an outside columnist for the Company. This Employment Agreement
shall commence on February 22, 1999 (the "Commencement Date"), and shall expire
on February 21, 2003, unless sooner terminated in accordance with Section 4
thereof (the "Term"). During the Term, except during any week when Cramer is on
vacation as set forth in Section 2(c) hereof, Cramer will author no fewer than
twelve (12) articles per week intended for publication in The Street.Com. The
Company agrees that, during the Term, it shall include an appropriate reference
to Cramer (e.g. the current reference to "Cramer's Latest") on the home page of
its web-site. During the Term, the Company agrees to provide an assistant for
Cramer, who shall be an employee of the Company, and who shall be subject to all
laws, rules, regulations and policies, including The Street.Com's Securities
Investment Policy (the "Securities Policy"), as are applicable to employees of
the Company, and shall be located at the Company's offices. For purposes of the
Securities Policy, Cramer's assistant shall be subject to the trading
restrictions applicable to "Editorial Staffers," notwithstanding the fact that
such assistant shall perform only duties associated with the designation of
"Business Staffer" under the Policy.
(b) Cramer agrees to perform faithfully the duties assigned to him
pursuant to this Employment Agreement to the best of his abilities. In
connection with the preparation of articles during the Term, Cramer shall
communicate solely with the Company's Editor-in-Chief or his or her designee.
Cramer shall be permitted to provide editorial advice and commentary to the
Editor-in-Chief or his or her
designee in a manner consistent with the Securities Policy, but shall not be
permitted to communicate with individual reporters or other editors of the
Company with regard to the Company's editorial content. During the Term, Cramer
must comply with all laws applicable to the Company's employees, as well as, to
the extent provided herein, the Securities Policy. For purposes of the
Securities Policy, Cramer shall be deemed an "Outside Columnist" as that term is
defined in such Policy, and shall be subject only to the restrictions in the
Policy which pertain to Outside Columnists. Cramer represents and acknowledges
that he has reviewed a draft of the Securities Policy, and in particular those
provisions which pertain to Outside Columnists, as of January 19, 1999 (the
Draft Securities Policy"), and has reviewed draft provisions regarding
disclosures as of the date of this Agreement (the "Draft Disclosure
Provisions"), and agrees that he shall be obligated to comply with any
provisions of the Securities Policy which pertain to Outside Columnists,
including those pertaining to disclosure, as they may be implemented or amended
from time to time throughout the Term, provided, however, that if the Securities
Policy and/or disclosure provisions implemented or amended by the Company
during the Term differ from the Draft Securities Policy or Draft Disclosure
Provisions in any way which Cramer believes, in his sole discretion, will have a
materially adverse effect on Cramer's outside business activities on behalf of
Cramer Berkowitz & Co. and its affiliates, then Cramer shall be entitled to
voluntarily resign with out Good Reason as set forth in Section 4(a) hereof, and
such resignation shall not be considered a breach of this Agreement.
(c) Subject to Cramer's personal and professional availability, and
consistent with past practice, during the Term Cramer also agrees to provide
other reasonable services upon reasonable advance notice from the Company's
Editor-in-Chief, including, without limitation, participation in the Company's
interactive chat rooms on its web-site and those on America Online, Inc. and
Yahoo! Inc. and any other web-sites established by the Company acting alone or
together with a business partner. The above activities may include streaming
audio to the Company's web-site, and any other web-sites established by the
Company acting alone or together with a business partner. The Company expressly
acknowledges, however, that Cramer shall not be required to perform any of the
services set forth in this Section 2(c) if performance of such services would
unreasonably interfere with any of Cramer's outside activities, including,
without limitation, Cramer's activities on behalf of Cramer Berkowitz & Co. and
its affiliates. The parties agree that Cramer's participation in radio and
television programs developed by the Company will be the subject of a separate
(d) The Company agrees that Cramer shall render his services to the
Company hereunder on a non-exclusive basis, provided, however, that Cramer
covenants that during the Term he shall not be under or subject to any
contractual restriction that is inconsistent with the performance of his duties
hereunder. In this regard, without limiting the generality of the foregoing, the
Company acknowledges and agrees that, notwithstanding the services Cramer shall
provide hereunder, Cramer (a) shall be entitled to engage, and will continue to
engage, in other journalistic, writing and media endeavors, including, without
limitation, writing for magazines, television appearances, the writing of books,
and, subject to the restriction in Section 5(a) hereof, various other on-line
media projects, provided that in the event Cramer does accept such engagements,
he shall use reasonable efforts to ensure that the byline for any articles he
authors, and the comparable on air indication for nonprint media, refer to
Cramer an an Outside Columnist for the Company; and (b) shall be entitled to
engage, and will continue to engage, in extensive investing and trading in
securities, rights and options relating thereto and contracts in stock indexes,
foreign currencies and financial instruments (collectively, "Securities
Activities") on behalf of Cramer Partners, L.P., a privately held limited
partnership engaged in extensive Securities Activities (the "Partnership");
Cramer Capital Corporation, the general partner of the Partnership and a
corporation of which Cramer is the president and Cramer's wife and Cramer are
the sole stockholders; and other entities. Further, the Company acknowledges and
agrees that Cramer shall be entitled to engage, and will continue to engage, in
Securities Activities on behalf of other persons or entities (including Cramer
and members of his family) and that Cramer's wife will also engage in extensive
Securities Activities. (All such Securities Activities that the Partnership,
Cramer's wife, Cramer's affiliates or Cramer may engage in from time to time are
collectively referred to herein as the "Relevant Securities Activities.") In
connection with the foregoing, the Company further acknowledges and agrees that:
(i) The Relevant Securities Activities will often involve the
Partnership's and/or Cramer's beneficial ownership in and/or trading of
securities or other financial instruments that are the subject of, or otherwise
mentioned, referred to or discussed in, articles written by Cramer for the
Company, and that the Relevant Securities Activities involving such securities
or other financial instruments may occur at any time before or after the
publication date of an issue of any article on The Street.Com in which such
securities or other financial instruments are mentioned, referred to or
otherwise discussed by Cramer in such article.
(ii) Cramer shall not have access to articles written for the
Company by other writers, or information regarding such articles, prior to
publication, except for articles that Cramer is writing or projects in which
Cramer is involved. Furthermore, the Company will endeavor to keep Cramer
unaware, in any and all of his capacities, of the final content or publication
schedule of articles, columns or other writings scheduled for publication on The
Street.Com that cover or discuss publicly traded securities other than the
articles or columns or other written materials prepared by Cramer for
publication in The Street. Com.
(iii) Notwithstanding any policy of the Company to the contrary,
the Relevant Securities Activities, insofar as they are conducted in a manner
that does not violate the express provisions of the Securities Policy and
applicable law, will not be deemed to in any way violate or breach any other
procedures, policies or practicies of the Company now or hereafter in effect
with respect to Cramer, including, but not limited to, any other conflict of
interest rules or securities trading policies or other rules or procedures that
otherwise may apply to writers for the Company regarding their rights to engage
in the trading of securities or other Relevant Securities Activities, and
further, that any such policies shall not be applicable to Cramer in connection
with his services hereunder.
(iv) Provided Cramer is not in material breach of any of his
obligations hereunder, including any obligation under applicable law, and
without limiting the express provisions of this Agreement, the Company
irrevocably waives and releases Cramer, his affiliates and members of his
immediate family from any duty, fiduciary or otherwise, that Cramer or any of
them may owe, or be deemed to owe, the Company that may in any way prohibits or
limit the Relevant Securities Activities, insofar as they involve the trading
and/or ownership of securities or other financial instruments that are the
subject of or are otherwise referred to or discussed in the articles prepared by
Cramer pursuant to this Agreement, and acknowledges and agrees that such
Relevant Securities Activities do not, and will not, constitute a
misappropriation of the Company's property or a breach of any fiduciary or other
duty Cramer may owe the Company hereunder.
(v) The Company warrants and agrees that each of the articles
prepared by Cramer and published by the Company shall provide appropriate
disclosure relating to the Relevant Securities Activities, as set forth in the
Securities Policy. The Company further agrees that it shall not disclose any
information regarding securities positions provided by Cramer to the Company
pursuant to the Securities Policy to anyone other than that Company's senior
senior editorial staff, or its legal advisers, on a confidential, "need to know"
basis, or as required by any court of competent jurisdiction or other federal or
state governmental or regulatory authority.
(f) The Company agrees, to the extent permitted by applicable law, to
defend, indemnify and hold harmless Cramer against any and all loss, damage,
liability and expense, including, without limitation, reasonable attorneys'
fees, disbursements, court costs, and any amounts paid in settlement and the
costs and expenses of enforcing this Section of this Agreement, which may be
suffered or incurred by Cramer in connection with the provision of his services
hereunder, including, without limitation, any claims, litigations, disputes,
actions, investigations or other matters relating to any securities laws or
regulations, or the violation or alleged violation thereof (the "Securities
Actions"), provided that such loss, damage, liability and expense (i) arises out
of or in connection with the performance by Cramer of his obligations under this
Agreement and (ii) is not the result of any breach by Cramer of his obligations
hereunder, and provided further that, with respect to any Securities Actions,
the Company shall be under no obligation to defind, indemnify or hold harmless
Cramer if Cramer has not acted with a reasonable, good faith belief that his
actions were in no way violative of any securities laws or regulations. With
respect thereto, the termination of any action, suit or proceeding by judgment,
order, settlement, conviction, or upon a nolo contendere plea or its equivalent,
shall not, of itself, create a presumption that Cramer did not act with a
reasonable, good faith belief that his actions were in no way violative of any
securities laws or regulations. further, to the extent that Cramer has been
successful on the merits or otherwise in defense of any Securities Action, or in
defense of any claim, issue or matter therein, he shall be defended, indemnified
and held harmless by the Company as required herein. Expenses (including
reasonable attorneys' fees, disbursements and court costs) incurred by Cramer in
defending any Securities Action shall be paid by the Company in advance of the
final disposition of such Securities Action upon receipt of an undertaking by or
on behalf of Cramer to repay such amount if it shall ultimately be determined
that Cramer is not entitled to be indemnified by the Company pursuant hereto.
Section 2. Compensation.
(a) Salary. During the Term, as compensation for his services
hereunder, the Company shall pay to Cramer a salary of Two Hundred Fifty
Thousand Dollars ($250,000) per annum (the "Annual Salary"), payable in
accordance with the Company's standard payroll policies, provided that on each
anniversary of the Commencement Date, the Annual Salary shall be increased ten
percent (10%) from its then current rate. All applicable withholding taxes shall
be deducted from such payments.
(b) Stock Options. On May 7, 1998 Cramer was granted a nonqualified
option to purchase 200,000 shares of the Company's common stock, par value $.01
("Common Stock") at an exercise price of $.011 per share (the "Initial Option"),
which grant shall remain in effect in accordance with the terms of the
Nonqualified Employee Stock Option Agreement Between The Street.Com, Inc. and
James Cramer, a copy of which is attached hereto as Exhibit A (the "Option
Agreement"), as well as the Amended and Restated The Street.Com, Inc. 1998 Stock
Incentive Plan (the "Plan"). In addition, as of the date hereof, the Company
shall grant to Cramer an additional nonqualified option in accordance with the
terms of the Option Agreement and the Plan.
(c) Vacation. During each year of the Term, Cramer shall ebntitled to
four (4) weeks of paid vacation, provided that Cramer shall not take more than
two (2) weeks of vacation consecutively.
(d) Benefits. Cramer shall not be eligible to participate in any
benefit plans provided by the Company
Section 3. Expense Reimbursement.
During the Term, Cramer shall have the right to reimbursement, upon
proper accounting, of reasonable expenses and disbursements incurred by him in
the course of his duties hereunder.
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 Cramer's employment with the Company
hereunder, and to give Cramer notice of such termination as of a date not
earlier than seven (7) days from such notice, because of (i) Cramer's willful
misconduct or gross negligence in the performance of his obligations under this
Employment Agreement, (ii) dishonesty or misappropriation by Cramer relating to
the Company or any of its funds, properties, or other assets, (iii) in excusable
repeated or prolonged absence from work by Cramer (other that as a result of, or
in connection with, a disability), (iv) any intentional or reckless unauthorized
disclosure by Cramer of confidential or proprietary information of the company
which is reasonably likely to result in material harm to the Company, (v) a
conviction of Cramer (including entry of a guilty or nolo contendere plea) of a
felony involving fraud, dishonesty, moral turpitude, or involving a violation of
federal or state securities laws, (vi) the entry of an order, judgment or
decree, of any court of competent jurisdiction or any federal or state
authority, enjoining Cramer from violating the federal securities laws, or
suspending or otherwise limiting Cramer's right to act as an investment adviser,
underwriter, broker or dealer in securities, (vii) a finding by a court of
competent jurisdiction in a civil action or a finding by the Securities and
Exchange Commission that Cramer has violated any federal or state securities
law, or (vii) the failure by Cramer to perform faithfully his duties hereunder
or other breach by Cramer of this Employment Agreement and such failure or
breach is not cured, to the extent cure is possible, by Cramer within thirty
days after written notice thereof from the company to Cramer (each individually,
and all collectively, "Cause"). If this Employment Agreement and Cramer's
employment with the Company hereunder is terminated for Cause, or if Cramer
voluntarily resigns from the Company without Good Reason, during the Term, the
Company shall pay Cramer all earned but unpaid portions of the Annual Salary
through the date of termination, and following any such termination, Cramer
shall not be entitled to receive any other payment, except as provided for
hereunder with respect to any period after such termination.
(b) This Employment Agreement and Cramer's employment with the Company
hereunder may also be terminated by the Company without Cause, or by Cramer in
the event of a material breach of this Agreement by the Company, which is not
cured, to the extent cure is possible, within thirty days after written notice
thereof from Cramer to the Company (such breach constituting "Good Reason"). In
the event that Cramer's employment with the Company shall terminate during the
Term on account of termination by the Company without Cause, or by Cramer with
Good Reason, then the Company shall pay Cramer all earned but unpaid portions of
the Annual Salary through the date of termination, and Cramer shall not be
entitled to receive any other payment, except as provided in the Option
Agreement, with respect to any period after such termination.
(c) This Employment Agreement and Cramer's employment with the Company
hereunder shall terminate immediately and automatically on the death or
Disability (as defined below) of Cramer or the liquidation or dissolution of the
Company or other shutdown of the business then conducted by the Company. If this
Employment Agreement and Cramer's employment with the Company hereunder is
terminated an account of Cramer's death or Disability, or because of a
liquidation or dissolution of the Company or other shutdown of the business then
conducted by the Company, during the Term, then the Company shall pay Cramer all
earned but unpaid portions of the Annual Salary through the date of termination,
and following any such termination, neither Cramer, nor his estate, conservator
or designated beneficiary, as the case may be, shall be entitled to receive any
other payment, except as provided in the Option Agreement, with respect to any
period after such termination.
(d) Upon the termination of this Employment Agreement pursuant to
Section 4 hereof, the Company shall have no further obligations under this
Employment Agreement, provided, however, that Sections 5, 6, 7, 8, 9, 10, 11,
12, 13, 14, 15, 16, 17, 18 and 19 hereof shall survive and remain in full force
Section 5. Covenant Not to Compete.
(a) Cramer hereby agrees that, during the period from the Commencement
Date through the end of the Term, he will not (i) author articles or columns for
any other on-line financial publication that competes directly with the business
of the Company as it is then constituted without first notifying the Company and
securing its consent, which consent shall not be unreasonably withheld, and (ii)
will not act as a lender to, or stockholder, director, principal, owner, or
partner of, any other start-up on-line business that completes directly with the
business of the Company as it is then constituted. The Company understands and
acknowledges that Cramer is a party to agreements pursuant to which Cramer
writes articles for certain print publications, including, without limitation,
Time and GQ (the "Other Publications"), which may subsequently publish Cramer's
articles on-line on their respective web-sites. The Company agrees that
publication of Cramer's articles in the manner set forth in the preceding
sentence shall not constitute a breach of this Section #5.
(b) Cramer hereby agrees that for a period of eighteen (18) months
following the cessation of Cramer's employment with the Company hereunder, he
will not author articles or columns for any other on-line financial publication
with competes directly with the Company without first notifying the Company and
securing its consent, which consent shall not be unreasonably withheld.
(c) Cramer hereby agrees that, during the period from the Commencement
Date through the end of the first eighteen (18) months after the cessation of
Cramer's employment with the Company hereunder, he will not solicit for
employment, in any business enterprise or activity, any person who was employed
by the Company during the Term.
(d) The parties acknowledge that the restrictions contained in this
Section 5 are a reasonable and necessary protection of the immediate interests
of the Company, and any violation of these restrictions would cause substantial
injury to the Company and that the Company would not have entered into this
Employment Agreement, without receiving the additional consideration offered by
Cramer in binding himself to any of these restrictions. In the event of a breach
or threatened breach by Cramer of any of these restrictions, the Company shall
be entitled to apply to any court of competent jurisdiction for an injunction
restraining Cramer from such breach or threatened breach; provided, however,
that the right to apply for an injunction shall not be construed as prohibiting
the Company from pursuing any other available remedies for such breach or
Section 6. Confidentiality; Ownership of Articles and Columns.
(a) Except as otherwise provided in this Employment Agreement, Cramer
shall, and shall cause his attorneys, accounts and agents (collectively,
"Agents") to agree to, keep secret and retain in strictest confidence, any and
all confidential information relating to the Company or otherwise not available
to the general public, provided that such confidential information shall not
include any information that (a) has become generally available to the public
other than as a result of a disclosure by Cramer or his Agents, or (b) was
available to Cramer or any of his Agents on a non-confidential basis from a
third party having no obligation of confidentiality to the Company, and Cramer
shall not, and shall cause his Agents not to, disclose such confidential
information to any Person other than the Company or its Agents, except as may be
required by law (in which event Cramer shall so notify the other party hereto as
promptly as practicable).
(b) All articles or columns that Cramer authors for the Company and
which are in face published shall be owned by and belong exclusively to the
Company, and Cramer shall execute and deliver to the Company, without additional
compensation, such instruments as the Company may require from time to time to
evidence its ownership of any such articles or columns.
Section 7. No Third Party Beneficiary.
This Employment Agreement is not intended and shall not be construed to
confer any rights or remedies hereunder upon any Person, other than the parties
hereto or their permitted assigns. "Person" shall mean an individual,
corporation, partnership, limited liability company, limited liability
partnership, association, trust or other unincorporated organization or entity.
Section 8. Withholding of Taxes.
Any payments to Cramer pursuant to the terms of this Employment
Agreement shall be reduced by such amounts, if any, as are required to be
withheld with respect thereto under all present and future federal, statement
and local tax laws and regulations and other laws and regulations.
Section 9. Notices
Unless otherwise provided herein, any notice, exercise of rights or
other communication required or permitted to be given hereunder shall be in
writing and shall be given by overnight delivery service such as Federal
Express, telecopy )or like transmission) or personal delivery against receipt,
or mailed by registered or certified mail (return receipt requested), to the
party to whom it is given at such party's address set forth below such party's
name on the signature page or such other address as such party may hereafter
specify by notice to the other party hereto, with copies to the following:
For the Company: David J. Goldschmidt, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
For Cramer: Charles H. Googe, Jr.
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019-6064
Any notice or other communication shall be deemed to have been given as
of the date so personally delivery or transmitted by telecopy or like
transmission or on the next business day when sent by overnight delivery
Section 10. Amendment.
This Employment Agreement may be amended only by a written agreement
signed by the parties hereto.
Section 11. Binding Effect.
This Employment Agreement is not assignable by Cramer. Any assignment
in violation of this Employment Agreement shall be null and void ab initio. None
of Cramer's right under this Employment Agreement shall be subject to any
encumbrances or the claims of Cramer's creditors. This Employment Agreement
shall be binding upon and inure to the benefit of the Company and any successor
organization which shall succeed to substantially all of the business and
property of the Company, whether by merger, consolidation, acquisition of all or
substantially all of the assets of the Company or otherwise, including by
operation of law.
Section 12. Governing Law.
This Employment Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to its
conflict of laws provisions.
Section 13. Severability.
If any provisions of this Employment Agreement, including those
contained in Sections 5 and 6 hereof, shall for any reason be held invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions hereof shall not be affected or impaired thereby. Moreover,
if any one or more of the provisions of this Agreement, including those
contained in Section 5 and 6 hereof, shall be held to be excessively broad as to
duration, activity or subject, such provisions shall be construed by limiting
and reducing them so as to be enforceable to the maximum extent allowable by
applicable law. To the extent permitted by applicable law, each party hereto
waives any provision or law that renders any provision of this Employment
Agreement invalid, illegal or unenforceable in any way.
Section 14. Execution in Counterparts.
This Employment Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original and all of which shall
constitute one and the same instrument.
Section 15. Entire Agreement.
This Employment Agreement sets forth the entire agreement, and
supersedes all prior agreements and understandings, both written and oral,
including the Prior Agreement, between the parties with respect to the subject
Section 16. Titles and Headings.
Titles and headings to Sections herein are for purposes of references
only, and shall in no way limit, define or otherwise affect the meaning or
interpretation of any of the provisions of this Employment Agreement.
Section 17. No Cross-Default
No default by Cramer under this Employment Agreement shall
automatically constitute a default under any other agreement with the Company.
Section 18. Duty to Mitigate.
Cramer shall have no duty to mitigate any damages payable by the
Company to Cramer hereunder.
Section 19. Consent to Jurisdiction.
Cramer hereby irrevocably submits to the jurisdiction of any New York
State or Federal court sitting in the City of New York in any action or
proceeding to enforce the provisions of this Agreement, and waives the defense
of inconvenient forum to the maintenance of any such action or proceedings.
IN WITNESS WHEREOF, the undersigned have executed this Employment
Agreement as of the date first written above.
THE STREET.COM, INC.
By: /s/ Kevin W. English
Name: Kevin W. English
Title: Chairman, CEO & President
Address: 2 Rector Street
New York, NY 10005
Attention: Chief Financial Officer
/s/ James Cramer
Address: Cramer, Berkowitz & Co.
100 Wall Street
New York, New York 10005