Exhibit 10.5

EMPLOYMENT AGREEMENT

 

EMPLOYMENT AGREEMENT, dated as of March 1, 2003 (the "Employment Agreement"), by
and between TheStreet.com, Inc., a Delaware corporation (the "Company" or
"TheStreet.com"), and James K. Lonergan ("Lonergan").

WHEREAS, the Company desires that Lonergan enter into this Employment Agreement,
and Lonergan desires to enter into this Employment Agreement, on the terms and
conditions set forth herein;

NOW THEREFORE, the parties hereto agree as follows:

Section 1. Duties; Term.

The Company agrees to employ Lonergan, and Lonergan agrees to be so employed, in
the positions of President and Chief Operating Officer, and Lonergan agrees to
perform such duties, functions and responsibilities as are generally incident to
such position, reporting to and subject to the direction of the Chief Executive
Officer, for a period commencing on March 1, 2003 (the "Commencement Date") and
ending on February 28, 2005, unless sooner terminated in accordance with Section
4 hereof (the "Term"). Lonergan agrees to perform faithfully the 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.
Lonergan shall be subject to all laws, rules, regulations and policies as are
from time to time applicable to employees of the Company, including
TheStreet.com's Policy on Investments.

Section 2. Compensation.

(a) Annual Salary. As compensation for his services hereunder, during the Term
the Company shall pay to Lonergan a salary of Two Hundred and Fifty Thousand
Dollars ($250,000) 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
Chief Executive Officer and the Compensation Committee of the Company's Board of
Directors (the "Board"), taking into consideration both the Company's and
Lonergan's performance during the preceding year.

(b) Bonus. Except as set forth in Section 4 hereof, in addition to the Annual
Salary, Lonergan shall be entitled to receive additional bonus compensation,
which may be cash and/or equity compensation, for his employment during calendar
years 2003 and 2004 (the "Annual Bonus") in accordance with the mutually agreed
upon bonus schedule for the management and other significant employees of the
Company, which shall be based upon achievement of the Company's financial goals
as determined by the Compensation Committee.

(b) Options. Lonergan has previously been awarded options to purchase shares of
common stock of the Company under the Company's 1998 Stock Incentive Plan, as
amended (the "Plan") as follows: (i) 150,000 shares at an exercise price of
$3.25 per share, pursuant to an employee stock option agreement between Lonergan
and the Company (an "Option Agreement") dated February 14, (ii) 100,000 shares
at an exercise price of $1.25 per share, pursuant to an Option Agreement dated
July 20, 2001, (iii) 75,000 shares at an exercise price of $1.28 per share,
pursuant to an Option Agreement dated January 1, 2002, and (iv) 40,000 shares at
an exercise price of $2.93 per share, pursuant to an Option Agreement dated
January 1, 2002. In addition to the Annual Salary and the Annual Bonus, Lonergan
may, in the discretion of the Compensation Committee of the Company's Board of
Directors, be granted awards under the Plan on an annual or other basis as
compensation for the performance of his services hereunder.

Section 3. Benefits; Expense Reimbursement.

During the Term, Lonergan 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, and Lonergan 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,
Lonergan shall be entitled to three (3) 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 Lonergan's employment with the Company hereunder, upon
written notice to Lonergan, in the event Lonergan engages in conduct which
constitutes "Cause." For purposes of this Employment Agreement, Cause shall mean
(i) Lonergan's willful misconduct or gross negligence in the performance of his
obligations under this Employment Agreement, (ii) dishonesty or misappropriation
by Lonergan relating to the Company or any of its funds, properties, or other
assets, (iii) inexcusable repeated or prolonged absence from work by Lonergan
(other than as a result of, or in connection with, a disability), (iv) any
unauthorized disclosure by Lonergan of confidential or proprietary information
of the Company which is reasonably likely to result in material harm to the
Company, (v) a conviction of Lonergan (including entry of a guilty or nolo
contendere plea) involving fraud, dishonesty, moral turpitude, or involving a
violation of federal or state securities laws, or (vi) the failure by Lonergan
to perform faithfully his duties hereunder or other breach by Lonergan of this
Employment Agreement and such failure or breach is not cured, to the extent cure
is possible, by Lonergan within thirty (30) days after written notice thereof
from the Company to Lonergan. If this Employment Agreement and Lonergan's
employment with the Company hereunder is terminated for Cause, or if Lonergan
voluntarily resigns from the Company without Good Reason, during the Term, the
Company shall pay Lonergan an amount equal to all earned but unpaid portions of
the Annual Salary and unused vacation days through the date of termination, and
following any such termination, Lonergan shall not be entitled to receive any
other compensation or benefits from the Company hereunder.

(b) This Employment Agreement and Lonergan's employment with the Company
hereunder may also be terminated by the Company without Cause, or by Lonergan
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 Lonergan's functions, duties, or
responsibilities in his positions with the Company as provided in this
Employment Agreement, or (ii) a reduction in the Annual Salary during the Term,
or (iii) the failure of the Company to cure any other material breach of this
Employment Agreement, or (iv) the Company's consummation of a sale of all or
substantially all of its assets to a third party without requiring such third
party to assume the Company's obligations hereunder, or (v) Lonergan'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 Chatham, New
Jersey, provided that, in the case of (i), (ii), or (iii) above, the Company has
failed to cure the event constituting Good Reason within sixty (60) days
following written notice thereof from Lonergan. In the event that Lonergan's
employment with the Company shall terminate during the Term on account of
termination by the Company without Cause, or by Lonergan with Good Reason, then
the Company shall pay or provide to Lonergan, as his sole and exclusive remedy
hereunder, (A) an amount equal to all earned but unpaid portions of the Annual
Salary and unused vacation days through the date of termination, (B) group life,
disability, sickness, hospitalization and accident insurance benefits equivalent
to those to which Lonergan would have been entitled if he had continued working
for the Company for an additional twelve (12) month period, and (C) the Annual
Salary to the same extent to which Lonergan would have been entitled if he had
continued working for the Company for an additional twelve (12) month period,
or, at the Company's option, in a lump sum payment appropriately discounted for
the time value of money at the Treasury bill or note rate. The benefits
continuation and salary payments provided for in (B) and (C) above shall be
contingent upon Lonergan's continued compliance with Sections 5 and 6 hereof,
and shall be reduced by the corresponding benefits amounts and amounts of cash
compensation and any publicly traded or freely tradable securities compensation
(including, without limitation, securities that will become freely tradable
after a restrictive or vesting period) actually received by Lonergan after the
date of termination in connection with "Replacement Employment" (as defined
below). Lonergan shall make good faith efforts to obtain Replacement Employment
that is similar in duties and responsibilities to that provided for Lonergan
hereunder. Except as set forth above, Lonergan shall not be entitled to receive
any other compensation or benefits from the Company hereunder.

(c) This Employment Agreement and Lonergan's employment with the Company
hereunder shall terminate immediately and automatically upon (i) the death or
Disability (as defined below) of Lonergan, (ii) the liquidation or dissolution
of the Company or other shutdown of the business then conducted by the Company,
or (iii) the expiration of the Term. For purposes of this Employment Agreement,
"Disability" shall mean physical or mental incapacity of a nature which prevents
Lonergan, 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 Lonergan's employment with the Company hereunder is
terminated on account of (i) or (ii) above, then the Company shall pay Lonergan,
or his estate, conservator or designated beneficiary, as the case may be, an
amount equal to (A) all earned but unpaid portions of the Annual Salary and
unused vacation days through the date of termination, and following any such
termination, neither Lonergan, 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.

(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 through 18 hereof shall survive
and remain in full force and effect.

Section 5. Non-Competition.

(a) Lonergan hereby agrees that, during the period from the Commencement Date
through the end of the first twelve (12) months after the cessation of
Lonergan's employment with the Company, he will not engage in "Competition" with
the Company. For purposes of this Agreement, Competition by Lonergan shall mean
Lonergan'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 which engages in the business of
providing original editorial financial news content over the Internet; provided,
however, that, notwithstanding the foregoing, it shall not be a violation of
this Section 5(a) for Lonergan to become the registered or beneficial owner of
up to three percent (3%) of any class of the capital stock of a competing
corporation registered under the Securities Exchange Act of 1934, as amended,
provided that Lonergan does not otherwise participate in the business of such
corporation.

(b) Lonergan hereby agrees that, during the period from the Commencement Date
through the end of the first twelve (12) months after the cessation of
Lonergan's employment with the Company, he will not solicit for employment or
hire, in any business enterprise or activity, any person who was employed by the
Company during the Term.

Section 6. Confidentiality; Intellectual Property.

(a) Except as otherwise provided in this Employment Agreement, at all times
during and after the Term, Lonergan shall keep secret and retain in strictest
confidence, any and all confidential information relating to the Company, and
shall use such confidential information only in furtherance of the performance
by him of his duties to the Company and not for personal benefit or the benefit
of any interest adverse to the Company's interests. For purposes of this
Agreement, "confidential information" shall mean any information including
without limitation plans, specifications, models, samples, data, customer lists
and customer information, computer programs and documentation, and other
technical and/or business information, in whatever form, tangible or intangible,
that can be communicated by whatever means available at such time, that relates
to the Company's current business or future business contemplated during the
Term, products, services and development, or information received from others
that the Company is obligated to treat as confidential or proprietary (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 Lonergan, or (b) was available to or became known to Lonergan
prior to the disclosure of such information on a non-confidential basis without
breach of any duty of confidentiality from any party to the Company), and
Lonergan shall not disclose such confidential information to any Person other
than the Company, except as may be required by law or court or administrative
order (in which event Lonergan shall so notify the Company as promptly as
practicable). Upon termination of the Term for any reason, Lonergan shall return
to the Company all copies, reproductions and summaries of confidential
information in his possession and erase the same from all media in his
possession, and, if the Company so requests, shall certify in writing that he
has done so. All confidential information is and shall remain the property of
the Company (or, in the case of information that the Company receives from a
third party which it is obligated to treat as confidential, then the property of
such third party).

(b) All Intellectual Property (as hereinafter defined) and Technology (as
hereinafter defined) created, developed, obtained or conceived of by Lonergan
during the Term, and all business opportunities presented to Lonergan during the
Term, shall be owned by and belong exclusively to the Company, provided that
they reasonably relate to any of the business of the Company on the date of such
creation, development, obtaining or conception, and Lonergan shall (i) promptly
disclose any such Intellectual Property, Technology or business opportunity to
the Company, and (ii) 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 Intellectual Property, Technology or business
opportunity. For purposes of this Employment Agreement, (x) the term
"Intellectual Property" means and includes any and all trademarks, trade names,
service marks, service names, patents, copyrights, and applications therefor,
and (y) the term "Technology" means and includes any and all trade secrets,
proprietary information, invention, discoveries, know-how, formulae, processes
and procedures.

Section 7. Covenants Reasonable.

The parties acknowledge that the restrictions contained in Sections 5 and 6
hereof 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
Lonergan in binding himself to any of these restrictions. In the event of a
breach or threatened breach by Lonergan of any of these restrictions, the
Company shall be entitled to apply to any court of competent jurisdiction for an
injunction restraining Lonergan 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 threatened breach.

Section 8. 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 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. Any notice or other communication shall be
deemed to have been given as of the date so personally delivered or transmitted
by telecopy or like transmission or on the next business day when sent by
overnight delivery service.

Section 10. Representations.

The Company hereby represents and warrants that the execution and delivery of
this Agreement and the performance by the Company of its obligations hereunder
have been duly authorized by all necessary corporate action of the Company.

Section 11. Amendment.

This Employment Agreement may be amended only by a written agreement signed by
the parties hereto.

Section 12. Binding Effect.

This Employment Agreement is not assignable by Lonergan. None of Lonergan's
rights under this Employment Agreement shall be subject to any encumbrances or
the claims of Lonergan'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 the Company by merger or consolidation or operation of
law, or by acquisition of all or substantially all of the assets of the Company
(provided that a successor by way of acquisition of assets shall have undertaken
in writing to assume the obligations of the Company hereunder).

Section 13. Governing Law.

This Employment Agreement shall be governed by and construed in accordance with
the internal laws of the State of New York applicable to contracts to be
performed wholly within the state and without regard to its conflict of laws
provisions.

Section 14. Severability.

If any provision 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
Sections 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 of law that renders any provision of this Employment Agreement
invalid, illegal or unenforceable in any way.

Section 15. 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 16. Entire Agreement.

This Employment Agreement, together with the Option Agreement, sets forth the
entire agreement, and supersedes all prior agreements and understandings, both
written and oral, between the parties with respect to the subject matter hereof
and thereof.

Section 17. Titles and Headings.

Titles and headings to Sections herein are for purposes of reference 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 18. Conflicts of Interest.

Lonergan specifically covenants, warrants and represents to the Company that he
has the full, complete and entire right and authority to enter into this
Employment Agreement, that he has no agreement, duty, commitment or
responsibility of any kind or nature whatsoever with any corporation,
partnership, firm, company, joint venture or other entity or other Person which
would conflict in any manner whatsoever with any of his duties, obligations or
responsibilities to the Company pursuant to this Employment Agreement, that he
is not in possession of any document or other tangible property of any other
Person of a confidential or proprietary nature which would conflict in any
manner whatsoever with any of his duties, obligations or responsibilities to the
Company pursuant to his Employment Agreement, and that he is fully ready,
willing and able to perform each and all of his duties, obligations and
responsibilities to the Company pursuant to this Employment Agreement.

Section 19. Consent to Jurisdiction.

Lonergan 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 proceeding.

[END OF TEXT]

IN WITNESS WHEREOF, the undersigned have executed this Employment Agreement as
of the date first written above.

 

> > > > > /s/ James K. Lonergan
> > > > > 
> > > > > James K. Lonergan
> > > > > 
> > > > > 22 Edgewood Road
> > > > > 
> > > > > Chatham, NJ 07928
> > > > > 
> > > > > 
> > > > > 
> > > > > 
> > > > > THESTREET.COM, INC.
> > > > > 
> > > > >  
> > > > > 
> > > > > By: /s/ Thomas J. Clarke, Jr.
> > > > > 
> > > > > Name: Thomas J. Clarke, Jr.
> > > > > 
> > > > > Title: Chief Executive Officer
> > > > > 
> > > > >  
> > > > > 
> > > > > Address: 14 Wall Street
> > > > > 
> > > > > 15th Floor
> > > > > 
> > > > > New York, NY 10005
> > > > > 
> > > > > Telephone No.: (212) 321-5000
> > > > > 
> > > > > Fax No.: (212) 321-5014