Exhibit 10.2


 


EMPLOYMENT
AGREEMENT


 


                THIS
EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into as of January 2nd,
2008 (the “Effective Date”), by and between InnerWorkings, Inc., a Delaware corporation (the “Company”),
and Kevin Harrell (“Employee”).


 


1.             Employment; Position and Duties.  The Company agrees to employ Employee, and
Employee agrees to be employed by the Company, upon the terms and conditions of
this Agreement.  Employee shall be
employed by the Company as the Company’s Executive Vice President of Sales and
shall report to the Chief Operating Officer of the Company.  Employee shall perform his duties and
responsibilities to the best of his ability and in a diligent, businesslike and
efficient manner.  Employee shall be
employed on a full-time basis and shall devote his best efforts and all of his
business time and attention (except for permitted vacation periods and
reasonable periods of illness or other incapacity) to the business and affairs
of the Company.  Employee’s duties shall include
all those duties customarily performed by the Executive Vice President of Sales
and such other duties and responsibilities commensurate with such position as
may be reasonably assigned to him by the Chief Operating Officer of the
Company.  Employee acknowledges and
agrees that his responsibilities shall include business development activities
and assistance and support to the mergers and acquisitions department.  Employee shall comply with any policies and
procedures established for Company employees from time to time, including
without limitation, those policies and procedures contained in the Company’s
employee handbook previously delivered to Employee.  Employee agrees that during the Term of
Employment he shall not engage in any other employment, profitable activities,
or other pursuits which would cause him to utilize or disclose the Company’s
confidential information or trade secrets or detract in any material way from
his ability to devote his best efforts to the Company.


 


2.             Term of Employment.  The term of this Agreement shall commence on
the Effective Date and shall expire on January 2nd, 2012, unless earlier
terminated by either party in accordance with the terms of this Agreement.  The period during which Employee is employed
by the Company pursuant to the terms of this Agreement is hereinafter referred
to as the “Term of Employment.”  This
Agreement may be terminated by Employee or by the Company at any time, with or
without Cause (as defined below).  Upon
the termination of Employee’s employment with the Company for any reason,
neither party shall have any further obligation or liability under this
Agreement to the other party, except as set forth in Sections 5, 6, 7, 8, 9,
10, 11, 12 and 13 of this Agreement.


 


3.             Compensation. 
As compensation for the services to be rendered and the other
obligations undertaken by Employee under this Agreement, the Company shall pay
Employee the compensation set forth in this Section 3 as follows:


 


(a)           Base
Salary.  During the Term of
Employment, Employee shall be paid a base salary (“Base Salary”) of
$250,000.00 on an annualized basis, subject to applicable withholding, in
accordance with the Company’s normal payroll procedures.  Employee’s salary shall be reviewed on an
annual basis by the Company for possible increase (but not decrease) based on
the Company’s operating results and financial condition, salaries paid to other
Company executives, and general marketplace and other applicable
considerations. 

















 


Such
increased Base Salary, if any, shall then constitute Employee’s “Base Salary”
for purposes of this Agreement.


 


(b)           Benefits.  During the Term of Employment, Employee shall
have the right, on the same basis as other members of management of the
Company, to participate in and to receive benefits under any of the Company’s
employee benefit plans, insurance programs and/or indemnification agreements,
as the same may then be in effect from time to time, subject to any applicable
waiting periods and other terms and restrictions thereof.  The Company shall reimburse Employee for the
full amount of his insurance costs for him and his family should he elect to
participate in the Company’s insurance program(s).


 


(c)           Bonus.  In addition to the Base Salary, Employee
shall be eligible to receive an annual performance bonus (“Performance Bonus”)
of up to 30% of his Base Salary.  The
Performance Bonus shall be a discretionary bonus, determined in the sole
discretion of the Company, with consideration given to Employee’s performance
of his duties and the Company’s financial performance, as well certain
performance targets that are approved by the Employees and/or Directors of the
Company.  In addition, for Company
performance in excess of target, Kevin may be eligible for an annual bonus of
up to 150% of base salary.


 


(d)           Expenses.  The Company agrees to pay or to reimburse
Employee for all reasonable, ordinary, necessary and documented business or
entertainment expenses incurred during the Term of Employment in the
performance of his services hereunder in accordance with the policy of the
Company as from time to time in effect. 
Employee, as a condition precedent to obtaining such payment or
reimbursement, shall provide to the Company any and all statements, bills or
receipts evidencing the travel or out-of-pocket expenses for which Employee
seeks payment or reimbursement, and any other information or materials, as the
Company may from time to time reasonably require.


 


(e)           Vacation.  During the Term of Employment, Employee shall
be entitled to four (4) weeks paid vacation per calendar year, and shall
be entitled to as many holidays, sick days and personal days as are in
accordance with the Company’s policy then in effect generally for its
employees.  Vacation time will be accrued
at a rate of 30 days per month and will not carry over from year to year.


 


(f)            Car
Allowance.  During the Term of
Employment, the Company will provide Employee with a car allowance equal to
$600 per month in accordance with the Company’s automobile policy then in
effect generally for its employees.


 


4.             Equity Compensation.  On the Effective Date of Employment, Kevin
shall receive stock based compensation, with a mix of 50% stock options and 50%
of restricted shares, equivalent to $300,000 and vesting ratably over a four
year period (i.e. $75,000 per year in value). 
The equity shall be subject to the following vesting schedule: 25% of
shares and options shall vest on each of January 2nd, 2009, January 2nd,
2010, January 2nd, 2011, and January 2nd, 2012.  Except as provided herein, the equity shall be
subject to the terms of the InnerWorkings, Inc. 2006 Stock Incentive Plan
(the “Plan”) and the equity agreement provided to Employee pursuant to
the Plan, and Employee’s receipt of the Restricted Stock shall be subject to
his executing such restricted stock agreement. 
A copy of the Plan and the restricted stock agreement are attached
hereto as Exhibit A and Exhibit B, respectively.


 


 


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5.             Rights and Obligations Upon Termination.


 


(a)           Definition of Cause.  For purposes of this Agreement, “Cause”
shall mean any of the following:


 


(i)            Employee’s failure
to perform reasonably assigned duties and responsibilities, which failure is
not cured by Employee after fifteen (15) days prior written notice specifying
the nature of the failure (provided, that any such notice also must
include a statement that failure to cure any such failure may result in the
termination by the Company of Employee’s employment for Cause) or is not
capable of being cured;


 


(ii)           the theft,
dishonesty, fraud, misappropriation or other criminal malfeasance by Employee
against with respect to the Company or any of its subsidiaries or affiliates or
the falsification of any employment or other records of the Company by
Employee;


 


(iii)          the determination
by the Company that Employee has committed an act or acts constituting a felony
or any other crime involving theft, dishonesty, fraud or moral turpitude;


 


(iv)          the determination by
the Company that Employee has engaged in willful misconduct or gross negligence
in the performance of his employment duties;


 


(v)           the determination by
the Company that Employee has engaged in willful misconduct that reflects so
seriously on his or the Company’s public reputation as to prejudice the
interests of the Company or any of its subsidiaries or affiliates if he were to
continue to be retained as one of its employees; or


 


(vi)          the breach by
Employee of any material provision of this Agreement, which breach is not cured
by Employee after fifteen (15) days prior written notice specifying the nature
of the breach (provided, that any such notice also must include a
statement that failure to cure any such breach may result in the termination by
the Company of Employee’s employment for Cause) or is not capable of being
cured.


 


(b)           Definition of Good Reason.  For purposes of this Agreement, “Good
Reason” shall mean any of the following:


 


(i)            a material
reduction Employee’s duties or responsibilities in his capacity as a Senior
Vice President of Operations without Employee’s consent, or a permanent change
in Employee’s duties and responsibilities which are materially inconsistent
with the duties and responsibilities of a Senior Vice President of Operations
of the Company, which reduction or change is not cured within fifteen (15) days
of the receipt by the Company of written notice by Employee stating the nature
of such breach (provided, that any such notice also must include a
statement that failure to cure any such reduction or change may result in a
termination by Employee of his employment for Good Reason);


 


(ii)           Employee being
required to relocate the office from which he performs his responsibilities to
an office that is located more than thirty (30) miles outside of Chicago,
Illinois; or


 


 


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(iii)          a material breach
of this Agreement by the Company, which breach is not cured within fifteen (15)
days of the receipt by the Company of written notice by Employee stating the
nature of such breach (provided, that any such notice also must include
a statement that failure to cure any such reduction or change may result in a
termination by Employee of his employment for Good Reason).


 


(c)           Without Cause or For Good Reason.  Upon the termination of the Term of
Employment by the Company without Cause or by Employee for Good Reason, the
Company shall:


 


(i)            continue to pay Employee’s Base Salary then in effect,
less applicable withholding and in accordance with the Company’s normal payroll
procedures, for a period equal to six (6) months following the effective
date of such termination (the “Severance Period”);


 


(ii)           pay any unpaid reimbursable expenses outstanding as of the
date of termination;


 


(iii)          pay all benefits (including all accrued but unpaid vacation
pay), if any, that had accrued to Employee through the date of termination under
the benefit and retirement plans and programs in which he participated as an
employee of the Company in the manner and in accordance with the terms of such
plans and programs; and


 


(v)           continue
participation for Employee and his eligible dependents on the same basis
(except all premiums shall be paid by the Company) as the other executives of
the Company in all, medical, dental, disability and life insurance coverage
(such benefits collectively called the “Continued Plans”) in which he
was participating on the effective date of termination (as such Continued Plans
are from time to time in effect) until the end of the Severance Period; provided,
however, if Employee is precluded from continuing his participation in
any Continued Plan, then, during the Severance Period, the Company will be
obligated to reimburse him for any payments made by Employee in order to
maintain his rights granted by the Consolidated Omnibus Budget Reconciliation
Act (“COBRA”).


 


Notwithstanding anything to
the contrary herein, no payments shall be due under this Section 5(c) unless
and until Employee shall have executed a general release and waiver of claims
against the Company, consistent with Section 8 below, and in a form
reasonably satisfactory to the Company, and the execution of such general
release and waiver shall be a condition to Employee’s rights under this Section 5(c).


 


(d)           Other Termination Events.  Upon the termination of the Term of
Employment by the Company for Cause, by Employee for any reason (other than for
Good Reason), or by reason of his death or Disability, the Company shall have
no further obligations under this Agreement, except the Company shall:


 


(i)            pay Employee his unpaid Base Salary through, and any
unpaid reimbursable expenses outstanding as of, the effective date of such
termination;


 


 


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(ii)           pay
all benefits (including all accrued but unpaid vacation pay), if any, that had
accrued to Employee through the date of termination under the benefit and
retirement plans and programs in which he participated as an employee of the
Company in the manner and in accordance with the terms of such plans and
programs; and


 


                (iii)          afford Employee such rights granted by
the COBRA.


 


(e)           Return or Destruction.  Upon termination of the Term of Employment,
Employee shall not remove from any premises at which the business of the
Company is conducted any property of the Company, including without limitation,
any trade secrets or other confidential information, and shall return all the
property of the Company, including, without limitation, all tangible
embodiments of the trade secrets or other confidential information, in his
possession or under his control.


 


6.             Non-Competition. 
During the Term of Employment and for a period of two (2) years
following the expiration or termination of the Term of Employment for any
reason, Employee shall not, anywhere in the Geographic Area (as defined below),
other than on behalf of Company or with the prior written consent of Company,
directly or indirectly, perform services for (whether as an employee, agent,
consultant, advisor, independent contractor, owner, principal, proprietor,
partner, officer, director or otherwise), have any ownership interest in
(except for passive ownership of five percent (5%) or less of any entity whose
securities have been registered under the Securities Act or Section 12 of
the Securities Exchange Act of 1934, as amended), or participate or engage in
the financing, operation, management or control of, any firm, partnership,
corporation, entity or business that engages or participates in a “competing
business purpose” (as defined below).


 


For the purpose of this
Agreement, the term “competing business purpose” shall mean the sale or
provision of any printed materials, items or other products or services that
are competitive in any manner with the products or services sold or offered by
the Company during the term of this Agreement. 
The term “Geographic Area” shall mean any geographic area in
which the Company or any of its affiliates or subsidiaries conduct business.


 


The covenants contained in
this Section 6 shall be construed as a series of separate covenants, one
for each county, city, state, or any similar subdivision in any Geographic
Area.  Except for geographic coverage,
each such separate covenant shall be deemed identical in terms to the covenant
contained in the preceding Sections.  If,
in any judicial proceeding, a court refuses to enforce any of such separate
covenants (or any part thereof), then such unenforceable covenant (or such
part) shall be eliminated from this Agreement to the extent necessary to permit
the remaining separate covenants (or portions thereof) to be enforced.  In the event that the provisions of this Section 8
are deemed to exceed the time, geographic or scope limitations permitted by
applicable law, then such provisions shall be reformed to the maximum time,
geographic or scope limitations, as the case may be, permitted by applicable
laws.


 


7.             Non-Solicitation. 
During the Term of Employment and for a period of two (2) years
following the expiration or termination of the Term of Employment for any
reason, Employee shall not, directly or indirectly, on his own behalf or in the
service or on behalf of others:


 


 


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                                (a)           solicit, induce or divert or attempt
to solicit, induce or divert any customer, potential customer, supplier,
licensee, licensor, vendor or other business relation of Company to cease doing
business with Company, or in any way interfere with the relationship between
any customer, potential customer, supplier, licensee, licensor, vendor or other
business relation of Company or solicit the business of any customer or
potential customer of Company, whether or not Employee had personal contact
with such entity; and


 


                                (b)           solicit, induce or divert, or take
any action which is intended to solicit, induce or divert, or has the effect of
soliciting, inducing or diverting, any employee, consultant or independent
contractor of Company or any of its subsidiaries or affiliates to terminate his
or his employment or other relationship with Company or its subsidiary or
affiliate, other than in the discharge of his duties as an officer of the
Company, or hire or attempt to hire any such employee, consultant or
independent contractor.


 


8.             Confidential Information.


 


(a)           As used in this
Agreement, “Confidential Information,” shall mean any and all
confidential and proprietary technical and non-technical information of the
Company or any of its subsidiaries or affiliates, including patent, copyright,
trade secret, and proprietary information, techniques, sketches, drawings,
models, inventions, know-how, processes, apparatus, equipment, algorithms,
software programs, software source documents, and formulae related to the
current, future and proposed products and services of the Company or any of its
subsidiaries or affiliates and any suppliers or customers of the Company or any
of its subsidiaries or affiliates, and includes, without limitation, innovations,
tangible and intangible property, information of the Company or any of its
subsidiaries or affiliates concerning research, experimental work, development,
design details and specifications, engineering, financial information,
procurement requirements, purchasing manufacturing, customer lists, business
forecasts, vendors, supplier agreements, sales, merchandising and marketing
plans and information.


 


(b)           During
the Term of Employment and for twenty-four (24) months after the expiration or
termination of the Term of Employment, Employee shall hold and safeguard the
Confidential Information in trust for the Company, its successors and assigns
and agrees that he shall not use, without the prior written consent of the
Company, for Employee’s own benefit or purposes or misappropriate or disclose
or make available to any Person for use outside the Company’s organization at
any time, either during his employment with the Company or subsequent to the
termination of his employment with the Company during the 24-month period
following such termination, for any reason, any of the Confidential Information
or any copy, notes or item embodying Confidential Information, whether or not
developed by Employee, except (i) as required in the performance of
Employee’s employment duties and as authorized by the Company and (ii) to
the extent that such information (A) is or becomes generally available to
the public or the industry other than as a result of a disclosure by Employee
in violation of this Agreement or (B) is required to be disclosed pursuant
to a court order or other legal process (provided Employee gives the Company
notice of such obligation as soon as practical after Employee receives notice
of such obligation and prior to any disclosure pursuant to such obligation, affords
the Company the opportunity and reasonably cooperates with the Company in any
efforts by the Company to limit the scope of such obligation and/or to obtain
confidential treatment of any material disclosed pursuant to such obligation).


 


 


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9.             Equitable Remedies.  Employee acknowledges and agrees that the
agreements and covenants set forth in Sections
6, 7, and are reasonable in scope and essential for the protection of
the Company’s business interests, that irreparable injury will result to the
Company if Employee breaches any of the terms of said covenants, and that in
the event of Employee’s actual or threatened breach of any such covenants, the
Company will have no adequate remedy at law. 
Employee accordingly agrees that, in the event of any actual or
threatened breach by Employee of any of said covenants, the Company will be
entitled to seek immediate injunctive and other equitable relief, without bond
and without the necessity of showing actual monetary damages.  Nothing in this Section 9 will be construed as prohibiting the Company from
pursuing any other remedies available to it for such breach or threatened
breach, including the recovery of any damages that it is able to prove.


 


10.           Dispute Resolution.   In the event of any dispute or claim
relating to or arising out of this Agreement (including, but not limited to,
any claims of breach of contract, wrongful termination or age, sex, race or
other discrimination), Employee and the Company agree that all such disputes
shall be fully and finally resolved by binding arbitration conducted by the
American Arbitration Association in Chicago, Illinois in accordance with its
National Employment Dispute Resolution rules, as those rules are currently
in effect (and not as they may be modified in the future).  Any award rendered by the arbitrator shall be
final and binding and may be entered by any court having jurisdiction
thereof.  Employee acknowledges that by
accepting this arbitration provision he is waiving any right to a jury trial in
the event of such dispute. 
Notwithstanding the foregoing, this arbitration provision shall not
apply to (i) any equitable remedies which the Company may seek in
connection with Employee’s breach or alleged breach of any covenant or
agreement in Sections 6, 7, 8, or 9 above or (ii) any disputes or claims
relating to or arising out of the misuse or misappropriation of trade secrets
or proprietary information.


 


11.           Governing Law. 
THIS AGREEMENT AND ALL RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF
ILLINOIS WITHOUT REFERENCE TO ANY CONFLICTS OR CONFLICT OF LAWS PRINCIPLES IN
THE STATE OF ILLINOIS THAT WOULD RESULT IN THE APPLICATION OF THE LAW OF ANY
OTHER JURISDICTION.


 


12.           Successors and Assigns.  This Agreement shall inure to the benefit of
and be binding upon the Company and its successors and assigns, provided that
successor or assignee is the successor to substantially all of the assets of
the Company, or a majority of its then outstanding Units, and that such
successor or assignee assumes the liabilities, obligations and duties of the
Company under this Agreement, either contractually or as a matter of law.  In view of the personal nature of the
services to be performed under this Agreement by Employee, she shall not have
the right to assign or transfer any of his rights, obligations or benefits
under this Agreement, except as otherwise noted herein.


 


13.           Severability. 
Each section and subsection of this Agreement constitutes a separate and
distinct provision of this Agreement. It is the intent of the parties that the
provisions of this Agreement be enforced to the fullest extent permissible
under the laws and public policies applicable in each jurisdiction in which
enforcement is sought. Accordingly, if any provision of this Agreement is
adjudicated to be invalid, ineffective or unenforceable, the remaining
provisions will 


 


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not be affected by such adjudication. The invalid,
ineffective or unenforceable provision, without further action by the parties,
will be automatically amended to effect the original purpose and intent of the
invalid, ineffective or unenforceable provision; provided, however,
that such amendment will apply only with respect to the operation of such
provision in the particular jurisdiction with respect to which such
adjudication is made.


 


14.           Entire Agreement. 
This Agreement, including the Exhibits attached hereto, constitutes the
entire agreement between Employee and the Company regarding the terms and
conditions of his employment.  This
Agreement supersedes all prior negotiations, representations or agreements
between Employee and the Company, whether written or oral, concerning Employee’s
employment.


 


15.           No Conflict. 
Employee represents and warrants to the Company that neither his entry
into this Agreement nor his performance of his obligations hereunder will
conflict with or result in a breach of the terms, conditions or provisions of
any other agreement or obligation to which Employee is a party or by which
Employee is bound, including without limitation, any non-competition or
confidentiality agreement previously entered into by Employee.


 


16.           Survival of Certain Obligations.  The obligations of the Company and Employee
set forth in this Agreement that by their terms extend beyond or survive the
termination of this Agreement will not be affected or diminished in any way by
the termination of the Term of Employment.


 


17.           Amendments. 
This Agreement may not be modified or amended except by a  written agreement signed by Employee and the
Company.


 


18.           Legal Counsel. 
Each party hereby agrees and acknowledges that it has had full
opportunity to consult with counsel and tax advisors of its selection in
connection with the preparation and negotiation of this Agreement.


 


[Signature Page Follows]


 


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                IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date and
year written below.


 


	
   

  	
   

  	
  COMPANY:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  INNERWORKINGS,
  INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Nicholas J. Galassi

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Nicholas J. Galassi

  	
   

  
	
   

  	
   

  	
  Its:

  	
  Chief Financial Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EMPLOYEE:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Kevin Harrell

  	
   

  
	
   

  	
   

  	
  Kevin Harrell

  	
   

  	
   

  
									



 


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