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EXHIBIT 10.13
EMPLOYMENT AGREEMENT
This Employment Agreement is made and entered into by and between
MachOne Communications, Inc. ("Company") and Xxxxx Xxxxx ("Employee") effective
as of January 1, 1998.
I. Recitals.
A. MachOne's predecessor began business on April 15, 1997 as
FastBit Communications and changed its name to MachOne Communications on
April 15, 1997. MachOne Communications, Inc. was incorporated on August
18, 1997 (the foregoing businesses referred to herein, collectively, as
the "Company").
B. Company began employing Employee as its President & CEO
beginning on May 15, 1997. As of July 7, 1998, Employee's position
changed to the position as set forth below.
NOW, THEREFORE, the foregoing is incorporated herein by reference and,
in exchange for the mutual covenants contained below, the parties agree as
follows:
II. Definitions.
A. "COMMENCEMENT DATE" shall mean April 15, 1997.
B. "GOOD REASON" shall mean any of the following conditions: (i) a
decrease in Employee's base salary and/or bonus compensation; (ii) a material,
adverse change in Employee's title, authority, responsibilities or duties; (iii)
Company's relocation of the principal place of Employee's employment more than
fifty (50) miles; (iv) Company's material breach of any provision of this
Agreement; (v) Company's failure to obtain the assumption of this Agreement by
Company's successor or assign; (vi) Company's failure to continue Employee's
opportunity to participate, on the same or more favorable terms, in benefit or
compensation programs in which Employee was participating; or (vii) any
purported termination of Employee's employment for "material breach of contract"
which is not effected following a written notice and reasonable opportunity to
cure.
C. Termination for "CAUSE" shall mean: (i) Employee's theft, dishonesty,
or falsification of any Company documents or records; (ii) Employee's improper
use or disclosure of
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a materially detrimental effect on Company's reputation or business; (iv)
Employee's failure to perform any reasonable assigned duties after written
notice from Company and a reasonable opportunity to cure; or (v) any uncured
material breach by Employee of any written agreement between Employee and
Company.
III. Position.
Employee shall be employed by MachOne as its Chief Technical Officer
reporting only to the President, effective as of the Commencement Date. In that
position, Employee agrees to devote his full business time, energy and skill to
his duties at MachOne. Employee and MachOne agree that he will perform such
duties at MachOne's principal place of business, which shall be 000 Xxxxx Xx
Xxxx Xxxx., Xxx Xxxx, XX 00000.
IV. Term.
Employee's employment with MachOne will be for no specified term and may
be terminated by MachOne or Employee at any time, with or without cause. Upon
the termination of Employee's employment with MachOne for any reason, neither
MachOne nor Employee shall have any further obligation or liability under this
Agreement to the other, except as set forth in paragraphs V, VI, VII, IX and X,
below.
V. Base Salary.
In the position as outlines above, Employee shall be paid a monthly Base
Salary of $15,000 per month ($180,000 on an annualized basis), subject to
applicable withholding, in accordance with MachOne's normal payroll procedures.
VI. Benefits.
Employee shall be entitled to the benefits afforded to other members of
the Company's executive management under the Company's vacation, holiday and
business expense reimbursement policies. Employee shall be entitled to the
medical and dental benefits provided to other employees of MachOne.
A. Benefits Upon Voluntary Termination: In the event of Employee's
voluntary termination from employment with Company, or in the event that
Employee's employment terminates as a result of his death, Employee shall be
entitled to no compensation or benefits from Company other than those earned
through the date of such termination or in the case of any stock options, vested
through the date of such termination (except as specifically set forth otherwise
in provisions below).
B. Benefits Upon Other Termination. In the event of the termination of
Employee's employment by MachOne for the reasons set forth below, he shall be
entitled to the following:
1. Termination for Cause. If Employee's employment is terminated
by MachOne for Cause, Employee shall be entitled to no compensation or
benefits, from MachOne other than those earned under through the date of
termination (which shall
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include bonuses for the fiscal year then in progress determined on a pro
rated basis), or in the case of any stock options, vested through the
date of termination.
2. Termination Without Cause. If Employee is terminated by
Company for any reason other than for Cause (or resigns for Good
Reason), Employee shall be entitled to all accrued compensation
(including pro-rated bonuses), salary and benefits for three months
following termination, plus continued vesting of the Shares for a period
of six (6) months.
C. Vesting Upon Death or Disability. If Employee's employment ceases as
a result of death or disability, as of the date of such termination the Shares
that have vested (the "Vested Percentage") at the time of such cessation shall
then be multiplied by a factor of two (2) (but in no case shall the Vested
Percentage exceed 100%).
VII. Bonus.
Employee shall have the opportunity to earn an annual Performance Bonus
for each fiscal year, beginning with fiscal year 1998. This Performance Bonus
shall be based 75% upon the Company's achievement of the fiscal goals it
establishes as the Company's threshold for executive level employee bonuses (the
"Company Objectives"), and 25% based on performance objectives specifically
related to Employee's areas of responsibility (the "Performance Objectives").
The Company Objectives and the Performance Objectives (together, the
"Objectives") shall be determined in good faith and set forth on Exhibit A. For
subsequent fiscal years, the Company Objectives shall be the fiscal goals that
the Company establishes as the threshold for executive level employee bonuses.
The Performance Objectives and the Target Bonus shall be negotiated annually in
good faith by the parties during the fourth quarter of each fiscal year for the
upcoming fiscal year.
VIII. Inventions and Proprietary Rights.
Employee agrees to abide by the terms and conditions of MachOne's
standard Employee Inventions and Proprietary Rights Assignment Agreement as
executed by Employee and attached hereto as Exhibit A.
IX. Agreement Not to Compete Unfairly.
Employee agrees that in the event of his termination at any time and for
any reason, he shall not compete with MachOne in any unfair manner, including,
without limitation, using any confidential or proprietary information of MachOne
to compete with MachOne in any way. Employee agrees that for a period of one (1)
year after the date of the termination of his employment for any reason, he
shall not, either directly or indirectly, solicit the services, or attempt to
solicit the services, of any employee of MachOne to any other person or entity.
X. General Provisions.
A. 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 MachOne agree that all
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such disputes shall be fully and finally resolved by binding arbitration
conducted by the American Arbitration Association in Santa Xxxxx County,
California 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). Employee acknowledges that by accepting this arbitration provision he
is waiving any right to a jury trial in the event of such dispute. Provided,
however, that this arbitration provision shall not apply to any disputes or
claims relating to or arising out of the misuse or misappropriation of trade
secrets or proprietary information.
B. Attorneys' Fees: The prevailing party shall be entitled to recover
from the losing party its attorneys' fees and costs incurred in any action
brought to enforce any right arising out of this Agreement.
C. Interpretation: Employee and MachOne agree that this Agreement shall
be interpreted in accordance with and governed by the laws of the State of
California.
D. Successors and Assigns: This Agreement shall inure to the benefit of
and be binding upon MachOne and its successors and assigns. In view of the
personal nature of the services to be performed under this Agreement by
Employee, he shall not have the right to assign or transfer any of his rights,
obligations or benefits under this Agreement, except as otherwise noted herein.
E. Entire Agreement: This Agreement constitutes the entire employment
agreement between Employee and Company regarding the terms and conditions of his
employment, with the exception of (i) the Employee Inventions and Proprietary
Rights Assignment Agreement described in paragraph VII and (ii) any Founders'
Stock Purchase Agreement between Employee and Company. This Agreement supersedes
all prior negotiations, representations or agreements between Employee and
Company, whether written or oral, concerning Employee's employment by Company.
F. Validity: If any one or more of the provisions (or any part thereof)
of this Agreement shall be held invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
(or any part thereof) shall not in any way be affected or impaired thereby,
while giving the greatest possible effect to the parties' intent and the
exchange of consideration set forth in the Agreement.
G. Modification: This Agreement may only be modified or amended by a
supplemental written agreement signed by Employee and MachOne.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year written below.
MachOne Communications, Inc.
Date: By: /s/ AUTHORIZED SIGNATORY
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Its: Authorized Officer
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EMPLOYEE
Date: 7/8/98 Signature: /s/ XXXXX X. XXXXX
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Printed Name: Xxxxx X. Xxxxx
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