Exhibit 10.5
EMPLOYMENT AGREEMENT
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This Employment Agreement is made and entered into by and between BRIO
TECHNOLOGY, INC. (the "Company") and Xxxxxx X. Xxxxxx ("Xxxxxx") as of July 15,
1996 ("Effective Date").
1. POSITION AND DUTIES: Xxxxxx is employed by the Company as
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its Executive Vice President of World Wide Field Operations reporting to the
Company's President at its headquarters in Palo Alto, California. As Executive
Vice President of World Wide Field Operations Xxxxxx agrees to devote his energy
and skill to his duties at the Company. These duties shall include, but not be
limited to, any duties consistent with his position which may be assigned to
Xxxxxx from time to time by the Company's President.
2. TERM OF EMPLOYMENT: Xxxxxx'x employment with the Company
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pursuant to this Agreement will be on an at-will basis, and may be terminated by
Xxxxxx, or the Company at any time, with or without cause and with or without
notice. Upon the termination of Xxxxxx'x employment with the Company, for any
reason, neither Xxxxxx nor the Company shall have any further obligation or
liability to the other, except as set forth in this Agreement and in the
employee Confidential Information and Inventions Agreement attached hereto as
Exhibit A and made a part hereof.
3. COMPENSATION: Xxxxxx shall be compensated by the Company
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for his services as follows:
a. SALARY: Xxxxxx shall be paid a semi-monthly salary of
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$6,250.00 ($150,000.00 on an annualized basis), subject to applicable
withholding, in accordance with the Company's payroll procedures
regularly established, and as they may be amended, by the Company.
Xxxxxx'x salary will be reviewed annually and possibly adjusted as
determined appropriate at the sole discretion of the Company. In
addition, Xxxxxx shall be paid a commission and a draw in accordance
with a compensation plan outlined in the Company's offer letter to
Xxxxxx.
b. BENEFITS: Xxxxxx shall have the right, on the same
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basis as other employees of the Company, to participate in and to
receive benefits under all of the Company's employee benefit plans,
including medical, dental and disability group insurance plans, as set
forth in the Employee Handbook and as governed by
the terms of the applicable benefit plans, as they may be amended from
time to time. In addition, Xxxxxx shall be entitled to the benefits
afforded to other members of management under the Company's vacation,
holiday and business expense reimbursement policies as set forth in
the Employee Handbook and as they may be amended from time to time.
c. STOCK OPTIONS: Xxxxxx will be granted an option to
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purchase 450,000 shares of the Company's common stock at an exercise
price of thirty cents ($.30) per share. The option shall be subject to
four (4) year vesting and the terms and conditions of the Company's
1992 Stock Option Plan and related stock option agreement.
In addition, by September 30, 1996 the Company will present
Xxxxxx with an opportunity to earn options to buy an extra 75,000
shares based on beating certain aggressive but reasonable performance
goals that have yet to be determined.
d. EXPENSE REIMBURSEMENTS: Upon receipt of proper
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documentation establishing the amount of such expenses, the Company
shall reimburse Xxxxxx for any reasonable business expenses incurred
in accordance with applicable Company policies, and as they may be
amended from time to time. Xxxxxx agrees to comply with any and all
policies established by the Company regarding business expenses
seeking reimbursement for such expenses.
4. BENEFITS UPON VOLUNTARY TERMINATION: In the event that
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Xxxxxx voluntarily resigns from his employment with the Company, or in
the event that Xxxxxx'x employment terminates as the result of his
death or disability, Xxxxxx shall be entitled to no compensation or
benefits from the Company other than those earned under paragraph 3
above through the date of his termination.
5. TERMINATION FOLLOWING A CHANGE IN CONTROL: In the event
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of a Change in Control (defined below), and Xxxxxx'x employment with
the Company (or its successors or assigns) is terminated without cause
six (6) months prior to the date of the Change in Control, or twelve
(12) months after the date of the Change in Control, then Xxxxxx shall
be entitled to six (6) months salary continuation from the date of his
departure from the Company (or its successors or assigns) at the
higher of (i) Xxxxxx'x then current salary rate, or (ii) a rate no
less than an annualized salary of $150,000, less applicable
withholding. The vesting
provisions in Xxxxxx'x options shall be accelerated, and readjusted if
necessary, so that they are in fact or are deemed to be fully
exercisable just prior to the date of the Change in Control. In the
event that there are any conflicts between the provisions in the
Company's Stock Option Plan and this Agreement, the terms of this
Agreement supersede the Plan.
Except as expressly provided for herein, all compensation, benefit
coverage, and other prerequisites of employment shall cease as of such
termination date. In the event of any Change in Control, any
successor or assign to the Company shall jointly and severally assume
the obligations under this Agreement.
For purposes of this Agreement, a "Change in Control" shall
mean an event in which (A) the shareholders of the Company approve a
merger or consolidation of the Company, other than a merger or
consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted in voting
securities of the surviving entity) at lease fifty percent (50%) of
the total voting power of the Company or such surviving entity
outstanding immediately after such merger or consolidation, or (B) the
shareholders of the Company approve a plan of complete liquidation of
the Company or (C) the shareholders of the Company approve an
agreement for the sale of disposition by the Company of all or
substantially all of the Company's assets.
6. RETURN OF COMPANY PROPERTY: Xxxxxx hereby acknowledges
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and agrees that all personal property, including, without limitation,
all books, manuals, records, reports, notes, contracts, lists,
blueprints, and other documents, or other materials, or copies
thereof, and equipment furnished to or prepared by Xxxxxx in the
course of or incident to his employment, belong to the Company and,
absent the express written consent of the Chief Executive Officer,
shall be promptly returned to the Company upon termination of Xxxxxx'x
employment.
7. EXCLUSIVE REMEDY: Subject to paragraphs 4 and 5 above,
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Xxxxxx shall be entitled to no further compensation for any damage or
injury arising out of the termination of this employment by the
Company.
8. CONFIDENTIAL INFORMATION AND INVENTIONS AGREEMENT:
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Xxxxxx agrees to abide by the terms and conditions of the Company's
Employee
Confidential Information and Inventions Agreement executed by Xxxxxx
and attached hereto as Exhibit A.
9. ENTIRE AGREEMENT: This Agreement, along with Exhibit A
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hereto, constitutes the entire employment agreement between Xxxxxx and
the Company regarding the terms and conditions of his employment. The
parties intend that this Agreement supersede all prior negotiations,
representations or agreements between Xxxxxx and the Company, whether
written or oral, concerning Xxxxxx'x employment by the Company and
that no extrinsic evidence whatsoever may be introduced in any
judicial, administrative, or other legal proceeding involving this
Agreement.
10. ATTORNEYS' FEES: The prevailing party shall be
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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.
11. INTERPRETATION: Xxxxxx and the Company agree that this
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Agreement shall be interpreted in accordance with and governed by the
laws of the State of California.
12. SUCCESSORS AND ASSIGNS: This Agreement shall inure to
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the benefit or and be binding upon the Company and its successors and
assigns. In view of the personal nature of the services to be
performed under this Agreement by XXXXXX, he shall not have the right
to assign or transfer any of his rights, obligations or benefits under
this Agreement, except as otherwise note herein.
13. XXXXXX'X ACKNOWLEDGMENT: Xxxxxx acknowledges that he
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is not relying, and has not relied, on any promise, representation or
statement made by or on behalf of the Company, whether written or
oral, which is not set forth in this Agreement. Xxxxxx further
acknowledges that he has consulted with or has had the opportunity to
consult with independent counsel of his own choice concerning this
Agreement and has been advised to do so by the Company and he has read
and understands the Agreement, is fully aware of its legal effect, and
has entered into it freely based on his own judgment.
14. VALIDITY: If any one or more of the provisions (or any
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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.
15. MODIFICATION: This Agreement may only be modified or
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amended by a supplemental written agreement signed by Xxxxxx and the
Chief Executive Office of the Company.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date and year written below.
BRIO TECHNOLOGY, INC.
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxxx
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XXXXXX X. XXXXXX XXXXXX X. XXXXXX
PRESIDENT AND
CHIEF EXECUTIVE OFFICER
Date: July 15, 1996 Date: July 15, 1996
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ATTACHMENT A
STOCK OPTIONS:
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Xxxxxx will receive options to buy 450,000 shares of Brio common stock at $.30
per share in accordance with the Brio employee stock option plan. By October
31, 1996 Brio will present Xxxxxx with an opportunity to earn options to buy an
extra 75,000 shares based on beating certain aggressive but reasonable
performance goals that have yet to be determined.
CASH COMPENSATION. SALARY + COMMISSIONS:
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Brio Technology will pay Xxxxxx an annual base salary of $150,000, paid semi-
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monthly in accordance with the company's normal payroll procedures. Xxxxxx will
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also receive the following commission plan: Starting commission rate is .4% on
Brio's worldwide net bookings. Once Brio's for FY 1997 net bookings exceed $15
million, the rate increases to .8% on all incremental sales. When Brio's net
bookings for FY 1997 exceed $20 million, the rate increase to 1% on all
incremental sales. Finally, once Brio's FY 1997 net bookings reach $25 million,
Xxxxxx'x commission rate will be 2% on all incremental net bookings. The table
below outlines what Xxxxxx will receive under this plan at 5 levels of total
Brio net bookings during fiscal 1997, ending March 1997. The term "net
bookings" shall mean gross xxxxxxxx less returns or net xxxxxxxx. Commission
payment shall be due and paid on a monthly basis on or before the 15th day of
each month based on the prior month's net bookings. Any adjustments, including
overpayments or underpayments, shall be made at the end of the fiscal year.
Net Bookings Commission Rate Total Commissions Total Compensation
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Under $15 million .4% up to 60,000 $210,000 @ $15 million
$15 million to $20 million .8% up to 100,000 $250,000 @ $20 million
$20 million to $25 million 1% up to 150,000 $300,000 @ $25 million
Over $25 million 2% up to 250,000 $400,000 @ $30 million
GUARANTEED MINIMUM CASH FLOW:
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To guarantee Xxxxxx an annualized minimum compensation of $225,000 and to ensure
that he receives adequate cash flow during the early parts of a back loaded
year, we offer Xxxxxx a $6,250 recoverable draw against commissions every month.
If commissions are larger than this number, the accumulated recoverable draw is
paid off first before any commissions are paid out. The purpose of the draw is
to ensure that Xxxxxx never fall below an average monthly commission of $6,250.
When Xxxxxx'x total actual earned commissions payments exceed a monthly average
of $6,250, draw amounts in following months
are reduced by the amount of the excess. Any cumulative draw left at the end of
this fiscal year will be forgiven.
Example:
Aug Sep Oct Nov Dec
--- --- --- --- ---
Earned commissions: 4000 5000 10000 8000 3000
Commissions paid to you: 6250 6250 6500 8000 4250
Recoverable draw: 2250 1250 -3500 0 1250
Accumulated draw: 2250 3500 0 0 1250
In this example, the December draw would be reduced $2,000 to $4,250 because
Xxxxxx was 'ahead of schedule' by $2,000 ($8,250 - $6,250) at the end of
November.
OTHER BENEFITS:
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Finally, Brio is committed to do whatever is reasonable to minimize the impact
of Xxxxxx'x long commute and enable him to work effectively from home. At this
time, Brio is not sure what his schedule will look like, so specific measures
are hard to determine. For the time being, Brio proposes to offer Xxxxxx a
monthly car allowance of $1,000 for the remainder of fiscal 1997. If Brio
adopts a commute policy that does not use Xxxxxx'x car, the car allowance would
then be discontinued. Brio will provide Xxxxxx with a fax machine, mobile phone
and a portable computer.
Finally Brio offers Xxxxxx the following fringe benefits:
* Three weeks paid vacation per year and 10 paid sick days per year.
* Xxxxxx is eligible to participate in the Brio Section 125 Cafeteria Plan and
the 401(k) Retirement Plan after completing a 90-day benefits waiting period.
* Health coverage for Xxxxxx and, if desired, his family, which he is
eligible for as of the day he begins employment. Xxxxxx is also eligible
for dental coverage.
