Exhibit 10.13
EMPLOYMENT AGREEMENT
--------------------
This Employment Agreement (the "Agreement") is dated as of February 23,
---------
1999, by and between Xxxx Xxxxx ("Employee") and Brio Technology, Inc., a
--------
Delaware corporation (the "Company").
-------
RECITALS
--------
This Agreement is entered into in connection with and is ancillary to an
Agreement and Plan of Merger (the "Merger Agreement") dated as of February __,
----------------
1999 among the Company, SQRIBE Technologies Corp., a Delaware corporation
("Target") and Socrates Acquisition Corporation, a Delaware corporation and a
------
wholly owned subsidiary of Acquiror ("Sub"), pursuant to which Sub will merge
---
with and into the Company (the "Merger"). The date on which the Merger becomes
------
effective will be the effective date of this Agreement (the "Effective Date").
--------------
Employee is an officer, director and principal stockholder of Target. The
Company intends to continue the business of Target after the Merger and
integrate such business into the Company's ongoing business. To preserve and
protect the assets of Target, including Target's goodwill, customers and trade
secrets of which Employee has and will have knowledge in Employee's role as an
employee of the Company and to preserve and protect the Company's goodwill and
business interests going forward, and in consideration for the Company's
entering into and performing under the Merger Agreement, Employee has agreed to
enter into this Agreement.
In addition, as required by Section 8 below, Employee is concurrently
herewith entering into a Confidentiality Agreement in favor of the Company
designed to protect the Company's proprietary rights.
AGREEMENT
---------
In consideration of the mutual promises, agreements, warranties and
provisions contained in this Agreement, the parties agree as follows:
1. Term of Agreement. This Agreement shall commence on the date hereof
-----------------
and, except for covenants, which by their terms have a longer period of
effectiveness, shall have a term of one (1) year (the "Original Term"). This
-------------
Agreement may be terminated by either party, with or without cause, as provided
in Section 5. This Agreement may be extended for an additional one (1) year
after the end of the Original Term if the parties mutually agree in writing to
such extension.
2. Duties.
------
(a) Position. Employee will serve as Chairman of the Board of
--------
Directors, shall be employed as Executive Vice President, Business Development,
will have responsibility for corporate and business development and will report
to the Company's Chief Executive Officer.
(b) Obligations to the Company. Employee agrees to the best of his
--------------------------
ability and experience that he will at all times loyally and conscientiously
perform all of the duties and obligations required of and from Employee pursuant
to the express and implicit terms hereof, and to the reasonable satisfaction of
the Company. During the term of Employee's employment with the Company, Employee
will not engage in any other employment, occupation, or business activity
directly related to the business of the Company and will not compete with the
Company or assist others in competing with the Company in any way. Employee
will not serve as a director, officer, employee, or consultant of any person or
entity providing products and/or services that would substitute for or replace
those of the Company and agrees not to purchase or own any shares or interest in
any business providing products and/or services that would substitute for or
replace those of the Company, except Employee may own fewer than one percent
(1%) of the outstanding voting shares in a publicly traded corporation. Nothing
in this Agreement will prevent Employee from accepting speaking or presentation
engagements in exchange for honoraria, from serving on boards of charitable
organizations or companies which do not compete directly or indirectly with the
Company, or making investments in companies which do not compete directly or
indirectly with the Company. Employee will comply with and be bound by the
Company's operating policies, procedures and practices from time to time in
effect during the term of Employee's employment.
3. At-Will Employment. The Company and Employee acknowledge that
------------------
Employee's employment is and shall continue to be at-will, as defined under
applicable law, and that Employee's employment with the Company may be
terminated by either party at any time for any or no reason. If Employee's
employment terminates for any reason, Employee shall not be entitled to any
payments, benefits, damages, award or compensation other than as expressly
provided in this Agreement. The rights and duties created by this Section 3 may
not be modified in any way except by a written agreement executed by the Chief
Executive Officer of the Company.
4. Compensation. For the duties and services to be performed by Employee
------------
hereunder, the Company shall pay Employee, and Employee agrees to accept, the
salary, bonus and other benefits described below in this Section 4.
(a) Salary. Employee shall receive a monthly salary of $16,666.66,
------
which is equivalent to $200,000 on an annualized basis. Employee's monthly
salary will be payable pursuant to the Company's normal payroll practices.
Employee's salary shall be reviewed on at least an annual basis, and any
increase will be effective as of the date determined appropriate by the Board,
its Compensation Committee or the Chief Executive Officer; provided that at no
time will Employee's salary and bonus, in the aggregate, be less than 90% of the
salary and bonus payable to the Company's Chief Executive Officer.
(b) Bonus. Employee shall be entitled to receive an annual bonus of
-----
$70,000 (the "Bonus"), which will be earned upon the achievement of performance
-----
objectives to be determined by mutual agreement between Employee and the
Company.
(c) Additional Benefits. Employee will be eligible to participate in
-------------------
the Company's employee benefit plans of general application, including without
limitation, those plans covering medical, disability and life insurance in
accordance with the rules established for individual participation in any such
plan and under applicable law. Employee will be eligible for vacation and sick
leave in accordance with the policies in effect during the term of this
Agreement and will receive such other benefits as the Company generally provides
to its other employees of comparable position and experience.
(d) Reimbursement of Expenses. Employee shall be authorized to incur
-------------------------
on behalf and for the benefit of, and shall be reimbursed by, the Company for
reasonable expenses, provided that such expenses are approved and substantiated
in accordance with Company policies.
-2-
5. Termination of Employment and Severance Benefits.
------------------------------------------------
(a) Termination of Employment. This Agreement may be terminated
-------------------------
during its Original Term (or any extension thereof) upon the occurrence of any
of the following events and following notice to the non-terminating party:
(i) The Company's determination in good faith that it is
terminating Employee for Cause (as defined in Section 6 below) ("Termination
-----------
for Cause");
---------
(ii) The Company's determination that it is terminating Employee
without Cause, which determination may be made by the Company at any time at the
Company's sole discretion, for any or no reason ("Termination Without Cause");
-------------------------
(iii) The effective date of a written notice sent to the Company
from Employee stating that Employee is electing to terminate his or her
employment with the Company ("Voluntary Termination");
---------------------
(iv) A change in Employee's status such that a Constructive
Termination (as defined in Section 5(b)(iv) below) has occurred; or
(v) Following Employee's death or Disability (as defined in
Section 7 below).
(b) Severance Benefits. Employee shall be entitled to receive
------------------
severance benefits upon termination of employment only as set forth in this
Section 5(b):
(i) Voluntary Termination. If Employee's employment
---------------------
terminates by Voluntary Termination, then Employee shall not be entitled to
receive payment of any bonus or severance benefits. Employee will receive
payment(s) for all salary, pro-rated commissions and unpaid vacation accrued
as of the date of Employee's termination of employment and Employee's benefits
will be continued under the Company's then existing benefit plans and policies
in accordance with such plans and policies in effect on the date of
termination and in accordance with applicable law.
(ii) Involuntary Termination. If Employee's employment is
-----------------------
terminated under Section 5(a)(ii) or 5(a)(iv) above (such termination, an
"Involuntary Termination"), Employee will be entitled to receive on the
-----------------------
effective date of such termination a cash payment equal to six (6) months
salary, less applicable withholding. In partial consideration for such
payment, at the Company's request Employee shall continue to provide services
for a period of up to six (6) weeks following the effective date of such
termination. Employee will receive payment(s) for all salary, pro-rated bonus
and unpaid vacation accrued as of the date of Employee's termination of
employment and Employee's benefits will be continued under the Company's then
existing benefit plans and policies in accordance with such plans and policies
in effect on the date of termination and in accordance with applicable law.
(iii) Termination for Cause. If Employee's employment is
---------------------
terminated for Cause, then Employee shall not be entitled to receive any
further payment of any bonus or any severance benefits. Employee will receive
payment(s) for all salary, pro-rated bonus and unpaid vacation accrued as of
the date of Employee's termination of employment and Employee's benefits will
be continued under the Company's then existing benefit plans and policies in
accordance with such plans and policies in effect on the date of termination
and in accordance with applicable law.
-3-
(iv) Constructive Termination. "Constructive Termination"
------------------------ ------------------------
shall be deemed to occur if (A)(1) there is a material adverse change in
Employee's position causing such position to be of materially reduced stature
or responsibility; (2) a reduction of more than 20% of Employee's base
compensation unless in connection with similar decreases of other similarly
situated employees of the Company, or (3) Employee's refusal to relocate to a
facility or location that is more than fifty (50) miles from Palo Alto,
California, and (B) within the 30-day period immediately following such
material change or reduction Employee elects to terminate his or her
employment voluntarily.
(v) Termination by Reason of Death or Disability. In the
--------------------------------------------
event that Employee's employment with the Company terminates as a result of
Employee's death or Disability (as defined in Section 7 below), Employee or
Employee's estate or representative will receive at the time of such
termination all salary, pro-rated commissions and unpaid vacation accrued as
of the date of Employee's death or Disability, and any other benefits payable
under the Company's then existing benefit plans and policies in accordance
with such plans and policies in effect on the date of death or Disability and
in accordance with applicable law.
6. Definition of Cause. For purposes of this Agreement, "Cause" for
------------------- -----
Employee's termination will exist at any time after the happening of one or more
of the following events:
(a) Employee's willful misconduct or gross negligence in performance
of his or her duties hereunder, including Employee's refusal to comply in any
material respect with the legal directives of Employees' direct supervisor, the
Company's Chief Executive Officer or the Board of Directors so long as such
directives are not inconsistent with the Employee's position and duties, and
such refusal to comply is not remedied within 10 working days after written
notice from the Company, which written notice shall state that failure to remedy
such conduct may result in Termination for Cause;
(b) Fraudulent conduct, a deliberate attempt to do an injury to the
Company, or conduct that materially discredits the Company or is materially
detrimental to the reputation of the Company, including conviction of a felony;
or
(c) Employee's material breach of any element of the Company's
Confidential Information and Invention Assignment Agreement, including without
limitation, Employee's theft or other misappropriation of the Company's
proprietary information.
7. Definition of Disability. For purposes of this Agreement, "Disability"
------------------------ ----------
shall mean that Employee has been unable to perform his or her duties hereunder
as the result of his or her incapacity due to physical or mental illness, and
such inability, which continues for at least 120 consecutive calendar days or
150 calendar days during any consecutive twelve-month period, if shorter, after
its commencement, is determined to be total and permanent by a physician
selected by the Company and its insurers and acceptable to Employee or to
Employee's legal representative (with such agreement on acceptability not to be
unreasonably withheld).
8. Confidentiality Agreement. Employee shall sign, or has signed, a
-------------------------
Confidential Information and Invention Assignment Agreement (the
"Confidentiality Agreement") substantially in the form attached hereto as
-------------------------
Exhibit A. Employee hereby represents and warrants to the Company that he or
---------
she has complied with all obligations under the Confidentiality Agreement and
agrees to continue to abide by the terms of the Confidentiality Agreement and
further agrees that the provisions of the Confidentiality Agreement shall
survive any termination of this Agreement or of Employee's employment
relationship with the Company.
-4-
9. Noncompetition Covenant. Until the earlier of (i) three (3) years from
-----------------------
the date of this Agreement and (ii) one year following termination of his
employment for any reason (the "Non-Compete Period"), Employee hereby agrees
------------------
that he shall not do any of the following without the prior written consent of
the Company's Chief Executive Officer or Board of Directors:
(a) Compete. Carry on any sales, marketing or development business or
-------
activity (whether directly or indirectly, as a partner, stockholder, principal,
agent, director, affiliate, employee or consultant) which is competitive with
the Company's then primary products, nor engage in any other activities that
conflict with Employee's obligations to the Company; provided that nothing in
this Agreement will prevent Employee from from serving on boards of charitable
organizations or of companies which do not compete directly or indirectly with
the Company, or making investments in companies which do not compete directly or
indirectly with the Company.
(b) Solicit Business. Solicit or influence or attempt to influence
----------------
any client, customer or other person either directly or indirectly, to direct
his or its purchase of the Company's products and/or services to any person,
firm, corporation, institution or other entity in competition with the Company's
products.
(c) Solicit Personnel. During the Non-Compete Period, solicit or
-----------------
influence or attempt to influence any person employed by the Company to
terminate or otherwise cease his employment with the Company or become an
employee of any competitor of the Company.
10. Conflicts. Employee represents that his performance of all the terms
---------
of this Agreement will not breach any other agreement to which Employee is a
party. Employee has not, and will not during the term of this Agreement, enter
into any oral or written agreement in conflict with any of the provisions of
this Agreement.
11. Successors. Any successor to the Company (whether direct or indirect
----------
and whether by purchase, lease, merger, consolidation, liquidation or otherwise)
to all or substantially all of the Company's business and/or assets shall assume
the obligations under this Agreement and agrees expressly to perform the
obligations under this Agreement in the same manner and to the same extent as
the Company would be required to perform such obligations in the absence of a
succession. The terms of this Agreement and all of Employee's rights hereunder
shall inure to the benefit of, and be enforceable by, Employee's personal or
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.
12. Miscellaneous Provisions.
------------------------
(a) No Duty to Mitigate. Employee shall not be required to mitigate
-------------------
the amount of any payment contemplated by this Agreement (whether by seeking new
employment or in any other manner), nor, except as otherwise provided in this
Agreement, shall any such payment be reduced by any earnings that Employee may
receive from any other source.
(b) Amendments and Waivers. Any term of this Agreement may be
----------------------
amended or waived only with the written consent of the parties.
(c) Sole Agreement. This Agreement, including any Exhibits hereto,
--------------
and the Merger Agreement, including any Exhibits thereto, constitutes the sole
agreements of the parties and supersedes all oral negotiations and prior
writings with respect to the subject matter hereof and thereof.
-5-
(d) Notices. Any notice required or permitted by this Agreement
-------
shall be in writing and shall be deemed sufficient upon receipt, when
delivered personally or by a nationally-recognized delivery service (such as
Federal Express or UPS), or 48 hours after being deposited in the U.S. mail as
certified or registered mail with postage prepaid, if such notice is addressed
to the party to be notified at such party's address as set forth below or as
subsequently modified by written notice.
(e) Choice of Law. The validity, interpretation, construction and
-------------
performance of this Agreement shall be governed by the laws of the State of
California, without giving effect to the principles of conflict of laws.
(f) Severability. If one or more provisions of this Agreement are
------------
held to be unenforceable under applicable law, the parties agree to renegotiate
such provision in good faith. In the event that the parties cannot reach a
mutually agreeable and enforceable replacement for such provision, then (i) such
provision shall be excluded from this Agreement, (ii) the balance of the
Agreement shall be interpreted as if such provision were so excluded and (iii)
the balance of the Agreement shall be enforceable in accordance with its terms.
(g) Counterparts. This Agreement may be executed in counterparts,
------------
each of which shall be deemed an original, but all of which together will
constitute one and the same instrument.
(h) Arbitration. Any dispute or claim arising out of or in
-----------
connection with this Agreement will be finally settled by binding arbitration
in San Mateo, California in accordance with the rules of the American
Arbitration Association by one arbitrator appointed in accordance with said
rules. The arbitrator shall apply California law, without reference to rules
of conflicts of law or rules of statutory arbitration, to the resolution of
any dispute. Judgment on the award rendered by the arbitrator may be entered
in any court having jurisdiction thereof. Notwithstanding the foregoing, the
parties may apply to any court of competent jurisdiction for preliminary or
interim equitable relief, or to compel arbitration in accordance with this
paragraph, without breach of this arbitration provision. This Section 12(h)
shall not apply to the Confidentiality Agreement.
(i) Advice of Counsel. EACH PARTY TO THIS AGREEMENT ACKNOWLEDGES
-----------------
THAT, IN EXECUTING THIS AGREEMENT, SUCH PARTY HAS HAD THE OPPORTUNITY TO SEEK
THE ADVICE OF INDEPENDENT LEGAL COUNSEL, AND HAS READ AND UNDERSTOOD ALL OF THE
TERMS AND PROVISIONS OF THIS AGREEMENT. THIS AGREEMENT SHALL NOT BE CONSTRUED
AGAINST ANY PARTY BY REASON OF THE DRAFTING OR PREPARATION HEREOF.
[Signature Page Follows]
-6-
The parties have executed this Agreement the date first written above.
BRIO TECHNOLOGY, INC.
By:____________________________
Title:_________________________
Address: 0000 Xxxx Xxxxxxxx
Xxxx Xxxx, XX 00000
XXXX XXXXX
Signature:_____________________
Address:_______________________
_______________________
-7-
EXHIBIT A
---------
CONFIDENTIAL INFORMATION AND
INVENTION ASSIGNMENT AGREEMENT
-8-
