1
EXHIBIT 10.24
ONELIST, INC.
EMPLOYMENT AGREEMENT
This Agreement is entered into as of December 28, 1998, by and between ONElist,
Inc., a California corporation (the "Company") and Xxxx Xxxxxxxx (the
"Employee").
WHEREAS the parties hereto desire and agree to enter into an employment
relationship by means of this Agreement;
NOW THEREFORE in consideration of the promises and mutual covenants herein
contained, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, it is mutually covenanted and
agreed by and among the parties as follows:
1. Position and Duties. The Employee shall be employed as President and Chief
Executive Officer of the Company, reporting to the Board of Directors of the
Company (the "Board") and assuming and discharging such responsibilities as are
commensurate with the Employee position. The employee shall perform his duties
faithfully and to the best of his ability and shall devote his full business
time and effort to the performance of his duties hereunder, provided, however,
that the foregoing shall not preclude the Employee from engaging in civic,
charitable or religious activities, from devoting a reasonable amount of time to
private investments, or from being employed by, rendering services to or serving
on the boards of directors of other entities, so long as such activities,
employment and/or service do not materially interfere or conflict with his
responsibilities to the Company.
2. Employment Relationship. The Company and the Employee acknowledge that the
Employee's employment is and shall continue to be at Employee's employment
terminates for any reason, the Employee shall not be entitled to any payments,
benefits, damages, awards or compensation other than as provided by this
Agreement, or as may otherwise be available in accordance with the Company's
established employee plans and policies at the time of termination.
3. Compensation.
(a) Base Salary. For all services to be rendered by the Employee pursuant to
this Agreement, the Employee shall receive a minimum annual base salary of
$86,000, payable monthly in accordance with the Company's normal payroll
practices, increased from time to time by the Board consistent with past
practices.
(b) Bonus. Beginning with the Company's current fiscal year, and for each fiscal
year thereafter during the term of this Agreement the Employee shall be eligible
to receive a target bonus of up to fifty percent of Employee's base salary based
on performance of the Company
2
as set forth in the Company's annual operating plan established by the Chief
Executive officer of the Company and the Board (the "Target Bonus").
(c) Repurchase Option. The Employee shall execute an Amended and Restated Stock
Purchase Agreement (the "Purchase Agreement") of even date herewith whereby the
Employee shall grant to the Company a right of repurchase on 1,500,000 shares of
the Company's Common Stock owned by Employee (the "Shares"). Subject to the
provisions of Section 6, below, Twenty-Five percent (25%) of the Shares shall be
released from the Company's repurchase option as of the date of this Agreement.
1/48th of the Shares shall be released on the first day of each month commencing
on the thirteenth month after the date of this Agreement and each month
thereafter, provided in each case that the Purchaser's continuous status as an
employee has not terminated prior to the date of any such release.
4. Other Benefits. The Employee shall be entitled to participate in the employee
benefit plans and programs of the Company, if any, to the extent that his
position, tenure, salary, age, herewith and other qualifications make him
eligible to participate in such plans or programs, subject to the rules and
regulations applicable thereto. The Company reserves the right to cancel or
change the benefit plans and programs it offers to its employees at any time.
5. Expenses. The Company shall reimburse the Employee for reasonable travel
entertainment or other expenses incurred by the Employee in the furtherance of
or in connection with the performance of the Employee's duties hereunder, in
accordance with the Company's expense reimbursement policy as in effect from
time to time.
6. Termination.
(a) Involuntary Termination. If the Employee's employment with the Company
terminates as a result of Involuntary Termination (as defined below), then: (i)
the Employee shall be entitled to receive a severance payment equal to ninety
(90) days of the Employee's Current Compensation, and (ii) the Company's
repurchase option shall immediately lapse as to that number of shares as would
be released from the repurchase option had the Employee remained employed by the
Company for a period of ninety (90) days from the date of the termination of
Employee's employment with the Company. Any severance payments to which the
Employee is entitled pursuant to this Section 7(a) shall be paid in lieu of any
other severance or severance-type benefits to which the Employee may be entitled
under any other company-sponsored plan, and shall be paid to the Employee in a
lump sum within fifteen (15) days of the Employee's Involuntary Termination.
(b) Termination Following a Change In Control. In addition, if the Employee's
employment with the Company terminates as a result of Involuntary Termination
(as defined below), within one year of a Change in Control (as defined below),
the Unreleased Shares, if any, shall be automatically released. For purposes of
this Agreement, the term "Change of Control" shall mean the occurrence of any of
the following events:
-2-
3
(1) Any "person" (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) is or becomes
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing seventy five
percent (75%) or more of the total voting power represented by the Company's
then outstanding voting securities; provided, however, that a Change in Control
shall be deemed to occur in the event any one individual becomes the "beneficial
owner" (as defined in Rule l3d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing seventy percent (70%) or
more of the voting power represented by the Company's then outstanding voting
securities; or
(2) A merger or consolidation of the Company with any other corporation, 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 into voting securities of
the surviving entity) at least seventy percent (70%) of the total voting power
represented by the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, or the stockholders
of the Company approve a plan of complete liquidation of the Company or an
agreement for the sale or disposition by the Company of all or substantially all
the Company's assets.
(c) Other Termination. If the Employee's employment terminates other than in an
Involuntary Termination, or upon the Employee's Death or Disability, then the
Employee shall not be entitled to receive severance or other benefits pursuant
to this Agreement, but may be eligible for those benefits (if any) as may then
be established under the Company's severance and benefits plans and policies
existing at the time of such termination.
7. Definitions.
(a) Cause. "Cause" shall mean the occurrence of any one or more of the
following: (i) the Employee's conviction by, or entry of a plea of guilty or
nolo contendere in, a court of final jurisdiction for any crime which
constitutes a felony in the jurisdiction involved (other than a felony traffic
offense), which felony materially injures the Company, its prospects or its
reputation; (ii) the Employee's misappropriation of funds or commission of a
material act of fraud, whether prior or subsequent to the date hereof, upon the
Company; (iii) gross negligence by the Employee in the scope of the Employee's
services to the Company; (iv) a willful breach by the Employee of a material
provision of this Agreement; or (v) a willful failure of the Employee to
substantially perform his duties hereunder. Notwithstanding the foregoing, the
Employee shall not be deemed to have been terminated for Cause under clause
(iii), (iv) or (v) of this Section 7(a) unless the Board delivers a written
notice to the Employee setting forth the reasons for the Company's intention to
terminate for Cause and specifically identifying the manner in which the Board
believes that the Employee has engaged in such conduct, which conduct is not
substantially corrected by the Employee within 10 days following his receipt of
such notice, and provides the Employee with an opportunity, together with his
counsel, if any, to be heard before the Board.
-3-
4
(b) Current Compensation. "Current Compensation" shall mean an amount equal to
the sum of (i) the Employee's average annual (or annualized) base salary over
the three preceding fiscal years (or such lesser number of years as may be
applicable to the Employee); and (ii) the Employee's average annual (or
annualized) bonus over the three preceding fiscal years; provided, however that
if there are fewer than three years of actual bonus history, the Employee's
average bonus shall be calculated by including the Employee's Target Bonus for
the fiscal year in which the termination occurs. For example, if the termination
occurs in 2000, average bonus shall be calculated based on actual bonuses earned
for 1999 and 1999 and Target Bonus for 1999.
(c) Disability. The Employee shall be considered to have suffered a "Disability"
for purposes of this Agreement if, at the end of any calendar month during the
term of this Agreement, the Employee is and has been for the four consecutive
full calendar months then ending, or for fifty percent or more of the normal
working days during the eight consecutive full calendar months then ending,
unable due to mental or physical illness or injury to perform his duties under
this Agreement in his normal and regular manner.
(d) Involuntary Termination. "Involuntary Termination" shall mean (i) without
the Employee's express written consent, a reduction of the Employee's duties,
position or responsibilities relative to the Employee's duties, position Or
responsibilities in effect immediately prior to such reduction, or the removal
of the Employee from such position, duties and responsibilities, unless the
Employee is provided with comparable duties, position and responsibilities; (ii)
without the Employee's express written consent, a reduction of the Employee's
base salary or Target Bonus (as set forth in Section 3) in effect immediately
prior to such reduction; (iii) a reduction in the kind or level of employee
benefits to which the Employee is entitled immediately prior to such reduction
with the result that the Employee's overall benefits package is significantly
reduced; (iv) without the Employee's express written consent, the relocation of
the Employee to a facility or a location more than fifty (50) miles from his
current location; (v) any purported termination of the Employee which is not
effected for Cause or for which the grounds relied upon are not valid; or (vi)
the failure of the Company to obtain the assumption of this Agreement by any
successors contemplated in Section 9 below; provided, however, that an event
described above shall not constitute Involuntary Termination unless it is
communicated by the Employee to the Company in writing and is not corrected by
the Company in a manner that is reasonably satisfactory to the Employee
(including full retroactive correction with respect to any monetary matter)
within ten days of the Company's receipt of such written notice from the
Employee.
8. Right to Advice of Counsel. The Employee acknowledges that he has had the
right to consult with counsel and is fully aware of his rights and obligations
under this Agreement.
9. Successors.
(a) Company's Successors Any successor to the Company (whether direct or
indirect and whether by purchase, lease, merger, consolidation, liquidation or
otherwise) to all or
-4-
5
substantially all of the Company's business and/or assets shall assume the
obligations under this Agreement and agree 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.
For all purposes under this Agreement, the term "Company," shall include any
successor to the Company's business and/or assets which executes and delivers
the assumption agreement described in this subsection (a) or which becomes bound
by the terms of this Agreement by operation of law.
(b) Employee's Successors Without the written consent of the Company, the
Employee shall not assign or transfer this Agreement or any right or obligation
under this Agreement to any other person or entity. Notwithstanding the
foregoing, the terms of this Agreement and all rights of the Employee hereunder
shall inure to the benefit of, and be enforceable by, the Employee's personal or
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.
10. Notice Clause.
(a) Manner. Any notice hereby required or permitted to be given shall be
sufficiently given if in writing and upon mailing by registered or certified
mail, postage prepaid, to either party at the address of such party or such
other address as shall have been designated by written notice by such party to
the other party.
(b) Effectiveness. Any notice or other communication required or permitted to be
given under this Agreement will be deemed given on the day when delivered in
person, or the third business day after the day on which such notice was mailed
in accordance with Section 12(a).
11. Disputes. In the event that a dispute arises over the terms or enforcement
of this Agreement, the parties agree to submit such dispute to binding
arbitration in San Jose, California by a single arbitrator engaged through
JAMS-Endispute, Inc., its successor firm or another private dispute resolution
firm acceptable to both parties. The arbitrator shall be selected as follows:
the arbitration firm shall present its panel of available arbitrators, and each
party shall sign rank of preference to each of such panel with number 1 being
the highest rank. The person on the panel with the lowest total score shall be
the arbitrator for a dispute. The arbitrator shall have absolute discretion or
authority to limit discovery relevant to the matter and the length of the
proceeding before the arbitrator. The parties may not submit written briefs. The
arbitrator shall rule on the dispute in writing within ten (10) days after the
close of hearings. The time specified in this Section may be extended upon
mutual agreement of the parties. The decision of the arbitrator may be entered
or registered in any court of competent jurisdiction for execution and
enforcement. The arbitrator shall have the power to allocate between the parties
the costs of the proceeding and the attorneys' fees incurred in the proceeding
as he or she deem appropriate.
12. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal substantive laws, but not the choice of law rules,
of the state of California.
-5-
6
13. Severability. The invalidity or unenforceability of any provision of this
Agreement, or any terms hereof, shall not affect the validity or enforceability
of any other provision or term of this Agreement.
14. Integration. This Agreement represents the entire agreement and undemanding
between the parties as to the subject matter herein and supersedes all prior or
contemporaneous agreements whether written or oral. No waiver, alteration, or
modification of any of the provisions of this Agreement shall be binding unless
in writing and signed by duly authorized representatives of the parties hereto.
15. Taxes. All payments made pursuant to this Agreement shall be subject to
withholding of applicable income and employment taxes.
IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case
of the Company by a duly authorized officer, as of the day and year first above
written.
ONELIST, INC.
By:
----------------------------------
Title:
-------------------------------
EMPLOYER
--------------------------------------
-6-
