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EXHIBIT 10.17
EMPLOYMENT AGREEMENT
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This Employment Agreement is made and entered into by and between
ZLand, Inc. (the "Company") and Xxxx Xxxxxxxxx ("Xxxxxxxxx").
RECITALS
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On December 1, 1999 (the "Commencement Date") Nagelkirk was employed by
the Company as its Chief Financial Officer and is hereby bound by this
Employment Agreement.
NOW, THEREFORE, in consideration of the promises and benefits contained
in this Agreement, Nagelkirk and the Company hereby agree as follows:
1. Position and Duties: Nagelkirk shall be employed by the Company as
its Chief Financial Officer. As Chief Financial Officer, Nagelkirk agrees to
devote her full business time, energy and skill to her duties at the Company.
These duties shall include, but not be limited to, any duties consistent with
her position which may be assigned to Nagelkirk from the Company's Board of
Directors.
2. Term of Employment: Xxxxxxxxx'x employment with the Company pursuant
to this Agreement shall be on an at-will basis, subject to the provisions
regarding termination set forth below. Upon termination of Xxxxxxxxx'x
employment with the Company, neither Nagelkirk nor the Company shall have any
further obligation or liability to the other, except as set forth in Sections
3.3, 4, and 5 below.
3. Compensation: Nagelkirk shall be compensated by the Company for her
services as follows:
3.1 Base Salary: Nagelkirk shall be paid a monthly base salary
of sixteen thousand six hundred sixty-six dollars and sixty-seven cents
($16,666.67) (two hundred thousand dollars ($200,000.00) on an annualized
basis), subject to applicable withholding and paid in accordance with the
Company's normal payroll procedures. Such salary will be reviewed at least
annually and adjustments made as deemed appropriate by the Compensation
Committee of the Board of Directors. Any decrease in salary may be viewed as a
material event at Xxxxxxxxx'x sole discretion and therefore trigger termination
provisions as set forth in Sections 4 and 5 below.
3.2 Benefits: Nagelkirk shall have the right, on the same
basis as other employees of the Company, to participate in and to receive
benefits under any of the Company's benefit plans, including medical, dental and
group insurance plans for Nagelkirk and her immediate family. Nagelkirk shall
also be entitled to participate in any 401(k) Plan, Profit Sharing Plan or
Employee Stock Purchase Plan that the Company may offer, now or in the future,
in accordance with its terms. In addition, Nagelkirk shall be entitled to the
benefits afforded to other employees under the Company's vacation, holiday and
business expense reimbursement policies.
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3.3 Executive Incentive Compensation Plan: Nagelkirk will be
eligible to receive, in addition to her Base Salary, an annual incentive
compensation payment which would equal, at a minimum, forty percent (40%) of
Xxxxxxxxx'x current Base Salary, and at a maximum, seventy-five (75%) of
Xxxxxxxxx'x Base Salary, provided the Company achieves pre-defined goals for
that period. These goals will be determined mutually between Nagelkirk and the
Board of Directors. Similar bonuses will apply in subsequent fiscal years. These
payments will normally be made on a six month retroactive basis, on February
28th and August 31st of each fiscal year. If Nagelkirk terminates her employment
voluntarily, Nagelkirk shall be entitled to receive a payment pro-rated in
accordance with the period of Xxxxxxxxx'x employment with the Company during the
applicable fiscal year, provided that the pre-determined goals for that period
were met. Payment in this case will be made at the normal February 28th or
August 31st interval.
3.4 Stock Options: Nagelkirk will be granted a option, as part
of this contract, to purchase 200,000 shares of the Company's common stock at a
pre-IPO price not to exceed $9.00 per share. The shares subject to this option
will vest as follows: (A) upon the one (1) year anniversary of the Commencement
Date, 25%; (B) thereafter, 6.25% per month.
4. Benefits Upon Voluntary Termination: If Nagelkirk voluntarily
resigns from her employment with the Company, Nagelkirk shall be entitled to no
compensation or benefits other than those earned in Section 3 above through the
date of her termination, unless the Company materially altered Xxxxxxxxx'x
duties, responsibilities, authority or compensation from that set forth in
Sections 1 and 3 above. In that event, Section 5.2 shall apply. Nagelkirk will
have one (1) year from the date of her resignation to exercise any stock options
that were vested prior to the date of her resignation. If Xxxxxxxxx'x employment
terminates as a result of her death or disability, Nagelkirk shall be entitled
to the benefits described in Section 5.3.
5. Benefits Upon Other Termination: Nagelkirk agrees that her
employment may be terminated by the Company at any time, with or without cause.
In the event of the termination of Xxxxxxxxx'x employment by the Company for the
reasons set forth below, she shall be entitled to the following:
5.1 Termination for Cause: If Xxxxxxxxx'x employment is
terminated by the Company for Cause as defined below, Nagelkirk shall be
entitled to no compensation or benefits othis than those earned under Section 3
through the date of her termination. Nagelkirk will have one (1) year from the
date of her termination to exercise any stock options that were vested prior to
the date of her termination. For purposes of this Agreement, a termination "for
Cause" may only occur if Nagelkirk is terminated for any of the following
reasons:
(i) theft, dishonesty, or falsification of any employment
or Company records;
(ii) improper disclosure of the Company's confidential or
proprietary information;
(iii) failure or inability to perform any reasonable assigned
duties after written notice from the Company of, and a
reasonable opportunity to cure such failure or
inability; or
(iv) Xxxxxxxxx'x conviction of any criminal act which
impairs her ability to perform her duties under this
Agreement.
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5.2 Termination for Othis Than Cause: If Xxxxxxxxx'x
employment is terminated by the Company for any reason Other Than Cause and not
as a result of death or disability as set forth in Section 4, and not a result
of a Change of Control as set forth in Section 5.3 below, Nagelkirk shall be
entitled to receive a lump sum severance payment equal to twelve (12) months
Base Compensation plus 40% bonus, less applicable withholding, at her final
monthly salary rate. This payment shall be made immediately upon termination.
Nagelkirk will also be entitled to full benefits as set forth in Section 3.2
above, for a period of twelve (12) months after termination. In addition,
Nagelkirk shall be entitled to an acceleration of vesting of all remaining
unvested stock options granted as set forth in Section 3.4 for which she shall
have up to one (1) year after the date of termination to exercise. For purposes
of this Agreement, a termination for Other Than Cause shall occur if the Company
materially alters Xxxxxxxxx'x duties, responsibilities, authority or
compensation from that set forth in Sections 1 and 3 above.
5.3 Termination Following a Change in Control:
(a) If a Change in Control occurs, Nagelkirk will be
entitled to immediate acceleration of vesting for all stock options granted to
Nagelkirk as set forth in Section 3.4, as of the date of the Change in Control,
for which she has up to one (1) year after the date of the Change in Control, to
exercise.
(b) In addition, in the event of termination of
Xxxxxxxxx'x employment for any reason, or if the Company materially alters
Xxxxxxxxx'x duties, responsibilities, authority or compensation from that set
forth in Sections 1 and 3 above, within two (2) years after a Change of Control,
Nagelkirk shall be entitled to a lump sum severance payment equal to two (2)
years Base Salary and 40% bonus, less applicable withholding at her final
monthly salary rate. This payment shall be made immediately upon termination.
(c) In addition, Nagelkirk will also be entitled to
full benefits as set forth in Section 3.3 above, for a period of twelve (12)
months after termination.
(d) For purposes of this Agreement, a "Change of
Control" shall mean an Ownership Change in which the shareholders of the Company
before such Ownership Change do not retain, directly or indirectly, at least a
majority of the beneficiary interest in the voting stock of the Company after
such transaction or in which the Company is not the surviving corporation. For
purposes of this Agreement, an "Ownership Change" shall be deemed to have
occurred in the event any of the following occurs with respect to the Company:
(i) the direct or indirect sale or exchange by
the shareholders of the Company of all or
substantially all of the stock in the
Company;
(ii) a merger or consolidation in which the
Company is a minority party;
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(iii) the sale, exchange, or transfer of all or
substantially all of the assets of the
Company; or
(e) a liquidation or dissolution of the Company.
6. Exclusive Remedy: Nagelkirk agrees that the severance plan described
in Sections 4 and 5 above shall be her sole and exclusive remedy if the Company
terminates her employment and he shall be entitled to no further compensation
for any damage or injury arising out of the termination of her employment by the
Company.
7. Attorney's Fees: The prevailing party shall be entitled to recover
from the losing party its attorney's fees and costs incurred in any action
brought to enforce any right arising out of this Agreement.
8. Interpretation: Nagelkirk and the Company agree that this Agreement
shall be interpreted in accordance with and governed by the laws of the State of
California.
9. Successors and Assigns: This Agreement shall inure to the benefit of
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
Nagelkirk, he shall not have the right to assign or transfer any of her rights,
obligations or benefits under this agreement, except as otherwise noted herein.
10. Entire Agreement: This Agreement constitutes the entire employment
agreement between Nagelkirk and the Company regarding the terms and conditions
of her employment with the exception of any stock option agreement between
Nagelkirk and the Company for shares granted in Section 3.3 above.
11. Modification: This Agreement may only be modified or amended be a
supplemental written agreement signed by Nagelkirk and the Company.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year written below.
ZLand, Inc., a Delaware corporation
Date: December 1, 1999 /S/ XXXXX X. XXXXX
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By: Xxxxx X. Xxxxx, President
Date: December 1, 1999 /S/ XXXX XXXXXXXXX
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Xxxx Xxxxxxxxx
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