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EXHIBIT 10.22
EMPLOYMENT AGREEMENT
This Employment Agreement is made and entered into by and between
Telocity, Inc. (the "Company") and Xxxxxx X. Xxxxx, Xx. (the "Employee") on
December 10th, 1999.
1. POSITION AND DUTIES: The Employee shall be employed by the Company as its
Executive Vice President and Chief Financial Officer reporting only to the
Company's Chief Executive Officer (CEO) beginning no later than January
3rd, 2000 (the "Effective Date"). Employee agrees to devote his full
business time, energy and skill to his duties at the Company. These duties
shall include those duties customarily performed by the Chief Financial
Officer, as well as those duties that may be assigned by the CEO from time
to time.
2. TERM OF EMPLOYMENT. The Employee's employment with the Company will be for
no specified term, and may be terminated by the Employee or the Company at
any time, for any reason, with or without cause, and neither the Employee
nor the Company shall have any further obligation or liability whatsoever
under this Employment Agreement to the other, except as may be
specifically set forth herein.
3. COMPENSATION: The Employee shall be compensated by the Company for his
services as follows:
A. Base Salary. The Employee shall be paid a monthly Base Salary of
$20,833.33 per month ($250,000.00 [Two Hundred and Fifty Thousand
U.S. Dollars] on an annualized basis), subject to applicable
withholding, in accordance with the Company's normal payroll
procedures. The Employee's base salary shall be reviewed on at least
an annual basis and may be increased as appropriate. In the event of
such an increase, the new amount shall become the Employee's Base
Salary.
B. Benefits: The Employee shall have the right, on the same basis as
other members of the Company's senior management, to participate in
and receive benefits under any of the Company's Employee Benefit
Plans (broadly structured in Attachment A), as such plans may be
modified from time to time. The Employee shall be entitled to the
benefits afforded to other members of senior management under the
Company's vacation, holiday and business expense reimbursement
policies. The Employee will be entitled to five (5) weeks vacation.
To the extent the Employee is unable in the execution of his duties
and responsibilities to take the allotted (and any previously-
carried-over) vacation in any given year, the Employee will be
eligible to roll-over up to five (5) weeks of vacation annually.
C. Annual Incentive Bonus: By way of description and not limitation, the
Employee shall be entitled to the benefits afforded to other members
of senior management under the Company's Bonus Program (broadly
structured in Attachment B regarding components based upon company
performance and individual performance in any given fiscal year). The
Bonus Program shall be defined within thirty (30) days of the
Effective Date and which shall, in any case, contain a target bonus
amount of 50% of the Employee's base salary. The range of this annual
incentive bonus shall be determined by senior management as it
formulates the mechanics of the Company's management incentive
compensation plan.
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D. Hiring Bonus: In order to incent the Employee to join the Company and
address certain forfeitures, including forfeited stock options, prompted
by leaving the Employee's current employer, and to reimburse the
Employee for certain relocation expenses, the Company will provide a
one-time Hiring Bonus award of $325,000.00 (Three Hundred and
Twenty-Five Thousand U.S. Dollars), payable within thirty (30) days of
the Effective Date.
4. STOCK OPTIONS: The Employee shall be granted the option to purchase 370,000
(Three Hundred and Seventy Thousand) shares of the Company's Common stock
(the "Stock Options"), at an exercise price per share equal to the fair
market value of the Company's Common Stock on the date of grant as
determined by the Board in its sole discretion. Such grant and
determination shall be made no later than thirty (30) days after the
Effective Date. To the extent possible, such Option will be an incentive
stock option. The Stock Options shall vest monthly at the rate of 1/48 per
month; however there shall be a twelve (12) month cliff vesting period,
upon which the first 1/4th of the Stock Options shall vest. Upon the
termination of the Employee's employment in accordance with the provision
of Paragraph 6 below, the Stock Options shall vest as described in such
provisions. Except as provided herein and in Paragraph 6 below, the Stock
Options shall be subject to the terms of the Company's Stock Option Plan
and the Company's standard incentive and non-statutory Stock Option
Purchase Agreements (the "Standard Agreements" described in Attachment D),
provided pursuant tot he Company's Stock Option Plan. The Employee will be
permitted to exercise the option in full prior to vesting in the underlying
shares, subject to the Company's right to repurchase any unvested shares
(subject to Paragraph 6 below) at the Employee's original cost upon his
termination of employment, as provided in the Standard Agreements. In
addition, the Company shall permit the Employee to pay the option exercise
price with a full recourse loan (secured by the shares acquired with the
loan) at the lowest interest rate available to avoid the imposition of
imputed income under the tax laws to assist the Employee to exercise the
Stock Options. Such loan shall be repayable upon the earlier of: (i) the
fifth year anniversary of the Effective Date; (ii) the date six (6) months
after termination of the Employee's employment for any reason; or (iii) the
date twelve (12) months after the Employee is first eligible to sell shares
of the Company's stock that he holds following an initial public offering
of the Company's shares; provided however that in the event of termination
of the Employee Without Cause or the employee's Resignation for Good
Reason, such loan shall be repayable upon the earlier of the events stated
in clauses (i) or (iii) immediately preceding. Going forward, the Employee
will be eligible to receive additional Stock Options at amounts and
exercise prices then prevailing, but consistent with the proportional
amounts of the original grant vis-a-vis other senior manager's original
grant allotments.
5. DEFINITIONS APPLICABLE TO TERMINATIONS: For the purposes of "terminations"
as described in Paragraph 6, the following definitions shall apply:
A. A "Change of Control" is defined as and shall be deemed to have
occurred if any of the following occurs with respect to the Company
(except as may occur with a re-incorporation of the Company in Delaware
in advance of an initial public offering of the Company's stock): (i)
the direct or indirect sale or exchange in a single or series of
related transactions by the stockholders of the company of more than
fifty percent (50%) of the voting stock of the Company; (ii) a merger
or consolidation in which the Company is not the surviving party; (iii)
the sale, exchange, or transfer of all or substantially all of the
assets of the Company; or (iv) a liquidation or dissolution of the
Company. The re-incorporation of the Company without a
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material change in voting rights of the stockholders of the Company
shall not be deemed a Change in Control.
B. "Good Reason" shall be defined as, and shall be deemed to exist, if
any of the following conditions occur, provided that such conditions
persist for fifteen (15) business days after written notice to the
Board from the Employee and reasonable opportunity for the Company
to cure: (i) the Company, its successors or assigns decreases the
Employee's Base Salary; (ii) the Company, its successors or assigns
makes a material, adverse change in the Employee's title, authority,
responsibilities or duties, as measured against the Employee's
title, authority, responsibilities or duties immediately prior to
such change (provided that the Company or its successor may provide
an equivalent position); (iii) the Company, its successors or
assigns requires the relocation of the Employee's work place to a
location outside the San Francisco Bay Area (i.e., outside Marin
County, Contra Costa County, Alameda County, San Francisco County,
San Mateo County or Santa Xxxxx County); (iv) Xxxxx Xxxx leaves the
Company for reasons other than "Cause"; (v) covered above (vi) the
Company, its successors or assigns materially breaches any provision
of this Employment Agreement; or (vii) the Company fails to obtain
the assumption of this Employment Agreement by any successor or
assign of the Company.
C. Termination for "Cause" is defined as a termination of the Employee
based upon: (i) theft of the Company's assets; (ii) falsification of
any employment applications; (ii) conviction of a felony or
conviction of a crime involving fraud or dishonesty; or (iii)
improper and willful disclosure of the Company's confidential or
proprietary information that could materially harm the Company.
6. BENEFITS UPON TERMINATION: The Employee agrees that his employment may be
terminated by the Company at any time, for any reason, with or without
cause, and he shall be entitled as his sole remedy and compensation only
the compensation provided, below, in this Section 6. In the event of the
termination of the Employee's employment by the Company for any reasons
set forth below, he shall be entitled to the following:
A. Termination for "Cause": If the Employee's employment is terminated
by the Company for "Cause" as described above, the Employee shall be
entitled to no compensation or benefits from the Company other than
those under Paragraph 3 earned up until such termination and, in the
case of the Stock Options under Paragraph 4, shares vested through
the date of termination.
B. Voluntary Resignation: In the event of the Employee's voluntary
resignation from employment with the Company, other than for Good
Reason as described above, the Employee shall be entitled to no
compensation or benefits from the Company other than those under
Paragraph 3, earned up until such termination and, in the case of
the Stock Options under Paragraph 4, shares vested through the date
of his resignation.
C. Death or Disability: In the event that the Employee's employment
terminates as a result of his death or continued disability for
ninety (90) days ("disability" being defined as the inability to
perform specifically the essential functions of the Employee's
position as Chief Financial Officer), the Employee shall be entitled
to the following as of the date of death or disability.
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i. all accrued compensation and benefits earned through such date;
ii. the removal of any "cliff date" in calculating the number of
Stock Options vested upon the date of death or disability.
iii. an immediate vesting of all Stock Options granted and unvested as
of the date of death or disability. These Stock Options would be
then deemed immediately exercisable and remain exercisable for
the duration of the exercise period originally granted under the
Company's Stock Option Plan.
D. Termination Without Cause and/or Resignation for Good Reason: If the
Employee's employment is terminated by the Company without Cause, or
if the Employee resigns as an Employee of the Company for Good Reason
(provided that the underlying conditions persist for fifteen (15)
business days after written notice to the Company), then the Employee
shall be entitled, on such date, to all of the following:
i. all accrued compensation, benefits and vesting earned through the
date of termination or resignation;
ii. a lump-sum severance payment equal to twelve months of the
Employee's base salary and target incentive bonus, less
applicable withholding, payable immediately.
iii. the removal of any "cliff date" in calculating the number of
Stock Options vested upon such date; and
iv. The greater of: an immediate six (6) month acceleration in the
vesting schedule, or fifty percent (50%) of any unvested Stock
Options, shall be deemed to vest immediately on the date of
termination or resignation. These vested, and all previously
vested and unexercised, Stock Options would be then deemed
immediately exercisable and remain exercisable for the duration
of the exercise period originally granted under the Company's
Stock Option Plan.
7. EMPLOYEE INVENTIONS AND PROPRIETARY RIGHTS ASSIGNMENT AGREEMENT: The
Employee agrees to abide by the terms and conditions of the Company's
standard Employee Inventions and Proprietary Rights Assignment Agreement
(as described in Attachment E).
8. NON-SOLICITATION: The 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; (i) solicit the services, or
attempt to solicit the services, of any employee of the Company to any
other person or entity; or (ii) solicit or otherwise encourage any supplier
or other business contract of the Company to withdraw, curtail or cancel
their business with the Company.
9. INDEMNIFICATION: The Company agrees to make the Employee a party to its
standard form of indemnification agreement (as described in Attachment F)
as may be signed by the Company's other officers and directors from time to
time. The Employee will be covered under the Company-provided Directors'
and Officers' Liability Insurance Policies, which protections shall be
commensurate with the duties, responsibilities and risks of the Chief
Financial Officer position.
10. DISPUTE RESOLUTION: In the event of any dispute or claim relating to or
arising out of this Employment Agreement (including, but not limited to,
and claims of breach of contract, wrongful termination or age, sex, race or
other discrimination), the Employee and the Company agree that all such
disputes shall be fully and finally resolved by binding arbitration
conducted by the
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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). The 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.
11. ATTORNEY'S FEES: In the event that the Employee must bring action against
the Company to remedy breaches of the above Agreement, or to enforce any
right arising out of this Agreement, the following shall apply: (i) if the
action brought by the Employee fails to win the decision in the
arbitration, the Company shall not be liable to reimburse any costs
incurred by the Employee; (ii) if the action brought by the Employee
prevails in the arbitration, the Company shall be liable to reimburse the
Employee his incurred attorney's fees, arbitration costs and/or other costs
associated with the action or actions.
12. INTERPRETATION: The Employee and the Company agree that this Employment
Agreement shall be interpreted in accordance with and governed by the laws
of the State of California.
13. SUCCESSORS AND ASSIGNS: This Employment 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
Employment Agreement by the Employee, he shall not have the right to assign
or transfer any of his rights, obligations or benefits under the Employment
Agreement, except as otherwise noted herein. This agreement may be assigned
to the Company's successor without consent of the Employee (understanding
Change in Control provisions still apply).
14. ENTIRE AGREEMENT: This Employment Agreement constitutes the entire
employment agreement between the Employee and the Company regarding the
terms and conditions of his employment with the Company. To the extent that
there is any inconsistency between this Employment Agreement and any other
agreement between The Employee and the Company, the terms of this
Employment Agreement will govern. This Employment Agreement supersedes all
prior negotiations, representations or agreements between the Employee and
the Company, whether written or oral, concerning the Employee's employment
by the Company.
15. VALIDITY: If any one or more of the provisions (or any part thereof) of
this Employment 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.
16. MODIFICATION: This Employment Agreement and its Addenda may only be
modified or amended by a supplemental written agreement signed by the
Employee and the Company.
17. COUNTERPARTS: This Employment Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
IN WITNESS WHEREOF, the parties have executed this Employment Agreement as of
the date and year written below.
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Date: December 10, 1999 TELOCITY, INC.
By: Xxxx X. Xxxx
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Its: Pres. - CEO
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Date: December 10, 1999
/S/ XXXXXX XXXXX
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EMPLOYEE
Attachments
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