Exhibit 10.7
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement") is made as of this 29th day of
October, 1999, by and between Xxxxx X. Xxxxx ("Employee") and Lante Corporation
and any existing or future assigns or subsidiaries owned or controlled, directly
or indirectly, by Lante and for whom Employee works ("Lante").
In lieu of any prior agreement (except as specifically referred to herein),
Employee and Lante agree as follows:
1. Employment. Employee will serve as the Executive Vice President and
Chief Financial Officer of Lante and shall report to Lante's Chief Executive
Officer. Employee agrees to use his best efforts and abilities to promote the
interests of Lante. Lante hereby agrees to employ Employee as further defined
in this Agreement. Except as provided in this Agreement, Lante agrees to pay
Employee's salary, at the rate agreed to from time to time, and to confer upon
Employee Lante's standard health insurance, paid time off (four weeks vacation,
sick and personal time), retirement plan benefits and other standard benefits,
all as governed by its Employee Handbook and other plan documents, as amended
from time to time (collectively, "Benefits").
2. Inventions.
(a) As used herein, "inventions" means discoveries, improvements and ideas
(whether or not shown or described in writing or reduced to practice) and works
of authorship, whether or not patentable or copyrightable, (i) which relate
directly to the business of Lante, (ii) which relate to Lante's actual or
demonstrably anticipated research or development, (iii) which result from any
work performed by Employee for Lante, (iv) for which equipment, supplies,
facility or trade secret information of Lante is used, or (v) which is developed
on any Lante time. This Section 2 does not apply to any invention developed by
Employee prior to Employee's employment by Lante, provided that such invention
is listed and described in an exhibit attached to and made part of this
Agreement, nor does it apply to any invention developed by Employee subsequent
to Employee's employment by Lante and not in violation of this Agreement.
(b) With respect to inventions made, authored or conceived by Employee,
either solely or jointly with others, during Employee's employment, whether or
not during normal working hours and whether or not at Lante's premises, Employee
acknowledges and agrees that all such works are "works made for hire" and,
consequently, that Lante owns all copyright and other rights thereto. Employee
further agrees that it will (i) keep accurate, complete and timely records of
such inventions, which records shall be Lante's property and be retained on
Lante's premises; (ii) promptly and fully disclose and describe such inventions
in writing to Lante; (iii) assign, and does hereby assign, to Lante all of
Employee's rights to such inventions and to patents, copyrights, and
applications therefore with respect to such inventions; and (iv) acknowledge and
deliver promptly to Lante (without charge to Lante but at the expense of Lante)
such written instruments and do such other acts as may be necessary in the
opinion of Lante to obtain and preserve such property rights and to vest the
entire right and title thereto in Lante.
(c) Employee will cooperate with Lante in the execution of any documents
which affect the assignment of inventions or rights thereto which may be
required by a Lante client or other third party, provided that such requirement
is no broader than the requirements of Section 2(b) above.
(d) Pursuant to the provisions of the Illinois Employee Patent Act, 765
ILCS 1060/2, Employee acknowledges receipt of notice that this assignment does
not apply to an invention for which no equipment, supplies, facility, or trade
secret of Lante was used and which was developed entirely on Employee's own
time, unless (a) the invention relates (i) to the business of Lante, or (ii) to
Lante's actual or demonstrably anticipated research or development, or (b) the
invention results from any work performed by Employee for Lante.
3. Confidential Information.
(a) During the term of Employee's employment by Lante and any time
thereafter, except in the course of performing Employee's employment duties for
Lante, Employee will not use, disclose, reveal or report any Confidential
Information of Lante, of Lante's past or current clients, or of other parties
which have disclosed confidential or proprietary information to Lante. As used
herein, "Confidential Information" means information not generally known that is
proprietary to Lante, its clients or other parties, including but not limited to
information about any clients, prospective clients, sales proposals, employees,
processes, operations, products, services, organization, research, development,
accounting, marketing, applications, selling, servicing, finance, business
systems, computer systems, software systems and techniques. All information
disclosed to Employee, or to which Employee obtains access, whether originated
by Employee or by others, which Employee has reasonable basis to believe to be
Confidential Information, or which is treated by Lante or its clients or other
parties as being Confidential Information, shall be presumed to be Confidential
Information.
(b) Employee will cooperate with Lante in the execution of any personal
confidentiality agreement which may be required by a Lante client or other third
party, provided that such agreement is no broader in its provisions to the
requirements of Section 3(a) above.
4. Nonsolicitation. During the Nonsolicitation Period (as defined below),
Employee shall not, without Lante's written consent, directly nor indirectly, by
or for himself or as the agent of another or through others as Employee's agents
(i) solicit any business for the type of services typically performed by Lante
from any client for whom Lante has performed any services or issued any
proposals in the two (2) year period prior to such solicitation or acceptance,
(ii) request, induce or advise any such client to withdraw, curtail or cancel
its business with Lante or (iii) solicit for employment, employ, or engage as a
consultant any person who had been an employee of Lante at any time within the
six (6) months prior to such solicitation or engagement. The "Nonsolicitation
Period" shall be the two (2) year period following Employee's termination of
employment.
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5. Return of Lante Property. Upon termination of employment, Employee shall
return to Lante all copies of any Confidential Information (whether in paper,
electronic or any other form) as well as all hardware, software, books,
documentation, files, keys, keycards, company credit cards, records, lists and
any other information or property owned by Lante within Employee's possession or
control, including all copies thereof.
6. Injunctive Relief. In the event of a breach or threatened breach of
Sections 2, 3, 4 or 5 by Employee, Lante shall be entitled, without posting of a
bond, to an injunction restraining such breach, an accounting and repaying of
profits, compensation, commission, remuneration or other benefits that Employee,
directly or indirectly, may realize as a result of such violation and to
reimbursement of any attorneys' fees and costs incurred by Lante as a result of
such breach. Nothing herein shall be construed as prohibiting Lante from
pursuing any other remedy available to it for such breach.
7. Compensation.
(a) Employee shall receive a salary of $250,000 per year, to be payable
semi-monthly ("Base Salary"). Additionally, Employee shall be eligible for a
bonus of up to $100,000 annually, which shall be based upon criteria mutually
agreed upon by Employee and Lante (the "Target Bonus"). The Target Bonus shall
be payable on a quarterly basis, and shall be prorated for fiscal year 1999.
(b) Upon execution of this Agreement, Employee shall receive an option
grant to purchase 700,000 shares of common stock (as adjusted by stock splits,
stock dividends, reverse stock splits, recapitalizations, etc.) at $2.245 per
share, which is the fair market value on the date hereof (the "Option"). The
Option will be pursuant to the standard option agreement of Lante and shall vest
25% after one year of employment and 2.0833% per month thereafter. Any shares
acquired pursuant to the Option described in this Section 7(b) will be subject
to all terms and conditions of that certain Second Shareholders Agreement, dated
June 17, 1999, as amended from time to time (the "Shareholders Agreement"),
including without limitation Lante's repurchase right at fair market value
described in Section 9 thereof (the "Repurchase Right").
(c) Upon execution of this Agreement, Employee shall purchase 300,000
shares of common stock of Lante at a purchase price of $2.245 per share, which
is the fair market value as of the date hereof as determined by Lante. Of these
300,000 shares, (i) 100,000 shares will be exempted from the Repurchase Right,
and (ii) 200,000 shares will be subject to the Repurchase Right at fair market
value, except that 50,000 of these shares will be exempted from the Repurchase
Right for each full year of employment for Lante completed by Employee. All
shares acquired pursuant to this Section 7(c) shall be subject to all terms and
conditions of the Shareholders Agreement, except as specifically otherwise
indicated in this Section 7(c).
(d) Notwithstanding the foregoing, the Repurchase Right will be eliminated
upon the occurrence of a Qualified Public Offering (as defined in the
Shareholders Agreement).
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8. Term.
(a) Employment under this Agreement may be terminable by either Lante or
Employee without cause with a minimum of two (2) weeks prior notice, or may be
terminable by Lante for cause without notice. In the event of termination by
Lante without cause, Employee shall be entitled to receive (i) six months base
salary, (ii) prorated Target Bonus and Benefits, (iii) twelve months of
acceleration for the vesting schedules of his Option, and (iv) an exemption from
the Repurchase Right for the 200,000 shares related to the portion of the Option
described in Section 7(b)(ii). For purposes of this Agreement, "cause" shall
mean criminal activity, material dishonesty, material breach of Employee's
fiduciary duties to Lante, material breach of this Agreement or material failure
to perform to Lante's standards. If Employee either is placed in a
substantially different role within Lante, is forced to relocate from Chicago,
Illinois, receives a reduction in Base Salary or is subject to a substantially
changed reporting relationship, then Employee may terminate his employment and
deem such event to be considered "termination without cause."
(b) If Employee terminates his employment within six months of a change of
control of Lante, Employee shall be entitled to receive (i) six months base
salary, (ii) prorated Target Bonus and Benefits, (iii) twelve months of
acceleration for the vesting schedules of his Option and (iv) an exemption from
the Repurchase Right for the 200,000 shares related to the portion of the Option
described in Section 7(b)(ii). For purposes of this Agreement, a "change of
control" shall mean (i) any sale, issuance or recapitalization or series of
sales, issuances, or recapitalizations of shares of Lante's capital stock by
Lante or any holders thereof which results in any person or entity group of
affiliated persons or entities (other than the holders of Lante's (or its
predecessor's) outstanding capital stock as of the date hereof and their
affiliates) owning capital stock of Lante possessing the voting power to elect a
majority of Lante's board of directors, (ii) the closing of a sale or transfer
of more than fifty percent (50%) of the assets of Lante on a consolidated basis
in any transaction or series of related transactions or (iii) any merger or
consolidation to which Lante is a party except for a merger in which Lante is
the surviving corporation and, after giving effect to such merger, Lante's
outstanding capital stock immediately prior to the merger would entitle the
holders thereof to elect a majority of Lante's board of directors after such
merger.
(c) Sections 2 through 6 of this Agreement shall survive termination of
employment.
9. Relocation. Employee shall be provided benefits related to relocation and
will be allowed an interim commuting arrangement as described within the Term
Sheet previously delivered to Employee by Lante, dated October 21, 1999.
10. General Provisions. This Agreement may be assigned by Lante and shall
inure to the benefit of Lante's successors and assigns. If any term, provision,
covenant or agreement hereof is held by a court to be invalid, void or
unenforceable, the remainder of the terms hereof shall remain in full force and
effect and shall in no way be affected, impaired or invalidated. This Agreement
shall be governed by and construed in accordance with the laws of the State of
Illinois. This Agreement contains the entire contract between the parties.
Except as specifically referred
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to herein, all prior agreements between the parties regarding such matters of
Employee's employment are superseded hereby and terminated.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date written above.
EMPLOYEE
/s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
LANTE CORPORATION
/s/ Xxxx Xxxxx
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Xxxx Xxxxx
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Print Name
Chairman
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Title
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