EXHIBIT 10.28
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement"), dated as of May 25, 1999, is
entered into by Atrieva Corporation (the "Employer"), a Delaware corporation,
and Xxxxx Xxxxx ("Employee").
1. BACKGROUND
In consideration of the promises herein and for other good and valuable
consideration, the sufficiency of which is hereby acknowledged, Employer and
Employee hereby agree as follows:
2. EMPLOYMENT
Employee shall be the President and Chief Executive Officer of the Atrieva
Corporation as of date of approval by the Employer's Board of Directors.
Employee shall at all times report to, and his business activities shall be
subject to the direction and control of, the Employer's Board of Directors.
Subject to this direction and control, and to Employer's Certificate of
Incorporation and Bylaws, Employee will have authority to make any and all
decisions affecting the company, including use of proceeds, employee hiring and
firing, management titles, product pricing, and representations of company
policy. The Employer's Board of Directors may limit Employee's authority at any
time, or may assign Employee other duties from time to time which are
customarily performed by a corporation's CEO, and which relate to the business
of Employer, or to any parent or related corporations or entities, or to any
business ventures in which Employer or said related corporations or entities may
participate.
3. TERM
This Agreement shall become effective as of the date of this Agreement and
shall terminate in accordance with the provisions of paragraph 8 below.
4. COMPENSATION
4.1 Salary
During the term of this Agreement, Employer agrees to pay or cause to be paid to
Employee, and Employee agrees to accept in exchange for the services rendered
hereunder by him, a salary of $13,750 before all legally required payroll
deductions. Such salary shall be paid in substantially equal monthly
installments, on monthly paydays that are consistent with the payroll schedule
used for other employees of Employer.
CONFIDENTIAL TREATMENT **Confidential treatment has been
HAS BEEN REQUESTED FOR requested with respect to the
CERTAIN PORTIONS OF THIS information contained within the
DOCUMENT "[**]" markings. Such marked portions
have been omitted from this filing and
have been filed separately with the
Securities and Exchange Commission
4.2 Performance Bonus
In addition to the annual salary described in subparagraph 4.1 above,
Employee shall be entitled to receive a Bonus of up to $35,000 annually, said
Bonus to be paid once per year on the anniversary of the date of hire, the Bonus
will be based upon objectives determined and agreed upon by the Employer's Board
of Directors. Said objectives will be defined in writing no later than 60 days
after Employees signing of this agreement. All legally required payroll
deductions shall be taken from the Employee's Performance Bonus to arrive at his
net payable Performance Bonus.
4.3 Stock Subscription Agreement
In addition, the Employee and Employer shall enter into a stock
subscription agreement allowing the Employee to purchase 1,887,000 shares of the
Employer's common stock. The said stock shall be purchased with a note (due 5
years from the date of the note) at a simple interest rate of 6% payable
annually. The stock price will be the fair market value as determined by the
Employee's Board of Directors at the same board meeting that this agreement is
ratified. The Employer shall have a repurchase right for the stock at the
aforementioned stock price which shall reduce ratably over a four year period.
The stock above referenced shall have a provision calling for the
repurchase rights of the company to expire under specific events relating to a
change in control which result in a liquidity event to the company's
shareholders. In the event that a change in control takes place in which the
shareholders receive an equitable value in excess of 75 million dollars,
repurchase rights covering shares representing 25% of the employee's total share
purchase shall lapse. In the event of a change of ownership resulting in an
equitable value in excess of 250 million dollars, repurchase rights covering
shares representing 50% of the employee's total share purchase shall lapse.
4.1 EMPLOYEE BENEFITS
During the term of this Agreement, Employee will be entitled to participate
in such fringe benefit programs as may be provided from time to time by Employer
to its employees generally. Employee's participation in all such fringe benefit
programs shall be subject to and in accordance with all applicable eligibility
and other requirements of those programs, including, without limitation, the
terms of any applicable employee benefits plans.
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6. BOARD SEAT
Employee, as long as he remains CEO, shall be granted a board seat at the
next regularly scheduled board meeting.
7. TERMINATION
Employment of Employee pursuant to this Agreement may be terminated as follows:
7.1. By Employer
With or without Cause or for no cause (as defined in subparagraph 7.4 below),
Employer may terminate the employment of Employee at any time during the term of
this Agreement upon giving Notice of Termination (as defined in subparagraph 7.5
below).
7.2. By Employee
Employee may terminate his employment at any time, for any reason, upon giving
Notice of Termination.
7.3. Automatic Termination
This Agreement and Employee's employment hereunder shall terminate automatically
upon the death or Total Disability of Employee. The term "Total Disability" as
used herein shall mean Employee's inability to perform the essential functions
of Employer's Chief Executive Officer for a period or periods aggregating 60
calendar days in any 12-month period as a result of physical or mental illness,
loss of legal capacity or any other cause beyond Employee's control, unless
Employee is granted a leave of absence by Employer's Board of Directors.
Employee and Employer hereby acknowledge that Employee's ability to perform the
essential functions of Employer's Chief Executive Officer is of the essence of
this Agreement. Termination hereunder shall be deemed to be effective (a) at the
end of the calendar month in which Employee's death occurs or (b) immediately
upon a determination by Employer's Board Directors of Employees Total
Disability.
7.4. Cause
Wherever reference is made in this Agreement to termination being with or
without Cause, "Cause" is limited to the occurrence of one or more of the
following events:
(a) Failure or refusal to carry out the lawful duties of Employer's Chief
Executive Officer or any directions of the Employer, which directions are
reasonably consistent with the duties herein set forth to be performed by
Employee;
(b) Violation by Employee of a state or federal criminal law involving
the commission of any crime against Employer or any felony;
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(c) Current use by Employee of illegal substances; intoxication at work
which impairs Employee's performance of duties; deception, fraud,
misrepresentation or dishonesty by Employee; any incident materially
compromising Employee's reputation or ability to represent Employer with
the public; any breach of Employee's duty of loyalty to Employer, any act
or omission by Employee which substantially impairs Employer's business,
good will or reputation; unacceptable performance, as determined in the
sole and absolute discretion of Employer's Board of Directors; or any other
serious misconduct; or
(d) Any other material violation of any provision of this Agreement.
7.5. Notice
The term "Notice of Termination" shall mean at least five days' written notice
of termination of Employee's employment, during which period Employee's
employment and performance of services will continue; provided, however, that
Employer may, upon notice to Employee and without reducing Employee's
compensation during such period, excuse Employee from any or all of his duties
during such period. The effective date of the termination of Employee's
employment hereunder shall be the date on which such five-day period expires.
8. TERMINATION PAYMENTS
In the event of termination of Employee's employment hereunder, all
compensation set forth in this Agreement shall terminate except as specifically
provided in this paragraph 8.
8.1. Termination by Employer
If Employer terminates Employee's employment without Cause (as defined in
subparagraph 7.4 above), Employee shall be entitled to receive (a) continuation
of his salary for a twelve period following the effective date of the
termination of Employee's employment so long as Employee remains unemployed; (b)
any unpaid salary that has accrued for services already performed as of the
effective date of the termination of Employee's employment. If Employee is
terminated by Employer for Cause, Employee shall not be entitled to any payments
hereunder, other than those set forth in clause (b) of this subparagraph 8.1.
8.2. Termination by Employee
In the case of the termination of Employee's employment by Employee, Employee
shall not be entitled to any payments hereunder, other than those set forth in
clause (b) of subparagraph 8.1 hereof
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8.3. Termination by Automatic Termination
In the case of the automatic termination of Employee's employment because of
Employee's death or Total Disability, Employee shall not be entitled to any
payments hereunder, other than those set forth in clauses (b) of subparagraph
8.1 hereof.
8.4. Payment Schedule
All payments under this paragraph 8 shall be made to Employee at the same
interval as payments of salary were made to Employee immediately prior to
termination and the legally required payroll deductions will be made.
9. REPRESENTATIONS AND WARRANTIES
In order to induce Employer to enter into this Agreement, Employee represents
and warrants to Employer that neither the execution nor the performance of this
Agreement by Employee will violate or conflict in any way with any other
agreement by which Employee may be bound, or with any other duties imposed upon
Employee by corporate or other statutory or common law.
10. NOTICE AND CURE OF BREACH
Whenever a breach of this Agreement by either party is relied upon as
justification for any action taken by the other party pursuant to any provision
of this Agreement, other than pursuant to the definition of "Cause" set forth in
subparagraph 7.4 hereof, before such action is taken, the party asserting the
breach of this Agreement shall give the other party at least ten days' prior
written notice of the existence and the nature of such breach before taking
further action hereunder and shall give the party purportedly in breach of this
Agreement the opportunity to correct such breach during the ten-day period.
11. FORM OF NOTICE
All notice given hereunder shall be given in writing, shall specifically refer
to this Agreement and shall be personally delivered or sent by telecopy or other
electronic facsimile transmission or by registered or certified mail, return
receipt requested, at the address set forth below or at such other address as
may hereafter be designated by notice given in compliance with the terms hereof.
If to Employee: Xxxxx Xxxxx
[***]
If to Employer: Atrieva Corporation
000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Fax: (000) 000-0000
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Copy to: Xxxxx X. XxXxxx
Xxxxxxx Coie LLP
0000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000
Fax: (000) 000-0000
If notice is mailed, such notice shall be effective upon mailing, or if notice
is personally delivered or sent by telecopy or other electronic facsimile
transmission, it shall be effective upon receipt.
13. ASSIGNMENT
This Agreement is personal to Employee and shall not be assignable by Employee.
Employer may assign its rights hereunder to (a) any corporation resulting from
any merger, consolidation or other reorganization to which Employer is a party
or (b) any corporation, partnership, association or other person to which
Employer may transfer all or substantially all of the assets and business of
Employer existing at such time. All of the terms and provisions of this
Agreement shall be binding upon and shall inure to the benefit of and be
enforceable by the parties hereto and their respective successors and permitted
assigns.
14. WAIVERS
No delay or failure by any party hereto in exercising, protecting or enforcing
any of its rights, titles, interests or remedies hereunder, and no course of
dealing or performance with respect thereto, shall constitute a waiver thereof.
The express waiver by a party hereto of any right, title, interest or remedy in
a particular instance or circumstance shall not constitute a waiver thereof in
any other instance or circumstance. All rights and remedies shall be cumulative
and not exclusive of any other rights or remedies.
15. ARBITRATION
With the exception of any claims for which the applicable law precludes a pre-
dispute agreement to binding arbitration, any controversies or claims arising
out of or relating to this Agreement, or to the employment relationship between
Employee and Employer, shall be settled by final and binding arbitration
administered by the American Arbitration Association (the "AAA") under its then-
current National Rules for the Resolution of Employment Disputes. A single
arbitrator shall be selected and the arbitration shall be held in Seattle,
Washington. The parties shall equally share the fees and expenses of the
arbitrator and the administrative expenses of the AAA. Judgment upon the
arbitrator's award may be entered in any court having jurisdiction and, for this
purpose, Employee irrevocably consents to the jurisdiction of the United
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States District Court for the Western District of Washington and the courts of
the State of Washington, with venue in King County.
16. AMENDMENTS IN WRITING
No amendment, modification, waiver, termination or discharge of any provision of
this Agreement nor consent to any departure therefrom by either party hereto,
shall in any event be effective unless the same shall be in writing,
specifically identifying this Agreement and the provision intended to be
amended, modified, waived, terminated or discharged and signed by Employer and
Employee, and each such amendment, modification, waiver, termination or
discharge shall be effective only in the specific instance and for the specific
purpose for which given. No provision of this Agreement shall be varied,
contradicted or explained by any oral agreement course of dealing or performance
or any other matter not set forth in an agreement in writing and signed by
Employer and Employee.
17. APPLICABLE LAW
This Agreement shall in all respects, including all matters of
construction, validity and performance, be governed by, and interpreted,
construed and enforced in accordance with, the laws of the state of Washington,
without regard to any rules governing conflicts of laws.
18. SEVERABILITY
If any provision of this Agreement shall be held invalid, illegal or
unenforceable in any jurisdiction, for any reason, including, without
limitation, the duration of such provision, its geographical scope or the extent
of the activities prohibited or required by it, then, to the full extent
permitted by law (a) all other provisions hereof shall remain in full force and
effect in such jurisdiction and shall be liberally construed in order to carry
out the intent of the parties hereto as nearly as may be possible, (b) such
invalidity, illegality or unenforceability shall not affect the validity,
legality or enforceability of any other provision hereof, and (c) any court or
arbitrator having jurisdiction thereover shall have the power to reform such
provision to the extent necessary for such provision to be enforceable under
applicable law.
19. HEADINGS
All headings used herein are for convenience only and shall not in any way
affect the construction of, or be taken into consideration in interpreting, this
Agreement.
20. ENTIRE AGREEMENT
This Agreement and a Stock Subscription Agreement between the parties to this
Agreement and dated as of the date of this Agreement constitute the entire
agreement between Employer and Employee with respect to the subject matter
hereof, and all
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prior or contemporaneous oral or written communications, understandings or
agreements between Employer and Employee with respect to such subject matter are
hereby superseded and nullified in their entireties.
IN WITNESS WHEREOF, the parties have executed and entered into this Agreement on
the dates set forth below.
FOR EMPLOYER: FOR EMPLOYEE:
By: /s/ [ILLEGIBLE]^^ /s/ Xxxxx Xxxxx
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of Atrieva Corporation Xxxxx Xxxxx
Its CEO
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Date: 6-1-1999 Date: June 1, 1999
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