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Exhibit 10.1(c)
EMPLOYMENT AGREEMENT
This Agreement, entered into and effective as of this 21st day of February,
2001, is by and between Xxxxx Xxxxxxxxxx ("Xxxxxxxxxx") and Metricom,
Incorporated ("MCOM").
Whereas, MCOM, a Delaware corporation with headquarters at 000 Xxxx Xxxxxx
Xxxxxx, Xxx Xxxx, Xxxxxxxxxx, desires to employ Xxxxxxxxxx, a Washington State
resident, as its interim Chief Executive Officer, and Xxxxxxxxxx is willing to
accept employment, on the terms and conditions of this Agreement,
In consideration of the mutual covenants herein, the parties agree:
1. POSITION AND DUTIES. Xxxxxxxxxx shall be employed by MCOM in the
position of Interim Chief Executive Officer. Xxxxxxxxxx shall have such
reasonable duties and responsibilities as may be required from time to
time by the Board of Directors of MCOM consistent with Xxxxxxxxxx'x
position as Chief Executive Officer. The Board expressly agrees to meet
with Xxxxxxxxxx no less frequently than once every two weeks during the
CEO Term.
2. CEO SEARCH. MCOM agrees to engage a reputable executive search firm to
engage a nationwide search for a "permanent" Chief Executive Officer
within thirty (30) days of the date of this Agreement.
3. TERM. The Initial Term of this Agreement as Interim CEO shall run from
February 21, 2001 through June 30, 2001 ("Initial Term"). During the
Initial Term, this Agreement may only be terminated for "Cause."
Xxxxxxxxxx'x employment as Interim CEO may be terminated by written
notice by either party at the conclusion of the Initial Term. If not
terminated at or before the conclusion of the Initial Term, Xxxxxxxxxx'x
term of employment with MCOM as Interim CEO shall automatically extend
for additional, consecutive two month periods, on the same terms and
conditions as the Initial Term (collectively "CEO Term"). If Xxxxxxxxxx
is employed by the Company (but not including any time spent as a
consultant pursuant to Section 4 below) beyond August 31, 2001 then this
Agreement shall be renegotiated between the parties on terms at least as
favorable to Xxxxxxxxxx as set forth in this Agreement.
4. CONSULTANT. Unless this Agreement is terminated for Cause, then at the
conclusion of Xxxxxxxxxx'x employment as Interim CEO, MCOM agrees to
hire Xxxxxxxxxx as a consultant. This consultant arrangement shall be
for a minimum term of twelve months commencing immediately upon the
conclusion of Xxxxxxxxxx'x employment as Interim CEO, and may only be
terminated for "Cause" ("Consultant Term").
5. LIMITATIONS ON OBLIGATION. In recognition of family obligations,
Xxxxxxxxxx shall not be required to work or travel for MCOM during the
weekends. In addition, the parties understand that there are some duties
that can be performed by Xxxxxxxxxx from
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Washington State. To the extent that Xxxxxxxxxx can perform his duties
from Washington State, MCOM expressly consents to his doing so.
6. COMPENSATION DURING THE CEO TERM.
(a) Base Salary. MCOM shall initially pay Xxxxxxxxxx a monthly gross
base salary in the amount of One Hundred Fifty Thousand Dollars and No
Cents ($150,000.00) ("Base Salary") in accordance with MCOM's standard
payroll processing schedule. Xxxxxxxxxx'x Base Salary shall not be
decreased absent Xxxxxxxxxx'x prior written consent.
(b) Non-Discretionary Bonus for Additional Funding.
1) In recognition that Xxxxxxxxxx'x services on behalf of MCOM
may attract additional third party investment in MCOM, MCOM shall
pay Xxxxxxxxxx an automatic and non-discretionary bonus equal to
one and one-half percent (1.5%) of the cash value of all new
investment funds received by MCOM arising from negotiations
entered into during the CEO Term and for a period of twenty-four
months thereafter (cumulatively, the "Bonus Period"). For
purposes of this Section 6, new investment funds received by MCOM
during the Bonus Period shall include, without limitation, all
venture capital and other private equity investment plus any
amounts secured by MCOM through a new line of credit, loan,
convertible note, or other debt arrangement. For each such line
of credit or other debt arrangement, the non-discretionary bonus
payment shall be calculated based on the amount that is actually
paid to MCOM. Multiple draws on any line of credit or debt
arrangement shall be taken into account separately in calculating
the bonus, and no draws on a line of credit or debt arrangement
that may create a bonus obligation to Xxxxxxxxxx shall be
undertaken without approval of Metricom's Board of Directors.
To the extent that new investment funds secured during the Bonus
Period include one or more investments received from Vulcan
Ventures (where each separate investment shall be referred to
singularly as a "Vulcan Investment"), then the non-discretionary
bonus provided for above, with respect only to any Vulcan
Investment shall be capped at a maximum of Three Hundred and
Fifty Thousand Dollars ($350,000).
The cap described in the immediately preceding paragraph shall be
applied separately to each distinct Vulcan Investment, on a
non-aggregated basis. For clarity, and by way of example, if
Vulcan Ventures participates in multiple investment rounds during
the Bonus Period committing "x" amount of dollars payable in
separate rounds with each payment contingent upon MCOM's
satisfaction of specified conditions at each round, the $350,000
limitation shall apply separately to the amount received at each
round. To the extent, if any, that additional investors (i. e.,
investors other than Vulcan Ventures) participate in such rounds
the cap shall not apply as to investments from such additional
investors.
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During the Bonus Period, the non-discretionary bonus shall be due
and payable to Xxxxxxxxxx regardless of whether Xxxxxxxxxx is
employed by or providing services to MCOM at the time any
additional funding is received.
(2) Non-Discretionary Bonus for Liquidity Event. In addition to
any non-discretionary bonus described in (b)(1) above, Xxxxxxxxxx
shall also receive an automatic and non-discretionary bonus if
there is a Liquidity Event during the Bonus Period. A "Liquidity
Event" shall mean: (i) any sale, exchange, or transfer of
substantially all of the assets of MCOM, (ii) any sale, exchange
or transfer involving the common stock of MCOM if, immediately
following the transaction, the persons who held MCOM common stock
(or securities convertible into MCOM common stock) hold less than
a majority of the combined equity of MCOM (or any successor
entity), or (iii) any other sale or similar transaction in which
MCOM undergoes a change of majority shareholder control in
exchange for consideration. Upon the occurrence of a Liquidity
Event, Xxxxxxxxxx shall receive a non-discretionary bonus equal
one and a half percent (1.5%) of the purchase price paid in the
Liquidity Event.
(3) Timing and Nature of Payment. Each non-discretionary bonus
provided for herein shall be payable on or before the closing of
the respective transactions. The parties further agree that, in
each calendar year of the Bonus Period, the first One Million
Dollars ($1,000,000) of any non discretionary bonus provided for
herein shall, at Xxxxxxxxxx'x election, be payable in cash or in
shares of MCOM common stock (or in securities convertible to MCOM
common stock), or in a combination thereof. If the cumulative
non-discretionary bonus exceeds $1,000,000 in any calendar year
during the Bonus Period, then the amount in excess of $1,000,000
shall be paid exclusively in shares of MCOM common stock (or in
securities convertible to MCOM common stock). In all cases where
the bonus is paid in the form of stock or other securities, the
number of shares due and payable to Xxxxxxxxxx shall be
calculated on the basis of the fair market value of the stock
prior to the public announcement or closing of the applicable
transaction. Thus, the total number of shares delivered to
Xxxxxxxxxx will be calculated based on the value of MCOM prior to
any investment which triggers the non-discretionary bonus.
7. COMPENSATION DURING THE CONSULTANT TERM
During the Consultant Term, Xxxxxxxxxx shall be compensated at the daily
rate of Five Thousand Dollars ($5000.00) a day. Xxxxxxxxxx shall not be
expected to work more than ten hours per day. If additional hours are
required, then they shall be compensated at the hourly rate of $250 per
hour. MCOM shall pay Xxxxxxxxxx for a minimum of three days of work a
month -- even if no services are required in a month.
8. FRINGE BENEFITS. Xxxxxxxxxx shall be entitled to the benefits provided
to officers of MCOM in accordance with its Personnel Policies (including
but not limited to health
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insurance) and consistent with Xxxxxxxxxx'x position as Chief Executive
Officer. At Xxxxxxxxxx'x sole election, he may obtain or retain
individual health, life, disability policies (and chose not to
participate in MCOM's group insurance policies). In such an event, then
MCOM agrees to reimburse Xxxxxxxxxx for all premium costs related to
such individual policies during the CEO and Consultant Terms.
9. EXPENSES. In addition, during both the CEO and Consultant Terms
Xxxxxxxxxx shall be entitled to reimbursement of all business expenses
incurred by Xxxxxxxxxx for business conducted on behalf of MCOM, as
supported by reasonable documentation evidencing such business expenses.
10. TRAVEL. MCOM shall pay for Xxxxxxxxxx'x travel, and the travel of his
immediate family, to and from the Puget Sound area (including, but not
limited to, Seattle and Port Angeles, Washington) and California. The
Company understands that Xxxxxxxxxx'x residence in the Puget Sound area
shall necessitate frequent trips between California and the Puget Sound
area. The Company shall also provide Xxxxxxxxxx with transportation
(including, but not limited to, an automobile at Xxxxxxxxxx'x choice) in
the San Xxxx area and for travel to and from his residences in the Puget
Sound area.
11. HOUSING. The Company will provide Xxxxxxxxxx with temporary housing in
the San Xxxx area during the CEO Term. This temporary housing shall be
of premium quality, tastefully furnished and sufficient to allow
extended visits by Xxxxxxxxxx'x immediate family. The parties understand
that a house, apartment, condo or hotel suite of rooms could suit this
requirement.
12. PAID LEAVE. The parties do not expect Xxxxxxxxxx to take vacation during
the Initial Term. If the CEO term continues beyond the Initial Term,
then Xxxxxxxxxx shall accrue a maximum of four (4) weeks paid vacation
on an annualized basis to be prorated based on five (5) paid vacation
days for each three month term or fraction thereof employed. During the
CEO Term, there shall be no limitation on the amount of paid sick days
available to Xxxxxxxxxx. Xxxxxxxxxx shall additionally be entitled to
take all paid company holidays off during the CEO Term.
13. TERMINATION. This Agreement may only be terminated during the CEO or the
Consultant Term only upon the occurrence of one or more of the following
events:
(a) TERMINATION BY THE COMPANY FOR CAUSE. As used herein, Cause means
the following:
(i) the willful and continued failure by Xxxxxxxxxx to
substantially perform his material duties as Chief
Executive Officer as set forth under this Agreement;
provided, however, that such termination shall not be
effective unless and until MCOM delivers to Xxxxxxxxxx a
written Notice of Cause specifically identifying the
manner in which MCOM believes Xxxxxxxxxx has not
substantially performed his duties as Chief Executive
Officer and providing Xxxxxxxxxx with a period of ten (10)
days from the
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date of receipt of the Notice of Cause (the "Cure Period")
in which to cure said performance deficiencies as stated
in the Notice of Cause and Xxxxxxxxxx fails to cure the
performance deficiencies within the Cure Period; or
(ii) Xxxxxxxxxx'x misappropriation of MCOM's funds or other
material dishonesty causing significant negative impact to
the Company;
(iii) Xxxxxxxxxx'x conviction of a felony;
(iv) Xxxxxxxxxx'x material breach of this Agreement.
(b) XXXXXXXXXX'X TERMINATION FOR "GOOD REASON." Xxxxxxxxxx may
terminate this Agreement at any time for "Good Reason." For
purposes of this Agreement, "Good Reason" shall mean:
(i) a breach by MCOM of the specific terms of this Agreement;
(ii) during the CEO Term, the assignment of any duties
inconsistent with Xxxxxxxxxx'x status as Chief Executive
Officer or a substantial adverse alteration in the nature,
conditions or responsibilities of Xxxxxxxxxx'x position as
Chief Executive Officer;
(iii) during the CEO Term, a reduction in Xxxxxxxxxx'x Base
Salary as in effect as of the date hereof or as the same
may be increased from time to time;
(iv) the failure of MCOM, without Xxxxxxxxxx'x written consent,
to pay Xxxxxxxxxx any portion of his Base Salary at its
then existing current rate; or
(v) the failure of MCOM, without Xxxxxxxxxx'x written consent,
to provide Xxxxxxxxxx with benefits consistent with his
position as Chief Executive Officer (as said benefits are
further described herein).
Provided that Xxxxxxxxxx shall have no right to terminate this
Agreement pursuant to this Paragraph unless Xxxxxxxxxx provides
MCOM with a written Notice of Good Reason Termination describing
the act or acts potentially giving rise to Xxxxxxxxxx'x
termination for Good Reason and providing MCOM a period of ten
(10) days from the date of receipt of said Notice (the "Cure
Period") in which to cure said act or acts as described in
Xxxxxxxxxx'x Notice of Good Reason Termination and MCOM fails to
cure said acts or acts within the Cure Period.
In the event Xxxxxxxxxx terminates his employment for Good
Reason, MCOM shall pay Xxxxxxxxxx xxxxxxxxx pay at the
Xxxxxxxxxx'x then current rate of Base Salary for the duration of
the applicable stated Term (i.e. CEO Term or Consultant Term as
applicable). Such severance payment under this Paragraph shall be
payable in a lump sum payment upon Xxxxxxxxxx'x effective date of
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termination. In addition, upon termination of Xxxxxxxxxx'x
employment under this Paragraph, MCOM shall also continue all of
Xxxxxxxxxx'x benefits at their current existing amounts as of the
date of termination, at MCOM's sole expense, for the duration of
the applicable stated Term (i.e. CEO Term or Consultant Term as
applicable).
14. NOTICES. All notices hereunder shall be in writing and personally
delivered or sent by certified or registered mail, postage prepaid,
return receipt requested, addressed as follows:
IF TO MCOM: Chair, Board of Directors
000 Xxxx Xxxxxx Xx.
Xxx Xxxx, XX. 00000
IF TO XXXXXXXXXX: Xxxxx X. Xxxxxxxxxx
[address deleted]
Either party may direct the other, by notice as provided herein, to
deliver notice in the future to another address.
15. MEDIATION. In the event any controversy, claim or dispute arising out of
this Agreement cannot be settled by the parties, the parties agree to
appoint a mediator to attempt to settle such controversy or claim. The
parties agree to appoint a mediator by mutual agreement. The parties
agree to first proceed with mediation with respect to any controversy,
claim or dispute arising out of this Agreement. The parties agree to
attend and to participate in good faith for one full day of a mediation
session; provided, however, that the parties may agree to participate in
additional mediation sessions by a writing signed by both parties
specifying the number of additional sessions upon which they agree to
participate. The parties agree to each be responsible for its or his own
costs, including reasonable attorneys' fees, associated with the
mediation, unless otherwise agreed to by the parties.
16. ENTIRE AGREEMENT. This Agreement contains the entire agreement of the
parties with respect to the employment of Xxxxxxxxxx. This Agreement
shall terminate and supersede any prior written or oral agreements or
understandings between the parties hereto regarding the terms and
conditions of MCOM's employment of Xxxxxxxxxx.
17. AMENDMENT; NON-WAIVER. Except as otherwise specifically provided, no
amendment or modification of this Agreement shall be valid, unless the
same is in writing and signed by the party against whom it is sought to
be enforced.
18. GOVERNING LAW/VENUE. This Agreement and all actions or suits hereunder
shall be governed by and construed in accordance with the laws of the
State of California. Both parties agree that any suit or action relating
to this Agreement shall be instituted and commenced exclusively in King
County Superior Court or in the United States District Court for the
Western District of Washington, sitting in Seattle, Washington. Both
parties waive the right to change such venue (except by mutual consent)
and hereby consent to the jurisdiction of such courts for such claims.
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19. BINDING EFFECT. All rights, remedies and liabilities herein given to or
imposed upon the parties shall extend to, inure to the benefit of and
bind, as the circumstances may require, the parties and their respective
heirs, personal representatives, administrators, successors and
permitted assigns.
20. ATTORNEYS' FEES. The prevailing party in any suit or action to enforce
this Agreement, or any term hereof, shall be entitled to recover all of
his or its costs and expenses incurred in connection with such suit or
action, including without limitation, reasonable attorneys' fees
incurred at all levels and proceedings.
21. SEVERABILITY. If any one or more provisions contained in this Agreement
shall be held to be invalid, illegal or unenforceable in any respect
under the law applicable hereto, the validity, legality and
enforceability of all remaining provisions shall not in any way be
affected or impaired and all provisions shall be enforceable to the full
extent permitted under applicable law.
22. HEADINGS. The paragraph headings in this Agreement are for convenience
of reference only and shall not be given effect in the construction or
interpretation hereof.
23. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument. A facsimile shall
be the same as an original for purposes of this Agreement.
24. CERTAIN PAYMENTS. The parties believe that the payments hereunder do not
constitute "Excess Parachute Payments" under Section 280G of the
Internal Revenue Code (the "Code"). Notwithstanding such belief, if any
payment under this Agreement is determined to be an "Excess Parachute
Payment," MCOM shall pay to Xxxxxxxxxx an additional amount (the "Tax
Payment") such that (x) the excess of all Excess Parachute Payments
(including any Tax Payment under this Section 24) over the sum of the
excise tax thereon under Section 4999 of the Code and income tax thereon
under Subtitle A of the Code and state law is equal to (y) the excess of
all Excess Parachute Payments (excluding any Tax Payment under this
Section 24) over applicable income tax thereon under Subtitle A of the
Code and state law.
IN WITNESS WHEREOF the parties have executed this Agreement as of the day first
hereinabove written.
METRICOM
By: /s/ XXXXXXX X. XXXXX March 29, 2001
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Authorized Member, Board of Directors Date
XXXXX XXXXXXXXXX:
/s/ XXXXX X. XXXXXXXXXX March 30, 2001
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Date
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