EXHIBIT 10.21
EMPLOYMENT AGREEMENT
This Employment Agreement is made and entered into by and between
SpatiaLight, Inc. (the "Company") and Xxxx Xxxxx ("Xxxxx") as of September
19, 1997 (the "Effective Date"). This Employment Agreement supersedes that
agreement between Xxxxx and the Company dated July 1, 1996, which agreement
shall have no further force or effect.
A. POSITION AND DUTIES:
1.1 Xxxxx has been employed by the Company in the position of Vice
President, Engineering since May 19, 1997. Xxxxx shall continue to be
employed in this position through the Term and any Renewal Term as defined in
paragraph 3, below. In this position, Xxxxx will continue to report to the
President and Chief Operating Officer.
1.2 Xxxxx agrees to devote his full business time, energy and
skill to his duties at the Company. These duties shall include, but not be
limited to, all duties consistent with Xxxxx'x position, as well as any other
duties that may be assigned to Xxxxx from time to time by the President
and/or the Board.
2. COMPENSATION:
2.1 BASE SALARY: Xxxxx will be paid an annual salary of $115,000,
less applicable withholding, in accordance with the Company's normal payroll
procedures. Xxxxx'x salary will be reviewed by the Board on an approximately
annual basis, and may be subject to adjustment based upon various factors
including, but not limited to, Xxxxx'x performance and the Company's
profitability. In any event, upon the occurrence of the earlier of: (i)
January 1, 1998; or (ii) an equity financing in which the Company sells
equity securities of the Company in an amount not less than Three Million
Dollars ($3,000,000.00), Xxxxx'x salary shall be increased to at least
$135,000 per year.
2.2 PERFORMANCE BONUS PLAN: Xxxxx will be eligible to participate
in the Company's performance bonus plan (the "Bonus Plan"), which currently
provides for a bonus of twenty (20) percent of salary upon achievement of
pre-established goals. Under the Bonus Plan, all bonuses, if earned, are
paid at the end of the fiscal year. Any bonus will be governed by the terms
of the Company's standard Bonus Plan in effect at the time.
2.3 EQUITY STAKE: The Board has previously approved the issuance
to Xxxxx of two separate options to purchase a total of 160,000 shares of the
Company's common stock (the "Options") in accordance with the Company's Stock
Option Plan (the "Plan"). The Plan provides that fifty percent of the
options vest upon the completion of one year's service and the remaining
fifty percent of the options vest upon completion of the second year's
service. Upon the execution of this Agreement the Options shall be amended
to provide that in the event of a Change of Control of the Company, all of
the options issued pursuant to the Options shall become fully vested as of
the date of the Change in Control. A "Change of Control" is defined herein
as a transaction or a series of related transactions resulting in the sale of
all or substantially all of the Company's assets or a merger or
consolidation, or sale or transfer of securities, which results in any entity
which does not currently hold any of the outstanding voting securities of the
Company (as determined immediately prior to such merger or consolidation or
sale or transfer of stock) owning, directly or indirectly, thirty-three
percent or more of the beneficial interest in the outstanding voting
securities of the Company or the surviving corporation that controls the
Company or of such surviving corporation's parent corporation (determined
immediately after such merger or consolidation or sale or transfer of stock).
The stock option agreements establishing the Options shall be amended to
reflect this additional provision, and Xxxxx agrees to execute such amended
stock option agreements.
ADDITIONAL OPTIONS: After the occurrence of an equity financing during
the nine months following the Effective Date in which the Company sells
equity securities of the Company in an amount not less than Three Million
Dollars ($3,000,000.00), Xxxxx shall be granted an additional stock option to
purchase that number of shares of Common Stock determined by the following
formula: the number of shares of the Company times one and one-third percent
(1.33%) less the number of shares subject to options previously granted to
Xxxxx. If such formula produces a negative number, then Xxxxx shall not
receive this Additional Option. The exercise price of this option shall be
the fair market value at the time of the grant of the option. This Additional
Option shall be immediately exercisable.
2.5 BENEFITS: Xxxxx will be entitled to continue to participate
in all of the Company's benefit plans, as those plans may change from time to
time, on the same terms as all other employees of the Company.
3. TERM OF EMPLOYMENT: Xxxxx'x employment with the Company pursuant
to this Agreement is for a period from the Effective Date through July 1,
2000, subject to the provisions regarding termination set forth below (the
"Term"). If neither party gives the other written notice of termination or a
desire to change the provisions herein, on or before the thirtieth (30th) day
prior to the expiration of the Term, this Agreement shall be automatically
renewed for an additional one (1) year period (the "Renewal Term").
Thereafter, if neither party gives the other written notice of termination or
a desire to change the provisions herein, on or before the thirtieth (30th)
day prior to the expiration of each Renewal Term, this Agreement shall be
renewed for an additional one (1) year period.
4. BENEFITS UPON TERMINATION:
Notwithstanding paragraph 3 above, Xxxxx'x employment may be terminated
by Xxxxx or the Company at any time, with or without notice and with or
without cause. In the event that either party elects to terminate this
Agreement prior to the expiration of the contract term, benefits shall be
provided as set forth below.
4.1 VOLUNTARY TERMINATION: In the event that Xxxxx voluntarily
resigns from his employment with the Company, or in the event that Xxxxx'x
employment terminates as a result of his death or disability, Xxxxx shall be
entitled to no compensation or benefits from the Company other than those
earned under paragraph 2 above through the date of his termination.
4.2 INVOLUNTARY TERMINATION: In the event of the termination of
Xxxxx'x employment by the Company for the reasons set forth below, Xxxxx
shall be entitled to the following:
a. TERMINATION FOR CAUSE: If Xxxxx'x employment is
terminated by the Company for cause as defined below, Xxxxx shall be entitled
to no compensation or benefits from the Company other than those earned under
paragraph 2 through the date of Xxxxx'x termination.
For purposes of this Agreement, a termination "for cause"
occurs if Xxxxx'x employment is terminated for any of the following reasons:
(1) theft, dishonesty, or falsification of any
employment or Company records;
(2) conviction of a felony or any act involving moral
turpitude;
(3) consistent poor performance, as determined by the
Board in its sole discretion;
(4) improper disclosure of the Company's confidential or
proprietary information;
(5) any intentional act by Xxxxx that has a material
detrimental effect on the Company's reputation or business;
(6) the Company ceases or fails to continue to do
business; or
(7) any material breach of this Agreement, which breach,
if curable, is not cured within thirty (30) days following written notice of
such breach from the Company.
b. TERMINATION FOR OTHER THAN CAUSE: If Xxxxx'x employment
is terminated by the Company for any reason other than cause, Xxxxx shall be
entitled to continuation of Xxxxx'x salary and all other benefits, including,
but not limited to, vesting in all stock options, for six months following
the termination of Xxxxx'x employment.
5. CONFIDENTIAL AND PROPRIETARY INFORMATION: As a condition of
Xxxxx'x employment with the Company, Xxxxx has signed the Company's standard
form of proprietary information and assignment of inventions agreement and
Xxxxx has and agrees to continue to comply with the terms of that agreement.
6. DISPUTE RESOLUTION: In the event of any dispute or claim relating
to or arising out of this Agreement (including, but not limited to, any
claims of breach of contract, wrongful termination or age, sex, race or other
discrimination), Xxxxx and the Company agree that all such disputes shall be
fully and finally resolved by binding arbitration conducted by the American
Arbitration Association in San Francisco, 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). Xxxxx 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.
7. ATTORNEYS' FEES: The prevailing party shall be entitled to
recover from the losing party its attorneys' fees and costs incurred in any
action brought to enforce any right arising out of this Agreement.
8. INTERPRETATION: This Agreement shall be interpreted in accordance
with and governed by the laws of the State of California.
9. ASSIGNMENT: In view of the personal nature of the services to be
performed under this Agreement by Xxxxx, Xxxxx shall not have the right to
assign or transfer any of his obligations under this Agreement.
10. ENTIRE AGREEMENT: This Agreement, along with any agreements
referred to in paragraph 2, relating to stock options and paragraph 5,
relating to proprietary information and assignment of inventions, sets forth
the entire agreement between Xxxxx and the Company regarding the terms and
conditions of Xxxxx'x employment, and supersedes all prior negotiations,
representations or agreements between Xxxxx and the Company regarding Xxxxx'x
employment, whether written or oral.
11. NO REPRESENTATIONS: Xxxxx acknowledges that he is not relying, and
has not relied, on any promise, representation or statement made by or on
behalf of the Company that is not set forth in this Agreement.
12. MODIFICATION: This Agreement may only be modified or amended by a
supplemental written agreement signed by Xxxxx and an authorized member of
the Board.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year written below.
SPATIALIGHT, INC.
Date:________________ _________ By:___________________________________
Its:__________________________________
Date:________________ _________ ______________________________________
Xxxx Xxxxx
