Exhibit 10.2
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made and entered into as of the
Closing (the "Effective Date"), by and between Onyx Software Corporation, a
Washington corporation (the "Company"), and Xxxxx Xxxxxxxx ("Employee").
WHEREAS, the Company, RevenueLab LLC, a Delaware limited liability company,
and the Members of RevenueLab, LLC (including Employee) have entered into a Unit
Purchase Agreement (the "Purchase Agreement"), dated as of the date of this
Agreement, pursuant to which the Company will purchase all of the outstanding
Class A and Class B membership units of RevenueLab, LLC. After the closing of
the transactions contemplated by the Purchase Agreement (the "Closing"),
RevenueLab LLC will be a wholly owned subsidiary of the Company.
WHEREAS, the Company desires to employ Employee and Employee desires to be
employed by the Company, all upon the terms and conditions set forth herein.
WHEREAS, the execution of this Agreement by the parties hereto is a
condition to the Closing.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and Employee agree as
follows:
1. EMPLOYMENT
1.1 Appointment. The Company agrees to employ Employee to serve in the
capacity of Chief Marketing Officer ("CMO") or in such other position as the
Company may determine at its sole discretion, and Employee accepts such
employment in accordance with the terms of employment hereinafter specified
("Employee's Employment").
2. DUTIES AND SCOPE OF EMPLOYMENT
2.1 Duties. Employee shall report directly to Chief Executive Officer
("CEO"), or any other manager selected by the Company. Employee's duties shall
include such duties as reasonably dictated by the Company.
2.2 Obligations. Employee agrees to faithfully and conscientiously serve
the Company, to devote his full time, skill, attention and energy to the
business and affairs of the Company and its direct and indirect subsidiaries
(collectively, the "Affiliates"), and to perform his duties hereunder
competently, diligently and to the best of his abilities. During the term of
Employee's Employment, Employee's services shall be rendered exclusively for the
Company and its Affiliates, and Employee shall not render services for his own
account or for any third party, without the prior written approval of the CEO.
Nothing contained in this Section shall preclude or restrict Employee from (i)
making passive investments or from performing volunteer, charitable, religious,
community, or other minimally-compensated (i.e., less than $5,000 per annum)
work, which neither interfere with the performance of his duties hereunder nor
violate any other agreement between Employee and the Company or (ii) performing
the activities detailed in Schedule 1 to this Agreement.
3. COMPENSATION AND BENEFITS
3.1 Base Compensation. During the term of employment under this
Agreement, the Company agrees to pay the Employee as compensation for services a
base salary at the annual rate of $150,000 or at such higher rate as the Company
may determine from time to time. Such salary shall be payable semi-monthly in
accordance with the standard payroll procedures of the Company. The annual
compensation specified in this Section 3.1, together with any adjustments in
such compensation that the Company may grant from time to time is referred to in
this Agreement as "Base Compensation."
3.2 Bonus. Employee shall be entitled to a one-time bonus in the amount
of $37,500, which will be due and payable upon the Closing.
3.3 Leveraged Compensation Plan. Employee will participate in the
Company's annual incentive compensation plan ("Leveraged Compensation Plan").
Employee shall be eligible to participate in Onyx' Leveraged Compensation
Program for a target of $150,000 if he achieves the specific performance
objectives for any given one-year period, broken out into 6 month segments and
semi-annual reviews and pay-outs. The performance objectives shall be determined
and approved at the beginning of each performance period by the CEO (or other
manager as contemplated in Section 2.1) in collaboration with the Employee.
Employees leveraged compensation will be determined based upon both the
Company's achievement of designated financial and business goals and the
designated financial and business objectives of RevenueLab. The specifics of
Employee's incentive bonus shall be detailed in Employee's individual
compensation plan, which is hereby incorporated by reference.
3.4 Stock Options.
3.4.1 Provided that Employee has executed a Termination of Option
Offer (as defined in the Purchase Agreement), Employee shall be granted
nonqualified stock options to purchase 105,282 shares of Onyx common stock at
$5.957 per/1/ share (the "Options") pursuant to a non-plan grant, the terms of
such non-plan grant to be materially consistent with the Company's 2001 Non-
officer Employee Stock Compensation Plan. The Options shall vest over the course
of four and one-half years, with 22% vesting on the one-year anniversary of
grant and 1/54 vesting each month thereafter; provided, however, that if (i)
Employee is terminated without Reasonable Cause or (ii) Employee resigns for
Good Reason (each term, as defined below), before the eighteen-month anniversary
of the Closing (the "First Milestone"), the Options shall, upon termination,
automatically vest and become exercisable for a total of 33%/2/ of the total
number of Onyx shares originally subject to the Option. In addition, if Employee
is still employed by the Company as of the First Milestone, but thereafter (i)
is terminated without Reasonable Cause or (ii) resigns for Good Reason, the
Options shall, upon such termination or resignation, automatically vest and
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/1/ Note: the tentative calculation for the strike price is (580,738 x fair
market value of the Company stock on date of grant - $1.84 million) 580,738. If
any of the Founders does not become employed with Onyx this calculation will be
adjusted as follows: instead of 580,738 in the numerator and denominator, the
number will be 580,738 minus the number of options that would have been
allocated to that Founder. I.e., options allocated to founders who do not join
Onyx will revert back to Onyx and the total pool of founders' options will be
decreased.]
/2/ Note: represents 18 months' worth of vesting on the 4 1/2 year schedule.
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become exercisable for an additional 11%/3/ of the total number of Onyx shares
originally subject to the Option (in addition to that portion already vested and
exercisable at the time of termination).
Notwithstanding the foregoing, in the event of either (i) Employee's death
or (ii) Employee's Permanent and Total Disability, the Options shall
automatically vest and become immediately exercisable for a total of 100% of the
total number of Onyx shares originally subject to the Option. Permanent and
Total Disability is defined as if the Employee is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to last for a continuous period of not
less than 12 months. An individual shall not be considered to be permanently and
totally disabled unless he furnishes proof of the existence thereof in such form
and manner, and at such times, at the Company Secretary may require.
3.4.2 In addition to the Options detailed in Section 3.4.1 above,
Employee shall be granted nonqualified stock options to purchase an additional
150,000 shares of Onyx common stock (the "Second Grant") pursuant to a non-plan
grant, the terms of such non-plan grant to be materially consistent with the
Company's 2001 Non-officer Employee Stock Compensation Plan. The exercise price
of the Second Grant shall be the fair market value of the Company common stock
on the date of grant. The options shall vest 25% on the first anniversary of the
date of grant, with an additional 2.0833% each month thereafter, resulting in
the option vesting 100% four years after the date of grant. For the avoidance of
doubt, the acceleration provisions contained in Section 3.4.1 shall not apply to
the Second Grant.
3.5 Benefits. During the term of employment under this Agreement, the
Employee shall be eligible to participate in the employee benefit plans and
employee compensation programs maintained by the Company, including (without
limitation) 401(k) and employee stock purchase plans, life, disability, medical,
dental, vision, accident and other insurance programs, transportation fringe
benefit plans, paid vacations, and similar plans or programs, subject in each
case to the generally applicable terms and conditions of the plan or program in
question and to the discretion and determinations of any person, committee or
entity administering such plan or program. Company and Employee acknowledge that
Employee shall be entitled to twenty (20) personal days off each year, which is
higher than the standard Company policy of fifteen (15) days.
3.6 Business Expenses and Travel. During the term of employment under
this Agreement, the Employee shall be authorized to incur necessary and
reasonable travel, entertainment and other business expenses in connection with
the Employees duties hereunder. The Company shall reimburse the Employee for
such expenses in accordance with generally applicable policies.
3.7 Relocation. Employee shall be required to relocate to Bellevue,
Washington in conjunction with the offer of employment hereunder. Relocation
benefits shall be paid to Employee pursuant to the Company's executive
relocation plan, which is hereby incorporated by reference.
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/3/ Note: represents 6 months' worth of vesting on the 4 1/2 year schedule.
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4. TERMINATION OF EMPLOYMENT
4.1 Death or Disability of the Employee. Notwithstanding anything in this
Agreement to the contrary, with the exception for the vesting acceleration
provisions in Section 3.4, this Agreement shall automatically terminate upon the
death or disability of the Employee, as permitted by law. For the purpose of
this Agreement, disability shall mean mental or physical illness or condition
certified in writing by Employee's doctor(s), not including the death of the
Employee, which either (i) significantly impairs the Employee's abilities to
perform his duties for a period of ninety (90) consecutive days, or (ii)
significantly impairs Employee's ability to perform his duties for one hundred
eighty (180) days or more in any twelve month period.
4.2 Termination of Employee. The Company may terminate the Employee's
employment at any time and for any reason, with or without Reasonable Cause (as
hereinafter defined) by providing written notice of termination to Employee,
provided, however, that if such termination is without Reasonable Cause (i) the
Company shall continue to pay to Employee the then current Base Salary for a
period of three (3) months following the date of such termination and (ii) the
vesting of Employee's Options shall be accelerated as provided in Section 3.4.
4.3 Definition of Reasonable Cause. The term "Reasonable Cause" shall be
defined as and strictly limited to one of the following grounds: (a) failure by
the Employee to perform the duties under this Agreement, other than a failure
resulting from Employee's complete or partial incapacity due to physical or
mental illness or impairment; (b) gross misconduct by the Employee that is
materially injurious to the Company; (c) breach by the Employee of a provision
of this Agreement; (d) violation of federal or state law or regulation
applicable to the business of the Company that is injurious to the Company; and
(e) violation of the Employee's statutory duty of loyalty to the Company. Upon
termination of Employee's employment with the Company for Reasonable Cause, the
Company shall be under no further obligation to the Employee, except to pay all
accrued but unpaid base salary to the date of termination.
4.4 Resignation by Employee For Good Reason. The Employee may resign from
his or her employment with the Company for Good Reason (as defined below) with
thirty (30) days' written notice. Following resignation by the Employee for Good
Reason, the Company shall continue to pay to Employee the then current Base
Salary for a period of three (3) months following the date of such termination
and the vesting of Employee's Options shall be accelerated as provided in
Section 3.4. For purposes of this Agreement, "Good Reason" means the occurrence
of any of the following without Employee's express written consent, unless, in
the case of clauses (a), (c) and (d), such circumstances are fully corrected
before the date of termination specified in the notice of termination given by
Employee to the Company with respect to such circumstances: (a) failure by the
Company to timely pay, or reduction by the Company, of Employee's annual base
salary; (b) a requirement by Company that the principal place of business at
which Employee performs his or her duties be changed to a location more than 50
miles from the current location; (c) a failure by the Company to continue in
effect any benefits provided to Employee, unless the Company provides Employee
with a plan or plans that provide substantially similar benefits, or the taking
of any action by the Company that would adversely affect Employee's benefits
under any such plans or deprive Employee of any material fringe benefit enjoyed
by him or her, except to the extent that such loss or reduction of benefits is
applicable to all employees of similar position and authority; or (d) any
material breach by the Company of any provision of this Agreement.
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5. TRADE SECRETS AND ASSIGNMENT OF INVENTIONS
5.1 Confidential Information
5.1.1 Acknowledgement. The Company and the Employee acknowledge that
the services to be performed by the Employee under this Agreement are unique and
extraordinary and that, as a result of the Employee's employment, the Employee
will be in a relationship of confidence and trust with the Company and will come
into possession of "Confidential Information" (1) owned or controlled by the
Company, (2) in the possession of the Company and belonging to third parties or
(3) conceived, originated, discovered or developed, in whole or in part, by the
Employee. As used herein "Confidential Information" includes trade secrets and
other confidential or proprietary business, technical, personnel or financial
information, whether or not the Employee's work product, in written, graphic,
oral or other tangible or intangible forms, including but not limited to
specifications, samples, records, data, computer programs, drawings, diagrams,
models, customer names, ID's or e-mail addresses, business or marketing plans,
studies, analyses, projections and reports, communications by or to attorneys
(including attorney-client privileged communications), memos and other materials
prepared by attorneys or under their direction (including attorney work
product), and software systems and processes. Any information that is not
readily available to the public shall be considered to be a trade secret and
confidential and proprietary, even if it is not specifically marked as such,
unless the Company advises the Employee otherwise in writing.
5.1.2 Nondisclosure. The Employee agrees that the Employee will not,
without the prior written consent of the Company, directly or indirectly use or
disclose Confidential Information to any person, during or after the Employee's
employment, except as may be necessary in the ordinary course of performing the
Employee's duties under this Agreement. The Employee will keep the Confidential
Information in strictest confidence and trust. This Section 5.1.2 shall apply
indefinitely, both during and after the term of this Agreement.
5.1.3 Surrender Upon Termination. The Employee agrees that in the
event of the termination of the Employee's employment for any reason, the
Employee will immediately deliver to the Company all property belonging to the
Company, including all documents and materials of any nature pertaining to the
Employee's work with the Company, and will not take with the Employee any
documents or materials of any description, or any reproduction thereof of any
description, containing or pertaining to any Confidential Information. It is
understood that the Employee is free to use information that is in the public
domain (not as a result of a breach of this Agreement).
5.2 Inventions and Creations Belong to the Corporation
5.2.1 Any and all inventions, discoveries, improvements, or creations
(collectively "Creations") which the Employee has conceived or made or may
conceive or make during the period of employment under this Agreement in any
way, directly or indirectly, connected with the Company's business shall be the
sole and exclusive property of the Company. The Employee agrees that all
copyrightable works created by the Employee or under the Company's direction in
connection with the Company's business are "works made for hire" and shall be
the sole and complete property of the Company and that any and all copyrights to
such works shall belong to the Company. To the extent such works are not deemed
to be "works made for hire," the Employee hereby assigns all proprietary rights,
including copyright, in these works to the Company without further compensation.
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5.2.2 The Employee further agrees to (i) disclose promptly to the
Company all such Creations which the Employee has made or may make solely,
jointly, or commonly with others, (ii) assign all such Creations to the Company,
and (iii) execute and sign any and all applications, assignments, or other
instruments which the Company may deem necessary in order to enable it, at its
expense, to apply for, prosecute, and obtain copyrights, patents or other
proprietary rights in the United States and foreign countries or in order to
transfer to the Company all right, title, and interest in said Creations.
5.2.3 NOTICE REQUIRED BY REVISED CODE OF WASHINGTON 49.44.140: Any
assignment of Inventions required by this Agreement does not apply to an
Invention for which no equipment, supplies, facilities or trade secret
information of the Company was used and which was developed entirely on the
employee's own time, unless (a) the Invention relates (i) directly to the
business of the Company or (ii) to the Company's actual or demonstrably
anticipated research or development, or (b) the Invention results from any work
performed by the employee for the Company.
6. MISCELLANEOUS
6.1 Waiver. No provision of this Agreement shall be modified, waived or
discharged unless the modification, waiver or discharge is agreed to in writing
and signed by the Employee and by an authorized officer of the Company. No
waiver by either party of any breach of, or of compliance with, any condition or
provision of this Agreement by the other party shall be considered a waiver of
any other condition or provision or of the same condition or provision at
another time.
6.2 Whole Agreement. No agreements, representations or understandings
(whether oral or written and whether express or implied) that are not expressly
set forth in this Agreement have been made or entered into by either party with
respect to the subject matter hereof. In addition, the Employee hereby
acknowledges and agrees that this Agreement supersedes in its entirety any
employment agreement between the Employee and the Company and the Employee and
RevenueLab LLC. As of the effective date of this Agreement, any such employment
agreements shall terminate without any further obligation by either party
thereto, and the Employee hereby relinquishes any further rights that the
Employee may have had under any such prior employment agreements.
6.3 Notice. Notices and all other communications contemplated by this
Agreement shall be in writing and shall be deemed to have been duly given when
personally delivered or when mailed by U.S. registered or certified mail, return
receipt requested and postage prepaid. In the case of the Employee, mailed
notices shall be addressed to the Employee at the home of the Company, mailed
notices shall be addressed to its corporate headquarters, and all notices shall
be directed to the attention of its General Counsel.
6.4 Choice of Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
Washington. Jurisdiction and venue for any claims arising under this Agreement
shall lie exclusively in King County, Washington State, USA.
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6.5 Severability. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision hereof, which shall remain in full force and effect.
6.6 No Assignment of Benefits. The rights of any person to payments or
benefits under this Agreement shall not be made subject to option or assignment,
either by voluntary or involuntary assignment or by operation of law, including
(without limitation) bankruptcy, garnishment, attachment or other creditor's
process, and any action in violation of this Subsection 6.6 shall be void.
6.7 Employment at Will; Limitation of Remedies. The Company and the
Employee acknowledge that the Employee's employment is at will, as defined under
applicable law. If the Employee's employment terminates for any reason, the
Employee shall not be entitled to any payments, benefits, damages, awards or
compensation other than as provided by this Agreement.
6.8 Employment Taxes. All payments made pursuant to this Agreement shall
be subject to withholding of applicable taxes.
IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the
case of the Company by its duly authorized officer, as of the day and year first
above written. Employee has consulted (or has had the opportunity to consult)
with his or her own counsel prior to execution of this Agreement.
ONYX SOFTWARE CORPORATION
By: /s/ Xxxxx Xxxx
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Xxxxx Xxxx
Its: Chief Executive Officer
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EMPLOYEE
/s/ Xxxxx Xxxxxxxx
-----------------------------------------
Xxxxx Xxxxxxxx
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Schedule l
Intentionally left blank.
