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EXHIBIT 10.6
[COMPANY LOGO AND LETTERHEAD]
June 11, 1999
Xxxxxxx X. Xxxxx
0000 Xxxxx Xxxx Xxxx
Xxxxxx, XX 00000
RE: EMPLOYMENT AGREEMENT
Dear Xxxx:
Pursuant to our discussions, this letter sets forth the terms of your
employment with NetPartners Internet Solutions, Inc. (the "Company") as well as
our understanding with respect to any termination of that employment
relationship.
1. POSITION AND DUTIES: You will be employed by the Company as its Chief
Financial Officer, reporting to the Chief Executive Officer ("CEO") and, as
needed, the Company's Board of Directors (the "Board") and audit committee. You
accept employment with the Company on the terms and conditions set forth in this
Agreement, and you agree to devote your full business time, energy and skill to
your duties at the Company. Your duties shall include, but not be limited to,
any duties that are consistent with your position, as well as any other duties
that may be assigned to you from time to time by the CEO or the Board. Those
duties will include responsibility for the Company's control, treasury,
strategic planning, human resources, legal and MIS functions.
2. TERM OF -EMPLOYMENT: Your employment with the Company will start on
June 11, 1999, will be for no specified term, and may be terminated by you or
the Company at any time, with or without cause, subject to the provisions of
Paragraphs 4 and 5 below.
3. COMPENSATION: You will be compensated by the Company for your
services as follows:
(a) Salary: You will be paid a monthly salary of $12,500.00, less
applicable withholding, in accordance with the Company's normal payroll
procedures. Your salary will be reviewed by the CEO on an annual basis, and may
be subject to adjustment based upon various factors including, but not limited
to, your performance and the Company's profitability. Any adjustment to your
salary shall occur only by the mutual agreement of you and the CEO.
(b) Bonus: You will be eligible to earn an annual bonus of up to 20%
of your annual base salary. The bonus plan will be based upon the Company's
achievement of various financial and/or other goals established in a written
bonus plan that will be communicated to you each year. Your 1999 bonus plan will
be established as soon as possible.
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(c) Benefits: You will have the right, on the same basis as other
executive employees of the Company, to participate in and to receive benefits
under any Company medical, vision, life, disability or other group insurance
plans, as well as under the Company's 401 (k) and business expense reimbursement
policy. NetPartners pays all but $5.00 per month of your health and dental
premiums for yourself and 50% of the premiums for your dependents.
(d) Vacation: You will accrue three weeks paid vacation each year of
employment and receive ten holidays each year. You shall schedule all of your
vacations at times that are mutually convenient and reasonable for both you and
the Company.
(e) Stock Options. On June 11, 1999 the Board of Directors approved
that you be granted an option to purchase 300,000 shares of the Company's common
stock, with a strike price of $0.75 per share, and which option will vest over a
four year period, except that the first years options (75,000 shares), are
immediately exercisable. You may purchase these 75,000 shares any time during
your first year of employment, provided, however, that the Company shall have
the right to repurchase all unvested shares at the original purchase price of
$0.75 per share. The right of repurchase in favor of the Company shall lapse
monthly (6,250 shares per month) so that on June 11, 2000 the right of
repurchase in favor of the Company shall have lapsed in full. In addition, from
June 11, 1999 your options will be treated as if you had achieved the one-year
employment requirement making you eligible for any acceleration of options due
to Change of Control. Except as noted here, your option will be governed by the
terms and conditions of the Company's stock option plan.
4. VOLUNTARY TERMINATION: In the event that you voluntarily resign from
your employment with the Company, or in the event that your employment
terminates as a result of your death or disability (meaning that you are unable
to perform your duties for any 90 days in any one year period as a result of a
physical and/or mental impairment), you will be entitled to no compensation or
benefits from the Company other than those earned under Paragraph 3 through the
date of your termination. In particular, you will not be entitled to any pro
rated portion of the bonus that you would have earned under subparagraph 3(b)
had you been employed for the entire year in which your termination occurs. You
agree that in the event you resign from your employment with the Company for any
reason, you will provide the Company with one month's written notice of your
resignation. The Company may, in its sole discretion, elect to waive all or any
part of such notice period and accept your resignation at an earlier date so
long as it pays you any compensation and benefits that you would have earned
through the end of such notice period.
5. OTHER TERMINATION: Your employment may be terminated by the Company
under the circumstances set forth below.
(a) Termination for Cause. If your employment is terminated by the
Company for cause as defined below, you shall be entitled to no compensation or
benefits from the Company other than those earned under Paragraph 3 through the
date of your termination. In particular, you will not be entitled to any pro
rated portion of the bonus that you would have earned under subparagraph 3(b)
had you been employed for the entire year in which your termination occurs.
For purposes of this Agreement, a termination "for cause" occurs if you
are terminated for any of the following reasons: (i) theft dishonesty,
misconduct or falsification of any employment or Company
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records; (ii) improper disclosure of the Company's confidential or proprietary
information; (iii) any action by you which has a material detrimental effect on
the Company's reputation or business; (iv) your failure or inability to perform
any assigned duties reasonably expected of a chief financial officer after
written notice from the Company to you of, and a reasonable opportunity to cure,
such failure or inability; (v) any material breach of this Agreement by you,
which breach is not cured within 10 days following written notice to you of such
breach; or (vi) your conviction (including any plea of guilty or nolo contendre)
for any criminal act that impairs your ability to perform your duties under this
Agreement.
(b) Termination Without Cause: If your employment is terminated by
the Company without cause (and not as a result of your death or disability), you
shall receive severance payments at your final base salary rate, less applicable
withholding, for a period of six months. Severance payments will be made in
accordance with the Company's normal payroll procedures. The Company will also
accelerate the vesting of any unvested stock options previously granted to you
that would have vested during the six-month period following the termination of
your employment. You will also be entitled to receive any compensation and
benefits that you earn under Paragraph 3 through the date of your termination
without cause. You will not be entitled to any pro rated portion of the bonus
that you would have earned under subparagraph 3(b) had you been employed for the
entire year in which your termination occurs. Your right to receive the
severance pay and other benefits described in this subparagraph is conditioned
upon your execution and delivery to the Company of a general release of claims,
in form reasonably satisfactory to the Company and you, that does not impair
your right to receive any compensation or benefits that you have earned under
this Agreement.
(c) Termination Without Cause Following Change in Control: If your
employment is terminated by the Company without cause and within one year
following any Change in Control (as defined below), you shall receive severance
payments at your final base salary rate, less applicable withholding, for a
period of 12 months. Severance payments will be made on your final day of
employment. The Company will also accelerate the vesting of any unvested stock
options previously granted to you as outlined in the Company option plan. You
will also be entitled to receive any compensation and benefits that you earn
under Paragraph 3 through the date of your termination without cause. You will
not be entitled to any pro rated portion of the bonus that you would have earned
under subparagraph 3(b) had you been employed for the entire year in which your
termination occurs. Your right to receive the severance pay and other benefits
described in this subparagraph is conditioned upon your execution and delivery
to the Company of a general release of claims, in form reasonably satisfactory
to the Company and you, that does not impair your right to receive any
compensation or benefits that you have earned under this Agreement. If your
employment is terminated by the Company without cause either within four months
prior to, or more than one year after, any Change in Control, you shall receive
only the compensation and benefits described in subparagraph 5(b).
For purposes of this Agreement, a "Change in Control" of the Company
shall be deemed to have occurred if:
(i) any "person" (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")),
other than a trustee or other fiduciary holding securities of the Company under
an employee benefit plan of the Company, becomes the "beneficial owner" (as
defined in Rule 13d-3 promulgated under the Exchange Act), directly or
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indirectly, of securities of the Company representing 50% or more of (A) the
outstanding shares of common stock of the Company or (B) the combined voting
power of the Company's then-outstanding securities entitled to vote generally in
the election of directors; or
(ii) the Company (A) is party to a merger or consolidation which
results in the holders of voting securities of the Company outstanding
immediately prior thereto failing to continue to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) at least 50% of the combined voting power of the voting securities of
the Company or such surviving entity outstanding immediately after such merger
or consolidation, or (B) sells or disposes of all or substantially all of the
Company's assets (or any transaction having similar effect is consummated), or
(C) the individuals constituting the Board immediately prior to such merger,
consolidation, sale or disposition shall cease to constitute at least 50% of the
Board, unless the election of each director who was not a director prior to such
merger, consolidation, sale or disposition was approved by a vote of at least
two-thirds of the directors then in office who were directors prior to such
merger, consolidation, sale or disposition.
6. CONFIDENTIAL AND PROPRIETARY INFORMATION: As a condition of your
employment, you agree to sign the Company's standard form of employee
proprietary information and assignment of inventions agreement.
7. DISPUTE RESOLUTION: In the event of any dispute or claim relating to
or arising out of your employment relationship with the Company, this Agreement,
or the termination of your employment with the Company for any reason
(including, but not limited to, any claims of breach of contract, wrongful
termination or age, disability or other discrimination), you and the Company
agree that all such disputes shall be fully, finally and exclusively resolved by
binding arbitration conducted by the American Arbitration Association ("AAA") in
Orange County, California, pursuant to the AAA's National Rules for the
Resolution of Employment Disputes. You and the Company hereby knowingly and
willingly waive your respective rights to have any such disputes or claims tried
to a judge or jury. Provided, however, that this arbitration provision shall not
apply to any disputes or claims relating to or arising out of the actual or
alleged misuse or misappropriation of the Company's property, including, but not
limited to, its trade secrets or proprietary information. In any arbitration (or
other legal proceeding) commenced to enforce any right arising out of this
Agreement, the prevailing party shall be entitled to recover from the losing
party its attorneys' fees and costs incurred in connection with such proceeding.
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 you, you cannot assign or transfer any of your
obligations under this Agreement.
10. ENTIRE AGREEMENT: This Agreement and the agreements referred to
above constitute the entire agreement between you and the Company regarding the
terms and conditions of your employment, and they supersede all prior
negotiations, representations or agreements between you and the Company
regarding your employment whether written or oral.
11. MODIFICATION: This Agreement may only be modified or amended by a
supplemental written agreement signed by you and the CEO.
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Xxxx, we look forward to working with you at NetPartners Internet
Solutions, Inc. Please sign and date this letter on the spaces provided below to
acknowledge your acceptance of the terms of this Agreement.
Sincerely,
NetPartners Internet Solutions, Inc.
By: /s/ Xxxx X. Xxxxxxxxxx 6/11/99
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Xxxx X. Xxxxxxxxxx
Chief Executive Officer
I agree to and accept employment with NetPartners Internet Solutions,
Inc. on the terms and conditions set forth in this Agreement
Date: June 11, 1999 /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
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