EXHIBIT 10.13
-------------
CHANGE OF CONTROL AGREEMENT
This Change of Control Agreement (the "Agreement") is made and entered into
effective as of __________, by and between "Employee" (the "Employee") and Moai
Technologies, Inc., a California corporation (the "Company").
RECITALS
A. It is understood that another company or other entity may from time to
time consider the possibility of acquiring the Company or that a change in
control may otherwise occur, with or without the approval of the Company's Board
of Directors (the "Board"). The Board has identified the Employee, as a key
employee whose continued employment with the Company is critical to the
Company's future success. The Board recognizes that the possibility of a change
in control can be a distraction to the Employee and can cause the Employee to
consider alternative employment opportunities. The Board has determined that it
is in the best interests of the Company and its shareholders to assure that the
Company will have the continued dedication and objectivity of the Employee,
notwithstanding the possibility, threat or occurrence of a Change of Control (as
defined below) of the Company.
B. The Board recognizes that there is increasing competitive pressure in
the Silicon Valley to hire and retain key personnel in senior management
positions. As a result, the Board believes that it is in the best interests of
the Company and its shareholders to provide the Employee with an incentive to
continue his or her employment with the Company. For purposes of this Agreement,
this shall include Employee's employment in a majority-owned subsidiary or other
surviving entity of an acquiring Company.
C. The Board believes that it is imperative to provide the Employee with
certain benefits upon a Change of Control and, under certain circumstances, upon
termination of the Employee's employment in connection with a Change of Control,
which benefits are intended to provide the Employee with financial security and
provide sufficient income and encouragement to the Employee to remain with the
Company notwithstanding the possibility of a Change of Control.
D. To accomplish the foregoing objectives, the Board of Directors has
directed the Company, upon execution of this Agreement by the Employee, to agree
to the terms provided in this Agreement.
E. Certain capitalized terms used in the Agreement are defined in Section
4 below.
In consideration of the mutual covenants contained in this Agreement, and
in consideration of the continuing employment of Employee by the Company, the
parties agree as follows:
1. At-Will Employment. The Company and the Employee acknowledge
------------------
that the Employee's employment is and shall continue to be at-will, as defined
under applicable law. If the Employee's employment terminates for any reason,
including (without limitation) any termination prior to a Change of Control, the
Employee shall not be entitled to any payments or benefits, other than as
provided by this Agreement, or as may otherwise be available in accordance with
the terms of the Company's established employee plans and written policies at
the time of termination. The terms of this Agreement shall terminate upon the
earlier of (i) the date on which Employee ceases to be employed by the Company,
other than as a result of an involuntary termination by the Company without
Cause (ii) the date that all obligations of the parties hereunder have been
satisfied, or (iii) twelve (12) months after a Change of Control. A termination
of the terms of this Agreement pursuant to the preceding sentence shall be
effective for all purposes, except that such termination shall not affect the
payment or provision of compensation or benefits on account of a termination of
employment occurring prior to the termination of the terms of this Agreement.
2. Change of Control.
-----------------
(a) Termination Following A Change of Control. Subject to
-----------------------------------------
Section 4 below, If the Employee's employment with the Company is terminated at
any time within twelve (12) months after a Change of Control, then the Employee
shall be entitled to receive severance benefits and acceleration of vesting as
follows:
(i) Voluntary Resignation. If the Employee voluntarily
---------------------
resigns from the Company (other than as an Involuntary Termination (as defined
below), then the Employee shall not be entitled to receive severance payments or
accelerated vesting under this Agreement. The Employee's benefits will be
terminated under the Company's then-existing benefit plans and policies in
accordance with such plans and policies in effect on the date of termination or
as otherwise determined by the Board of Directors of the Company.
(ii) Involuntary Termination. If the Employee's employment
-----------------------
is terminated as a result of an Involuntary Termination other than for Cause,
(A) the Employee shall be entitled to receive a lump sum severance payment equal
to the equivalent of six (6) months of the Employee's then current "target
compensation", which payment shall be paid within ten (10) business days of the
termination date; and (B) the vesting schedule with respect to all stock options
(the "Option") for the Company's securities granted to the Employee shall be
accelerated by six months so that the number of shares of the Company's
securities that would have vested over the six month period following the
Involuntary Termination of Employee had Employee continued to be employed by the
Company (the "Six Month Period") shall be deemed fully vested and immediately
exercisable in accordance with the provisions of the Option Agreement and Plan
pursuant to which such Option was granted and the repurchase rights of the
Company with respect to Restricted Stock that would have vested over the Six
Month Period shall immediately terminate. For purposes of this Agreement, the
term "target compensation" shall mean the sum of Employee's base salary, bonus
and commission payments payable as if fully earned under the applicable criteria
for such payments.
-2-
(iii) Involuntary Termination for Cause. If the Employee's
---------------------------------
employment is terminated for Cause, then the Employee shall not be entitled to
receive severance payments or accelerated vesting under this Agreement. The
Employee's benefits will be terminated under the Company's then existing benefit
plans and policies in accordance with such plans and policies in effect on the
date of termination or as otherwise determined by the Board of Directors of the
Company.
(b) Termination Apart from A Change of Control. In the event
------------------------------------------
the Employee's employment terminates for any reason, either prior to the
occurrence of a Change of Control or after the twelve (12) month period
following the effective date of a Change of Control, then the Employee shall not
be entitled to receive any severance payments or accelerated vesting under this
Agreement. The Employee's benefits will be terminated under the terms of the
Company's then existing benefit plans and policies in accordance with such plans
and policies in effect on the date of termination or as otherwise determined by
the Board of Directors of the Company.
3. Definition of Terms. The following terms referred to in this
-------------------
Agreement shall have the following meanings:
(a) Change of Control. "Change of Control" shall mean the
-----------------
consummation of any of the following events:
(i) Ownership. Any "Person" (as such term is used in
---------
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) is
or becomes the "Beneficial Owner" (as defined in Rule 13d-3 under said Act),
directly or indirectly, of securities of the Company representing fifty percent
(50%) or more of the total voting power represented by the Company's then
outstanding voting securities without the approval of the Board of Directors of
the Company; or
(ii) Merger/Sale of Assets. A merger or consolidation of
---------------------
the Company whether or not approved by the Board of Directors of the Company,
other than a merger or consolidation which would result in the voting securities
of the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving entity) at least fifty percent (50%) of the total voting power
represented by the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, or the shareholders
of the Company approve a plan of complete liquidation of the Company or an
agreement for the sale or disposition by the Company of all or substantially all
of the Company's assets.
(b) Cause. "Cause" shall mean (i) gross negligence or willful
-----
misconduct in the performance of the Employee's duties to the Company where such
gross negligence or willful misconduct has resulted or is likely to result in
substantial and material damage to the Company or its subsidiaries, including,
without limitation, Employee's refusal to comply in any material respect with
the legal directives of the Company's Board of Directors so long as such
directives are not inconsistent with the Employee's position and duties, and
such refusal to comply is not remedied within 10 business days after written
notice from the
-3-
Company, which written notice shall state that failure to remedy such conduct
may result in termination for Cause, (ii) repeated unexplained or unjustified
absence from the Company, (iii) a material and willful violation of any federal
or state law; (iv) commission of any act of fraud with respect to the Company;
or (v) conviction of a felony or a crime involving moral turpitude causing
material harm to the standing and reputation of the Company, in each case as
determined in good faith by the Board of Directors of the Company.
(c) Involuntary Termination. "Involuntary Termination" shall
-----------------------
include any termination by the Company other than for Cause and the Employee's
voluntary termination, upon 30 days prior written notice to the Company,
following a material reduction or change in job duties, responsibilities and
requirements inconsistent with the Employee's position with the Company and the
Employee's prior duties, responsibilities and requirements, taking into account
the differences in job title and duties that are normally occasioned by reason
of an acquisition of one company by another and that do not actually result in a
material change in duties, responsibilities and requirements inconsistent with
an employee's prior position with the acquired company, which reduction or
change results in a reduction of more than 10% of the Employee's base
compensation.
4. Certain Business Combinations. In the event it is determined by
-----------------------------
the Board, upon consultation with Company management and the Company's
independent auditors, that the enforcement of any Section of this Agreement,
including, but not limited to, Section 2 hereof, which allows for the
acceleration of vesting of Option shares and termination of Repurchase Rights
upon the Involuntary Termination of Employee, would preclude accounting for any
proposed business combination of the Company involving a Change of Control as a
pooling of interests, and the Board otherwise desires to approve such a proposed
business transaction which requires as a condition to the closing of such
transaction that it be accounted for as a pooling of interests, then any such
Section of this Agreement shall be null and void. For purposes of this Section
4, the Board's determination shall require the unanimous approval of the non-
Employee Board members.
5. Successors. Any successor to the Company (whether direct or
----------
indirect and whether by purchase, lease, merger, consolidation, liquidation or
otherwise) to all or substantially all of the Company's business and/or assets
shall assume the obligations under this Agreement and agree expressly to perform
the obligations under this Agreement in the same manner and to the same extent
as the Company would be required to perform such obligations in the absence of a
succession. The terms of this Agreement and all of the Employee's rights
hereunder shall inure to the benefit of, and be enforceable by, the Employee's
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.
6. 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. Mailed notices to the Employee
shall be addressed to the Employee at the home address which the Employee most
recently communicated to the Company in writing. In the
-4-
case of the Company, mailed notices shall be addressed to its corporate
headquarters, and all notices shall be directed to the attention of its
Secretary.
7. Miscellaneous Provisions.
------------------------
(a) No Duty to Mitigate. The Employee shall not be required to
-------------------
mitigate the amount of any payment contemplated by this Agreement (whether by
seeking new employment or in any other manner), nor, except as otherwise
provided in this Agreement, shall any such payment be reduced by any earnings
that the Employee may receive from any other source.
(b) 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 (other than the Employee). 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.
(c) Whole Agreement. No agreements, representations or
---------------
understandings (whether oral or written and whether express or implied) which
are not expressly set forth in this Agreement have been made or entered into by
either party with respect to the subject matter hereof. This Agreement
supersedes any agreement of the same title and concerning similar subject matter
dated prior to the date of this Agreement, and by execution of this Agreement
both parties agree that any such predecessor agreement shall be deemed null and
void.
(d) Choice of Law. The validity, interpretation, construction
-------------
and performance of this Agreement shall be governed by the laws of the State of
California without reference to conflict of laws provisions.
(e) Severability. If any term or provision of this Agreement
------------
or the application thereof to any circumstance shall, in any jurisdiction and to
any extent, be invalid or unenforceable, such term or provision shall be
ineffective as to such jurisdiction to the extent of such invalidity or
unenforceability without invalidating or rendering unenforceable the remaining
terms and provisions of this Agreement or the application of such terms and
provisions to circumstances other than those as to which it is held invalid or
unenforceable, and a suitable and equitable term or provision shall be
substituted therefor to carry out, insofar as may be valid and enforceable, the
intent and purpose of the invalid or unenforceable term or provision.
(f) Arbitration. Any dispute or controversy arising under or in
-----------
connection with this Agreement may be settled at the option of either party by
binding arbitration in the County of San Francisco, California, in accordance
with the rules of the American Arbitration Association then in effect. Judgment
may be entered on the arbitrator's award in any court having jurisdiction.
Punitive damages shall not be awarded.
-5-
(g) Legal Fees and Expenses. The parties shall each bear their
-----------------------
own expenses, legal fees and other fees incurred in connection with this
Agreement.
(h) 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 (h) shall be
void.
(i) Employment Taxes. All payments made pursuant to this
----------------
Agreement will be subject to withholding of applicable income and employment
taxes.
(j) Assignment by the Company. The Company may assign its
-------------------------
rights under this Agreement to an affiliate, and an affiliate may assign its
rights under this Agreement to another affiliate of the Company or to the
Company; provided, however, that no assignment shall be made if the net worth of
the assignee is less than the net worth of the Company at the time of
assignment. In the case of any such assignment, the term "Company" when used in
a section of this Agreement shall mean the corporation that actually employs the
Employee.
(k) Counterparts. This Agreement may be executed in
------------
counterparts, each of which shall be deemed an original, but all of which
together will constitute one and the same instrument.
-6-
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.
MOAI TECHNOLOGIES, INC. ((EMPLOYEE))
By: ______________________________ _____________________________
Title:____________________________
-7-