Exhibit 10.1
COMPENSATION AGREEMENT
This Compensation Agreement (this "Agreement") is dated and made effective
the 10/th/ day of July, 2000 (the "Effective Date") between Interactive Objects,
Inc. a Washington corporation (the "Company") and Xxxxxx Xxxxxx (the
"Employee").
1. Employment. Company employs and Employee accepts employment on the
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terms and conditions in this Agreement.
2. Duties. Employee is employed in the capacity of President of
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Interactive Objects, reporting to the Chairman & CEO of the Company. Employee
shall perform the duties customarily performed by a President, provided that
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Employee's precise duties may be changed, extended or curtailed, from time to
time, at the Company's direction, and Employee shall assume and perform the
further reasonable responsibilities and duties that the Company may assign from
time to time.
3. Intensity of Effort; Other Business. Employee shall devote Employee's
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entire working time, attention and efforts to Company's business and affairs,
shall faithfully and diligently serve Company's interests and shall not engage
in any business or employment activity that is not on Company's behalf (whether
or not pursued for gain or profit) except for (a) activities approved in writing
in advance by the Board and (b) passive investments that do not involve Employee
providing any advice or services to the businesses in which the investments are
made.
4. Term. The term of this Agreement starts on the Effective Date and
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expires one year later (the "Initial Term"). This Agreement shall automatically
be renewed for successive one-year terms (each referred to as an "Extended
Term") unless either party gives written notice of nonrenewal at least thirty
(30) days before the expiration of the term. Unless stated otherwise, the word
"year" as used in this Agreement refers to incremental periods of 365 days each
(366 days in the case of a leap year), not calendar years. This Agreement may
terminate before the expiration of any term as provided below.
5. Compensation. Employee's compensation shall be as follows:
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a. Employee's salary initially shall be $125,000 per year, which
shall be computed and paid in equal installments consistent with Company's
normal payroll procedures. At the end of each calendar year, Employee's salary
shall be reviewed by the Board and adjusted as determined by the Board in its
sole discretion, provided that, absent cause or Employee's consent, it may not
be adjusted downward.
b. Employee shall receive a signing bonus in the form of an option to
purchase 500,000 shares of Common Stock of the Company. The strike price of the
shares will be determined by the last trade price at the close of business on
your first day of employment. Options shall be subject to the terms and
conditions of the Company's 1998 stock option plan
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and will vest according to the schedule below:
# of shares Vesting Period
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250,000 One year from grant date
150,000 Two years from grant date
50,000 Three years from grant date
50,000 Four years from grant date
If dismissed without cause, employee will have 12 months from
dismissal date to exercise any vested options. If employee resigns or is
terminated with cause employee will receive the standard 90 days to exercise any
vested options. If Employee exercises any options, upon exercise of the options
employee will hold those options for six months with a limit of 10,000
shares/day that employee can sell on the open market.
c. Employee will receive a bonus of $25,000 if four of the following
six requirements are met:
1) Iomega Product Ship Date of 10/1/2000
2) Win-Jam Product Ship Date of 7/2000
3) Second Ijam agreement negotiated
4) Second Iomega agreement negotiated
5) Hiring and filling of all open positions
6) Developing second generation DAP platform or other new
platforms for licensing.
d. Employee shall be eligible for such other compensation as may be
provided by the Board in its sole discretion.
6. Benefit Plans. Employee shall be eligible for all benefit plans
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(including retirement or pension plans, profit sharing plans and stock option
plans) that are provided generally to Company's executive employees.
7. Vacation and Sick Leave. Employee shall be entitled to accrue three
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weeks paid vacation, and ten personal days per calendar year (prorated if this
Agreement begins and/or ends in the middle of a calendar year), as provided in
the Company's benefit plan set forth in the Company's Employee Handbook.
8. Disability. Employee shall be entitled to such disability benefits as
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provided in the Company's benefit plan set forth in the Company's Employee
Handbook.
9. Business Expenses. Employee is authorized to incur reasonable travel
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and entertainment expenses to promote Company's business. Company shall
reimburse Employee for those expenses. Employee shall provide to Company the
itemized expense account information that Company reasonably requests.
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10. Termination. Employee's employment may be terminated before the
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expiration of this Agreement as follows; in which event Employee's compensation
and benefits shall terminate except as otherwise provided below:
a. By Company Without Cause. Company may terminate Employee's
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employment at anytime, without cause or good reason or advance notice.
b. By Company for Cause. Company may terminate Employee's employment
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for cause. If Company wishes to terminate Employee's employment for cause it
shall first give Employee 30 days' written notice of the circumstances
constituting cause and an opportunity to cure, unless the circumstances are not
subject to being cured. Following the notice and opportunity to cure (if cure is
not made), or immediately if notice and opportunity to cure are not required,
Company may terminate Employee's employment for cause by giving written notice
of termination. The notice may take effect immediately or at such later date as
Company may designate, provided that Employee may accelerate the termination
date by giving five business days' written notice of the acceleration. Any
termination of Employee's employment for cause must be approved by a majority of
the Board other than Employee. Employee must be given reasonable advance notice
of the meeting at which termination is to be considered, and a reasonable
opportunity to address the Board.
For purposes of this Agreement "cause" means and is limited to dishonesty,
fraud, commission of a felony or of a crime involving moral turpitude,
destruction or theft of Company property, physical attack to a fellow employee,
intoxication at work, use of narcotics or alcohol to an extent that materially
impairs Employee's performance of his or her duties, willful malfeasance or
gross negligence in the performance of Employee's duties, violation of law in
the course of employment that has a material adverse impact on Company or its
employees, misconduct materially injurious to Company, or any material breach of
Employee's duties or obligations to Company that results in material harm to
Company.
c. By Employee Without Good Reason. Employee may terminate
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Employee's employment at any time, with or without good reason, by giving
ninety-(90) days' advance written notice of termination.
d. By Employee for Good Reason. Employee may terminate Employee's
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employment for good reason, in which event Employee shall be entitled to the
same rights under this Agreement as if Company had terminated Employee's
employment without cause. If Employee wishes to terminate employment for good
reason Employee shall first give Company 30 days' written notice of the
circumstances constituting good reason and an opportunity to cure, unless the
circumstances are not subject to being cured. Following the notice and
opportunity to cure (if cure is not made), or immediately if notice and
opportunity to cure are not required, Employee may terminate employment for good
reason by giving written notice of termination. The notice may take effect
immediately or at such later date as Employee may designate, provided that
Company may accelerate the termination date by giving five business days'
written notice of the acceleration.
For purposes of this Agreement, "good reason" means and is limited to the
occurrence
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without cause and without Employee's consent of a material reduction in the
character of Employee's duties, level of work responsibility or working
conditions, a reduction in Employee's salary and/or benefits greater than 10% of
the level initially established at the commencement of this Agreement, Company
requiring Employee to be based anywhere other than the greater Seattle area,
except for reasonable travel on Company's business, or any material breach by
Company of its duties or obligations to Employee that results in material harm
to Employee.
e. Death. Employee's employment shall terminate automatically upon
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Employee's death.
11. Indemnification. Company shall defend and indemnify Employee from and
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against any and all claims that may be asserted against Employee by third
parties (including derivative claims asserted by third parties on behalf of
Company) that are connected with Employee's employment by Company, to the extent
permitted by applicable law. The foregoing notwithstanding, Company shall not be
required to defend or indemnify Employee (a) in criminal proceedings, (b) in
civil proceedings where Employee is the plaintiff or (c) to the extent it is
finally adjudicated that Employee did not act in good faith and in the
reasonable belief that Employee's actions were appropriate in the discharge of
Employee's duties for Company. Company may fulfill its duty of defense by
providing competent legal counsel of Company's choosing. The foregoing rights
are in addition to any other rights to which Employee may be entitled under any
other agreement, policy, bylaw, insurance policy, ordinance, statute or other
provision.
12. Invention, Confidentiality, Nonraiding and Noncompetition Agreement.
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Employee shall execute an Invention, Confidentiality, Nonraiding and
Noncompetition Agreement in the form attached as Exhibit A, which is a part of
this Agreement.
13. Dispute Resolution. All disputes between Employee and Company that
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otherwise would be resolved in court shall be resolved instead by the following
alternate dispute resolution process (the "Process").
a. Disputes Covered. This Process applies to all disputes between
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Employee and Company, including those arising out of or related to this
Agreement or Employee's employment at Company. Disputes subject to this Process
include but are not limited to pay disputes, contract disputes, wrongful
termination disputes and discrimination, harassment or civil rights disputes.
This Process applies to disputes Employee may have with Company and also applies
to disputes Employee may have with any of Company's employees or agents so long
as the employee or agent with whom Employee has the dispute is also bound by or
consents to this Process. This Process applies regardless of when the dispute
arises and will remain in effect after Employee's employment with Company ends,
regardless of the reason it ends. This Process does not apply, however, to
workers' compensation or unemployment compensation claims.
b. Mediation. Before having an arbitration hearing, Employee and
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Company agree to attempt to resolve all disputes by mediation using the
Employment Mediation Rules of the American Arbitration Association. Mediation
is a nonbinding process in which a neutral person helps the parties to try to
reach an agreement to resolve their disputes. If the mediation is
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done after one party has started the arbitration process, the mediation shall
not delay the arbitration hearing date. Temporary or interim relief may be
sought without mediating first. Any failure to mediate shall not affect the
validity of an arbitration award or the obligation to arbitrate.
c. Arbitration. All disputes that are not resolved by agreement (in
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mediation or otherwise) shall be determined by binding arbitration. Arbitration
is a process in which one or more neutral people decide the case after hearing
evidence presented by both sides. The arbitration shall be governed by the rules
of the American Arbitration Association.
d. Injunctive Relief. Either party may request a court to issue such
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temporary or interim relief (including temporary restraining orders and
preliminary injunctions) as may be appropriate, either before or after mediation
or arbitration is commenced. The temporary or interim relief shall remain in
effect pending the outcome of mediation or arbitration. No such request shall be
a waiver of the right to submit any dispute to mediation or arbitration.
e. Attorneys' Fees, Venue and Jurisdiction in Court. In any lawsuit
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arising out of or related to this Agreement or Employee's employment at Company,
the prevailing party shall recover reasonable costs and attorneys' fees,
including on appeal. Venue and jurisdiction of any such lawsuit shall exist
exclusively in state and federal courts in King County, Washington, unless
injunctive relief is sought by Company and, in Company's judgment, that relief
might not be effective unless obtained in some other venue. These provisions do
not give any party a right to proceed in court in violation of the agreement to
arbitrate described above.
f. Employment Status. This Dispute Resolution Process does not
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guarantee continued employment, require discharge only for cause or require any
particular corrective action or discharge procedures.
14. Governing Law. This Agreement shall be governed by the internal laws
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of the state of Washington without giving effect to provisions thereof related
to choice of laws or conflict of laws.
15. Saving Provision. If any part of this Agreement is held to be
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unenforceable, it shall not affect any other part. If any part of this Agreement
is held to be unenforceable as written, it shall be enforced to the maximum
extent allowed by applicable law. The indemnification, confidentiality,
limitations on publicity, possession of materials, noncompetition, nonraiding
and dispute resolution provisions of this Agreement shall survive after
Employee's employment by Company ends, regardless of the reason it ends, and
shall be enforceable regardless of any claim Employee may have against Company.
16. Waiver. No waiver of any provision of this Agreement shall be valid
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unless in writing, signed by the party against whom the waiver is sought to be
enforced. The waiver of any breach of this Agreement or failure to enforce any
provision of this Agreement shall not waive any later breach.
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17. Assignment; Successors. Company may assign its rights and delegate
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its duties under this Agreement. Employee may not assign Employee's rights or
delegate Employee's duties under this Agreement.
18. Binding Effect. This Agreement is binding upon the parties and their
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personal representatives, heirs, successors and permitted assigns.
19. Counterparts. This Agreement may be executed in any number of
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counterparts, each of which shall be an original and all of which, taken
together, shall constitute a single agreement.
20. Legal Representation. In connection with this Agreement, the law firm
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of Cairncross & Hempelmann has represented only Company and has not represented
Employee. Employee acknowledges that Employee has been advised to consult with
independent legal counsel before signing this Agreement and has had the
opportunity to do so.
21. Complete Agreement. This Agreement, together with the attached
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Exhibits, is the final and complete expression of the parties' agreement
relating to Employee's employment, and supercedes any prior employment
agreements and/or understandings between the parties. This Agreement may be
amended only by a writing signed by both parties; it may not be amended orally
or by course of dealing. The parties are not entering into this Agreement
relying on anything not set out in this Agreement. This Agreement shall control
over any inconsistent policies or procedures of Company, whether in effect now
or adopted later, but Company's policies and procedures that are consistent with
this Agreement, whether in effect now or adopted later, shall apply to Employee
according to their terms.
DATED as of the date first written above.
EMPLOYEE:
______________________________________
COMPANY: INTERACTIVE OBJECTS, INC.:
By:___________________________________
Its:__________________________________
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