EXHIBIT 10.37
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made and entered into as of
this 1st day of April, 1999, by and between Nettaxi, Inc. (the "Company") and
Xx. Xxxxx Xxxxx ("Executive").
RECITALS
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A. The Company is in the business of providing entertainment,
education, and information services over the world wide web through its internet
web site at xxxx://xxx.XXXXXXX.xxx.
B. Executive has acquired certain skills, experience and abilities with
respect to the Company's business.
C. The Company desires to employ Executive, and Executive desires to
accept such employment on the terms and conditions set forth herein.
AGREEMENT
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NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. Employment.
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(a) Subject to the terms and conditions of this Agreement, the Company
shall employ Executive as Chief Financial Officer of the Company. As Chief
Financial Officer, Executive shall have, subject to the control of the Board of
Directors, the duties consistent with the position of Chief Financial Officer,
including but not be limited to: (i) the management and supervision of the
accounting and financial operations and duties of the Company; the hiring of
personnel; and (iii) any other duties reasonably assigned to Executive by the
President, the Chief Executive Officer or the Board of Directors of the Company.
2. Acceptance of Executive.
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(a) Executive hereby accepts such employment and agrees to devote his
best efforts to the service of the Company, to render this service to the
Company on a full-time basis and faithfully, diligently and to the best of his
ability discharge the responsibilities thereof. Executive may perform his
duties from the Company's principle location or from such other location as he
believes is appropriate.
(b) During the term hereof, Executive may not directly or indirectly,
either as an employee or employer, consultant, agent, principal, partner,
stockholder or in any other individual or representative capacity engage in
other businesses competitive with the business of the Company.
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3. Compensation. In consideration of the services to be rendered hereunder,
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Executive shall receive compensation subject to withholding and other usual
deductions in the amount set forth below:
(a) Base Salary. Initially, Executive shall receive a base salary at
the annual rate of $125,000. Beginning on August 1, 1999 Executive's annual
base salary shall be increased to $150,000. Thereafter, the Board of Directors
shall review Executive's annual base salary at least annually, to determine the
appropriate increase thereof. At a minimum, the base salary shall be increased
by an amount equivalent to an increase of Ten Percent (10%) per annum, which
increase shall be cumulative for each year. The base salary shall be payable in
accordance with the regular payroll practices of Employer. The Minimum Bonus or
any additional bonus amount shall not be taken into consideration when
determining the annual salary increases.
(b) Bonus. Executives shall be entitled to an annual bonus in the
minimum amount of Fifty Thousand Dollars ($50,000) U.S.D. (the "Minimum Bonus"),
up to a maximum of the Annual Salary then payable to the Executive in accordance
with the terms and provisions of this Agreement, payable on each anniversary
date of this Agreement. Any annual bonus in excess of the Minimum Bonus shall
be determined by the Board in its sole discretion based upon performance targets
established by the Board at the beginning of each year of employment hereunder.
4. Payment of Expenses. The Company shall pay directly on behalf of
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Executive, or reimburse Executive upon presentation of satisfactory receipts,
the reasonable expenses incurred by Executive in carrying out his duties
pursuant to this Agreement.
5. Other Benefits. Executive shall receive three (3) weeks paid vacation
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leave during the first year of his employment and four (4) weeks per year
thereafter. Executive shall be entitled to participate in the Company's health
and other benefit plans which are in effect from time to time.
6. Option to Purchase Common Stock. The Company hereby grants Executive an
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option to purchase two hundred fifty thousand (250,000) shares of common stock
(the "Options") of the Company which shall vest in twelve equal quarterly
installments in accordance with the Company's 1998 Stock Option Plan.
7. Assignment of Inventions. Executive shall communicate promptly to the
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Company all inventions, discoveries, concepts and ideas whether patentable or
not, including but not limited to hardware, software, processes, methods,
techniques as well as improvements thereto conceived (collectively referred to
as "Developments"), developed, completed or reduced to practice during
Executives employment with the Company, that (i) are related to the present or
prospective business, work or consulting of the Company; (ii) result from any
work performed on behalf of the Company; or (iii) result from use of the
Company's equipment, facilities or materials. Executive hereby assigns his
entire right, title and interest in and to all such Developments and any
intellectual property rights arising therefrom. Executive shall further
cooperate with the Company in connection with any applications, filings or
documents prepared and or filed related to the Developments.
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8 Confidentiality. Except as may be required by Executive's employment with
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the Company, Executive shall not, without the prior written consent of the
Company, disclose or use at any time, either during or subsequent to Executive's
employment with the Company, any secret or confidential information
(collectively referred to as "Confidential Information") disclosed by the
Company to him or which he learns during his employment with the Company. Upon
termination of his employment, Executive shall promptly deliver to the Company
all correspondence, manuals, letters, notes, notebooks, reports, flow-charts,
programs, proposals or any other documents concerning the Company's customers,
products, processes or business practices. However, this provision shall not
apply to the information, systems, processes, contacts or operating
methodologies brought by Executive to the Company or general information and
skills learned or developed by Executive, any information in the public domain,
or disclosed to third parties by the Company. For purposes of this Agreement,
"Confidential Information shall include but not be limited to customer lists,
contact lists, vendor lists, bidding procedures, designs, specifications, source
codes, mask works, products in development, technical drawing, schematics, bills
of materials, sales and manufacturing techniques, developments, production
processes, operational methodologies, financial statements, marketing
strategies, employee data and other information related to such business and
practices of the Company
9 Non-Solicitation. During the term of this Agreement and for a period of
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one year following the termination or expiration of this Agreement for whatever
reason (or if this period of time shall be unenforceable by law, then for such
period as shall be enforceable), Executive agrees not to contact, with a view
towards purchasing or selling any product or service competitive with any
product or service purchased or sold by Company, or purchase or sell any such
product or service from or to any person, firm, association, corporation or
other entity whatsoever: (i)which Executive solicited, contacted or otherwise
dealt with on behalf of the Company during the twelve (12) month period or any
portion thereof preceding termination or expiration of Executive's employment
with the Company; or (ii) which is known by Executive to have been a customer,
or client of the Company during the twelve (12) month period or any portion
thereof preceding the termination or expiration of his or her employment with
the Company. Furthermore, Executive shall not for a period of two (2) years
after the termination of his or her employment for whatever reason, solicit for
hire, or hire any employee of the Company, or any person who was employed by the
Company at any time within six (6) months of the termination of Executive's
employment with the Company, to work for Executive or any other person or
entity.
10. Term. Unless the employment of Executive is terminated as set forth
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herein, this Agreement shall continue in full force and effect for a period of
three (3) years from the date hereof. The Agreement shall be automatically
renewed for successive periods of one (1) year unless notice is received by the
other party at least thirty (30) days prior to the end of the term or extension
thereof or otherwise terminated pursuant to the terms hereof.
11. Termination of Employment by the Company.
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(a) THE COMPANY MAY TERMINATE THE EMPLOYMENT OF EXECUTIVE AT ANY TIME
WITH OR WITHOUT CAUSE, FOR ANY REASON OR NO REASON. THE EMPLOYMENT RELATIONSHIP
CONTEMPLATED HEREUNDER SHALL BE AT THE WILL OF THE PARTIES HERETO. EXECUTIVE'S
EMPLOYMENT SHALL ALSO TERMINATE UPON HIS DEATH.
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(b) The Company may terminate Executive's Employment without cause upon
not less than thirty (30) days notice. The Company may also terminate
Executive's employment for "cause" upon the determination in good faith of a
majority of the Board of Directors of the Company three (3) days notice to
Executive. The term "cause" as used herein shall include: (i) Executive's
conviction of, guilty or no contest plea to, or confession of guilt to, a
felony; (ii) a willful act by Executive which constitutes gross misconduct and
which is materially injurious to Employer; (iii) a willful and material failure
by Executive to substantially perform his duties, other than a failure resulting
from a disability; or (iv) violation by Executive of Section 8 of this
Agreement.
(c) Severance. Upon the termination of the employment of Executive
without cause the company shall pay the Executive: (i) Executive's annual base
salary payable through the term of this Agreement, as if Executive had not been
terminated; (ii) bonus compensation payable through the term of this Agreement
as if Executive had not been terminated; and (iii) continued payments for health
or benefit plans through the term of this Agreement as if Executive had not been
terminated. Additionally, upon such termination, the vesting of all options to
purchase Common Stock of the Company held by Executive shall be accelerated so
that such options are immediately exercisable. For purposes of calculating the
amount due under (ii), above, the amount of Executive's most recent annual bonus
shall be the presumed annual bonus. The amounts due under (i) and (ii), above,
shall be paid in one lump-sum within three (3) calendar days of such
termination. All amounts to be paid by Employer to Executive pursuant to this
Section 11(c) shall be considered by the parties to be severance payments. In
the event such payments are treated as damages, it is expressly acknowledged by
the parties that damages to Executive for termination of employment would be
difficult to ascertain and the above amounts are reasonable estimates thereof.
(d) Severance Based upon Change of Control. In the event Employer
enters into an agreement with another person or entity, the effect of which is
to change the control of the Employer, then and in such event, Executive shall
be exclusively entitled to terminate this Agreement, and in such event, Employer
shall pay to Executive severance payments in accordance with Section 11(c) of
this Agreement. For purposes of this Agreement, the term "change of control"
shall mean: (i) any change of equity such that more than fifty percent (50%) of
the issued and outstanding shares of the Company are transferred to a third
party; (ii) or debt ownership, including but not limited to conversion rights of
debt to equity of the Employer such that more than fifty percent (50%) of the
issued and outstanding shares are transferred to a third party; or (iii) a sale
of substantially all of Employer's assets.
12. Termination of Employment by Executive. Executive shall have the right
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to terminate his employment by providing the Company thirty (30) days notice of
such termination.
13. Indemnification. The Company shall indemnify Executive, and hold
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Executive harmless against, any and all debts, obligations and other liabilities
(whether absolute, accrued, contingent, fixed or otherwise, or whether known or
unknown, or due or to become due or otherwise), monetary damages, fines, fees,
penalties, interest obligations, deficiencies, losses and expenses (including
without limitation attorneys fees and litigation costs) incurred or suffered by
the Executive resulting from Executive's employment with the Company.
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14. Miscellaneous.
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(a) Attorney's Fees. In the event that any legal action is brought to
enforce or interpret any part of this Agreement, the prevailing party shall be
entitled to recover reasonable attorney's fees and other costs incurred in that
action, in addition to any other relief to which that party may be entitled.
(b) Successors. Any successor to the Company (whether direct or
indirect and whether by purchase, lease, merger, consolidation, liquidation or
otherwise) to 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 Executive's rights hereunder shall inure
to the benefit of, and be enforceable by, your personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees, and legatees.
(c) Governing Law. This Agreement shall in all respects be construed,
interpreted, and enforced in accordance with, and governed by the laws of the
State of California.
(d) Severability. If any term or provision of this Agreement shall be
held invalid or unenforceable to any extent, the remainder of this Agreement
shall not be affected and each other term and provision of this Agreement shall
be valid to the fullest extent permitted by law.
(e) Counterparts. This Agreement may be executed in counterparts, each
of which shall constitute an original and all of which shall be one and the same
instrument.
(f) Arbitration. In the event a dispute of any kind or nature arises
under this Agreement, any documents executed in connection with this Agreement,
or any matters related to this Agreement, the parties shall, within ninety (90)
days of the receipt by the other party of a demand for arbitration, select a
mutually agreeable arbitrator and submit the dispute to such arbitrator for
binding arbitration, through the nearest American Arbitration Association
Regional Office, under the Commercial Arbitration Rules of the American
Arbitration Association. In the event the parties are unable to agree upon an
arbitrator, the arbitrator shall be appointed in accordance with the rules and
procedures of the American Arbitration Association. The fees for the
arbitration proceedings shall be forwarded by the party demanding arbitration.
However, the arbitration fee shall be paid or reimbursed by the non-prevailing
party, as determined by the arbitrator, who shall also award appropriate
attorney's fees and costs to the prevailing party.
(g) Modification. Any amendment, change or modification of this
Agreement shall be effective only if it is in writing and signed by the parties
hereto.
(h) Waiver. The failure of either party to insist upon strict
compliance with any of the terms, covenants or conditions of this Agreement by
the other party shall not be deemed a waiver of that term, covenant or
condition, nor shall any waiver or relinquishment of any right or power at any
one time be deemed a waiver or relinquishment of that right or power for all or
any other time.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first written above.
THE COMPANY: NETTAXI, INC.
By:____________________
Its:___________________
EXECUTIVE: _______________________
Xxxxx Xxxxx
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