SOURCEFORGE, INC. EMPLOYMENT AGREEMENT
EXHIBIT
10.1
This
Employment Agreement (the “Agreement”) is made and entered into by and between
Xxxxx X. Xxxxxxxx (“Executive”) and SourceForge, Inc. (the “Company”), effective
as of December 3, 2008 (the “Effective Date”).
1. Duties
and Scope of Employment.
(a) Position
and Duties.
(i) For
the
period beginning as of the Effective Date and ending on January 4, 2009,
Executive will be employed by the Company on a part-time basis, engaging in
activities related to his transition into the position of President and Chief
Executive Officer and reporting to the Company's Board of Directors (the
"Board"). During such period of part-time employment, which is referred to
herein as the "Transition Term," Executive shall be permitted to balance his
attention to Company matters with his prior business commitments.
(ii) Beginning
on January 5, 2009 (the “Full-Time Start Date”), Executive will serve as
President and Chief Executive Officer of the Company. Executive will render
such
business and professional services in the performance of Executive’s duties,
consistent with Executive’s position within the Company, as will reasonably be
assigned by the Board. The Board may modify Executive’s job title and duties as
it deems necessary and appropriate in light of the Company’s needs and interests
from time to time. The period of Executive’s full-time employment under this
Agreement commencing on the Full-Time Start Date is referred to herein as the
“Employment Term.”
(b) Board
Membership.
During
the Employment Term, Executive will serve as a member of the Board, subject
to
any required Board and/or stockholder approval. Upon termination of the
Employment Term, Executive shall resign from the Board.
(c) Obligations.
During
the Transition Term, Executive will be only obligated to perform services to
the
Company on a part-time basis. During the Employment Term, Executive will perform
Executive’s duties faithfully and to the best of Executive’s ability and will
devote Executive’s full business efforts and time to the Company. For the
duration of the Employment Term, Executive agrees not to actively engage in
any
other employment, occupation or consulting activity for any direct or indirect
remuneration without the prior approval of the Board. Notwithstanding the
foregoing, Executive may continue to serve as an outside corporate board member
for those four (4) companies listed on Schedule
A,
so long
as such service does not interfere with Executive’s performance of his
responsibilities and duties to the Company. Further, Executive agrees in good
faith to reduce his board memberships over time to no more than two (2) board
memberships as the opportunity arises.
2. At-Will
Employment.
The
Company and Executive acknowledge that Executive’s employment is and will be
at-will, as defined under applicable law. If Executive’s employment terminates
for any reason, including (without limitation) any termination prior to or
following a Change of Control, Executive will not be entitled to any
acceleration
of Award vesting or severance pay based on termination of employment
other
than as provided by this Agreement. If Executive should resign his employment,
the Company requests, as a courtesy, that Executive provides at least thirty
(30) day advance notice to the Board.
3. Compensation.
(a) Base
Salary.
For the
Transition Term, the Company will pay Executive a one-time payment equal to
$10,000 as compensation for Executive’s services. Such payment will be paid on
the first payroll date to occur following the commencement of the Employment
Term in January 2009. During the Employment Term, the Company will pay Executive
an annual salary of not less than $400,000 as compensation for Executive’s
services (the “Base Salary”). The Base Salary will be paid in accordance with
the Company’s normal payroll practices and be subject to the usual, required
withholdings. Executive’s salary will be subject to review and adjustments will
be made based upon the Company’s normal performance review
practices.
(b) Target
Bonus.
Executive will be eligible to receive an annual target bonus of seventy-five
percent (75%) of, with a maximum annual target bonus of up to one hundred fifty
percent (150%) of, Executive’s Base Salary, less applicable withholdings, upon
achievement of performance objectives to be determined by the Compensation
Committee of the Board in its sole discretion (the “Target Bonus”). Executive’s
Target Bonus will be subject to the terms of the Company’s Named Executive
Officer Bonus Policy and Plan (the “Bonus Plan”). Currently, pursuant to the
Bonus Plan the Target Bonus will be paid quarterly based on achievement of
quarterly performance objectives with payment made within sixty (60) days after
the end of each fiscal quarter. The Company may, in its discretion, modify
the
Bonus Plan to, without limitation, make bonus payments annually to participants,
in which case Executive’s Target Bonus will also then be paid annually. In no
event, however, shall the Target Bonus, or any portion thereof, be paid after
the later of (i) March 15 following the calendar year in which such Target
Bonus is earned or (ii) the
15th
day of
the 3rd
month
following the close of the Company’s fiscal year in which such Target
Bonus
is
earned. On the six (6) month anniversary of the Full-Time Start Date, Executive
will receive the pro-rata portion of the Target Bonus at seventy-five percent
(75%) of Executive’s Base Salary, which is equal to $150,000, subject to
Executive’s continued employment with the Company through such date.
(c) Equity.
(i) At
the
meeting of the Board on December 3, 2008, it will be recommended to the Board
that Executive be granted a stock option to purchase 2,250,000 shares of the
Company’s Common Stock (the “Option”) at the fair market value of the Company’s
Common Stock on the date of grant (i.e., December 3, 2008). Subject to the
accelerated vesting provisions set forth herein below in Section 7, the Option
will vest as to 25% of the shares subject to the Option one (1) year after
the
Effective Date, and as to 1/48th of the shares subject to the Option monthly
thereafter on the same day of the month as the Effective Date (and if there
is
no corresponding day, the last day of the month), so that the Option will be
fully vested and exercisable on the four (4) year anniversary of the Effective
Date, subject to Executive continuing to be a service provider to the Company,
as defined in the Company’s 2007 Equity Incentive Plan (the “Equity Plan”)
through the relevant vesting dates. The Option will be subject to the terms,
definitions and provisions of the Equity Plan and the stock option agreement
by
and between Executive and the Company (the “Option Agreement”), both of which
documents are incorporated herein by reference
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(ii) Executive
will be eligible to receive awards of stock options, restricted stock,
restricted stock units, stock appreciation rights, performance units and
performance shares or other equity awards (“Awards”) pursuant to any plans or
arrangements the Company may have in effect from time to time. The Board or
the
Compensation Committee will determine in its discretion whether Executive will
be granted any such Awards and the terms of any such Award in accordance with
the terms of any applicable plan or arrangement that may be in effect from
time
to time.
4. Employee
Benefits.
Executive will be entitled to participate in the employee benefit plans
currently and hereafter maintained by the Company of general applicability
to
other senior executives of the Company. The Company reserves the right to cancel
or change the benefit plans and programs it offers to its employees at any
time.
5. Vacation.
Executive will be entitled to three (3) weeks (15 working days) of paid time
off
(“PTO”) annually, in accordance with the Company’s PTO policy, with the timing
and duration of specific vacations mutually and reasonably agreed to by the
parties hereto. Upon Executive’s termination of employment, Executive will be
entitled to receive Executive’s accrued but unpaid vacation through the date of
Executive’s termination.
6. Expenses.
The
Company will reimburse Executive for reasonable travel, entertainment or other
expenses incurred by Executive in the furtherance of or in connection with
the
performance of Executive’s duties hereunder, in accordance with the Company’s
expense reimbursement policy as in effect from time to time.
7. Severance
Benefits.
(a) Termination
for other than Cause, Death or Disability Prior to a Change of Control or after
Twelve Months Following a Change of Control.
During
the Employment Term, if prior to a Change of Control or after twelve (12) months
following a Change of Control, the Company (or any parent or subsidiary or
successor of the Company) terminates Executive’s employment other than for
Cause, death or Disability, then, subject to Section 7(c) below, Executive
will
receive the following severance from the Company:
(i) Severance
Payment.
Executive will receive: (A) a lump-sum severance payment in an amount equal
to
twelve (12) months of his Base Salary (as in effect immediately prior to
Executive’s termination), and (B) a lump-sum amount equal to the pro-rata
portion of Executive’s Target Bonus at seventy-five percent (75%) of Executive’s
Base Salary for the period beginning on the first day of the Target Bonus period
for the quarter or year, as applicable, in which Executive’s employment is
terminated and ending on the date of Executive’s termination. Executive will
receive the foregoing amounts, less applicable withholdings, not later than
five
(5) business days after the effective date of the Release (as defined in Section
7(c) below).
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(ii) Accelerated
Vesting.
The
unvested portion of the Option that would normally vest over the following
twelve (12) months from the date of Executive’s termination will immediately
vest prior to Executive’s termination and become exercisable. The Option will
remain exercisable, to the extent applicable, following the date of termination
for the period prescribed in the Equity Plan and Option Agreement.
(iii) Continued
Employee Benefits.
Executive will receive Company-paid coverage for the cost of continuation
coverage for Executive and Executive’s eligible dependents under the Company’s
Benefit Plans until the earlier of (A) a period of twelve (12) months from
the
date of Executive’s termination of employment with the Company, or (B) the date
upon which Executive and/or Executive’s eligible dependents becomes covered
under similar plans.
(b) Termination
for other than Cause, Death or Disability or Resignation for Good Reason Within
Twelve Months Following a Change of Control.
During
the Employment Term, if within twelve (12) months following a Change of Control,
(i) the Company (or any parent or subsidiary or successor of the Company)
terminates Executive’s employment other than for Cause, death or Disability, or
(ii) upon Executive’s resignation with the Company (or any parent or subsidiary
or successor of the Company) for Good Reason, then, subject to Section 7(c)
below, Executive will receive the following severance from the
Company:
(i) Severance
Payment.
Executive will receive: (A) a lump-sum severance payment in an amount equal
to
twelve (12) months of his Base Salary (as in effect immediately prior to
Executive’s termination), and (B) a lump-sum amount equal to Executive’s Target
Bonus for one (1) year equal to seventy-five percent (75%) of Executive’s Base
Salary. Executive will receive the foregoing amounts, less applicable
withholdings, not later than five (5) business days after the effective date
of
the Release.
(ii) Accelerated
Vesting.
The
unvested portion of the Option that would normally vest over the following
eighteen (18) months from the date of Executive’s termination will immediately
vest prior to Executive’s termination and become exercisable. The Option will
remain exercisable, to the extent applicable, following the date of termination
for the period prescribed in the Equity Plan and Option Agreement.
(iii) Continued
Employee Benefits.
Executive will receive Company-paid coverage for the cost of continuation
coverage for Executive and Executive’s eligible dependents under the Company’s
Benefit Plans until the earlier of (A) a period of twelve (12) months from
the
date of Executive’s termination of employment with the Company, or (B) the date
upon which Executive and/or Executive’s eligible dependents becomes covered
under similar plans.
(c) Separation
and Release of Claims Agreement.
The
receipt of any severance payments or benefits pursuant to this Agreement is
subject to the Executive signing and not revoking a separation and release
of
claims agreement in a form reasonably acceptable to the Company (the “Release”),
which must become effective no later than the 60th
day
following the Executive’s termination of employment (the “Release Deadline”),
and if not, the Executive will forfeit any right to severance payments or
benefits under this Agreement. To become effective, the Release must be executed
by the Executive and any revocation periods (as required by statute, regulation,
or otherwise) must have expired without the Executive having revoked the
Release. In addition, no severance payments or benefits will be paid or provided
until the Release actually becomes effective.
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(d) Death
Benefits.
If
Executive should die before all amounts due under this Agreement have been
paid,
such unpaid amounts will be paid in a lump sum payment (less any withholding
taxes) to Executive’s designated beneficiary, if living, or otherwise to the
personal representative of Executive’s estate.
(e) Voluntary
Resignation; Termination due to Death or Disability.
If
Executive’s employment with the Company (or
any
parent or subsidiary or successor of the Company) terminates
voluntarily by Executive (except upon Good
Reason
following a Change of Control), or due to Executive’s death or Disability, then
(i) all vesting will terminate immediately with respect to Executive’s
outstanding Awards, (ii) all payments of compensation by the Company to
Executive hereunder will terminate immediately (except as to amounts already
earned through the date of termination), and (iii) Executive will not be
entitled
to receive severance or other benefits except for those benefits (if any) which
do not concern acceleration
of Award vesting or severance pay based on termination of employment
as
may
then be established under other Company policies or programs, if any.
(f) Termination
for Cause.
If
Executive’s employment with the Company terminates for Cause by the Company
(or
any
parent or subsidiary or successor of the Company),
then
(i) all vesting will terminate as of the termination date with respect to
Executive’s outstanding Awards, and (ii) all payments of compensation by the
Company to Executive hereunder will terminate immediately as of the date thereof
(except as to amounts already earned as of the date Executive receives written
notification of Executive’s termination for Cause).
(g) Exclusive
Remedy.
In the
event of a termination of Executive’s employment with the Company (or any parent
or subsidiary or successor of the Company), the provisions of this Section
7 are
intended to be and are exclusive and in lieu of any other rights or remedies
to
which Executive or the Company may otherwise be entitled, whether at law, tort
or contract, in equity, or under this Agreement. Executive will be entitled
to
no severance or other benefits upon termination of employment with respect
to
acceleration
of Award vesting or severance pay
other
than those benefits expressly set forth in this Section 7.
(h) Section
409A.
(i) Notwithstanding
anything to the contrary in this Agreement, if Executive is a “specified
employee” within the meaning of Section 409A of the Internal Revenue Code of
1986, as amended (the “Code”) and any other official guidance promulgated
thereunder (“Section 409A”), at the time of Executive’s termination, then, if
required, the severance and benefits payable to Executive pursuant to this
Agreement (other than due to death), if any, and any other severance payments
or
separation benefits which may be considered deferred compensation under Section
409A (together, the “Deferred Compensation Separation Benefits”), which are
otherwise due to Executive on or within the six (6) month period following
Executive’s termination will accrue during such six (6) month period and will
become payable in a lump sum payment on the date six (6) months and one (1)
day
following the date of Executive’s termination of employment or the date of
Executive’s death, if earlier. All subsequent Deferred Compensation Separation
Benefits, if any, will be payable in accordance with the payment schedule
applicable to each payment or benefit. Each payment and benefit payable under
this Agreement is intended to constitute separate payments for purposes of
Section 1.409A-2(b)(2) of the Treasury Regulations.
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(ii) Any
amount paid under the Agreement that satisfies the requirements of the
“short-term deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury
Regulations shall not constitute Deferred Compensation Separation Benefits
for
purposes of clause (i) above.
(iii) Any
amount paid under this Agreement that qualifies as a payment made as a result
of
an involuntary separation from service pursuant to Section 1.409A-1(b)(9)(iii)
of the Treasury Regulations that does not exceed the Section 409A Limit (as
defined below) will not constitute Deferred Compensation Separation Benefits
for
purposes of clause (i) above.
(iv) The
foregoing provisions are intended to comply with the requirements of Section
409A so that none of the severance payments and benefits to be provided
hereunder will be subject to the additional tax imposed under Section 409A,
and
any ambiguities herein will be interpreted to so comply. Executive and the
Company agree to work together in good faith to consider amendments to this
Agreement and to take such reasonable actions which are necessary, appropriate
or desirable to avoid imposition of any additional tax or income recognition
prior to actual payment to Executive under Section 409A.
8. Limitation
on Payments.
In the
event that the severance and other benefits provided for in this Agreement
or
otherwise payable to Executive (i) constitute “parachute payments” within the
meaning of Section 280G of the Code and (ii) but for this Section 8, would
be
subject to the excise tax imposed by Section 4999 of the Code, then Executive’s
severance benefits will be either:
| (a) |
delivered
in full, or
|
| (b) |
delivered
as to such lesser extent which would result in no portion of
such
severance benefits being subject to the excise tax under Section
4999 of
the Code,
|
whichever
of the foregoing amounts, taking into account the applicable federal, state
and
local income taxes and the excise tax imposed by Section 4999, results in the
receipt by Executive on an after-tax basis, of the greatest amount of severance
benefits, notwithstanding that all or some portion of such severance benefits
may be taxable under Section 4999 of the Code. If a reduction in the severance
and other benefits constituting “parachute payments” is necessary so that no
portion of such severance benefits is subject to the excise tax under Section
4999 of the Code, the reduction shall occur in the following order unless the
Company determines in writing a different order: (1) reduction of the
severance payments under Sections 7(a)(i) or 7(b)(i); (2) cancellation of
accelerated vesting of Awards; and (3) reduction of continued employee benefits.
In the event that acceleration of vesting of Award compensation is to be
reduced, such acceleration of vesting shall be cancelled in the reverse order
of
the date of grant of Executive’s Awards.
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Unless
the Company and Executive otherwise agree in writing, any determination required
under this Section 8 will be made in writing by an independent firm immediately
prior to Change of Control (the “Firm”), whose determination will be conclusive
and binding upon Executive and the Company for all purposes. For purposes of
making the calculations required by this Section 8, the Firm may make
reasonable assumptions and approximations concerning applicable taxes and may
rely on reasonable, good faith interpretations concerning the application of
Sections 280G and 4999 of the Code. The Company and Executive will furnish
to
the Firm such information and documents as the Firm may reasonably request
in
order to make a determination under this Section. The Company will bear all
costs the Firm may reasonably incur in connection with any calculations
contemplated by this Section 8.
9. Definition
of Terms.
The
following terms referred to in this Agreement will have the following
meanings:
(a) Benefit
Plans.
For
purposes of this Agreement, “Benefit Plans” means plans, policies or
arrangements that the Company sponsors (or participates in) and that immediately
prior to Executive’s termination of employment provide Executive and/or
Executive’s eligible dependents with group health benefits (i.e., medical,
dental and vision benefits). Benefit Plans do not include any other type of
benefit (including, but not by way of limitation, disability, life insurance
or
retirement benefits). A requirement that the Company provide Executive and
Executive’s eligible dependents with coverage under the Benefit Plans will not
be satisfied unless the coverage is no less favorable than that provided to
senior executives of the Company at any applicable time during the period
Executive is entitled to receive severance pursuant to Section 7. The Company
may, at its option, satisfy any requirement that the Company provide coverage
under any Benefit Plan by (i) reimbursing Executive’s premiums under
Title X of the Consolidated Budget Reconciliation Act of 1985, as amended
(“COBRA”) after Executive has properly elected continuation coverage under COBRA
(in which case Executive will be solely responsible for electing such coverage
for Executive’s eligible dependents), or (ii) providing coverage under a
separate plan or plans providing coverage that is sufficient to provide
Executive and Executive’s eligible dependents with equivalent coverage that is
reasonably available to Executive and/or Executive’s eligible
dependents.
(b) Cause.
“Cause”
is defined as a determination by the Company of any of the following: (i) any
act of personal dishonesty involving Executive that is material to Executive’s
responsibilities as an employee of the Company; (ii) Executive’s conviction of,
or plea of guilty or nolo contendere
to, a
felony; (iii) a willful act by Executive which constitutes gross misconduct
and
which is injurious to the Company; or (iv) violations by Executive of
Executive’s obligations as an employee of the Company which are demonstrably
material, willful and deliberate on Executive’s part and are not discontinued
within thirty (30) days after there has been delivered to Executive a written
demand for performance from the Company which describes the basis for the
Company's belief that Executive has
not
substantially performed Executive’s duties (unless such violation by its nature
cannot be cured, in which case notice and an opportunity to cure shall not
be
required).
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(c) Change
of Control.
“Change
of Control” means the occurrence of any of the following events:
(i) the
acquisition by any one person, or more than one person acting as a group (for
these purposes, persons will be considered to be acting as a group if they
are
owners of a corporation that enters into a merger, consolidation, purchase
or
acquisition of stock, or similar business transaction with the Company),
(“Person”) that or is or becomes the owner, directly or indirectly, of
securities of the Company representing more than fifty percent (50%) of the
total voting power represented by the Company’s then outstanding securities (the
“Voting Securities”); provided, however, that for purposes of this subsection
(i), the acquisition of additional securities by any one Person, who is
considered to own more than fifty percent (50%) of the total voting power of
the
securities of the Company shall not be considered a Change of Control;
or
(ii) a
change
in the ownership of a substantial portion of the Company’s assets which occurs
on the date that any Person acquires (or has acquired during the twelve (12)
month period ending on the date of the most recent acquisition by such person
or
persons) assets from the Company that have a total gross fair market value
equal
to or more than fifty percent (50%) of the total fair market value of all of
the
assets of the Company immediately prior to such acquisition or related series
of
acquisitions; provided, however, that for purposes of this Section 9(c)(ii)
the
following shall not constitute a change in the ownership of a substantial
portion of the Company’s assets: (1) a transfer to an entity that is controlled
by the Company’s shareholders immediately after the transfer; or (2) a transfer
of assets by the Company to: (A) a shareholder of the Company (immediately
before the asset transfer) in exchange for or with respect to the Company’s
securities; (B) an entity, fifty percent (50%) or more of the total value or
voting power of which is owned, directly or indirectly, by the Company; (C)
a
Person, that owns, directly or indirectly, fifty percent (50%) or more of the
total value or voting power of all the outstanding stock of the Company; or
(D)
an entity, at least fifty percent (50%) of the total value or voting power
of
which is owned, directly or indirectly, by a Person described in subsection
(C).
For purposes of this Section 9(c)(ii), gross fair market value means the value
of the assets of the Company, or the value of the assets being disposed of,
determined without regard to any liabilities associated with such
assets.
Notwithstanding
the foregoing, a transaction shall not constitute a Change of Control if:
(i) its sole purpose is to change the state of the Company’s incorporation;
(ii) its sole purpose is to create a holding company that will be owned in
substantially the same proportions by the persons who held the Company’s
securities immediately before such transaction; or
(iii)
it does not constitute a change in control event under Treasury Regulation
1.409A-3(i)(5)(v) or (vii).
(d) Disability.
“Disability” will mean that Executive has been unable to perform Executive’s
Company duties as the result of Executive’s incapacity due to physical or mental
illness, and such inability, at least twenty-six (26) weeks after its
commencement, is determined to be total and permanent by a physician selected
by
the Company or its insurers and acceptable to Executive or Executive’s legal
representative (such Agreement as to acceptability not to be unreasonably
withheld). Termination resulting from Disability may only be effected after
at
least thirty (30) days’ written notice by the Company of its intention to
terminate Executive’s employment. In the event that Executive resumes the
performance of substantially all of Executive’s duties hereunder before the
termination of Executive’s employment becomes effective, the notice of intent to
terminate will automatically be deemed to have been revoked.
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(e) Good
Reason.
“Good
Reason” means Executive’s resignation within thirty (30) days following the
expiration of any Company cure period (discussed below) following the occurrence
of one or more of the following events without Executive’s consent: (i) the
assignment to Executive of any duties or the reduction of Executive’s duties,
either of which results in a material diminution in Executive’s authority,
duties or responsibilities with the Company in effect immediately prior to
such
assignment or reduction, or the removal of Executive from such position and
responsibilities, unless Executive is provided with comparable authority, duties
or responsibilities; provided, however, it
being
understood that a new position within a larger combined company does not
constitute “Good
Reason”
if
it
is in the same area of operations and involves similar scope of management
responsibility notwithstanding that Executive may not retain as senior a
position overall within the larger combined company as Executive’s prior
position;
(ii) a
material reduction of Executive’s Base Salary; (iii) a material change in the
geographic location at which Executive must perform services (for purposes
of
this Agreement, the relocation of Executive to a facility or a location less
than fifty (50) miles from Executive’s then-present location shall not be
considered a material change in geographic location); or (iv) any material
breach by the Company of any material provision of this Agreement or any
agreement in connection with any Award. Executive will not resign for Good
Reason without first providing the Company with written notice of the acts
or
omissions constituting the grounds for “Good Reason” within ninety (90) days of
the initial existence of the grounds for “Good Reason” and a reasonable cure
period of not less than thirty (30) days following the date of such
notice.
(f) Section
409A Limit.
For
purposes of this Agreement, “Section 409A Limit” means the lesser of two (2)
times: (i) Executive’s
annualized compensation based upon the annual rate of pay paid to Executive
during the Company’s taxable year preceding the Company’s taxable year of
Executive’s termination of employment as determined under Treasury Regulation
1.409A-1(b)(9)(iii)(A)(1) and any Internal Revenue Service guidance issued
with
respect thereto; or (ii) the maximum amount that may be taken into account
under a qualified plan pursuant to Section 401(a)(17) of the Code for the
year in which Executive’s employment is terminated.
10. Successors.
(a) The
Company’s Successors.
Any
successor to the Company (whether direct or indirect and whether by purchase,
merger, consolidation, liquidation or otherwise) to all or substantially all
of
the Company’s business and/or assets will 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. For all purposes under
this Agreement, the term “Company” will include any successor to the Company’s
business and/or assets which executes and delivers the assumption agreement
described in this Section 10(a) or which becomes bound by the terms of this
Agreement by operation of law. The failure of the Company to obtain the
assumption of this Agreement by any successor will constitute a material breach
of a material part of this Agreement.
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(b) Executive’s
Successors.
The
terms of this Agreement and all rights of Executive hereunder will inure to
the
benefit of, and be enforceable by, Executive’s personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees.
11. Notice.
(a) General.
Notices
and all other communications contemplated by this Agreement will be in writing
and will 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 Executive, mailed notices will be addressed
to
Executive
at
the
home address which Executive most recently communicated to the Company in
writing. In the case of the Company, mailed notices will be addressed to its
corporate headquarters, and all notices will be directed to the attention of
its
Secretary.
(b) Notice
of Termination.
Any
termination by the Company for Cause or by Executive for Good Reason or as
a
result of a voluntary resignation by Executive will be communicated by a notice
of termination to the other party hereto given in accordance with Section 11(a)
of this Agreement. Such notice will indicate the specific termination provision
in this Agreement relied upon, will set forth in reasonable detail the facts
and
circumstances claimed to provide a basis for termination under the provision
so
indicated, and will specify the termination date consistent with any applicable
cure period as set forth in Section 9(b) or 9(e) above or, if not applicable,
not more than thirty (30) days after the giving of such notice. The failure
by
Executive to include in the notice any fact or circumstance which contributes
to
a showing of Good Reason will not waive any right of Executive hereunder or
preclude Executive from asserting such fact or circumstance in enforcing
Executive’s rights hereunder.
12. Arbitration.
(a) Arbitration.
In
consideration of Executive’s employment with the Company, its promise to
arbitrate all employment-related
disputes, and Executive’s receipt of the compensation, pay raises and other
benefits paid to Executive by the Company, at present and in the future,
Executive agrees that any and all controversies, claims, or disputes with anyone
(including the Company and any employee, officer, director, shareholder or
benefit plan of the Company in their capacity as such or otherwise) arising
out
of, relating to, or resulting from Executive’s employment with the Company or
termination thereof, including any breach of this Agreement, will be subject
to
binding arbitration under the Arbitration Rules set forth in California Code
of
Civil Procedure Section 1280 through 1294.2, including Section 1281.8 (the
“Act”), and pursuant to California law. The Federal Arbitration Act shall also
apply with full force and effect, notwithstanding the application of procedural
rules set forth under the Act.
(b) Dispute
Resolution.
Disputes
that Executive agrees to arbitrate, and thereby agrees to waive any right to
a
trial by jury, include any statutory claims under local, state, or federal
law,
including, but not limited to, claims under Title VII of the Civil Rights Act
of
1964, the Americans with Disabilities Act of 1990, the Age Discrimination in
Employment Act of 1967, the Older Workers Benefit Protection Act, the Sarbanes
Oxley Act, the Worker Adjustment and Retraining Notification Act, the California
Fair Employment and Housing Act, the Family and Medical Leave Act, the
California Family Rights Act, the California Labor Code, claims of harassment,
discrimination, and wrongful termination, and any statutory or common law
claims. Executive further understands that this Agreement to arbitrate also
applies to any disputes that the Company may have with Executive.
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(c) Procedure.
Executive agrees that any arbitration will be administered by the Judicial
Arbitration & Mediation Services, Inc. (“JAMS”), pursuant to its Employment
Arbitration Rules & Procedures (the “JAMS Rules”). The arbitrator shall have
the power to decide any motions brought by any party to the arbitration,
including motions for summary judgment and/or adjudication, motions to dismiss
and demurrers, and motions for class certification, prior to any arbitration
hearing. The arbitrator shall have the power to award any remedies available
under applicable law, and the arbitrator shall award attorneys’ fees and costs
to the prevailing party, except as prohibited by law. The Company will pay
for
any administrative or hearing fees charged by the administrator or JAMS, and
all
arbitrator’s fees, except that Executive shall pay any filing fees associated
with any arbitration that Executive initiates, but only so much of the filing
fee as Executive would have instead paid had Executive filed a complaint in
a
court of law. Executive agrees that the arbitrator shall administer and conduct
any arbitration in accordance with California law, including the California
Code
of Civil Procedure and the California Evidence Code, and that the arbitrator
shall apply substantive and procedural California law to any dispute or claim,
without reference to the rules of conflict of law. To the extent that the JAMS
Rules conflict with California law, California law shall take precedence. The
decision of the arbitrator shall be in writing. Any arbitration under this
Agreement shall be conducted in Santa Xxxxx County, California.
(d) Remedy.
Except
as provided by the Act, arbitration shall be the sole, exclusive, and final
remedy for any dispute between Executive and the Company. Accordingly,
except as provided by the Act and this Agreement, neither Executive nor the
Company will be permitted to pursue court action regarding claims that are
subject to arbitration.
Notwithstanding, the arbitrator will not have the authority to disregard or
refuse to enforce any lawful Company policy, and the arbitrator will not order
or require the Company to adopt a policy not otherwise required by law which
the
Company has not adopted.
(e) Administrative
Relief.
Executive is not prohibited from pursuing an administrative claim with a local,
state, or federal administrative body or government agency that is authorized
to
enforce or administer laws related to employment, including, but not limited to,
the Department of Fair Employment and Housing, the Equal Employment Opportunity
Commission, the National Labor Relations Board, or the Workers’ Compensation
Board. However, Executive may not pursue court action regarding any such claim,
except as permitted by law.
(f) Voluntary
Nature of Agreement.
Executive acknowledges and agrees that Executive is executing this Agreement
voluntarily and without any duress or undue influence by the Company or anyone
else. Executive further acknowledges and agrees that Executive has carefully
read this Agreement and that Executive has asked any questions needed for
Executive to understand the terms, consequences and binding effect of this
Agreement and fully understands it, including that EXECUTIVE
IS WAIVING EXECUTIVE’S RIGHT TO A JURY TRIAL.
Finally, Executive agrees that Executive has been provided an opportunity to
seek the advice of an attorney of Executive’s choice before signing this
Agreement.
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13. Confidential
Information.
Executive agrees to enter into the Company’s standard At-Will Employment,
Confidential Information, Invention and Assignment Agreement (the “Confidential
Information Agreement”) upon commencing employment hereunder.
14. Representation
re Former Employers.
Executive represents and warrants that, to the best of his knowledge and good
faith assessment (i) acceptance of the terms of this employment agreement and
the fulfillment of its terms will not constitute a breach of, default under,
or
conflict with any agreement or other instrument to which Executive is a party
or
to which Executive is bound; and (ii) no agreement or other instrument exists
to
which Executive is a party or to which Executive is bound that will prevent,
impair, or otherwise interfere with
Executive being employed by the Company or performing the duties of his position
as set forth herein. Executive further agrees not to bring any third-party
confidential information to the Company, including that of any former employer,
and that he will not in any way utilize any such information in performing
his
duties for the Company.
15. Miscellaneous
Provisions.
(a) No
Duty to Mitigate.
Executive will not be required to mitigate the amount of any payment
contemplated by this Agreement, nor will any such payment be reduced by any
earnings that Executive may receive from any other source.
(b) Amendment.
No
provision of this Agreement will be modified, waived or discharged unless the
modification, waiver or discharge is agreed to in writing and signed by
Executive and by an authorized officer of the Company (other than Executive)
that is expressly designated as an amendment to this Agreement.
(c) Waiver.
No
waiver by either party of any breach of, or of compliance with, any condition
or
provision of this Agreement by the other party will be considered a waiver
of
any other condition or provision or of the same condition or provision at
another time.
(d) Headings.
All
captions and section headings used in this Agreement are for convenient
reference only and do not form a part of this Agreement.
(e) Entire
Agreement.
This
Agreement, together with the Equity Plan, Option Agreement and the Confidential
Information Agreement represents the entire agreement and understanding between
the parties as to the subject matter herein and supersedes all prior or
contemporaneous agreements whether written or oral, including the outline of
major terms of employment, dated November 10, 2008. This
Agreement may be modified only by agreement of the parties by a written
instrument executed by the parties that is designated as an amendment to this
Agreement.
(f) Choice
of Law.
The
validity, interpretation, construction and performance of this Agreement will
be
governed by the laws of the State of California
(with
the exception of its conflict of laws provisions).
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(g) Severability.
The
invalidity or unenforceability of any provision or provisions of this Agreement
will not affect the validity or enforceability of any other provision hereof,
which will remain in full force and effect.
(h) Withholding.
All
payments made pursuant to this Agreement will be subject to all applicable
withholdings, including all applicable income and employment taxes, as
determined in the Company’s reasonable judgment.
(i) Counterparts.
This
Agreement may be executed in counterparts, each of which will be deemed an
original, but all of which together will constitute one and the same
instrument.
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 set forth
below.
|
COMPANY
|
||
|
By:
|
//s//
Xxxxxx X. Xxxxxxxxxx, Xx.
|
|
|
Title:
|
Chairman
of the Board of Directors
|
|
|
EXECUTIVE
|
By:
|
//s//
Xxxxx X. Xxxxxxxx
|
|
Title:
|
Individual
|
|
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Schedule
A
Executive
presently serves as a member of the board of directors of the following
companies:
Coremetrics,
Inc.
MDC
Partners, Inc.
PopTok
Ltd.
Zango,
Inc.
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