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EXHIBIT 10(f)
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is effective as of December
15, 2000 (the "Effective Date"), and is entered into by and between Xxxxxxx X.
Xxxxx ("Xxxxx") and Xxxxxxxx, Inc., a Delaware corporation (the "Company").
1. EMPLOYMENT. As of the Effective Date, the Company hereby employs
Xxxxx to serve in the capacity of Executive Vice President, Chief Operating
Officer and Chief Financial Officer ("COO/CFO"). The Company's Board of
Directors (the "Board") and/or the Company's Chief Executive Officer (the "CEO")
may provide such additional designations of title to Xxxxx as the Board and/or
CEO, in its discretion, may deem appropriate.
Xxxxx agrees to perform the executive duties and functions customarily
associated with the offices of COO/CFO and as specified from time to time by the
Board and/or the CEO. Except for legal holidays, vacations and absences due to
temporary illness, Xxxxx shall devote his time, attention and energies to the
business of the Company on a full-time basis. Xxxxx represents and warrants to
the Company that he is under no restriction, limitation or other prohibition to
perform his duties as described herein.
2. EMPLOYMENT COMPENSATION AND BENEFITS.
(a) Base Salary. Xxxxx'x initial base salary shall be at the
annual rate of two hundred and thirty thousand dollars ($230,000). This
salary level shall be reviewed at least annually by the Board's
Compensation Committee on the basis of Xxxxx'x performance and the
Company's financial success and progress.
(b) Annual Bonus and Stock Options. Xxxxx is eligible to
participate in the Company's Bonus Program as established from time to
time.
(c) Automobile Allowance. The Company shall pay Xxxxx an
automobile expense allowance of one thousand dollars ($1,000) per month
to defray the cost of business automobile expense.
(d) Vacation. Xxxxx shall be entitled to annual vacations in a
manner commensurate with his status as a key executive and in accordance
with the Company's vacation policies in effect during the term of this
Agreement.
(e) Expense Reimbursement. The Company shall reimburse Xxxxx for
all reasonable amounts actually expended by Xxxxx in the course of
performing his duties for the Company and in accordance with any
Company-established guidelines where Xxxxx tenders receipts or other
documentation reasonably substantiating the amounts as required by the
Company.
(f) Other Benefits. Except as otherwise provided in this
Agreement, Xxxxx shall be entitled to receive all of the rights,
benefits and privileges of an executive officer of the Company under any
retirement, pension, profit-sharing, group medical insurance,
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group dental insurance, group-term life insurance, and disability
insurance, and other employee benefit plans which may be now in effect
or hereafter adopted.
3. TERMINATION.
(a) At Will. The Company shall employ Xxxxx at will, and either
Xxxxx or the Company may terminate Xxxxx'x employment with the Company
at any time and for any reason, with or without cause.
(b) Severance Payment and Benefits. If Xxxxx'x employment is
terminated as a result of a Qualifying Termination, as defined below,
and if Xxxxx delivers a fully executed release and waiver of all claims
against the Company in the form attached hereto as Exhibit A, then, upon
expiration of any applicable revocation period contained in the Release
Agreement, the Company shall pay or provide Xxxxx the following
severance payment and benefits:
(i) Xxxxx shall receive the equivalent of nine (9) months
of his then-current salary (the "Severance Payment"), which shall
be payable in equal monthly installments beginning on the first
day of the first full month following Xxxxx'x Qualifying
Termination and continuing on the first day of each month
thereafter until fully paid. The Severance Payment is in lieu of
any severance payment benefits which otherwise may at that time
be available under the Company's applicable policies; provided,
however, that nothing in this Agreement is intended to modify or
supercede the "Agreement re: Change In Control" entered into
between Xxxxx and the Company as of November 1, 2000, and Xxxxx
shall be entitled to receive whatever additional severance pay
benefits, if any, for which he may qualify according to the terms
of his Agreement re: Change in Control with the Company.
(ii) For the nine-month period following the Qualifying
Termination of his employment, Xxxxx shall be entitled to
continue to participate in the following executive benefit
programs which had been made available to him (including his
family) before the Qualifying Termination: group medical
insurance, group dental insurance, group-term life insurance, and
disability insurance. The programs shall be continued in the same
way and at the same level as immediately prior to the Qualifying
Termination. Xxxxx'x participation in each of such executive
benefit programs shall be earlier terminated or reduced, as
applicable, if and to the extent Xxxxx receives benefits as a
result of concurrent coverage through another program.
(iii) Xxxxx'x unvested stock options shall immediately
become fully vested and exercisable.
(c) Qualifying Termination. Xxxxx'x termination shall be
considered a "Qualifying Termination" unless:
(i) Xxxxx voluntarily terminates his employment with the
Company and its affiliated companies. Xxxxx, however, shall not
be considered to have
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voluntarily terminated his employment with the Company and its
affiliated companies if he elects to terminate his employment
because his overall compensation is reduced or adversely
modified in any material respect or his authority or duties are
materially changed. For such purposes, Xxxxx'x authority or
duties shall be considered to have been "materially changed" if,
without Xxxxx'x express and voluntary written consent, there is
any substantial diminution or adverse modification in his title,
status, overall position, responsibilities, reporting
relationship, general working environment (including without
limitation secretarial and staff support, offices, and frequency
and mode of travel), or if, without Xxxxx'x express and
voluntary written consent, his job location is transferred to a
site more than fifty (50) miles away from his place of
employment.
(ii) The termination is on account of Xxxxx'x death or
Disability. For such purposes, "Disability" shall mean a physical
or mental incapacity as a result of which Xxxxx becomes unable to
continue the performance of his responsibilities for the Company
and its affiliated companies and which, at least three (3) months
after its commencement, is determined to be total and permanent
by a physician agreed to by the Company and Xxxxx, or in the
event of Xxxxx'x inability to designate a physician, his legal
representative. In the absence of agreement between the Company
and Xxxxx, each party shall nominate a qualified physician and
the two physicians so nominated shall select a third physician
who shall make the determination as to Disability.
(iii) Xxxxx is involuntarily terminated for "Cause." For
this purpose, "Cause" shall be limited to only three types of
events:
(A) Xxxxx'x willful and deliberate refusal to
comply with a lawful, written instruction of the Board of
Directors, which refusal is not remedied by Xxxxx within a
reasonable period of time after his receipt of written
notice from the Company identifying the refusal, so long
as the instruction is consistent with the scope and
responsibilities of Xxxxx'x position;
(B) Xxxxx'x act or acts of personal dishonesty
which were intended to result in Xxxxx'x substantial
personal enrichment at the expense of the Company; or
(C) Xxxxx'x conviction of any felony involving an
act of moral turpitude.
(d) Return of Materials. In the event of any termination of
Xxxxx'x employment for any reason whatsoever, Xxxxx shall promptly
deliver to the Company all Company property, including, but not limited
to, documents, data, and other information pertaining to Confidential
Information, as defined below. Xxxxx shall not take with him any
documents or other information, or any reproduction, summary or excerpt
thereof, containing or pertaining to any Confidential Information.
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4. NONDISCLOSURE OF CONFIDENTIAL INFORMATION. Xxxxx acknowledges that
during the term of his employment with the Company, he will have access to and
become acquainted with information of a confidential, proprietary or secret
nature which is or may be either applicable to, or related in any way to, the
present or future business of the Company, the research and development or
investigation of the Company, or the business of any customer of the Company
("Confidential Information"). For example, Confidential Information includes,
but is not limited to, devices, secret inventions, processes and compilations of
information, records, specifications, designs, plans, proposals, software,
codes, marketing and sales programs, financial projections, cost summaries,
pricing formula, and all concepts or ideas, materials or information related to
the business, products or sales of the Company and its customers and vendors.
Xxxxx shall not disclose any of Confidential Information, directly or
indirectly, or use them in any way, either during the term of this Agreement or
at any time thereafter, except as required in the course of employment with the
Company. Xxxxx also agrees to comply with the Company's policies and
regulations, as established from time to time for the protection of its
Confidential Information, including, for example, executing the Company's
standard confidentiality agreements. This section shall survive termination of
this Agreement.
5. NON-SOLICITATION. Xxxxx agrees that so long as he is employed by the
Company and for a period of two (2) years after termination of his employment
for any reason, he shall not (a) directly or indirectly solicit, induce or
attempt to solicit or induce any Company employee to discontinue his or her
employment with the Company; (b) usurp any opportunity of the Company of which
Xxxxx became aware during his tenure at the Company or which is made available
to him on the basis of the belief that Xxxxx is still employed by the Company;
or (c) directly or indirectly solicit or induce or attempt to influence any
person or business that is an account, customer or client of the Company to
restrict or cancel the business of any such account, customer or client with the
Company. This section shall survive termination of this Agreement.
6. SUCCESSORS.
(a) This Agreement is personal to Xxxxx, and without the prior
written consent of the Company shall not be assignable by Xxxxx other
than by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of and be enforceable by Xxxxx'x legal
representatives.
(b) The rights and obligations of the Company under this
Agreement shall inure to the benefit of and shall be binding upon the
successors and assigns of the Company.
7. GOVERNING LAW. This Agreement is made and entered into in the State
of California, and the internal laws of California shall govern its validity and
interpretation in the performance by the parties hereto of their respective
duties and obligations hereunder.
8. MODIFICATIONS. This Agreement may be amended or modified only by an
instrument in writing executed by all of the parties hereto.
9. ENTIRE AGREEMENT. Except as otherwise set forth herein, this
Agreement, together with the exhibits attached hereto, supersedes any and all
prior written or oral agreements between Xxxxx and the Company, and contains the
entire understanding of the parties hereto
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with respect to the terms and conditions of Xxxxx' employment with the Company;
provided, however, that this Agreement is not intended to supercede the
Agreement re: Change in Control between Xxxxx and the Company, which they
entered into as of November 1, 2000, or any agreements which Xxxxx may
previously have entered into regarding the protection of trade secrets and
confidential information.
10. DISPUTE RESOLUTION.
(a) Any controversy or dispute between the parties involving the
construction, interpretation, application or performance of the terms,
covenants, or conditions of this Agreement or in any way arising under
this Agreement (a "Covered Dispute") shall, on demand by either of the
parties by written notice served on the other party in the manner
prescribed in Section 11 hereof, be referenced pursuant to the
procedures described in California Code of Civil Procedure ("CCP")
Sections 638, et seq., as they may be amended from time to time (the
"Reference Procedures"), to a retired Judge from the Superior Court for
the County of San Diego or the County of Orange for a decision.
(b) The Reference Procedures shall be commenced by either party
by the filing in the Superior Court of the State of California for the
County of Orange or the County of San Diego of a petition pursuant to
CCP Section 638(1) (a "Petition"). Said Petition shall designate as a
referee a Judge from the list of retired San Diego County and Orange
County Superior Court Judges who have made themselves available for
trial or settlement of civil litigation under said Reference Procedures.
If the parties hereto are unable to agree on the designation of a
particular retired San Diego County or Orange County Superior Court
Judge or the designated Judge is unavailable or unable to serve in such
capacity, request shall be made in said Petition that the Presiding or
Assistant Presiding Judge of the Orange County Superior Court or the San
Diego County Superior Court, as relevant, appoint as referee a retired
San Diego County or Orange County Superior Court Judge from the
aforementioned list.
(c) Except as hereafter agreed by the parties, the referee shall
apply the internal law of California in deciding the issues submitted
hereunder. Unless formal pleadings are waived by agreement among the
parties and the referee, the moving party shall file and serve its
complaint within 15 days from the date a referee is designated as
provided herein, and the other party shall have 15 days thereafter in
which to plead to said complaint. Each of the parties reserves its
respective rights to allege and assert in such pleadings all claims,
causes of action, contentions and defenses which it may have arising out
of or relating to the general subject matter of the Covered Dispute that
is being determined pursuant to the Reference Procedures. Reasonable
notice of any motions before the referee shall be given, and all matters
shall be set at the convenience of the referee. Discovery shall be
conducted as the parties agree or as allowed by the referee. Unless
waived by each of the parties, a reporter shall be present at all
proceedings before the referee.
(d) It is the parties' intention by this Section 10 that all
issues of fact and law and all matters of a legal and equitable nature
related to any Covered Dispute will be submitted for determination by a
referee designated as provided herein. Accordingly, the parties hereby
stipulate that a referee designated as provided herein shall have all
powers
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of a Judge of the Superior Court including, without limitation, the
power to grant equitable and interlocutory and permanent injunctive
relief.
(e) Each of the parties specifically (i) consents to the exercise
of jurisdiction over his person by a referee designated as provided
herein with respect to any and all Covered Disputes; and (ii) consents
to the personal jurisdiction of the California courts with respect to
any appeal or review of the decision of any such referee.
(f) Each of the parties acknowledges that the decision by a
referee designated as provided herein shall be a basis for a judgment as
provided in CCP Section 644 and shall be subject to exception and review
as provided in CCP Section 645.
11. NOTICES. Any notice or communications required or permitted to be
given to the parties hereto shall be delivered personally or be sent by United
States registered or certified mail, postage prepaid and return receipt
requested, and addressed or delivered as follows, or at such other addresses the
party addressed may have substituted by notice pursuant to this Section:
Xxxxxxxx, Inc. Xxxxxxx X. Xxxxx
0000 Xxxxx Xxxxxx Xxxx 00000 Xxxxxx Xxxx Xxxx
Xxxxxxxx, Xxxxxxxxxx 00000 Xxxxx Xxxxx, Xxxxxxxxxx 00000
Attn: President
12. CAPTIONS. The captions of this Agreement are inserted for
convenience and do not constitute a part hereof.
13. SEVERABILITY. In case any one or more of the provisions contained in
this Agreement shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement, but this Agreement shall
be construed as if such invalid, illegal or unenforceable provision had never
been contained herein and there shall be deemed substituted for such invalid,
illegal or unenforceable provision such other provision as will most nearly
accomplish the intent of the parties to the extent permitted by the applicable
law. In case this Agreement, or any one or more of the provisions hereof, shall
be held to be invalid, illegal or unenforceable within any governmental
jurisdiction or subdivision thereof, this Agreement or any such provision
thereof shall not as a consequence thereof be deemed to be invalid, illegal or
unenforceable in any other governmental jurisdiction or subdivision thereof.
14. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
together constitute one in the same Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered effective as of the day and year first written above
in Carlsbad, California.
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XXXXXXXX, INC.
By: /s/Xxxxxxx X. Xxxxxx, Xx.
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Title: CEO and President
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XXXXXXX X. XXXXX
By: /s/Xxxxxxx X. Xxxxx
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EXHIBIT A
RELEASE AGREEMENT
I, Xxxxxxxx X. Xxxxx, hereby enter into this Release Agreement (this
"Agreement"), pursuant to Paragraph 3(b) of my Employment Agreement with
Xxxxxxxx, Inc., a Delaware corporation (the "Company"), in consideration for
which the Company shall make the Severance Payment as described in my Employment
Agreement entered into effective as of December 15, 2000.
1. The date of my Qualifying Termination is _________________, and I
have received a final paycheck for all wages due, including all accrued
vacation, through that date. Other than the Severance Payment as described in my
Employment Agreement and whatever additional severance pay benefits, if any, for
which I may qualify according to the terms of my Agreement re: Change in Control
with the Company, the foregoing payments are the only amounts which I am
entitled to receive from the Company, and I hereby waive all other payments or
claims for payments.
2. As consideration for the Severance Payment as described in my
Employment Agreement, I hereby release the Company, its successors, affiliates,
directors, employees and agents from any and all claims or lawsuits (including,
for example, equal employment claims, wrongful discharge claims and claims for
age discrimination under the Age Discrimination in Employment Act) which I may
have based either on my employment, my termination, or any other event occurring
prior to the date of this Agreement. This Release is intended to settle any and
all claims that I may have against the Company. Accordingly, I waive any and all
rights conferred under Section 1542 of the California Civil Code, which
provides: "A general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing the release
which if known by him must have materially affected his settlement with the
debtor."
3. I acknowledge and understand my continuing obligation (a) to maintain
the confidentiality of the Company's trade secrets, confidential and proprietary
information and (b) not to solicit the Company's customers or employees, as set
forth in Paragraphs 4 and 5 of my Employment Agreement. I also warrant and
represent that I have returned all Company materials as required in Paragraph
3(d) of my Employment Agreement.
4. I acknowledge that I fully understand my right to discuss this
Agreement with an attorney, and I have carefully read and fully understand this
entire Agreement, and I am entering into this Agreement voluntarily.
5. I understand that I shall have twenty-one (21) days from the date of
receipt of this Agreement to consider this Agreement, I shall have seven (7)
days following the signing of this Agreement to revoke it in writing, and this
Agreement shall not be effective or enforceable until this revocation period has
expired.
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Dated: XXXXXXX X. XXXXX
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By:
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Dated: XXXXXXXX, INC.
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By:
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Title:
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