EXHIBIT 10.15
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into by and
between Xxxxxxx X. Xxxxxxxxx ("Employee") and SDL, Inc. (the
"Company"), and is effective as of the 1st day of October, 1998 and
supercedes any/all previous employment agreements.
The parties hereby agree as follows:
1. Period of Employment
The Company will employ Employee to render services to the Company
in the position and with the duties and responsibilities described in
Section 2, for the compensation specified in Sections 3 and 4 and for the
period commencing on the effective date of this Agreement and ending on
termination as provided in Section 5.
2. Position and Duties
Employee accepts employment with the Company as its Chief Operating
Officer. As such, Employee shall have the responsibilities for the
management and operations of the Company established for him from time to
time by the Board of Directors.
3. Compensation
(a) Base Salary. Employee shall receive a base salary of
$209,204 per year, payable in equal installments in accordance with the
Company's current practices or as they may be amended. The foregoing
base salary shall be subject to annual reviews each year during the term
of the Agreement, as determined by the Board of Directors in its sole
discretion.
(b) Annual Bonuses. The Board of Directors shall approve an
annual operating plan for the Company. Employee shall receive cash
bonuses in connection with each audit of the Company's results of
operations conducted by the Company's independent certified public
accountants. Such audits shall be conducted at least annually.
Employee's bonuses shall be computed as provided in the matrix attached
to this agreement as Exhibit A or other such criteria as determined by
the SDL Board of Directors, provided that such bonuses shall be adjusted
pro rata to reflect any audit period less than twelve (12) months. The
Company's results of operations shall be determined by the Company's
independent certified public accountants in accordance with generally
accepted accounting principles applied consistent with the practice for
prior periods and shall be accompanied by an audit report of such
accountants, which shall be reasonably acceptable to the Company's Board
of Directors. Such bonuses shall be calculated and paid within thirty
(30) days following delivery of the audit report. Bonuses shall be
deemed earned with respect to each fiscal year (or portion thereof)
during which Employee has been employed hereunder as of the end of the
fiscal period covered by the audit; such bonuses shall thereafter be
paid on the dates set forth above, subject only to the determination of
the Company's results of operations.
(c) Option Appreciation Guarantee. Offer letter dated
February 21, 1997 states: "If at the end of your second complete year
with SDL the options that you have been granted do not yield you $200,000
appreciation, SDL will make up the difference in cash. That is, if the
options are below water SDL will pay $200,000 in cash less taxes. If the
options are above water but their value is less than $200,000 above the
exercise price, SDL will pay you the difference in cash less taxes. SDL
will calculate the appreciation on the second anniversary of your option
grant date based on a 3 day average of the last trade price as reported
in the Wall Street Journal; day before, anniversary date, and day after."
This agreement amends the above paragraph by adding the following
sentence: Any such payout will actually occur on your tenth anniversary
or termination from the Company for any reason, whichever comes first.
4. Benefits
(a) Employee will continue to receive benefits
made generally available to employees of the Company. In addition,
Employee shall receive in the future benefits generally made available to
the Company's executives at a similar reporting level. The foregoing
shall include stock option plan grants, with the number of shares, if
any, covered by such grants determined by the Board of Directors in its
sole discretion. The Company shall reimburse Employee for reasonable
travel and other business expenses incurred by him in the performance of
his duties hereunder in accordance with the Company's policies in this
regard.
(b) During the term of this Agreement and for a period of
six (6) months thereafter, the Company will maintain an insurance policy
on Employee's life in an amount equal to his then-current base salary.
The proceeds of the foregoing insurance policy shall be payable to such
beneficiaries as Employee may designate from time to time or, in the
absence of a designation, to his estate.
(c) New Loan. In the event Employee sells the Property and
purchases a new residence, the Company agrees to enter into a new housing
assistance loan (the "New Loan"), the terms of which will be the same in
all material respects to the terms of Housing Assistance Loan, including
but not limited to the terms related to the on-going loan repayment
obligations of Employee and the repayment obligations of Employee in the
event of termination by the Company, provided, however, that (i) at the
time of the close of escrow for the new residence, the Employee must be
currently employed at the Company, (ii) the amount of the New Loan will
be equal to the price of the new residence minus $228,000, but in no
event shall it exceed the amount outstanding under the Note at the time
such amount became due and payable and (iii) the New Loan will be due and
payable on the tenth anniversary of the date of the Note.
(d) See attached "Addendum, Terms of Employment Offer"
Section 1)(d)(iii) under "Relocation Package" in the
attached "Addendum, Terms of Employment Offer" dated
February 21, 1997 is amended to read as follows:
Dollar forgiveness on the anniversary of your
employment date
1999 $40,000 - 2nd Anniversary
2000 $40,000 - 3rd Anniversary
2001 $40,000 - 4th Anniversary
2002 $80,000 - 5th Anniversary
2003 $40,000 - 6th Anniversary
2004 $40,000 - 7th Anniversary
2005 $40,000 - 8th Anniversary
2006 $40,000 - 9th Anniversary
2007 $40,000 - 10th Anniversary
5. Termination
In addition to the terms of termination defined in the "Addendum, Terms
of Employment Offer" (see attached) the following will apply.
(a) Employee's employment by the Company hereunder shall be
terminable by either Employee or the Company at any time and for any
reason, with or without cause, effective upon written notice to the other
party. Upon termination of employment the employee shall be deemed to
have resigned from all offices and directorships then held with the
Company or any affiliate.
(b) In the event the Company terminates Employee's employment
pursuant to subsection (a) above other than for cause (as defined below),
or the Employee resigns following a reduction in base pay and bonus when
said reduction is not in conjunction with similar reductions in base pay
and bonus with other Senior Executives or employee is no longer in the
role of Chief Operating Officer or at least equivalent position, Employee
shall be entitled to the following benefits:
(i) An amount, payable monthly for six (6) months, commencing
on the effective date of termination of the Employee's employment equal
to his then current monthly base salary;
(ii) Accelerated vesting, for six (6) additional months from
the effective date of termination, under all outstanding stock options
then held by Employee; and
(iii) An amount, payable monthly for six (6) months commencing
on the effective date of termination of Employee's employment equal to
4.1667% of his then current annual base salary
(iv) For a period of six (6) months following the
termination of Employee's employment pursuant to this Agreement, the
Company will pay the cost to maintain medical benefits under COBRA,
provided that Employee will continue to pay the amount he paid for
medical insurance prior to such termination and provided the employee
adheres to the terms of COBRA.
(v) $200,000 of "Housing Assistance Loan"
described in the Terms of Offer dated February 21, 1997 will be forgiven
if termination occurs during the first 5 years of employment at SDL and
the balance of the loan is due upon close of escrow on the house
repurchase or within 1 year which ever comes first,
(vi) At your option, SDL can repurchase your CA
house, within 1 year of your termination date, at the higher of original
purchase price or appraised value at the time of termination or you will
need to pay the balance of the loan within 1 year.
(c) If Employee terminates his employment pursuant to this
Agreement in accordance with Section 5(a), or if the Company terminates
Employee's employment pursuant to Section 5(a) for cause (defined as
willful breach of duty in the course of employment or habitual neglect of
duty or continued inability to perform it), continued inability to
perform it shall not include performance results, unwillingness to move
(more than 100 miles)/accept transfer or unwillingness to accept
excessive travel or any reasons/circumstances resulting from illness in
family or child care, the following shall apply:
(i) No further salary shall be payable to Employee, except for
amounts accruing prior to the termination date;
(ii) No further vesting of Employee's stock options or stock
purchase, or similar rights shall occur; and
(iii) No further bonuses shall be payable pursuant to Section
3(b).
(iv) No forgiveness of the $200,000 "Housing Assistance Loan
will be provided,
(v) "Housing Assistance Loan' balance in full is payable with 1
year, or upon sale of house whichever occurs first.
(d) Subsequent to the termination of Employee's employment
hereunder, the payments and benefits provided for in Sections 4(b) and
subsections 5 (b) (i), (ii), (iii) and (iv) shall terminate at such time,
if any, as Employee commences employment.
(e) This Agreement shall terminate upon Employee's death or
permanent disability. In such event, Employee (or his estate) shall be
entitle to receive the benefits provided for under Section 5(b).
6. Miscellaneous
(a) Notices under this Agreement shall be in writing and shall
be deemed given when delivered in person or three (3) days after deposit in
the United States Mail, postage prepaid, certified or return receipt
requested, and addressed as follows:
If to Employee: NAME
STREET ADDRESS
CITY, STATE, ZIP
If to the Company: 00 Xxxx Xxxxxxx Xxx
Xxx Xxxx, Xxxxxxxxxx 00000
Attention: Corporate Secretary
The foregoing addresses may be changed by notice in accordance with this
subsection (a).
(b) The prevailing party in any action to enforce the terms of
this Agreement shall be entitled to reimbursement from the other party
for its costs and expenses (including reasonable attorneys' fees) in
connection therewith.
(c) The terms of this Agreement are intended by the parties to be
the final expression of their agreement with respect to the employment of
Employee by the Company and may not be contradicted by evidence of any
prior or contemporaneous agreement. The parties further intend that this
Agreement shall constitute the complete and exclusive statement of its
terms and that no extrinsic evidence whatsoever may be produced in any
legal proceeding involving this Agreement. This Agreement may be
amended, and the observance of any of its terms may be waived, only by a
writing signed by the party to be charged with such amendment or waiver.
(d) If any provision of this Agreement, or the application
thereof to any person, place or circumstance, shall be held by a court of
competent jurisdiction to be invalid, unenforceable or void, the
remainder of this Agreement and such provisions as applied to other
persons, places and circumstances shall remain in full force and effect.
(e) The validity, interpretation, enforceability and performance
of this Agreement shall be governed by and construed in accordance with
the laws of the State of California, without regard to its rules
regarding conflicts of laws.
(f) Employee agrees that all disputes between him and the Company
(including all affiliates, shareholders, directors, officers, employees,
consultants, agents, successors and assigns), which arise during
Employee's employment or after, will be resolved by arbitration. The
arbitration will be conducted by a single arbitrator. The arbitrator
will be selected and the arbitration conducted pursuant to the Employment
Dispute Resolution rules of the American Arbitration Association (AAA).
The arbitration agreement covers all disputes arising from Employee's
employment, including (1) claims for wages, benefits or compensation, (2)
all tort and contract claims of any kind, including disputes concerning
this Agreement, and (3) claims based on any federal or state law,
including discrimination, harassment or retaliation laws. For example,
this arbitration agreement includes claims arising under Title VII of the
Civil Rights Act of 1964, the Age Discrimination in Employment Act, the
Americans with Disabilities Act, and the California Fair Employment and
Housing Act. The only claims not covered by this arbitration agreement
are workers' compensation and unemployment compensation claims, and the
Company may, at its option, seek injunctive relief, equitable relief and
damages in court for any breach of this Invention and Proprietary
Information Agreement, any other agreement, or any federal or state law,
concerning Proprietary Information or Inventions. Except as provided in
the previous sentence, arbitration is the exclusive remedy for all
disputes covered by this arbitration agreement, including whether a
particular dispute is covered by this agreement, and shall be final and
binding on both parties, which means that BOTH EMPLOYEE AND THE COMPANY
WAIVE ANY RIGHT TO A JURY TRIAL. Either Employee or the Company may
bring an action in court to compel arbitration and to enforce an
arbitration award. Otherwise, neither party shall initiate or prosecute
any lawsuit or administrative action in any way related to any dispute
covered by the arbitration agreement. The Federal Arbitration Act shall
govern the interpretation and enforcement of this arbitration agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first set forth above.
EMPLOYEE SDL, INC.
By /s/ Xxxxxxx X. Xxxxxxxxx By /s/ Xxxxxx X. Xxxxxxx
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