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EXHIBIT 10.15
EMPLOYMENT AGREEMENT
This Employment Agreement is made and entered into by and between Zland inc.
(the "Company") and Xxxx Xxxxxxxx. ("Xxxxxxxx").
RECITALS
A. On July 8, 1999 (the "Commencement Date") Xxxxxxxx was employed by the
Company as its Chairman and Chief Executive Officer and is hereby bound
by this Employment Agreement;
NOW, THEREFORE, in consideration of the promises and benefits contained
in this Agreement, Xxxxxxxx and the Company hereby agree as follows:
1. Position and Duties: Xxxxxxxx shall continue to be employed by
the Company as its Chairman and Chief Executive. As Chairman and
CEO, Xxxxxxxx agrees to devote his full business time, energy and
skill to his duties at the Company. These duties shall include,
but not be limited to, any duties consistent with his position
which may be assigned to Xxxxxxxx from the Zland Board of
Directors.
2. Term of Employment: Veenstra's employment with the Company
pursuant to this Agreement shall be on an at-will basis, subject
to the provisions regarding termination set forth below. Upon
termination of Veenstra's employment with the Company, neither
Xxxxxxxx nor the Company shall have any further obligation or
liability to the other, except as set forth in Paragraphs 3(c ),
4, and 5 below.
3. Compensation: Xxxxxxxx shall be compensated by the Company for his
services as follows:
(a) Base Salary: Xxxxxxxx shall be paid a monthly base salary
of twenty thousand dollars ($20,000.00) (two hundred forty
thousand dollars ($240,000.00) on an annualized basis),
subject to applicable withholding and paid in accordance
with the Company's normal payroll procedures. Such salary
will be reviewed on an annual basis and adjustments made as
deemed appropriate by the Compensation Committee of the
Board of Directors. Any decrease in salary may be viewed as
a material event at Veenstra's sole discretion and
therefore trigger termination clauses as set forth in
Paragraphs 4 and 5 below.
(b) Benefits: Xxxxxxxx shall have the right, on the same basis
as other employees of the Company, to participate in and to
receive benefits under any of the Company's benefit plans,
including medical, dental and group insurance plans for
Xxxxxxxx and his immediate family. Xxxxxxxx shall also be
entitled to participate in
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any 401(k) Plan or Employee Stock Purchase Plan that the
Company may offer, now or in the future, in accordance with
its terms. In addition, Xxxxxxxx shall be entitled to the
benefits afforded to other employees under the Company's
vacation, holiday and business expense reimbursement
policies.
(c) Executive Incentive Compensation Plan: Xxxxxxxx will be
eligible to receive, in addition to his Base Salary, an
annual incentive compensation payment which would equal, at
a minimum, fifty percent (50%) of Veenstra's current Base
Salary, and at a maximum, seventy-five (75%) of Veenstra's
Base Salary, provided the Company achieves pre-defined
goals for that period. These goals will be determined
mutually between Xxxxxxxx and the Board of Directors.
Similar bonuses will apply in subsequent fiscal years.
These payments will normally be made on a six month
retroactive basis, by August 30th of the current fiscal
year, and February 28th of the next fiscal year.
In the event that Xxxxxxxx terminates his employment
voluntarily, Xxxxxxxx shall be entitled to receive a
payment pro-rated in accordance with the period of
Veenstra's employment with the Company during the
applicable fiscal year, provided that the predetermined
goals for that period were met. Payment in this case will
be made at the normal August 30th or February 28th
interval.
(d) Stock Options: Xxxxxxxx, will be granted a option, as part
of this contract, to purchase 500,000 shares of the
Company's common stock at a pre-IPO price not to exceed
$9.00/share. The shares subject to this option will vest as
follows: (A) upon the one (1) year anniversary of the
Commencement date, 25%; (B) thereafter, 2.0833% per month.
In addition, Xxxxxxxx will be granted a contract bonus of
100,000 shares of the Company's common stock at a pre-IPO
price not to exceed $9.00/share. The shares subject to this
option will be vested immediately.
4. Benefits Upon Voluntary Termination: In the event that Xxxxxxxx
voluntarily resigns from his employment with the Company, Xxxxxxxx
shall be entitled to no compensation or benefits other than those
earned in Paragraph 3 above through the date of his termination,
unless the Company materially altered Veenstra's duties,
responsibilities, authority or compensation from that set forth in
Paragraphs 1 and 3 above. In that event, Paragraph 5(b) shall
apply. Xxxxxxxx will have one (1) year from
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the date of his resignation to exercise any stock options that
were vested prior to the date of his resignation.
In the event that Veenstra's employment terminates as a result of
his death or disability, Xxxxxxxx shall be entitled to the
benefits described in Paragraph 5(c).
5. Benefits Upon Other Termination: Xxxxxxxx agrees that his
employment may be terminated by the Company at any time, with or
without cause. In the event of the termination of Veenstra's
employment by the Company for the reasons set forth below, he
shall be entitled to the following:
(a) Termination for Cause: If Veenstra's employment is
terminated by the Company for Cause as defined below,
Xxxxxxxx shall be entitled to no compensation or benefits
other than those earned under Paragraph 3 through the date
of his termination. Xxxxxxxx will have one (1) year from
the date of his termination to exercise any stock options
that were vested prior to the date of his termination.
For purposes of this Agreement, a termination "for Cause"
may only occur if Xxxxxxxx is terminated for any of the
following reasons:
(i) theft, dishonesty, or falsification of any
employment or Company records;
(ii) improper disclosure of the Company's confidential or
proprietary information;
(iii) failure or inability to perform any reasonable
assigned duties after written notice from the
Company of, and a reasonable opportunity to cure
such failure or inability; or
(iv) Veenstra's conviction of any criminal act which
impairs his ability to perform his duties under this
Agreement.
(b) Termination for Other Than Cause: If Veenstra's employment
is terminated by the Company for any reason Other Than
Cause and not as a result of death or disability as set
forth in Paragraph 4, and not a result of a Change of
Control as set forth in subparagraph 5(c) below, Xxxxxxxx
shall be entitled to receive a lump sum severance payment
equal to twelve (12) month's Base Compensation plus 50%
bonus, less applicable withholding, at his final monthly
salary rate. This payment shall be made immediately upon
termination. Xxxxxxxx will also be entitled to full
benefits as set forth in Paragraph 3(b) above, for a period
of twelve (12) months after termination. In addition,
Xxxxxxxx shall be entitled to an acceleration of vesting of
all remaining unvested
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stock options granted as set forth in Paragraph 3(d) for
which he has up to one (1) year after the date of
Termination to exercise.
For purposes of subparagraph 5(b), a Termination for Other
Than Cause shall occur if the Company materially alters
Veenstra's duties, responsibilities, authority or
compensation from that set forth in Paragraphs 1 and 3
above.
(c) Termination Following a Change in Control:
(i) In the event a Change in Control occurs, Xxxxxxxx
will be entitled to immediate acceleration of
vesting for all stock options granted to Xxxxxxxx as
set forth in Paragraph 3(d), as of the date of the
Change in Control, for which he has up to one (1)
year after the date of the Change in Control, to
exercise.
(ii) In addition, in the event of termination of
Veenstra's employment for any reason, or if the
Company materially alters Veenstra's duties,
responsibilities, authority or compensation from
that set forth in Paragraphs 1 and 3 above, within
two (2) years after a Change of Control, Xxxxxxxx.
shall be entitled to a lump sum severance payment
equal to two (2) years Base Salary and 50% bonus,
less applicable withholding at his final monthly
salary rate. This payment shall be made immediately
upon termination.
(iii) In addition, Xxxxxxxx will also be entitled to full
benefits as set forth in Paragraph 3(c) above, for a
period of twelve (12) months after termination.
(iv) For purposes of this Agreement, a "Change of
Control" shall mean an Ownership Change in which the
shareholders of the Company before such Ownership
Change do not retain, directly or indirectly, at
least a majority of the beneficiary interest in the
voting stock of the Company after such transaction
or in which the Company is not the surviving
corporation. For purposes of this Agreement an
"Ownership Change" shall be deemed to have occurred
in the event any of the following occurs with
respect to the Company:
A. the direct or indirect sale or exchange by
the shareholders of the Company of all or
substantially all of the stock in the
Company;
B. a merger or consolidation in which the
Company is a minority party;
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C. the sale, exchange, or transfer of all or
substantially all of the assets of the
Company; or
D. a liquidation or dissolution of the Company.
6. Exclusive Remedy: Xxxxxxxx agrees that the severance plan
described in Paragraphs 4 and 5 above shall be his sole and
exclusive remedy in the event that the Company terminates his
employment and he shall be entitled to no further compensation for
any damage or injury arising out of the termination of his
employment by the Company.
7. Attorney's Fees: The prevailing party shall be entitled to recover
from the losing party its attorney's fees and costs incurred in
any action brought to enforce any right arising out of this
Agreement.
8. Interpretation: Xxxxxxxx and the Company agree that this Agreement
shall be interpreted in accordance with and governed by the laws
of the State of California.
9. Successors and Assigns: This Agreement shall inure to the benefit
of and be binding upon the Company and its successors and assigns.
In view of the personal nature of the services to be performed
under this Agreement by Xxxxxxxx, he shall not have the right to
assign or transfer any of his rights, obligations or benefits
under this agreement, except as otherwise noted herein.
10. Entire Agreement: This Agreement constitutes the entire employment
agreement between Xxxxxxxx and the Company regarding the terms and
conditions of his employment with the exception of any stock
option agreement between Xxxxxxxx and the Company for shares
granted in Paragraph 3(d) above.
11. Modification: This Agreement may only be modified or amended be a
supplemental written agreement signed by Xxxxxxxx and the Company.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and
year written below.
Zland Corporation
Date: 7/8/99 By: /s/ XXXXX XXXXX
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Its: President & COO
Date: 7/8/99 /s/ XXXX XXXXXXXX
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Xxxx Xxxxxxxx
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