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EXHIBIT 10.10
August 3, 2000
Xxx Xxxxxxx
RE: EMPLOYMENT AGREEMENT
Dear Xxx:
On behalf of NETGEAR, Inc. I would like to extend you the following
offer of employment as further set forth in the following:
1. Position and Duties. You will be employed by Netgear, Inc.
("Company") as its Chief Financial Officer, reporting to me. You accept
employment with the Company on the terms and conditions set forth in this
Agreement, and you agree to devote your full business time, energy and skill to
your duties at the Company. Your duties will include, but not be limited to,
those duties normally performed by a Chief Financial Officer, as well as any
other reasonable duties that may be assigned to you from time to time by me.
2. Term of Employment. Your employment with the Company will start on
the date as indicated by you in the attachment to this offer.
3. Compensation. You will be compensated by the Company for your
services as follows:
(a) Salary: You will be paid an annual salary of $225,000 (two
hundred twenty-five thousand dollars), less applicable withholding and taxes, in
accordance with the Company's normal payroll procedures. Your salary will be
reviewed by the Company from time to time (but no more frequently than
annually), and may be subject to adjustment based upon various factors
including, but not limited to, your performance and the Company's profitability.
Any adjustment to your salary shall be in the sole discretion of the Company .
(b) MBO Bonus: You will be eligible to receive annual target
bonus of $45,000 (forty five thousand dollars) per year based upon the Company's
achievement of various financial and/or other goals established by the Board.
All MBO bonuses will be subject to applicable withholding and taxes.
(c) Benefits: You will have the right, on the same basis as other
employees of the Company, to participate in and to receive benefits under any
Company medical, disability or other group insurance plans, as well as under the
Company's business expense
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reimbursement and other policies. You will accrue paid vacation in accordance
with the Company's vacation policy at the rate of 3 weeks per year.
(d) Netgear, Inc. Stock Options: Following your written
acceptance of these terms and subject to the approval of the Board, you will be
granted by the Board an option to purchase 1% (one percent) of the fully diluted
post August 2000 private placement outstanding shares of Netgear, Inc. common
stock under the Company's stock option plan at an exercise price as approved by
the Board. The vesting of these options will be as follows: these options will
vest over a four year period with 25% of the shares vesting on the first
anniversary of the date you commence employment with the Company, and 1/48th of
the shares vesting monthly for three years thereafter. Your option will be
governed by and subject to the terms and conditions of the Company's standard
form of stock option agreement (which you will be required to sign in connection
with the issuance of your option).
(i) If you are terminated without Cause (as defined below), you
will be entitled to continue to have stock options vest during the one year
period immediately following such termination.
(ii) If within one year following any Change of Control (as
defined below), and (A) your employment is terminated without Cause, or (B) you
resign from your employment for Good Reason (as defined below), you will receive
two year acceleration of any unvested portion of this Netgear, Inc. stock
option.
4. Voluntary Termination. In the event that you voluntarily resign from
your employment with the Company other than for Good Reason, or in the event
that your employment terminates as a result of your death or disability (meaning
that you are unable to perform your duties for any 90 days in any one year
period as a result of a physical and/or mental impairment), you will be entitled
to no compensation or benefits from the Company other than those earned under
Paragraph 3 through the date of your termination. You agree that if you
voluntarily terminate your employment with the Company for any reason, you will
provide the Company with thirty days' written notice of your resignation. The
Company may, in its sole discretion, elect to waive all or any part of such
notice period and accept your resignation at an earlier date.
5. Other Termination. Your employment may be terminated under the
circumstances set forth below.
(a) Termination for Cause: If your employment is terminated by
the Company for Cause as defined below, you shall be entitled to no compensation
or benefits from the Company other than those earned under Paragraph 3 through
the date of your termination for Cause.
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For purposes of this Agreement, a termination "for Cause" occurs if you
are terminated for any of the following reasons: (i) theft, dishonesty, material
misconduct, or any material violation of the Company's personnel policies and
procedures, or falsification of any employment or Company records; (ii)
disclosure of the Company's confidential or proprietary information in violation
of the Company's Invention and Proprietary Information Agreement; (iii) any
intentional action by you which has a material detrimental effect on the
Company's reputation or business; (iv) your failure or inability to perform any
assigned duties after written notice from the Company to you of, and a
reasonable opportunity to cure, such failure or inability, which is not less
than 90 days; or (v) your conviction (including any plea of guilty or no
contest) for any criminal act that impairs your ability to perform your duties
under this Agreement.
(b) Termination Without Cause: If your employment is terminated
by the Company without Cause (and not as a result of your death or disability),
you will receive severance payments at your final base salary rate plus targeted
commission, less applicable withholding, until twenty-six weeks after the date
of your termination without Cause. Severance payments will be made in accordance
with the Company's normal payroll procedures. During the period in which you are
receiving severance payments, you will have the option of continuing to
participate in the Company's medical, dental and vision group health insurance
coverage if you elect to have the premiums for this coverage deducted from your
severance pay.
(c) Resignation for Good Reason: If, within one year following
any Change of Control, you resign from your employment with the Company for Good
Reason, you shall be entitled to receive the severance payments and health
insurance premium payments described in subparagraph 5(b) and the accelerated
vesting described in subparagraph 3(d)(ii). In no event will you be entitled to
more than two years acceleration of stock vesting under the terms of this
Agreement.
6. Change of Control/Good Reason.
(a) For purposes of this Agreement, a "Change of Control" of the
Company shall be deemed to have occurred if at any time after the Private
Offering has occurred:
(i) any "person" (as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")), other than a trustee or other fiduciary holding securities of the
Company under an employee benefit plan of the Company, becomes the "beneficial
owner" (as defined in Rule 13d-3 promulgated under the Exchange Act), directly
or indirectly, of securities of the Company representing 50% or more of (A) the
outstanding shares of common stock of the Company or (B) the combined voting
power of the Company's then-outstanding securities entitled to vote generally in
the election of directors; or
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(ii) the Company (A) is party to a merger, consolidation
or exchange of securities which results in the holders of voting securities of
the Company outstanding immediately prior thereto failing to continue to hold at
least 50% of the combined voting power of the voting securities of the Company,
the surviving entity or a parent of the surviving entity outstanding immediately
after such merger, consolidation or exchange, or (B) sells or disposes of all or
substantially all of the Company's assets (or any transaction having similar
effect is consummated), or (C) the individuals constituting the Board
immediately prior to such merger, consolidation, exchange, sale or disposition
shall cease to constitute at least 50% of the Board, unless the election of each
director who was not a director prior to such merger, consolidation, exchange,
sale or disposition was approved by a vote of at least two-thirds of the
directors then in office who were directors prior to such merger, consolidation,
exchange, sale or disposition.
(b) For purposes of this Agreement, "Good Reason" means any of
the following conditions, which condition(s) remain(s) in effect 10 days after
written notice to the Board from you of such condition(s):
(i) a decrease in your target annual compensation; or
(ii) a material, adverse change in your authority,
responsibilities or duties, as measured against your authority, responsibilities
or duties immediately prior to such change.
(iii) Notwithstanding the foregoing, for the purposes of
this Agreement in no event will you have Good Reason to resign due merely to a
change of title or a change in your reporting caused by a change of control or
discontinuance of any duties and responsibilities solely related to the
operation of a public company.
7. Condition Precedent to Severance Benefits. As a condition of
receiving severance benefits including, but not limited to, severance payments,
continued stock vesting, acceleration of stock vesting or other benefits
described in paragraphs 3(d) and 5, you will be required to sign a full release
of all claims against the Company (except for any claims for workers'
compensation benefits or claims for indemnity based upon acts or omissions
committed by you in good faith during the course and scope of your employment
with the Company) and an agreement not to compete against the Company for a
period of twenty-six weeks, and not to solicit Company employees to seek
employment outside the Company for a period of one year after your employment
with the Company terminates.
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8. Confidential and Proprietary Information. As a condition of your
employment, you agree to sign the Company's standard form of employee invention
and proprietary information agreement.
9. Co-Employment: You acknowledge and agree that for the purposes of the
provision of human resource services including employee relations, payroll and
the provision of certain employee benefits that the Company will be in a
co-employment relationship with TriNet Employer Group, Inc. ("TriNet"), and to
that extent you will be in an employment relationship with the Company and
TriNet. Nothing about this paragraph creates any new rights in your favor, nor
any new obligations on the part of either TriNet or the Company not already
contained in, nor otherwise modifies the terms and conditions of, the Service
Agreement between the Company and TriNet.
10. Dispute Resolution. In the event of any dispute or claim relating to
or arising out of your employment relationship with the Company, this Agreement,
or the termination of your employment with the Company for any reason
(including, but not limited to, any claims of breach of contract, wrongful
termination or age, disability or other discrimination), you and the Company
agree that all such disputes shall be fully, finally and exclusively resolved by
binding arbitration conducted by the American Arbitration Association of San
Francisco, California. You and the Company hereby knowingly and willingly waive
your respective rights to have any such disputes or claims tried to a judge or
jury. Provided, however, that this arbitration provision shall not apply to any
claims for injunctive relief by you or the Company.
11. Assignment. In view of the personal nature of the services to be
performed under this Agreement by you, you cannot assign or transfer any of your
obligations under this Agreement.
12. Entire Agreement. This Agreement and the agreements referred to
above constitute the entire agreement between you and the Company regarding the
terms and conditions of your employment, and they supersede all prior
negotiations, representations or agreements between you and the Company
regarding your employment, whether written or oral.
13. Modification. This Agreement may only be modified or amended by a
supplemental written agreement signed by you and an authorized representative of
the Company.
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Xxx, we look forward to working with you at Netgear, Inc. Please sign and date
this letter on the spaces provided below to acknowledge your acceptance of the
terms of this Agreement.
Sincerely,
Xxxxxxx Xx,
President & CEO
Netgear, Inc.
I agree to and accept employment with Netgear, Inc. on the terms and
conditions set forth in this Agreement.
Date: , 2000
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Xxx Xxxxxxx
