EXHIBIT 10.10
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is entered into as of March 24, 2003, by and
between ANTs software inc., a Delaware corporation (the "Company"), and Xxxx
Xxxxxxxx (the "Executive") (hereinafter collectively referred to as "the
parties").
WHEREAS, the Executive shall serve as President and Chief Operating
Officer of the Company; and
WHEREAS, the Executive possesses an intimate knowledge of the business and
affairs of the Company and its policies, procedures, methods, and personnel; and
WHEREAS, the Company has determined that it is essential and in its best
interests to retain the services of key management personnel and to ensure their
continued dedication and efforts; and the Executive is willing to render such
services on the terms and conditions set forth herein; and
WHEREAS, the parties have agreed to terminate that certain Independent
Contractor Agreement entered into on or about February 10, 2003 (the "Consultant
Agreement").
NOW, THEREFORE, in consideration of the foregoing and the respective
agreements of the parties contained herein, the parties hereby agree as follows:
1. Term. Executive shall provide references to the Company. In the
event the Company is satisfied with the references provided by Executive, the
initial term of employment under this Agreement shall commence on March 24, 2003
(the "Commencement Date") and end on the anniversary of the Commencement Date
(the "Initial Term"); provided, however, that upon the expiration of the Initial
Term, this Agreement shall be automatically extended for a period of one year
(the Initial Term and the term of any such extension period shall be referred to
as the "Term") unless either the Company or the Executive shall have given
written notice to the other, at least forty-five (45) days prior to the end of
the Term, that the Term shall not be so extended. Notwithstanding the foregoing,
this Agreement may be terminated at any time by either party as set forth below
in Section 9.
2. Employment.
(a) Position. The Executive shall be employed as the President
and Chief Operating Officer of the Company or such other meaningful executive
position as may be determined by the Company. The Executive shall perform the
duties, undertake the responsibilities, and exercise the authority customarily
performed, undertaken, and exercised by persons employed in a similar executive
capacity. The Executive shall report to the Chief Executive Officer.
(b) Obligations. The Executive agrees to devote his full
business time and attention exclusively to the business and affairs of the
Company. The foregoing, however, shall not preclude the Executive from serving
on other corporate boards with the prior written approval of the Chief Executive
Officer of the Company, which approval may be withheld in the Chief Executive
Officer's sole discretion, or any civic or charitable boards or committees or
from managing personal investments at the Executive's own discretion, so long as
such activities do not interfere with the performance of the Executive's
responsibilities hereunder.
3. Base Salary. The Company agrees to pay or cause to be paid to the
Executive during the Term an annual base salary at the rate of $240,000
(hereinafter referred to as the "Base Salary"). The Base Salary will be subject
to annual review (on a calendar year schedule) and may be changed from time to
time by the Company in its sole discretion considering factors such as the
Executive's responsibilities, compensation of similar executives within the
Company and in other comparable companies, performance of the Executive, and
other pertinent factors. Any changes in the Base Salary determined by the
Company shall be made effective as of January 1 of each year. The Base Salary
shall be payable in accordance with the Company's usual payroll procedures.
4. Equity Compensation. Subject to approval by the Company's Board
of Directors, the Company shall grant the Executive (a) stock options to
purchase up to 300,000 shares of Common Stock of the Company under the Company's
2000 Stock Option Plan (the "Plan") on or about the Commencement Date of this
Agreement and (b) stock options to purchase up to 275,000 shares of Common Stock
of the Company under the Plan on or about the date the shareholders of the
Company approve the amendment to the Plan increasing the number of shares of
Common Stock reserved to 5,450,000. These options will vest as follows: Sixteen
and 6/10 percent (16.6%) of the shares granted shall vest on the date six (6)
months from March 24, 2003 (the "Vesting Measurement Date"); thereafter, Two and
78/100 percent (2.78%) of the shares granted shall vest at the conclusion of
each month, such that One Hundred Percent (100%) of shares granted are vested on
the date three (3) years from the Vesting Measurement Date.
5. Employee Benefits. The Executive shall be entitled to participate
in all employee benefit plans, practices, and programs maintained by the Company
and made available to senior executives generally and as may be in effect from
time to time, including, without limitation, the Company's stock option plan and
401(k) plan or their equivalents. The Executive's participation in such plans,
practices and programs shall be on the same basis and terms as are applicable to
senior executives of the Company generally.
6. Other Payments.
(a) Annual Bonus. The Executive shall be eligible to receive
an annual cash bonus determined by achievement by the Executive of specific
objectives set by the Company in its sole discretion. The specific objectives
are set forth in Annex A for 2003. The Bonus shall be paid during January of
each year based on the Executive's performance for the preceding calendar year.
The first period for assessing the Executive's achievement of specific
objectives shall be March 24, 2003 through December 31, 2003.
7. Other Benefits.
(a) Life Insurance. During the Term, the Company shall be
entitled to maintain a "key person" term life insurance policy on the life of
the Executive, the proceeds of which shall be payable to the Company or its
designees. The Executive agrees to undergo any reasonable physical examination
and other procedures as may be necessary to maintain such policy.
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(b) Expenses. Subject to applicable Company policies, the
Executive shall be entitled to receive prompt reimbursement of all expenses
reasonably incurred by him in connection with the performance of his duties
hereunder or for promoting, pursuing, or otherwise furthering the business or
interests of the Company.
(c) Office and Facilities. The Executive shall be provided
with appropriate offices and with such secretarial and other support facilities
as are commensurate with the Executive's status with the Company and adequate
for the performance of his duties hereunder.
(d) Travel. International business travel to destinations
outside North America shall be business class or its equivalent .
8. Vacation. The Executive shall be entitled to annual vacation in
accordance with policies as periodically established by the Company for
similarly situated executives of the Company, but, in any event, not less than
of fifteen (15) paid vacation days per calendar year.
9. Termination. The Executive's employment hereunder is terminable
at will by either the Company or the Executive at any time. Any decision to
terminate this Agreement by either the Company or the Executive shall be
communicated by delivering a written notice of termination to the other thirty
(30) days prior to the Termination Date. "Termination Date" shall mean in the
case of the Executive's death, the date of death, or in all other cases, the
date specified in the notice of termination.
10. Compensation Upon Termination.
(a) If the Executive's employment is terminated (1) by the
Company for Cause (which shall be indicated in the notice of termination sent by
the Company to the Executive) or (2) by the Executive for any reason other than
for Good Cause, the Company's sole obligation hereunder shall be to pay the
Executive the following amounts earned hereunder but not paid as of the
Termination Date: (i) Base Salary, (ii) reimbursement for any and all monies
advanced or expenses incurred pursuant to Section 7(b) through the Termination
Date, and (iii) any earned compensation which the Executive had previously
deferred (including any interest earned or credited thereon) (collectively,
"Accrued Compensation"). The Executive's entitlement to any other benefits shall
be determined in accordance with the Company's employee benefit plans then in
effect.
For purposes of this Agreement, "Good Cause" shall mean a material change
in Executive's corporate position, title or responsibility, and "Cause" shall
mean (i) any material breach by the Executive of any agreement to which the
Executive and the Company are parties (including, without limitation, this
Agreement and the Proprietary Information and Inventions Agreement), (ii) any
tortious or criminal act (other than termination of employment) or omission to
act by the Executive which would reasonably be likely to have a material adverse
effect on the business of the Company or the Executive's ability to perform
services for the Company, (iii) any material misconduct or gross negligence of
Executive, (iv) any material violation by Executive of the Company's policies,
or (v) any willful non-performance of duties by the Executive in connection with
the business or affairs of the Company.
(b) If the Executive's employment is terminated (1) by the
Company for any reason, other than for Cause, or (2) by the Executive for Good
Cause, the Company's sole obligation hereunder shall be as follows:
(i) the Company shall pay the Executive the Accrued
Compensation; and
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(ii) the Company shall continue to pay the Executive the
Base Salary for a period of four (4) months following the
Termination Date (the "Severance").
(c) During the period the Executive is receiving salary
continuation pursuant to Section 10(b)(ii) hereof, the Company shall, at its
expense, provide to the Executive and the Executive's beneficiaries medical and
dental benefits substantially similar in the aggregate to those provided to the
Executive immediately prior to the date of the Executive's termination of
employment, or at the Company's option, in lieu thereof, a cash payment for the
cost of such benefits; provided, however, that the Company's obligation with
respect to the foregoing benefits shall be reduced to the extent that the
Executive or the Executive's beneficiaries obtains any such benefits pursuant to
a subsequent employer's benefit plans.
(d) The Executive shall not be required to mitigate the amount
of any payment provided for in this Agreement by seeking other employment or
otherwise. In the event that the Executive does obtain subsequent employment
while receiving salary continuation pursuant to Section 10(b)(ii) hereof, the
amount of such cash payment from the Company to the Executive shall be reduced
by the same amount as the base compensation provided to the Executive by his
subsequent employer for the same time intervals.
11. Executive Representations and Warranties. The Executive
expressly represents and warrants to the Company that the Executive is not a
party to any agreement and is not otherwise obligated in any way, and is not
subject to any rules or regulations, whether governmentally imposed or
otherwise, which will or may restrict in any way the Executive's ability to
fully perform the Executive's duties and responsibilities under this Agreement.
12. Proprietary Information and Inventions Agreement Executive shall
duly execute, accurately complete, and deliver to the Company, a Proprietary
Information and Inventions Agreement, in the form provided by the Company, and
Executive acknowledges that the due execution, completion and delivery is an
inducement and condition precedent for the Company to retain Executive and that
the Company does not intend to execute or perform this Agreement without such
due execution, completion and delivery.
13. Company Policies. Executive agrees to comply in all respects
with all of the Company's present and future policies, including without
limitation (i) the Company's Memorandum regarding Restrictions and
Responsibilities of Officers and Directors under Federal Securities Laws, as
amended from time to time, (ii) the Company's Xxxxxxx Xxxxxxx Policy, as amended
from time to time, and (iii) the Company's Investor Relations and Public
Communication Policy, as amended from time to time.
14. Agreement Not To Compete. In order to protect the business
interest and good will of the Company, and to protect the confidential
information of the Company, Executive covenants and agrees that during the term
of this Agreement, and for a period of four (4) months after termination of
Executive's employment in the event Executive's employment is terminated as set
forth above in Section 10(b), Executive will not:
(a) directly or indirectly contact any customer of the Company
for the purpose of soliciting such customer to purchase, lease or license a
product or service that is the same as, similar to, or in competition with those
products and/or services made, rendered, offered or under development by the
Company;
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(b) directly or indirectly employ, or request that a company
or business directly or indirectly controlled by Executive employ a person who
is employed by the Company;
(c) directly or indirectly interfere with or attempt to
disrupt the relationship, contractual or otherwise, between the Company and any
of its employees or solicit, induce, or attempt to induce employees of the
Company to terminate employment with the Company and become self-employed or
employed with others in the same or similar business or any product line or
service provided by the Company;
(d) directly or indirectly engage in any activity or business
as a consultant, independent contractor, agent, employee, officer, partner, or
otherwise, alone or in association with any other person, corporation, or other
entity in any Competing Business (operating in the United States). "Competing
Business" shall mean any individual, corporation, partnership, business or other
entity which operates or attempts to operate a business which provides, designs,
develops, markets, engages in, produces or sells any products, services, or
businesses which are the same or similar to those produced, marketed, or sold by
the Company.
15. Termination of the Consultant Agreement. The parties hereby
terminate the Consultant Agreement effective immediately. As of and after this
date, no provision of the Consultant Agreement shall have any force or effect
nor shall any such provision control or otherwise be binding upon the parties.
16. Successors and Assigns.
(a) This Agreement shall be binding upon and shall inure to
the benefit of the Company, its successors and assigns, and the Company shall
use its best efforts to require any successor or assign to expressly assume and
agree to perform this Agreement in the same manner and to the same extent that
the Company would be required to perform it if no such succession or assignment
had taken place. The term "the Company" as used herein shall include any such
successors and assigns to the Company's business and/or assets. The term
"successors and assigns" as used herein shall mean a corporation or other entity
acquiring or otherwise succeeding to, directly or indirectly, all or
substantially all the assets and business of the Company (including this
Agreement) whether by operation of law or otherwise.
(b) This Agreement is not assignable by Executive without the
written consent of the Company. .
17. Arbitration. Except with respect to the remedies specifically
set out elsewhere in this Agreement, any controversy or claim between the
Company or any of its affiliates and the Executive arising out of or relating to
this Agreement or its termination shall be settled and determined by binding
arbitration. The American Arbitration Association shall administer the binding
arbitration. The arbitration shall take place in San Francisco, California. Each
of the Company and the Executive shall appoint one person to act as an
arbitrator, and a third arbitrator shall be chosen by the first two arbitrators
(such three arbitrators, the "Panel"). The Panel shall have no authority to
award punitive damages against the Company or the Executive. The Panel shall
have no authority to add to, alter, amend, or refuse to enforce any portion of
the disputed agreements. The Company and the Executive each waive any right to a
jury trial or to a petition for stay in any action or proceeding of any kind
arising out of or relating to this Agreement or its termination.
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18. Notice. For the purposes of this Agreement, notices and all
other communications provided for in the Agreement (including the Notice of
Termination) shall be in writing and shall be deemed to have been duly given
when personally delivered or sent by registered or certified mail, return
receipt requested, postage prepaid, or upon receipt if overnight delivery
service or facsimile is used, addressed as follows:
To the Executive:
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Xxxx Xxxxxxxx
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To the Company: With a copy to:
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ANTs software inc. ANTs counsel
000 Xxxxxx Xxxx, Xxxxx X The Corporate Law Group
Xxxxxxxxxx, Xxxxxxxxxx 00000 000 Xxxxxxx Xxxx. Xxxxx 000
Attn: Xxx Xxxxxxx Xxxxxxxxxx, XX 00000
Fax: (000) 000-0000 Att'n: Xxxx Xxxxxxxx
Fax: (000) 000-0000
19. Miscellaneous. No provision of this Agreement may be modified,
waived, or discharged unless such waiver, modification, or discharge is agreed
to in writing and signed by the Executive and the Company. No waiver by either
party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No agreement or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not expressly set
forth in this Agreement.
20. Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of California without
giving effect to the conflict of law principles thereof.
21. Severability. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, such provision, or such portion
of such provision as may be necessary, shall be excluded from this Agreement and
the balance of the Agreement shall be interpreted as if such provision were so
excluded and shall be thereafter enforceable in accordance with its terms.
22. Entire Agreement. This Agreement, along with the Proprietary
Information and Inventions Agreement, constitutes the entire agreement between
the parties hereto with respect to the subject matter hereof and supersedes all
prior agreements, if any, understandings and arrangements, oral or written,
between the parties hereto with respect to the subject matter hereof.
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23. No Rules of Construction. Both Executive and the Company shall
be considered to be joint authors of this Agreement and no rules of construction
shall be invoked concerning this Agreement or the interpretation of this
Agreement or its provisions.
24. Counterparts. This Agreement may be executed in counterparts,
including counterparts transmitted by facsimile, each of which shall be deemed
an original, and all such counterparts shall constitute one and the same
agreement.
IN WITNESS WHEREOF, the parties have executed this Employment Agreement as
of the day and year first above written.
COMPANY:
ANTS SOFTWARE INC.
By: /s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
Title: Chairman and Chief
Executive Officer
EXECUTIVE:
/s/ Xxxx Xxxxxxxx
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Xxxx Xxxxxxxx
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Annex A
Executive's 2003 Annual Bonus shall be based on achievement of the Company's
Revenue Goal for 2003 which is $1.5 million. The Bonus shall be calculated as
follows:
Annual Bonus = (25% of Base Salary) * (Revenue Achievement/Revenue Goal).
No Bonus shall be paid if Revenue Achievement for 2003 is less than 50% of
Revenue Goal for 2003. Revenue Achievement is the total cash received from
customers during 2003. This may differ from revenue recognition in accordance
with GAAP guidelines and SEC regulations.
COMPANY:
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ANTS SOFTWARE INC.
By: /s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
Title: Chairman and Chief Executive
Officer
EXECUTIVE:
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/s/ Xxxx Xxxxxxxx
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Xxxx Xxxxxxxx
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