Exhibit 10.10
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made this __ day of _______, 1998, by and
between Xxxxx & Xxxxxxxxxx Computer Corporation, a Utah corporation (the
"COMPANY"), and Xxxxx X. Xxxx (the "EXECUTIVE").
R E C I T A L S
WHEREAS, the Executive was employed by AccelGraphics, Inc.
("AccelGraphics"); and
WHEREAS, the Company, has acquired all of the issued and outstanding stock
of AccelGraphics pursuant to that certain Agreement and Plan of Merger dated
April 22, 1998; and
WHEREAS, the Board of Directors of the Company (the "BOARD") desires to
provide for the employment of the Executive with the Company in such capacity as
it may from time to time determine;
WHEREAS, the Executive is willing to commit herself to serve the Company,
on the terms and conditions herein provided; and
WHEREAS, in order to effect the foregoing, the Company and the Executive
wish to enter into an employment agreement on the terms and conditions set forth
below;
A G R E E M E N T
NOW, THEREFORE, in consideration of the premises and the respective
covenants and agreements of the parties herein contained, the parties hereto
agree as follows:
1. EMPLOYMENT.
The Company hereby agrees to employ the Executive, and the Executive hereby
agrees to serve the Company, on the terms and conditions set forth herein.
2. TERM.
The term of this Agreement shall commence on the date hereof and end on
December 31, 1999.
3. POSITION AND DUTIES.
The Executive shall serve initially as _____________________________ of the
Company and shall have such responsibilities and authority as may from time to
time be assigned to the Executive by the Board or the Chief Executive Officer of
the Company. The Executive shall devote substantially all her working time and
efforts to the business and affairs of the Company as directed by the Board or
Chief Executive Officer of the Company.
4. PLACE OF PERFORMANCE.
In connection with the Executive's employment by the Company, the Executive
shall be based at the offices of the Company in Milpitas, California except for
required travel on the Company's business.
5. COMPENSATION AND RELATED MATTERS.
The Executive shall receive the following consideration and benefits while
employed by the Company:
(a) Salary. During the period of the Executive's employment
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hereunder, the Company shall pay to the Executive a salary at a rate of
$140,000 per annum according to the Company's usual pay practices. This
salary may be increased from time to time in accordance with normal
business practices of the Company and, if so increased, shall not
thereafter during the term of this Agreement be decreased;
(b) ESIP. Executive shall be entitled to participate in the
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Xxxxx & Xxxxxxxxxx Incentive Program ("ESIP"), with an ESIP target of
$35,000 of Executive's base compensation (less any of such amount which
shall have been paid by AccelGraphics, Inc. prior to the Effective Time of
the Merger), upon achieving the specified management revenue and profit
criteria set forth on Exhibit A attached hereto. As an additional incentive
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bonus, the Executive shall receive (i) $40,000 for the fiscal year ended
December 31, 1998 upon achieving specified revenue goals pursuant to
certain management scenario projections; (ii) $60,000 for the fiscal year
ended December 31, 1998 upon achieving specified operating profit goals
pursuant to certain management scenario projections; (iii) $80,000 for the
fiscal year ended December 31, 1999 upon achieving specified revenue goals
pursuant to certain management scenario projections; and (iv) $120,000 for
the fiscal year ended December 31, 1999 upon achieving specified operating
profit goals pursuant to the specified management revenue and profit
criteria set forth on Exhibit A attached hereto. Attached as Exhibit B
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hereto is a description of the ESIP which sets forth the manner in which
additional compensation beyond that described above may be earned.
(d) Expenses. The Executive shall be entitled to receive prompt
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reimbursement for all reasonable expenses incurred by the Executive in
performing services hereunder, including all expenses to travel and living
expense while away from home on business or at the request of and in the
service of the Company, provided that such expenses are incurred and
accounted for in accordance with the policies and procedures presently
established by the Company;
(e) Other Benefits. The Company shall provide Executive with all
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other benefits normally provided to an employee of the Company similarly
situated to Executive, including being added as a named officer on the
Company's existing directors' and officers' liability insurance policy;
(f) Vacations. The Executive shall be entitled to the number of
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vacation days in each calendar year, and to compensation in respect of
earned but unused vacation days, determined in accordance with the
Company's vacation plan, but in no event less than fifteen (15) days. The
Executive shall also be entitled to all paid holidays given by the Company
to its executives; and
(g) Services Furnished. The Company shall furnish the Executive with
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office space, and such other facilities and services as shall be suitable
to the Executive's position and adequate for the performance of her duties
as set forth in paragraph 3 hereof.
6 OFFICES.
The Executive agrees to serve without additional compensation, if elected
or appointed thereto, in one or more executive offices of the Company, or any
affiliate thereof, provided that the Executive is indemnified for serving in any
and all such capacities on a basis no less favorable than is currently provided
in the Company's Bylaws.
7. TERMINATION.
(a) Definitions. For purposes of this Agreement, the following terms
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shall have the meanings assigned below:
(i) "Cause" shall mean(i) gross negligence or willful misconduct
in the performance of the Executive's duties to the Company where such
gross negligence or willful misconduct has resulted or is likely to
result in substantial and material damage to the Company or its
subsidiaries, (ii) repeated unexplained or unjustified absence from
the Company, (iii) a material and willful violation of any federal or
state law, (iv)commission of any act of fraud with respect to the
Company, or (v) conviction of a felony or a crime involving moral
turpitude causing material harm to the standing and reputation of the
Company, in each case as determined in good faith by the Board of
Directors of the Company.
(ii) A termination by the Executive for "Just Cause' shall mean a
termination by the Executive of his employment with the Company
following (i) a material reduction or change in job duties,
responsibilities and requirements inconsistent with the Executive's
position with the Company, or (ii) a breach by the Company of the
terms and conditions of this Agreement, including by way of example
paragraphs 4 and 5(a).
(b) Termination By The Company. The Executive's employment hereunder
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may be terminated without any breach of this Agreement under the following
circumstances:
(i) Death. The Executive's employment hereunder shall
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terminate upon her death.
(ii) Disability. If, as a result of the Executive's incapacity
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due to physical or mental illness, the Executive shall have been
absent from her duties hereunder on a full-time basis for the entire
period of three (3) consecutive months, and within thirty (30) days
after Notice of Termination (as hereinafter defined) is given (which
may occur before or after the end of such three-month period) shall
not have returned to the performance of her duties hereunder on a
full-time basis, the Company may terminate the Executive's employment
hereunder.
(iii) Cause. For Cause.
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(c) Termination by the Executive. The Executive may terminate her
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employment hereunder at any time by providing ninety (90) days prior
written notice of termination.
(d) Notice of Termination. "Notice of Termination" shall mean a
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notice which shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the
Executive's employment under the provision so indicated. Any termination
of the Executive's employment by the Company or by the Executive (other
than termination pursuant to subsection 7(b)(i) above) shall be
communicated by written Notice of Termination to the other party hereto.
8. COMPENSATION UPON TERMINATION OR DURING DISABILITY.
(a) Disability Insurance. The Company has no liability in the event
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of termination because of disability. Rather, Executive's sole remedy and
claim shall be under any applicable disability insurance policy.
(b) Other Termination.
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(i) If the Company shall terminate the Executive's employment
other than pursuant to paragraph 7(b)(ii) disability or 7(b)(iii)
cause during the term hereof, or if the Executive shall terminate his
employment with the Company for Just Cause, the Company shall pay the
Executive her full salary though the Date of Termination at the rate
in effect at the time Notice of Termination is given, shall pay any
applicable MIP compensation pro rated for that year only through the
time of termination, and shall pay to Executive in a lump sum an
amount equal to the greater of (A) the total of all base salary
payments remaining to be paid during the term of this Agreement (based
upon the Executive's base salary in effect at the time of
termination), provided that such lump sum payment shall not exceed one
year's base salary, or (B) six (6) months' base salary (based upon the
Executive's base salary in effect at the time of termination).
(ii) If the Executive shall voluntarily terminate her employment,
and the Company is not in breach hereunder, the Company shall pay the
Executive her full salary through the Date of Termination at the rate
in effect at the time Notice of
Termination is given, shall have no obligation to pay any MIP payment,
and the Company shall have no further obligations to the Executive
under this Agreement.
(c) Termination By Executive For Ill Health. If the Executive shall
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terminate her employment under paragraph 7(c) hereof for reasons of ill
health, the Company shall pay the Executive her full salary through the
Date of Termination at the rate in effect at the time Notice of Termination
is given and the Company shall also pay any applicable MIP compensation pro
rated for that year through the time of termination.
9. NON-COMPETE. The Executive hereby agrees that during the term of this
Agreement and for the period of one (1) year from the termination hereof,
that the Executive will not:
(a) Within any jurisdiction or marketing area in the United States,
England, France, Germany or Japan, in which the Company or any subsidiary
thereof is doing business, own, manage, operate or control any business of
the type and character engaged in and competitive with the combined
AccelGraphics-Desktop Graphics division of the Company or any subsidiary
thereof. For purposes of this paragraph, ownership of securities of not in
excess of five percent (5%) of any class of securities of a public company
shall not be considered to be competition with the combined AccelGraphics-
Desktop Graphics division of the Company or any subsidiary thereof; or
(b) Within any jurisdiction or marketing area in the United States,
England, France, Germany or Japan, in which the Company or any subsidiary
thereof is doing business, act as, or become employed as, an officer,
director, employee, consultant or agent of any business of the type and
character engaged in and competitive with the combined AccelGraphics-
Desktop Graphics division of the Company or any of its subsidiaries; or
(c) Solicit the employment of, or hire, any full time employee
employed by the Company, or its subsidiaries, in its combined
AccelGraphics-Desktop Graphics division at the time of such termination of
employment by the Executive.
10. SUCCESSORS; BINDING AGREEMENT.
(a) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, by
agreement in form and substance satisfactory to the Executive, 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 occurred. As used in this paragraph, "Company" shall mean the
Company as aforesaid which executes and delivers the agreement provided for
in this paragraph 10 or which otherwise becomes bound by all the terms and
provisions of this paragraph by operation of law.
(b) This Agreement and all rights of the Executive hereunder shall
inure to the benefit of and be enforceable by the Executive's personal or
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. This Agreement
replaces and supersedes the previously executed Key Employee Retention
Agreement executed by the Executive and AccelGraphics, Inc. In connection
with the foregoing, the Company and the Executive acknowledge and agree
that any acceleration of vesting that would otherwise have occurred under
such Key Employee Retention Agreement with respect to AccelGraphics, Inc.
stock options held by the Executive at the time of the Merger shall
continue to occur immediately prior to the consummation of the Merger
notwithstanding such replacement and supersession, except for the vesting
under any AccelGraphics, Inc. stock options granted to the Executive after
April 21, 1998, which the parties agree shall not be accelerated by reason
of the consummation of the Merger.
11. NOTICE.
All notices provided by this Agreement shall be in writing and shall be
given by facsimile transmission, overnight courier, by registered mail or by
personal delivery, by one party to the other, addressed to such other party at
the applicable address set forth below, or to such other address as may be given
for such purpose by such other party by notice duly given hereunder. Notice
shall be deemed properly given on the date of delivery.
To Executive: Xxxxx X. Xxxx
___________________
___________________
To the Company: Xxxxx & Xxxxxxxxxx Computer Corporation
Attn: Chief Executive Officer
000 Xxxxx Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
12. MISCELLANEOUS.
No provisions of this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is agreed to in writing signed by
the Executive and the Company's Chief Executive Officer or such other officer as
may be specifically designated by the Board. 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 agreements or representations,
oral or otherwise, express or implied, with respect to the subject matter hereof
have been made by either party which are not set forth expressly in this
Agreement.
13. VALIDITY.
The invalidity or unenforceability of any provision or provisions of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.
14. COUNTERPARTS.
This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original but all of which together will constitute one
and the same instrument.
15. ARBITRATION.
Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by binding arbitration, conducted before
a panel of three arbitrators, in accordance with the rules of the American
Arbitration Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction. The prevailing party in
such arbitration shall be entitled to recover all expenses of such arbitration
including fees and expenses of counsel, from the other party.
16. GOVERNING LAW.
This Agreement shall be governed in all respects by the laws of the State
of Utah as applied to agreements among Utah residents entered into and to be
performed entirely within Utah, without regard to the conflict of law provisions
thereof.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
and year first above written.
XXXXX & XXXXXXXXXX COMPUTER CORPORATION
By:_____________________________________
Name:___________________________________
Title:__________________________________
EXECUTIVE
________________________________________
Xxxxx X. Xxxx
