LIMELIGHT NETWORKS, INC. EMPLOYMENT AGREEMENT
EXHIBIT 99.1
This EMPLOYMENT AGREEMENT (the “Agreement”) is entered into as of September 22, 2008 (the
“Effective Date”), by and between Limelight Networks, Inc. (the “Company”) and Xxxxxx Xxxxxxxxxx
(“Employee”). Company and Employee may be collectively referred to herein as the “Parties.”
RECITALS
| A. | Employee is currently serving as the Company’s Chief Technology Officer (“CTO”). Employee has previously signed and delivered a Confidential Information and Invention Assignment Agreement (the “Inventions Agreement”) signed approximately May 2006. The Inventions Agreement acknowledges certain rights and imposes certain obligations on the parties. | ||
| B. | Employee and the Company desire to grant certain additional rights and impose certain additional obligations upon the parties by entering into this Agreement. |
AGREEMENT
1. Duties and Scope of Employment.
(a) Affirmation of Inventions Agreement, Position and Duties. The parties each hereby
reaffirm all of the terms and covenant included in the Inventions Agreement. In the event of a
conflict between the terms of the Inventions Agreement and this Agreement, the terms of this
Agreement will control. As CTO, Employee reports to the Company’s Chief Executive Officer (“CEO”).
Employee agrees to devote his full business efforts and time to performing the duties of CTO, which
include, but are not limited to, acting as the Company’s technical advisor, managing the overall
research and development and network operations functions, working closely with the CEO to assess
network expansion and modifications and to assure alignment with the Company’s overall technology
strategy, and ensuring that development and research teams support product initiatives that are
aligned with the strategic objectives of the Company, and will render such additional business and
professional services in the performance of Employee’s duties, consistent with Employee’s position
within the Company, as will reasonably be assigned to Employee by the CEO. The parties acknowledge
and agree that Employee may perform his duties from either the Company’s facilities in Tempe, AZ or
from Employee’s remote office in his home in Xxxxxxx Hole, WY, provided the Company may require
that Employee perform his duties from the Company’s facilities in Tempe, visiting customers or
otherwise away from his home office in Xxxxxxx Hole for up to fifty percent (50%) of business days
each calendar month.
(b) Obligations. Employee, except as provided in this Agreement, will devote
Employee’s full business efforts and time to the Company and will use good faith efforts to
discharge
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Employee’s obligations under this Agreement to the best of Employee’s ability and in
accordance with each of the Company’s policies and procedures, including without limitation, the
Company’s code of conduct, conflict of interests policies and such other policies and procedures as
the Company may adopt from time to time. Employee agrees not to actively engage in any other
employment, occupation, or consulting activity for any direct or indirect remuneration without the
prior approval of the CEO (which approval will not be unreasonably withheld); provided, however,
that Employee may, without the approval of the CEO, serve in any capacity with any civic,
educational, professional, industry or charitable organization, provided such services do not
interfere with Employee’s obligations to Company.
2. At-Will Employment. The Parties reaffirm that Employee’s employment with the
Company is for an unspecified duration, and constitutes “at-will” employment. The Parties
acknowledge that this employment relationship may be terminated at any time, upon written notice to
the other party, with or without good cause or for any or no cause, at the option either of the
Company or Employee. However, as described in this Agreement, Employee may be entitled to
severance benefits depending upon the circumstances of Employee’s termination of employment.
3. Compensation.
(a) Base Salary. Commencing with the Effective Date, the Company will pay Employee an
annual salary of $295,000 as compensation for Employee’s services (such annual salary, as is then
effective, to be referred to herein as “Base Salary”). Employee’s Base Salary will be subject to
annual review (subject to the provisions of Section 10(d)(iii) of this Agreement). The Base Salary
will be paid periodically in accordance with the Company’s normal payroll practices and will be
subject to the usual, required withholdings.
(b) Annual Incentive. Employee will be eligible to receive annual cash incentives
payable for the achievement of company or individual performance goals established or approved by
the Board of Directors of the Company (the “Board”) or by the Compensation Committee of the Board
(the “Committee”). During calendar year 2008, Employee’s target annual incentive (“Target Annual
Incentive”) will be $110,000. The actual earned annual cash incentive, if any, payable to Employee
for any performance period will depend upon the extent to which the applicable performance goal(s)
specified by the Committee are achieved.
(c) Equity Award.
(i) Employee may from time to time be issued stock options or other equity awards under the
Company’s 2007 Equity Incentive Plan (the “Plan”), or successor plan(s). Such equity awards,
together with any equity awards issued to Employee by the Company prior to the Effective date
whether under the Plan or any predecessor plan, are referred to in this Agreement as the Equity
Awards. Except as provided in this Agreement, the Equity Awards will be subject to the Company’s
standard terms and conditions for Equity Awards granted under the Plan or such predecessor or
successor plan under which such Equity Award was or may be issued.
(ii) Acceleration upon Change of Control. In the event of a Change of Control, 50% of
Employee’s then outstanding unvested Equity Awards will immediately vest. In the
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event that the Employee’s employment is terminated without cause or resignation for Good
Reason in connection with a Change of Control transaction, 100% of Employee’s then outstanding
unvested Equity Awards will immediately vest. See, Section 7(b) herein.
4. Employee Benefits.
(a) Generally. Employee will be eligible to participate in accordance with the terms
of all Company employee benefit plans, policies and arrangements that are applicable to other
Employees of the Company, as such plans, policies and arrangements may exist from time to time.
(b) Vacation. Employee will be entitled to receive paid annual vacation in accordance
with Company policy for other Employees, but with vacation accrual of not less than four (4) weeks
per year.
5. Expenses. The Company will reimburse Employee for reasonable travel, entertainment
and other expenses, and for professional association fees and continuing education expenses,
incurred by Employee in the furtherance of the performance of Employee’s duties hereunder. All
reimbursements to Employee by the Company pursuant to this Section 5 shall be in accordance with
the Company’s expense reimbursement policy as in effect from time to time.
6. Termination of Employment. In the event Employee’s employment with the Company
terminates for any reason, Employee will be entitled to any (a) unpaid Base Salary accrued up to
the effective date of termination; (b) unpaid, but earned and accrued annual incentive for any
completed fiscal year as of his termination of employment; (c) pay for accrued but unused vacation;
(d) benefits or compensation as provided under the terms of any employee benefit and compensation
agreements or plans applicable to Employee; (e) unreimbursed business expenses required to be
reimbursed to Employee; and (f) rights to indemnification Employee may have under the Company’s
Certificate of Incorporation, Bylaws, this Agreement, and/or separate indemnification agreement, as
applicable. In the event Employee’s employment with the Company terminates for any reason (other
than Cause), Employee will be entitled to exercise any outstanding vested stock options for a
period of three months following the later of such termination of employment or the date upon which
Employee ceases to provide any other services to the Company or any of its affiliates, whether as a
director, independent contractor or otherwise, but in no event later than the applicable scheduled
expiration date of such award (in the absence of any termination of employment) as set forth in the
award agreement. For purposes of clarity, the term “expiration date” shall be the scheduled
expiration of the option agreement and not the period that Employee shall be entitled to exercise
such option. In addition, if the termination is by the Company without Cause or Employee resigns
for Good Reason, Employee will be entitled to the amounts and benefits specified in Section 7.
7. Severance.
(a) Termination Without Cause other than in Connection with a Change of Control. If
Employee’s employment is terminated by the Company without Cause and such termination is not in
Connection with a Change of Control, then, subject to Section 8, Employee will receive: (i)
continued payment of Employee’s Base Salary (subject to applicable tax withholdings) for twelve
(12) months, such amounts to be paid in accordance with the Company’s normal payroll policies;
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(ii) the actual earned cash incentive, if any, payable to Employee for the current year, pro-rated
to the date of termination, with such pro-rated amount to be calculated by multiplying the current
year’s Target Annual Incentive by a fraction with a numerator equal to the number of days inclusive
between the start of the current calendar year and the date of termination and a denominator equal
to 365, such amounts to be paid at the same time as similar bonus payments are made to the
Company’s other Employee officers, and (iii) reimbursement for premiums paid for continued health
benefits for Employee (and any eligible dependents) under the Company’s health plans until the
earlier of (A) twelve (12) months, payable when such premiums are due (provided Employee validly
elects to continue coverage under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”)), or
(B) the date upon which Employee and Employee’s eligible dependents become covered under similar
plans. For purposes of clarity, the Committee shall determine, in good faith, the extent to which
any cash incentive has been earned by Employee.
(b) Termination Without Cause or Resignation for Good Reason in Connection with a Change
of Control. If Employee’s employment is terminated by the Company without Cause or by Employee
for Good Reason, and the termination is in Connection with a Change of Control, then, subject to
Section 8, Employee will receive: (i) continued payment of Employee’s Base Salary for the year in
which the termination occurs (subject to applicable tax withholdings), for twelve (12) months, such
amounts to be paid in accordance with the Company’s normal payroll policies; (ii) payment of an
amount equal to 100% of Employee’s Target Annual Incentive for the year in which termination occurs
(subject to applicable tax withholding) such amount to be paid in accordance with the Company’s
normal payroll procedures over the following twelve (12) months, (iii) the vesting of 100% of
Employee’s then outstanding unvested equity awards, and (iv) reimbursement for premiums paid for
continued health benefits for Employee (and any eligible dependents) under the Company’s health
plans until the earlier of (A) twelve (12) months, payable when such premiums are due (provided
Employee validly elects to continue coverage under COBRA), or (B) the date upon which Employee and
Employee’s eligible dependents become covered under similar plans.
(c) Voluntary Termination Without Good Reason or Termination for Cause. If Employee’s
employment is terminated voluntarily (excluding a termination for Good Reason in connection with a
change of control) or is terminated for Cause by the Company, then, except as provided in Section
7, (i) all further vesting of Employee’s outstanding equity awards will terminate immediately and
such options shall be exercisable in accordance with the Company’s stock option plan; (ii) all
payments of compensation by the Company to Employee hereunder will terminate immediately, and (iii)
Employee will be eligible for severance benefits only in accordance with the Company’s then
established plans, if any. In the event that Employee’s employment is terminated due to death or
Disability, fifty percent (50%) of Employee’s then unvested Equity Awards shall vest.
8. Conditions to Receipt of Severance/Acceleration.
(a) Separation Agreement and Release of Claims. The receipt of any severance or other
benefits pursuant to Sections 3 and 7 will be subject to Employee signing and not revoking a
separation agreement and release of claims in a form reasonably acceptable to the Company and
honoring all continuing covenants in this Agreement and the Inventions Agreement. No severance
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or other benefits pursuant to Section 7 will be paid or provided until the separation
agreement and release of claims becomes effective.
(b) Confidentiality. Employee will fully perform and honor, and hereby reaffirms, all
covenants included in any other agreements between Employee and the Company, including without
limitation, all covenant included in the Inventions Agreement.
(c) Non-Competition. Employee agrees, for the duration of two (2) years (the “Time
Limit”) following the date of the termination of employment with the Company (whether such
termination is voluntary or involuntary, with or without cause) directly or indirectly or in any
individual or representative capacity, that he will not engage, own, manage, operate, control, aid,
or assist another in the operation, organization or promotion of, be employed by, participate in,
advise, or engage in any manner with the ownership, management, operation, or control of any
business, which has a place of business or regularly conducts business in the United States of
America, and which promotes or sells products or services competitive with those of the Company;
namely, content delivery network (“CDN”) services. In the event of a violation of any of the
covenants contained in this Agreement, the Time Limit shall be extended by a period of time equal
to that period beginning when the activities constituting the violation commenced, and ending when
those activities terminated. In the event that a court of competent jurisdiction determines that
the Time Limit restriction is too broad, the Parties agree to reduce such restriction to Employee’s
employment with the Company and eighteen (18) months from the date of termination of any such
employment. In the event that a court of competent jurisdiction determines that the 18 month Time
Limit herein is too broad, the Parties agree to reduce such restriction to Employee’s employment
with the Company and twelve (12) months from the date of termination of any such employment.
(e) Non-Solicitation. Employee agrees, for the duration of the Time Limit, that he,
either directly or indirectly or in any individual or representative capacity, will not request or
solicit any of the Company’s customers, clients or suppliers (defined as any person or entity who
has received services from the Company within the 12 month period prior to the time Employee’s
employment with the Company terminates) to withdraw, curtail, cancel, or decrease the level of
their business with the Company or request that they do business with any third party in
competition with the Company. Employee further agrees that, for the duration of the Time Limit
that he, either directly or indirectly or in any individual or representative capacity, will not
request or solicit any of the Company’s prospective customers, clients or suppliers (defined as any
person or entity who has been directly solicited to become a customer, client or supplier by the
Company and whom Employee has knowledge of such solicitation, within the 12 month period prior to
the time Employee’s employment with the Company terminates) to forgo doing business with the
Company or request that such prospective customer, client or supplier do business with any third
party in competition with the Company. Notwithstanding anything to the contrary herein, Employee
is nonetheless obligated not to use or disclose, at any time during or after his employment, any
Confidential Information (as defined in the Inventions Agreement). Employee further agrees, for
the duration of the Time Limit that he, either directly or indirectly or in any individual or
representative capacity, will not solicit any of the Company’s employees and/or applicants to
terminate his/her employment or prospective employment with the Company or to accept employment or
consulting arrangements with any third party. This restriction shall not apply to the placing of
general advertisements in a widely-distributed media (such as newspapers, Internet
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postings, etc.) for employment directed at the public at large (as opposed to directed
specifically at the Company’s employees).
(f) Minimum and Reasonable Limitations. The Employee hereby acknowledges and agrees
that the covenants and obligations made and undertaken in this Agreement are fair and reasonable
for the protection of the interests of the Company, with respect to duration, geographic area and
scope of activity, and do not (and shall not) prevent the Employee from earning a livelihood. The
Employee hereby covenants that he shall not, directly or indirectly, initiate or participate in any
action or proceeding or otherwise do or cause to be done any act or thing to cause any such
covenant or obligation to be terminated, cancelled, voided, nullified, reduced in scope or effect
or otherwise declared unenforceable. Moreover, Employee is aware that there may be defenses to the
enforceability of the foregoing restrictive covenants, based on time, territory or scope of
activity considerations, and Employee knowingly, consciously, intentionally and entirely
voluntarily, irrevocably waives any and all such defenses and will not assert the same in any
action or other proceeding brought by Company for the purpose of enforcing the restrictive
covenants, or in any other action or proceeding involving Employee and Company.
(g) Intellectual Property. All intellectual property rights relating to the Company’s
business, the Confidential Information, and to this Agreement, including all trademarks, trade
names, fictitious names, copyrights, patents, trade secrets, inventions, or other intellectual
property rights, are and shall remain the property of the Company, and the Employee shall obtain no
rights in any such intellectual property by virtue of this Agreement or his/her employment with the
Company. Upon the termination of the Employee’s employment with the Company, or upon request, the
Employee shall immediately discontinue all use of all such intellectual property rights. The
Employee agrees that any intellectual property that he may develop in the course of his services
provided to the Company or which relate in any manner to the Company’s business shall be and remain
the property of the Company. The Employee hereby assigns and conveys all of his right, title and
interest in any such trademarks, trade names, fictitious names, copyrights, patents, trade secrets,
and other intellectual property rights to the Company, and agrees, upon request, to execute any
formal assignments, or other documents as the Company may request to effectuate such assignment.
Employee acknowledges and agrees that all works relating to any products, services, methods,
know-how, procedures, formulae, processes, specifications, and anything of a similar nature which
relate to Employee’s employment with the Company, whether the same are derived from the use of
Confidential Information, or other confidential, proprietary, or trade secret information, or
otherwise developed or conceived by Employee will be deemed works made for hire, and will remain
the Company’s property. This Section 8(g) is supplemental to, and not in lieu of, Employee’s
covenants and representations in the Inventions Agreement.
(h) Non-disparagement. During the term of Employee’s Employment with Company, and for
the Time Limit, Employee and the Company in its official communications will not knowingly and
materially disparage, criticize, or otherwise make any derogatory statements regarding the other.
The Company will instruct its officers and directors to not knowingly and materially disparage,
criticize, or otherwise make any derogatory statements regarding Employee. Notwithstanding the
foregoing, nothing contained in this agreement will be deemed to restrict Employee, the Company or
any of the Company’s current or former officers and/or directors from providing factual information
to any governmental or regulatory agency (or in any way limit the
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content of any such information) to the extent they are requested or required to provide such
information pursuant to applicable law or regulation.
(i) Other Requirements. Employee’s receipt of severance payments pursuant to Section
7 is consideration for Employee continuing to comply with the terms of the Inventions Agreement and
the provisions of this Section 8.
(j) No Duty to Mitigate. Employee will not be required to mitigate the amount of any
severance payment contemplated by this Agreement, nor will any earnings that Employee may receive
from any other source reduce any such severance payment.
9. Excise Tax. In the event that the benefits provided for in this Agreement
constitute “parachute payments” within the meaning of Section 280G of the Internal Revenue Code of
1986, as amended (the “Code”) and will be subject to the excise tax imposed by Section 4999 of the
Code (the “Excise Tax”), then Employee’s severance benefits payable under the terms of this
Agreement will be, at Employee’s option, either (a) delivered in full, or (b) delivered as to such
lesser extent which would result in no portion of such severance benefits being subject to the
Excise Tax, whichever of the foregoing amounts, taking into account the applicable federal, state
and local income taxes and the Excise Tax, results in the receipt by Employee on an after-tax
basis, of the greatest amount of severance benefits.
10. Definitions.
(a) Cause. For purposes of this Agreement, “Cause” will mean:
(i) Acts or omissions constituting gross negligence, recklessness or willful misconduct on the
part of Employee with respect to Employee’s obligations under this Agreement or otherwise relating
to the business of Company;
(ii) Repeated or habitual neglect of Employee’s duties or responsibilities that continues
after notice to Employee of such neglect, or failure or refusal to carry-out the legitimate
assignments given Employee by his supervisor, CEO or the Board;
(iii) Any act of personal dishonesty taken by Employee in connection with his responsibilities
as an employee of the Company with the intention or reasonable expectation that such action may
result in the substantial personal enrichment of Employee;
(iv) Employee’s conviction of, or plea of nolo contendre to, a felony that the Board
reasonably believes has had or will have a material detrimental effect on the Company’s reputation
or business;
(v) A breach of any fiduciary duty owed to the Company by Employee that has a material
detrimental effect on the Company’s reputation or business;
(vi) Employee being found liable in any Securities and Exchange Commission or other civil or
criminal securities law action or entering any cease and desist order with respect to such action
(regardless of whether or not Employee admits or denies liability);
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(vii) Employee (A) obstructing or impeding; (B) endeavoring to obstruct, impede or improperly
influence, or (C) failing to materially cooperate with, any investigation authorized by the Board
or any governmental or self-regulatory entity (an “Investigation”). However, Employee’s failure to
waive attorney-client privilege relating to communications with Employee’s own attorney in
connection with an Investigation will not constitute “Cause”;
(viii) Employee’s disqualification or bar by any governmental or self-regulatory authority
from serving in the capacity contemplated by this Agreement or Employee’s loss of any governmental
or self-regulatory license that is reasonably necessary for Employee to perform his
responsibilities to the Company under this Agreement, if (A) the disqualification, bar or loss
continues for more than thirty (30) days, and (B) during that period the Company uses its good
faith efforts to cause the disqualification or bar to be lifted or the license replaced. While any
disqualification, bar or loss continues during Employee’s employment, Employee will serve in the
capacity contemplated by this Agreement to whatever extent legally permissible and, if Employee’s
employment is not permissible, Employee will be placed on leave (which will be paid to the extent
legally permissible); or
(b) Change of Control. For purposes of this Agreement, “Change of Control” will mean
the occurrence of any of the following events:
(i) The consummation by the Company of a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would result in the voting securities of
the Company outstanding immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving entity) more than 50% of
the total voting power represented by the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation;
(ii) The approval by the stockholders of the Company, or if stockholder approval is not
required, approval by the Board, of a plan of complete liquidation of the Company or an agreement
for the sale or disposition by the Company of all or substantially all of the Company’s assets; or
(iii) Any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended), other than Xxxxxxx Xxxxx & Co and its related funds and
entities, becoming the “beneficial owner” (as defined in Rule 13d-3 under said Act), directly or
indirectly, of securities of the Company representing 50% or more of the total voting power
represented by the Company’s then outstanding voting securities.
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(c) Disability. For purposes of this Agreement, “Disability” will mean Employee’s
absence from his responsibilities with the Company on a full-time basis for 120 calendar days in
any consecutive twelve (12) month period as a result of Employee’s mental or physical illness or
injury coupled with a medical determination that such mental or physical illness or injury renders
Employee unable to continue to perform the duties of his position with the Company.
(d) Good Reason. For purposes of this Agreement, “Good Reason” means the occurrence
of any of the following, without Employee’s express written consent:
(i) A significant reduction of Employee’s duties, position, or responsibilities, relative to
Employee’s duties, position, or responsibilities in effect immediately prior to such reduction,
provided that a change of title that does not also involve a significant reduction of Employee’s
duties, position, or responsibilities will not constitute “Good Reason”;
(ii) A material reduction in the kind or level of employee benefits to which Employee is
entitled immediately prior to such reduction with the result that Employee’s overall benefits
package is significantly reduced. Notwithstanding the foregoing, a one-time reduction that also is
applied to substantially all other Employee officers of the Company and that reduces the level of
employee benefits by a percentage reduction of 10% or less will not constitute “Good Reason”;
(iii) A reduction in Employee’s Base Salary or Target Annual Incentive as in effect
immediately prior to such reduction. Notwithstanding the foregoing, a one-time reduction that also
is applied to substantially all other Employee officers of the Company and which one-time reduction
reduces the Base Salary or Target Annual Incentive by a percentage reduction of 10% or less in the
aggregate will not constitute “Good Reason”;
(iv) The relocation of Employee to a facility or location more than twenty-five (25) miles
from the location of the Company’s Employee offices as of the Effective Date or rescission of
Employee’s right to perform his duties at least 50% of business days each month from his home
office in Xxxxxxx Hole, WY as provided in Section 1(a) of this Agreement;
(v) Any material breach by the Company of any material contractual obligation owed Employee
which breach is not remedied within thirty (30) days of written notice; or
(vi) The failure of the Company to obtain the assumption of this Agreement by a successor.
(e) In Connection with a Change of Control. For purposes of this Agreement, a
termination of Employee’s employment with the Company is “in Connection with a Change of Control”
if Employee’s employment is terminated within three (3) months prior the execution of an agreement
that results in a Change of Control or twelve (12) months following a Change of Control.
11. Indemnification. Subject to applicable law, Employee will be provided
indemnification to the maximum extent permitted by the Company’s Certificate of Incorporation or
Bylaws.
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12. Assignment. This Agreement will be binding upon and inure to the benefit of (a)
the heirs, executors and legal representatives of Employee upon Employee’s death, and (b) any
successor of the Company. Any such successor of the Company will be deemed substituted for the
Company under the terms of this Agreement for all purposes. For this purpose, “successor” means
any person, firm, corporation, or other business entity which at any time, whether by purchase,
merger, or otherwise, directly or indirectly acquires all or substantially all of the assets or
business of the Company. None of the rights of Employee to receive any form of compensation
payable pursuant to this Agreement may be assigned or transferred except by will or the laws of
descent and distribution. Any other attempted assignment, transfer, conveyance, or other
disposition of Employee’s right to compensation or other benefits will be null and void. This
Section 14 will in no way prevent Employee from transferring any vested property he owns.
13. Notices. All notices, requests, demands and other communications called for
hereunder will be in writing and will be deemed given (a) on the date of delivery if delivered
personally; (b) one (1) day after being sent overnight by a well-established commercial overnight
service, or (c) four (4) days after being mailed by registered or certified mail, return receipt
requested, prepaid and addressed to the parties or their successors at the following addresses, or
at such other addresses as the parties may later designate in writing:
If to the Company:
0000 X 00xx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attn: Director of Human Resources
Xxxxx, Xxxxxxx 00000
Attn: Director of Human Resources
If to Employee:
at the last residential address known by the Company.
14. Severability. It is the agreement and desire of the Parties that the provisions
of this Agreement be enforced to the fullest extent possible. Accordingly, should any provision
hereof become or be declared by a court of competent jurisdiction to be illegal, unenforceable, or
void, this Agreement will continue in full force and effect without said provision.
15. Arbitration. The parties agree that any and all disputes arising out of the terms
of this Agreement, Employee’s employment by the Company, Employee’s service as an officer or
director of the Company, or Employee’s compensation and benefits, their interpretation and any of
the matters herein released, will be subject to binding arbitration. In the event of a dispute,
the parties (or their legal representatives) will promptly confer to select a single Arbitrator
mutually acceptable to both parties. If the parties cannot agree on an Arbitrator, then the moving
party may file a Demand for Arbitration with the American Arbitration Association (“AAA”) in
Phoenix, Arizona, who will be selected and appointed consistent with the AAA-Employment Dispute
Resolution Rules. Any arbitration will be conducted in a manner consistent with AAA National Rules
for the Resolution of Employment Disputes. The Parties further agree that the prevailing party in
any arbitration will be entitled to injunctive relief in any court of competent jurisdiction to
enforce the arbitration award. The parties hereby agree to waive their right to have any dispute
between
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them resolved in a court of law by a judge or jury. This paragraph will not prevent either
party from seeking injunctive relief (or any other provisional remedy) from any court having
jurisdiction over the Parties and the subject matter of their dispute relating to Employee’s
obligations under this Agreement and the Confidential Information Agreement.
16. Integration. This Agreement, together with the Inventions Agreement and the forms
of equity award agreements that describe Employee’s outstanding equity awards, represents the
entire agreement and understanding between the parties as to the subject matter herein and
supersedes all prior or contemporaneous agreements whether written or oral. All prior agreements,
conditions, practices, customs, usages and obligations are completely superseded and revoked,
insofar as any such prior agreement, condition, practice, custom, usage or obligation might have
given rise to any enforceable right. No waiver, amendment, alteration, or modification of any of
the provisions of this Agreement will be binding unless in a writing and signed by duly authorized
representatives of the parties hereto. In entering into this Agreement, no party has relied on or
made any representation, warranty, inducement, promise, or understanding that is not in this
Agreement. To the extent that any provisions of this Agreement conflict with those of any other
agreement to be signed upon Employee’s hire, the terms in this Agreement will prevail.
17. Waiver of Breach. The waiver of a breach of any term or provision of this
Agreement, which must be in writing, will not operate as or be construed to be a waiver of any
other previous or subsequent breach of this Agreement.
18. Survival. The Inventions Agreement and the Company’s and Employee’s
responsibilities under Sections 7, 8, 9 and 11 will survive the termination of this Agreement.
19. Headings. All captions and Section headings used in this Agreement are for
convenient reference only and do not form a part of this Agreement.
20. Tax Withholding. All payments made pursuant to this Agreement will be subject to
withholding of applicable taxes.
21. Governing Law. This Agreement will be governed by and construed in accordance
with the laws of the State of Arizona without regard to conflict of law provisions.
22. Acknowledgment. Employee acknowledges that he has had the opportunity to discuss
this matter with and obtain advice from his private attorney, has had sufficient time to, and has
carefully read and fully understands all the provisions of this Agreement, and is knowingly and
voluntarily entering into this Agreement.
23. Code Section 409A. Notwithstanding anything to the contrary in this Agreement, if
the Company reasonably determines that Section 409A of the Code will result in the imposition of
additional tax related to a payment of any severance or other benefits otherwise due to Employee on
or within the six (6) month period following Employee’s termination or separation from service (as
defined pursuant to said Section 409A), the severance benefits will accrue during such six (6)
month period and will become payable in a lump sum payment on the date six (6) months and one (1)
day following the date of Employee’s termination or separation from service, as the case may be.
All
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subsequent payments, if any, will be payable as provided in this Agreement. The Company and
Employee agree to work together in good faith to consider amendments to this Agreement necessary or
appropriate to avoid imposition of any additional tax or income recognition prior to actual payment
to Employee under Section 409A of the Code and any temporary or final Treasury Regulations and
Internal Revenue Service guidance thereunder.
24. Counterparts. This Agreement may be executed in counterparts, and each
counterpart will have the same force and effect as an original and will constitute an effective,
binding agreement on the part of each of the undersigned.
IN WITNESS WHEREOF, each of the Parties has executed this Agreement, in the case of the
Company by a duly authorized officer, as of the day and year written below.
COMPANY: |
||
/s/ Xxxx Xxxxxxxx
|
Date: September 22, 2008 | |
Xxxx Xxxxxxxx, Chief Executive Officer |
||
EMPLOYEE: |
||
/s/ Xxxxxx Xxxxxxxxxx
|
Date: September 22, 2008 | |
Xxxxxx Xxxxxxxxxx |
Page 12 of 12
