EXHIBIT 10.28
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement") is entered into as of this 2nd day
of May, 1997, by and between Xxxxxx X. Xxxxx, a resident of Los Altos,
California ("Employee") and Engineering Animation, Inc., a Delaware corporation
with its principal offices in Ames, Iowa ("EAI" or "Company").
RECITALS
A. EAI is in the business of producing custom 3D computer animations,
interactive software products, 3D animation software products and conducting
various other activities associated therewith (the "Business").
B. EAI desires to employ Employee and Employee desires to be employed by
EAI on the terms and conditions set forth herein.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. EMPLOYMENT TERMS. Subject to the terms and conditions set forth
herein, EAI will employ Employee for a term commencing as of May 2, 1997 (the
"Effective Date") and ending on the first anniversary of the Effective Date, or
such earlier date as may occur pursuant to the terms of this Agreement (the
"Employment Term"). This Agreement may be extended by mutual agreement of the
parties.
2. EMPLOYMENT DUTIES. During the term of this Agreement, Employee will
serve EAI and perform such duties as assigned from time to time by the Chief
Executive Officer of EAI, subject to the terms of this Agreement. Employee
will, during the term of this Agreement, serve the Company faithfully,
diligently, and competently and will perform assigned duties on a full-time
basis to the best of Employee's ability.
3. COMPENSATION. During the term of employment, EAI will pay to
Employee for services rendered by Employee under this Agreement, the following:
a. From the Effective Date of this Agreement through the first
anniversary of the Effective Date, a salary at a rate of $135,000 per
annum ($11,250 per month) payable in arrears monthly, in accordance
with EAI's ordinary payroll practices; and
b. After the end of each fiscal year of the Company during the
Employment Term, Employee shall be eligible for an annual performance
bonus, the nature and amount of which shall be determined by and in
the discretion of the Company after reviewing Employee's performance
and the Company's results of operations during and for such fiscal
year and such other considerations deemed appropriate by the Company.
Employee shall receive, at the end of the 1997 fiscal year, a
guaranteed minimum bonus of $10,000. Notwithstanding anything else
in this Agreement, the declaration and payment and the amount of any
performance bonus to Employee shall be in the discretion of the
Company and Employee shall have no absolute right to a performance
bonus in any year except 1997.
Payments made pursuant to this section while Employee is employed by EAI
shall be treated as wages for withholding and employment tax purposes.
4. INCENTIVE STOCK OPTIONS. Within thirty (30) days following the
Effective Date, Employee shall be granted an incentive stock option under the
EAI Employee Stock Option Plan which will permit the purchase of up to thirty-
six thousand five hundred (36,500) shares of EAI common stock at an exercise
price equal to the average of the high and low selling prices on the NASDAQ on
the date of grant. The incentive stock option shall have a term of ten (10)
years and shall provide for vesting of nine thousand one hundred and twenty
five (9,125) shares at the end of the first, second, third and fourth years
from the date of grant. All other terms shall be as provided in the Option
Agreement and the Stock Option Plan, copies of which are attached hereto as
Exhibit C.
5. SEVERANCE PROVISIONS. In the event that Employee is terminated for
any reasons whatsoever, except conviction of a criminal act, during the first
year of employment then Employee shall receive severance payments equal to
the monthly salary payments to the first anniversary date. In the event that
Employee is terminated during the one year period following the first
anniversary of this agreement, and provided the termination follows a merger,
sale or Change of Control ( as defined in the attached Incentive Stock Option
Agreement) of the Company, then Employee will receive a severance payment
equal to the total compensation paid to Employee during the first year of
employment. In the event that Employee is terminated for cause during the one
year period following the first anniversary of this Agreement then Employee
shall receive a severance payment equal to the total compensation paid to
Employee during the first year of employment.
6. BENEFITS.
a. Employee shall be entitled during the Employment Term to
participate in such employee benefits plans and programs,
including, without limitation, profit sharing, cafeteria and
health insurance plans, as are maintained from time to time for
employees of EAI to the extent that his position, tenure,
compensation, age, health and other qualifications, make him
eligible to participate. The Company does not promise the
adoption or continuation
of any particular plan or program during the employment term
and employee's (and his dependents') participation in any such
plan or program shall be subject to the provisions, rules,
regulations and laws applicable from time to time thereto.
b. During the Employment Term, Employee shall be entitled to paid
time off in accordance with policies of the Company which
provide for fifteen (15) days paid time off during the first
year of employment, eighteen (18) days during the second year
of employment, and twenty-one (21) days during the third year
of employment. In addition, Employee shall be entitled to paid
time off on such holidays as are observed by the Company from
time to time. Accrued, unused vacation may be carried over
from one year to the next in accordance with Company
policies.
c. Employee shall be permitted, upon the Effective Date to
participate in the EAI 401(k) savings plan which permits
employee contributions of up to eighteen percent (18%) of total
annual compensation and provides that EAI will match one-half of
Employee's contribution up to a total of two percent (2%) of
Employee's total compensation. EAI's contribution to the Plan
vests according to the terms of the Plan.
d. EAI will provide to Employee a term life insurance policy in the
amount of $200,000, payable to a beneficiary of Employee's
choice.
7. REIMBURSEMENT OF EXPENSES. To the extent consistent with the general
expense reimbursement policies maintained by EAI from time to time, Employee
shall be entitled to reimbursement for ordinary, necessary and reasonable out-
of-pocket trade or business expenses which Employee incurs in connection with
performing his duties under this Agreement, including reasonable travel and
meal expenses. The reimbursement of all such expenses shall be made upon
presentation of evidence reasonably satisfactory to EAI of the amounts and
nature of such expenses and shall be subject to the prior approval of EAI.
8. KEY EMPLOYEE NON-COMPETITION AGREEMENT. Employee agrees to be bound
by the terms of the Key Employee Non-competition Agreement which is attached
hereto as Exhibit A.
9. EMPLOYEE PROPRIETARY INFORMATION AGREEMENT. Employee recognizes that
as a result of employment by EAI, she will come into possession of confidential
information and as a condition of employment, agrees to execute and abide by
the terms of the Employee Proprietary Information Agreement attached hereto as
Exhibit B.
10. TERMINATION. This Agreement may be terminated for cause which shall
be defined as (i) any action by Employee involving willful gross misconduct
having a material adverse effect on the Company; (ii) Employee being convicted
of a felony under the laws of state of the United States or any state or under
the laws of any other country or political subdivision thereof.
11. MISCELLANEOUS.
a. All notices hereunder shall be in writing and shall be deemed
given when: delivered in person; or, when sent by email or
telecopier followed by hard copy; or, following three (3)
business days after being deposited in the United States mail,
postage prepaid, by registered or certified mail; or, two days
after delivery to a nationally recognized express courier,
expenses prepaid, addressed as follows:
If to Employee: Addressed to the last address on the
payroll records of EAI.
If to EAI: Engineering Animation, Inc.
0000 Xxxxx Xxxx Xxxxx
Xxxx, XX 00000
Attention: Xxxxx X. Xxxx, General Counsel
b. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective heirs, successors, and
permitted assigns.
c. This Agreement contains all of the agreements between the
parties with respect to the subject matter hereof and this
Agreement supersedes all other agreements, oral or written,
between the parties hereto with respect to the subject matter
hereof.
d. No change or modification of this Agreement shall be valid
unless the same shall be in writing and signed by the parties
hereto. No waiver of any provisions of this Agreement shall be
valid unless in writing and signed by the waiving party.
e. If any provisions of this Agreement (or portions thereof) shall,
for any reason, be deemed invalid or unenforceable by any court
of competent jurisdiction, such provisions (or portions thereof)
shall be ineffective only to the extent of such invalidity or
unenforceability, and the remaining provisions of this Agreement
(or portions thereof) shall nevertheless be valid, enforceable
and of full force and effect. EAI's rights under this Agreement
shall not be exclusive and shall be in addition to all other
rights and remedies available at law or in equity.
f. This Agreement may be executed in multiple counterparts, each of
which shall be deemed to be an original and all of which, when
taken together, shall constitute a single instrument.
g. This Agreement shall be governed and controlled as to validity,
enforcement, interpretation, construction, effect, and in all
other respects by the laws of the state of Iowa applicable to
contracts made in Iowa (other than any conflict of laws rule
which might result in the application of the laws of any other
jurisdiction). Employee hereby expressly submits and consents
in advance to the personal jurisdiction of the federal and state
courts of the state of Iowa for all purposes in connection with
any action or proceeding arising out of or relating to this
Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first written above.
ENGINEERING ANIMATION, INC. EMPLOYEE
/S/ XXXXXXX XXXXX XXXXXX X. XXXXX
------------------------------- ----------------------------------
XXXXXXX XXXXX, CEO & PRESIDENT XXXXXX X. XXXXX
