EXHIBIT 10.17
EMPLOYMENT AGREEMENT
This Employment Agreement is made and entered into by and between
Spatialight, Inc. (the "Company") and L. Xxxx Xxxxxx ("Xxxxxx") as of February
17, 1997 (the "Effective Date").
1. POSITION AND DUTIES:
1.1 Effective February 17, 1997 (the "Commencement Date"), Xxxxxx
will be employed by the Company as its Senior Executive Vice President and Chief
Operating Officer ("COO") reporting to Xxxxxxx X. Xxxxxx, President and Chief
Executive Officer. It is expected that at the next regularly scheduled meeting
of the Company's Board of Directors (the "Board") Xxxxxx will be appointed
Chairman of the Board. If this occurs, the Company will recommend that the
Board approve Xxxxxx for employment as the Company's President and COO, and will
further recommend Xxxxxx for a seat on the Company's Board.
1.2 Xxxxxx agrees to devote his full business time, energy and skill
to his duties at the Company. These duties shall include, but not be limited
to, assisting in all efforts to raise equity financing, assisting with
presentations to shareholders and the Board, providing technical marketing
expertise to the Company, assisting in the development of the Company's business
plan and any other duties consistent with Xxxxxx' position(s), as well as any
other duties that may be assigned to Xxxxxx from time to time by the Board.
1.3 Xxxxxx further agrees to undertake his best efforts to induce
Xxxx Xxxxx, to accept employment with the Company.
2. COMPENSATION:
2.1 BASE SALARY: Xxxxxx will be paid an annual salary of $175,000,
less applicable withholding, in accordance with the Company's normal payroll
procedures. Xxxxxx' salary will be reviewed by the Board on an approximately
annual basis, and may be subject to adjustment based upon various factors
including, but not limited to, Xxxxxx' performance and the Company's
profitability.
2.2 PERFORMANCE BONUS PLAN: Xxxxxx will be eligible to participate
in the Company's performance bonus plan (the "Bonus Plan"), which currently
provides for a bonus of twenty (20) percent of salary upon achievement of
pre-established goals. Under the Bonus Plan, all bonuses, if earned, are
paid at the end of the fiscal year. Any bonus will be governed by the terms
of the Company's standard Bonus Plan in effect at the time.
2.3 EQUITY STAKE: The Company will recommend that its Board
approve the issuance to Xxxxxx of options to purchase 400,000 shares of the
Company's common stock (the
1
"Option") in accordance with the Company's Stock Option Plan (the "Plan").
The Plan provides that fifty percent of options vest upon the completion of
one year's service and the remaining fifty percent of options vest upon the
completion of the second year's service. However, in the event that the
Company files for bankruptcy protection pursuant to the United States
Bankruptcy Code, the parties agree that all of the options issued pursuant to
the Option shall become fully vested as of the date the Company files its
Petition for Bankruptcy Protection. Except as otherwise provided herein, the
Option shall be subject to the terms and conditions of the Company's stock
option plan and the Company's standard form of stock option agreement, which
Xxxxxx shall be required to sign as a condition of the issuance of the
Initial Stock Option.
2.4 SIGNING BONUS: Immediately upon execution of this Agreement,
the Company shall provide Xxxxxx with a signing bonus in the amount of
Twenty-Five Thousand Dollars ($25,000.00)(the "Signing Bonus"). The Signing
Bonus is not payment for any labor performed by Xxxxxx and consequently does
not constitute "wages" under the California Labor Code. In the event that
Xxxxxx voluntarily terminates his employment with the Company prior to the
expiration of twelve months following the Commencement Date, Xxxxxx shall
reimburse the Company for the Signing Bonus.
2.5 BENEFITS: Xxxxxx will be entitled to participate in all of the
Company's benefit plans, as those plans may change from time to time, on the
same terms as all other employees of the Company.
3. TERM OF EMPLOYMENT: Xxxxxx' employment with the Company
pursuant to this Agreement is for a three-year period, commencing on the
Commencement Date, subject to the provisions regarding termination set forth
below (the "Term"). If neither party gives the other written notice of
termination or a desire to change the provisions herein, on or before the
thirtieth (30th) day prior to the expiration of the Term, this Agreement
shall be automatically renewed for an additional one (1) year period (the
"Renewal Term"). Thereafter, if neither party gives the other written notice
of termination or a desire to change the provisions herein, on or before the
thirtieth (30th) day prior to the expiration of each Renewal Term, this
Agreement shall be renewed for an additional one (1) year period.
4. BENEFITS UPON TERMINATION:
Notwithstanding paragraph 3 above, Xxxxxx' employment may be terminated
by Xxxxxx or the Company at any time, with or without notice and with or
without cause. In the event that either party elects to terminate this
Agreement prior to the expiration of the contract term, benefits shall be
provided as set forth below.
4.1 VOLUNTARY TERMINATION: In the event that Xxxxxx voluntarily
resign from his employment with the Company, or in the event that Xxxxxx'
employment terminates as a result of his death or disability, Xxxxxx shall be
entitled to no compensation or benefits from the Company other than those
earned under paragraph 2 above through the date of his termination.
2
4.2 INVOLUNTARY TERMINATION: In the event of the termination of
Xxxxxx' employment by the Company for the reasons set forth below, Xxxxxx
shall be entitled to the following:
TERMINATION FOR CAUSE: If Xxxxxx' employment is
terminated by the Company for cause as defined below, Xxxxxx shall be
entitled to no compensation or benefits from the Company other than those
earned under paragraph 2 through the date of Xxxxxx' termination.
For purposes of this Agreement, a termination "for cause"
occurs if Xxxxxx are terminated for any of the following reasons:
(1) theft, dishonesty, or falsification of any
employment or Company records;
(2) conviction of a felony or any act involving moral
turpitude;
(3) consistent poor performance, as determined by the
Board in its sole discretion;
(4) improper disclosure of the Company's confidential
or proprietary information;
(5) any intentional act by Xxxxxx that has a material
detrimental effect on the Company's reputation or business; or
(6) any material breach of this Agreement, which
breach, if curable, is not cured within thirty (30) days following written
notice of such breach from the Company.
b. TERMINATION FOR OTHER THAN CAUSE: If Xxxxxx'
employment is terminated by the Company for any reason other than cause,
Xxxxxx shall be entitled to continuation of Xxxxxx' salary and all other
benefits, including, but not limited to, vesting in all stock options, for
six months following the termination of Xxxxxx' employment.
5. CONFIDENTIAL AND PROPRIETARY INFORMATION: As a condition of
Xxxxxx' employment with the Company, Xxxxxx will be required to sign the
Company's standard form of proprietary information and assignment of
inventions agreement. As a further condition of Xxxxxx' employment, Xxxxxx
will be required to cause the assignment of all patents issued in relation to
the wireless technology for the home environment (the "Patents") to the
Company.
6. ATTORNEYS' FEES: The prevailing party shall be entitled to
recover from the losing party its attorneys' fees and costs incurred in any
action brought to enforce any right arising out of this Agreement.
3
7. INTERPRETATION: This Agreement shall be interpreted in
accordance with and governed by the laws of the State of California.
ASSIGNMENT: In view of the personal nature of the services to be
performed under this Agreement by Xxxxxx, Xxxxxx shall not have the right to
assign or transfer any of his obligations under this Agreement.
9. ENTIRE AGREEMENT: This Agreement, along with any agreements
referred to in paragraph 2, relating to stock options and paragraph 5,
relating to proprietary information and assignment of inventions, sets forth
the entire agreement between Xxxxxx and the Company regarding the terms and
conditions of Xxxxxx' employment, and supersedes all prior negotiations,
representations or agreements between Xxxxxx and the Company regarding
Xxxxxx' employment, whether written or oral.
10. NO REPRESENTATIONS: Xxxxxx acknowledges that his is not
relying, and have not relied, on any promise, representation or statement
made by or on behalf of the Company that is not set forth in this Agreement.
11. MODIFICATION: This Agreement may only be modified or amended
by a supplemental written agreement signed by Xxxxxx and an authorized member
of the Board.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year written below.
SPATIALIGHT, INC.
Date: By:
--------------------- ----------------------------
Its:
---------------------------
Date:
--------------------- -------------------------------
L. Xxxx Xxxxxx
4