EXHIBIT - 10.9
NETGEAR, INC.
XXXXXX X. XXXXX EMPLOYMENT AGREEMENT
This Agreement is entered into as of OCTOBER 14, 2002, (the "EFFECTIVE
DATE") by and between NETGEAR, INC. (the "COMPANY"), and XXXXXX X. XXXXX
("EXECUTIVE").
1. Duties and Scope of Employment.
(a) Positions and Duties. As of the Effective Date,
Executive will serve as VICE PRESIDENT OF MARKETING of the Company. Executive
will render such business and professional services in the performance of her
duties, consistent with Executive's position within the Company, as shall
reasonably be assigned to her by the Company's Chief Executive Officer,
President, Chief Financial Officer and/or Board of Directors (the "BOARD"). The
period of Executive's employment under this Agreement is referred to herein as
the "EMPLOYMENT TERM."
(b) Obligations. During the Employment Term, Executive
will perform her duties faithfully and to the best of her ability and will
devote her full business efforts and time to the Company. For the duration of
the Employment Term, Executive 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 Board.
2. At-Will Employment. The parties agree that Executive's
employment with the Company will be "at-will" employment and may be terminated
at any time with or without cause or notice. Executive understands and agrees
that neither her job performance nor promotions, commendations, bonuses or the
like from the Company give rise to or in any way serve as the basis for
modification, amendment, or extension, by implication or otherwise, of her
employment with the Company.
3. Compensation.
(a) Base Salary. During the Employment Term, the Company
will pay Executive as compensation for her services a base salary at the
annualized rate of TWO HUNDRED AND FIFTEEN THOUSAND DOLLARS ($215,000) (the
"BASE SALARY"). The Base Salary will be paid periodically in accordance with the
Company's normal payroll practices and be subject to the usual, required
withholding. Executive's salary will be reviewed by the Company from time to
time (but no more frequently than annually), and may be subject to adjustment
based upon various factors including, but not limited to, Executive's
performance and the Company's profitability. Any adjustment to Executive's
salary shall be in the sole discretion of the Company.
(b) MBO Bonus. Executive will be eligible to receive an
annual target bonus of up to forty percent (40%) of the earned Base Salary for
such year based upon the Company's achievement of various financial and/or other
goals established by the Board. All MBO bonuses will be subject to applicable
withholding and taxes.
(c) Stock Option. Following Executive's written
acceptance of these terms and subject to the approval of the Board, Executive
will be granted an option, subject to the Board's approval, to purchase one
hundred thousand (100,000) shares of the Company's common stock under the
Company's stock option plan at an exercise price as approved by the Board (the
"OPTION"). The vesting of the Option will be as follows: the Option will vest
over a four year period with 25% of the shares vesting on the first anniversary
of the date you commence employment with the Company, and 1/48th of the shares
vesting monthly for three years thereafter. The Option will be subject to the
terms, definitions and provisions of the Company's Stock Plan (the "OPTION
PLAN") and the stock option agreement by and between Executive and the Company
(the "OPTION AGREEMENT"), both of which documents are incorporated herein by
reference.
(d) Relocation and Temporary Living Reimbursement. During
the Employment Term, and in accordance with the Relocation Policy attached
hereto and incorporated by reference, the Company will reimburse Executive for:
(i) reasonable moving expenses incurred by Executive and her family during their
relocation from Executive's primary residence to the Company location area, and
(ii) reasonable temporary housing and living expenses to be mutually agreed to
by the Company and Executive, which shall include a temporary housing allowance
of up to $3,000 per month (to cover any increase in the mortgage/rental
obligations incurred by Executive as compared to Executive's most recent
permanent residence) for up to two (2) years after Executive moves out of
temporary housing approved by the Company. The total of all such amounts shall
not exceed those amounts set forth in the Relocation Policy.
4. Employee Benefits. During the Employment Term, Executive will
be entitled to participate in the employee benefit plans currently and hereafter
maintained by the Company of general applicability to other senior executives of
the Company, including, without limitation, the Company's group medical, dental,
vision, and disability plans. The Company reserves the right to cancel or change
the benefit plans and programs it offers to its employees at any time.
5. Expenses. The Company will reimburse Executive for reasonable
travel, entertainment or other expenses incurred by Executive in the furtherance
of or in connection with the performance of Executive's duties hereunder, in
accordance with the Company's expense reimbursement policy as in effect from
time to time.
6. Severance.
(a) Involuntary Termination. If Executive's employment
with the Company terminates other than voluntarily or for "Cause" (as defined in
Paragraph 9 of this Agreement), and Executive signs and does not revoke a
standard release of claims with the Company, then, Executive shall be entitled
to receive severance payments at Executive's final base salary rate plus
targeted commission, less applicable withholding, until twenty-six (26) weeks
after the date of termination without Cause. Severance payments will be made in
accordance with the Company's normal payroll procedures. During the period in
which Executive is receiving severance payments, Company will reimburse
Executive and her family for COBRA premiums, assuming Executive remains eligible
during the entire Severance Period. In addition, if Executive's employment
terminates other than voluntarily or for "Cause" (as defined herein), Executive
will be entitled to continue to have stock options vest during the one year
period immediately following the date of such termination.
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7. Voluntary Termination; Termination for Cause. If Executive's
employment with the Company terminates voluntarily by Executive or for Cause by
the Company, then all vesting of the Option and all other options granted to
Executive will terminate immediately and all payments of compensation by the
Company to Executive hereunder and all obligations with respect thereto
(including, without limitation, with respect to base salary, bonuses, employee
benefits, relocation and temporary living reimbursements and other expense
reimbursements) will terminate immediately (except as to amounts already
earned).
8. Change of Control/Good Reason.
(a) If within one year following any Change of Control
(as defined below) Executive's employment is terminated without Cause or
voluntarily by Executive for Good Reason, Executive will receive two years
acceleration of any unvested portion of the Option.
(b) For purposes of this Agreement, a "CHANGE OF CONTROL"
of the Company shall be deemed to have occurred if at any time after the
Effective Date:
(i) any "person" (as such term is used
in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT")), other than a trustee or other fiduciary holding
securities of the Company under an employee benefit plan of the Company, becomes
the "beneficial owner" (as defined in Rule 13d-3 promulgated under the Exchange
Act), directly or indirectly, of securities of the Company representing 50% or
more of (A) the outstanding shares of common stock of the Company or (B) the
combined voting power of the Company's then-outstanding securities entitled to
vote generally in the election of directors; or
(ii) the Company (A) is party to a
merger, consolidation or exchange of securities which results in the holders of
voting securities of the Company outstanding immediately prior thereto failing
to continue to hold at least 50% of the combined voting power of the voting
securities of the Company, the surviving entity or a parent of the surviving
entity outstanding immediately after such merger, consolidation or exchange, or
(B) sells or disposes of all or substantially all of the Company's assets (or
any transaction having similar effect is consummated), or (C) the individuals
constituting the Board immediately prior to such merger, consolidation,
exchange, sale or disposition shall cease to constitute at least 50% of the
Board, unless the election of each director who was not a director prior to such
merger, consolidation, exchange, sale or disposition was approved by a vote of
at least two-thirds of the directors then in office who were directors prior to
such merger, consolidation, exchange, sale or disposition.
(c) For purposes of this Agreement, "GOOD REASON" means
any of the following conditions, which condition(s) remain(s) in effect 10 days
after written notice to the Board from you of such condition(s):
(i) a material decrease in your target
annual compensation; or
(ii) a material, adverse change in your
authority, responsibilities or duties, as measured against your authority,
responsibilities or duties immediately prior to such change.
(iii) notwithstanding the foregoing, for
the purposes of this Agreement in no event will you have Good Reason to resign
due merely to a change of title or a change
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in your reporting caused by a change of control or discontinuance or
modification of any duties and responsibilities solely related to the operation
of a public company
9. Definition of Cause. For purposes of this Agreement, "CAUSE"
is defined as (i) an act of dishonesty made by Executive in connection with
Executive's responsibilities as an employee, (ii) Executive's conviction of, or
plea of nolo contendere to, a felony, (iii) Executive's gross misconduct, or
(iv) Executive's continued violation of her employment duties after Executive
has received a written demand for performance from the Company which
specifically sets forth the factual basis for the Company's belief that
Executive has not substantially performed her duties.
10. Confidential Information. Executive agrees to enter into the
Company's standard Confidential Information and Invention Assignment Agreement
(the "CONFIDENTIAL INFORMATION AGREEMENT") upon commencing employment hereunder,
and to abide by its terms during and after her employment with the Company.
11. Non-Solicitation. Until the date one (1) year after the
termination of Executive's employment with the Company for any reason, Executive
agrees and acknowledges that Executive's right to receive the severance payments
set forth in Section 6 (to the extent Executive is otherwise entitled to such
payments) shall be conditioned upon Executive not either directly or indirectly
soliciting, inducing, attempting to hire, recruiting, encouraging, taking away,
hiring any employee of the Company or causing an employee to leave his or her
employment either for Executive or for any other entity or person.
12. Assignment. This Agreement will be binding upon and inure to
the benefit of (a) the heirs, executors and legal representatives of Executive
upon Executive'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 Executive 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 Executive's right to compensation or other benefits will be null
and void.
13. Notices. All notices, requests, demands and other
communications called for hereunder shall be in writing and shall be deemed
given (i) on the date of delivery if delivered personally, (ii) one (1) day
after being sent by a well established commercial overnight service, or (iii)
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:
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If to the Company:
NETGEAR, Inc.
0000 Xxxxx Xxxxxxx Xxxxxxx
Xxxxx Xxxxx, XX 00000
Attn: Chief Executive Officer
If to Executive:
at the last residential address known by the Company.
14. Severability. In the event that any provision hereof becomes
or is 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. Co-Employment. Executive acknowledges and agrees that for the
purposes of the provision of human resource services including employee
relations, payroll and the provision of certain employee benefits that the
Company will be in a co-employment relationship with TriNet Employer Group, Inc.
("TRINET"), and to that extent Executive will be in an employment relationship
with the Company and TriNet. Nothing about this paragraph creates any new rights
in your favor, nor any new obligations on the part of either TriNet or the
Company not already contained in, nor otherwise modifies the terms and
conditions of, the Service Agreement between the Company and TriNet.
16. Arbitration.
(a) General. In consideration of Executive's service to
the Company, its promise to arbitrate all employment related disputes and
Executive's receipt of the compensation, pay raises and other benefits paid to
Executive by the Company, at present and in the future, Executive agrees that
any and all controversies, claims, or disputes with anyone (including the
Company and any employee, officer, director, shareholder or benefit plan of the
Company in their capacity as such or otherwise) arising out of, relating to, or
resulting from Executive's service to the Company under this Agreement or
otherwise or the termination of Executive's service with the Company, including
any breach of this Agreement, shall be subject to binding arbitration under the
Arbitration Rules set forth in California Code of Civil Procedure Section 1280
through 1294.2, including Section 1283.05 (the "RULES") and pursuant to
California law. Disputes which Executive agrees to arbitrate, and thereby agrees
to waive any right to a trial by jury, include any statutory claims under state
or federal law, including, but not limited to, claims under Title VII of the
Civil Rights Act of 1964, the Americans with Disabilities Act of 1990, the Age
Discrimination in Employment Act of 1967, the Older Workers Benefit Protection
Act, the California Fair Employment and Housing Act, the California Labor Code,
claims of harassment, discrimination or wrongful termination and any statutory
claims. Executive further understands that this Agreement to arbitrate also
applies to any disputes that the Company may have with Executive.
(b) Procedure. Executive agrees that any arbitration will
be administered by the American Arbitration Association ("AAA") and that a
neutral arbitrator will be selected in a manner consistent with its National
Rules for the Resolution of Employment Disputes. The arbitration proceedings
will allow for discovery according to the rules set forth in the California Code
of Civil
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Procedure. Executive agrees that the arbitrator shall have the power to decide
any motions brought by any party to the arbitration, including motions for
summary judgment and/or adjudication and motions to dismiss and demurrers, prior
to any arbitration hearing. Executive agrees that the arbitrator shall issue a
written decision on the merits. Executive also agrees that the arbitrator shall
have the power to award any remedies, including attorneys' fees and costs,
available under applicable law. The Parties understand that the Arbitrator shall
issue a written decision in support of her award. Executive understands the
Company will pay for any administrative or hearing fees charged by the
arbitrator or AAA except that Executive shall pay the first $200.00 of any
filing fees associated with any arbitration Executive initiates. Executive
agrees that the arbitrator shall administer and conduct any arbitration in a
manner consistent with the Rules and that to the extent that the AAA's National
Rules for the Resolution of Employment Disputes conflict with the Rules, the
Rules shall take precedence.
(c) Remedy. Except as provided by the Rules, arbitration
shall be the sole, exclusive and final remedy for any dispute between Executive
and the Company. Accordingly, except as provided for by the Rules, neither
Executive nor the Company will be permitted to pursue court action regarding
claims that are subject to arbitration. Notwithstanding, the arbitrator will not
have the authority to disregard or refuse to enforce any lawful Company policy,
and the arbitrator shall not order or require the Company to adopt a policy not
otherwise required by law which the Company has not adopted.
(d) Availability of Injunctive Relief. In addition to the
right under the Rules to petition the court for provisional relief, Executive
agrees that any party may also petition the court for injunctive relief where
either party alleges or claims a violation of this Agreement or the
Confidentiality Agreement or any other agreement regarding trade secrets,
confidential information, nonsolicitation or Labor Code Section 2870. In the
event either party seeks injunctive relief, the prevailing party shall be
entitled to recover reasonable costs and attorneys fees.
(e) Administrative Relief. Executive understands that
this Agreement does not prohibit Executive from pursuing an administrative claim
with a local, state or federal administrative body such as the Department of
Fair Employment and Housing, the Equal Employment Opportunity Commission or the
workers' compensation board. This Agreement does, however, preclude Executive
from pursuing court action regarding any such claim.
(f) Voluntary Nature of Agreement. Executive acknowledges
and agrees that Executive is executing this Agreement voluntarily and without
any duress or undue influence by the Company or anyone else. Executive further
acknowledges and agrees that Executive has carefully read this Agreement and
that Executive has asked any questions needed for Executive to understand the
terms, consequences and binding effect of this Agreement and fully understand
it, including that Executive is waiving Executive's right to a jury trial.
Finally, Executive agrees that Executive has been provided an opportunity to
seek the advice of an attorney of Executive's choice before signing this
Agreement.
17. Integration. This Agreement, together with the Relocation
Plan, the Option Plan, Option Agreement and the Confidential Information
Agreement 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. No waiver, alteration, or modification of
any
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of the provisions of this Agreement will be binding unless in writing and signed
by duly authorized representatives of the parties hereto.
18. Tax Withholding. All payments made pursuant to this Agreement
will be subject to withholding of applicable taxes.
19. Governing Law. This Agreement will be governed by the laws of
the State of California.
20. Acknowledgment. Executive acknowledges that he has had the
opportunity to discuss this matter with and obtain advice from her 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.
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IN WITNESS WHEREOF, each of the parties has executed this Agreement, in
the case of the Company by their duly authorized officers, as of the day and
year first above written.
COMPANY:
NETGEAR, INC.
By: /s/ Xxxxxxxx Xxxxxx Date: 4/03/03
_________________________________ __________________________
Name: Xxxxxxxx Xxxxxx
Title: Chief Financial Officer
EXECUTIVE:
/s/ Xxxxxx X. Xxxxx Date: 4/03/03
____________________________________ __________________________
XXXXXX X. XXXXX
