EXHIBIT 10.28
EMPLOYMENT AGREEMENT
XXXXXXX XXXXXX
This Employment Agreement is entered into as of this 1st day of November
1996 (the "Effective Date") by and among Xxxxxxx Xxxxxx ("Executive") and
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Dogloo, Inc., a California corporation (the "Company"). The term of this
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Agreement shall be one (1) year (the "Term") and shall renew automatically
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following the expiration date of the previous Term.
In consideration of the mutual covenants herein contained, and in
consideration of the employment of Executive by the Company, the parties agree
as follows:
1. DUTIES AND SCOPE OF EMPLOYMENT. The Company agrees to employ the
Executive and the Executive accepts the position of Executive Vice President of
Sales and Marketing of the Company with the responsibilities set forth in the
Bylaws of the Company or otherwise directed by the Chief Executive Officer.
Executive shall report directly to the Chief Executive Officer of the Company.
Executive's employment shall be "at-will" and may be terminated pursuant to the
provisions of Section 4 of this Agreement.
2. COMPENSATION. During Executive's employment under this Agreement, the
Company agrees to pay the following amounts to Executive as compensation for his
services:
(a) Base Salary. The Company shall pay Executive a minimum base
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salary ("Base Salary") of $13,880 per month ($166,560 for 12 months).
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(b) Bonus. During Executive's employment, Executive shall be eligible
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for an annual bonus targeted, but not capped, at thirty-seven percent (37%) of
his Base Salary; provided, that Executive meets mutually agreed to performance
targets which are determined prior to the commencement of each year. The
determination of whether the performance targets have been met shall be made
annually by the Board of Directors of the Company in its sole discretion.
3. EMPLOYEE BENEFITS. During Executive's employment under this
Agreement, Executive shall be eligible to participate in all the benefit plans
offered generally to the Company's employees, subject in each case to the
generally applicable terms and conditions of the plan or program in question.
Executive shall also be entitled to fringe benefits in accordance with the most
favorable policies to executives of the Company in effect at any time during the
term of this Agreement. Executive shall be granted two (2) weeks paid vacation
in addition to the Company's paid holidays.
4. PAYMENTS UPON TERMINATION OF EMPLOYMENT. The Company may terminate
Executive's employment at any time, for any reason or no reason whatsoever, and
Executive shall be entitled to the consideration specified below.
(a) Termination Without Cause or Resignation for Good Reason. If the
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Company terminates Executive's employment without Cause (as defined below), or
if, on or before August 31, 1999, Executive resigns for Good Reason (as defined
below), Executive shall be entitled to receive:
(A) Severance Pay. An amount equal to Executive's Base Salary
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for a period of twelve (12) months and a bonus equal to (i) the last annual
bonus paid to Executive or (ii) if greater, the bonus payable based on
performance during the fiscal year of termination. Such payments, other than the
bonus, which shall be paid at the end of the severance pay period, shall be made
in accordance with Company's standard payment practices.
(B) Medical Insurance. Company paid medical insurance as
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provided to Executive and dependents immediately prior to the date of
termination for a period of twelve (12) months; provided, that such medical
insurance shall cease upon Executive's commencement of employment with a new
employer and Executive's eligibility requirements for medical coverage through
his new employer have been met and new coverage is in effect. At the end of the
twelve (12) month period, Executive shall be eligible for COBRA benefits to the
extent allowed by law.
(b) Termination Without Cause or Resignation for Good Reason on or
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before August 31, 1999. If, on or before August 31, 1999, the Company terminates
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Executive's employment without Cause or Executive resigns for Good Reason,
Executive shall also be entitled to receive:
(A) Outplacement Services. Outplacement services at a cost not
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to exceed fifteen percent (15%) of Executive's Base Salary. If Executive chooses
not to participate in an outplacement program, he will be reimbursed for out-of-
pocket expenses related to a job search or establishment of a business up to
seven and one half percent (7.5%) of his Base Salary in lieu of such service.
(B) Reimbursement of Second Relocation. If Executive is unable
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to secure employment within one year of termination without Cause or resignation
for Good Reason, the Company will reimburse Executive for documented relocation
expenses of any move of more than 100 miles in an amount not to exceed eighty
percent (80%) of Executive's initial move from California to Texas.
(c) Termination Upon Disability. If the Company terminates
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Executive's employment for Disability, the Executive shall receive an amount
equal to the Executive's base salary for twelve (12) months, less the number of
months for which the Executive was paid but unable to perform his duties, and a
bonus equal to the last annual bonus paid to Executive. In the event of
Executive's Disability, the Company shall continue medical insurance for
Executive and his dependents as in effect immediately prior to such termination
for twelve (12) months from the date of termination. For all purposes of this
Agreement, "Disability" shall mean that Executive, at the time notice is given,
has been unable to
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substantially perform his duties under this Agreement as determined by the
Company's Board of Directors for a period not less than six (6) consecutive
months as the result of his incapacity due to physical or mental illness.
(d) Death. Upon event of Executive's death, Executive's employment
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with the Company shall be considered automatically terminated and Executive's
estate shall be entitled to receive the same base salary and bonus as set forth
in Section 4(c) and the Company shall continue medical insurance for Executive's
dependents as in effect immediately prior to such termination for a period of
twelve (12) months.
(e) Termination for Cause. If the Company terminates Executive's
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employment for Cause, the applicable provisions of Section 4(g) (without regard
to the notice requirement) shall apply. For purpose of this Agreement, "Cause"
shall mean:
(A) A persisting and recurring willful or grossly thereof
negligent failure by Executive to perform his duties hereunder or as an employee
or officer of the Company and Executive has not or cannot correct such failure
within 30 days after the Company has given Executive written notice thereof.
(B) Commission of any act of dishonesty, gross carelessness,
misconduct (including but not limited to illegal or unethical conduct) or
commission of any act or series of acts which have a direct, substantial and
adverse effect on the Company or its business or reputation, or
(C) Executive's habitual misuse of alcohol or any illegal drug
or intoxicant.
(f) Resignation by Executive for Good Reason. If Executive resigns
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his employment from the Company without Good Reason, the applicable provisions
of Section 4(g) shall apply. For purpose of this Agreement, "Good Reason" shall
mean a reduction in Executive's salary or a demotion in his position or
responsibility other than for Cause.
(g) Voluntary Termination by Executive. Executive may terminate his
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employment by giving the Company at least thirty (30) days' advance notice in
writing. If Executive terminates his employment under the preceding sentence,
no compensation or payments will be paid or provided to the Executive for the
periods following the date when such a termination of employment is effective.
Executive's rights under the Company's benefit plans shall be determined under
the provisions of those plans.
(h) Waiver of Notice. Any waiver of notice under this Section 4 shall
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be valid only if it is made in writing and expressly refers to the applicable
notice requirement in this Section 4.
5. Proprietary Information. Executive has signed a Proprietary
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Information and Inventions Agreement in the form attached hereto as Appendix A
and agrees to comply fully
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with the Company's policies relating to nondisclosure of trade secrets and
proprietary information and processes.
6. Notice. Notice and all other communication contemplated by this
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Agreement shall be in writing and shall be deemed to have been duly given when
personally delivered or when mailed by U.S. registered or certified mail, return
receipt requested and postage prepaid. In the case of Executive, mailed notices
shall be addressed to him at the home address which he most recently
communicated to the Company in writing. In the case of the Company, mailed
notices shall be addressed to its corporate headquarters addressed to the
attention of the Corporate Secretary.
7. Miscellaneous Provisions.
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(a) Waiver. No provisions of this Agreement shall be modified, waived
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or discharged unless the modification, waiver or discharge is agreed to in
writing and signed by Executive and by an authorized officer of the Company
(other than Executive) acting pursuant to specific approval by the Board of
Directors. No waiver by either party of any breach of, or of compliance with,
any condition or provision of this Agreement by the other party shall be
considered a waiver of any other condition or provision or of the same condition
or provision at another time.
(b) Whole Agreement. No Agreement, representations or understandings
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(whether oral or written and whether express or implied) which are not expressly
set forth in this Agreement and its exhibits have been made or entered into by
either party with respect to the subject matter hereof.
(c) Choice of Law. The validity, interpretation, construction and
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performance of this Agreement shall be governed by the laws of the State of
Texas.
(d) Severability. The invalidity or unenforceability of any provision
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or provisions of this Agreement shall not affect the validity or enforceability
of any other provision hereof, which shall remain in full force and effect.
(e) ARBITRATION. ANY DISPUTE OR CONTROVERSY ARISING UNDER OR IN
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CONNECTION WITH THIS AGREEMENT SHALL BE DETERMINED BY ARBITRATION IF GOOD FAITH
NEGOTIATIONS AMONG THE PARTIES HERETO, IF ANY, DO NOT RESOLVE SUCH CLAIM,
DISPUTE OR OTHER MATTER. SUCH ARBITRATION SHALL PROCEED IN ACCORDANCE WITH THE
THEN-CURRENT RULES FOR ARBITRATION AS ESTABLISHED BY JUDICIAL ARBITRATION
MEDIATION SERVICES, INC. ("JAMS"), UNLESS THE PARTIES HERETO MUTUALLY AGREE
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OTHERWISE, AND PURSUANT TO THE FOLLOWING PROCEDURES:
(i) Executive and the Company shall each appoint an arbitrator
from the JAMS panel of retired judges, and those party-appointed arbitrators
shall appoint a third
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arbitrator from the JAMS panel of retired judges within ten (10) days. If the
party-appointed arbitrators fail to appoint a third arbitrator within ten (10)
days, such third arbitrator shall be appointed by JAMS in accordance with its
rules.
(ii) Reasonable discovery shall be allowed in arbitration.
(iii) All proceedings before the arbitrators shall be held in
Tarrant County or Dallas County, Texas. The governing law shall be as specified
herein.
(iv) The award rendered by the arbitrators shall be final and
binding, and judgment may be entered in accordance with applicable law and in
any court having jurisdiction thereof.
(v) The Company shall pay Executive's legal costs (not to
exceed ten percent (10%) of Executive's Base Salary) unless the arbitrators
conclude that Executive did not incur such costs in good faith. Under no
circumstances will the Company reimburse Executive's legal costs outside of
arbitration as specified in this Section 7(e)(v). The award rendered by the
arbitrators shall include (A) a provision that the prevailing party in such
arbitration recover its cost relating to the arbitration and reasonable
attorneys' fees from the other party, (B) the amount of such cost and fees, and
(C) an order that the losing party pay the fees and expenses of the arbitrators.
All costs and fees required by JAMS to be deposited during or prior to the JAMS
proceedings shall be advanced by the Company.
(f) No Assignment of Benefits. The rights of any person to payments
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or benefits under this Agreement shall not be made subject to option or
assignment, either by voluntary or involuntary assignment or by operation of
law, including (without limitation) bankruptcy, garnishment, attachment or other
creditor's process, and any action in violation of this subsection (f) shall be
void.
(g) Employment at Will; Limitations of Remedies. The Company and
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Executive acknowledge that Executive's employment is at will, as defined under
applicable law. To the extent permitted by law, if Executive's employment is
terminated for any reason, Executive shall not be entitled to any payments,
benefits, damages, awards or compensation other than expressly provided by this
Agreement; provided, however, termination hereunder shall have no effect on
vested stock options and purchased shares of the Company's Common Stock under
separate agreements except as expressly provided in the agreements governing
such options and purchased shares.
(h) Employment Taxes. All payments made pursuant to this Agreement
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will be subject to withholding of applicable taxes.
(i) Counterparts. This Agreement may be executed in counterparts,
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each which shall be deemed an original but all of which together will constitute
one and the same instrument.
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(j) Prior Agreements Superseded. This Agreement shall supersede any
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employment or consulting agreement, oral or written, entered into between
Executive and the Company prior to the Effective Date of this Agreement.
Specifically, the parties hereto acknowledge that all other employment
agreements previously in existence between the Executive and the Company
(whether oral or written) are terminated and of no further force or effect as of
the Effective Date.
(k) Exercise Price of Dogloo Options. The Company and Executive
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acknowledge and agree that, as of September 22, 1995, the exercise price for
Executive's options to purchase Dogloo Common Stock ("Dogloo Options") is $0.23
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per share.
(l) No Conflict. Executive covenants and represents that he is not a
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party to any agreement or understanding which impairs or prohibits his ability
to enter into, and perform services under, this Agreement.
/s/ XXXXXXX XXXXXX
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Xxxxxxx Xxxxxx
DOGLOO, INC.,
A CALIFORNIA CORPORATION
By: /s/ XXXXXX XXXXXXX
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Xxxxxx Xxxxxxx
Chief Financial Officer
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APPENDIX A
EMPLOYEE
PROPRIETARY INFORMATION
AND INVENTIONS AGREEMENT
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The following confirms an agreement between me and Dogloo, Inc., a
California corporation (the "Company"), which is a material part of the
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consideration for my employment by the Company:
1. I understand that the Company possesses and will possess
Proprietary Information which is important to its business. For purposes of
this Agreement, "Proprietary Information" is information that was or will be
developed, created, or discovered by or on behalf of the Company, or which
became or will become known by, or was or is conveyed to the Company, which has
commercial value in the Company's business. "Proprietary Information" includes,
but is not limited to, information about algorithms, trade secrets, computer
programs, designs, technology, ideas, know-how, processes, formulas, data,
techniques, improvements, inventions (whether patentable or not), works of
authorship, business and product development plans, the salaries and terms of
compensation of other employees, customers and other information concerning the
Company's actual or anticipated business, research or development, or which is
received in confidence by or for the Company from any other person. I
understand that my employment creates a relationship of confidence and trust
between me and the Company with respect to Proprietary Information.
2. I understand that the Company possesses or will possess "Company
Materials" which are important to its business. For purposes of this Agreement,
"Company Materials" are documents or other media or tangible items that contain
or embody Proprietary Information or any other information concerning the
business, operations or plans of the Company, whether such documents have been
prepared by me or by others. "Company Materials" include, but are not limited
to, blueprints, drawings, photographs, charts, graphs, notebooks, customer
lists, computer disks, tapes or printouts, sound recordings and other printed,
typewritten or handwritten documents, as well as samples, prototypes, models,
products and the like.
3. In consideration of my employment by the Company and the
compensation received by me from the Company from time to time, I hereby agree
as follows:
a. All Proprietary Information and all title, patents, patent
rights, copyrights, mask work rights, trade secret rights, and other
intellectual property and rights anywhere in the world (collectively "Rights")
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in connection therewith shall be the sole property of the Company. I hereby
assign to the Company any Rights I may have or acquire in such Proprietary
Information in connection with my employment with the Company. At all times,
both during my employment by the Company and after its termination, I will keep
in confidence and trust and will not use or disclose any Proprietary Information
or anything relating to it without the prior written consent of an officer of
the Company.
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b. All Company Materials shall be the sole property of the
Company. I agree that during my employment by the Company, I will not remove any
Company Materials from the business premises of the Company or deliver any
Company Materials to any person or entity outside the Company, except as I am
required to do in connection with performing the duties of my employment. I
further agree that, immediately upon the termination of my employment by me or
by the Company for any reason, or during my employment if so requested by the
Company, I will return all Company Materials, apparatus, equipment and other
physical property, or any reproduction of such property, excepting only (i) my
personal copies of records relating to my compensation; (ii) my personal copies
of any materials previously distributed generally to stockholders of the
Company; and (iii) my copy of this Agreement.
c. I will promptly disclose in writing to my immediate
supervisor or to any persons designated by the Company, all "Inventions," (which
term includes improvements, inventions, works of authorship, trade secrets,
technology, algorithms, computer programs, formulas, ideas, designs, processes,
techniques, know-how and data, whether or not patentable) made or conceived or
reduced to practice or developed by me, either alone or jointly with others,
during the term of my employment. I will also disclose to the President of the
Company Inventions related to the business of the Company conceived, reduced to
practice, or developed by me within six (6) months of the termination of my
employment with the Company; such disclosures shall be received by the Company
in confidence (to the extent they are not assigned in (d) below) and do not
extend the assignment made in paragraph (d) below. I will not disclose
Inventions covered by paragraph 3(d) to any person outside the Company unless I
am requested to do so by management personnel of the Company.
d. I agree that all Inventions which I make, conceive, reduce
to practice or develop (in whole or in part, either alone or jointly with
others) during my employment shall be the sole property of the Company to the
maximum extent permitted by Texas law. I hereby assign such Inventions and all
Rights therein to the Company. The Company shall be the sole owner of all Rights
in connection therewith.
e. I agree to perform, during and after my employment, all acts
deemed necessary or desirable by the Company to permit and assist it, at the
Company's expense, in evidencing, perfecting, obtaining, maintaining, defending
and enforcing Rights and/or my assignment with respect to such Inventions in any
and all countries. Such acts may include, but are not limited to, execution of
documents and assistance or cooperation in legal proceedings. I hereby
irrevocably designate and appoint the Company and its duly authorized officers
and agents, as my agents and attorneys-in-fact to act for and in my behalf and
instead of me, to execute and file any documents and to do all other lawfully
permitted acts to further the above purposes with the same legal force and
effect as if executed by me.
f. Any assignment of copyright hereunder includes all rights of
paternity, integrity, disclosure and withdrawal and any other rights that may be
known as or referred to as "moral rights" (collectively "Moral Rights"). To the
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extent such Moral Rights
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cannot be assigned under applicable law and to the extent the following is
allowed by the laws in the various countries where Moral Rights exist, I hereby
waive such Moral Rights and consent to any action of the Company that would
violate such Moral Rights in the absence of such consent. I will confirm any
such waivers and consents from time to time as requested by the Company.
g. I have attached hereto a complete list of all existing
Inventions to which I claim ownership as of the date of this Agreement and that
I desire to specifically clarify are not subject to this Agreement, and I
acknowledge and agree that such list is complete. If no such list is attached to
this Agreement, I represent that I have no such Inventions at the time of
signing this Agreement.
h. During the term of my employment and for one (1) year
thereafter, I will not encourage or solicit any employee or consultant of the
Company to leave the Company for any reason. However, this obligation shall not
affect any responsibility I may have as an employee of the Company with respect
to the bona fide hiring and firing of Company personnel.
i. I agree that during my employment with the Company I will
not engage in any employment, business, or activity that is in any way
competitive with the business or proposed business of the Company, and I will
not assist any other person or organization in competing with the Company or in
preparing to engage in competition with the business or proposed business of the
Company. The provisions of this paragraph shall apply both during normal working
hours and at all other times including, but not limited to, nights, weekends and
vacation time, while I am employed by the Company.
j. I represent that my performance of all the terms of this
Agreement will not breach any agreement to keep in confidence proprietary
information acquired by me in confidence or in trust prior to my employment by
the Company. I have not entered into, and I agree I will not enter into, any
agreement either written or oral in conflict herewith or in conflict with my
employment with the Company.
4. I agree that this Agreement is not an employment contract and
that I have the right to resign and the Company has the right to terminate my
employment at any time, for any reason, with or without cause. I acknowledge and
agree that this Section 4 states the entire agreement between the Company and me
regarding the subject matter of this Section.
5. I agree that this Agreement does not purport to set forth all of
the terms and conditions of my employment, and that as an employee of the
Company, I have obligations to the Company which are not set forth in this
Agreement.
6. I agree that my obligations under paragraph 3(a) through 3(f) and
paragraph 3(h) of this Agreement shall continue in effect after termination of
my employment, regardless of the reason or reasons for termination, and whether
such
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termination is voluntary or involuntary on my part, and that the Company is
entitled to communicate my obligations under this Agreement to any future
employer or potential employer of mine.
7. I agree that any dispute in the meaning, effect or validity of
this Agreement shall be resolved in accordance with the laws of the State of
California without regard to the conflict of laws provisions thereof. I further
agree that if one or more provisions of this Agreement are held to be illegal or
unenforceable under applicable California law, such illegal or unenforceable
portion(s) shall be limited or excluded from this Agreement to the minimum
extent required so that this Agreement shall otherwise remain in full force and
effect and enforceable in accordance with its terms.
8. This Agreement shall be effective as of the date I execute this
Agreement and shall be binding upon me, my heirs, executors, assigns, and
administrators and shall inure to the benefit of the Company, its subsidiaries,
successors and assigns.
9. This Agreement can only be modified by a subsequent written
agreement executed by the President of the Company.
I HAVE READ THIS AGREEMENT CAREFULLY AND I UNDERSTAND AND ACCEPT THE
OBLIGATIONS WHICH IT IMPOSES UPON ME WITHOUT RESERVATION. NO PROMISES OR
REPRESENTATIONS HAVE BEEN MADE TO ME TO INDUCE ME TO SIGN THIS AGREEMENT. I
SIGN THIS AGREEMENT VOLUNTARILY AND FREELY, IN DUPLICATE, WITH THE UNDERSTANDING
THAT ONE COUNTERPART WILL BE RETAINED BY THE COMPANY AND THE OTHER COUNTERPART
WILL BE RETAINED BY ME.
/s/ XXXXXXX XXXXXX
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[Signature of Employee]
Xxxxxxx Xxxxxx
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[Print Name of Employee
Accepted and Agreed to:
DOGLOO, INC.
By: /s/ XXXXXX XXXXXXX
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Xxxxxx Xxxxxxx
Chief Financial Officer
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