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EXHIBIT 10.18
EMPLOYEE AGREEMENT
This Agreement effective 9th September 1996, between Xybernaut Corporation, a
Delaware corporation located at 00000 Xxxx Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, XX
00000 ("Company"), and Will Xxxxxxxxxx, an individual residing at 0000 Xxxxxxxx
Xxxxxx, Xxxxxxx Xxxxx, XX 00000-0000 ("Employee").
WITNESSETH;
WHEREAS Company and Employee desire to effect an employment arrangement
under the terms and conditions contained in this Agreement;
NOW THEREFORE, in consideration of the foregoing and the mutual covenants
and promises made herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Company and
Employee agree as follows:
1. EMPLOYMENT.
Company agrees to employ Employee as Vice President, Strategic Planning and
Technology. Said employment shall start on September 9, 1996.
2. TERM.
2.1 The term of this Agreement shall be for a period of three (3) years
commencing on the date of the execution of this Agreement unless terminated
earlier in accordance with some other provision of this Agreement.
2.2 After the initial three year period, this Agreement shall terminate
unless mutually agreed upon to continue from year to year by the parties
hereto or a new agreement is entered into by both parties.
2.3 This Agreement may be terminated by either party upon sixty (60) days
written notice to the other party.
3. BASIC COMPENSATION.
3.1 Except as described above, Company will pay to Employee for services
rendered hereunder, a basic gross salary of $12,500 per month, payable
monthly or more frequently in accordance with Company policy. Increase in
base salary shall be negotiated each year but shall at least equal the
national CPI.
3.2 Company acknowledges and agrees to pay Employee his full basic salary
during the term of this Agreement, so long as he is willing and able to
perform his duties and obligations and has not defaulted under the terms of
this or any other Agreement he signs with the Company.
3.3 Company agrees that should the financial and business conditions of
the company allow it, Employee shall be entitled to annual performance
bonuses of up to 40% (the company target) of his base salary contingent on
his individual contributions to the company.
3.4 Company agrees that should the financial and business conditions of
the company allow it, Employee has the potential to receive additional
bonuses on a quarterly basis for exceptional achievement (e.g. Principal or
key member of team negotiating outstanding contracts, strategic
partnerships, mergers, acquisitions, and major funding, etc.)
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3.5 As additional consideration, upon execution of this Agreement,
Employee will be granted the option to purchase 10,000 vested shares of the
Company's common stock at a strike price equal to the closing price per
share of Company stock as of the date this Agreement is executed. Such
option will expire ten (10) years after the date of grant.
4. EQUITY POSITION.
4.1 Company acknowledges and agrees to grant Employee options to purchase
90,000 shares of its stock said options to be at a strike price equal to
the closing price per share of Company stock as of the date this Agreement
is executed, to vest monthly in equal shares over a five year (60 month)
period; and subject to the same restrictions, if any, required of Company
senior management. Such restrictions include the execution of a lockup
agreement as was required of all stock holders by the underwriter for the
Company's initial public offering and may include the placing of a portion
of these shares into an escrow account established for officers, directors,
and senior management pursuant to the initial public offering. Should
Employee depart, with the company's agreement, prior to said three years,
but with satisfactory performance, then all remaining unvested shares shall
vest in accordance with the five year schedule, or sooner, at the option of
Company.
4.2 Company shall propose Employee for a seat on its Advisory Board and
shall consider Employee for a position on its Board of Directors at a later
time.
5. DUTIES AND RESPONSIBILITIES OF EMPLOYEE.
Employee shall devote substantially all his business time and attention to
the practice of his profession for Company. Employee shall be Vice
President of Strategic Planning and Technology. The expenditure of
reasonable time for teaching, personal or outside business, charitable and
professional activities shall not constitute a breach of this Agreement if
such activities do not materially interfere with Employee's duties,
responsibilities and obligations, as solely determined by Company. Employee
specifically agrees to place his duties to Company above all other
activities and will abandon or curtail outside activities if so directed by
Company, if in Company's opinion these exists a conflict or other
reasonable grounds for abandoning or curtailing such activities.
6. AUTHORITY AND POWERS OF COMPANY.
Company shall have the power to direct, control and supervise Employee's
duties including the manner of, and time for, performing such duties.
7. ALLOWANCES AND COMPANY-PROVIDED SERVICES.
7.1 Company agrees to provide Employee with either an initial office
set-up allowance or a West Coast office suite of equipment to include: a
portable computer, telephone, facsimile machine, e-mail, pertinent
software, supplies, and other functional necessities to conduct business
for Company while on the West Coast.
7.2 Company agrees to provide Employee with an auto allowance, not to
exceed $1,000 per month in accordance with Company policy, to include
lease/purchase payment, insurance, maintenance, etc.
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8. RELOCATION.
Should relocation to Virginia or elsewhere be necessary, Company agrees to
pay Employee, in accordance with company policy, all customary and usual
moving expenses, to be approved in advance, including, but not limited to:
moving, temporary housing, and reasonable loan and brokerage costs. Said
allowance shall not exceed $50,000.
9. HEALTH AND INSURANCE PLANS: FRINGE BENEFITS.
Employee shall be provided coverage in Company's current medical, dental,
and disability programs, as well as any corporate plans or agreements
regarding life insurance, retirement, 401-K plans, matching savings plans,
employee stock option plans, and other related fringe benefits in
accordance with the company policy for each.
10. VACATION AND OTHER TIME OFF.
Employee will be entitled to a paid annual vacation of four weeks, in
addition to sick leave and holidays, in accordance with general corporate
policy.
11. SEVERANCE.
Employee will be entitled to severance pay after twelve months of
employment with the company. In the event of severance after twelve months
of employment, Employee shall be entitled to receive severance pay equal to
four months of his full basic salary for each full year, or prorated
portion thereof, of employment with the company. Said payment will be due
sixty (60) days after the severance date.
12. CHANGE IN CONTROL.
A "change in control" of Company for purposes of this Agreement shall mean
someone other than XXXXXX XXXXXX serving as Company's Chairman of the Board
of Directors, President or Chief Executive Officer. However, in the event
of a change of control, Employee, in his sole discretion, shall have the
right to terminate this Agreement and shall be entitled to severance pay
equal to the greater of the amount of compensation received by Employee
during the previous two (2) calendar years of the term of this Agreement,
or two (2) times the amount of compensation due to Employee at the end of
the then current fiscal year. All unvested stock options held by Employee
at the time of such change in control shall vest immediately.
13. MISCELLANEOUS.
13.1 Employee agrees to sign and be bound by Company's Confidentiality
Agreement.
13.2 This Agreement may be altered, amended, or changed only through
mutual written agreement of the parties involved.
13.3 This Agreement constitutes the entire understanding between the
parties with respect to the employment of Employee by Company.
13.4 This Agreement may be modified only with the written consent of both
parties.
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14. RIGHTS AND OBLIGATIONS.
The rights and obligations under this Agreement shall in all respects be
governed by the laws of the Commonwealth of Virginia and the venue in any
legal action shall exist exclusively in the appropriate courts of Fairfax
County, Commonwealth of Virginia.
IN WITNESS WHEREOF the Parties hereto set their hands;
COMPANY
By: /s/ XXXXXX X. XXXXXX
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Xxxxxx X. Xxxxxx
President & CEO
Date Sept. 9th 1996
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By: /s/ XXXXXX X. XXXXXX
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Xxxxxx X. Xxxxxx
Director
Date Sept. 9th 1996
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EMPLOYEE
By: /s/ WILL XXXXXXXXXX
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Will Xxxxxxxxxx
Date 10 September 1996
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