EXHIBIT 10.32
EMPLOYMENT AGREEMENT
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This Employment Agreement ("the Agreement") is made and entered into by and
between Xxxxxxx.xxx, Inc. (the "Company") and Xxx Xxxxxxxx ("Xxxxxxxx"). This
Agreement is effective November 5, 1999. This Agreement replaces the Employment
Agreement entered into between the parties of July 1999.
1. Position and Duties. The Company will employ you as President and Chief
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Operating Officer, Secretary and Treasurer, reporting to the Board of
Directors. You will continue your employment with the Company on the terms
and conditions set forth in this Agreement, and you agree to devote your
full business time, energy and skill to your duties at the Company. These
duties shall include, but are not limited to, any duties consistent with
your position as well as any other duties that are assigned to you from time
to time.
2. Compensation. You will be compensated by the Company for your services as
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follows:
a. Salary: You will be paid a semi-monthly salary of $10,416.67, which is
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equal to an annual salary of $250,000 less applicable withholding, in
accordance with the Company's normal payroll procedures. Your salary may
be reviewed from time to time and may be subject to adjustment based on
various factors including, but not limited to, your performance and the
Company's profitability.
b. Bonus. You will be eligible for a yearly bonus of up to 25% of your
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annual salary, payable pro rata at the end of each quarter, based on
the performance of the Company. Performance goals for bonus eligibility
will be set independently from this Agreement.
c. Stock Options.
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i) The vesting schedule for your previously granted options to purchase
239,998 shares of the Company's Common Stock under the 1999 Equity
Compensation Plan is adjusted to have vested and be vested at a rate
of 2.7778% monthly over a 36 month period from the date such options
were granted.
ii) You have the right to receive options to purchase an additional
260,000 shares of the Company's Common Stock, vesting at a rate of
2.7778% monthly over a 36 month period starting from November 5,
1999 under the Company's standard form of option agreement.
d. Directorship. You will receive a seat on the Company's Board of
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Directors, and while you remain the Company's President, the board will
continue to nominate you for a position on the Company's Board of
Directors.
e. Benefits. You will have the right, on the same basis as other executive
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employees of the Company, to participate in and to receive benefits
under any of the Company's employee benefit plans, including the
Company's group health, dental and disability or other group insurance
plans, and the Company's 401(k) plan. In addition, you will be entitled
to the benefits afforded other to other executive employees under the
Company's vacation, holiday and business expense reimbursement policies.
3. At-Will Employment. Your employment relationship with the Company will be
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at-will, meaning that either you or the Company can terminate your
employment at any time with or without cause or notice.
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4. Benefits On Voluntary Termination. You agree that your employment may be
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terminated at any time, with or without cause. In the event your employment
is terminated by the Company for the reasons set forth below, you shall be
entitled to the following:
a. Termination for Cause. If your employment is terminated by the Company
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at any time for cause, you shall be entitled to no compensation or
benefits from the Company other than those earned under Paragraph 2
through the date of your termination. In particular, you shall not be
entitled to any bonus under subparagraph 2(b) unless that bonus or
portion thereof was earned prior to the date of your termination for
cause. For purposes of this Agreement, a termination "for cause" occurs
if your employment is terminated for any of the following reasons: (i)
material and willful violation of any federal or state law; (ii)
conviction of any act of fraud with respect to the Company; or (iii)
conviction of a felony or a crime causing material harm to the standing
and reputation of the Company or (iv) willful improper disclosure of the
Company's confidential or proprietary information.
b. Termination for Other Than Cause. If the Company terminates your
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employment for any reason other than Cause, you shall receive severance
payments at your final salary rate, less applicable withholding, and
benefits, including all pension, profit-sharing and any other retirement
plans of the Company that you are then participating in solely for the
purpose of allowing you to vest in such plans, and the Company's medical
and other insurance plans for the nine (9) month period following your
employment termination date at the Company's expense. Severance payments
will be made in accordance with the Company's normal payroll procedures,
and will be less applicable withholding taxes. In addition to any
severance and benefits to which you are entitled under this
Subparagraph, you shall also be entitled to receive any compensation and
benefits that you earn under Paragraph 2 through the date of your
termination of employment; provided, however, that you shall not be
entitled to any bonus under Subsection 2(b) unless that bonus or portion
thereof was earned prior to the date of the termination of your
employment.
i) In the event of termination for other than cause, 50% of your
unvested stock options granted to date will become immediately
vested.
ii) In the event of a Change of Control, 50% of your unvested stock
options granted to date will become immediately vested, if you are
not retained by the Company in a substantially similar position in
the Bay Area.
iii) For purposes of subparagraph (ii) above, Change of Control is
defined as (i) the sale, lease, conveyance or other disposition of
all or substantially all of the Company's assets as an entirety or
substantially as an entirety to any person, entity or group of
persons acting in concert; (ii) any "person" (as such term is used
in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934,
as amended) becoming the "beneficial owner" (as defined in Rule
13(d)-3 under said Act), directly or indirectly, of securities of
the Company representing more than 50% of the total voting power
represented by the Company's then outstanding voting securities;
(iii) a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation that would result
in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the
surviving entity) at least 50% of the total voting power
represented by the voting securities of the Company or such
surviving entity outstanding immediately after such merger or
consolidation; or (iv) the liquidation or winding up of the
business of the Company.
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iv) "Constructive Termination" means that the Company, without your
prior written approval, has (I) materially reduced your title,
authority or responsibilities; (ii) reduced your salary or bonus
plans; or (iii) relocated your principal place of work by a
distance of more than 50 miles.
5. Exclusive Remedy. The severance payments described in Paragraph 4(b) shall
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be your sole and exclusive remedy in the event that the Company terminates
your employment without cause, and you shall be entitled to no other
compensation for any damage or injury arising out of the termination of your
employment with the Company.
6. Confidential and Proprietary Information. As a condition of your employment
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with the Company, you have already agreed to and signed the Company's
standard form of Employee Confidentiality and Assignment of Invention
Agreement at the start of your employment. You hereby affirm your
obligations under such agreement.
7. Dispute Resolution. In the event of any dispute or claim relating to or
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arising out of your employment relationship, the termination of that
relationship of this Agreement (including but not limited to any claims of
wrongful termination or other discrimination), we agree that all such
disputes shall be fully and finally resolved by binding arbitration
conducted by the American Arbitration Association in Santa Clara, California
according to its then-current rules by one arbitrator. The parties agree to
waive their respective rights to have any such disputes tried by a judge or
jury. Provided, however, that this arbitration provision shall not apply to
any disputes or claims to or arising out of the actual or alleged misuse or
misappropriation of Company trade secrets or proprietary information, nor
shall it prevent the parties from seeking equitable relief. This Agreement
shall be interpreted in accordance with and governed by the laws of the
State of California, as applied to parties and transactions to be wholly
performed within the State of California.
8. Attorneys' Fees. The prevailing party shall be entitled to recover from the
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losing party its attorneys' fees and costs incurred in any action brought to
enforce any rights arising out of this Agreement.
9. Board Approval. This Agreement is subject to the approval of the Company's
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Board of Directors.
10. Modification. This Agreement may only be modified or amended by writing
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signed by both Xxxxxxxx and a duly authorized member of the Company's Board
of Directors.
11. Confidentiality. The terms of this Agreement are confidential.
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12. Interpretation. Xxxxxxxx acknowledges that he has had full opportunity to
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consult with the counsel of his choice concerning this Agreement. This
Agreement is to be interpreted according to the plain meaning of its terms,
and not for or against either party.
13. Headings for Convenience. Headings used in this Agreement are for the
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convenience of the parties, and are not to be construed in the
interpretation of this Agreement.
14. Entire Agreement. The Agreement, along with any agreements relating to
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confidential or proprietary rights or stock options referred to herein,
constitute the entire Agreement between Xxxxxxxx and the Company regarding
the terms and conditions of his employment, and they
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supersede all prior negotiations, representations or agreements between
Xxxxxxxx and the Company regarding his employment, whether written or oral.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year written below.
XXXXXXX.XXX, INC.
By: /s/ Xxxx X. Xxxx
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Xxxx X. Xxxx
Title: Director, for the
Company's Board of Directors
Date:
ACCEPTED:
By:
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Xxx Xxxxxxxx
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