EXECUTIVE EMPLOYMENT AGREEMENT
EXHIBIT
10.2
THIS
EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”),
is
entered into this 3rd
day of
February, 2006, by and between Xxxxx Networks, Inc., a Nevada corporation
(the
“Company”),
and
Xxxxxx X. Xxxxx (the “Executive”),
and
shall be retroactively effective as of January 2, 2006 (the “Effective
Date”).
W
I T N E
S S E T H:
WHEREAS,
the Company and the Executive desire to memorialize the terms of their agreement
regarding the Executive’s employment with the Company, as set forth below;
and
WHEREAS,
the Company wishes to continue to employ the Executive, and the Executive
desires to continue in the employ of the Company, upon the terms and conditions
of this Agreement.
NOW,
THEREFORE, in consideration of the foregoing, of the mutual promises herein,
and
of other good and valuable consideration, including the employment of the
Executive by the Company and the compensation to be received by the Executive
from the Company from time to time, and specifically the compensation to
be
received by the Executive pursuant to Section 4 hereof, the receipt and
sufficiency of which are hereby acknowl-edged, the parties hereto, intending
legally to be bound, hereby agree as follows:
1. Employment.
The
Company hereby employs the Executive and the Executive hereby accepts employment
as President and Chief Executive Officer of the Company upon the terms and
conditions of this Agreement.
2. Duties.
The
Executive shall faithfully perform all duties of the Company related to the
position or positions held by the Executive, including but not limited to
all
duties set forth in this Agreement and/or in the Bylaws of the Company related
to the position or positions held by the Executive and all additional duties
that are prescribed from time to time by the Board of Directors of the Company
(the “Board”).
The
Executive shall devote the Executive’s full time and attention to the
performance of the Executive’s duties and responsibilities on behalf of the
Company and in furtherance of its best interests. The Executive shall comply
with all Company policies, standards, rules and regulations (the “Company Policies”)
and
all applicable government laws, rules and regulations that are now or hereafter
in effect. The Executive acknowledges receipt of copies of all written Company
Policies that are in effect as of the date of this Agreement.
3. Term.
Unless
earlier terminated as provided herein, the initial term of this Agreement
shall
commence on the Effective Date and shall
continue until the one-year anniversary of the Effective Date. Thereafter,
this
Agreement shall automatically renew on a year-to-year basis on the same terms
and conditions set forth herein unless earlier terminated or amended as provided
herein. The initial term of this Agreement and all renewals thereof are referred
to herein as the “Term.”
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4. Compensation.
During
the Term, as compensation for the services rendered by the Executive under
this
Agreement, the Executive shall be entitled to receive the following (all
payments are subject to applicable withholdings):
(a) Base
Salary.
The
Executive shall receive an annual salary of $175,000 payable in accordance
with
the then-current payroll policies of the Company or as otherwise agreed to
by
the parties. The Executive’s salary may be increased from time to time by the
Compensation Committee of the Board.
(b) Bonuses.
The
Executive shall be eligible to participate in all bonus or profit sharing
plans
adopted by the Board. The amount awarded to the Executive under any profit
sharing or bonus plan shall be in the discretion of the Board or any committee
administering such plan, based on its assessment of the Executive’s and the
Company’s performance during the relevant period.
(c) Benefits.
The
Executive shall be entitled to receive those benefits provided from time
to time
to other executive employees of the Company, in
accordance with the terms and conditions of the applicable plan documents;
provided that, the Executive meets the eligibility requirements thereof.
All
such benefits are subject to amendment or termination from time to time by
the
Company without the consent of the Executive or any other employ-ee of the
Company.
5. Termination.
This
Agreement and the Executive’s employment by the Company shall or may be
terminated, as the case may be, as follows:
(a) Termination
upon Expiration of the Term.
This
Agreement and the Executive’s employment by the Company shall terminate upon the
expiration of the Term.
(b) Termination
by the Executive.
The
Executive may terminate this Agreement and his employment by the Company
at any
time and for any reason, with or without notice.
(c) Termination
by the Company.
The
Company may terminate this Agreement and the Executive’s employment by the
Company:
(i) at
any
time and for any reason (other than “for cause” (as defined herein));
and
(ii) for
cause. As used herein, “for
cause”
shall
mean:
(1) Any
material breach of the terms of this Agreement by the Executive, or the failure
of the Executive to diligently and properly perform the Executive’s duties for
the Company or the Executive’s failure to achieve the objectives specified by
the Board;
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(2) The
Executive’s misappropriation or unauthorized use of the Company’s tangible or
intangible property, or breach of the Proprietary Information Agreement (as
defined herein);
(3) The
Executive’s use of illegal drugs or any illegal substance, or the Executive’s
use of alcohol in any manner that materially interferes with the performance
of
the Executive’s duties under this Agreement;
(4) Any
dishonest or illegal action (including, without limitation, embezzlement)
or any
other action whether or not dishonest or illegal by the Executive which is
materially detrimental to the interest and well-being of the Company, including,
without limitation, harm to its reputation;
(5) The
Executive’s failure to fully disclose any material conflict of interest the
Executive may have with the Company in a transaction between the Company
and any
third party which is materially detrimental to the interest and well-being
of
the Company;
(6) Any
adverse action or omission by the Executive which would be required to be
disclosed pursuant to public securities laws or which would limit the ability
of
the Company or any entity affiliated with the Company to sell securities
under
any Federal or state law or which would disqualify the Company or any affiliated
entity from any exemption otherwise available to it; or
(7) The
Executive’s violation of the Company’s Policies, including without limitation,
the Company’s Policies prohibiting harassment, unlawful discrimination,
retaliation or workplace violence.
(d) Obligations
of the Company Upon Termination.
(i) Upon
the
termination of this Agreement: (a) pursuant to the expiration of the Term;
(b)
by the Executive pursuant to paragraph 5; or (c) by the Company pursuant
to
paragraph 5(c)(ii), the Company shall have no further obligations hereunder
other than the payment of all compensation and other benefits payable to
the
Executive through the date of such termination.
(ii) Upon
termination of this Agreement by the Company pursuant to paragraph 5(c)(i)
and
provided the Executive executes a Release and Settlement Agreement in a form
acceptable to the Company: (1) the Company shall pay the Executive an amount
equal to six (6) months base salary (less all applicable deductions) payable
in
accordance with the then-current payroll policies of the Company or as otherwise
agreed to by the parties; and (2) the vesting of shares subject to any
outstanding options to purchase Company securities then held by the Executive,
shall be accelerated in an amount equal to that which would have occurred
had
the Executive remained employed by the Company for an additional period of
six
(6) months.
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(a) If
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 the Company or any trustee or fiduciary holding securities under
an
employee benefit plan of the Company) becomes a beneficial owner (as defined
in
Rule 13d-3 under the Exchange Act), directly or indirectly, of securities
of the
Company representing 50% or more of the voting power of the then outstanding
securities of the Company; provided that, a Change of Control shall not be
deemed to occur as a result of a transaction in which the Company becomes
a
subsidiary of another corporation and in which the stockholders of the Company,
immediately prior to the transaction, will beneficially own, immediately
after
the transaction, shares entitling such stockholders to more than 50% of all
votes to which all stockholders of the parent corporation would be entitled
in
the election of directors (without consideration of the rights of any class
of
stock to elect directors by a separate class vote); or
(b) Upon
the
consummation of (i) a merger or consolidation of the Company with another
corporation where the stockholders of the Company, immediately prior to the
merger or consolidation, will not beneficially own, immediately after the
merger
or consolidation, shares entitling such stockholders to more than 50% of
all
votes to which all stockholders of the surviving corporation would be entitled
in the election of directors (without consideration of the rights of any
class
of stock to elect directors by a separate class vote), or (ii) a sale or
other
disposition of all or substantially all of the assets of the
Company.
7. Proprietary
Information Agreement.
The
terms of the Employee Inventions and Proprietary Rights Assignment Agreement
by
and between the Company and the Executive, dated February 15, 2000 (the
“Proprietary
Information Agreement”),
are
hereby incorporated by reference and are a material part of this
Agreement.
8. Indemnification
by the Executive.
The
Executive shall
indemnify and hold harmless the Company, its directors, officers, stockholders,
agents, and employees against all claims, costs, expenses, liabilities, and
lost
profits, including amounts paid in settlement, incurred by any of them as
a
result of the breach by the Executive of any provision of this
Agreement.
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10. Effect.
This
Agreement shall be binding on and inure to the respective benefit of the
Company
and its successors and assigns and the Executive and his personal
representatives.
11. Entire
Agreement.
This
Agreement constitutes the entire agreement between the parties with respect
to
the matters set forth herein and supercedes all prior agreements and
understandings between the parties with respect to the same.
12. Severability.
The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision.
13. Amendment
and Waiver.
No
provision of this Agreement, including the provisions of this Paragraph,
may be
amended, modified, deleted, or waived in any manner except by a written
agreement executed by the parties.
14. No
Assignment.
Neither
this Agreement nor any interest herein may be assigned by either party without
the consent of the other party.
15. Governing
Law.
This
Agreement shall be construed and enforced in accordance with the laws of
the
State of California, other than its rules with respect to choice of
law.
16. Consent
to Jurisdiction and Venue.
Each of
the parties agrees that any suit, action, or proceeding arising out of this
Agreement may be instituted against it in the District Court of Santa Xxxxx
County, California or in the United States District Court for the Northern
District of California (assuming that such court has subject matter jurisdiction
over such suit, action or proceeding). Each of the parties hereby waives
any
objection that it may have to the venue of any such suit, action, or proceeding,
and each of the parties hereby irrevocably consents to the personal jurisdiction
of any such court in any such suit, action, or proceeding.
17. Counterparts.
This
Agreement may be executed in more than one counterpart, each of which shall
be
deemed an original, and all of which shall be deemed a single
agreement.
18. Headings.
The
headings herein are for convenience only and shall not affect the interpretation
of this Agreement.
[Remainder
of Page Intentionally Left Blank.]
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IN
WITNESS WHEREOF, the parties have executed this Employment Agreement as of
the
day and year first above written.
Xxxxx
Networks, Inc.
By:
/s/ Xxxxxx X.
Xxxxx
Name:
Xxxxxx
X.
Xxxxx
Title:
President and Chief Executive Officer
/s/
Xxxxxx X.
Xxxxx
Xxxxxx
X.
Xxxxx
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