EXHIBIT 10.38
EMPLOYMENT AGREEMENT
THIS AGREEMENT made and entered into on this 1st day of October 2001,
to be effective as of November 1, 2001, by and between Stellent, Inc., a
Minnesota corporation (hereinafter referred to as "Company") and Xxxx Xxxxxxx
residing at 00000 Xxxxxxx Xxx. X., Xxxxxxxxxx, XX 00000 (hereinafter referred to
as "Employee").
WITNESSETH:
WHEREAS, the Company desires to assure itself of the services of
Employee; and
WHEREAS, Employee desires to be employed by the Company.
NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, the parties hereto agree as follows:
1. Employment. The Company agrees to employ Employee and Employee agrees
to accept such employment upon the terms and conditions hereinafter set forth.
2. Duties. Employee shall serve in an executive capacity as the President
and Chief Executive Officer, of the Company performing such services as the By
Laws provide, and as the Company's Board of Directors may, from time to time,
determine.
3. Terms. This Agreement shall be for a six month period commencing on the
effective date first above written and then automatically renewing on April 1,
2002 for one year, ultimately terminating on March 31, 2003, subject, however,
to prior termination as provided as Section 7 herein.
4. Base Salary. In consideration for the Employee's service under this
Agreement, the Company agrees to pay Employee a Base Salary at a rate set
annually - after the end of each prior fiscal year- by the Board of Directors.
Employee will receive an annual performance review after the end of each fiscal
year. The Base Salary shall be subject to any withholding required by law and
shall be payable in accordance with the normal payroll practices of the Company.
The current Base Salary is listed in the addendum to this agreement.
5. Bonus. Employee will be eligible for quarterly and annual bonuses
according to a plan determined annually - after the end of each prior fiscal
year- by the Board of Directors. The current Bonus plan is set forth in the
addendum to this agreement.
6. Additional Benefits and Working Facilities.
(a) The Company shall furnish Employee with the equipment, office
space, secretarial support and such other items related to his employment that
Employee determines are necessary, useful, and appropriate to him for the duties
required by his employment. The Company shall reimburse for reasonable travel,
entertainment and other business related expenses, including but not limited to,
conference membership fees and cellular phone costs and charges, you incur on
behalf of the Company.
(b) The Company shall provide Employee health and dental insurance,
401(k), and any other benefits included in its corporate benefit program. In
addition, Employee shall have the benefit of such other employee benefit plans
that the Company may, from time to time, establish and in which employee would
be entitled to participate pursuant to the terms thereof. COMPANY, AT ITS SOLE
DISCRETION, SHALL HAVE THE RIGHT TO CHANGE OR DISCONTINUE SUCH PLANS.
(c) Employee shall be entitled to annual paid vacation consistent with
the Company's existing vacation policy, and as amended from time to time.
(d) In addition to Section 6(c) above, Employee shall accrue personal
days at the rate of six (6) personal days per year of employment. Any personal
days not used within the year of accrual shall lapse.
(e) The Company shall reimburse Employee for all reasonable expenses
incurred by Employee in connection with the Company's business,
upon presentation of itemized statements therefore.
(f) Employee shall be entitled to an automobile allowance of $700.00
per month payable as a taxable fringe benefit and in accordance
with the regular payroll practices of the Company.
(g) As additional consideration for the Employee's services under this
Agreement, the Company has granted Employee a stock option. The
details of this option grant are set forth in the attached
addendum.
7. Events of Termination. This Agreement may be terminated as follows:
(a) On the expiration of the term set forth at Section 3 above;
(b) By mutual written agreement of the parties;
(c) Upon Employee's death;
(d) Without notice, by the Company, for cause. "Cause" for purposes
hereof shall mean a determination by the Company's Board of Directors
that Employee has: (i) committed an illegal or dishonest act that
directly reflects upon his fitness to act as President and Chief
Executive Officer of the Company; (ii) breached his fiduciary
obligations to the Company; or (iii) refused or is unable to perform
his duties
hereunder, other than as a result of illness or disability, for a period of one
hundred twenty (120) days; or
(e) At the Company's option, without cause, (i) upon 30 days' written
notice to Employee provided the Employee receives 6 months
severance pay (Base Salary only), or (ii) with notice in the event
of a change in control of the Company (as defined in the Company's
stock option plan) and Employee's employment is terminated,
provided Employee immediately receives 6 months severance pay (Base
Salary only).
8. Inventions.
(a) "Inventions," as used in this Section 8, means any discoveries,
improvements, and ideas (whether or not they are in writing or reduced to
practice) or works of authorship (whether or not they can be patented or
copyrighted) that the Employee makes, authors, or conceives (either alone or
with others) and that:
(i) concern directly the Company's business or the Company's
present or demonstratably anticipated future research or development;
(ii) result from any work that Employee performs for the Company;
(iii) use the Company's equipment, supplies, facilities, or trade
secret information; or
(iv) the Employee develops during the time the Employee is performing
employment duties for the Company.
(b) Employee agrees that all inventions made by the Employee during the
term of this Agreement will be the Company's sole and exclusive property. That
Employee will, with respect to any invention:
(i) keep current, accurate, and complete records, which will belong
to the Company and be kept and stored on the Company's premises while
the Employee is employed by the Company;
(ii) promptly and fully disclose the existence and describe the
nature of the Invention to the Company in writing (and without
request);
(iii) assign (and the Employee does hereby assign) to the Company all
of his rights to the Invention, any applications he makes for patents
or copyrights in any country, and any patents or copyrights granted
to him in any country; and
(iv) acknowledge and deliver promptly to the Company any written
instruments, and perform any other acts necessary in the Company's
opinion to preserve property rights in the Invention against
forfeiture, abandonment, or loss
and to obtain and maintain letters patent and/or copyrights on the
invention and to vest the entire right to title the Invention in the
Company.
The requirements of this subsection 8(b) do not apply to any Invention for which
no equipment or trade secret information of the Company was used which was
developed on the Employee's own time and: (1) which does not relate directly to
the Company's business or to the Company's actual or demonstrably anticipated
research or development; or (2) which does not result in any way from any work
the Employee performed for the Company. Except as previously disclosed to the
Company in writing, prior to the commencement of employment hereunder, the
Employee does not have and will not assert, any claims to or rights under any
discoveries, improvements, ideas or works of authorship which are within the
scope of the Company's business. With respect to obligations performed by the
Employee under this subsection 8(b) following termination of employment, the
Company will pay the Employee reasonable hourly compensation (consistent with
the last Base Salary) and will pay or reimburse all reasonable out-of-pocket
expenses.
9. Confidential Information.
(a) "Confidential Information," as used in this Section 9, means
information that is not generally known and that is proprietary. Any
information, that the Employee reasonably should consider Confidential
Information, or the Company designates as Confidential Information, will be
presumed to be Confidential Information (whether the Employee or others
originated it and regardless of how the Employee obtained it).
(b) Except as specifically permitted by the Company's Board of
Directors or by written Company policies, the Employee will never, either during
or after his employment by the Company, use Confidential Information for any
purpose other than the business of the Company or disclose it to any person who
is not also an employee of the Company. When the Employee's employment with the
Company ends, the Employee will promptly deliver to the Company all records and
any compositions, articles, devices, apparatus and other items that disclose,
describe, or embody Confidential Information including all copies, reproductions
and specimens of the Confidential Information in the Employee's possession,
regardless of who prepared them and will promptly deliver any other property of
the Company in the Employee's possession, whether or not Confidential
Information.
10. Conflicts of Interest. The Employee agrees that he will not, directly or
indirectly, transact business with the Company personally, or as agent, owner,
partner or shareholder of any other entity; provided, however, that any such
transaction may be entered into if knowingly approved by all of the
disinterested members of the Company's Board of Directors.
11. Non-Competition Agreement. During the full term hereof, and on the
termination of Employee's employment for any reason, Employee shall not, for a
period of six (6) months from the date of such termination:
(a) directly or indirectly, anywhere in the United States, own, manage,
operate or control, or participate in the ownership, management,
operation or control of, or be connected with, or have any interest in,
as a stockholder, director, officer, employee, agent, advisor,
consultant, partner, or otherwise: (i) any "business" which
manufactures, produces, sells, markets or distributes any products or
services that are being manufactured, produced, marketed, sold or
distributed by Company as of the date of such termination; or (ii) any
other business which is competitive with any business currently or
hereafter conducted by Company as of the date of such termination;
provided, however, that nothing contained herein shall prohibit
Employee from owning less than 3% of any class of securities listed on
a national securities exchange or traded publicly in the
over-the-counter market. Employee acknowledges and agrees that the
provisions of this Section are both reasonable and valid in
geographical and temporal scope and in all other respects. If any of
the provisions of this Section are held to be unenforceable because of
the scope, duration or area of its applicability, the court making such
determination shall have the power to modify such scope, duration or
area or all of them, and such provision shall then be applicable in
such modified form.
(b) either directly or indirectly, alone or with others, solicit or
assist anyone else in the solicitation of, any of the employees employed by
Company at the time of Employee's termination of employment with Company, to
terminate their employment with Company and to become employed by any business
enterprise with which the Employee may then be associated, affiliated or
connected.
Employee will, prior to accepting employment, consulting or similar contract or
agreement with any third party, inform that party of this Agreement and provide
that party with a copy of this Agreement.
12. No Adequate Remedy. Employee understands that if the Employee fails to
fulfill the Employee's obligations under Section 8, 9, 10 or 11 of this
Agreement, the damages to the Company would be very difficult to determine.
Therefore, in addition to any other rights or remedies available to the Company
at law, in equity, or by statute, the Employee thereby consents to the specific
enforcement of the provisions of those Sections by the Company through an
injunction or restraining order issued by an appropriate court.
13. Additional Documents. The parties shall each, without further
consideration, execute such additional documents as may be reasonably
required in order to carry out the purpose and intent of this Agreement and to
fulfill the obligation of the respective parties hereunder.
14. Waiver. Any waiver of any term or condition of this Agreement shall not
operate as a waiver of any other breach of such term or condition, or of any
other term or condition, nor shall any failure to enforce a provision hereof
operate as a waiver of such provision or of any other provision hereof.
15. Notices. All communications with respect to this Agreement shall be
considered given if delivered or sent as follows:
(a) If to Employee, by first class certified mail, postage prepaid,
return receipt requested, addressed as follows:
Xxxx Xxxxxxx
00000 Xxxxxxx Xxx. X.
Xxxxxxxxxx, XX 00000
(b) If to the Company, by first class mail, postage prepaid, return
receipt requested, addressed as follows:
Xx. Xxxxxx X. Xxxxx
Chairman of the Board
Stellent, Inc.
0000 Xxxxxx Xxxxxxxx Xxxxx
Xxxx Xxxxxxx, XX 00000
or mailed to such other address as the parties hereto may designate by notice
given in like manner. Notice shall be effective three (3) calendar days after
mailing or upon personal delivery.
16. Entire Agreement. This Agreement, together with all exhibits and writings
required or contemplated hereby, constitutes the entire Agreement between the
parties hereto with respect to the transaction contemplated hereby and no party
shall be liable or bound to another in any manner by and warranties,
representations, or guarantees, except as specifically set forth herein.
17. Modification, Amendments and Waivers. The parties hereto at any time may, by
written Agreement: (i) extend the time for the performance of any of the
obligations or other acts of the parties hereto; (ii) waive any inaccuracies in
the representations and warranties contained in this Agreement or in any
exhibit, schedule, letter, certificate, or other instrument delivered pursuant
hereto; (iii) waive compliance with any of the covenants or agreements contained
in this Agreement; or (iv) make any other modifications of this Agreement. This
Agreement shall not be altered or otherwise amended except pursuant to an
instrument in writing executed by both parties hereto.
18. Severability. No finding or adjudication that any provision of this
Agreement is invalid or unenforceable shall affect the validity or
enforceability of the remaining provision herein, and this Agreement shall be
construed as though such invalid or unenforceable provisions were omitted.
19. Miscellaneous.
(a) The terms and conditions of this Agreement shall inure to the
benefit of and be binding upon the parties hereto and the respective legal
representatives, successors, and assigns of both of the parties hereto.
(b) This Agreement is made pursuant to and shall be construed under the
laws of the State of Minnesota.
(c) This Agreement shall be executed in two (2) counterparts, but each
of these counterparts shall, for all purposes, be deemed to be an original, but
both counterparts shall together constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement effective
the date set forth above.
EMPLOYER: EMPLOYEE:
STELLENT, INC.
/s/ Xxxxxx X. Xxxxx /s/ Xxxx Xxxxxxx
------------------------- ---------------------------
By: Xxxxxx X. Xxxxx Xxxx Xxxxxxx
Chairman of the Board
ADDENDUM TO EMPLOYMENT AGREEMENT
This is an addendum to the Employment Agreement, effective November 1, 2001, by
and between Stellent, Inc., a Minnesota corporation (hereinafter referred to as
"Company" and Xxxx Xxxxxxx (hereinafter referred to as "Employee").
1. For purposes of the Employment Agreement the annual Base
Salary is $240,000 annually.
2. For purposes of the Employment Agreement the Bonus Plan is
$160,000 annually, payable at a rate of $25,000 per quarter
($50,000 for the balance of Fiscal Year 2002) with a $60,000
(5/12th or $25,000 for the balance of Fiscal Year 2002) annual
lump sum bonus payable at fiscal year end. Each quarterly
bonus payment is payable at 100% if revenue and earnings meet
consensus street expectations, or the Company's stated
internal revenue and earnings objectives, whichever are
higher. No bonus will be paid out in quarters where
street/internal revenue and earnings expectations are not met.
The annual bonus will be based upon objectives as determined
from time to time by the Company's Board of Directors.
3. For purposes of the Employment Agreement the Stock Option
Grant is as follows: The Company has granted Employee a stock
option to purchase 75,000 shares of the Company's Common Stock
at the fair market value on October 1, 2001 vesting one-third
on March 31, 2002, one-third on March 31, 2003, and the
remaining one-third on March 31, 2004. Options will vest
immediately upon Change in Control and Employee is terminated
within one year of Change in Control.
EMPLOYER: EMPLOYEE:
STELLENT, INC.
/s/ Xxxxxx X. Xxxxx /s/ Xxxx Xxxxxxx
-------------------------- --------------------------
By: Xxxxxx X. Xxxxx Xxxx Xxxxxxx
Chairman of the Board
