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EXHIBIT 10.7
EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into as of December 18, 1996, by and between
XXXXXXXXXXX XXXXXXXXX (the "Employee") and CBOOKS EXPRESS, INC., a California
corporation (the "Company").
1. Term of Employment.
(a) Basic Rule. The Company agrees to continue the Employee's
employment, and the Employee agrees to remain in employment with the Company,
from the date of this Agreement until the date when the Employee's employment
terminates pursuant to Subsection (b), (c) or (d) below.
(b) Without Cause. Subject to Section 7, the Company may terminate the
Employee's employment at any time and for any reason by giving the Employee 30
days' advance notice in writing. The Employee may terminate his employment by
giving the Company 30 days' advance notice in writing. The Employee's employment
shall terminate automatically in the event of his death. Any waiver of notice
shall be valid only if it is made in writing and expressly refers to the
applicable notice requirement of this Section 1.
(c) Cause. The Company may terminate the Employee's employment at any
time for Cause. For all purposes under this Agreement, "Cause" shall mean (i) a
failure by the Employee to perform any of his duties hereunder, other than a
failure resulting from the Employee's complete or partial incapacity due to
physical or mental illness or impairment, (ii) any other breach by the Employee
of his obligations hereunder, (iii) gross misconduct or fraud or (iv) conviction
of, or a plea of "guilty" or "no contest" to, a felony.
(d) Disability. The Company may terminate the Employee's active
employment due to Disability by giving the Employee 30 days' advance notice in
writing. For all purposes under this Agreement, "Disability" shall mean that the
Employee, at the time notice is given, has failed to perform his duties under
this Agreement for a period of not less than three consecutive months as the
result of his incapacity due to physical or mental illness. In the event that
the Employee resumes the performance of substantially all of his duties
hereunder before the termination of his active employment under this Subsection
(d) becomes effective, the notice of termination shall automatically be deemed
to have been revoked.
(e) Rights Upon Termination. Except as expressly provided in Section 7,
upon the termination of the Employee's employment pursuant to this Section 1,
the Employee shall only be entitled to the compensation, benefits and
reimbursements described in Sections 3, 4 and 5 for the period preceding the
effective date of the termination. The payments under this Agreement shall fully
discharge all responsibilities of the Company to the Employee.
(f) Termination of Agreement. This Agreement shall terminate when all
obligations of the parties hereunder have been satisfied.
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2. Duties and Scope of Employment.
(a) Position. The Company agrees to employ the Employee as its President
for the term of his employment under this Agreement ("Employment").
(b) Obligations. During the term of his Employment, the Employee shall
devote his full business efforts and time to the Company and its subsidiaries
(if any). He shall not render services to any other person or entity without the
express prior approval of the Company's Board of Directors.
3. Salary. During the term of his Employment, the Company agrees to pay
the Employee as compensation for his services a base salary at the annual rate
of $80,000 or at such higher rate as the Company may determine from time to
time. Such salary shall be payable in accordance with the Company's standard
payroll procedures. The annual compensation specified in this Section, together
with any increases in such compensation that the Company may grant from time to
time, is referred to in this Agreement as "Base Compensation."
4. Employee Benefits and Vacation. During the term of his Employment,
the Employee shall be eligible to participate in the employee benefit and group
insurance plans maintained by the Company, subject in each case to the generally
applicable terms and conditions of the plan in question and to the
determinations of any person or committee administering such plan. During the
term of his Employment, the Employee shall also accrue paid vacation in
accordance with the Company's standard vacation policy.
5. Business Expenses. During the term of his Employment, the Employee
shall be authorized to incur necessary and reasonable travel, entertainment and
other business expenses in connection with his duties hereunder. The Company
shall reimburse the Employee for such expenses upon presentation of an itemized
account and appropriate supporting documentation, all in accordance with the
Company's generally applicable policies.
6. Vesting Under Stock Purchase Agreement. Section 3.1(b) of the Stock
Purchase Agreement entered into as of June 12, 1995, by the Company, the
Employee and Xxx Xxxxxxxxx, as amended as of September 26, 1996, shall be
amended further by adding at the end thereof the following new language:
"In the event that the Corporation is subject to a Change in Control, an
additional portion of the Shares issued to the Purchasers under this
Agreement shall become Vested. Such portion shall be the greater of:
(i) 50% of the Shares then remaining vested; or
(ii) the number of Shares that would have become vested during the
12-month period next following the Change in Control.
For purposes of this Agreement, `Change in Control' shall mean:
(i) The consummation of a merger or consolidation of the Corporation with or
into another entity or any other corporate reorganization, if more than
50% of the combined voting power of the continuing or surviving entity's
securities
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outstanding immediately after such merger, consolidation or other
reorganization is owned by persons who were not stockholders of the
Corporation immediately prior to such merger, consolidation or other
reorganization; or
(ii)The sale, transfer or other disposition of all or substantially all of
the Corporation's assets.
A transaction shall not constitute a Change in Control if its sole purpose
is to change the state of the Corporation's incorporation or to create a
holding company that will be owned in substantially the same proportions by
the persons who held the Corporation's securities immediately before such
transaction."
7. Involuntary Termination. The Company shall continue to pay the
Employee's Base Compensation, at the annual rate then in effect, for six months
if the Company terminates the Employee's Employment without his consent for any
reason other than Cause or Disability after the closing of the sale of the
Company's Series B Preferred Stock (the "Closing"). The payments under this
Section 7 shall cease in the event of the Employee's death.
8. Successors.
(a) Company's Successors. This Agreement shall be binding upon any
successor (whether direct or indirect and whether by purchase, lease, merger,
consolidation, liquidation or otherwise) to all or substantially all of the
Company's business and/or assets. For all purposes under this Agreement, the
term "Company" shall include any successor to the Company's business and/or
assets which becomes bound by this Agreement.
(b) Employee's Successors. This Agreement and all rights of the Employee
hereunder shall inure to the benefit of, and be enforceable by, the Employee's
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.
9. Nondisclosure. Prior to the commencement of Employee's Employment,
Employee shall enter into a Confidentiality and Proprietary Rights Agreement
with the Company.
10. Miscellaneous Provisions.
(a) Notice. Notices and all other communications contemplated by this
Agreement shall be in writing and shall be deemed to have been duly given when
personally delivered or when mailed by U.S. registered mail, return receipt
requested and postage prepaid. In the case of the Employee, 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, and all notices shall be directed to
the attention of its Secretary.
(b) Waiver. No provision of this Agreement shall be modified, waived or
discharged unless the modification, waiver or discharge is agreed to in writing
and signed by the Employee and by an authorized officer of the Company (other
than the Employee). No waiver by either party of any breach of, or of compliance
with, any condition or provision of this Agreement
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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.
(c) Whole Agreement; Modifications. No agreements, representations or
understandings (whether oral or written and whether express or implied) which
are not expressly set forth in this Agreement have been made or entered into by
either party with respect to the subject matter hereof. A modification of this
Agreement shall be valid only if it is made in writing and executed by both
parties hereto.
(d) Withholding Taxes. All payments made under this Agreement shall be
subject to reduction to reflect taxes or other charges required to be withheld
by law.
(e) Choice of Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
California (except their provisions governing the choice of law).
(f) Severability. The invalidity or unenforceability of any provision 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.
(g) Arbitration. Any controversy or claim arising out of or relating to
this Agreement, or the breach thereof, shall be settled by arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association, and judgment on the award rendered by the arbitrator may be entered
in any court having jurisdiction thereof. All fees and expenses of the
arbitrator and such Association shall be paid equally by the parties.
(h) No Assignment. The rights of any person to payments 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 (h) shall be void.
(i) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, each of the parties has executed this Agreement, in
the case of the Company by its duly authorized officer, as of the day and year
first above written.
/s/ Xxxxx XxxXxxxxx
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Employee
CBOOKS EXPRESS, INC.
By: /s/ Xxx Xxxxxxxxx
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AMENDMENT TO THE EMPLOYMENT AGREEMENT
THIS AMENDMENT TO THE EMPLOYMENT AGREEMENT is entered into and
effective as of May 30, 1997, by and between XXXXX XXXXXXXXX (the "Employee")
and CBOOKS EXPRESS, INC., a California corporation (the "Company").
WHEREAS, the parties hereto have previously entered into that
certain Employment Agreement by and between the parties hereto dated as December
18, 1996 (the "Prior Agreement") and desire to amend Section 7 of the Prior
Agreement in its entirety with the following provision.
NOW THEREFORE, The Parties hereto hereby agree as follows:
1. Section 7 of the Prior Agreement shall be amended in its entirety to read:
7. Involuntary Termination. The Company shall continue to pay the
Employee's Base Compensation, at the annual rate then in effect, for six months
from the date the Company provides notice to the Employee pursuant to Section 1
if the Company terminates the Employee's Employment without his consent for any
reason other than Cause or Disability. The payments under this Section 7 shall
cease in the event of the Employee's death. For the first three months following
the notice to the Employee pursuant to Section 1, the payments due under this
Section 7 shall be made to the Employee in monthly installments based on the
Employee's Base Compensation for that respective month. For the remaining three
months, the payments due under this Section 7 shall be paid to the Employee in
monthly installments based on the Employee's Base Compensation; provided,
however that the monthly payment due to the Employee for these remaining three
months shall be reduced for that specific monthly period by an amount, if any,
equal to the compensation received for that specific monthly period by the
Employee from an employer (other than the Company) who has hired the Employee
following his termination from the Company.
2. This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
3. Other than as specifically set forth herein, the Prior Agreement shall remain
in full force and effect.
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IN WITNESS WHEREOF, each of the parties has executed this
Amendment to the Employment Agreement, in the case of the Company by its duly
authorized officer, as of the day and year first above written.
/s/ Xxxxx XxxXxxxxx
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Xxxxx XxxXxxxxx
CBOOKS EXPRESS, INC.
By: /s/ Xxx Xxxxxxxxx
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Title: Vice President Engineering
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