EXHIBIT 10.3
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is entered into by and between
Data Net International, Inc. (the "Company") and Xxx Xxxx Xxxx ("Employee"), as
of the 1st day of July, 1997.
I. EMPLOYMENT.
The Company hereby employs Employee and Employee hereby accepts such
employment, upon the terms and conditions hereinafter set forth, from July 1,
1997, to and including June 30, 2002. This Agreement is subject to renewal
only as set forth in Section VI below.
II. DUTIES.
A. Employee shall serve during the course of her employment as
Secretary and Treasurer of the Company, and shall have such other duties and
responsibilities as the Chief Executive Officer of the Company shall
determine from time to time.
B. Employee agrees to devote substantially all of her time, energy and
ability to the business of the Company. Nothing herein shall prevent
Employee, upon approval of the Board of Directors of the Company, from
serving as a director or trustee of other corporations or businesses which
are not in competition with the business of the Company as set forth in
Section IV hereof or in competition with any present or future affiliate of
the Company. Nothing herein shall prevent Employee from investing in real
estate for her own account or from becoming a partner or a stockholder in any
corporation, partnership or other venture not in competition with the
business of the Company as set forth in Section IV hereof or in competition
with any present or future affiliate of the Company.
C. During the term of this Agreement, Employee shall report to the
Chief Executive Officer of the Company or his designee.
III. COMPENSATION.
A. The Company will pay to Employee a base salary at the annual rate of
$40,000.00 up to and including September 30, 1997 and thereafter at the
annual rate of $72,000.00 during the remaining term of this Agreement. Such
salary shall be earned monthly and shall be payable in periodic installments
no less frequently than monthly in accordance with the Company's customary
practices. Amounts payable shall be reduced by standard withholding and other
authorized deductions. The Company may in its discretion increase Employee's
salary but it may not reduce it during the term of this agreement.
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B. STOCK OPTIONS. The Company shall grant to Employee, concurrent with
the execution of this Agreement, options to purchase 2,500 shares of the
Company's Common Stock (the "Options"), exercisable at a per share exercise
price of $29.55 per share, subject to the vesting requirements set forth in
the Option Certificate to be signed by Employee, a copy of which is attached
hereto and made a part hereof.
C. WELFARE BENEFIT PLANS. Employee and/or her family, as the case may
be, shall be eligible for participation in and shall receive all benefits
under welfare benefit plans, practices, policies and programs provided by the
Company (including, without limitation, medical, prescription, dental,
disability, salary continuance, employee life, group life, accidental death
and travel accident insurance plans and programs) to the extent applicable
generally to other peer executives of the Company. Employee will be
compensated for up to ten sick days per year.
D. EXPENSES. Employee shall have access to an expense account in the
sum of $20,400.00 per year. Employee shall be entitled to withdraw from the
expense account to pay for all reasonable employment expenses incurred by her
in accordance with the policies, practices and procedures as in effect
generally with respect to other peer executives of the Company.
E. FRINGE BENEFITS. Employee shall be entitled to fringe benefits in
accordance with the plans, practices, programs and policies as in effect
generally with respect to other peer executives of the Company.
F. VACATION. Employee shall be entitled to two weeks paid vacation per
year, in accordance with the plans, policies, programs and practices as in
effect generally with respect to other peer executives of this Company.
G. CAR ALLOWANCE. Employee shall be entitled to a car allowance in the
sum of $500.00 per month.
H. The Company reserves the right to modify, suspend or discontinue any
and all of the above plans, practices, policies and programs at any time
without recourse by Employee so long as such action is taken generally with
respect to other similarly situated peer executives and does not single out
Employee.
IV. TERMINATION.
A. DEATH OR DISABILITY. Employee's employment shall terminate
automatically upon Employee's death. If the Company determines in good faith
that the Disability of Employee has occurred (pursuant to the definition of
Disability set forth below), it may give to Employee written notice in
accordance with Section XIX of its intention to terminate effective on the
30th day after receipt of such notice by Employee, provided that, within the
30 days after such receipt, Employee shall not have returned to full-time
performance of her duties. For purposes of this Agreement, "disability"
shall mean a physical or mental impairment which substantially limits a
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major life activity of Employee and which renders Employee unable to perform
the essential functions of her position, even with reasonable accommodation
which does not impose an undue hardship on the Company. The Company reserves
the right, in good faith, to make the determination of disability under this
Agreement based upon information supplied by Employee and/or her medical
personnel, as well as information from medical personnel (or others) selected
by the Company or its insurers. "Incapacity" as used herein shall be limited
only to such Disability which substantially prevents the Company from
availing itself of the services of Employee.
B. CAUSE. The Company may at any time terminate Employee's
employment for Cause. For purposes of this Agreement, "cause" shall mean
that the Company, acting in good faith based upon the information then known
to the Company, determines that Employee has engaged in or committed:
willful misconduct; gross negligence; theft, fraud or other illegal conduct;
refusal or unwillingness to perform her duties; sexual harassment; conduct
which reflects adversely upon, or making any remarks disparaging of, the
Company, its Board officers, directors, advisors or employees or its
affiliates or subsidiaries; insubordination; any willful act that is likely
to and which does in fact have the effect of injuring the reputation,
business or a business relationship of the Company; violation of any
fiduciary duty; violation of any duty of loyalty; and breach of any term of
this Agreement.
C. OTHER THAN CAUSE OR DEATH OR DISABILITY. The Company may
terminate Employee's employment at any time, with or without cause, upon
written notice.
D. OBLIGATIONS OF THE COMPANY UPON TERMINATION.
1. DEATH OR DISABILITY. If Employee's employment is terminated
by reason of Employee's Death or Disability, this Agreement shall terminate
without further obligations to Employee or her/her legal representatives
under this Agreement, other than for (a) payment of the sum of (i) employees
annual base salary through the date of termination to the extent not
heretofore paid and (ii) any compensation previously deferred by Employee
(together with any accrued interest or earnings thereon) and any accrued
vacation pay, in each case to the extent not theretofore paid (the sum of the
amounts described in clauses (i) and (ii) shall be hereinafter referred to as
the "Accrued Obligations"), which shall be paid to Employee or her estate or
beneficiary, as applicable, in a lump sum in cash within 30 days of the date
of termination; and (b) payment to Employee or her estate or beneficiary, as
applicable, any amounts due pursuant to the terms of any applicable welfare
benefit plans.
2. CAUSE. If Employee's employment is terminated by the Company
for Cause, this Agreement shall terminate without further obligations to
Employee other than for the timely payment of Accrued Obligations. If it is
subsequently determined that the Company did not have Cause for termination
under this Section IV(D)(2), then the Company's decision to terminate shall
be deemed to have been made under Section IV(D)(3) and the amounts payable
thereunder shall be the only amounts Employee may receive for her termination.
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3. OTHER THAN CAUSE OR DEATH OR DISABILITY. If the Company
terminates Employee's employment for other than Cause of Death or Disability,
this Agreement shall terminate without further obligations to Employee other
than for the timely payment of Accrued Obligations.
4. EXCLUSIVE REMEDY. Employee agrees that the payments
contemplated by this Agreement shall constitute the exclusive and sole remedy
for any termination of her employment and Employee covenants not to assert or
pursue any other remedies, at law or in equity, with respect to any
termination of employment.
V. ARBITRATION.
Any controversy or claim arising out of or relating to this Agreement,
its enforcement or interpretation, or because of an alleged breach, default
or misrepresentation in connection with any of its provisions, shall be
submitted to arbitration, to be held in Los Angeles County, California in
accordance with California Civil Procedures Code Sections 1282-1284.2. In
the event either party institutes arbitration under this Agreement, the party
prevailing in any such litigation shall be entitled, in addition to all other
relief, to reasonable attorneys' fees relating to such arbitration. The non
prevailing party shall be responsible for all costs of the arbitration,
including but not limited to, the arbitration fees, court reporter fees, etc.
VI. RENEWAL.
This Agreement shall be automatically renewed for consecutive periods
ofone year, each after the expiration of the stated term, unless one party or
the other gives notice, in writing, at least thirty (30) days prior to the
expiration of this Agreement (or any renewal) of their desire to terminate
the Agreement or modify its terms.
VII. ANTI-SOLICITATION.
Employee promises and agrees that during the term of this Agreement or
renewal in accordance with Section VI above, she will not influence or
attempt to influence customers of the Company or any of its present or future
subsidiaries or affiliates, either directly or indirectly to divert their
business to any individual, partnership, firm, corporation or other entity
then in competition with the business of the Company, or any subsidiary or
affiliate of the Company.
VIII. JOINING FORMER COMPANY EMPLOYEES.
Employee promises and agrees that for one year following her termination
of employment, other than pursuant to Section IV(A) or (C) above or
expiration of this Agreement, she will not enter business or work with any
person who was employed with the Company, and who earned annually $25,000 or
more as a Company employee during the last six months of her or her own
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employment, in any business, partnership, firm, corporation or other entity
then in competition with the business of the Company or any subsidiary or
affiliate of the Company.
IX. SOLICITING EMPLOYEES.
Employee promises and agrees that she will not, for a period of one year
following termination of her employment in accordance with Section VI above,
directly or indirectly solicit any of the Company employees who earned
annually $25,000 or more as a Company employee during the last six months of
her or her own employment to work for any business, individual, partnership,
firm, corporation, or other entity then in competition with the business of
the Company or any subsidiary or affiliate of the Company.
X. CONFIDENTIAL INFORMATION.
A. Employee, in the performance of Employee's duties on behalf of the
Company, shall have access to, receive and be entrusted with confidential
information, including but in no way limited to development, marketing,
organizational, financial, management, administrative, production,
distribution and sales information, data, specifications and processes
presently owned or at any time in the future developed, by the Company or its
agents or consultants, or used presently or at any time in the future in the
course of its business that is not otherwise part of the public domain
(collectively, the "Confidential Material"). All such Confidential Material
is considered secret and will be available to Employee in confidence. Except
in the performance of duties on behalf of the Company, Employee shall
disclose or use any such Confidential Material, unless such Confidential
Material ceases (through no fault of Employee's) to be confidential because
it has become part of the public domain. All records, files, drawings,
documents, equipment and other tangible items, wherever located, relating in
any way to the Confidential Material or otherwise to the Company's business,
which Employee prepares, uses or encounters, shall be and remain the
Company's sole and exclusive property and shall be included in the
Confidential Material. Upon termination of this Agreement by any means, or
whenever requested by the Company, Employee shall promptly deliver to the
Company any and all of the Confidential Material, not previously delivered to
the Company, that may be or at any previous time has been in Employee's
possession or under Employee's control.
B. Employee hereby acknowledges that the sale or unauthorized use or
disclosure of any of the Company's Confidential Material by any means
whatsoever and any time before, during or after Employee's employment with
the Company shall constitute unfair Competition. Employee agrees that
Employee shall not engage in Unfair Competition either during the time
employed by the Company or any time thereafter.
XI. SUCCESSORS.
A. This Agreement is personal to Employee and shall not, without the
prior written consent of the Company, be assignable by Employee.
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B. This Agreement shall inure to the benefit of and be binding upon the
Company and its successors and assigns and any such successor or assignee
shall be deemed substituted for the Company under the terms of this Agreement
for all purposes. As used herein, "successor" and "assignee" shall include
any person, firm, corporation or other business entity which at any time,
whether by purchase, merger or otherwise, directly or indirectly acquires the
stock of the Company or to which the Company assigns this Agreement by
operation of law or otherwise.
XII. WAIVER.
No waiver of any breach of any term or provision of this Agreement shall
be construed to be, nor shall be, a waiver of any other breach of this
agreement. No waiver shall be binding unless in writing and signed by the
party waiving the breach.
XIII. MODIFICATION.
This Agreement may not be amended or modified other than by a written
agreement executed by Employee and an officer of the Company following
authorization by the Board of Directors of the Company.
XIV. SAVING CLAUSE.
If any provision of this Agreement or the application thereof is held
invalid, the invalidity shall not effect other provisions or applications of
the Agreement which can be given effect without invalid provisions or
application and to this end the provisions of this Agreement are declared to
be severable.
XV. COMPLETE AGREEMENT.
This Agreement constitutes and contains the entire agreement and final
understanding concerning Employee's employment with the Company and the other
subject matters addressed herein between the parties. It is extended by the
parties as a complete and exclusive statement of the terms of their
agreement. It supersedes and replaces all prior negotiations and all
agreements proposed or otherwise, whether written or oral, concerning the
subject matter hereof. Any representation, promise or agreement, not
specifically included in this Agreement shall not be binding upon or
enforceable against either party. This is a fully integrated agreement.
XVI. GOVERNING LAW.
This Agreement shall be deemed to have been executed and delivered within
the State of California, and the rights and obligations of the parties
hereunder shall be construed and enforced in accordance with and governed by,
by the laws of the State of California without regard to principles of
conflict of laws.
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XVII. CONSTRUCTION.
Each party has cooperated in the drafting and preparation of this
Agreement. Hence, in any construction to be made of this Agreement, the same
shall not be construed against any party on the basis that the party was the
drafter. The captions of this Agreement are not part of the provisions
hereof and shall have no force or effect.
XVIII.NOTICES.
All notices, requests, demands and other communications hereunder shall
be in writing and shall be deemed to have been duly given if delivered or if
mailed by registered or certified mail, postage prepaid, addressed as follows:
If to Employee: Xxx Xxxx Xxxx
00000 X. Xxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
If to Company: Data Net International, Inc.
0000 Xxxx Xxxx Xxxxx
Xxxx xx Xxxxxxxx, XX 00000
Either party may change the address at which notice shall be given by written
notice given in the above manner.
XIX. EXECUTION.
This Agreement is being executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument. Photographic copies of such signed counterparts
may be used in lieu of the original for any purpose.
XX. LEGAL COUNSEL.
Employee and the Company recognize that this is a legally binding
contract and acknowledge and agree that they have had the opportunity to
consult with legal counsel of their choice.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
Data Net International, Inc.
By
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Its Chief Executive Officer Employee
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OPTION CERTIFICATE
(NON-STATUTORY STOCK OPTION)
THIS IS TO CERTIFY that Data Net International, Inc., a California
corporation (the "COMPANY"), has granted to the person named below ("OPTIONEE")
a non-statutory stock option (the "OPTION") to purchase shares of the Company's
Common Stock (the "SHARES") under its 1997 Stock Plan and upon the terms and
conditions as follows:
Name of Optionee: Xxx Xxxx Yang
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Address of Optionee: 00000 X. Xxxxxxxxx Xxxxx
--------------------------------------
Xxxxxx, XX 00000
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Number of Shares: 2,500
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Option Exercise Price: $ 29.55 per share
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Date of Grant: July 1, 1997
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Option Expiration Date: July 1, 2007
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EXERCISE SCHEDULE: The Option shall become exercisable as follows:
One quarter (1/4) of the options shall vest on July 1, 1997. The remaining
three quarters (3/4) shall vest on the first day of each calendar month for
forty seven (47) months thereafter in forty seven (47) equal installments of
one-forty eighth (1/48) of the remaining shares rounded down to the nearest
whole share, and all remaining shares shall vest on July 1, 2001; provided,
however, that if the employment of Optionee pursuant to that certain Employment
Agreement between Optionee and the Company dated July 1, 1997 is terminated
without cause by the Company, then all unvested shares shall vest immediately
upon such termination.
SUMMARY OF OTHER TERMS: This Option is defined in the Stock Option
Agreement (Non-statutory Stock Option) (the "OPTION AGREEMENT") which is
attached to this Option Certificate (the "CERTIFICATE") as Annex I. This
Certificate summarizes certain of the provisions of the Option Agreement for
your information, but is not complete. Your rights are governed by the Option
Agreement, NOT by this summary. The Company strongly suggests that you
carefully review the full Option Agreement prior to signing this Certificate or
exercising the Option.
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Among the terms of the Option Agreement are the following:
EMPLOYMENT: The Option Agreement does not obligate the Company to retain
you for any period of time. Unless otherwise agreed IN WRITING, the Company
reserves the right to terminate any employee at any time, with or without
cause. See Section 5(d) of the Option Agreement.
TERMINATION OF EMPLOYMENT: While the Option terminates on the Option
Expiration Date, it will terminate earlier if you cease to be employed by the
Company. If your employment ends due to death or permanent disability, the
Option terminates six months after the date of death or disability, and is
exercisable during such six-month period as to the portion of the Option
which had vested prior to the date of death or disability. In all other
cases, the Option terminates 30 days after the date of termination of
employment, and is exercisable during such time period as to the portion of
the Option which had vested prior to the date of termination of employment;
PROVIDED, HOWEVER, if you are terminated "for cause," the Option will
terminate 5 days after the date of termination of your employment and is
exercisable during such time period as to the portion of the Option which had
vested prior to the date of termination of employment. See Section 5 of the
Option Agreement.
TRANSFER: The Option is personal to you, and cannot be sold,
transferred, assigned or otherwise disposed of to any other person, except on
your death. See Section 15(d) of the Option Agreement.
EXERCISE: You can exercise the Option (once it is exercisable), in whole
or in part, by delivering to the Company a Notice of Exercise identical to
Exhibit "A" attached to the Option Agreement, accompanied by payment of the
Exercise Price for the Shares to be purchased. The Company will then issue a
certificate to you for the Shares you have purchased. You are under no
obligation to exercise the Option. See Section 4 of the Option Agreement.
MARKET STAND-OFF: The Option provides that in connection with any
underwritten public offering by the Company, you may not sell or transfer any
of your Shares without the prior written consent of the Company or its
underwriters for a period of up to 180 days after the effective date of the
offering. See Section 6(a) of the Option Agreement.
ADJUSTMENTS UPON RECAPITALIZATION: The Option contains provisions which
affect your rights in the event of stock splits, stock dividends, mergers and
other major corporate reorganizations. See Section 7 of the Option Agreement.
WAIVER: By signing this Certificate, you will be agreeing to all of the
terms of the Option Agreement, including those not summarized in this
Certificate. You will waive your rights to options or stock which may
otherwise have been promised to you. See Section 8 of the Option Agreement.
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WITHHOLDING: The Company may require you to make any arrangements
necessary to insure the proper withholding of any amount of tax, if any,
required to be withheld by the Company as a result of the exercise of the
Option. See Section 13 of the Option Agreement.
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