EXHIBIT 10.40
EMPLOYMENT AGREEMENT
THIS AGREEMENT made and entered into this 14th day of June, 2000, to be
effective as of July 24, 2000, by and between IntraNet Solutions, Inc., a
Minnesota corporation (hereinafter referred to as "Company") and Xxxxx X.
Xxxxxxxx, residing at 0000 Xxxxxxx Xxxxx, Xxxxx, 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 Vice
President of WorldWide Sales, 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 an initial two (2) year period
commencing on the effective date first above written and terminating on
July 24, 2002, subject, however, to prior termination as provided as Section 7
herein. This Agreement shall automatically renew for a new two (2) year period
on July 24 of each year.
4. Base Salary. In consideration for the Employee's service under this
Agreement, the Company agrees to pay Employee an initial Base Salary at rate of
One Hundred Seventy-Five Thousand Dollars ($175,000).
Annually, Employee will receive an annual performance review and the
Base Salary may be increased at such time in the sole discretion of the Chief
Executive Officer and the Compensation Committee of the Company's Board of
Directors. 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.
5. Bonus. You will be eligible for quarterly and annual bonuses totaling
$125,000 payable at a rate of $25,000 per quarter with a $25,000 annual lump sum
bonus payable at fiscal year end. Each bonus payment is dependent upon
achievement of Company performance and personal objectives as established by the
Chief Executive Officer and the Compensation Committee of the Company's Board of
Directors from time to time.
6. Additional Benefits and Working Facilities.
(a) The Company shall furnish Employee with the equipment, office
space, administrative 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.
(b) The Company shall provide Employee health and dental insurance,
401K, 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 accruing at the
rate of 15 days of vacation per year (prorated based on date of hire) of
employment and otherwise 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 with an initial
pro-ration of days based on date of hire. Any personal days not used within one
year following 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 therefor.
As additional consideration for the Employee's services under this Agreement,
the Company agrees to grant Employee an initial option grant to purchase 300,000
shares of the Company's Common Stock at the fair market value on the date of
this Agreement, vesting as follows:
25,000 shares on January 24, 2001, 200,000 shares, 50,000 of which shall vest on
July 23, 2001 and the remaining 150,000 ratably over 12 quarters at the end of
each quarter, 75,000 shares vesting at nine years or earlier if certain mutually
agreed upon milestones are achieved, All options will be non-qualified stock
options with immediate vesting (i) upon change in control as defined in the
stock option plan or (ii) upon the termination of Employee's employment for
other than Cause after the Company has entered into an agreement to enter into a
change in control.
Employee will have six months to exercise vested options upon termination
7. Events of Termination. This Agreement may be terminated as follows:
(a) On the expiration of the term set forth at Section 3 above;
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 (in its
reasonable discretion) that Employee has: (i) without authority, used or
disclosed confidential information or trade secrets of the Company, which use or
disclosure causes material harm to the Company; (ii) been convicted of or pled
"guilty" or "no contest" to a felony under the laws of the United States or any
state thereof; (iii) committed gross negligence; or (iv) refused or is unable to
perform his duties hereunder, other than as a result of illness or disability,
for a period of ninety (90) days.
At the Company's option, without cause, (i) upon 30 days' written notice to
Employee provided the Employee immediately receives 12 month's severance pay
(Base Salary only) and acceleration of the vesting for the 200,000 portion of
the options noted in Section 6(f) for the twelve month period following the
termination as if employee is employed during such 12 month period (ii) with
notice at anytime after a change in control of the Company (as defined in the
Company's stock option plan), provided Employee immediately receives 12 month's
severance pay (Base Salary only) and full vesting of all options noted in
Section 6(f). If after a change in control (as defined in the Company's stock
option plan), Employee voluntarily resigns his employment for "Good Reason",
then employee shall immediately receive 12 months severance pay (Base Salary
only). For purposes of this agreement, "Good Reason" shall mean that the
Executive (i) Has incurred a material reduction in his authority or
responsibilities as an employee of the Company, including (without limitation) a
material reduction or elimination of his authority to approve expenditures or to
hire, promote, demote or terminate subordinates; (ii) Has incurred a reduction
in his base salary other than pursuant to a Company-wide reduction of salaries
for employees of the Company generally; (iii) Has incurred a material reduction
in his opportunity to earn a cash bonus, other than pursuant to a reduction of
bonus opportunities for executives of the company generally; (iv) Has been
notified that his principal place of work as employee of the company will be
relocated by a distance of 30 miles or more.
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 cause or because of Employee
resignation for other than "Good Reason," Employee shall not, for a period of
twelve (12) 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:
(b) 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
(b) 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.
(c) 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. Employee acknowledges that
Section 7e is adequate compensation for the Section 11.
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:
Xxxxx X. Xxxxxxxx
0000 Xxxxxxx Xxxxx
Xxxxx, XX 00000
(b) If to the Company, by first class mail, postage prepaid, return
receipt requested, addressed as follows:
Xx. Xxxxxx X. Xxxxx, Chief Executive Officer
IntraNet Solutions, Inc.
0000 Xxxxxxx Xxxx
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 through 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:
INTRANET SOLUTIONS, INC.
/s/ Xxxxxx X. Xxxxx /s/ Xxxxx X. Xxxxxxxx
------------------------- ---------------------------
By Xxxxxx X. Xxxxx Xxxxx X. Xxxxxxxx
CEO
