1
Exhibit 10.22
97
2
MACROMEDIA, INC.
EMPLOYMENT AGREEMENT
This Agreement is made effective as of the 17th day of February 1997,
between Macromedia, Inc., a Delaware corporation ("Macromedia"), and Xxxx X.
Xxxxxxx, Xx. ("Executive").
WHEREAS, Macromedia is engaged in the business of developing and
marketing certain computer software; and
WHEREAS, Macromedia desires to secure the services of Executive as
Chief Financial Officer, and Executive desires to perform such services for
Macromedia, on the terms and conditions as set forth herein;
NOW, THEREFORE, in consideration of the premises and of the covenants
and agreements set forth below, it is mutually agreed as follows:
1. Duties. Executive shall have such duties as the President of
Macromedia may from time to time prescribe consistent with Executive's position
as Chief Financial Officer of Macromedia. Executive shall devote his full
time, attention, energies and best efforts to the business of Macromedia based
in San Francisco, California, and shall not during his period of employment as
Chief Financial Officer of Macromedia engage in any other business activity,
whether or not such business activity is pursued for gain, profit of other
pecuniary advantage. This Section 1 shall not be construed as preventing
Executive from investing his assets in such form and manner as will not require
any substantial services on his part in the operation of the affairs of the
business entities in which such investments are made.
2. Compensation. Macromedia shall pay and Executive shall
accept, as full consideration for the services to be rendered hereunder,
compensation consisting of the following:
2.1 Base Salary. $200,000 per year in base salary,
payable in installments twice per month, with such deductions or withholdings
which are required by law.
2.2 Bonus. A target bonus of $100,000 per year based on
attainment of 100% of the Macromedia Executive Bonus Plan objectives, as
established each year by the Board of Directors. The Macromedia Executive
Bonus Plan objectives for fiscal 1997 have been provided to Executive. For the
balance of fiscal 1997, Executive will be paid a prorata bonus based on the
target bonus amount.
2.3 Stock Options. Macromedia will grant Executive
non-qualified options to purchase 200,000 shares of Macromedia common stock
under the Macromedia 1992 Equity Incentive Plan. The exercise price for such
options will be the fair market value of Macromedia common stock on the date of
grant by the Compensation Committee. Because Macromedia is in the process of
obtaining stockholder approval for an increase in the number of shares
available under the 1992 Equity Incentive Plan, options to purchase 100,000 of
the 200,000 shares will be
98
3
subject to the approval of such increase by the stockholders, which is
currently expected to occur on March 3, 1997. The options will have a maximum
term of ten (10) years, subject to earlier termination 180 days after the date
of Executive's termination of service with Macromedia or any successor entity.
The options will vest as to 25% of the option shares (50,000 shares) at the end
of twelve (12) full months of continuous service with Macromedia. Thereafter
the options will vest in a series of thirty-six (36) successive equal monthly
installments over Executive's period of service with Macromedia, with each
monthly installment equal to 1/48th of the total number of shares in the
options (4,166,67 shares) on the seventeenth day of each month thereafter over
the thirty-six (36) month period. For purposes of such options, the Executive
will be deemed to continue in service with Macromedia for so long as he renders
services as an employee, director or independent consultant to Macromedia or
any parent or subsidiary corporation. Macromedia shall register the shares
issuable under the options on a Form S- 8 registration statement prior to the
initial vesting date thereunder and shall keep such registration statement in
effect for the entire period the options thereafter remain outstanding. The
stock options shall be evidenced by a stock option agreement which shall
contain the terms in effect for employee nonqualified stock options granted
under the Macromedia 1992 Equity Incentive Plan.
2.4 Indemnification. In the event Executive is made, or
threatened to be made, a party to any legal action or proceeding, whether civil
or criminal, by reason of the fact that Executive is or was a director or
officer of Macromedia or serves or served any other corporation fifty percent
(50%) or more owned or controlled by Macromedia in any capacity at Macromedia's
request, Executive shall be indemnified by Macromedia, and Macromedia shall pay
Executive's related expenses when and as incurred, all to the fullest extent
permitted by law.
3. Benefits. Executive shall be entitled to and shall receive
such pension, profit sharing and fringe benefits such as hospitalization,
medical, life and other insurance benefits, vacation, sick pay and short-term
disability as the Board of Directors of Macromedia may, from time to time,
determine to provide for the key Executives of Macromedia.
4. Executive Proprietary Information and Inventions Agreement.
As part of the consideration between the parties for this Agreement, Executive
hereby agrees to enter into Macromedia's Proprietary Information and Inventions
Agreement contemporaneously with the execution of this Agreement.
5. Termination. Executive's employment as Chief Financial
Officer of Macromedia shall terminate immediately upon Executive's receipt of
written notice by Macromedia, upon Macromedia's receipt of written notice by
Executive, or upon Executive's death.
6. Surrender of Records and Property. At the time of termination
of Executive's employment, Executive shall deliver promptly all equipment,
records, manuals, books, data tables or copies thereof regardless of the
underlying media upon which such materials are recorded which are property of
Macromedia and which are under Executive's possession and control.
7. Benefits Upon Termination as Chief Financial Officer. Except
in connection with a termination for Cause (as defined in Subsection 7.2) or a
voluntary termination by Executive for other than Good Reason (as defined in
Subsection 7.3), Macromedia shall provide Executive
99
4
with termination benefits upon his termination by Macromedia as Chief Financial
Officer of Macromedia irrespective of the cause of the termination, as follows:
7.1 Termination Benefits. During a period of time
beginning on the date of Executive's termination as Chief Financial Officer of
Macromedia and ending three months from such date, Executive's base salary at
the time of termination shall continue to be paid by Macromedia in installments
twice per month with applicable deductions or withholdings, and Executive shall
also be entitled to a prorated portion of any quarterly bonus payment at the
target plan during that three-month period. Executive shall also be entitled
to participate in any plans or other employee benefit arrangements which are
generally available to employees or executives of Macromedia during such period
other than any Macromedia tax-qualified pension or profit-sharing plans or the
employee stock purchase plan. Under no circumstances shall Macromedia be
obligated to make any payments or continue benefits beyond the three-month
period after his termination by Macromedia as Chief Financial Officer of
Macromedia. Prior to the payment of any termination benefits under this
Section 7 or Section 8, Executive and Macromedia will enter into a mutual
general release; provided, however, that such release shall not extend to any
subsequent claims Executive may have with respect to those termination
benefits.
7.2 Circumstances Under Which Termination Benefits Would
Not Be Paid. Macromedia shall not be obligated to pay Executive the
termination benefits described in Subsection 7.1 above if Executive's
employment as Chief Financial Officer of Macromedia is terminated for Cause.
For purposes of this Agreement, "Cause" shall be limited to (1) Executive's
conviction of any felony under federal or state law, or any fraud,
misappropriation or embezzlement or act of dishonesty; or (2) Executive's
commission of a material violation of the Executive's Proprietary Information
and Inventions Agreement. In addition, Executive shall not be entitled to any
termination benefits under Subsection 7.1 if he voluntarily terminates his
service with Macromedia other than for Good Reason as determined under
Subsection 7.3.
7.3 Constructive Termination. Notwithstanding anything
in this Section 7 to the contrary, Executive's employment as Chief Financial
Officer of Macromedia will be deemed to have been terminated by Macromedia (a
"Constructive Termination") and Executive will be deemed to have Good Reason
for voluntary termination of his employment hereunder ("Good Reason"), if there
should occur:
(A) a material adverse change in Executive's position
causing it to be of materially less stature or responsibility without
Executive's written consent, and such a materially adverse change shall in all
events be deemed to occur if Executive no longer serves as Chief Financial
Officer of a publicly traded company, unless Executive consents in writing to
such change,
(B) a reduction, without Executive's written consent, in
his level of compensation (including base salary and fringe benefits) by more
than ten percent (10%) or a reduction by more than ten percent (10%) in his
target bonus formula under any performance-based executive incentive plans, or
(C) a relocation of his principal place of employment by
more than 50 miles.
100
5
8. Change in Control Benefits
Should there occur a Change in Control (as defined below),
then the following provisions shall become applicable:
(A) During the period (if any) following a Change in
Control that Executive continues as Chief Financial Officer of Macromedia
without a Constructive Termination, then the terms and provisions of this
Agreement shall continue in full force and effect, and Executive shall continue
to vest in his outstanding stock options
(B) In the event of (x) a Constructive Termination of
Executive's employment as Chief Financial Officer of Macromedia at or at any
time after a Change in Control or (y) the Executive voluntarily terminates his
employment as Chief Financial Officer of Macromedia within one hundred eighty
(180) days following a Change in Control, the following benefits shall become
due and payable:
(i) Executive's base salary in effect immediately
prior to his termination as Chief Financial Officer of Macromedia shall
continue to be paid for a twelve-month period by Macromedia or the successor
entity in installments twice per month with applicable deductions or
withholdings, and Executive shall also be entitled to quarterly bonus payments
at the target plan (or any successor plan) during that twelve-month period,
with such bonus payments to be not less than $100,000 in the aggregate for such
period. Macromedia or any successor entity shall be obligated to continue
Executive's service in one or more other capacities, but Executive shall have
complete discretion in determining whether he is to render such service as a
part time employee or independent consultant. Executive shall also be entitled
to participate in any plans or other employee benefit arrangements which are
generally available to employees or executives of Macromedia during such period
other than any Macromedia tax-qualified pension or profit-sharing plans or the
employee stock purchase plan.
(ii) Executive's options shall immediately become
exercisable and vest with respect to that number of option shares for which
those options would have otherwise vested over the full vesting term of the
options had Executive continued his employment under this Agreement. The
options as so accelerated shall remain exercisable for a period of 180 days
following the later of (a) the date of Executive's termination of service as
Chief Financial Officer of Macromedia or (b) the date of such option
acceleration.
For purposes of this Section 8, a Change of Control shall be
deemed to occur upon:
(I) the sale, lease, conveyance or other disposition of
all or substantially all of Macromedia's assets as an entirety or substantially
as an entirety to any person, entity or group of persons acting in concert,
(II) any transaction or series of transactions (as a
result of a tender offer, merger, consolidation or otherwise) that results in,
or that is in connection with, any person, entity or group acting in concert,
becoming the "beneficial owner" (as defined in Rule 13d-3
101
6
under the Securities Exchange Act of 1934), directly or indirectly, of more
than 50% percent of the aggregate voting power of all classes of common equity
stock of Macromedia, or
(III) a liquidation and winding up of the business of
Macromedia.
9. Arbitration.
9.1 Except for proceedings seeking injunctive relief,
including, without limitation, allegations of misappropriation of trade
secrets, copyright or patent infringements, or breach of any anti-competition
provisions of this Agreement, any controversy or claim arising out of or in
relation to this Agreement, or the breach thereof, shall be settled by
arbitration in accordance with the Commercial Arbitration rules of the American
Arbitration Association ("AAA"), and judgment upon the award rendered by the
arbitrator may be entered in any court having jurisdiction thereof.
Arbitration of this Agreement shall include claims of fraud or fraud in the
inducement relating to this Agreement. Arbitration further includes all
claims, regardless of whether the dispute arises during the term of the
Agreement, at the time of termination or thereafter.
9.2 Either party may initiate the arbitration
proceedings, for which the provision is herein made, by notifying the opposing
party, in writing, of its demand to arbitrate. In any such arbitration there
shall be appointed one arbitrator who shall be selected in accordance with the
AAA Commercial Arbitration Rules. The place of arbitration shall be San
Francisco, California. The law applicable to the dispute shall be the laws of
the State of California. Accordingly, the California Uniform Arbitration Act
shall apply to the interpretation of the arbitration procedure; pursuant
thereto, the arbitrator's powers shall include, without limitation, the power
to issue subpoenas for the attendance of witnesses for hearing or deposition,
and for other production of books, records, documents or other evidence
pursuant to California law.
9.3 The parties agree that the award of the arbitrator
shall be the sole and exclusive remedy between them regarding any claims,
counterclaims, issues or accountings presented or plead to the arbitrator; that
the arbitrator shall be the final judge of both law and fact in arbitration of
disputes arising out of or relating to this Agreement, including the
interpretation of the terms of this Agreement. The parties further agree it
shall be the sole and exclusive duty of the arbitrator to determine the
arbitrability of issues in dispute and that neither party shall have recourse
to the court for such a determination.
10. General.
10.1 Waiver. Neither party shall, by mere lapse of time,
without giving notice or taking other action hereunder, be deemed to have
waived any breach by the other party of any of the provisions of this
Agreement. Further, the waiver by either party of a particular breach of this
Agreement by the other shall neither be construed as, nor constitute a,
continuing waiver of such breach or of other breaches by the same or any other
provision of this Agreement.
10.2 Severability. If for any reason a court of competent
jurisdiction or arbitrator finds any provision of this Agreement to be
unenforceable, the provision shall be deemed amended as necessary to conform to
applicable laws or regulations, or if it cannot be so
102
7
amended without materially altering the intention of the parties, the remainder
of the Agreement shall continue in full force and effect as if the offending
provision were not contained herein.
10.3 Notices. All notices and other communications
required or permitted to be given under this Agreement shall be in writing and
shall be considered effective upon personal service or upon depositing such
notice in the U.S. Mail, postage prepaid, return receipt requested and
addressed to the President of Macromedia as its principal corporate address,
and to Executive at his most recent address shown on Macromedia's corporate
records, or at any other address which he may specify in any appropriate notice
to Macromedia.
10.4 Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original and all of
which taken together constitutes one and the same instrument and in making
proof hereof it shall not be necessary to produce or account for more than one
such counterpart.
10.5 Entire Agreement. The parties hereto acknowledge
that each has read this Agreement, understands it, and agrees to be bound by
its terms. The parties further agree that this Agreement and the referenced
stock option agreement and Proprietary Information and Inventions Agreement
constitute the complete and exclusive statement of the agreement between the
parties and supersedes all proposals (oral or written), understandings,
representations, conditions, covenants, and all other communications between
the parties relating to the subject matter hereof.
10.6 Assignment and Successors. Macromedia shall have the
right to assign its rights and obligations under this Agreement to an entity
which acquires substantially all of the assets of Macromedia. The rights and
obligation of Macromedia under this Agreement shall inure to the benefit and
shall be binding upon the successors and assigns of Macromedia.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
MACROMEDIA, INC. ACCEPTED BY EXECUTIVE
By: /s/ Xxxxxx X. Xxxxxxx /s/ Xxxx X. Xxxxxxx, Xx.
--------------------- -------------------------
Xxxx X. Xxxxxxx, Xx.
Name: Xxxxxx X. Xxxxxxx
-----------------
Title: President
---------
103
