EXHIBIT 10.2
EMPLOYMENT AGREEMENT
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This Employment Agreement (the "Agreement") is made and entered into
effective as of the 3rd day of November, 1997, by and between GeoCities, a
California corporation, whose address is 0000 Xxxx Xxxxxx, 0xx Xxxxx, Xxxxx
Xxxxxx, Xxxxxxxxxx 00000-0000 (the "Company"), and Xxxxxxx X. Xxxxxx, whose
address is 0000 Xxxxxxxxx Xxx Xxxxx, Xxxx Xxxxx, Xxxxxxxxxx 00000 ("Employee").
1. Employment.
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1.1 The Company hereby agrees to employ Employee, and Employee hereby
accepts such employment, on the terms and conditions set forth herein,
commencing November 3, 1997 (the "Effective Date"), and continuing
through November 2, 1999 (such period, the "Term"), unless terminated
earlier as provided in Section 4 below.
2. Duties of Employee.
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2.1 Employee shall serve as the Chief Financial Officer and Chief
Administrative Officer of the Company. In this capacity, Employee
shall perform such customary, appropriate and reasonable executive
duties as are usually performed by a Chief Financial Officer and Chief
Administrative Officer, including such duties as may be reasonably
delegated to him from time to time by the Board of Directors of the
Company (the "Board") or the Chief Executive Officer of the Company.
Employee shall report directly to the Company's Chief Executive
Officer and shall be based at the Company's main headquarters in the
greater Los Angeles Metropolitan area.
2.2 Employee agrees to devote Employee's full time, attention, skill and
efforts to the performance of his duties for the Company during the
Term.
2.3 This Agreement shall not be interpreted to prohibit Employee from
making passive personal investments or managing the business affairs
of Employee's family if those activities are not in competition with
those of the Company and do not materially interfere with the services
required under this Agreement.
3. Compensation and Other Benefits.
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3.1 Base Salary. During the Term, the Company shall pay to Employee a
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base salary of Two Hundred Thousand Dollars ($200,000) per calendar
year (the "Base Salary"), prorated for any portion thereof during the
Term, payable at the rate of Sixteen Thousand Six Hundred Sixty-Six
and 67/100 Dollars ($16,666.67) per month, with payments to be made in
accordance with the Company's standard payment policy and subject to
such withholding as may be required by law.
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3.2 Bonus. During the Term, the Company shall also pay to Employee a cash
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bonus in a gross amount equal to Fifty Thousand Dollars ($50,000) per
calendar year (the "Annual Bonus"), less withholding required by law,
half of which is payable on the first business day of ______ and
_______ of each year during the Term. Employee shall not be eligible
to receive any unpaid Annual Bonus if his employment hereunder is
terminated pursuant to either Section 4.1 or 4.2, or if Employee
voluntarily quits.
3.3 Vacation. Employee shall be entitled to a maximum of up to fifteen
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(15) days of paid vacation during each 12-month period during the
Term. Vacation shall accrue at a rate of 1.25 days per month, up to
the maximum number of accrued days allowed under the Company's policy
with respect to accrued vacation days.
3.4 Other Benefits. During the Term, Employee shall be entitled to
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receive all group life, health, medical, dental or disability
insurance or other employee, health and welfare benefits made
available generally to other officers of the Company, when and as
Employee becomes eligible therefor.
3.5 Business Expenses. The Company shall promptly reimburse Employee for
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all reasonable and necessary business expenses incurred by Employee in
connection with the business of the Company and the performance of his
duties under this Agreement, subject to Employee providing the Company
with reasonable documentation thereof.
3.6 Option Grants. Employee shall be considered, subject to the sole
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discretion of the Board, for stock option grants under the Company's
stock option plan(s) or any other available equity incentive plan of
the Company.
4. Termination.
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4.1 Termination for Cause.
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(a) The Company may terminate Employee's employment with the Company
pursuant to this Agreement "for cause" as follows: (1) if
Employee is convicted of (A) a felony or (B) other serious crime
that causes material harm to the Company; (2) for Employee's
gross negligence, or willful misconduct in the performance of his
duties for the Company; (3) for Employee's willful dishonesty
towards or fraud upon, or deliberate injury or attempted injury
to, the Company or (4) for a material breach by Employee of any
other agreement between the Company and Employee, including,
without limitation, Employee's Employee Confidential Information
and Inventions Agreement.
(b) The Company may terminate this Agreement immediately for any of
the reasons stated in Section 4.1(a) by giving written notice to
Employee without prejudice to any other remedy to which the
Company may be entitled. The notice of termination shall specify
the grounds for termination. If Employee's employment hereunder
is terminated "for
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cause" pursuant to this Section 4.1., Employee shall be entitled
to receive hereunder his accrued but unpaid Base Salary, and
reimbursement for any expenses as set forth in Section 3.5,
through the date of termination only, and shall not be entitled
to receive any portion of the Annual Bonus or any other amount.
4.2 Termination Without Cause. Subject to Section 4.3, the Company may,
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in its sole discretion, terminate Employee's employment with the
Company pursuant to this Agreement for any reason (not including those
reasons set forth in either Section 4.1 or 5), or, for no reason (any
such termination shall be deemed to be "without cause"), by giving
written notice to Executive at least thirty (30) days in advance.
4.3 Severance Payments and Other Benefits Upon Termination Without Cause.
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(a) If the Company terminates Employee's employment hereunder without
cause (i) the Company shall pay to Employee a severance payment
in an amount equal to six (6) months of his Base Salary, payable
in accordance with the Company's standard payment policy, and
subject to withholding as may be required by law, and (ii) the
vesting of Employee's stock option to purchase up to (A) 150,000
shares of the Company's Common Stock granted on the date hereof
(as adjusted for stock splits and reverse stock splits) (the
"150,000 Share Option") shall immediately be accelerated such
that Employee shall, in addition to any previously vested option
shares thereunder, become vested in the number of option shares
thereunder that Employee would have vested in had he remained
employed through the next annual vesting date, and (B) 75,000
shares of the Company's Common Stock granted on the date hereof
(as adjusted for stock splits and reverse stock splits) (the
"75,000 Share Option") shall, assuming a Milestone Event (as
defined below) had occurred previously, immediately be
accelerated such that Employee shall, in addition to any
previously vested option shares thereunder, become vested in the
number of option shares thereunder that Employee would have
vested in had he remained employed through the next annual
vesting date.
(b) If the Company or any successor in interest to the Company, or
assignee of the Company, within eighteen (18) months following a
Change of Control (as defined below), terminates Employee's
employment hereunder without cause (i) the Company or such
successor or assignee shall pay to Employee a severance payment
in an amount equal to six (6) months of his Base Salary, payable
in accordance with the same schedule theretofore followed by the
Company, and subject to withholding as may be required by law,
and (ii) in addition to any option shares previously vested
thereunder (not including pursuant to Section 4.3(a)), the
vesting of Employee's 150,000 Share Option shall be accelerated
such that Employee shall become immediately vested in (A) the
number of option shares thereunder that Employee would have
vested in had he remained employed with the Company through the
end of the then-current month (assuming monthly vesting of the
150,000 Share Option), plus (B) the number of option shares
thereunder that Employee would have vested in had he remained
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employed with the Company for the immediately succeeding twelve
(12) month period (assuming monthly vesting of the 150,000 Share
Option), and (iii) if the Change of Control is also a Milestone
Event, or if a Milestone Event had occurred previously, in
addition to any previously vested option shares thereunder (not
including pursuant to Section 4.3(a)), the vesting of Employee's
75,000 share option shall immediately be accelerated such that
Employee shall become immediately vested in (X) the number of
option shares thereunder that Employee would have vested in had
he remained employed with the Company through the end of the
then-current month (assuming monthly vesting of the 75,000 Share
Option), plus (Y) the number of option shares thereunder that
Employee would have vested in had he remained employed with the
Company for the immediately succeeding twelve (12) month period
(assuming monthly vesting of the 75,000 Share Option).
4.4 Voluntary Termination by Employee. Employee shall have the right to
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voluntarily terminate his employment hereunder upon thirty (30) days
advance written notice to the Company.
5. Death or Disability.
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5.1 This Agreement shall terminate automatically upon the Employee's
death. If Employee's employment hereunder is terminated pursuant to
this Section 5.1, the Company shall pay to Employee's estate (i) all
accrued and unpaid Base Salary, prorated through the date of the
Employee's death and (ii) Employee's Annual Bonus, prorated through
the date of Employee's death. Employee's estate shall also be
reimbursed for all business expenses pursuant to Section 3.5
previously incurred by Employee.
5.2 In the event that Employee, because of an accident, disability or
physical or mental illness, is incapable of performing his duties
hereunder, the Company shall have the right to terminate Employee's
employment hereunder upon thirty (30) days prior written notice to
Employee. For purposes of this Section 5.2, Employee shall be deemed
to have become incapable of performing his duties hereunder if the
Board, in its good faith judgement, shall determine that Employee is,
by reason of any medically-diagnosed physical or mental impairment,
expected to result in death or to be of continuous duration of not
less than six (6) consecutive months, unable to perform his usual
duties for the Company. If Employee's employment hereunder is
terminated pursuant to this Section 5.2, the Company shall pay to
Employee, all accrued and unpaid Base Salary, prorated through the
date of termination as set forth in the written notice and Employee's
Annual Bonus, prorated through the date of termination as set forth in
the notice. Employee shall also be reimbursed for all business
expenses pursuant to Section 3.5 previously incurred by Employee.
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6. Assignment. Employee may not assign this Agreement or any rights or
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obligations hereunder. The Company may assign this Agreement to any of its
subsidiaries or affiliates or in connection with any Change of Control or
reincorporation of the Company.
7. Miscellaneous.
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7.1 This Agreement supersedes any and all other agreements, either oral or
in writing, between the parties hereto with respect to the employment
of Employee by the Company, including, without limitation, the offer
letter dated October 3, 1997, between the Company and Employee, and
constitutes the entire agreement between the Company and the Employee
with respect to its subject matter.
7.2 This Agreement may not be amended, supplemented, modified or extended,
except by written agreement which expressly refers to this Agreement
and which is signed by of the parties hereto.
7.3 This Agreement is made in and shall be governed by the laws of
California, without giving effect to its conflicts-of-law principles.
7.4 In the event that any provision of this Agreement is determined to be
illegal, invalid or void for any reason, the remaining provisions
hereof shall continue in full force and effect.
7.5 Employee represents and warrants to the Company that there is no
restriction or limitation, by reason of any agreement or otherwise,
upon Employee's right or ability to enter into this Agreement and
fulfill his obligations under this Agreement.
7.6 All notices and other communications required or permitted hereunder
shall be in writing and shall be mailed by first-class mail, postage
prepaid, registered or certified, or delivered either by hand, by
messenger or by overnight courier service, and addressed to the
receiving party at the respective address set forth in the heading of
this Agreement, or at such other address as such party shall have
furnished to the other party in accordance with this Section 7.6 prior
to the giving of such notice or other communication.
7.7. For purposes of this Agreement, the term "Change of Control" shall
mean a change in ownership or control of the Company effected through
any of the following transactions:
(i) a merger, consolidation or reorganization approved by the
Company's stockholders, unless securities representing more than fifty
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percent (50%) of the total combined voting power of the voting
securities of the successor corporation are immediately thereafter
beneficially owned, directly or indirectly and in substantially the
same proportion, by the persons who beneficially owned the Company's
outstanding voting securities immediately prior to such transaction,
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(ii) any stockholder-approved transfer or other disposition of
all or substantially all of the Company's assets, or
(iii) the acquisition, directly or indirectly by any person or
related group of persons (other than the Company or a person that
directly or indirectly controls, is controlled by, or is under common
control with, the Company), of beneficial ownership (within the
meaning of Rule 13d-3 of the Securities Exchange Act of 1934) of
securities possessing more than fifty percent (50%) of the total
combined voting power of the Company's outstanding securities pursuant
to a tender or exchange offer made directly to the Company's
stockholders which the Board recommends such stockholders accept.
For purposes of this Agreement, the term "Milestone Event" shall mean
either (i) an initial public offering of the Company Common Stock or
(ii) a Change of Control, which, under either (i) or (ii), occur
during the Term and which transactions establish a value for the
entire Company of $300 million or more.
GEOCITIES
By: ___________________________________
Xxxxx X. Xxxxxxx, President & Chief
Executive Officer
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Xxxxxxx X. Xxxxxx
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