EXHIBIT 10.10
Entrada Networks, Inc.
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of June 15, 2002 between Entrada Networks, Inc., a
Delaware Corporation (the "Company"), having a principal place of business at 00
Xxxxxx, Xxxxxx, Xxxxxxxxxx 00000, and Xxxxxxxx Xxxxx, Ph.D. (the "Employee"),
having an address .
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WITNESSETH
WHEREAS, the Employee possesses substantial knowledge with respect to the
industry in which the Company conducts its business by reason of his employment
and may acquire further knowledge of such business by reason of his employment
as hereinafter provided; and
WHEREAS, the Company desires to procure the services of the Employee, and
to secure the Employee's agreement not to compete and to treat as confidential
and as the property of the Company certain information gained in the course of
the Employee's employment by the Company both before and after the effective
date of this Agreement, as the case may be, and the Employee is willing to
continue in the employment of and to so agree with the Company, all upon the
terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual promises contained herein,
the Company and the Employee agree as follows:
1. Employment. The Company agrees to employ the Employee, and the Employee
accepts the employment, on the terms and conditions hereinafter set forth.
During the term of employment hereunder, the Employee shall serve in such
capacity as may from time to time be determined by or pursuant to authority
granted by the Board of Directors of the Company, and during such term of
employment, the Employee shall devote his best efforts, knowledge and skill and
his full time to the Company's business and affairs. Subject to the authority of
the Board of Directors of the Company, the Company will employ the Employee in
the capacity of Vice President and Chief Financial Officer. The Employee shall
report directly to the Chief Executive Officer.
2. Term of Employment: Termination.
2.1. The Employee agrees to work for the Company for a period of forty
eight (48) months commencing on the date of hire, which was November 1, 2001.
However, the Company may terminate the Employee's employment at any time, for
any reason (or no reason), and with or Without Cause, by providing the Employee
with thirty (30) days' written notice. If employment continues following the end
of the four (4)-year term of this Agreement (the "Term"), it will continue on an
"at-will" basis, which means that either the Employee or the Company may
terminate the
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Employee's employment at any time, for any reason (or no reason), and with or
Without Cause, by providing the other party with thirty (30) days written
notice.
2.2. If the Company terminates the Employee's employment Without
Cause, or if the Employee resigns his employment for Good Reason, or if this
Agreement terminates pursuant to paragraph 2.3 below, prior to the end of the
Term, the Employee, or his legal representatives, as the case may be, shall
receive: (i) all salary and bonus earned by the Employee through the last day of
his employment; (ii) continuation of the Employee's base salary for a period of
two (2) years after the date of the termination of the Employee's employment;
(iii) immediate vesting of all outstanding shares of the Employee's Company
stock options, notwithstanding anything to the contrary in the agreement(s)
granting such options; and (iv) the Company's right to repurchase shares as
provided in paragraph 3.4.1 below and to cancel unexercised vested options, as
provided in the Stock Option Agreement or elsewhere, shall terminate. However,
if: (i) the Employee resigns at any time Without Good Reason; (ii) the Company
terminates the Employee's employment for Cause prior to the end of the Term; or
(iii) the Company terminates the Employee's employment with Cause, or if the
Employee resigns, Without Good Reason, after the end of the Term, the Employee
will only be entitled to all salary earned by him through the last day of his
employment.
For purposes of this Agreement, "Cause" shall mean a good faith
determination by the Board of Directors of the Company, following a reasonable
factual investigation, of the occurrence of any one or more of the following
events or circumstances, provided however, such event or circumstance will not
constitute Cause unless Employee has failed to cure such event or circumstance
within 30 days after receipt by Employee of written notice thereof: (i) Employee
willfully engages in wrongful conduct that results in material damage to the
Company; (ii) any willful and material failure to perform Employee's duties
hereunder; (iii) Employee is convicted of a felony, including a plea of no
contest, (iv) employee engages in fraud or one or more acts of dishonesty which
materially damages the Company; or (v) Employee materially breaches this
Agreement or the Proprietary Information and Invention Agreement, which material
breach results in material damage to the Company. No act or failure to act on
Employee's part shall be deemed "willful" unless it is done, or omitted to be
done, by Employee not in good faith and such that a reasonable person would
believe that the act, or failure to act, was not in the best interests of the
Company.
For purposes under this Agreement, "Good Reason" for Employee's resignation
will exist if Employee resigns within sixty days of any of the following: (i)
any reduction in his base salary or bonus, if any unless mutually agreed upon;
(ii) any material reduction in his benefits; (iii) a change in Employee's
position with the Company or a successor company which materially reduces
Employee's duties or level of responsibility. A resignation by Employee under
any other circumstances or for any other reasons will be a resignation "Without
Good Reason."
2.3. This Agreement shall automatically terminate in the event of the
Employee's death or Permanent Disability. "Permanent Disability" is defined as
physical or mental incapacity rendering the Employee unable to perform
substantially all of his duties for a period of at least four (4) consecutive
months or an aggregate of at least six (6) months over any twelve (12) month
period.
3. Compensation.
3.1. Salary. As full compensation for the services to be rendered by
the Employee hereunder and as consideration for the observance of the provisions
of Section 4 hereof, the Company shall pay the Employee, and the Employee shall
accept, a salary at the rate of One Hundred Fifty Thousand Dollars ($150,000.00)
per annum in cash and Fifty Thousand Dollars ($50,000.00) in common stock of
Entrada for the first year. Such salary shall be payable not less frequently
than once a month. In the event that the Employee's employment shall be
terminated by death or
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Permanent Disability, the Employee, or his legal representatives, as the case
may be, shall receive: (i) all salary earned by the Employee through the last
day of his employment; and (ii) immediate vesting of all outstanding shares of
the Employee's Company stock options, notwithstanding anything to the contrary
in the agreement(s) granting such options.
3.2. Bonus. Employee shall be entitled to participate on an annual or
quarterly basis in the Company's Executive Cash Incentive Plan, subject to the
terms and condition governing said Plan.
3.3. Benefits. Participation in group life, medical, pension, profit
sharing and other employee benefit plans (collectively hereinafter referred to
as "Fringe Benefit Plans"), and other provisions of the Employee's employment
not herein specifically provided for shall be consistent with that provided to
senior executives of the Company.
3.4. Stock Options.
3.4.1. Option Grant. The Company has granted Employee an option
to purchase 450,000 shares of the Company's common stock. The per share exercise
price of the option is $0.15. The term of such option is 10 years, subject to
earlier expiration in the event of the termination of Employee's employment.
Such option is immediately exercisable, but the purchased shares shall be
subject to repurchase by the Company at the exercise price paid per share in the
event that Employee's employment terminates prior to vesting in the shares. The
Employee shall acquire a vested interest in, and the Company's repurchase right
shall accordingly lapse with respect to, (i) Fifty Thousand (50,000) of the
Option Shares on November 1, 2001, (ii) On Hundered Thousand (100,000) of the
Option Shares upon Employee's completion of one (1) year of Service measured
from his date of hire and (ii) the balance of the Option Shares in a series of
thirty-six (36) successive equal monthly installments upon Employee's completion
of each additional month of Service over the thirty-six (36)-month period
measured from the first anniversary of the date of hire. In no event shall any
additional Option Shares vest after Employee's cessation of Service.
3.4.2. Exercise of Option. The option grant made pursuant to
Section 3.4.1 above shall be subject to the Company's standard form of Stock
Option Agreement
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(Together with Notice of Grant), a copy of which is attached hereto as an
exhibit, and which notice must be executed as a condition of the grant.
4. No Solicitations. The Employee agrees that for a period of one (1) year
following the termination of the Employee's employment for any reason, the
Employee shall not directly or indirectly, personally or through others, solicit
or attempt to solicit (on the Employee's behalf or on behalf of any other person
or entity) for hire any employee or consultant of the Company.
5. Corporate Opportunities. The Employee agrees that during his employment
hereunder he will not take any action which might divert from the Company or any
subsidiary or affiliate of the Company any opportunity which would be within the
scope of any of the present or future businesses thereof.
6. Nondisclosure of Confidential Information; Non-competition.
6.1. The Employee shall not, without the prior written consent of the
Company, use, divulge, disclose or make accessible to any other person, firm,
partnership, corporation or other entity any Confidential Information pertaining
to the business of the Company or any of its affiliates, except when required to
do so by a court of competent jurisdiction, by any governmental agency having
supervisory authority over the business of the Company, or by any administrative
body or legislative body (including a committee thereof) with jurisdiction to
order the Employee to divulge, disclose or make accessible such information. For
purposes of this Agreement, "Confidential Information" shall mean non-public
information concerning the financial data, strategic business plans, product
development, proprietary product data, customer lists, technology (whether or
not patented or copyrighted), marketing plans and other non-public, proprietary
and confidential information of the Company and its affiliates and customers
that, in any case, is not otherwise available to the public.
6.2. Given the Employee's role in the Company, during the period of
the Employee's employment, whether pursuant to this Agreement or otherwise, the
Employee agrees that, without the prior written consent of the Company, he will
not, directly or indirectly, either as principal, manager, agent, consultant,
officer, stockholder, partner, investor, lender or employee or in any other
capacity, carry on, be engaged in, or have any financial interest in any
business in the United States which is in competition with the business of the
Company or any of its subsidiaries or affiliates; provided that the foregoing
shall not prevent the Employee from being a stockholder of less than five
percent (5%) of the issued and outstanding securities of any class of a
corporation listed on a national securities exchange or designated as national
market system securities on an inter-dealer quotation system by the National
Association of Securities Dealers, Inc.
6.3. The Employee and the Company agree that this covenant not to
compete is a reasonable covenant under the circumstances, and further agree that
if in the opinion of any court of competent jurisdiction such restraint is not
reasonable in any respect, such court shall have the right, power and authority
to modify such provision or provisions of this covenant to the extent the court
determines such restraint is not reasonable and to enforce the covenant as so
amended.
6.4. The Employee and the Company agree that any breach of the
covenants contained in this Section 6 would irreparably injure the Employee or
the Company. Accordingly, the Employee and the Company mutually agree that
either party may, in addition to pursuing any other remedies it may have in law
or in equity, obtain
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an injunction against the other from any court having jurisdiction over the
matter restraining any violation of Section 6 this Agreement by either party.
6.5 As a condition of employment, employee will execute the Company's
standard Proprietary Information and Invention Agreement, a copy of which is
attached.
7. Successors. This Agreement shall be binding upon and inure to the
benefit of the Company and their respective successors and assigns by merger,
consolidation, transfer of business and properties or otherwise, and upon the
Employee and his heirs and legal representatives.
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8. Arbitration. Any disputes or claims arising out of or concerning this
Agreement or under any applicable statutes, including those relating to the
Employee's employment or termination thereof, shall be settled by arbitration in
Orange County, California, in accordance with the commercial rules of the
American Arbitration Association then in effect, except as modified by this
Agreement. The arbitrator will have authority in his or her discretion to grant
injunctive relief, award specific performance and impose sanctions upon any
party to any such arbitration. The arbitrator's decision shall be final and
binding on both parties. Judgment upon the award rendered by the arbitrator may
be entered in any court of competent jurisdiction. In recognition of the fact
that resolution of any disputes or claims in the courts is rarely timely or cost
effective for either party, the Company and the Employee enter this mutual
agreement to arbitrate in order to gain the benefits of a speedy, impartial and
cost-effective dispute resolution procedure.
(a) The prevailing party may recover from the other party costs
for fees and expenses of the arbitrator and attorney fees and costs incurred in
such amount as the arbitrator or the court in such judicial action, as the case
may be, may determine to be reasonable and appropriate under the circumstances.
(b) Any decision of an arbitrator under this provision shall be
in writing, signed by the arbitrator, and shall contain a statement regarding
the reasons for the disposition of any claim.
(c) In a contractual claim under this Agreement, the arbitrator
shall have no authority to add, delete or modify any term of this Agreement.
9. Notices. All notices hereunder shall be in writing, sent by overnight
courier, providing written proof of delivery, or registered or certified mail,
return receipt requested, to the address first set forth above, or to such
address as a party may indicate by like notice.
10. Miscellaneous. Except as expressly provided herein, this Agreement
contains the entire agreement between the parties relating to the subject matter
hereof. Neither this Agreement nor any term hereof may be modified, amended,
waived, discharged or terminated except by a written instrument executed by the
party against which enforcement of such modification, amendment, waiver,
discharge or termination is sought. Any agreement or understanding, written or
otherwise, prior to the effective date of this Agreement between the Employee
and the Company relating to the employment of the Employee is hereby terminated
and discharged. California law shall govern the execution, delivery and
performance of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date and year first above written.
/s/ Xxxxxxxx Xxxxx
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Xxxxxxxx Xxxxx, Ph.D.
Employee
ENTRADA NETWORKS, INC.
By: /s/ Xxxxxx X.X. Xxxxxx
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Xxxxxx X.X. Xxxxxx, Ph.D.
Title: President & Chief Executive Officer
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