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Exhibit 10.23
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, dated as of July 11, 1997, by and between
Sybase, Inc., a Delaware corporation ("Company") and Xxxx Xxxx ("Employee").
Recitals
Sybase desires to employ Employee, and Employee desires to be employed
by the Company, as a regular full-time employee on the terms and conditions set
forth below.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Duties. Employee shall hold the title of President and Chief Operating
Officer, and shall perform such functions and duties in such capacity as
designated by the Chief Executive Officer. During the term of employment,
Employee shall be employed by the Company as a regular full-time employee, and
shall carry out his duties and responsibilities in a diligent, competent and
professional manner. For purposes of this Agreement, "Commencement Date" means
the later of August 4, 1997 or the date Employee first reports for work on a
full time basis at Sybase. If the Commencement Date has not occurred by August
15, 1997, Sybase may at its election terminate this Agreement and the stock
options described below.
2. Compensation.
(a) Base Salary. Employee's initial annual base salary hereunder shall
be $500,000.00, payable on a semi-monthly basis. Employee's base salary shall
be subject to periodic review and adjustment from time to time in accordance
with the Company's then-current policies. Currently, such review is made by the
Compensation Committee of the Board of Directors on an annual basis.
(b) Incentive Compensation. Employee shall also be eligible to
participate in the Company's executive incentive program (which is the same
program afforded to other senior executive officers reporting to the Chief
Executive Officer) with an annual target incentive compensation equal to 50% of
annual base salary. Under such plan, the amount of actual incentive
compensation paid will be based on achievement of specified corporate
objectives and mutually agreed upon individual objectives. Such annual
incentive bonuses are paid once per year. Notwithstanding the foregoing,
Employee will be paid incentive compensation for the 1997 calendar year,
regardless of achievement of individual or corporate objectives, in an amount
equal to the initial $250,000 annual target prorated based on the number of
days in the year from and after
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the Commencement Date. For example, if the Commencement Date is August 4, 1997,
Employee's incentive compensation will be $102,739.73 (150 days/365 days X
$250,000).
(c) Benefit Plans. Employee's prior employer maintained a term life
insurance, AD&D insurance and long term disability policies in the name of
Employee for Employee's benefit (the "Individual Policies"). Company shall
continue to maintain such Individual Policies during the term of Employee's
employment and any post-termination period specified in this Agreement.
Employee will be eligible to participate in and receive benefits under
the Company's employee benefit plans and policies in effect from time to time,
subject to the terms, conditions and eligibility requirements of the particular
plans. Such plans may include stock benefit plans, paid vacation, paid
sabbatical leave, health care, life insurance, accidental death and disability,
short- and long-term disability, and/or savings plans provided by, through, or
on behalf of the Company to employees in the United States. The Company may
change, amend, modify or terminate any benefit plan from time to time without
prior notice to Employee.
Sybase currently offers a cafeteria style benefits program and
allocates an amount ("Nautilus Benefit Allowance") to each employee for the
employee to allocate to various benefits that the employee can choose between.
The benefit coverages that Employee received from his prior employer are
specified in that certain "Siemens Pyramid Benefit Coverage for Xxxx Xxxx,
Chairman, President and CEO" previously provided to Xxxxxxxx Xxxxxxxx. The
benefit coverages appearing on such list, excluding the Individual Policies and
those under the heading "other", are referred to as the "Former Minimum
Benefits". The Company shall provide employee with benefits that are at least
substantially comparable to the Former Minimum Benefits (except that (i) the
maximum lifetime benefit under the group medical plan will be $1,000,000 and
(ii) to the extent the employer matching contribution under the 401(k) plan is
lower than under the Former Minimum Benefits, Employee shall be provided a
bonus equivalent to such difference, grossed up to reflect the pretax nature of
a 401(k) contribution), it being understood that the choice of benefit
provider is entirely at the discretion of the Company and, that to the extent
the benefits can be covered by the Nautilus Benefit Allowance, Employee will
apply such allowance to them. Any cost of providing the benefits substantially
comparable to the Former Minimum Benefits in excess of the Nautilus Benefit
Allowance shall be the Company's expense.
In addition, Company shall (i) reimburse employee for medical, legal,
financial planning and tax preparation expenses up to an aggregate maximum of
$10,000 per year (ii) permit Employee to fly first class on business trips
(other aspects of travel to be consistent with Company travel policies); and
(iii) provide a car allowance of $18,000 per year.
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Sybase employees accrue two weeks of vacation per year during each of
their first two years at Sybase. In addition to those two weeks per year,
Employee shall be entitled to take up to two additional weeks of paid vacation
per year during each of Employee's first two years of employment.
(d) Stock Option Grant. Employee will be granted stock options to
purchase an aggregate of 500,000 shares of the Company's Common Stock pursuant
to the Company's 1996 Stock Plan and/or 1988 Stock Option Plan. To the extent
permitted by law and the plans, the options so granted will be granted as
incentive stock options, with the balance granted as non-statutory stock
options. The exercise price per share will be the closing price as quoted on
NASDAQ on the date the option is granted. The options will vest as follows"
125,000 shares will vest on the Commencement Date and 1/48 of the total shares
(approximately 10,416 shares) will vest each month commencing with the
thirteenth month of employment following your Commencement Date through the
48th month. Subsequent option grants, if any, shall be entirely at the
discretion of the Compensation Committee. It is acknowledged that the
Compensation Committee's current practice is to make annual stock option grants
to executive officers in connection with its annual review of executive
compensation. It is also acknowledged that one guideline currently considered
within the Compensation Committee's current option philosophy framework
regarding option grants is to make subsequent annual grants such that the total
amount of an officer's unvested shares is comparable to the options that the
Company would have to then offer in order to recruit a new person into such
officer's position. The foregoing guideline is only one of several factors
considered by the Compensation Committee and that guideline together with any
other guidelines and factors may be changed at any time.
(e) Commencement of Benefits. The salary, incentive compensation and
other benefits specified in subsections (a), (b) and (c) shall not commence or
otherwise begin to accrue until the Commencement Date.
(c) Withholding; Deductions. Unless otherwise specified herein, the
Company shall make such deductions, withholdings and other payments from all
sums payable to Employee which Employee requests, or which are required by law
for taxes and other charges.
3. Board of Directors. The Board of Directors of the Company has authorized an
increase in the number of authorized directors and has proposed that you be
appointed as a director of the Company subject to your commencement of
employment. It is the intention of the Board of Directors following your
Commencement Date (the next currently scheduled meeting of the Board of
Directors after August 4, 1997 is September 12, 1997).
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4. Nondisclosure Agreement. Concurrently with the execution of this Agreement,
Employee shall execute an Employee Nondisclosure and Assignment of Inventions
Agreement in the form attached hereto ("Nondisclosure Agreement").
5. Change of Control. On the Commencement Date, Employee and the Company shall
enter into a Statement of Employment Terms in the form attached hereto
("Statement of Employment Terms"). In the event that Employee's employment is
terminated by the Company (or any successor thereto) at any time within
eighteen months following a Change of Control (as defined in the Statement of
Employment Terms), Employee shall be entitled to the severance benefits
specified in such Statement of Employment Terms and shall not be entitled to
severance in accordance with Section 6 below. Notwithstanding the foregoing, in
the event that Section 8 of the Statement of Employment Terms would preclude
acceleration of vesting of stock options, Employee shall be entitled to the
continuation of the vesting stock options provided in the applicable provisions
of Section 6 of this Agreement.
6. Compensation Upon Termination or Resignation.
(a) Voluntary or For Cause. Upon termination for Cause (as defined
below) or upon Employee's death, disability (as defined below) or voluntary
resignation (except as provided in Section 6(c), the Company shall pay to
Employee (or to his estate in the event of his death) in a lump sum all accrued
unpaid compensation earned by the Employee prior to the effective date of
termination. Employee's rights under the Company's benefit plans shall be
determined under the provisions of those plans.
(b) Termination by the Company Without Cause. In the event the Company
terminates Employee's employment other than for Cause prior to April 1, 1999,
the Company shall (i) pay to Employee the sum of 150% of the Employee's
then-current annual base salary, payable in three installments (net of all
applicable taxes and deductions) as follows: 50% of the amount within seven
days of the date of termination, 25% on the date six months following the date
of termination and 25% on the date one year following date of termination; (ii)
continue to make available, at the Company's expense, the benefits specified
in Section 2(c) above for a period of one year following such date of
termination; and (iii) provide for the stock options granted pursuant to
Section 2(d) above to continue to vest for a period of one year following the
date of termination (it being understood that such options shall become
non-statutory stock options on the date ninety (90) days following such date of
termination).
(c) Termination after January 1999. In selecting Employee for the
position undertaken hereunder by Employee, the Company's objective was to
recruit an individual that could create a close partnership with Xxxxxxxx
Xxxxxxxx in which Employee could both manage the Company's daily operations and
also fill the role of the identified successor to the position of chief
executive officer for succession planning
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purposes. The parties intend that at the Board of Director's first meeting in
1999 (but not later than February 15, 1999) the Board of Directors and Xxxxxxxx
Xxxxxxxx, in consultation with Employee, will determine whether Employee shall
be named Chief Executive Officer (reporting to Xxxxxxxx Xxxxxxxx as Chairman).
If Employee is not so promoted and communicates to the Board of Directors in
writing after February 15, 1999 (or, in the event the Board of Directors
decides prior to February 15, 1999 that Employee will not be promoted in the
future to Chief Executive Officer, the date the Board of Directors provides
written communication to Employee of such decision, which will be provided in
good faith) that he desires to resign as Chief Operating Officer and President
to pursue his career objectives elsewhere (the "Resignation Notice"), the
Company shall (A) pay to Employee an amount equal to the Employee's
then-current annual base salary, payable in one installment (net of all
applicable taxes and deductions) within seven days following the date of
termination; (B) continue to make available, at the Company's expense, the
benefits specified in Section 2(c) above for a period of one year following
such date of termination and (C) provide for the stock options granted pursuant
to Section 2(d) above to continue to vest for a period of one year following
the date of termination (it being understood that such options shall become
non-statutory options on the date ninety (90) days following such date of
termination). The Company's obligations under the preceding sentence are
subject to the conditions that (i) Employee agrees to continue to perform (and
does perform) his duties in good faith and in a reasonably cooperative and
satisfactory manner for a period of six weeks following the date of the
Resignation Notice and (ii) the Resignation Notice is received not later than
August 1, 1999. In the event that the Company terminates Employee without Cause
after April 1, 1999, Employee shall be entitled to the amounts specified in A,
B and C of this paragraph, except that the amount specified in A shall be
payable, not as a lump sum, but in three installments (net of all applicable
taxes and deductions) as follows: 50% of the amount within seven days of the
date of termination, 25% on the date six months following the date of
termination and 25% on the date one year following date of termination.
(d) Definition of Cause. For purposes of this Agreement, "Cause" shall
mean any of the following: (i) any act of personal dishonesty taken by the
Employee in connection with his or her responsibilities as an employee and
intended to result in substantial personal enrichment of the Employee, (ii) the
conviction of a felony, (iii) a willful act by the Employee which constitutes
gross misconduct or which the Employee intends to be or reasonably knows will
be seriously injurious to the Company or the Company's reputation or employees,
and (iv) Employee's willful or continued material failure to substantially
perform his job duties hereunder, provided however that if such Cause is
reasonably curable the Company shall not terminate Employee's employment
hereunder unless the Company first gives notice of its intention to terminate
and of the grounds for such termination and Employee has not within a
reasonable period of not less than thirty days following receipt of such notice
cured such Cause.
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(e) Disability. "Disability" shall have the meaning ascribed to it in
the Statement of Employment Terms.
(f) Involuntary Termination. Employee shall be deemed to have been
terminated by the Company other than for Cause in the event of an Involuntary
Termination. "Involuntary Termination" shall mean (i) without the Employee's
express written consent, the assignment to the Employee of any duties or the
significant reduction of the Employee's duties, either of which is materially
inconsistent with the Employee's position with the Company and responsibilities
in effect immediately prior to such assignment, or the removal of the Employee
form such position and responsibilities, which is not effected for Disability of
for Cause; (ii) a material reduction by the Company in the base salary and/or
target bonus of the Employee as in effect immediately prior to such reduction;
(iii) a material reduction by the Company in the kind or level of employee
benefits to which the Employee is entitled immediately prior to such reduction
with the result that the Employee's overall benefits package is significantly
reduced (other than a nondiscriminatory reduction affecting the Company's
employees generally); or (iv) the relocation of the Employee to a facility or a
location more than 75 miles from San Francisco, without the Employee's express
written consent.
(g) Breach of Nondisclosure Agreement. Notwithstanding any provisions
herein to the contrary, the Company's obligations under this Section 6 to pay
any severance or otherwise extend benefits or stock option vesting shall
terminate immediately upon any intentional breach by Employee of the
Nondisclosure Agreement.
7. No Conflict. Employee represents and warrants that execution of this
Agreement and the Nondisclosure Agreement, and performance of Employee's
obligations hereunder and thereunder, will not conflict with, or result in a
violation or breach of any other agreement to which Employee is a party, or any
judgment, order or decree to which Employee is subject.
8. Governing Law. This Agreement, shall be governed by and construed in
accordance with the laws of California.
9. Entire Agreement. This Agreement, together with the Statement of Employment
Terms and Nondisclosure Agreement, sets forth the entire agreement and
understandings of the parties with respect to the subject matter hereof, and
supersedes any other written or oral negotiations, agreements, understandings,
representations or practices. Any waiver, modification or amendment of this
Agreement shall be effective only if in writing and signed by the parties
hereto.
10. Arbitration. Any dispute or controversy arising under or in connection with
this Statement shall be settled exclusively by arbitration in Emeryville,
California, in
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accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitrator's award in any court having
jurisdiction.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first written above.
SYBASE, INC. EMPLOYEE:
By: /s/ XXXXXXXX X. XXXXXXXX /s/ XXXX X. XXXX
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Its: Chief Executive Officer Address: 000 Xxxxxxxx Xxx Xxxxx
Xxxxxxxx, XX 00000
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