EXHIBIT 10.8
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into
as of March 1, 1999, by and between XXX.XXX Inc., a Delaware corporation (the
"Company"), and Xxxx Xxxxxxx ("Executive").
I.
EMPLOYMENT
1.1 Position and Duties. The Company hereby engages and employs
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Executive as Chief Executive Officer for the terms set forth in this Agreement.
The Company's Board of Directors (the "Board") may provide such
additional designations of title to Executive as the Board, in its discretion,
may deem appropriate. Executive shall perform the executive duties and
functions related to the above positions, subject to the reasonable limitations
of authority set forth from time to time in the resolutions of the Board and
applicable law.
1.2 Best Efforts. Executive agrees to devote his full time and
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attention to the Company, to use his best efforts to advance the business and
welfare of the Company, to render his services under this Agreement fully,
faithfully, diligently, competently and to the best of his ability, and not to
engage in any other employment activities. Notwithstanding anything herein to
the contrary, Executive shall not be precluded from (a) engaging in charitable
activities and community affairs or (b) managing his personal investments and
affairs, provided that such activities do not materially interfere with the
proper performance of his duties and responsibilities under this Agreement.
II.
COMPENSATION AND BENEFITS
2.1 Base Salary. For all services to be rendered by Executive under
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this Agreement, the Company agrees to pay Executive an annual base salary of Two
Hundred Forty Thousand Dollars ($240,000.00), less deductions required by law,
payable in accordance with the normal payroll practices of the Company.
2.2 Stock Options. The Company shall grant Executive an option to
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purchase Four Hundred Eighty Four Thousand (484,000) shares of the Company's
common stock, subject to the vesting structure noted in the Offer Letter dated
February 12, 1999 and the provisions set forth in the Company's Stock Option
Plan and Stock Option agreement.
2.3 Other Benefits. The Company shall further provide to Executive
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the following other benefits:
(a) An automobile allowance of Eight Hundred dollars ($800.00) per
month; and
(b) Full participation, on a basis commensurate with his position
with the Company, in all plans of life, accident, disability and health
insurance that generally are made available to senior executives of the Company.
2.4 Expense Reimbursement. The Company shall promptly reimburse
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Executive for all actual and reasonable business expenses incurred by Executive
in promoting the business of the Company, including expenditures for car phone,
entertainment, travel, or other expenses, provided that (a) such expenditures
are of a nature qualifying them as legitimate business deductions and (b)
Executive furnishes to the Company adequate records and other documentary
evidence reasonably required by the Company to substantiate such expenditures.
III.
TERMINATION AND SEVERANCE PAY
3.1 At Will. Executive and the Company acknowledge and agree that
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Executive's employment with the Company is expressly "at-will" both during and
after the term of this Agreement. This means that either party may terminate
Executive's employment with or without cause. Any termination of Executive's
employment is, however, subject to the terms and provisions of this Agreement as
to severance pay and other obligations.
3.2 Involuntary Termination.
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(a) Severance Pay. In the event that Executive's employment with the
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Company is terminated by the Company for Cause (as defined in Section 3.2(c)),
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Executive shall be entitled to no severance pay. In the event that Executive's
employment with the Company is terminated by the Company other than for Cause,
then in consideration of Executive's compliance with his obligations under
Article V and Article VI and Executive's execution of a general release in favor
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of the Company, Executive, on March 1 2000, shall have the right to exercise the
One Hundred and Eight Thousand - Nine Hundred (108,900) options that vest on
March 1, 2000 in accordance with Executive's option grant dated March 1, 1999;
and Executive shall be entitled to severance pay ("Severance Pay") in the form
of monthly payments to Executive in the amount of Executive's monthly base
salary as in effect on the date of termination, payable in accordance with
customary payroll practices, and related health benefits for the greater of (i)
the remainer of the initial one year term as defined in Section 4.1, or (ii) six
(6) months. Executive acknowledges and agrees that in the event Executive
breaches any provision of Article V or Article VI, his right to receive
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severance payments under this Section 3.2(a) shall automatically terminate.
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(b) Benefits. Following termination, Executive shall cease to be a
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Company employee and shall not be entitled to any employee benefits. This shall
not preclude Executive from exercising his COBRA benefits under applicable law.
(c) Cause. For purposes of this Agreement, "Cause" shall mean (i) the
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willful refusal of Executive to comply with a lawful instruction of the Board;
(ii) an act or acts of personal dishonesty by Executive that were intended to
result in personal enrichment of Executive at the expense of the Company; (iii)
Executive's conviction of any felony; (iv) performing an act of race, sex,
national origin, religion, disability, age-based or other illegal discrimination
or an act of sexual harassment; or (v) Executive's willful insubordination or
misconduct, intentional or persistent
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failure to abide by the Company's policies, or material breach of any provision
of this Agreement, including any representation or covenant contained in
Article V or Article VI of this Agreement.
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3.3 Voluntary Termination.
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(a) Severance Pay. In the event Executive voluntarily terminates his
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employment with the Company, Executive shall be entitled to no severance pay.
For purposes of this Agreement, the term "voluntarily terminates" shall not
include a resignation that is tendered by Executive pursuant to a direct request
for the Board. A resignation tendered by Executive pursuant to a direct request
of the Board shall, for purposes of this Agreement, be treated as an involuntary
termination, and Executive's entitlement to severance pay in accordance with the
provisions of Section 3.2(a) shall depend upon whether the Board's request was
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based on Cause (as defined in Section 3.2(c)).
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3.4 Death. In the event of Executive's death, this Agreement shall
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automatically terminate and shall be of no further force and effect.
Termination of Executive's employment as a result of his death shall not result
in any obligation by the Company to pay severance pay or other benefits to
Executive's estate or heirs.
3.5 Disability. In the event of Executive's Disability (as defined
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below) during the term of this Agreement for any period of at least three (3)
consecutive months, the Company shall have the right, which may be exercised in
its sole discretion, to terminate this Agreement. In the event the Company does
elect to terminate this Agreement, Executive shall not be entitled to any
severance pay at any time but shall be entitled to normal disability benefits in
accordance with the policies established from time to time by the Company. For
purposes of this Agreement, "Disability" shall mean the inability of Executive
to perform his employment services hereunder by reason of physical or mental
illness or incapacity as determined by a physician chosen by the Company and
reasonably satisfactory to Executive or his legal representative.
IV.
TERM
4.1 Term. The term of Executive's employment under this Agreement
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shall commence on the date hereof and shall continue for one year from the date
hereof, as such date may be extended from time to time.
V.
NONDISCLOSURE OF INFORMATION
AND NON-SOLICITATION OF EMPLOYEES
5.1 Nondisclosure of Confidential Information. Except in the
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performance of his duties hereunder, Executive shall not disclose to any person
or entity or use for his own direct or indirect benefit any Confidential
Information (as defined below) pertaining to the Company obtained by Executive
in the course of his employment with the Company. For purposes of this
Agreement, "Confidential Information" shall include the Company's products,
services, processes, suppliers, customers, customers' account executives,
employees, financial, sales and distribution
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information, price lists, identity and list of actual and potential customers,
trade secrets, technical information, business plans, payroll information and
strategies to the extent that such information has not been publicly
disseminated by the Company, other than through a breach hereof.
5.2 Return of Information. Upon termination of Executive's
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employment, Executive will deliver to the Company all customer lists, proposals,
reports, memoranda, computer software and programming, budgets and other
financial information, and other materials or records or writings of any type
(including any copies thereof and regardless of the medium in which the
information exists) made, used or obtained by Executive in connection with his
employment by the Company.
5.3 Employee Proprietary Information and Inventions Agreement.
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Executive shall be subject to the provisions of the Company's Employee
Proprietary Information and Inventions Agreement, a copy of which is attached
hereto as Exhibit A and incorporated herein by this reference.
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5.4 Non-Solicitation. Executive agrees that, so long as he is
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employed by the Company and for a period of one (1) year after termination of
his employment for any reason, he shall not (a) directly or indirectly solicit,
induce or attempt to solicit or induce any Company employee to discontinue his
or her employment with the Company, (b) usurp any opportunity of the Company
that Executive became aware of during his tenure at the Company or which is made
available to him on the basis of the belief that Executive is still employed by
the Company, or (c) directly or indirectly solicit or induce or attempt to
influence any person or business that is an account, customer or client of the
Company to restrict or cancel the business of any such account, customer or
client with the Company.
VI.
NON-COMPETITION
Executive agrees that given the extent and nature of the Confidential
Information he obtains during the course of his employment, it would be
inevitable that such Confidential Information would be disclosed or utilized by
the Executive should he obtain employment from, or become associated with, an
entity or person that is engaged in a business whose products or services are
substantially similar in function or capability to the products or services then
being developed, manufactured or sold by the Company, and are marketed to
substantially the same type of user as that to which the products and services
of the Company are marketed or proposed to be marketed. In order to protect the
Confidential Information Executive obtains during the course of his employment,
Executive agrees that, so long as Executive is employed by the Company and for a
period of six (6) months after termination of his employment for any reason,
Executive shall not, without the prior written consent of the Company, either
directly or indirectly, including without limitation through a partnership,
joint venture, corporation or other entity or as a consultant, director or
employee, engage in a business whose products or services are substantially
similar in function or capability to the products or services then being
developed, manufactured or sold by the Company, and are marketed to
substantially the same type of user as that to which the products and services
of the Company are marketed or proposed to be marketed.
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The parties hereto agree that both the scope and nature of the
covenant and the duration and area for which the covenant not to compete set
forth in this Article VI is to be effective are reasonable in light of all facts
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and circumstances. In the event that any provision of this Agreement, including
without limitation any provision of this Article VI, shall to any extent be held
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invalid, unreasonable or unenforceable, in any circumstances, the parties hereto
agree that the remainder of this Agreement and the application of such provision
of this Agreement to other circumstances shall be valid and enforceable to the
fullest extent permitted by law. If any provision, or any part thereof, is held
to be unenforceable because of the scope or duration of or the area covered by
such provision, the parties hereto agree that the court making such
determination shall have the power, and is hereby asked by the parties, to
reduce the scope, duration and/or areas of such provisions (and to substitute
appropriate provisions for any such unenforceable provisions) in order to make
such provisions enforceable to the fullest extent permitted by law, and/or to
delete specific words and phrases, and such modified provisions shall then be
enforceable and shall be enforced.
VII.
MISCELLANEOUS
7.1 Successors; Binding Agreement. This Agreement shall not be
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terminated by the voluntary or involuntary dissolution of the Company or by any
merger or consolidation, whether or not the Company is the surviving or
resulting corporation, or upon any transfer of all or substantially all of the
assets of the Company. In the event of any such merger, consolidation or
transfer of assets, the provisions of this Agreement shall bind and inure to the
benefit of the surviving or resulting corporation, or the corporation to which
such assets shall have been transferred, as the case may be; provided, however,
that the Company will require any successor to all or substantially all of the
business and/or assets of the Company, by agreement in form and substance
satisfactory to Executive, to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place.
7.2 Arbitration. Any disputes or controversy between the parties to
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this Agreement, including allegations of fraud and misrepresentation arising
from or as a result of this Agreement, the resulting business dealings between
Company and Executive, Executive's employment or the termination thereof,
including any claims of discrimination or other claims under any federal, state,
or local law or regulation now in existence or hereinafter enacted concerning in
any way the subject of Executive's employment with Company or its termination,
shall be resolved, after the parties attempt informal resolution, exclusively by
arbitration in accordance with the National Rules for the Resolution of
Employment Disputes of the American Arbitration Association. All arbitration
hearings shall be held in Orange County, California within one hundred twenty
days from the date arbitration is demanded by any of the parties and the
arbitrator shall render his/her written decision within thirty days after the
arbitration hearing has concluded. The decision of the arbitrator shall be final
and binding on all parties, and may be entered as a judgment by any party with
any federal or state court of competent jurisdiction. The parties to the
arbitration hearing shall share any filing fees and arbitrator's fees which must
be paid in advance of the hearing equally; however, as set forth below the
prevailing party shall be entitled to recover from the losing party all costs
that it has incurred as a result of the arbitration hearing, including fees paid
to the arbitrator, travel costs and attorneys' fees. This provision shall not
alter
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the rights of the parties to seek and obtain the provisional equitable remedies
provided under any applicable state or federal law. Executive represents, by her
signature, that he is making a voluntary and knowing waiver of her right to
pursue any and all employment-related claims in court.
7.3 No Waiver. The waiver by either party of a breach of any
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provision of this Agreement shall not operate as or be construed as a waiver of
any subsequent breach thereof.
7.4 Governing Law. This Agreement shall be construed and enforced in
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accordance with the laws and decisions of the State of California.
7.5 Entire Agreement; Modifications. This Agreement represents the
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entire agreement between the parties with respect to the matters set forth
herein and supersedes all prior agreements and understandings between the
parties relating to the employment of Executive by the Company, and it may not
be changed or terminated orally. No modification, termination, or attempted
waiver of any other provisions of this Agreement shall be valid unless in
writing signed by the party against whom the same is sought to be enforced.
7.6 Jurisdiction; Venue. The parties do hereby agree and submit to
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personal jurisdiction in the State of California for the purposes of any
proceedings brought to enforce or construe the terms of this Agreement or to
resolve any dispute or controversy relating to Executive's employment or arising
under, as a result of, or in connection with this Agreement, and do hereby agree
and stipulate that any such proceedings shall be venued and held in Orange
County, California.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the day and year first above written.
The "COMPANY":
XXX.XXX Inc.
a Delaware corporation
By: ____________________________
Its:____________________________
"EXECUTIVE":
________________________________
Name: __________________________
EXHIBITS
EXHIBIT A Employee Proprietary
Information and Inventions
Agreement
6
AMENDMENT NO. 1
TO THE
EMPLOYMENT AGREEMENT
THIS AMENDMENT NO. 1 TO THE EMPLOYMENT AGREEMENT (the "Amendment") is made
and entered into effective as of this ___ day of July, 1999 (the "Effective
Date") by and between Xxx.Xxx Inc., a Delaware corporation (the "Company"), and
Xxxx Xxxxxxx, an individual ("Executive").
RECITALS
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A. The Company and Executive entered into that certain Employment Agreement
(the "Employment Agreement") dated March 1, 1999 governing the terms of
Executive's employment with the Company and certain related compensation
matters. Capitalized terms, unless expressly defined herein, shall have the
same meaning herein as provided in the Employment Agreement.
B. The parties hereto desire to amend the Employment Agreement as provided in
this Amendment.
AGREEMENT
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NOW, THEREFORE, the parties hereto agree as follows:
1. Term.
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Section 4.1 of the Employment Agreement is hereby amended and restated in
its entirety to provide as follows:
"4.1 Term. The term of Executive's employment under this Agreement shall
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commence on March 1, 1999 and shall continue for one year from such date, as
such date may be extended from time to time. After expiration of the initial one
year period of this Agreement, Executive's employment will automatically renew
for a period of one year, each year, on the same terms and conditions as are set
forth herein except as provided below, unless either party gives the other
notice of non-renewal at least thirty (30) days prior to the end of the initial
term of employment, or for any year in which the employment was renewed,
whichever the case may be. Notwithstanding anything to the contrary contained
herein, Sections 3.2, 3.3, 3.4 and 3.5 of this Agreement shall not apply or have
any force or effect any time after the initial one year term."
2. Stock Options
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Section 2.2 of the Employment Agreement is hereby amended and restated in
its entirety to provide as follows:
"2.2 Stock Options. The Company shall grant Executive an option to
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purchase Four Hundred Eighty Four Thousand Five Hundred and Ten (484,510) shares
of the Company's common stock, subject to the vesting structure noted in the
Offer Letter dated February 12, 1999 and the provisions set forth in the
Company's Stock Option Plan and Stock Option agreement."
3. Effect of Amendment.
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Except as hereby modified and amended by this Amendment, the Employment
Agreement shall remain unchanged and shall continue in full force and effect.
4. General Provisions.
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3.1 Counterparts. This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
3.2 Headings. The various headings used in this Amendment are
inserted for convenience only and shall not affect the meaning or interpretation
of the Employment Agreement, as amended by this Amendment, or any provision
thereof.
3.3 Entire Amendment. This Amendment, the Executive Agreement (and
those Agreements incorporated by reference therein) constitute the entire
agreement between the parties hereto with respect to the subject matter hereof
and supersede all prior agreements, representations, undertakings and
understandings, both written and oral, between the Company and Executive with
respect to the subject matter hereof.
IN WITNESS WHEREOF, the undersigned have executed this Amendment No. 1 to
the Employment Agreement effective as of the day and year first above written.
The "COMPANY":
XXX.XXX INC., a Delaware corporation
By:__________________________________
Its:_________________________________
"EXECUTIVE":
_____________________________________
Name: Xxxx Xxxxxxx
AMENDMENT NO. 1
TO THE
EMPLOYMENT AGREEMENT
THIS AMENDMENT NO. 1 TO THE EMPLOYMENT AGREEMENT (the "Amendment") is made
and entered into effective as of this ___ day of July, 1999 (the "Effective
Date") by and between Xxx.Xxx Inc., a Delaware corporation (the "Company"), and
Xxxx Xxxxxxx, an individual ("Executive").
RECITALS
--------
A. The Company and Executive entered into that certain Employment Agreement
(the "Employment Agreement") dated March 1, 1999 governing the terms of
Executive's employment with the Company and certain related compensation
matters. Capitalized terms, unless expressly defined herein, shall have
the same meaning herein as provided in the Employment Agreement.
B. The parties hereto desire to amend the Employment Agreement as provided in
this Amendment.
AGREEMENT
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NOW, THEREFORE, the parties hereto agree as follows:
1. Term.
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Section 4.1 of the Employment Agreement is hereby amended and restated in
its entirety to provide as follows:
"4.1 Term. The term of Executive's employment under this Agreement shall
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commence on March 1, 1999 and shall continue for one year from such date, as
such date may be extended from time to time. After expiration of the initial
one year period of this Agreement, Executive's employment will automatically
renew for a period of one year, each year, on the same terms and conditions as
are set forth herein except as provided below, unless either party gives the
other notice of non-renewal at least thirty (30) days prior to the end of the
initial term of employment, or for any year in which the employment was renewed,
whichever the case may be. Notwithstanding anything to the contrary contained
herein, Sections 3.2, 3.3, 3.4 and 3.5 of this Agreement shall not apply or have
any force or effect any time after the initial one year term."
2. Stock Options
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Section 2.2 of the Employment Agreement is hereby amended and restated in
its entirety to provide as follows:
"2.2 Stock Options. The Company shall grant Executive an option to
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purchase Four Hundred Eighty Four Thousand Five Hundred and Ten (484,510) shares
of the Company's common stock, subject to the vesting structure noted in the
Offer Letter dated February 12, 1999 and the provisions set forth in the
Company's Stock Option Plan and Stock Option agreement."
3. Effect of Amendment.
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Except as hereby modified and amended by this Amendment, the Employment
Agreement shall remain unchanged and shall continue in full force and effect.
4. General Provisions.
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3.1 Counterparts. This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
3.2 Headings. The various headings used in this Amendment are
inserted for convenience only and shall not affect the meaning or interpretation
of the Employment Agreement, as amended by this Amendment, or any provision
thereof.
3.3 Entire Amendment. This Amendment, the Executive Agreement (and
those Agreements incorporated by reference therein) constitute the entire
agreement between the parties hereto with respect to the subject matter hereof
and supersede all prior agreements, representations, undertakings and
understandings, both written and oral, between the Company and Executive with
respect to the subject matter hereof.
IN WITNESS WHEREOF, the undersigned have executed this Amendment No. 1 to
the Employment Agreement effective as of the day and year first above written.
The "COMPANY":
XXX.XXX INC., a Delaware corporation
By:_________________________________
Its:________________________________
"EXECUTIVE":
____________________________________
Name: Xxxx Xxxxxxx
