EXHIBIT 10.20
EMPLOYMENT AGREEMENT
This Agreement is entered into as of May 23, 1997, by and between
XXXXXX X. XXXX (the "Employee") and XXXX, XXXXXX & ASSOCIATES, INC., a
California corporation (the "Company").
1. Term of Employment.
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(a) Basic Rule. The Company agrees to continue the Employee's
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employment, and the Employee agrees to remain in employment with the Company,
from the date of this Agreement until the date when the Employee's employment
terminates pursuant to Subsection (b), (c) or (d) below.
(b) Without Cause. Subject to Section 6, the Company may terminate
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the Employee's employment at any time by giving the Employee 30 days' advance
notice in writing. The Employee may terminate her employment by giving the
Company 30 days' advance notice in writing. The Employee's employment shall
terminate automatically in the event of her death. Any waiver of notice shall
be valid only if it is made in writing and expressly refers to the applicable
notice requirement of this Section 1.
(c) Cause. The Company may terminate the Employee's employment at any
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time for Cause. For all purposes under this Agreement, "Cause" shall mean one
of the following:
(i) A failure by the Employee to perform her material duties
hereunder which continues for more than 30 days after receipt of a written
warning from the Company specifying the act or omission that constitutes
Cause, other than a failure resulting from the Employee's complete or partial
incapacity due to physical or mental illness or impairment;
(ii) Gross misconduct or fraud; or
(iii) Conviction of, or a plea of "guilty" or "no contest"
to, a felony.
(d) Disability. The Company may terminate the Employee's active
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employment due to Disability by giving the Employee 30 days' advance notice in
writing. For all purposes under this Agreement, "Disability" shall mean that
the Employee, at the time notice is given, has performed substantially none of
her duties under this Agreement for a period of not less than three consecutive
months as the result of her incapacity due to physical or mental illness. In
the event that the Employee resumes the performance of substantially all of her
duties hereunder before the termination of her active employment under this
Subsection (d) becomes effective, the notice of termination shall automatically
be deemed to have been revoked.
(e) Rights Upon Termination. Except as expressly provided in Sections
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6 and 7, upon the termination of the Employee's employment pursuant to this
Section 1, the Employee shall only be entitled to the compensation, benefits and
reimbursements described in Sections 3, 4 and 5 for the period preceding the
effective date of the termination. The payments under this Agreement shall
fully discharge all responsibilities of the Company to the Employee.
(f) Termination of Agreement. This Agreement shall terminate when all
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obligations of the parties hereunder have been satisfied.
2. Duties and Scope of Employment.
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(a) Position. The Company agrees to employ the Employee as its Chief
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Executive Officer for the term of her employment under this Agreement
("Employment"). The Employee shall be subject to the supervision of, and shall
have such authority as is delegated to her by the Company's Board of Directors
(the "Board"), and her powers and authority shall be superior to any other
officer or employee of the Company. The Company agrees to use its best efforts
to cause the Employee to be nominated for election as a member of the Company's
Board throughout the term of her Employment.
(b) Obligations. During the term of her Employment, the Employee
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shall devote her full business efforts and time to the Company and its
subsidiaries (if any). She shall not render services to any other person or
entity without the express prior approval of the Board. Such approval shall not
be withheld unreasonably, provided that service on the boards of directors of
other corporations will be approved only if (i) such other corporations are not
engaged in activities that are competitive, or potentially competitive, with the
Company and (ii) such other corporations are of a quality and stature
commensurate, in the sole judgment of the Board, with the Employee's position
under this Agreement and with the Company's objectives.
3. Compensation.
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(a) Salary. During the term of her Employment, the Company agrees to
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pay the Employee as compensation for her services a base salary at the annual
rate of $260,000 or at such higher rate as the Company may determine from time
to time. Such salary shall be payable in accordance with the Company's standard
payroll procedures. (The annual compensation specified in this Subsection (a),
together with any increases in such compensation that the Company may grant from
time to time, is referred to in this Agreement as "Base Compensation.")
(b) Bonus Program. The Employee shall be eligible to receive a bonus
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of up to 75% of her Base Compensation by participating in a bonus program for
fiscal year 1997 and subsequent years during the term of her Employment, subject
to the generally applicable terms and conditions of such program and to the
determinations of the Board or any committee administering such program.
(c) Car Allowance. During the term of her Employment, the Company
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agrees to pay for a car lease on behalf of the Employee.
4. Employee Benefits.
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(a) Vacation. During the term of her Employment, the Employee shall
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be entitled to four weeks of paid vacation per year. Vacation time shall accrue
in accordance with the Company's generally applicable vacation policies.
(b) Group Insurance. During the term of her Employment, the Employee
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shall be eligible to participate in the employee benefit plans maintained by the
Company, subject in each case to the generally applicable terms and conditions
of the plan in question and to the determinations of any person or committee
administering such plan. The Employee shall be eligible to commence
participation in the Company's medical, dental and group life insurance program
effective immediately.
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5. Business Expenses.
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During the term of her Employment, the Employee shall be authorized to
incur necessary and reasonable travel, entertainment and other business
expenses in connection with her duties hereunder. The Company shall reimburse
the Employee for such expenses upon presentation of an itemized account and
appropriate supporting documentation, all in accordance with the Company's
generally applicable policies.
6. Involuntary or Constructive Termination.
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(a) Salary Continuation. In the event that the Company terminates the
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Employee's Employment without her consent for any reason other than Cause, or
the Employee is subject to a Constructive Discharge (as defined in Subsection
(b) below), then the Company shall pay to the Employee each of the following,
subject to the terms of Section 7 below:
(i) The Employee's Base Compensation (at the annual rate then
in effect) for 24 months following a termination of the Employee's Employment,
in accordance with the Company's standard payroll procedures; and
(ii) Continued coverage at the Company's expense under all
medical plans in which the Employee and the Employee's dependents have
participated through date of termination, provided the Employee is eligible
for and elects COBRA coverage, for a period extending through the earlier of
12 months after the Employee's termination of employment and the date that the
Employee's (or, with respect to a dependent, such dependent's) COBRA
eligibility ceases.
The payments under this Subsection (a) shall cease in the event of the
Employee's death.
(b) Definition of "Constructive Discharge." For purposes of this
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Agreement, the term "Constructive Discharge" shall mean that one of the
following events occurs:
(c) The Employee's responsibilities are materially diminished, the
Employee is assigned duties that are inconsistent with her position under this
Agreement or the Employee's title is changed without her consent; or
(d) The Employee's Base Compensation is reduced.
7. Non-competition.
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(a) Competitive Activities. The Employee shall not engage in
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Competitive Activities during the 24-month period in which she receives the
salary continuation set forth in Section 6(a). The Employee will be deemed to
be engaged in Competitive Activities if during the term of this Agreement and
for two years following the termination of the Employee's Employment, the
Employee, directly or indirectly, engages in any business or activity in which
the Company or any subsidiary of the Company is engaged ("Competitive
Businesses") or be employed by, render services of any kind to, advise or
receive compensation in any form from, or invest or participate in any manner or
capacity in, any entity or person which directly or indirectly engages in a
Competitive Business.
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(b) Exception. Subsection (a) above shall not preclude investments in
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a corporation whose stock is traded on a public market and of which the Employee
owns less than one percent.
(c) Purpose of Restrictions. It is agreed by the Employee and the
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Company that the restrictions contained in Subsection (a) above are reasonable
and necessary to protect the confidentiality of the customer lists and trade
secrets, and other confidential information concerning the Company, acquired by
the Employee.
(d) Modification by Court. If any of the restrictions contained in
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Subsection (a) above is determined to be unenforceable because of the duration
of such restrictions or the area covered thereby, then the court making the
determination shall have the power to reduce the duration of such restrictions
and/or the area covered thereby, and such restrictions, in their reduced form,
shall be enforceable.
8. Successors.
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(a) Company's Successors. The Company shall require any successor
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(whether direct or indirect and whether by purchase, lease, merger,
consolidation, liquidation or otherwise) to all or substantially all of the
Company's business and/or assets, by an agreement in substance and form
satisfactory to the Employee, to assume this Agreement and to agree expressly to
perform this Agreement in the same manner and to the same extent as the Company
would be required to perform it in the absence of a succession. The Company's
failure to obtain such agreement prior to the effectiveness of a succession
shall be a breach of this Agreement and shall entitle the Employee to the
compensation to which she would have been entitled pursuant to Section 6(a), if
the Company involuntarily terminates her Employment without Cause immediately
after such succession becomes effective. For all purposes under this Agreement,
the term "Company" shall include any successor to the Company's business and/or
assets which executes and delivers the assumption agreement described in this
Subsection (a) or which becomes bound by this Agreement by operation of law.
(b) Employee's Successors. This Agreement and all rights of the
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Employee hereunder shall inure to the benefit of, and be enforceable by, the
Employee's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
9. Nondisclosure.
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Prior to the commencement of Employee's Employment, Employee shall
have entered into an Employee Proprietary Information and Inventions Agreement
with the Company.
10. Miscellaneous Provisions.
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(a) Notice. Notices and all other communications contemplated by
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this Agreement shall be in writing and shall be deemed to have been duly given
when personally delivered or when mailed by U.S. registered mail, return
receipt requested and postage prepaid. In the case of the Employee, mailed
notices shall be addressed to her at the home address which she most recently
communicated to the Company in writing. In the case of the Company, mailed
notices shall be addressed to its corporate headquarters, and all notices
shall be directed to the attention of its Secretary.
(b) Waiver. No provision of this Agreement shall be modified,
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waived or discharged unless the modification, waiver or discharge is agreed to
in writing and signed by
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the Employee and by an authorized officer of the Company (other than the
Employee). No waiver by either party of any breach of, or of compliance with,
any condition or provision of this Agreement by the other party shall be
considered a waiver of any other condition or provision or of the same
condition or provision at another time.
(c) Whole Agreement; Modifications. No agreements, representations
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or understandings (whether oral or written and whether express or implied)
which are not expressly set forth in this Agreement have been made or entered
into by either party with respect to the subject matter hereof. This Agreement
and the Employee Proprietary Information and Inventions Agreement contain the
entire understanding of the parties with respect to the subject matter hereof.
A modification of this Agreement shall be valid only if it is made in writing
and executed by both parties hereto.
(d) Withholding Taxes. All payments made under this Agreement
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shall be subject to reduction to reflect taxes or other charges required to be
withheld by law.
(e) Choice of Law. The validity, interpretation, construction
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and performance of this Agreement shall be governed by the laws of the State
of California (except their provisions governing the choice of law).
(f) Severability. The invalidity or unenforceability of any
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provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision hereof, which shall remain in full force
and effect.
(g) Arbitration. Any controversy or claim arising out of or
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relating to this Agreement, or the breach thereof, shall be settled by
arbitration in accordance with the Commercial Arbitration Rules of the
American Arbitration Association, and judgment on the award rendered by the
arbitrator may be entered in any court having jurisdiction thereof. All fees
and expenses of the arbitrator and such Association shall be paid equally by
the parties.
(h) Employment at Will. Nothing in this Agreement shall confer
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upon the Employee any right to continue in Employment for any period of
specific duration or interfere with or otherwise restrict in any way the
rights of the Company or of the Employee, which rights are hereby expressly
reserved by each, to terminate her Employment at any time and for any reason,
with or without Cause.
(i) No Assignment. The rights of any person to payments or benefits
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under this Agreement shall not be made subject to option or assignment, either
by voluntary or involuntary assignment or by operation of law, including
(without limitation) bankruptcy, garnishment, attachment or other creditor's
process, and any action in violation of this Subsection (i) shall be void.
(j) Counterparts. This Agreement may be executed in two or more
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counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, all of the parties have executed this Agreement,
in the case of the Company by its duly authorized officer, as of the day and
year first above written.
/s/ Xxxxxx Xxxx
______________________________
Xxxxxx Xxxx
XXXX, XXXXXX AND ASSOCIATES, INC.
By /s/ Xxxx Xxxxxxxx
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Xxxx Xxxxxxxx, President
