Exhibit 99.17
EMPLOYMENT AGREEMENT
This Employment Agreement ("AGREEMENT") is entered into as of June 16, 2005
(the "EFFECTIVE DATE"), by and between Xxxxx.xxx, Inc., a Washington corporation
(the "COMPANY"), and Xxxx XxXxx ("EMPLOYEE").
The parties agree as follows:
1. EMPLOYMENT. The Company hereby employs Employee through its wholly-owned
subsidiary, Jadeon, Inc. ("JADEON"), and Employee hereby accepts such
employment, upon the terms and conditions set forth in this Agreement.
2. DUTIES.
2.1 POSITION. Employee shall report directly to the Company's
President or Chief Executive Officer and perform such duties as are customary
for the position of Division Executive. Employee shall devote Employee's full
business time and efforts to the performance of Employee's assigned duties for
the Company, provided, however, that Employee, subject to the approval of the
President, Chief Executive Officer or the Company's Board of Directors (the
"BOARD"), may devote reasonable periods of time to (a) serving on the boards of
directors of other corporations, and (b) engaging in charitable or community
service activities, so long as none of the foregoing additional activities
materially interferes with Employee's duties under this Agreement.
2.2 WORK LOCATION. Employee's principal place of work shall be located
in Irvine, California, or such other location as the parties may agree upon from
time to time.
3. TERM. The employment relationship pursuant to this Agreement shall be
for an initial term (the "INITIAL TERM") commencing on the Effective Date set
forth above and continuing until the earlier of (i) two (2) years from the
Effective Date or (ii) the date on which Employee exercises his right to
repurchase all of the outstanding shares of Jadeon pursuant to Article X of that
certain Stock Purchase Agreement by and between the Company and Employee dated
as of May 17, 2005, as amended, and may be terminated by Employee or the Company
at any time, with or without Cause (as defined in Section 7.1) or for Good
Reason (as defined in Section 7.2), subject to the provisions regarding
termination set forth in Section 7; provided, however, that the employment
relationship pursuant to this Agreement shall be automatically renewed for
additional twelve-month terms, unless either party gives the other notice of
intention to terminate not less than sixty (60) days prior to the end of the
Initial Term or any renewal period thereof.
4. COMPENSATION.
4.1 BASE SALARY. As compensation for Employee's performance of
Employee's duties under this Agreement, the Company shall pay Employee a base
salary ("BASE SALARY"), at a monthly rate, initially, of $10,416.67 (which
equals $125,000.00 per year), payable in accordance with the normal payroll
practices of the Company, less required deductions for state and federal
withholding tax, social security and all other employment taxes and payroll
deductions.
4.2 INCENTIVE COMPENSATION. If, during the period commencing from the
Effective Date through June 16, 2015, cumulative Gross Revenues exceed
$60,000,000 in the aggregate (such excess Gross Revenues shall be referred to
herein as the "EXCESS GROSS REVENUES"), the Company shall pay Employee a
commission equal to the lesser of the following: (a) 10.0% of any such Excess
Gross Revenues recognized by Jadeon for such period, or (b) 100% of Jadeon's net
income plus amortization
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for such period, calculated consistently with generally accepted accounting
principles, as applied by the Company (the "COMMISSION PAYMENT"), payable on
quarterly basis, less required deductions for state and federal withholding tax,
social security and all other employment taxes and payroll deductions. For
purposes of this Agreement, "GROSS REVENUES" means the gross revenues recognized
by Jadeon from the sales of its products and services from the business
conducted by Jadeon, excluding costs of all hardware sales of Jadeon that are
sold as part of a system installation, in all cases calculated consistently with
generally accepted accounting principles, as applied by the Company. In no event
shall Employee be entitled to any Commission Payment for any Excess Gross
Revenues received by Jadeon or the Company after June 16, 2015. The parties
acknowledge and agree that Jadeon's results of operations will be included in
the consolidated financial statements of the Company, and, as a result, the
parties agree that, for purposes of calculating Jadeon's net income plus
amortization, Jadeon will be assigned its reasonable portion of the general and
administrative costs of the Company, as determined by the Company's independent
auditors, provided that the amount of such general and administrative costs
assigned to Jadeon shall not exceed $20,000 per month.
4.3 PERFORMANCE AND SALARY REVIEW. The Board will periodically review
Employee's performance on no less than an annual basis to determine whether
Employee's salary or other compensation will be adjusted. Adjustments to salary
or other compensation, if any, will be made by the Board in its sole and
absolute discretion.
4.4 VACATION. Employee shall accrue three (3) calendar weeks of paid
vacation in each year of this Agreement in addition to regular Company holidays.
Vacation may be carried over to the following year and shall not be deemed
forfeited if unused, provided, however, that Employee may not accrue more than
four (4) calendar weeks of vacation.
5. BENEFITS AND INSURANCE. Employee shall be entitled to all health
insurance and other benefits that the Company may make generally available from
time to time to its employees.
6. BUSINESS EXPENSES. The Company shall pay, or promptly reimburse, the
Employee for all reasonable, out-of-pocket business expenses incurred in the
performance of Employee's duties on behalf of Company for which Employee submits
appropriate supporting documentation.
7. TERMINATION OF EMPLOYEE'S EMPLOYMENT.
7.1 TERMINATION FOR CAUSE BY COMPANY. The Company may terminate
Employee's employment at any time for Cause. For purposes of this Agreement,
"CAUSE" is defined as: (a) acts constituting willful misconduct on the part of
Employee with respect to Employee's obligations or otherwise relating to the
business of Company, including any wilful breach of this Agreement or the
Employee Nondisclosure and Assignment Agreement entered into by Employee at the
commencement of his employment with Jadeon (the "EMPLOYEE NDA"), which breach is
not cured within ten (10) days following written notice specifying the breach of
this Agreement or the Employee NDA given by Employee to the Company; or (b)
Employee's conviction or entry of a plea of nolo contendere for fraud or
embezzlement, any felony, or any crime involving moral turpitude. In the event
Employee's employment is terminated in accordance with this Section 7.1,
Employee shall be entitled to receive only (i) the Base Salary then in effect,
prorated to the actual date of Employee's termination of employment with Jadeon
or the Company (the "TERMINATION DATE"), and (ii) accrued but unused vacation as
of the Termination Date, less applicable withholdings. All other Company
obligations to Employee, including but not limited to, any bonus or other
compensation, as described in Sections 4.2, or Severance (as defined in Section
7.2), will automatically terminate and be completely extinguished as of the
Termination Date.
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7.2 TERMINATION WITHOUT CAUSE OR VOLUNTARY RESIGNATION WITH GOOD
REASON. If the Company terminates Employee's employment without Cause (as
defined in Section 7.1) or if Employee terminates his employment for Good Reason
(defined as (i) the removal of Employee from the executive office set forth in
Section 2.1 above, without Employee's consent, or (ii) any significant
diminution, without Employee's consent, in the nature or scope of the
authorities, powers, functions, duties or compensation attached to such
executive office; or (iii) any material breach by the Company of any of its
obligations under this Agreement, which breach is not cured within ten (10) days
following written notice specifying the breach given by Employee to the
Company), upon Employee's compliance with Section 7.4, Employee will be entitled
to receive the following, less applicable withholdings: (a) the greater of (i)
Employee's Base Salary then in effect for the remainder of the Initial Term or
(ii) an amount equal to one (1) year of Employee's Base Salary then in effect,
in either case payable in accordance with the Company's normal payroll
practices; (b) all accrued but unused vacation; and (c) Commission Payments, if
any, payable in accordance with Section 4.2 (together, "SEVERANCE"). All other
Company obligations to Employee pursuant to this Agreement will automatically
terminate and be completely extinguished.
7.3 VOLUNTARY RESIGNATION BY EMPLOYEE WITHOUT GOOD REASON. Employee
may voluntarily resign his position with Company at any time on sixty (60) days'
advance written notice without Good Reason. In the event of Employee's
resignation without Good Reason, Employee will be entitled to receive only (i)
the Base Salary then in effect, prorated to the Termination Date, and (ii)
accrued but unused vacation as of the Termination Date. All other Company
obligations to Employee pursuant to this Agreement will become automatically
terminated and completely extinguished.
7.4 EMPLOYEE'S EXECUTION OF RELEASE. The payment of Severance
described in Section 7.2 is expressly contingent upon Employee's signing a full
and general release of any and all claims against the Company and its officers,
directors, investors and affiliates.
7.5 TERMINATION UPON DEATH OR DISABILITY. In the event that Employee's
employment terminates as a result of his death or Disability (as defined below),
upon Employee's or Employee's heirs or estate's compliance with Section 7.4,
Employee or his heirs or estate will be entitled to receive Severance as
described in Section 7.2. For purposes of this Agreement, "DISABILITY" shall
mean the inability of Employee, in the opinion of a qualified physician
acceptable to the Company, to perform the major duties of Employee's position
with the Company because of sickness or injury of Employee.
7.6 OFFSETS. Upon termination of Employee's employment for any reason,
Employee acknowledges and agrees that the Company will have the right to offset
from Employee's final paycheck or from any other amounts due Employee any
amounts due and owing the Company. Such offsets shall include, but not be
limited to, the Book Value of any asset loaned to the Employee, but that has not
been returned to the Company before or on the Termination Date. For purposes of
this Section 7.6, "BOOK VALUE" shall be defined as the amount carried on the
balance sheet of the Company at the time of the Termination Date, provided, that
if the asset is not depreciated according to generally accepted accounting
principles, the value of the loaned asset shall be the replacement value of the
asset at the time of the Termination Date.
8. AGREEMENT TO ARBITRATE AND GOVERNING LAW. This Agreement shall be
governed by, and construed in accordance with, the laws of the State of
California as though made and to be fully performed in that State. Any
controversies or claims arising out of or relating to this Agreement shall be
fully and finally settled by arbitration in accordance with the Employment
Arbitration Rules of the American Arbitration Association then in effect (the
"AAA RULES"), conducted by one arbitrator either mutually agreed upon by the
Company and Employee or chosen in accordance with the AAA Rules, except that the
parties shall have any right to discovery as would be permitted by the Federal
Rules of
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Civil Procedure for a period of ninety (90) days following the commencement of
such arbitration and the arbitrator thereof shall resolve any dispute which
arises in connection with such discovery. The prevailing party shall be entitled
to costs, expenses, and reasonable attorneys' fees, and judgment upon the award
rendered by the arbitrator may be entered in any court having jurisdiction
thereof. Notwithstanding the foregoing, this arbitration provision shall not
apply to any disputes or claims relating to or arising out of the misuse or
misappropriation of the Company's trade secrets or proprietary information.
9. GENERAL PROVISIONS.
9.1 SUCCESSORS AND ASSIGNS. The rights and obligations of Company
under this Agreement shall inure to the benefit of and shall be binding upon the
successors and assigns of the Company. Employee shall not be entitled to assign
any of Employee's rights or obligations under this Agreement.
9.2 WAIVER. Either party's failure to enforce any provision of this
Agreement shall not in any way be construed as a waiver of any such provision,
or prevent that party thereafter from enforcing each and every other provision
of this Agreement.
9.3 SEVERABILITY. In the event any provision of this Agreement is
found to be unenforceable by an arbitrator or court of competent jurisdiction,
such provision shall be deemed modified to the extent necessary to allow
enforceability of the provision as so limited, it being intended that the
parties shall receive the benefit contemplated in this Agreement to the fullest
extent permitted by law. If a deemed modification is not satisfactory in the
judgment of such arbitrator or court, the unenforceable provision shall be
deemed deleted, and the validity and enforceability of the remaining provisions
shall not be affected.
9.4 INTERPRETATION; CONSTRUCTION. The headings set forth in this
Agreement are for convenience only and shall not be used in interpreting this
Agreement. Both parties have participated in the negotiation of this Agreement.
Therefore, the normal rule of construction to the effect that any ambiguities
are to be resolved against the drafting party shall not be employed in the
interpretation of this Agreement.
9.5 NOTICES. Any notice required or permitted by this Agreement shall
be in writing and shall be delivered as follows with notice deemed given as
indicated: (a) by personal delivery when delivered personally; (b) by overnight
courier upon written verification of receipt; (c) by telecopy or facsimile
transmission upon acknowledgment of receipt of electronic transmission; or (d)
by certified or registered mail, return receipt requested, upon verification of
receipt. Notice shall be sent to the addresses set forth below, or such other
address as either party may specify in writing.
9.6 EMPLOYEE POLICIES. Employee agrees to comply with all Company
policies and procedures as adopted from time to time. Without limiting the
foregoing, Employee expressly acknowledges that the Company is committed to
maintaining a drug and alcohol-free workplace. Employee consents to drug and
alcohol testing when such testing is required for any particular client
engagement, and authorizes release of such test results to the Company and such
client and their designated agents. Employee further releases the Company from
any and all claims, demands or liabilities that may arise in connection with the
administration of any drug and alcohol test or use of the test results.
9.7 SURVIVAL. Section 7 ("Termination of Employee's Employment"),
Section 8 ("Agreement to Arbitrate and Governing Law") and Section 9 ("General
Provisions") of this Agreement shall survive Employee's employment by the
Company.
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9.8 INJUNCTIVE RELIEF. Employee acknowledges that the Company will
suffer immediate and irreparable harm, which will not be compensable by damages
alone, if Employee repudiates or breaches any of the provisions of this
Agreement, or threatens or attempts to do so. If any such actual, threatened or
attempted repudiation or breach occurs, Employee agrees and stipulates that the
Company, in addition to and not in limitation of any other rights, remedies or
damages available to it at law or in equity, shall be entitled to obtain
temporary, preliminary and permanent injunctions to prevent or restrain any such
breach, and the Company shall not be required to post a bond as a condition for
the granting of such relief.
9.9 ENTIRE AGREEMENT. This Agreement and the Employee NDA, constitute
the entire agreement between the parties relating to this subject matter and
supersede all prior or simultaneous representations, discussions, negotiations,
and agreements, whether written or oral. This Agreement may be amended or
modified only with the written consent of Employee and a duly authorized officer
of the Company. No oral waiver, amendment or modification will be effective
under any circumstances whatsoever.
THE PARTIES TO THIS AGREEMENT HAVE READ THE FOREGOING AGREEMENT AND FULLY
UNDERSTAND EACH AND EVERY PROVISION. WHEREFORE, THE PARTIES HAVE EXECUTED THIS
AGREEMENT ON THE DATES SHOWN BELOW.
XXXX XXXXX
Dated:
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Address:
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XXXXX.XXX, INC.
Dated: By:
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(signature)
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(print name)
Its:
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