Exhibit 10.22
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made and entered into effective
as of April 13, 2000, by and between Xxxxxx Xxxxx (the "Executive") and
Electronics for Imaging, Inc., a Delaware corporation (the "Company").
RECITALS
A. It is expected that the Company from time to time will consider the
possibility of an acquisition by another company or other change of control. The
Board of Directors of the Company (the "Board") recognizes that such
consideration can be a distraction to the Executive and can cause the Executive
to consider alternative employment opportunities. The Board has determined that
it is in the best interests of the Company and its stockholders to assure that
the Company will have the continued dedication and objectivity of the Executive,
notwithstanding the possibility, threat or occurrence of a Change of Control (as
defined below) of the Company.
B. The Board believes that it is in the best interests of the Company
and its stockholders to provide the Executive with an incentive to continue his
employment and to motivate the Executive to maximize the value of the Company
upon a Change of Control for the benefit of its stockholders.
C. The Board believes that it is imperative to provide the Executive
with certain benefits upon a Change of Control and, under certain circumstances,
upon termination of the Executive's full-time employment in connection with a
Change of Control, which benefits are intended to provide the Executive with
financial security and provide sufficient incentive and encouragement to the
Executive to remain with the Company notwithstanding the possibility of a Change
of Control.
D. Further, the Board believes that it is in the best interest of the
Company and its stockholders to provide additional benefits to the Executive in
the event the Executive's employment terminates for any reason other than a
Change in Control. Such benefits are intended to provide the Executive with
financial security and provide sufficient incentive and encouragement to the
Executive to remain with the Company notwithstanding the possible termination of
employment.
E. To accomplish the foregoing objectives, the Board of Directors has
directed the Company, upon execution of this Agreement by the Executive, to
agree to the terms provided herein.
F. Certain capitalized terms used in the Agreement are defined in
Section 6 below.
In consideration of the mutual covenants herein contained, and in
consideration of the continuing employment of the Executive by the Company, the
parties agree as follows:
1. Duties and Scope of Employment.
(a) Position. The Company shall employ the Executive in the
position of Chief Financial Officer, as such position is defined in terms of
responsibilities and compensation as of the effective date of this Agreement;
provided, however, that the Board of Directors by mutual agreement with the
Executive shall have the right, at any time prior to the occurrence of a Change
of Control, to revise such responsibilities and compensation. The Executive
shall continue to devote his full business efforts and time to the Company and
its subsidiaries. The Executive shall comply with and be bound by the Company's
operating policies, procedures and practices from time to time in effect during
his employment. During the term of the Executive's employment with the Company,
the Executive shall devote his full-time, skill and attention to his duties and
responsibilities, and shall perform them faithfully, diligently and competently,
and the Executive shall use his best efforts to further the business of the
Company and its affiliated entities. Subject to the Executive's fiduciary duties
to the Company, this Agreement shall not prohibit the Executive from serving on
the board of directors or any advisory board of other companies.
2. Base Compensation.
(a) Annual Salary. The Company shall pay the Executive as
compensation for his services a base salary at an annualized rate that is not
less than his base salary as of the effective date of this Agreement (the
"Annual Salary"). The Annual Salary may be subject to annual increases as the
Board may authorize from time to time in connection with Executive's annual
review. The Annual Salary shall be paid periodically in accordance with normal
Company payroll procedures. The Annual Salary (together with bonus amounts as
specified in Section 2), and any increases in such compensation that the Board
of Directors may grant from time to time, is referred to in this Agreement as
"Base Compensation."
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(b) Bonus. In addition to the Annual Salary, the Executive
will be eligible to receive an annual bonus under the Company's Executive Bonus
Plan as determined by the Board in its discretion.
3. Executive Benefits. The Executive shall be eligible to participate
in the employee benefit plans and executive compensation programs maintained by
the Company applicable to other key executives of the Company, including
(without limitation) retirement plans, savings or profit-sharing plans, stock
option, incentive or other bonus plans, life, disability, health, accident and
other insurance programs, paid vacations, and similar plans or programs, subject
in each case to the generally applicable terms and conditions of the applicable
plan or program in question and to the determination of any committee
administering such plan or program. In addition, the Executive shall continue to
be entitled to receive any other benefits currently received by the Executive
such as automobile and car phone allowance benefits.
4. At-Will Employment. The Company and the Executive acknowledge that
the Executive's employment is and shall continue to be at-will, as defined under
applicable law. If the Executive's employment terminates for any reason,
including, without limitation, any termination prior to and not in connection
with a Change of Control, the Executive shall not be entitled to any payments,
benefits, damages, awards or compensation other than as provided by this
Agreement, or as may otherwise be available in accordance with the Company's
established employee plans and policies at the time of termination. The terms of
this Agreement shall terminate upon the earlier of (i) the date that all
obligations of the parties hereunder have been satisfied, or (ii) March 8, 2003,
or (iii) eighteen (18) months after a Change of Control unless the Executive's
employment terminates as a result of Involuntary or Constructive Termination. A
termination of the terms of this Agreement pursuant to the preceding sentence
shall be effective for all purposes, except that such termination shall not
affect the payment or provision of compensation or benefits on account of a
termination of employment occurring prior to the termination of the terms of
this Agreement.
5. Severance Benefits.
(a) Termination in Connection with a Change of Control.
Subject to Section 7 below, if the Company terminates the Executive's employment
at any time during the period beginning upon the earlier to occur of (i) the
execution of a binding letter of intent regarding a Change of Control, and (ii)
ninety (90) days before a Change of Control, and ending eighteen (18) months
after a Change of Control, and the Executive signs and does not revoke a
standard release of claims with the Company attached hereto as Exhibit A, then
the Executive shall be entitled to receive severance benefits as follows:
(i) Involuntary or Constructive Termination. If the
Executive's employment terminates as a result of Involuntary or Constructive
Termination other than for Cause, then the Executive shall be entitled to
receive severance pay in an amount equal to two (2) times the Executive's Base
Compensation for the year coinciding with the year of termination, plus an
amount equal to the bonus the Executive would have earned had he been employed
by the Company at the end of such year multiplied by a fraction (x) the
numerator of which is the number of completed months in that year, and (y) the
denominator of which is twelve (12) (the "Current Bonus"). Any severance
payments except for the Current Bonus to which the Executive is entitled
pursuant to this Section shall be paid in a lump sum within thirty (30) days of
the Executive's termination. The Current Bonus to which the Executive is
entitled pursuant to this Section shall be paid in a lump sum within thirty (30)
days of the date that the Company's audit is complete for such year.
(ii) Voluntary Resignation; Termination For Cause. If
the Executive voluntarily resigns from the Company (other than as an Involuntary
or Constructive Termination described in subsection 5(a)(i)), or if the Company
terminates the Executive's employment for Cause, then the Executive shall not be
entitled to receive severance or other benefits except for those (if any) as may
then be established under the Company's then existing benefit plans at the time
of such termination.
(iii) Disability; Death. If the Company terminates
the Executive's employment as a result of the Executive's Disability, or such
Executive's employment is terminated due to the death of the Executive, then the
Executive or the Executive's estate, as the case may be, shall be entitled to
receive (i) severance pay in an amount equal to one-half (1/2) of the
Executive's Base Compensation for the year coinciding with the year of
termination plus his Current Bonus, (ii) in addition to the Executive's stock
options that were exercisable immediately prior to such termination, the vesting
of additional options shall accelerate and become exercisable as to that number
of shares that would have vested if the Executive had remained continuously
employed for a period of six (6) months following such termination (and if any
of such options vest on an annual basis, the appropriate credit shall be given
as if the vesting accrued monthly), and such options shall remain exercisable
for the period prescribed in Executive's stock option agreements, and (iii) such
other benefits (if any) as may then be established under the Company's then
existing benefit plans at the time of such Disability or death. Any severance
payments except for the Current Bonus to which the Executive is entitled
pursuant to this Section shall be paid in a lump sum within thirty (30) days of
the Executive's termination. The Current Bonus to which the Executive is
entitled pursuant to this Section shall be paid in a lump sum within thirty (30)
days of the date that the Company's audit is complete for such year.
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(b) Termination Apart from Change of Control. Subject to
Section 7 below, if the Company terminates the Executive's employment at any
time, either before the earlier to occur of (i) the execution of a binding
letter of intent regarding a Change of Control, and (ii) ninety (90) days before
a Change of Control, or after the 18-month period following a Change of Control,
and the Executive signs and does not revoke a standard release of claims with
the Company attached hereto as Exhibit A, then the Executive shall be entitled
to receive severance benefits as follows:
(i) Voluntary Resignation; Termination for Cause. If
the Executive voluntarily resigns from the Company (other than as an Involuntary
or Constructive Termination), or if the Company terminates the Executive's
employment for Cause, then the Executive shall be entitled to receive severance
and any other benefits only as may then be established under the Company's then
exiting benefit plans at the time of such termination.
(ii) Termination other than Voluntary Resignation or
Termination for Cause. In the event the Executive's employment is terminated for
any reason (including as a result of the Executive's Disability or due to the
death of the Executive) except for termination as described in Section 5(b)(i)
above, then the Executive or the Executive's estate, as the case may be, shall
be entitled to receive (i) severance pay in an amount equal to one-half (1/2) of
the Executive's Base Compensation for the year coinciding with the year of
termination plus his Current Bonus, (ii) in addition to Executive's stock
options that were exercisable immediately prior to such termination, the vesting
of additional options shall accelerate and become exercisable by the Executive
or the Executive's estate, as the case may be, as to that number of shares that
would have vested if the Executive had remained continuously employed for a
period of six (6) months following such termination (and if any of such options
vest on an annual basis, the appropriate credit shall be given as if the vesting
accrued monthly), and such options shall remain exercisable for the period
prescribed in Executive's stock option agreements, and (iii) the same level of
health (i.e., medical, vision and dental) coverage and benefits as in effect for
the Executive on the day immediately preceding the day of Executive's
termination of employment; provided, however, that (i) the Executive constitutes
a qualified beneficiary, as defined in Section 4980B(g)(1) of the Internal
Revenue Code of 1986, as amended (the "Code"); and (ii) Executive elects
continuation coverage pursuant to the Consolidated Omnibus Budget Reconciliation
Act of 1985, as amended ("COBRA"), within the time period prescribed pursuant to
COBRA. The Company shall continue to provide Executive with health coverage
until the earlier to occur of (i) the date Executive is no longer eligible to
receive continuation coverage pursuant to COBRA, or (ii) eighteen (18) months
from the termination date. In addition to the foregoing, Executive shall also be
paid such other benefits (if any) as may then be established under the Company's
then existing benefit plans at the time of such termination. Any severance
payments except for the Current Bonus to which the Executive is entitled
pursuant to this Section shall be paid in a lump sum within thirty (30) days of
the Executive's termination. The Current Bonus to which the Executive is
entitled pursuant to this Section shall be paid in a lump sum within thirty (30)
days of the date that the Company's audit is complete for such year.
(c) Options. Subject to Section 7 hereof, upon a Change of
Control, the unvested portion of any stock option held by the Executive shall
automatically be accelerated and the Executive or the Executive's
representative, as the case may be, shall have the right to exercise all or any
portion of such stock option, in addition to any portion of the option
exercisable prior to the Change of Control and in accordance with the
Executive's stock option agreement.
6. Definition of Terms. The following terms referred to in this
Agreement shall have the following meanings:
(a) Cause. "Cause" shall mean (i) any act of personal
dishonesty taken by the Executive in connection with his responsibilities as an
employee and intended to result in substantial personal enrichment of the
Executive, (ii) committing a felony or an act of fraud against the Company or
its affiliates, and (iii) acts by the Executive which constitute gross
misconduct, are injurious to the Company, and which are demonstrably willful and
deliberate on the Executive's part after there has been delivered to the
Executive a written demand of cessation of such acts from the Company which
describes the basis for the Company's belief that the Executive has engaged or
committed such acts.
(b) Change of Control. "Change of Control" shall mean the
occurrence of any of the following events:
(i) Any "person" (as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) becomes the
"beneficial owner" (as defined in Rule 13d-3 under said Act), directly or
indirectly, of securities of the Company representing fifty percent (50%) or
more of the total voting power represented by the Company's then outstanding
voting securities; or
(ii) A change in the composition of the Board of
Directors of the Company occurring within a two-year period, as a result of
which fewer than a majority of the directors are Incumbent Directors. "Incumbent
Directors" shall mean directors who either (A) are directors of the Company as
of the date hereof, or (B) are elected, or nominated for election, to the Board
of Directors of the Company with the affirmative votes of at least a majority of
the Incumbent Directors at the time of such election or
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nomination (but shall not include an individual whose election or nomination is
in connection with an actual or threatened proxy contest relating to the
election of directors to the Company); or
(iii) A merger or consolidation of the Company with
any other corporation, other than a merger or consolidation which would result
in the voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) at least sixty percent (60%) of
the total voting power represented by the voting securities of the Company or
such surviving entity outstanding immediately after such merger or
consolidation.
(c) Involuntary or Constructive Termination. "Involuntary or
Constructive Termination" shall mean (i) without the Executive's express written
consent, the assignment to the Executive of any duties or the significant
reduction of the Executive's duties, either of which is inconsistent with the
Executive's position with the Company and responsibilities in effect immediately
prior to such assignment, or the removal of the Executive from such position and
responsibilities; (ii) without the Executive's express written consent, a
substantial reduction, without good business reasons, of the facilities and
perquisites (including office space and location) available to the Executive
immediately prior to such reduction; (iii) a reduction by the Company in the
Base Compensation of the Executive as in effect immediately prior to such
reduction; (iv) a material reduction by the Company in the kind or level of
employee benefits to which the Executive is entitled immediately prior to such
reduction with the result that the Executive's overall benefits package is
significantly reduced; (v) the relocation of the Executive to a facility or a
location more than 30 miles from the Executive's then present location, without
the Executive's express written consent; (vi) any purported termination of the
Executive by the Company which is not effected for Disability or for Cause, or
any purported termination for which the grounds relied upon are not valid; or
(vii) the failure of the Company to obtain the assumption of this agreement by
any successors contemplated in Section 8 below.
(d) Disability. "Disability" shall mean that the Executive has
been unable to perform his duties under this Agreement as the result of his
incapacity due to physical or mental illness, and such inability, at least 26
weeks after its commencement, is determined to be total and permanent by a
physician selected by the Company or its insurers and acceptable to the
Executive or the Executive's legal representative (such agreement as to
acceptability not to be unreasonably withheld). Termination resulting from
Disability may only be effected after at least 30 days' written notice by the
Company of its intention to terminate the Executive's employment. In the event
that the Executive resumes the performance of substantially all of his duties
hereunder before the termination of his employment becomes effective, the notice
of intent to terminate shall automatically be deemed to have been revoked.
7. Limitation on Payments. In the event that the severance and other
benefits provided for in this Agreement or otherwise payable to the Executive
(i) constitute "parachute payments" within the meaning of Section 280G of the
Code, and (ii) would be subject to the excise tax imposed by Section 4999 of the
Code (the "Excise Tax"), then Executive's benefits under this Agreement shall be
either:
(i) delivered in full, or
(ii) delivered as to such lesser extent which would result in
no portion of such benefits being subject to the Excise Tax,
whichever of the foregoing amounts, taking into account the
applicable federal, state and local income taxes and the Excise Tax, results in
the receipt by Executive on an after-tax basis, of the greatest amount of
benefits, notwithstanding that all or some portion of such benefits may be
taxable under Section 4999 of the Code.
Unless the Company and the Executive otherwise agree in writing, any
determination required under this Section 7(a) shall be made in writing in good
faith by the accounting firm serving as the Company's independent public
accountants immediately prior to the Change of Control (the "Accountants"). In
the event of a reduction in benefits hereunder, the Executive shall be given the
choice of which benefits to reduce. For purposes of making the calculations
required by this Section 7(a), the Accountants may make reasonable assumptions
and approximations concerning applicable taxes and may rely on reasonable, good
faith interpretations concerning the application of the Code. The Company and
the Executive shall furnish to the Accountants such information and documents as
the Accountants may reasonably request in order to make a determination under
this Section. The Company shall bear all costs the Accountants may reasonably
incur in connection with any calculations contemplated by this Section 7(a).
8. Successors.
(a) Company's Successors. Any successor to the Company
(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 assets shall
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assume the obligations under this Agreement and agree expressly to perform the
obligations under this Agreement in the same manner and to the same extent as
the Company would be required to perform such obligations in the absence of a
succession. For all purposes under this Agreement, the term "Company" shall
include any successor to the Company's business and assets which executes and
delivers the assumption agreement described in this subsection (a) or which
becomes bound by the terms of this Agreement by operation of law.
(b) Executive's Successors. The terms of this Agreement and
ail rights of the Executive hereunder shall inure to the benefit of, and be
enforceable by, the Executive's personal or legal representatives, executors,
administrators, successors, heirs, devisees and legatees.
9. Notice.
(a) General. Notices and all other communications contemplated
by 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 or certified
mail, return receipt requested and postage prepaid. In the case of the
Executive, mailed notices shall be addressed to him at the home address which he
most recently communicated to the Company in writing. In the case of the
Company, mailed notices shall be addressed to its corporate headquarters, and
ail notices shall be directed to the attention of its Secretary.
(b) Notice of Termination. Any termination by the Company
shall be communicated by a notice of termination to the other party hereto given
in accordance with Section 9 of this Agreement. Such notice shall indicate the
specific termination provision in this Agreement relied upon, shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination under the provision so indicated, and shall specify the termination
date (which shall be not more than 15 days after the giving of such notice). The
failure by the Executive to include in the notice any fact or circumstance which
contributes to a showing of Involuntary or Constructive Termination shall not
waive any right of the Executive hereunder or preclude the Executive from
asserting such fact or circumstance in enforcing his rights hereunder.
10. Arbitration.
(a) Any dispute or controversy arising out of, relating to, or
in connection with this Agreement, or the interpretation, validity,
construction, performance, breach, or termination thereof, shall be settled by
binding arbitration to be held in California, in accordance with the National
Rules for the Resolution of Employment Disputes then in effect of the American
Arbitration Association (the "Rules"). The arbitrator may grant injunctions or
other relief in such dispute or controversy. The decision of the arbitrator
shall be final, conclusive and binding on the parties to the arbitration.
Judgment may be entered on the arbitrator's decision in any court having
jurisdiction.
(b) The arbitrator(s) shall apply California law to the merits
of any dispute or claim, without reference to conflicts of law rules. The
arbitration proceedings shall be governed by federal arbitration law and by the
Rules, without reference to state arbitration law. Executive hereby consents to
the personal jurisdiction of the state and federal courts located in California
for any action or proceeding arising from or relating to this Agreement or
relating to any arbitration in which the parties are participants.
(c) Executive understands that nothing in this Section
modifies Executive's at-will employment status. Either Executive or the Company
can terminate the employment relationship at any time, with or without Cause.
(d) EXECUTIVE HAS READ AND UNDERSTANDS THIS SECTION, WHICH
DISCUSSES ARBITRATION. EXECUTIVE UNDERSTANDS THAT SUBMITTING ANY CLAIMS ARISING
OUT OF, RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT, OR THE
INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH OR TERMINATION
THEREOF TO BINDING ARBITRATION, CONSTITUTES A WAIVER OF EMPLOYEE'S RIGHT TO A
JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS
OF THE EMPLOYER/EMPLOYEE RELATIONSHIP, INCLUDING BUT NOT LIMITED TO, THE
FOLLOWING CLAIMS:
(i) ANY AND ALL CLAIMS FOR WRONGFUL DISCHARGE OF
EMPLOYMENT; BREACH OF CONTRACT, BOTH EXPRESS AND IMPLIED; BREACH OF THE COVENANT
OF GOOD FAITH AND FAIR DEALING, BOTH EXPRESS AND IMPLIED; NEGLIGENT OR
INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS; NEGLIGENT OR INTENTIONAL
MISREPRESENTATION; NEGLIGENT OR INTENTIONAL INTERFERENCE WITH CONTRACT OR
PROSPECTIVE ECONOMIC ADVANTAGE; AND DEFAMATION;
(ii) ANY AND ALL CLAIMS FOR VIOLATION OF ANY FEDERAL
STATE OR MUNICIPAL STATUTE, INCLUDING, BUT NOT LIMITED TO, TITLE VII OF THE
CIVIL RIGHTS ACT OF 1964, THE CIVIL RIGHTS ACT OF 1991, THE AGE DISCRIMINATION
IN EMPLOYMENT ACT OF 1967, THE AMERICANS WITH
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DISABILITIES ACT OF 1990, THE FAIR LABOR STANDARDS ACT, THE CALIFORNIA FAIR
EMPLOYMENT AND HOUSING ACT, AND LABOR CODE SECTION 201, et seq;
(iii) ANY AND ALL CLAIMS ARISING OUT OF ANY OTHER
LAWS AND REGULATIONS RELATING TO EMPLOYMENT OR EMPLOYMENT DISCRIMINATION.
11. Miscellaneous Provisions.
(a) No Duty to Mitigate. The Executive shall not be required
to mitigate the amount of any payment contemplated by this Agreement (whether by
seeking new employment or in any other manner), nor shall any such payment be
reduced by any earnings that the Executive may receive from any other source.
(b) Waiver. No provision of this Agreement shall be modified,
waived or discharged unless the modification, waiver or discharge is agreed to
in writing and signed by the Executive and by an authorized officer of the
Company (other than the Executive). 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. No agreements, representations 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.
(d) Choice of Law. The validity, interpretation, construction
and performance of this Agreement shall be governed by the laws of the State of
California.
(e) Severability. The invalidity or unenforceability of any
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.
(f) No Assignment of Benefits. The rights of any person to
payments or benefits under this Agreement shall not be made subject to option or
assignment, either by voluntary or involuntary assignment or by operation of
taw, including (without limitation) bankruptcy, garnishment, attachment or other
creditor's process, and any action in violation of this subsection (f) shall be
void.
(g) Employment Taxes. All payments made pursuant to this
Agreement will be subject to withholding of applicable income and employment
taxes.
(h) Assignment by Company. The Company may assign its rights
under this Agreement to an affiliate, and an affiliate may assign its rights
under this Agreement to another affiliate of the Company or to the Company;
provided, however, that no assignment shall be made if the net worth of the
assignee is less than the net worth of the Company at the time of assignment. In
the case of any such assignment, the term "Company" when used in a Section of
this Agreement shall mean the corporation that actually employs the Executive.
(i) Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together will constitute one and the same instrument.
IN WITNESS WHEREOF, each of the parties has executed this
Agreement, in the case of the Company by its duly authorized officer, as of the
day and year first above written.
ELECTRONICS FOR IMAGING, INC. EXECUTIVE:
/s/ Xxx Xxxxx /s/ Xxxxxx Xxxxx
------------------------------------ -----------------------------------
Chief Executive Officer Xxxxxx Xxxxx
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