EXHIBIT 10.8
EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into as of January 22, 1999 by and between
Sterling Partners, Inc., a Delaware Corporation (the "Company") and Xxxxxx
Xxxxxxxxx (the "Executive"). In consideration of the mutual covenants contained
herein, the parties agree as follows:
1. Employment; Term of Employment. The Company hereby employs the
Executive, and the Executive hereby accepts such employment with the
Company, upon all the terms and conditions set forth below. The term
of the Executive's employment under this Agreement shall continue
from the date hereof unless earlier terminated as hereinafter
provided.
2. Duties.
2.1 Position. The Company shall employ the Executive in the position of
President and Chief Executive Officer. The Executive will also be a
member of the Company's Board of Directors, subject to approval by
the Company's shareholders. The Board of Directors shall have the
right to review the compensation of the Executive, but not below
the amount of base compensation set forth in Section 3.1 below, from
time to time as the Board may deem necessary or appropriate.
2.2 Obligations. The Executive shall devote his full efforts and time to
the Company. The foregoing, however, shall not preclude the
Executive, outside normal business hours, from engaging in
appropriate civic, charitable or religious activities or from
devoting a reasonable amount of time to private investments or from
serving on the boards of directors of other entities, as long as such
activities and service do not interfere or conflict with his
responsibilities to the Company.
3. Compensation.
3.1 Base Compensation. The Company shall pay the Executive as
compensation for his services a base compensation at the annualized
rate of $150,000.00. Such compensation shall be reviewed annually
and may be increased from time to time, as appropriate, as determined
by the Board of Directors. Compensation shall be paid periodically in
accordance with normal Company payroll practices.
3.2 Equity. The Company will grant to the Executive within 30 days of the
date of this Agreement a ten year non-statutory stock option to
purchase 900,000 shares of the Company's Common Stock at an exercise
of $1.00 per share (the "Stock Option"). The Stock Option shall vest
upon the satisfaction of certain performance criteria which shall be
unanimously approved by the Company's board of directors (the
"Performance Criteria"). The Stock Option agreement will be in a form
reasonably acceptable to Executive with customary terms, and will
provide that vested shares granted under the Stock Option will
remain exercisable during the term of the Stock Option following
termination of employment; provided, however, that if the Executive
resigns or is terminated with Cause, the Stock Option will remain
exercisable for a period of 6 months following his termination. In
addition, all of the unvested portion of the Stock Option will
accelerate and vest upon the closing of a merger in which the
Company is not the surviving corporation or the acquisition of all
or substantially of the Company's assets.
3.2 Employee Benefits. The Executive shall be eligible to participate in
the employee benefits plans and executive compensation programs
maintained by the Company applicable to similarly situated executives
of the Company, including a 401(k) plan, and health and disability
insurance and vacation. Such eligibility shall be subject in each
case to the generally applicable terms and conditions of the plan or
program in question and to the determination of any committee
administering such plan or program.
4. Severance. All of the Executive's severance benefits shall be
governed by the provisions of this Section 4.
4.1 First Scenario. If the Performance Criteria are met and the Executive
remains with the Company in his capacity as set forth in Section 2.1,
the Executive shall be entitled to receive his then current salary,
and the shares granted under the Stock Option shall continue to vest
pursuant to the Stock Options's vesting schedule. In addition, if
the Performance Criteria are met, and the Executive is terminated
without Cause, the Company shall pay the Executive six months of his
then current annual salary and all of his unvested shares granted
under the Stock Option shall be come fully vested.
4.2 Second Scenario. If the Performance are met, but the Executive is
assigned and accepts a different position with the Company, the
Executive shall be entitled to receive his then current salary, and
the shares granted under the Stock Option shall continue to vest
pursuant to the Stock Option's vesting schedule. In addition, if the
Performance Criteria are met, and the Executive is terminated
without Cause after accepting such different position with the
Company, the Company shall pay the Executive six months of his then
current annual salary and all of his unvested shares granted under
the Stock Option shall be come fully vested.
4.3 Third Scenario. If the Performance Criteria are not met, the
Company's board of directors may terminate the Executive's employment
with the Company. If the Board would like Executive to continue his
employment with the Company, the Company and the Executive will
mutually agree on the terms of a new employment agreement.
4.4 Fourth Scenario. If the Performance Criteria are not met, the
Company's board of directors may terminate the Executive's
employment with the Company. If the Executive is terminated under
this Section 4.4, he shall be paid one month of his then annual
salary.
4.5 Fifth Scenario. If the Executive is terminated without cause during
any period prior to there being a determination as to whether the
Performance Criteria are met, the Company shall pay the Executive the
greater of his entire remaining current salary for the applicable
term or 6 months of his current annual salary. For purposes of this
Section 4.5, if it is determined that the Performance Criteria were
met after the Executive was terminated, then all of the shares
granted under the Stock Option shall become fully vested.
Alternatively, if it is determined that the Performance Criteria were
not met after the Executive was terminated, then one-third of his
shares granted under the Stock Option shall become fully vested for
every year or part of a year of Executive's employment with the
Company.
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4.6 Definition of Cause. For purposes of this Agreement, "Cause" shall
mean (i) any act of personal dishonesty taken by the Executive in
connection with his responsibilities as an employee; (ii) the
Executive being convicted of a felony; or (iii) a act by the
Executive which constitutes gross misconduct and which is injurious
to the Company.
5. Noncompetition. In the event the Executive is terminated for Cause
or resigns, the Executive agrees that he shall not for a period of
one year after termination of employment with the Company engage in,
directly or indirectly, as an owner, partial owner, principal or
salesperson in any sole proprietorship, partnership, corporation,
joint venture or other entity which directly or indirectly competes
with any product or service offered by the Company.
6. Non-Assignability. Neither this Agreement nor any right or interest
hereunder shall be assignable by the Executive, his beneficiaries, or
legal representatives without the Company's prior written consent;
provided, however, that nothing in this subparagraph shall preclude
(i) the Executive from designating a beneficiary to receive any
benefit payable hereunder upon his death, or (ii) the executors,
administrators, or other legal representatives of the Executive or
his estate from assigning any rights hereunder to the person or
persons entitled thereunto.
7. 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/or assets shall 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/or assets which
executes and delivers the assumption agreement described in this
Section 7 or which becomes bound by the terms of this Agreement by
operation of law.
8. Binding Effect. This Agreement shall inure to the benefit of and be
binding upon the parties and their respective heirs, successors,
legal representatives and assigns.
9. Notices. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and either delivered in
person or sent by first class certified or registered mail, postage
prepaid, if to the Company at the Company's principal place of
business, and if to the Employee, at his home address most recently
filed with the Company, or to such other address as either party
shall have designated in writing to the other party hereto.
10. Law Governing. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
11. Attorneys' Fees. In any action brought to enforce any provision of
this Agreement, the losing party shall the prevailing party's
reasonable attorney fees and costs.
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12. Severability. If any provision of this Agreement shall be determined
to be invalid, illegal or unenforceable in whole or in part, neither
the validity of the remaining part of such provision nor the validity
of any other provision of this Agreement shall in any way be affected
thereby.
13. Waiver. Failure to insist upon strict compliance with any of the
terms, covenants or conditions hereof shall not be deemed a waiver of
such term, covenant or condition.
14. Entire Agreement; Modifications. This Agreement (including all
exhibits hereto) constitutes the entire agreement of the parties with
respect to the subject matter hereof and supersedes all prior
agreements, oral and written between the parties hereto with respect
to the subject matter hereof. This Agreement may be modified or
amended only by an instrument in writing signed by both parties.
16. Employee Confidentiality Agreement. As a condition to his
employment with the Company, Executive shall execute the Company's
customary form of Employee Confidentiality Agreement.
IN WITNESS WHEREOF the Company and the Executive have duly executed
and delivered this Agreement as of the day and year first above written.
STERLING PARTNERS, INC.
a Delaware Corporation
By
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Title
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/s/ Xxxxxx Xxxxxxxxx
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Xxxxxx Xxxxxxxxx
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