Exhibit 10.8
EXECUTIVE EMPLOYMENT AGREEMENT
This employment agreement between The Pathways Group, Inc. (hereinafter
the "Company") and Xxxxxxx X. XXXX (hereinafter "XXXX"), effective as of
February 8, 2000, is made for good and sufficient consideration, as reflected in
the mutual promises, covenants, obligations, undertakings and conditions set
forth below:
1. POSITION AND DUTIES:
The Company shall employ XXXX as Senior Vice President, Treasurer and
in any additional capacity or capacities as the Company's President and Chief
Executive Officer may from time to time decide. XXXX shall have the full
responsibilities, duties and authorities of the Company's Senior Vice President,
Treasurer. In addition, XXXX shall be responsible for implementing and complying
with directives issued by the Company's President and Chief Executive Officer.
2. TERM OF EMPLOYMENT:
Subject to earlier termination as provided in this agreement, XXXX
shall be employed for a term of three (3) years, which shall be automatically
extended for additional one (1) year periods (such initial term and all extended
terms being referred to collectively herein as the "employment term") unless
either party gives notice in writing to the other not less than ninety (90) days
before the end of the initial term or extended term that the employment contract
shall not be extended.
3. COMPENSATION:
(a) BASE SALARY: Company shall pay a basic salary to XXXX at
the rate of One Hundred Twenty Five Thousand Dollars ($125,000.00) per
year, payable semi-monthly, in twenty-four (24) equal installments,
subject to all withholdings and deductions required for federal, state
and local taxes and charges and any other withholdings or deductions
authorized by XXXX.
(b) BONUS: XXXX shall also be paid an annual discretionary
performance bonus as determined by the Chief Executive Officer and/or
Board of Directors.
(b) AUTOMOBILE ALLOWANCE: The Company shall pay to XXXX an
annual Automobile Allowance in the annual amount of Seven Thousand
Eight Hundred Dollars ($7,800.00), payable semi-monthly in twenty-four
equal installments, subject to all withholdings and deductions required
for federal, state and local taxes and charges and any other
withholdings authorized by XXXX.
(c) STOCK OPTIONS: The Company shall issue to XXXX options to
purchase One Hundred Thousand (100,000) shares of the Company's common
stock, which options shall vest equally over three (3) years, at an
exercise price of $2 1/4 per share, pursuant to
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a stockholders plan intended to be qualified under Section 422 of the
Internal Revenue Code of 1986 and the regulations promulgated in
relation thereto. The plan will expire January 12, 2005. Unexercised
options awarded to XXXX hereunder shall be subject to forfeiture as
provided in Paragraphs 6 and 7 of this agreement.
4. EMPLOYMENT BENEFITS:
Throughout the employment term, XXXX shall be entitled to receive the
employment benefits generally offered to all other executive employees,
including, but not limited to, medical, dental, optical, prescription drugs and
life insurance for XXXX and his family, at Company expense, and:
(a) EXECUTIVE COMPENSATION PACKAGE: Enrollment in Executive
Compensation Package.
(b) VACATION: The Company waives its policy on vacations, to allow
for four weeks per year.
(c) LIFE INSURANCE: The Company shall provide and pay for life
insurance on the life of XXXX in the amount of three (3) times
his annual salary provided for in this agreement. The
beneficiary shall be XXXX'x estate, unless otherwise directed
by XXXX in writing at any time prior to his death.
(d) STOCK ISSUANCE: The Company and XXXX may agree from time to
time, with the approval of the Board of Directors, to issue to
XXXX Common Stock of the Company in consideration of such
services or contributions of property as may be deemed
appropriate, and at a value determined by the Board of
Directors in good faith and in compliance with applicable law.
Any such issuance of stock may, at the request of XXXX, and
subject to the approval of the Company which may not be
unreasonably withheld, be issued by the Company to such party
or entity, including without limitation, an irrevocable trust
or similar entity, as XXXX may at ---- the time of issuance
direct.
(e) DISABILITY COMPENSATION:
(1) If XXXX becomes disabled at any time, and for any
number of times, due to any cause so that he is
physically unable to perform his ordinary duties and
responsibilities under this agreement, then XXXX
shall be entitled to receive, in lieu of salary, an
amount equal to his salary, payable at the same time
and in the same manner as XXXX'x salary is paid,
provided however, that this benefit shall be limited
to not more than a total of twelve (12) months during
the term of the agreement.
(2) XXXX'x entitlement to disability income pursuant to this
subparagraph shall
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begin and end as determined by a certificate issued
by a qualified M.D. or D.O. licensed by the State of
California. The certificate shall state in substance
that XXXX was determined to be disabled and unable to
perform the ordinary and usual duties as Senior Vice
President, Treasurer of Pathways, beginning [DATE]
and XXXX'x disability continues as of this [DATE].
Such a certificate shall be submitted every three (3)
months beginning with the date of disability and
continuing thereafter until XXXX'x disability ends
and he is able to return to work full time or his
disability compensation benefit has been fully used,
whichever occurs first.
5. EXPENSE REIMBURSEMENT:
During the employment term, the Company shall reimburse XXXX for
reasonable out-of pocket expenses incurred in connection with the Company's
business, including travel expenses, food, and lodging when away from home,
subject to such policies as the Company may from time to time reasonably
establish for its employees.
6. LIMITATION ON OUTSIDE ACTIVITIES:
During his employment, XXXX shall devote his full occupational time,
energies, abilities, knowledge and experience to the performance of his duties
under this agreement and shall not render to others services of any kind for
compensation or engage in any other business activity without the Company's
prior written consent. XXXX shall not, directly or indirectly, whether as a
partner, employee, creditor, shareholder or otherwise, promote, participate or
engage in any business activity competitive with the Company or its
subsidiaries, affiliates, co-venturers, customers or assigns. XXXX shall not
take any action to establish, form, assist or become employed by any such
competing business on termination of XXXX'x employment. XXXX'x breach of any of
the provisions of this paragraph shall give the Company the right, in addition
to all other remedies the Company may have, to terminate the employment and to
cancel and/or terminate any and all compensation and benefits to which XXXX
might otherwise be entitled under this agreement.
7. TERMINATION OF EMPLOYMENT:
The employment created by this agreement may be terminated during the
employment term in accordance with the following provisions of this paragraph:
(a) TERMINATION WITHOUT CAUSE BY THE COMPANY: The employment
may be terminated without cause in the sole and absolute discretion of
the Company upon written notice by the Company to Xxxx; provided,
however, that if this agreement is terminated pursuant to this
subparagraph, Xxxx shall receive from Company all salary and benefits
provided under this agreement for six (6) months after the effective
date of the termination. Such salary and benefits shall constitute the
complete and exclusive obligation of the Company for termination of the
employment and for any and all claims
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of Xxxx arising out of or in connection with Xxxx'x employment or the
termination thereof.
(b) TERMINATION WITHOUT CAUSE BY XXXX: The employment may be
terminated without cause in the sole and absolute discretion of XXXX
upon six (6) months written notice by XXXX to the Company, provided,
however, that if this agreement is terminated pursuant to this
subparagraph, XXXX shall forfeit any unexercised, vested stock options
under this agreement.
(c) TERMINATION FOR CAUSE BY THE COMPANY: The Company may
terminate the employment at any time upon written notice to XXXX if the
Company ceases a substantial portion of its business operation, in the
event of the sale or change of ownership of the Company or a
substantial portion of its assets, or if, in the sole and absolute
determination of the Company:
(1) Its business circumstances change so materially that
it is impracticable for the Company to continue using
XXXX'X employment services; or XXXX'x continued
employment would not confer to the Company the
substantial benefit intended to be gained by the
employment; or
(2) XXXX breaches his duty of loyalty to the Company or
any material term, promise, covenant, condition,
obligation, undertaking or commitment set out in this
agreement or the Company's operational policies or
procedures, personnel policies or procedures or work
rules; commits any material act of dishonesty or
illegality; commits any act or omission creating an
unreasonable risk of civil or criminal legal action
against the Company; discloses any trade secret or
confidential or proprietary information of the
Company, its subsidiaries, affiliates, co-venturers,
customers or assigns; is guilty of carelessness,
misconduct, neglect of duty or unsatisfactory work
performance; or acts in any way that significantly
impedes or creates a risk of significant detriment to
the Company's operations, profits, reputation or
other business interests.
Such termination shall be effective immediately upon written notice of
termination.
(d) TERMINATION FOR CAUSE BY XXXX: XXXX may terminate the
employment at any time upon written notice to Company, if, in the sole
and absolute determination of XXXX, the Company breaches any material
term, promise, covenant, condition, obligation, undertaking or
commitment set out in this agreement; commits any material act of
dishonesty or illegality; commits any act or omission creating an
unreasonable risk of civil or criminal legal action against XXXX;
improperly discloses any personal or private information of XXXX
protected by any Constitutional or statutory right to privacy; acts in
a manner constituting constructive discharge of XXXX; or the Company's
actions or business circumstances or XXXX'x personal or family
circumstances make it impossible or
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impracticable for XXXX to continue performing employment services to
the Company. Such termination shall be effective immediately upon
written notice of termination.
(e) TERMINATION IN THE EVENT OF DISABILITY: If XXXX is unable,
due to mental or physical illness or injury, to substantially perform his duties
under this agreement in a satisfactory manner for a period of twelve (12)
months, the employment shall terminate at the end of such period.
8. CONFIDENTIALITY, PROPERTY RIGHTS AND NO SOLICITATION:
(a) CONFIDENTIAL INFORMATION: In the course of his employment
by the Company, XXXX will have access to trade secrets and confidential
and proprietary information of the Company, its subsidiaries,
affiliates, co-venturers and customers, including, but not limited to,
personnel, products (developed and under development), proposals,
services, operations, procedures, customers, customer lists, customer
needs, customer contacts, customer relations, customer data and
information, marketing areas, marketing proposals, marketing methods
and plans, business development plans and techniques, business methods
and plans, sales methods and plans, sales figures, sales projections,
price lists, pricing formulae and information, inventions, discoveries,
formulae, patents, trademarks, copyrights, films, scripts, ideas,
creations, concepts, theories, technologies, technology applications,
data, product research, prototypes, models, designs, system design
documents, specifications and requirements, schematics, software,
codes, program components and documentation, processes, techniques,
tools, devices, know-how, estimates, accounting records, and accounting
procedures (collectively referred to as "Confidential Information").
Except as required in the course of his employment by Company, XXXX
will not, without Company's prior consent, either during his employment
by Company or after termination of the employment, directly or
indirectly disclose to any third person any Confidential Information.
XXXX acknowledges and agrees that all such Confidential Information,
regardless of who discovered, created or developed it, is the property
of the Company, solely and exclusively, and is valuable proprietary
information of the Company. Upon termination of the employment, whether
with or without cause, XXXX shall immediately return and deliver to the
Company all Confidential Information in his possession or control.
(b) NO SOLICITATION OF EMPLOYEES: Xxxx agrees that, during his
employment and for two (2) years thereafter, he will not solicit any of
the Company's employees for a competing business and will not induce or
attempt to induce any of the Company's employees to leave their
employment with the Company.
(c) INTELLECTUAL PROPERTY RIGHTS: All rights, title and
interest of every kind and nature whatsoever in and to any intellectual
property, including, but not limited to, any inventions, patents,
trademarks, copyrights, films, scripts, ideas, creations, concepts,
theories, technologies, technology applications, products (developed
and under development), product research, prototypes and models,
whether or not invented, created,
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written, developed, furnished, produced or disclosed by Xxxx in the
course of rendering his services to the Company under this Agreement
shall, as between the parties hereto, be and remain the sole and
exclusive property of the Company for any and all purposes and uses
whatsoever, and XXXX shall have no right; We or interest of any kind or
nature therein or thereto, or in and to any results and proceeds
therefrom.
(d) RETURN OF ALL OF THE COMPANY'S PROPERTY. Whenever
requested by the Company during the employment, and without request
upon termination of the employment, whether termination is with or
without cause, Xxxx shall immediately return and deliver to the Company
all of the Company's property, including all items used by Duan in
rendering services hereunder and all originals and copies of the
Company's documents and data, including, but not limited to, all
Confidential Information.
(e) PROTECTION OF OTHER COMPANIES' TRADE SECRETS AND
CONFIDENTIAL INFORMATION: Xxxx understands that state and federal laws
provide severe penalties for misappropriation and unauthorized
disclosure of trade secrets and confidential, proprietary business
information belonging to Employee's previous employers or to any other
company. Xxxx agrees and warrants that, in connection with his/her
employment by Company, he/she will not misappropriate, use or disclose
any trade secret or confidential, proprietary information belonging to
any previous employer or any other company. Xxxx agrees and warrants
that, if he/she has any question or uncertainty about whether
particular information might be a trade secret or confidential,
propriety business information of a previous employer or another
company, Xxxx will immediately contact Company's General Counsel.
9. NON-COMPETITION AFTER TERMINATION OF EMPLOYMENT:
Xxxx and the Company recognize and acknowledge that in his employment,
he will become familiar with all of the Company's sales methods and plans,
marketing, marketing and development, technologies, applications of
technologies, products (developed and under development), product research,
business methods and plans, data, processes, techniques, inventions,
discoveries, formulae, patterns, devices, know-how, services, products, and
other customer information (collectively referred to as "Confidential
Information"), in all of the geographic areas throughout the world in which the
Company already has made marketing efforts and/or sales of products and
services, and he will become knowledgeable about present and future marketing
proposals and plans for those products and services. Xxxx agrees, as part of the
consideration for this Employment Agreement, that Xxxx will not engage, directly
or indirectly, nor solicit employees of the Company to engage in the
development, distribution, manufacture or sale of any products or services which
compete with the products or services provided by the Company or its related
companies, for a period of two (2) years. The parties agree that the phrase
"engage, directly or indirectly, nor solicit employees of the Company to engage
in the development distribution, manufacture or sale of any products or services
which compete with the products or services provided by the Company or its
related companies" shall include any situation or circumstance in which Xxxx
shall be owner, partner, officer, director or shareholder
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of a corporation, or an agent, employee or consultant of any business entity
engaged, or about to become engaged, in competition with the Company.
10. INJUNCTIVE RELIEF:
Xxxx acknowledges and agrees that any breach of the terms of Paragraphs
8 or 9 above would irreparably injure the Company and that it would be
impossible to measure in money the resulting injury to the Company, and, in any
action to enforce this the terms of Paragraphs 8 or 9 or to enjoin any breach of
those paragraphs, Xxxx waives any claim or defense that the Company
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has an adequate remedy at law or that the Company would not be irreparably
injured by breach of the terms of Paragraphs 8 or 9, and Xxxx acknowledges and
agrees that the Company will be entitled to temporary, preliminary and permanent
injunctive relief and restraining orders, without any delay whatsoever, in
connection with any breach, or threatened or impending breach, of any of the
terms of those paragraphs. In any action to enforce the Company's rights under
Paragraphs 8 through 10 of this agreement, the party prevailing in such action
shall be entitled to recover as damages reasonable attorneys' fees and all other
reasonable expenses incurred in the action and in any efforts prior to or during
the action to secure compliance with the terms of this agreement.
11. ARBITRATION:
Except for claims, disputes and causes of action arising out of or in
connection with Paragraphs 8 through 10 above, the Company and Xxxx agree to
arbitrate any and 51 disputes and claims, including discrimination claims,
arising out of or in connection with the employment or the termination thereof,
if the amount in controversy is more than $5,000.00. This arbitration agreement
applies to all disputes between the parties and any and all claims by Xxxx
against the Company and any officer, director, employee, agent or representative
of the Company, against any corporate parent or subsidiary of the Company,
and/or against any person or company affiliated with the employer (e.g., a
person or company involved in a joint venture, partnership or other similar
business relationship with the employer or one having an owner, partner or
parent or subsidiary corporation in common with the employer). The arbitration
award shall be final and binding on all parties to the arbitration proceeding.
The arbitration shall be conducted in Santa Rosa, California, pursuant to the
California Arbitration Act and the terms of this agreement. Arbitration may not
be initiated after expiration of any statute of limitation for the commencement
of any civil or administration proceeding on the claim or dispute. Arbitration
shall be initiated by written notice by one party to the other, specifying the
nature of each claim or dispute at issue and the amount and manner of
calculation of each item of damages. The parties shall each appoint one
arbitrator, and the parties' arbitrators shall together select a third neutral
arbitrator. If the three arbitrators determine that the claims or disputes
specified in the notice collectively involve an amount in controversy more than
$5,000.00, they shall hear and determine the dispute(s) or claim(s) according to
applicable laws, this arbitration agreement and the Company's work rules and
policies in effect at the time of the events which gave rise to the arbitration.
The three arbitrators shall issue a written decision determining each dispute,
claim and item of damages submitted to the arbitrators. Determination of each
dispute, claim and item of damages shall require the concurrence of at least two
arbitrators, but it is not necessary that the same two arbitrators concur on
every dispute, claim or item of damages. The arbitration decision shall attest
that the requisite concurrence existed as to each dispute, claim and item of
damages. THE COMPANY AND XXXX UNDERSTAND AND EXPRESSLY AGREE THAT, BY ENTERING
INTO THIS ARBITRATION AGREEMENT, THEY ARE GIVING UP THE RIGHT TO BRING IN ANY
COURT ANY CLAIM, CAUSE OF ACTION OR DISPUTE ARISING OUT OF OR IN CONNECTION WITH
THE EMPLOYMENT OR THE TERMINATION THEREOF, INCLUDING THE RIGHT TO A JURY TRIAL.
The arbitration award may be confirmed by any court having jurisdiction of the
matter, and judgment may be entered on the confirmed award. Charges and expenses
of the neutral arbitrator shall be borne by the parties equally, and the
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parties shall deposit their respective shares of the neutral arbitrator's
estimated charges prior to the arbitration hearing. The parties shall each bear
their own cost, expenses and attorneys' fees
in connection with the arbitration, unless a statute or contract applicable to
the claim or dispute expressly provides for recovery of attorneys' fees by the
prevailing party.
12. INCORPORATION AND INTEGRATION:
Xxxx shall comply with and enforce all of the Company's operational
policies and procedures, personnel policies and procedures and work rules, as
they may be promulgated and announced from time to time. Except for such
operational policies and procedures, personnel policies and procedures and work
rules, this written agreement contains the entire agreement between the parties
and supersedes all prior oral, written and/or implied agreements, promises,
covenants, obligations, undertakings, commitments, representations and
understandings by or between the parties, including all prior employment
agreements, whether or not fully performed by Xxxx before the date of this
agreement. The Company and Xxxx acknowledge and agree that there are no terms,
conditions, covenants, obligations or promises, express or implied, applicable
to the employment except those set out in this agreement. There shall be no
amendment, modification, change or enlargement of this agreement except by a
writing signed by the party to be charged with performance of the amendment,
modification, change or enlargement. In the event of any conflict or difference
between this agreement and Company's current or future operational policies and
procedures, personnel policies and procedures and work rules, the provisions of
this agreement shall control.
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13. SURVIVAL, GOVERNING LAW, VENUE AND SEVERABILITY:
The representations, warranties, covenants, promises and restrictions set out in
this agreement shall operate continuously and shall survive termination of the
employment created by the agreement. The agreement shall inure to the benefit of
and be binding upon Xxxx, his heirs, estate, executors, administrators and all
others claiming through or on behalf of Xxxx, and upon Company, its
subsidiaries, affiliates, successors and assigns. The agreement shall be
construed and governed in accordance with the laws of the State of California.
All actions, arbitrations and proceedings arising from or in connection with the
agreement or the employment it creates shall be commenced and maintained in
Sonoma County, State of California. If any term, covenant, condition, clause or
provision of this agreement is held to be invalid or unenforceable, then such
clause or provision shall be severed herefrom, and such invalidity or
unenforceability shall not affect any other provision of this agreement, the
balance of which shall remain in full force and effect; provided, however, that
if any such term, covenant, condition, clause or provision may be modified so as
to be valid or enforceable as a matter of law, then such term, covenant,
condition, clause or provision shall be deemed modified so as to be enforceable
to the maximum extent permitted by law.
14. NOTICES:
Any notices to be given hereunder by any party to another party shall
be in writing and delivered in person or mailed registered or certified mail,
postage prepaid with return receipt requested.
The Pathways Group, Inc.
By
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Xxxxxxx X. Xxxx Xxxxx X. Xxxx XX
President & CEO
By
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Xxxxx Xxxxxx, Director acting under
authority of the Board of Directors
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