Exhibit 10.9
EXECUTIVE EMPLOYMENT AGREEMENT
This employment agreement between The Pathways Group, Inc. (hereinafter
the "Company") and Xxxxxx Xxxxx (hereinafter "Xxxxx"), effective as of February
14, 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 Xxxxx as Senior Vice President, Finance and in
any additional capacity or capacities as the Company's President and Chief
Executive Officer may from time to time decide. Xxxxx shall have the full
responsibilities, duties and authorities of the Company's Senior Vice President,
Finance. In addition, Xxxxx 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, Xxxxx
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 Xxxxx 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 Xxxxx.
(b) BONUS: Xxxxx 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 Xxxxx 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 Xxxxx.
(c) STOCK OPTION: The Company shall issue to Xxxxx 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
15/32 per share, pursuant to 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 Xxxxx hereunder shall
be subject to forfeiture as provided in Paragraphs 6 and 7 of this
agreement.
4. EMPLOYMENT BENEFITS:
Throughout the employment term, Xxxxx 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 Xxxxx 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 Xxxxx in the amount of
three (3) times his annual salary provided for in
this agreement. The beneficiary shall be Xxxxx'x
estate, unless otherwise directed by Xxxxx in writing
at any time prior to his death.
(d) STOCK ISSUANCE: The Company and Xxxxx may agree from
time to time, with the approval of the Board of
Directors, to issue to Xxxxx 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 Xxxxx, 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 Xxxxx may at the time of issuance
direct.
(e) DISABILITY COMPENSATION:
(1) If Xxxxx 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 Xxxxx 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 Xxxxx'x
salary is paid, provided however, that this
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benefit shall be limited to not more than a
total of twelve (12) months during the term
of the agreement.
(2) Xxxxx'x entitlement to disability income
pursuant to this subparagraph shall 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 Xxxxx was
determined to be disabled and unable to
perform the ordinary and usual duties as
Senior Vice President, Finance of Pathways,
beginning [DATE] , and Xxxxx'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 Xxxxx'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 Xxxxx 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, Xxxxx 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. Xxxxx 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. Xxxxx shall not
take any action to establish, form, assist or become employed by any such
competing business on termination of Xxxxx'x employment. Xxxxx'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
Xxxxx 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
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notice by the Company to Xxxxx; provided, however, that if this
agreement is terminated pursuant to this subparagraph, Xxxxx 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 of Xxxxx arising out of or in connection
with Xxxxx'x employment or the termination thereof.
(b) TERMINATION WITHOUT CAUSE BY XXXXX: The employment may be
terminated without cause in the sole and absolute discretion of XXXXX
upon six (6) months written notice by XXXXX to the Company, provided,
however, that if this agreement is terminated pursuant to this
subparagraph, XXXXX 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 XXXXX 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
XXXXX'X employment services; or XXXXX'X continued
employment would not confer to the Company the
substantial benefit intended to be gained by the
employment; or
(2) XXXXX 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 ternination shall be effective immediately upon written notice of
termination.
(d) TERMINATION FOR CAUSE BY XXXXX: XXXXX may terminate the
employment at any time upon written notice to Company, if, in the sole
and absolute determination of Xxxxx, 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
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of civil or criminal legal action against XXXXX; improperly discloses
any personal or private information of XXXXX protected by any
Constitutional or statutory right to privacy; acts in a manner
constituting constructive discharge of XXXXX; or the Company's actions
or business circumstances or XXXXX'X personal or family circumstances
make it impossible or impracticable for XXXXX 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 XXXXX 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, XXXXX 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, XXXXX 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. XXXXX 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, Xxxxx shall immediately
return and deliver to the Company all Confidential Information in his
possession or control.
(b) NO SOLICITATION OF EMPLOYEES: Xxxxx 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.
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(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, written, developed, furnished,
produced or disclosed by Xxxxx 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 Xxxxx shall have no
right title 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, Xxxxx shall immediately return and deliver to the
Company all of the Company's property, including all items used by
Xxxxx 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: Xxxxx 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. Xxxxx 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. Xxxxx 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, Xxxxx will immediately contact Company's General Counsel.
9. NON-COMPETITION AFTER TERMINATION OF EMPLOYMENT:
Xxxxx 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. Xxxxx agrees, as part of
the consideration for this Employment Agreement, that Xxxxx 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
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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 Xxxxx shall be owner, partner, officer, director or
shareholder 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:
Xxxxx 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, Xxxxx waives any claim or defense that the Company
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 Xxxxx 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 Xxxxx agree to
arbitrate any and all 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 Xxxxx
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
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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 XXXXX 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 parties shall deposit their respective shares of
the neutral arbitrator's estimated charges prior to he arbitration hearing. The
parties shall each bear their own costs, 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:
Xxxxx 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 Xxxxx before the date of this
agreement. The Company and Xxxxx 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 Xxxxx, his heirs, estate, executors,
administrators and all others claiming through or on behalf of Xxxxx, 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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Xxxxxx Xxxxx 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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