EXHIBIT 10.33
EMPLOYMENT AGREEMENT
OF XXXX X'XXXXXXX
WITH
VYYO INC.
THIS EMPLOYMENT AGREEMENT (this "Agreement"), is made and entered into
effective as of the 12th day of October, 2000, by and between VYYO INC., a
Delaware corporation (hereinafter the "Corporation"), and XXXX X'XXXXXXX
(hereinafter "X'XXXXXXX").
RECITAL
The Corporation and X'XXXXXXX agree to the employment terms set forth
herein for X'XXXXXXX'x position as the Corporation's Chief Executive Officer
("CEO").
AGREEMENT
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Employment Duties.
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a. General. The Corporation hereby agrees to employ X'XXXXXXX with the
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Corporation or any of its subsidiaries, and X'XXXXXXX hereby agrees to accept
employment with the Corporation or its subsidiaries, on the terms and conditions
hereinafter set forth.
b. Corporation's Duties. The Corporation shall allow X'XXXXXXX to, and
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X'XXXXXXX shall, perform responsibilities normally incident to the position of
CEO, commensurate with his background, education, experience and professional
standing. The Corporation shall provide X'XXXXXXX with such office equipment,
supplies, customary services, office, and cooperation suitable for the
performance of his duties.
x. X'XXXXXXX'x Duties. Unless otherwise agreed to by the parties,
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X'XXXXXXX shall serve as CEO of the Corporation. X'XXXXXXX shall devote his
full productive work time, attention, energy and skill to the business of the
Corporation. X'XXXXXXX shall report directly to the Chairman of the Board of
Directors. X'XXXXXXX'x primary office location shall be in Cupertino,
California, but he shall be expected to perform his duties worldwide, where
requested by the Corporation.
2. Term. The initial term of this employment is three (3) years from the date
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of this Agreement, subject to applicable laws. Thereafter, this Agreement may be
renewed by X'XXXXXXX and the Corporation on such terms as the parties may agree
to in writing. Except as provided in Section 6 (below), absent written notice to
the contrary, thirty (30) days prior to the end of the initial three (3) year
employment term, this Agreement will be automatically renewed for consecutive
one (1) year extensions.
3. Compensation. X'XXXXXXX shall be compensated as follows:
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a. Fixed Salary. X'XXXXXXX shall receive a fixed annual salary of Three
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Hundred Thousand Dollars ($300,000). The Corporation agrees to review the fixed
salary on, or before, January 1, 2001, and thereafter at the end of each
calendar year during the employment term based upon X'XXXXXXX'x services and the
financial results of the Corporation, and to make such increases as may be
determined appropriate in the sole discretion of the Corporation's Board of
Directors, and/or the Corporation's Compensation Committee.
b. Payment. X'XXXXXXX'x fixed salary shall be payable on a semi-
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monthly basis, in accordance with the Corporation's usual payroll practices.
c. Bonus Compensation.
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i. Signing Bonus. As an inducement for X'XXXXXXX to join the
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Corporation as its Chief Executive Officer, the Corporation agrees to pay to
X'XXXXXXX on the first payroll date following January 1, 2001, the sum of Six
Hundred Thousand Dollars ($600,000), subject to applicable withholdings for a
salary payment of such amount.
ii. Yearly Plan. During the Employment Term, X'XXXXXXX shall
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participate in each bonus plan adopted by the Corporation's Board of Directors.
Commencing in 2000, X'XXXXXXX shall be entitled to receive an annual bonus
equal to (1) fifteen percent (15%) of his annual base salary should the
Corporation meet eighty percent (80%) of its plan as presented to the Board in
January of each year, during the term of X'XXXXXXX'x employment ("Yearly Plan");
(2) fifty percent (50%) of his annual base salary should the Corporation meet
its Yearly Plan; and (3) ninety percent (90%) of his annual base salary should
the Corporation meet one hundred twenty percent (120%) of its Yearly Plan, with
the bonus prorated if the Yearly Plan is met between eighty percent (80%) and
one hundred percent (100%); or between one hundred percent (100%) and one
hundred twenty percent (120%). For purposes of this Section, the meeting of the
Yearly Plan shall be based upon the actual revenues set forth by management and
the Board of Directors for each applicable year (each compared to the revenues
and other items projected in the Yearly Plan). Any bonus payable for the year
2000 pursuant to the preceding sentences shall be prorated to reflect the number
of months that X'XXXXXXX worked for the Corporation or any of its subsidiaries
in 2000. The bonus shall be prorated for any year should X'XXXXXXX'x employment
terminate prior to the full calendar year. X'XXXXXXX shall also be entitled to
receive an additional annual bonus based on his performance and that of the
Corporation each year as determined by the Board of this Corporation, or its
Compensation Committee, in its discretion.
d. Stock Options. X'XXXXXXX shall be eligible for stock options that may
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be awarded by the Corporation, from time to time, in recognition of X'XXXXXXX'x
contribution to the Corporation's success.
e. Vacation. X'XXXXXXX shall accrue paid vacation at the rate of twenty-
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five (25) days for each twelve (12) months of employment. X'XXXXXXX shall be
compensated at his usual rate of compensation during any such vacation.
X'XXXXXXX shall be entitled to paid holidays as generally
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given by the Corporation. X'XXXXXXX shall receive sick leave or disability leave
in accordance with the terms of the Corporation's standard sick leave or
disability leave policy.
f. Benefits. During the employment term, X'XXXXXXX and his dependents
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shall be entitled to participate in any group plans or programs maintained by
the Corporation for any employees relating to group health, disability, life
insurance and other related benefits as in effect from time to time. X'XXXXXXX
shall also be entitled to Director and Officer ("D&O") insurance in such amounts
and coverage and such indemnification provisions as are afforded other officers
and directors of the Corporation. Premiums for such benefits under this Section
3.f. will be paid for by the Corporation.
g. Expenses. The Corporation shall reimburse X'XXXXXXX for his
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normal and reasonable expenses incurred for travel, entertainment and similar
items in promoting and carrying out the business of the Corporation in
accordance with the Corporation's general policy as adopted by the Corporation's
management from time to time. In addition, X'XXXXXXX shall be reimbursed for
the reasonable costs associated with one cellular telephone, and shall be
entitled to reimbursement for such reasonable continuing professional education,
memberships and certifications as are deemed normal and appropriate for Chief
Executive Officers. As a condition of payment or reimbursement, X'XXXXXXX
agrees to provide the Corporation with copies of all available invoices and
receipts, and otherwise account to the Corporation in sufficient detail to allow
the Corporation to claim an income tax deduction for such paid item, if such
item is deductible. Reimbursements shall be made on a monthly, or more
frequent, basis.
h. Relocation Loan. In connection with X'XXXXXXX'x relocation to
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California, the Corporation shall loan to X'XXXXXXX on or before January 31,
2001, the amount of One Million Dollars ($1,000,000). The loan shall be subject
to the following terms: (a) the loan shall bear interest at the lowest allowable
rate under applicable tax and accounting laws, and accrued interest shall be
paid on December 15 of each year with a 30 day grace period, during which the
loan is outstanding; (c) the principal amount of the loan shall be repaid on the
first to occur of 90 days after X'Xxxxxxx'x employment termination with the
Corporation, or October 12, 2003. The loan will be unsecured.
4. Confidentiality and Competitive Activities. X'XXXXXXX agrees that during
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the employment term he is in a position of special trust and confidence and has
access to confidential and proprietary information about the Corporation's
business and plans. X'XXXXXXX agrees that he will not directly or indirectly,
either as an employee, employer, consultant, agent, principal, partner,
stockholder, corporate officer, director, or in any similar individual or
representative capacity, engage or participate in any business that is in
competition, in any manner whatsoever, with the Corporation. Notwithstanding
anything in the foregoing to the contrary, X'XXXXXXX shall be allowed to invest
as a shareholder in publicly-traded companies, or through a venture capital firm
or an investment pool.
For purposes of this Section 4 and of Sections 5 and 7 of this Agreement,
the term "Corporation" shall include the Corporation, and any subsidiaries or
affiliated entities of Corporation.
5. Trade Secrets.
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a. Special Techniques. It is hereby agreed that the Corporation has
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developed or acquired certain products, technology, unique or special methods,
manufacturing and assembly processes and techniques, trade secrets, special
written marketing plans and special customer arrangements, and other
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proprietary rights and confidential information and shall during the employment
term continue to develop, compile and acquire said items (all hereinafter
collectively referred to as the "Corporation's Property"). It is expected that
X'XXXXXXX will gain knowledge of and utilize the Corporation's Property during
the course and scope of his employment with the Corporation, and will be in a
position of trust with respect to the Corporation's Property.
b. Corporation's Property. It is hereby stipulated and agreed that the
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Corporation's Property shall remain the Corporation's sole property. In the
event that X'XXXXXXX'x employment is terminated, for whatever reason, X'XXXXXXX
agrees not to copy, make known, disclose or use, any of the Corporation's
Property without the Corporation's prior written consent. In such event,
X'XXXXXXX further agrees not to endeavor or attempt in any way to interfere with
or induce a breach of any prior proprietary contractual relationship that the
Corporation may have with any employee, customer, contractor, supplier,
representative, or distributor for nine (9) months after any termination of this
Agreement. X'XXXXXXX agrees upon termination of employment to deliver to the
Corporation all confidential papers, documents, records, lists and notes
(whether prepared by X'XXXXXXX or others) comprising or containing the
Corporation's Property. X'XXXXXXX recognizes that violation of covenants and
agreements contained in this Section 5 may result in irreparable injury to the
Corporation which would not be fully compensable by way of money damages, and
that Corporation shall be entitled to pursue and seek any available remedy for
X'XXXXXXX'x violation of this agreement, including but not limited to injunctive
and equitable relief.
6. Termination.
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a. General. The Corporation may terminate this Agreement without cause,
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on ninety (90) days' written notice to X'XXXXXXX. X'XXXXXXX may voluntarily
terminate his employment hereunder upon ninety (90) days' written notice to the
Corporation.
b. Termination for Cause. The Corporation may immediately terminate
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X'XXXXXXX'x employment at any time for cause. Termination for cause shall be
effective from the receipt of written notice thereof to X'XXXXXXX specifying the
grounds for termination and all relevant facts. Cause shall be deemed to
include: (i) material neglect of his duties or a significant violation of any
of the provisions of this Agreement, which continues after written notice and a
reasonable opportunity (not to exceed thirty (30) days) in which to cure; (ii)
fraud, embezzlement, defalcation, dishonesty, conviction of any felonious
offense, or commission of an act of moral turpitude which results in either
civil or criminal liability; or (iii) intentionally imparting confidential
information relating to the Corporation, or any subsidiaries or affiliated
entities of Corporation, or their businesses, to competitors or to other third
parties other than in the course of carrying out his duties hereunder. The
Corporation's exercise of its rights to terminate with cause shall be without
prejudice to any other remedy it may be entitled at law, in equity, or under
this Agreement.
c. Termination Upon Death or Disability. This Agreement shall
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automatically terminate upon X'XXXXXXX'x death. In addition, if any disability
or incapacity of X'XXXXXXX to perform his duties as the result of any injury,
sickness, or physical, mental or emotional condition continues for a period of
thirty (30) business days (excluding any accrued vacation) out of any one
hundred twenty (120) calendar day period, the Corporation may terminate
X'XXXXXXX'x employment upon written notice. Payment of salary to X'XXXXXXX
during any sick leave shall only be to the extent that
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X'XXXXXXX has accrued sick leave or vacation days. X'XXXXXXX shall accrue sick
leave at the same rate generally available to the Corporation's employees.
x. Xxxxxxxxx Pay.
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(i) If this Agreement is terminated by the Corporation without cause
pursuant to Section 6.a. (above), the Corporation shall pay O'CONNELL a
severance payment equal to the greater of the full amount of the compensation he
could have expected under this Agreement, as and when payable under this
Agreement, without deduction except for tax withholding amounts, through the end
of the term, or nine (9) months of his then-current salary without bonus,
subject to tax withholding amounts, in either case in exchange for a release as
to any and all claims X'XXXXXXX may have against the Corporation. During the
time period that X'XXXXXXX is receiving such severance pay, he shall remain as
an employee of the Corporation in a non-policy making role, and his options
shall continue to vest.
(ii) If this Agreement is not renewed after the original three year
term, the employment shall be deemed to terminate at the end of the original
term and the Corporation shall pay O'CONNELL a severance payment equal to nine
(9) months of his then-current salary without bonus, subject to tax withholding
amounts, in exchange for a release as to any and all claims X'XXXXXXX may have
against the Corporation.
(iii) If this Agreement is terminated by X'XXXXXXX pursuant to Section
6.a (above), the employment shall be deemed to terminate at the end of the
ninety (90) day notice provision and the Corporation shall pay to O'CONNELL a
severance payment equal to three (3) months of his then-current salary without
bonus, subject to tax withholding amounts, in exchange for a release as to any
and all claims X'XXXXXXX may have against the Corporation.
(iv) If this Agreement is terminated by the Corporation for cause
pursuant to Section 6.b (above), the employment shall be deemed to terminate on
the date that the notice is given by the Corporation and the Corporation shall
pay to O'CONNELL a severance payment equal to three (3) months of his then-
current salary without bonus, subject to tax withholding amounts, in exchange
for a release as to any and all claims X'XXXXXXX may have against the
Corporation.
7. Corporate Opportunities.
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a. Duty to Notify. In the event that X'XXXXXXX, during the employment
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term, shall become aware of any material and significant business opportunity
directly related to any of the Corporation's significant businesses, X'XXXXXXX
shall promptly notify the Corporation's Chairman of the Board of such
opportunity. X'XXXXXXX shall not appropriate for himself or for any other
person other than the Corporation, or any affiliate of the Corporation, any such
opportunity unless, as to any particular opportunity, the Board of Directors of
the Corporation fails to notify X'XXXXXXX within thirty (30) days that the
Corporation would like to avail itself of such opportunity or further review
such opportunity. X'XXXXXXX'x duty to notify the Corporation and to refrain
from appropriating all such opportunities for thirty (30) days shall neither be
limited by, nor shall such duty limit, the application of the general law of
California relating to the fiduciary duties of an agent or employee.
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b. Failure to Notify. In the event that X'XXXXXXX fails to notify the
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Corporation of, or so appropriates, any such opportunity without the express
written consent of the Corporation, X'XXXXXXX shall be deemed to have violated
the provisions of this Section notwithstanding the following:
i. The capacity in which X'XXXXXXX shall have acquired such
opportunity; or
ii. The probable success in the Corporation's hands of such
opportunity.
8. Miscellaneous.
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a. Entire Agreement. This Agreement constitutes the entire agreement and
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understanding between the parties with respect to the subject matters herein,
and supersedes and replaces any prior agreements and understandings, whether
oral or written between them with respect to such matters. The provisions of
this Agreement may be waived, altered, amended or repealed in whole or in part
only upon the written consent of both parties to this Agreement.
b. No Implied Waivers. The failure of either party at any time to
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require performance by the other party of any provision hereof shall not affect
in any way the right to require such performance at any time thereafter, nor
shall the waiver by either party of a breach of any provision hereof be taken or
held to be a waiver of any subsequent breach of the same provision or any other
provision.
c. Personal Services. It is understood that the services to be performed
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by X'XXXXXXX hereunder are personal in nature and the obligations to perform
such services and the conditions and covenants of this Agreement cannot be
assigned by X'XXXXXXX. Subject to the foregoing, and except as otherwise
provided herein, this Agreement shall inure to the benefit of and bind the
successors and assigns of the Corporation.
d. Severability. If for any reason any provision of this Agreement shall
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be determined to be invalid or inoperative, the validity and effect of the other
provisions hereof shall not be affected thereby, provided that no such
severability shall be effective if it causes a material detriment to any party.
e. Applicable Law. This Agreement shall be governed by and construed in
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accordance with the laws of the State of California, applicable to contracts
between California residents entered into and to be performed entirely within
the State of California.
f. Notices. All notices, requests, demands, instructions or other
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communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given upon delivery, if
delivered personally, or if given by prepaid telegram, or mailed first-class,
postage prepaid, registered or certified mail, return receipt requested, shall
be deemed to have been given seventy-two (72) hours after such delivery, if
addressed to the other party at the addresses as set forth on the signature page
below. Either party hereto may change the address to which such communications
are to be directed by giving written notice to the other party hereto of such
change in the manner above provided.
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g. Merger, Transfer of Assets, or Dissolution of the Corporation. This
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Agreement shall not be terminated by any dissolution of the Corporation
resulting from either merger or consolidation in which the Corporation is not
the consolidated or surviving corporation or a transfer of all or substantially
all of the assets of the Corporation. In such event, the rights, benefits and
obligations herein shall automatically be assigned to the surviving or resulting
corporation or to the transferee of the assets.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
VYYO INC. XXXX X'XXXXXXX
a Delaware corporation
_____________________
00000 Xxxxxxx Xxxxx Xxxx., Xxx. 000
Xxxxxxxxx, Xxxxxxxxxx 00000 _____________________
(Print Address)
By: /s/ Xxxxxx Xxxx /s/ Xxxx X'Xxxxxxx
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Xxxxxx Xxxx, Chairman of the (Signature)
Board
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