EXHIBIT 10.9
EMPLOYMENT AGREEMENT
AGREEMENT, dated and effective as of Feb. 12, 1997 by and between
PerArdua Corporation, a Delaware corporation, (the "Company") and Xxxxxxxx Xxx
Xxxxx, an individual with an address at 00000 Xxxxxxx Xxxxx Xxxxx, Xxx Xxxxx,
Xxxxxxxxxx 00000 ("Executive").
W I T N E S S E T H:
WHEREAS, the Executive is willing to serve as President and Chief
Operating Officer of the Company, and the Company desires to retain the
Executive in such capacities on the terms and conditions herein set forth;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. Employment: Position and Duties: Extent of Services.
(a) Employment. The Company agrees to employ the Executive,
and the Executive agrees to be employed by the Company, for the Term provided
in Section 2 below and upon the other terms and conditions hereinafter provided.
(b) Position and Duties. During the Term as defined in
Section 2 herein, the Executive agrees to serve as the President and Chief
Operating Officer of the Company and to perform such reasonable duties
consistent with such position as may be delineated by the Chief Executive
Officer and as may be assigned to him from time to time by the Board of
Directors and/or Chief Executive Officer of the Company.
(c) Extent of Services. During the Term, and except for
illness or incapacity, the Executive shall devote all of his business time,
attention, skill and efforts exclusively to the business and affairs of the
Company, shall not be engaged in any business activity in violation of Section 6
of this Agreement or which would conflict with his obligations hereunder, and
shall perform and discharge well and faithfully the duties which may be
assigned to him from time to time by the Chief Executive Officer and/or Board of
Directors; provided, however, that nothing in this Agreement shall preclude the
Executive from devoting reasonable time during reasonable periods required for
any or all of the following:
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(i) serving as a director or member of a committee of any other
company or organization involving no actual or potential conflict of interest
with the Company or any of its subsidiaries or affiliates;
(ii) engaging in charitable and community activities; and/or
(iii) investing his personal assets in businesses in such form or
manner as will not require any services on the part of the Executive in the
operation or affairs of such businesses.
At the request of the Company, the Executive shall advise the Company of
the nature and identity of other business organizations or endeavors in which he
may be involved.
2. Term of Employment.
The Company hereby agrees to employ the Executive, and the Executive
hereby agrees to accept such employment in the capacity set forth herein, for a
period beginning either March 3 or March 10, 1997, the exact date to be
determined in the discretion of the Executive, and expiring February 29, 2000,
subject to the provisions of Section 5 of this Agreement (the "Term"). The
Company agrees that, at least ninety (90) days prior to the anticipated
expiration of the Term, it will, if the Executive so desires, negotiate in good
faith with the Executive regarding continued employment beyond said expiration
date.
3. Compensation and Benefits.
As compensation to the Executive for all services to be rendered by
him in any capacity hereunder, the Company shall pay a monthly salary at a rate
of Ten Thousand and no/100 Dollars ($10,000.00) payable bi-weekly. Executive
shall be entitled to four (4) weeks paid vacation per year. In addition,
promptly upon the closing of an underwritten initial public offering of
Securities of the Company's Common Stock, the Company shall grant to him stock
options to purchase 100,000 shares of the Company's Common Stock pursuant to the
provisions of the Company's 1996 Stock Option Plan at a per share price not
greater than the market value of the stock on the date of grant and not less
than $5.00 per share. The options shall vest as follows: 30,000 shares on the
date of grant, 35,000 shares on June 30, 1998, and 35,000 shares on December 31,
1999. The Company shall reimburse Executive for the amounts necessary for the
Executive to maintain health insurance for himself and his immediate family
during the Term pursuant to his COBRA rights with respect to his preceding
employer. When such rights expire the Company will pay for comparable health
insurance coverage to the extent the same is available. The Company will provide
annual renewable term life insurance on the life of the Executive in an amount
of $200,000
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plus $100,000 additiona1 in the event of an accidental death. Executive may
designate the beneficiary of such policy.
4. Location.
At the commencement of the Term, the Company is maintaining temporary
executive office space at 00000 Xxxxxxxx Xxxxxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx, and
intends to maintain such space at least until the completion of the Company
initial public offering of securities. The Company then intends to establish its
executive offices in the San Diego area. Executive agrees to travel from his
home in San Diego to the Company's office in Los Angeles so as to be present in
such office at least three days a week, subject to any business travel. The
Company will reimburse Executive for his reasonable out-of-pocket expenses, upon
presentation of appropriate voucher, for such travel between San Diego and Los
Angeles, including lodging and meals.
5. Change-of-Control.
Any of the following transactions shall be deemed to constitute a
"Change of Control:"
(i) the adoption of a plan of merger or consolidation of the Company
with any other corporation as a result of which the holders of the
outstanding voting stock of the Company as a group would receive
less than 50% of the voting stock of the surviving or resulting
corporation;
(ii)the adoption of a plan of liquidation or the approval of the
dissolution of the Company;
(iii)the sale or transfer of all or substantially all of the assets of
the Company; or
(iv)a tender offer or exchange offer for shares of Common Stock other
than any such offer made by the Company.
If following a Change of Control the Executive's employment should be
terminated for any reason whatsoever, including voluntary termination by
Executive, or if Executive employment's hereunder shall be terminated by the
Company at any time without good cause, then Executive shall be entitled to
receive in a single lump sum payment, the following:
(a) an amount equal to the lesser of six (6) months salary or the
amount
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of salary then remaining to be payable for the duration of the
Term, plus
(b) an amount equal the then most recent monthly payment made by the
Company for health insurance for the Executive and his immediate
family, multiplied by the lesser of six or the number of months
then remaining in the Term.
6. Trade Secrets and Confidential Information.
(a) Definition. As used in this Agreement (i) "Confidential
Information and Trade Secrets" means all information, processes, process
parameters, methods, practices, chemical and other formulae, fabrication
techniques, technical plans, algorithms, computer programs and related
documentation, customer lists, price lists, supplier lists, marketing plans,
financial information, and all other compilations of information which relate to
the business of the Company and which have not been released by the Company to
the general public, but shall not include general technical and business skills
and expertise which Executive has acquired or developed by reason of prior
experience, and (ii) a "Business Competitive with the Company" means an
enterprise which is engaged in the development or promotion of a product or
service which may be reasonablely considered to compete, or have the potential
to compete, in the marketplace with a product or service which the Company has
been developing or promoting, or has had plans to develop or promote, at any
time during the Executive's employment hereunder.
(b) Restrictive Covenants.
(i) Executive acknowledges that during the term of employment with the
Company, Executive will have access to and become acquainted with the
Confidential Information and Trade Secrets of the Company. Executive agrees not
to use or disclose (directly or indirectly) any Confidential Information and
Trade Secrets of the Company at any time or in any manner, except as required in
the course of employment with the Company. The obligations of this paragraph are
continuing and survive the termination of Executive's employment with the
Company. All documents and equipment relating to the business of the Company,
whether prepared by Executive or otherwise coming into Executive's possession,
are the exclusive property of the Company, and must not be removed from the
premises of the Company except as required in the course of employment with the
Company. All such documents and equipment must be returned to the Company when
Executive leaves the employment of the Company.
(ii) While employed by the Company, Executive agrees not to undertake
any planning for any outside business which would constitute a Business
Competitive with the Company.
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(iii) While employed by the Company and for five (5) years after that
employment ends, Executive agrees not to enter into any employment with a
Business Competitive with the Company in which the complete fulfillment of the
duties of the competitive employment would inherently require Executive to
reveal or use any of the Confidential Information and Trade Secrets of the
Company learned or obtained by Executive while employed by the Company.
(iv) While employed by the Company and for five (5) years after that
employment ends, Executive agrees not to divert or attempt to divert (by
solicitation or by any other means) the customers of the Company existing at the
time Executive's employment ends.
7. Miscellaneous.
(a) Successors and Assigns. This Agreement is intended to benefit
and is binding on (i) the successors and assigns of the Company and (ii) the
heirs and legal successors of Executive.
(b) Governing Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of California.
(c) Separate Enforcement of Provisions. If for any reason a part
of this Agreement is unenforceable, the remainder of the Agreement shall be
enforced to the extent possible.
(d) Modification of Agreement. This Agreement may only be
modified by a writing signed (i) by Executive and (ii) by an authorized
representative of the Company.
(e) No Conflicting Contracts. Executive represents that Executive
has no contracts with any other party that would interfere with Executive's
compliance with the terms and conditions of this Agreement.
(f) No Right to Continuing Employment. No provision of this
Agreement shall be construed as giving Executive the right to be retained in the
employment of the Company, except to the extent expressly set forth in this
Agreement.
Executed as of the date first above written.
Xxxxxxxx Xxx Xxxxx PerArdua Corporation
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Xxxxxxxx Xxx Xxxxx
by: Xxxxxx X. Xxxxx
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Treasurer
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