Exhibit 10.4
LIMELIGHT NETWORKS, INC.
XXXX XXXXXXXX EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is entered into as of October
20, 2006 (the "Signing Date"), by and between Limelight Networks, Inc. (the
"Company") and Xxxx Xxxxxxxx ("Executive").
1. Duties and Scope of Employment.
(a) Positions and Duties. No later than November 20, 2006 (the
"Effective Date"), Executive will commence service as the Company's Chief
Executive Officer and President. Executive will report to the Company's Board of
Directors (the "Board"), the date on which Executive actually commences such
service as the Company's Chief Executive Officer shall be the "Effective Date."
As of the Effective Date, Executive will render such business and professional
services in the performance of his duties, consistent with Executive's position
within the Company, as will reasonably be assigned to him by the Board. The
period Executive is employed by the Company under this Agreement is referred to
herein as the "Employment Term". In the event that Executive fails (i) to tender
his resignation as President and Chief Executive Officer with his current
employer by 12:01 pm Pacific Daylight Time on October 27, 2006 or (ii) to begin
full-time employment with the Company by November 20, 2006 and a Change of
Control has not occurred, this Agreement, other than the last sentence of
paragraph 3(f)(i), shall be null and void.
(b) Board Membership. As of the Effective Date, Executive will serve
as a member of the Board and as the Chairman of the Board. At each annual
meeting of the Company's stockholders during the Employment Term, the Company
will nominate Executive to serve as a member of the Board. Executive's service
as a member of the Board will be subject to any required stockholder approval.
Upon the termination of Executive's employment for any reason, unless otherwise
requested by the Board, Executive will be deemed to have resigned from the Board
(and all other positions held at the Company and its affiliates) voluntarily,
without any further required action by Executive, as of the end of Executive's
employment and Executive, at the Board's request, will execute any documents
necessary to reflect his resignation. This paragraph is intended to clarify that
upon Executive's termination, his positions on the Company's Board and otherwise
will terminate immediately and shall not be deemed to in any way modify
Executive's rights to severance under this Agreement.
(c) Obligations. During the Employment Term, Executive, except as
provided below, will devote Executive's full business efforts and time to the
Company and will use good faith efforts to discharge Executive's obligations
under this Agreement to the best of Executive's ability and in accordance with
each of the Company's written corporate guidance and ethics guidelines, conflict
of interests policies and code of conduct as the Company may adopt from time to
time. For the duration of the Employment Term, Executive agrees not to actively
engage in any other employment, occupation, or consulting activity for any
direct or indirect remuneration without the prior approval of the Board (which
approval will not be unreasonably withheld); provided, however, that Executive
may, without the approval of the Board, (i) serve in any capacity with any
civic,
educational, professional, industry or charitable organization, provided such
services do not interfere with Executive's obligations to Company, and (ii)
serve on the boards of directors of WebSideStory, Inc. and Midtown Bank and
Trust Company.
(i) Executive hereby represents, warrants and covenants to the
Company that as of the Effective Time, Executive will not be a party to any
contract, understanding, agreement or policy, written or otherwise, that will be
breached by Executive's entering into, or performing services under, this
Agreement. Executive further represents that he has disclosed to the Company in
writing all threatened, pending, or actual claims that are unresolved and still
outstanding as of the Signing Date, in each case, against Executive of which he
is aware, if any, as a result of his employment with any previous employer or
his membership on any boards of directors.
(d) Other Entities. Executive agrees to serve if appointed, without
additional compensation, as an officer and director for each of the Company's
subsidiaries, partnerships, joint ventures, limited liability companies and
other affiliates, including entities in which the Company has a significant
investment as determined by the Company. As used in this Agreement, the term
"affiliates" will mean any entity controlled by, controlling, or under common
control of the Company.
2. At-Will Employment. Executive and the Company agree that Executive's
employment with the Company constitutes "at-will" employment. Executive and the
Company acknowledge that this employment relationship may be terminated at any
time, upon written notice to the other party, with or without good cause or for
any or no cause, at the option either of the Company or Executive. However, as
described in this Agreement, Executive may be entitled to severance benefits
depending upon the circumstances of Executive's termination of employment.
3. Compensation.
(a) Base Salary. Commencing with the Effective Date, the Company will
pay Executive an annual salary of $325,000 as compensation for his services
(such annual salary, as is then effective, to be referred to herein as "Base
Salary"). Executive's Base Salary will be subject to annual review (subject to
the provisions of Section 10(e)(iii) of this Agreement). Notwithstanding the
foregoing, Executive's annual salary shall be increased to $400,000 effective
upon the closing of an initial public offering of the Company's Common Stock.
The Base Salary will be paid periodically in accordance with the Company's
normal payroll practices and will be subject to the usual, required
withholdings.
(b) Annual Incentive. Executive will be eligible to receive annual
cash incentives payable for the achievement of performance goals established by
the Board or by the Compensation Committee of the Board (the "Committee").
During calendar year 2007, Executive's target annual incentive ("Target Annual
Incentive") will be $275,000. The actual earned annual cash incentive, if any,
payable to Executive for any performance period will depend upon, the extent to
which the applicable performance goal(s) specified by the Committee with the
input of Executive are achieved.
(c) Signing Bonus. Executive shall receive a $100,000 signing bonus.
In addition, Executive shall be entitled to such additional bonus, if any, as
determined in good faith by the Committee, which will be based upon Executive's
receipt, if any, of his bonus associated with
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performance by Executive while at Executive's prior employer. Executive
represents that he is entitled to certain bonus payments by his current employer
based upon his and his employer's performance during calendar year 2006. In the
event that Executive's employer fails to pay amounts owed to Executive pursuant
to the 2006 WSSI Bonus Plan, the Company shall pay such additional amounts,
which in no event shall exceed $150,000.00, that are determined as follows: the
amount calculated under the WSSI 2006 Bonus Plan owing to Executive, minus the
amount actually paid to Executive by his current employer, WebSideStory, Inc.
Executive agrees to provide such assistance in calculating the amounts owing
under the WSSI 2006 Bonus Plan as the Committee reasonably requests and to
assign any and all rights Executive may have against WebSideStory, Inc. to
recover such bonus to the extent that such bonus is not paid to executive but is
paid by the Company. Notwithstanding the actual date of payment of any bonus
under this paragraph 3(c), such bonus shall not constitute payments under
paragraph 3(b) above.
(d) Management Carve-Out. Executive shall be entitled to participate
in the Company's 2006 Sale Participation Program. On the 120th day after the
Signing Date, Executive will receive 107,500 Participating Units, which shall
entitle Executive to certain rights under the 2006 Sale Participation Program.
Notwithstanding the foregoing, in a Change of Control transaction in which the
Series B Preferred Stock of the Company does not convert into common stock of
the Company, it is the intent of the parties that the total amount that
Executive would receive in such transaction, based on Executive's equity
ownership (both stock and options) and interest in the 2006 Sale Participation
Program, shall not exceed $9,780,000.00 and Executive shall be deemed to have
returned such number of Participating Units (up to all of such Units) as to
limit the amount Executive would receive from all such equity interests and
Participating Units to such $9,780,000.00 amount. For purposes of determining
the amount Executive would receive in connection with such Change of Control
transaction, all options granted and stock issued to executive shall be deemed
to be fully vested and not subject to any rights of first refusal irrespective
of the actual treatment of such options and restricted stock pursuant to
paragraphs 3 and 7 of this Agreement
(e) Acquisition Bonus. If on or prior to the 120th day following the
Signing Date, the Company enters into a definitive agreement that contemplates a
transaction or series of related transactions that, upon closing of such
transaction or transactions, would constitute a Change of Control (as defined
below), (i) an aggregate of 1,000,000 shares (which amount shall include any
shares of stock previously vested) subject to the Initial Grant (as defined
below) shall vest (the "Acquisition Bonus") if and when such transaction
actually closes. Notwithstanding the foregoing, such Acquisition Bonus shall
only be payable if such Change of Control transaction closes within 12 months of
the Signing Date. The parties hereto agree that such payment of the Acquisition
Bonus shall be the only payment based upon equity ownership, options granted or
Participation Units held by Executive. For the avoidance of doubt upon the
closing of such Change of Control, (i) the $9.80 Option shall terminate, (ii)
the $19.80 Option shall terminate, and (iii) the Participation Units shall be
deemed to be surrendered by Executive.
(f) Equity Awards.
(i) On the Signing Date, Executive will be granted 1,000,000
shares of restricted Common Stock of the Company (the "Initial Grant"). The
Initial Grant will be granted under and subject to the terms, definitions and
provisions of the Company's 2003 Incentive Compensation Plan (the "Plan").
Twelve and one-half percent (12.5%) of the shares subject to the
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Initial Grant shall be vested on the date of grant. An additional twelve and
one-half percent (12.5%) of the shares subject to the Initial Grant shall be
vested on the 120th day after the Signing Date and 1/48th of the shares subject
to the Initial Grant will vest monthly thereafter assuming Executive's continued
employment with the Company on each scheduled vesting date. Except as provided
in this Agreement, the Initial Grant will be subject to the Company's standard
terms and conditions under the Plan. Notwithstanding the previous sentence to
the contrary, if Executive terminates his employment under circumstances
identified under paragraph 7(c) (other than the last sentence thereof) within
the first year following the Effective Date or fails to become a full-time
employee of the Company by November 20, 2006, Executive shall sell to the
Company all shares of Company stock then held by Executive for an aggregate of
$1.00.
(ii) On the Effective Date, the Company will also issue to
Executive an option to purchase 500,000 shares of Common Stock at a per share
exercise price equal $9.80 per share (the "$9.80 Option"). The $9.80 Option will
be granted under and subject to the terms, definitions and provisions of the
Plan and will be scheduled to vest at a rate of 25% of the shares subject to the
$9.80 Option on the first anniversary of the grant and 1/48 of the shares will
be scheduled to vest monthly thereafter assuming Executive's continued
employment with the Company on each scheduled vesting date. Except as provided
in this Agreement, the $9.80 Option will be subject to the Company's standard
terms and conditions for options granted under the Plan.
(iii) The Company will also issue to Executive an option to
purchase 500,000 shares of Common Stock at a per share exercise price equal
$19.80 per share (the "$19.80 Option"). The $19.80 Option will be granted under
and subject to the terms, definitions and provisions of the Plan and beginning
on the second anniversary of the Effective Date, such option will vest at a rate
of 1/48 of the shares subject to such option monthly thereafter assuming
Executive's continued employment with the Company on each scheduled vesting
date. Except as provided in this Agreement, the $19.80 Option will be subject to
the Company's standard terms and conditions for options granted under the Plan.
(iv) In the event that the Company consummates a Change of
Control transaction, 50% (subject to the following sentence) of Executive's then
outstanding unvested equity awards will vest. Notwithstanding the previous
sentence to the contrary, if the Acquisition Bonus pursuant to paragraph 3(e)
shall become due and payable, then no acceleration of vesting shall occur
pursuant to this paragraph 3(f)(iv).
4. Employee Benefits.
(a) Generally. Executive will be eligible to participate in accordance
with the terms of all Company employee benefit plans, policies and arrangements
that are applicable to other executive officers of the Company, as such plans,
policies and arrangements may exist from time to time.
(b) Vacation. Executive will be entitled to receive paid annual
vacation in accordance with Company policy for other senior executive officers,
but with vacation accrual of not less than four (4) weeks per year.
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5. Expenses. The Company will reimburse Executive for reasonable travel,
entertainment and other expenses incurred by Executive in the furtherance of the
performance of Executive's duties hereunder, in accordance with the Company's
expense reimbursement policy as in effect from time to time. Such reimbursement
shall include the actual costs incurred by Executive in flying his personal,
single engine airplane on business travel; provided, however, that the maximum
reimbursable for such expenses shall be $400.00 per hour based on the xxxxx
time. In addition, the Company shall reimburse Executive (a) for his expenses in
renting an apartment in the Phoenix area, which expenses shall not exceed
$2,000.00 per month, and (b) up to $2,500 for his expenses in engaging legal
counsel to review this Agreement on his behalf.
6. Termination of Employment. In the event Executive's employment with the
Company terminates for any reason, Executive will be entitled to any (a) unpaid
Base Salary accrued up to the effective date of termination; (b) unpaid, but
earned and accrued annual incentive for any completed fiscal year as of his
termination of employment; (c) pay for accrued but unused vacation; (d) benefits
or compensation as provided under the terms of any employee benefit and
compensation agreements or plans applicable to Executive; (e) unreimbursed
business expenses required to be reimbursed to Executive; and (f) rights to
indemnification Executive may have under the Company's Certificate of
Incorporation, Bylaws, this Agreement, and/or separate indemnification
agreement, as applicable. In the event Executive's employment with the Company
terminates for any reason (other than Cause), Executive will be entitled to
exercise any outstanding stock options for at least twenty-four (24) months
after the later of such termination of employment or the date upon which
Executive ceases to provide any other services to the Company or any of its
affiliates, whether as a director, independent contractor or otherwise, but in
no event later than the applicable scheduled expiration date of such award (in
the absence of any termination of employment) as set forth in the award
agreement. For purposes of clarity, the term "expiration date" shall be the
scheduled expiration of the option agreement and not the period that Executive
shall be entitled to exercise such option. In addition, if the termination is by
the Company without Cause or Executive resigns for Good Reason, Executive will
be entitled to the amounts and benefits specified in Section 7.
7. Severance.
(a) Termination Without Cause or Resignation for Good Reason other
than in Connection with a Change of Control. If Executive's employment is
terminated by the Company without Cause or if Executive resigns for Good Reason,
and such termination is not in Connection with a Change of Control, then,
subject to Section 8, Executive will receive: (i) continued payment of
Executive's Base Salary (subject to applicable tax withholdings) for twelve (12)
months, such amounts to be paid in accordance with the Company's normal payroll
policies; (ii) the current year's Target Annual Incentive pro-rated to the date
of termination, with such pro-rated amount to be calculated by multiplying the
current year's Target Annual Incentive by a fraction with a numerator equal to
the number of days inclusive between the start of the current calendar year and
the date of termination and a denominator equal to 365, such amounts to be paid
at the same time as similar bonus payments are made to the Company's other
executive officers, and (iii) reimbursement for premiums paid for continued
health benefits for Executive (and any eligible dependents) under the Company's
health plans until the earlier of (A) twelve (12) months, payable when such
premiums are due (provided Executive validly elects to continue coverage under
the Consolidated Omnibus Budget Reconciliation Act ("COBRA")), or (B) the date
upon which Executive and Executive's eligible dependents become covered under
similar plans. Notwithstanding the foregoing, if Executive is
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terminated without Cause or resigns for Good Reason, and such termination is not
in Connection with a Change of Control and occurs prior to January 2,2007, then
"six (6) months" will be substituted for "twelve (12) months" in clause (i) of
the preceding sentence.
(b) Termination Without Cause or Resignation for Good Reason in
Connection with a Change of Control. If Executive's employment is terminated by
the Company without Cause or by Executive for Good Reason, and the termination
is in Connection with a Change of Control, then, subject to Section 8, Executive
will receive: (i) continued payment of Executive's Base Salary for the year in
which the termination occurs (subject to applicable tax withholdings), for
twelve (12) months, such amounts to be paid in accordance with the Company's
normal payroll policies; (ii) the payment in an amount equal to 100% of
Executive's Target Annual Incentive for the year in which the termination occurs
(subject to applicable tax withholdings), such amounts to be paid in accordance
with the Company's normal payroll policies over the course of twelve (12)
months; (iii) 100% (subject to the following sentence) of Executive's then
outstanding unvested equity awards will vest, and (v) reimbursement for premiums
paid for continued health benefits for Executive (and any eligible dependents)
under the Company's health plans until the earlier of (A) twelve (12) months,
payable when such premiums are due (provided Executive validly elects to
continue coverage under COBRA), or (B) the date upon which Executive and
Executive's eligible dependents become covered under similar plans.
Notwithstanding the previous sentence to the contrary, if the Acquisition Bonus
pursuant to paragraph 3(e) shall become due and payable, then no acceleration of
vesting shall occur pursuant to this paragraph 7(b).
(c) Voluntary Termination Without Good Reason or Termination for
Cause. If Executive's employment is terminated voluntarily (excluding a
termination for Good Reason), is terminated for Cause by the Company, then,
except as provided in Section 3(f)(i) or Section 6, (i) all further vesting of
Executive's outstanding equity awards will terminate immediately; (ii) all
payments of compensation by the Company to Executive hereunder will terminate
immediately, and (iii) Executive will be eligible for severance benefits only in
accordance with the Company's then established plans. In the event that
Executive's employment is terminated due to death or Disability, twenty-five
percent (25%) of executive's then unvested options shall vest.
8. Conditions to Receipt of Severance; No Duty to Mitigate.
(a) Separation Agreement and Release of Claims. The receipt of any
severance or other benefits pursuant to Section 7 will be subject to Executive
signing and not revoking a separation agreement and release of claims in a form
reasonably acceptable to the Company. No severance or other benefits pursuant to
Section 7 will be paid or provided until the separation agreement and release
agreement becomes effective.
(b) Non-solicitation and Non-competition. The receipt of any severance
or other benefits pursuant to Section 7 will be subject to Executive agreeing
that during the Employment Term and for twenty-four (24) months thereafter,
Executive will not (i) solicit any employee of the Company (other than
Executive's personal assistant) for employment other than at the Company, or
(ii) directly or indirectly engage in, have any ownership interest in or
participate in any entity that as of the date of termination, competes with the
Company in any substantial business of the Company or any business reasonably
expected to become a substantial business of the Company. If Executive violates
this Section 8(b), the Company's sole form of recourse will be to terminate any
future
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payments or benefits owed to Executive pursuant to Section 7 of this Agreement.
Executive's passive ownership of not more than 1% of any publicly traded company
and/or 5% ownership of any privately held company will not constitute a breach
of this Section 8(b). Public solicitation, such as by taking out ads in a
newspaper, advertising on the web and the like, not specifically aimed at
employees of the Company, will not constitute a breach of this Section 8(b).
(c) Nondisparagement. During the Employment Term and Continuance
Period, Executive and the Company in its official communications will not
knowingly and materially disparage, criticize, or otherwise make any derogatory
statements regarding the other. The Company will instruct its officers and
directors to not knowingly and materially disparage, criticize, or otherwise
make any derogatory statements regarding Executive. Notwithstanding the
foregoing, nothing contained in this agreement will be deemed to restrict
Executive, the Company or any of the Company's current or former officers and/or
directors from providing factual information to any governmental or regulatory
agency (or in any way limit the content of any such information) to the extent
they are requested or required to provide such information pursuant to
applicable law or regulation.
(d) Other Requirements. Executive's receipt of continued severance
payments pursuant to Section 7 will be subject to Executive continuing to comply
with the terms of the Confidential Information Agreement and the provisions of
this Section 8.
(e) No Duty to Mitigate. Executive will not be required to mitigate
the amount of any payment contemplated by this Agreement, nor will any earnings
that Executive may receive from any other source reduce any such payment.
9. Excise Tax. In the event that the benefits provided for in this
Agreement constitute "parachute payments" within the meaning of Section 280G of
the Internal Revenue Code of 1986, as amended (the "Code") and will be subject
to the excise tax imposed by Section 4999 of the Code (the "Excise Tax"), then
Executive's severance benefits payable under the terms of this Agreement will
be, at Executive's option, either (a) delivered in full, or (b) delivered as to
such lesser extent which would result in no portion of such severance benefits
being subject to the Excise Tax, WHICHEVER OF THE FOREGOING AMOUNTS, TAKING INTO
ACCOUNT THE APPLICABLE FEDERAL, STATE AND LOCAL INCOME TAXES AND THE EXCISE TAX,
RESULTS IN THE RECEIPT BY EXECUTIVE ON AN AFTER-TAX BASIS, OF THE GREATEST
AMOUNT OF SEVERANCE BENEFITS.
10. Definitions.
(a) Cause. For purposes of this Agreement, "Cause" will mean:
(i) Acts or omissions constituting gross negligence, recklessness
or willful misconduct on the part of Executive with respect to Executive's
obligations under this Agreement or otherwise relating to the business of
Company;
(ii) Any act of personal dishonesty taken by Executive in
connection with his responsibilities as an employee of the Company with the
intention or reasonable expectation that such action may result in the
substantial personal enrichment of Executive;
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(iii) Executive's conviction of, or plea of nolo contendere to, a
felony that the Board reasonably believes has had or will have a material
detrimental effect on the Company's reputation or business;
(iv) A breach of any fiduciary duty owed to the Company by
Executive that has a material detrimental effect on the Company's reputation or
business;
(v) Executive being found liable in any Securities and Exchange
Commission or other civil or criminal securities law action or entering any
cease and desist order with respect to such action (regardless of whether or not
Executive admits or denies liability);
(vi) Executive (A) obstructing or impeding; (B) endeavoring to
obstruct, impede or improperly influence, or (C) failing to materially cooperate
with, any investigation authorized by the Board or any governmental or
self-regulatory entity (an "Investigation"). However, Executive's failure to
waive attorney-client privilege relating to communications with Executive's own
attorney in connection with an Investigation will not constitute "Cause";
(vii) Executive's disqualification or bar by any governmental or
self-regulatory authority from serving in the capacity contemplated by this
Agreement or Executive's loss of any governmental or self-regulatory license
that is reasonably necessary for Executive to perform his responsibilities to
the Company under this Agreement, if (A) the disqualification, bar or loss
continues for more than thirty (30) days, and (B) during that period the Company
uses its good faith efforts to cause the disqualification or bar to be lifted or
the license replaced. While any disqualification, bar or loss continues during
Executive's employment, Executive will serve in the capacity contemplated by
this Agreement to whatever extent legally permissible and, if Executive's
employment is not permissible, Executive will be placed on leave (which will be
paid to the extent legally permissible).
(b) Change of Control. For purposes of this Agreement, "Change of
Control" will mean the occurrence of any of the following events:
(i) The consummation by the Company of a merger or consolidation
of the Company with any other corporation, other than a merger or consolidation
which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) more than 50% of the total voting power represented by the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation;
(ii) The approval by the stockholders of the Company, or if
stockholder approval is not required, approval by the Board, of a plan of
complete liquidation of the Company or an agreement for the sale or disposition
by the Company of all or substantially all of the Company's assets;
(iv) Any "person" (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended), other than Xxxxxxx
Xxxxx and its related funds and entities, becoming the "beneficial owner" (as
defined in Rule 13d-3 under said Act), directly or indirectly, of securities of
the Company representing 50% or more of the total voting power represented by
the Company's then outstanding voting securities.
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(c) Continuance Period. For purposes of this Agreement, "Continuance
Period" will mean the period of time beginning on the date of the termination of
Executive's employment and ending on the date on which Executive is no longer
receiving Base Salary payments under Section 7.
(d) Disability. For purposes of this Agreement, "Disability" will mean
Executive's absence from his responsibilities with the Company on a full-time
basis for 120 calendar days in any consecutive twelve (12) month period as a
result of Executive's mental or physical illness or injury.
(e) Good Reason. For purposes of this Agreement, "Good Reason" means
the occurrence of any of the following, without Executive's express written
consent:
(i) An adverse change in Executive's title or reporting
relationship, or a significant reduction of Executive's duties, position, or
responsibilities, relative to Executive's duties, position, or responsibilities
in effect immediately prior to such reduction;
(ii) A material reduction in the kind or level of employee
benefits to which Executive is entitled immediately prior to such reduction with
the result that Executive's overall benefits package is significantly reduced.
Notwithstanding the foregoing, a one-time reduction that also is applied to
substantially all other executive officers of the Company and that reduces the
level of employee benefits by a percentage reduction of 10% or less will not
constitute "Good Reason";
(iii) A reduction in Executive's Base Salary or Target Annual
Incentive as in effect immediately prior to such reduction. Notwithstanding the
foregoing, a one-time reduction that also is applied to substantially all other
executive officers of the Company and which one-time reduction reduces the Base
Salary or Target Annual Incentive by a percentage reduction of 10% or less in
the aggregate will not constitute "Good Reason";
(iv) The relocation of Executive to a facility or location more
than twenty-five (25) miles from the location of the Company's executive
offices as of the Effective Date;
(v) Any material breach by the Company of any material
contractual obligation owed Executive which breach is not remedied within thirty
(30) days of written notice; or
(vi) The failure of the Company to obtain the assumption of this
Agreement by a successor.
While the Company is not subject to the reporting requirements under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), the failure of
the Company's stockholders to elect or reelect Executive to the Board shall
constitute "Good Reason" for purposes of this Agreement. After such time as the
Company becomes subject to the reporting requirements under the Exchange Act,
the failure of the Company's stockholders to elect or reelect Executive to the
Board will not constitute "Good Reason" for purposes of this Agreement.
(f) In Connection with a Change of Control. For purposes of this
Agreement, a termination of Executive's employment with the Company is "in
Connection with a Change of Control" if Executive's employment is terminated
within three (3) months prior the execution of an agreement that results in a
Change of Control or twelve (12) months following a Change of Control
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11. Indemnification. Subject to applicable law, Executive will be provided
indemnification to the maximum extent permitted by the Company's Articles of
Incorporation or Bylaws, including, if applicable, any directors and officers
insurance policies, with such indemnification to be on terms determined by the
Board or any of its committees, but on terms no less favorable than provided to
any other Company executive officer or director and subject to the terms of any
separate written indemnification agreement.
12. Confidential Information. Executive will execute the form of
Employment, Confidential Information and Invention Assignment Agreement,
appended hereto as Exhibit A (the "Confidential Information Agreement"). In the
event of any inconsistency between the terms of this Agreement and the terms of
the Confidential Information Agreement, this Agreement will prevail.
13. Assignment. This Agreement will be binding upon and inure to the
benefit of (a) the heirs, executors and legal representatives of Executive upon
Executive's death, and (b) any successor of the Company. Any such successor of
the Company will be deemed substituted for the Company under the terms of this
Agreement for all purposes. For this purpose, "successor" means any person,
firm, corporation, or other business entity which at any time, whether by
purchase, merger, or otherwise, directly or indirectly acquires all or
substantially all of the assets or business of the Company. None of the rights
of Executive to receive any form of compensation payable pursuant to this
Agreement may be assigned or transferred except by will or the laws of descent
and distribution. Any other attempted assignment, transfer, conveyance, or other
disposition of Executive's right to compensation or other benefits will be null
and void. This Section 13 will in no way prevent Executive from transferring any
vested property he owns.
14. Notices. All notices, requests, demands and other communications called
for hereunder will be in writing and will be deemed given (a) on the date of
delivery if delivered personally; (b) one (1) day after being sent overnight by
a well-established commercial overnight service, or (c) four (4) days after
being mailed by registered or certified mail, return receipt requested, prepaid
and addressed to the parties or their successors at the following addresses, or
at such other addresses as the parties may later designate in writing:
If to the Company:
If to Executive:
at the last residential address known by the Company.
With a copy to:
15. Severability. If any provision hereof becomes or is declared by a court
of competent jurisdiction to be illegal, unenforceable, or void, this Agreement
will continue in full force and effect without said provision.
16. Arbitration. The parties agree that any and all disputes arising out of
the terms of this Agreement, Executive's employment by the Company, Executive's
service as an officer or director
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of the Company, or Executive's compensation and benefits, their interpretation
and any of the matters herein released, will be subject to binding arbitration.
In the event of a dispute, the parties (or their legal representatives) will
promptly confer to select a single Arbitrator mutually acceptable to both
parties. If the parties cannot agree on an Arbitrator, then the moving party may
file a Demand for Arbitration with the American Arbitration Association ("AAA")
in Phoenix, Arizona, who will be selected and appointed consistent with the
AAA-Employment Dispute Resolution Rules. Any arbitration will be conducted in a
manner consistent with AAA National Rules for the Resolution of Employment
Disputes. The Parties further agree that the prevailing party in any arbitration
will be entitled to injunctive relief in any court of competent jurisdiction to
enforce the arbitration award. THE PARTIES HEREBY AGREE TO WAIVE THEIR RIGHT TO
HAVE ANY DISPUTE BETWEEN THEM RESOLVED IN A COURT OF LAW BY A JUDGE OR JURY.
This paragraph will not prevent either party from seeking injunctive relief (or
any other provisional remedy) from any court having jurisdiction over the
Parties and the subject matter of their dispute relating to Executive's
obligations under this Agreement and the Confidential Information Agreement.
17. Integration. This Agreement, together with the Confidential Information
Agreement, the forms of equity award grant that describe Executive's outstanding
equity awards and the preexisting indemnification agreement between the parties,
represents the entire agreement and understanding between the parties as to the
subject matter herein and supersedes all prior or contemporaneous agreements
whether written or oral. No waiver, alteration, or modification of any of the
provisions of this Agreement will be binding unless in a writing and signed by
duly authorized representatives of the parties hereto. In entering into this
Agreement, no party has relied on or made any representation, warranty,
inducement, promise, or understanding that is not in this Agreement. To the
extent that any provisions of this Agreement conflict with those of any other
agreement to be signed upon Executive's hire, the terms in this Agreement will
prevail.
18. Waiver of Breach. The waiver of a breach of any term or provision of
this Agreement, which must be in writing, will not operate as or be construed to
be a waiver of any other previous or subsequent breach of this Agreement.
19. Survival. The Confidential Information Agreement and the Company's and
Executive's responsibilities under Sections 3(c), 6, 7, 8 and 11 will survive
the termination of this Agreement.
20. Headings. All captions and Section headings used in this Agreement are
for convenient reference only and do not form a part of this Agreement.
21. Tax Withholding. All payments made pursuant to this Agreement will be
subject to withholding of applicable taxes.
22. Governing Law. This Agreement will be governed by the laws of the state
of Arizona without regard to its conflict of laws provisions.
23. Acknowledgment. Executive acknowledges that he has had the opportunity
to discuss this matter with and obtain advice from his private attorney, has had
sufficient time to, and has carefully read and fully understands all the
provisions of this Agreement, and is knowingly and voluntarily entering into
this Agreement.
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24. Code Section 409A. Notwithstanding anything to the contrary in this
Agreement, if the Company reasonably determines that Section 409A of the Code
will result in the imposition of additional tax related to a payment of any
severance or other benefits otherwise due to Executive on or within the six (6)
month period following Executive's termination or separation from service (as
defined pursuant to said Section 409A), the severance benefits will accrue
during such six (6) month period and will become payable in a lump sum payment
on the date six (6) months and one (1) day following the date of Executive's
termination or separation from service, as the case may be. All subsequent
payments, if any, will be payable as provided in this Agreement. The Company and
Executive agree to work together in good faith to consider amendments to this
Agreement necessary or appropriate to avoid imposition of any additional tax or
income recognition prior to actual payment to Executive under Section 409A of
the Code and any temporary or final Treasury Regulations and Internal Revenue
Service guidance thereunder.
25. Counterparts. This Agreement may be executed in counterparts, and each
counterpart will have the same force and effect as an original and will
constitute an effective, binding agreement on the part of each of the
undersigned
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IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the
case of the Company by a duly authorized officer, as of the day and year written
below.
COMPANY:
LIMELIGHT NETWORKS, INC.
/s/ Xxxxxxx X. Xxxxxxxx Date: 10/20, 2006
-------------------------------------
Title:
-----------------------------
EXECUTIVE: __________________________
/s/ Xxxx Xxxxxxxx Date: 10/20, 2006
-------------------------------------
Xxxx Xxxxxxxx
[SIGNATURE PAGE TO XXXXXXXX EMPLOYMENT AGREEMENT]
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