EXHIBIT 10.63
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is entered into as of September 1,
1998 (the "Effective Date"), between Xxxxxxx Navigation Limited, a California
corporation (the "Company"), and Xx. Xxxxxx X. Xxxxxx (the "Executive").
WHEREAS, the Company desires to employ the Executive as of the
Effective Date and the Executive desires to accept employment with the Company
on the terms and conditions set forth below;
WHEREAS, simultaneously with the execution hereof, the Company and
Consultant are entering a Standby Consulting Agreement (the "Standby Consulting
Agreement");
NOW, THEREFORE, in consideration of the foregoing recital and the
respective covenants and agreements of the parties contained in this document,
the Company and the Executive agree as follows:
1. Employment and Duties. During the Employment Period (as defined in
Section 2 below), the Executive will serve as Chairman of the Board of the
Company which position will be deemed an executive officer position. The duties
and responsibilities of the Executive will include the duties and
responsibilities for the Executive's corporate offices and positions as set
forth in the Company's bylaws from time to time in effect and such other duties
and responsibilities as the board of directors of the Company (the "Board of
Directors") may from time to time reasonably assign to the Executive, in all
cases to be consistent with the Executive's corporate offices and positions. The
Executive will perform faithfully the executive duties assigned to him to the
best of his ability and in the best interests of the Company. Executive will
continue to serve as a director of the Company without additional compensation.
2. Employment Period.
(a) Term. The employment period will begin upon the Effective
Date and will continue thereafter until August 31, 1999 (the "Employment
Period"), unless sooner terminated pursuant to the provisions of this Agreement.
Thereafter, Executive's employment will be at will.
(b) Early Termination. The Company may terminate the
Executive's employment prior to the end of the Employment Period by giving the
Executive 30 days' advance notice in writing. If the Company terminates the
Executive's employment prior to the end of the Employment Period for any reason
other than Cause or Disability, both as defined below, or if the Executive
terminates his employment for Good Reason, as defined below, the provisions of
Sections 10(a)(i), 10(b) and 10(c) will apply. The Executive may terminate his
employment prior to the end of the Employment Period by giving the Company 30
days' advance written notice. If the Executive terminates his employment prior
to the end of the Employment Period other than for Good Reason, the provisions
of Section 10(a)(ii) will apply. Upon termination of the Executive's employment
with the Company, the Executive's rights under any applicable benefit plans will
be determined under the provisions of those plans.
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(c) Death. The Executive's employment will terminate in the
event of his death. The Company will have no obligation to pay or provide any
compensation or benefits under this Agreement on account of the Executive's
death, or for periods following the Executive's death, provided, that the
Company's obligations under Section 10(a)(i) will not be interrupted as a result
of the Executive's death. The Executive's rights under the benefit plans of the
Company in the event of the Executive's death will be determined under the
provisions of those plans.
(d) Cause. During the Employment Period, the Company may
terminate the Executive's employment for cause by giving the Executive ten days'
advance notice in writing. For all purposes under this Agreement, "Cause" will
mean (i) willful failure by the Executive to substantially perform his duties
hereunder, (ii) a willful act by the Executive which is injurious to the
Company, (iii) a willful breach by the Executive of a material provision of this
Agreement, or (iv) a material and willful violation of a federal or state law or
regulation applicable to the business of the Company. No act, or failure to act,
by the Executive will be considered "willful" unless committed without a
reasonable belief that the act or omission was in the Company's best interest.
No compensation or benefits will be paid or provided to the Executive under this
Agreement on account of a termination for Cause, or for periods following the
date when such a termination of employment is effective. The Executive's rights
under the benefit plans of the Company will be determined under the provisions
of those plans.
(e) Disability. The Company may terminate the Executive's
employment for Disability by giving the Executive 30 days' advance notice in
writing. For all purposes under this Agreement, "Disability" will mean that the
Executive, at the time notice is given, has been unable to substantially perform
his duties under this Agreement for a period of not less than two consecutive
months as the result of his incapacity due to physical or mental illness. In the
event that the Executive resumes the performance of substantially all of his
duties hereunder before the termination of his employment under this Section
2(e) becomes effective, the notice of termination will automatically be deemed
to have been revoked. No compensation or benefits will be paid or provided to
the Executive under this Agreement on account of termination for Disability, or
for periods following the date when such a termination of employment is
effective. The Executive's rights under the benefit plans of the Company will be
determined under the provisions of those plans.
(f) Good Reason. Employment with the Company may be regarded
as having been constructively terminated by the Company, and the Executive may
therefore terminate his employment for Good Reason and thereupon become entitled
to the benefits of Sections 10(a)(i) and 10(b) below, if, before the end of the
Employment Period, one or more of the following events will occur (unless such
event(s) applies generally to all senior management of the Company):
(i) a material reduction by the Company in the
Salary of the Executive as in effect immediately prior to such reduction;
(ii) any purported termination of the Executive's
employment by the Company which is not effected for death, Disability or for
Cause, or any purported termination for which the grounds relied upon are not
valid; or
(iii) the failure of the Company to obtain the
assumption of this Agreement or the Stock Option (as defined in Section 5) by
any successor.
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3. Place of Employment. The Executive's services will be performed at
the Company's principal executive offices at 000 X. Xxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxxxx. The parties acknowledge, however, that the Executive may be required
to travel in connection with the performance of his duties hereunder.
4. Salary. For all services to be rendered by the Executive pursuant to
this Agreement, the Company agrees to pay the Executive during the Employment
Period a salary (the "Salary") at a monthly rate of not less than $10,000. The
Salary will be paid in periodic installments in accordance with the Company's
regular payroll practices. The Company will be entitled to withhold, or cause to
be withheld, from payment any amount of withholding taxes required by law with
respect to payments made to Executive in connection with his employment
hereunder.
5. Stock Option.
(a) Stock Option. Subject to the approval of the Board of
Directors, the Company will grant the Executive a five year option (the "Stock
Option") to purchase 60,000 shares of the Company's Common Stock (the "Option
Shares") at the fair market value of the Common Stock of the Company on the
Effective Date, which is contingent upon a continuous employment or consulting
relationship between Executive and the Company. Such fair market value will be
equal to the per share closing price for the Company's Common Stock on the
National Association of Securities Dealers, National Market System on such date
of grant as recorded in The Wall Street Journal. The Stock Option will vest as
described in Section 5(b) and will be subject to such other terms and conditions
as are described in Section 5(c).
(b) Vesting. Option Shares will vest monthly over the
twelve-month period that begins as of the Effective Date and ends August 31,
1999.
(c) Option Provisions. The Stock Option will be granted under
the 1993 Stock Option Plan (the "Stock Plan") and will be subject to the terms
and conditions of the Stock Plan and form of option agreement.
6. Expenses. The Executive will be entitled to prompt reimbursement by
the Company for all reasonable ordinary and necessary travel, entertainment, and
other expenses incurred by the Executive during the Employment Period (in
accordance with the policies and procedures established by the Company for its
senior executive officers) in the performance of his duties and responsibilities
under this Agreement; provided, that the Executive will properly account for
such expenses in accordance with Company policies and procedures. The parties
agree that for purposes of this Section, the Executive's air travel will be
coach class domestically and business class internationally.
7. Other Benefits. During the Employment Period, the Executive will be
entitled to participate in employee benefit plans or programs of the Company, if
any, to the extent that his position, tenure, salary, age, health and other
qualifications make him eligible to participate, subject to the rules and
regulations applicable thereto.
8. Holidays. The Executive will be entitled to Company holidays in
accordance with the Company's policies in effect from time to time for its
senior executive officers.
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9. Other Activities. The Executive will devote approximately one third
of his working time and efforts during the Company's normal business hours to
the business and affairs of the Company and its subsidiaries and to the diligent
and faithful performance of the duties and responsibilities duly assigned to him
pursuant to this Agreement. Executive will be free to commence and to continue
his other business relationships without restriction other than with respect to
his duty of loyalty to the Company.
10. Termination Benefits. In the event the Executive's employment
terminates prior to the end of the Employment Period, then the Executive will be
entitled to receive severance and other benefits as follows:
(a) Severance.
(i) Involuntary Termination. If the Company
terminates the Executive's employment other than for death, Disability or
Cause, or if the Executive terminates his employment for Good Reason,
then, in lieu of any severance benefits to which the Executive may
otherwise be entitled under any Company severance plan or program, the Executive
will be entitled to payment of his Salary on the regular payroll periods of the
Company until the end of the Employment Period or, if earlier, until a breach by
the Executive of his obligations under Sections 11 (Proprietary Information) or
12 (Non-Solicit) hereof.
(ii) Other Termination. In the event the
Executive's employment terminates for death, Disability or Cause, or the
Employee resigns for other than Good Reason, then the Executive will be
entitled to receive any benefits accrued to date only as may then be
established under the Company's existing benefit plans and policies at the time
of such termination. The Executive will receive only that compensation provided
for herein accrued for periods served prior to the termination of employment but
will not be entitled to any additional amounts under this Agreement.
(b) Options. In the event the Executive's employment is
terminated by the Company as described in Section 10(a)(i) above, then the
Executive will continue to vest in the unvested portion of the Stock Option
until August 31, 1999 (subject to the term of the Stock Option). If terminated
as described in Section 10(a)(ii), such vesting will terminate as of the date of
such termination.
(c) No Duty to Mitigate. The Executive will not be required to
mitigate the amount of any payment contemplated by this Agreement (whether by
seeking new employment or in any other manner).
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11. Proprietary Information. During the Employment Period and
thereafter, the Executive will not, without the prior written consent of the
Board of Directors, disclose or use for any purpose (except in the course of his
employment under this Agreement and in furtherance of the business of the
Company or any of its affiliates or subsidiaries) any confidential information
or proprietary data of the Company. As an express condition of the Executive's
employment with the Company, the Executive agrees to execute confidentiality
agreements as requested by the Company, including but not limited to the
Company's form of Employment, Confidential Information, Invention Assignment,
and Arbitration Agreement, which is attached hereto as Exhibit A and
incorporated herein by reference.
12. Non-Solicit. The Executive covenants and agrees with the Company
that during his employment with the Company and for a period expiring one year
after the date of termination of such employment, he will not solicit any of the
Company's then-current employees to terminate their employment with the Company
or to become employed by any firm, company or other business enterprise with
which the Executive may then be connected.
13. Right to Advice of Counsel. The Executive acknowledges that he has
had the opportunity to fully review this Agreement and if he so chooses, to
consult with counsel and is fully aware of his rights and obligations under this
Agreement.
14. Successors. The Company will require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume the
obligations of this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
Failure of the Company to obtain such assumption agreement prior to the
effectiveness of any such succession will entitle the Executive to the benefits
described in Sections 10(a)(i) and 10(b) of this Agreement, subject to the terms
and conditions therein.
15. Arbitration.
(a) Disputes. Except as provided in Section 15(d) below, the
Company and the Executive agree that, to the extent permitted by applicable law,
any dispute or controversy arising under or in connection with this Agreement
will be settled exclusively by arbitration in San Jose, California, in
accordance with the rules of the American Arbitration Association then in effect
by an arbitrator selected by both parties within ten days after either party has
notified the other in writing that it desires a dispute between them to be
settled by arbitration. In the event the parties cannot agree on such arbitrator
within such ten-day period, each party will select an arbitrator and inform the
other party in writing of such arbitrator's name and address within five days
after the end of such ten-day period and the two arbitrators so selected will
select a third arbitrator within 15 days thereafter; provided, however, that in
the event of a failure by either party to select an arbitrator and notify the
other party of such selection within the time period provided above, the
arbitrator selected by the other party will be the sole arbitrator of the
dispute. The decision of the arbitrator or a majority of the panel of
arbitrators will be binding upon the parties and judgment in accordance with
that decision may be entered in any court having jurisdiction thereover.
Punitive damages will not be awarded.
(b) Consent to Personal Jurisdiction. The arbitrator(s) will
apply California law to the merits of any dispute or claim, without reference to
conflicts of law rules. Executive hereby consents to the personal jurisdiction
of the state and federal courts located in California for any action or
proceeding arising from or relating to this Agreement or relating to any
arbitration in which the parties are participants.
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(c) Equitable Relief. The parties may apply to any court of
competent jurisdiction for a temporary restraining order, preliminary
injunction, or other interim or conservatory relief, as necessary, without
breach of this arbitration agreement and without abridgment of the powers of the
arbitrator.
(d) Acknowledgment. EXECUTIVE HAS READ AND UNDERSTANDS THIS
AGREEMENT, WHICH DISCUSSES ARBITRATION. EXECUTIVE UNDERSTANDS THAT BY SIGNING
THIS AGREEMENT, EXECUTIVE AGREES TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING
TO, OR IN CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY,
CONSTRUCTION, PERFORMANCE, BREACH OR TERMINATION THEREOF, TO BINDING
ARBITRATION, EXCEPT AS PROVIDED IN SECTION 15(c), AND THAT THIS ARBITRATION
CLAUSE CONSTITUTES A WAIVER OF EXECUTIVE'S RIGHT TO A JURY TRIAL AND RELATES TO
THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE RELATIONSHIP
BETWEEN THE PARTIES.
16. Absence of Conflict. The Executive represents and warrants that his
employment by the Company as described herein will not conflict with and will
not be constrained by any prior or other employment or consulting agreement or
relationship.
17. Assignment. This Agreement and all rights under this Agreement will
be binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective personal or legal representatives, executors,
administrators, heirs, distributees, devisees, legatees, successors and assigns.
This Agreement is personal in nature, and neither of the parties to this
Agreement will, without the written consent of the other, assign or transfer
this Agreement or any right or obligation under this Agreement to any other
person or entity; except that the rights and obligations of the Company under
this Agreement may be assigned to a corporation which becomes the successor to
the Company as the result of a merger or other corporate reorganization or sale
of substantially all the assets to a corporation which continues the business of
the Company or any other subsidiary of the Company, provided, that such
assignment will not relieve the Company of its obligations hereunder. If the
Executive should die while any amounts are still payable to the Executive
hereunder, all such amounts, unless otherwise provided herein, will be paid in
accordance with the terms of this Agreement to the Executive's devisee, legatee,
or other designee or, if there be no such designee, to the Executive's estate.
18. Notices. For purposes of this Agreement, notices and other
communications provided for in this Agreement will be in writing and will be
delivered personally or sent by United States certified mail, return receipt
requested, postage prepaid, addressed as follows:
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If to the Company: Xxxxxxx Navigation Limited
000 X. Xxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxxx, XX 00000-0000
Attn: Board of Directors
or to such other address or the attention of such other person as the recipient
party has previously furnished to the other party in writing in accordance with
this Section. Such notices or other communications will be effective upon
delivery or, if earlier, three days after they have been mailed as provided
above.
19. Integration. This Agreement and the Standby Consulting Agreement
represent the entire agreement and understanding between the parties as to the
subject matter hereof and supersede all prior agreements whether written or
oral. No waiver, alteration, or modification of any of the provisions of this
Agreement will be binding unless in writing and signed by the party against whom
enforcement of the change or modification is sought.
20. Waiver. Failure or delay on the part of either party hereto to
enforce any right, power, or privilege hereunder will not be deemed to
constitute a waiver thereof. Additionally, a waiver by either party or a breach
of any promise hereof by the other party will not operate as or be construed to
constitute a waiver of any subsequent waiver by such other party.
21. Severability. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
22. Applicable Law. This Agreement will be governed by and construed in
accordance with the internal substantive laws, and not the choice of law rules,
of the State of California.
23. Counterparts. This Agreement may be executed in counterparts, each
of which will be deemed to be an original, and which together will constitute a
single agreement.
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IN WITNESS WHEREOF, each of the parties has executed this Agreement, in
the case of the Company by its duly authorized officer, as of the day and year
first above written.
EXECUTIVE: XXXXXXX NAVIGATION LIMITED:
/s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxxxx X. Xxxxxxxxx
Xx. Xxxxxx X. Xxxxxx
Name: Xxxxxxxx X. Xxxxxxxxx
Title: President
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