EXHIBIT (E)(5)
EMPLOYMENT AGREEMENT
This Employment Agreement is made and entered into by and between Telocity,
Inc. (the "Company") and Xxx Xxxxxxxxx ("Xx. Xxxxxxxxx) on September 14, 1999.
1. Position and Duties. Xx. Xxxxxxxxx shall be employed by the Company as
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its Executive Vice President and Chief Marketing Officer, reporting only to the
Company's Chief Executive Officer (the "CEO") beginning no later than October 1,
1999 (the "Effective Date"). Xx. Xxxxxxxxx agrees to devote his full business
time, energy and skill to his duties at the Company. These duties shall include
all those duties customarily performed by the Chief Marketing Officer, including
but not limited to advertising, public relations, promotional activities,
Internet presence, corporate communications, product marketing and packaging,
market targeting, and market segmentation, as well as those duties that may be
assigned by the CEO from time to time. Xx. Xxxxxxxxx shall be responsible for
retaining and terminating, as necessary, all outside support for the Company's
marketing operations including, but not limited to, advertising, sales
promotion, media buying and public relations agencies, as well as website
design, product packaging design, and market research firms.
2. Term of Employment. Xx. Xxxxxxxxx'x employment with the Company will be
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for no specified term, and may be terminated by Xx. Xxxxxxxxx or the Company at
any time, for any reason, with or without cause, and neither Xx. Xxxxxxxxx nor
the Company shall have any further obligation or liability whatsoever under this
Employment Agreement to the other, except as may be specifically set forth
herein.
3. Compensation. Xx. Xxxxxxxxx shall be compensated by the Company for his
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services as follows:
3.1 Base Salary. Xx. Xxxxxxxxx shall be paid a monthly Base Salary of
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$22,917 per month ($275,000 on an annualized basis), subject to applicable
withholding, in accordance with the Company's normal payroll procedures. Xx.
Xxxxxxxxx'x salary shall be reviewed on at least an annual basis and may be
increased as appropriate. In the event of such an increase, the new amount shall
become Xx. Xxxxxxxxx'x Base Salary.
3.2 Benefits. Xx. Xxxxxxxxx shall have the right, on the same basis as
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other members of the Company's senior management, to participate in and to
receive benefits under any of the Company's employee benefit plans, as such
plans may be modified from time to time. By way of description and not
limitation, Xx. Xxxxxxxxx shall be entitled to the benefits afforded to other
members of senior management under the Company's Bonus Program, which shall be
defined within sixty (60) days of the Effective Date, and its vacation, holiday
and business expense reimbursement policies. Xx. Xxxxxxxxx shall also be
entitled to participate in the same option increase evaluation process, if any,
afforded to other members of senior management at such time as such process may
be undertaken.
3.3 "Gross-Up Payments". In the event that Xx. Xxxxxxxxx becomes
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entitled to receive a payment pursuant to this Agreement (a "Payment"), and is
entitled to a Gross-Up for such Payment pursuant to a specific provision of this
Agreement, then no later than the fifth day following the date (the "Payment
Date") on which Xx. Xxxxxxxxx becomes entitled to receive such Payment, the
Company shall pay to Xx. Xxxxxxxxx additional amounts (the "Gross-Up Payments")
such that the net amount retained by Xx. Xxxxxxxxx, after deduction of any
Excise Tax (within the meaning of Section 4999 of the Internal Revenue Code, the
"Code"), or federal, state or local income tax on the aggregate Payments
received (or that Xx. Xxxxxxxxx has become entitled to receive) as of the
Payment Date plus any federal, state or local income tax and any Excise Tax upon
the Gross-Up Payments (after taking into account all Gross-Up Payments
previously made), shall be equal to the amount Xx. Xxxxxxxxx is entitled to
receive under the definition of such Payment. For the purposes of determining
whether any Payment will be subject to Excise Tax and the amount of such Excise
Tax, (i) all amounts received or to be received by Xx. Xxxxxxxxx in connection
with a Change of Control (as defined in Section 9.1(a), below) shall be treated
as "parachute payments" within the meaning of Section 280G(b)(2) of the Code,
and all excess "parachute payments" within the meaning of Section 280G(b)(1) of
the Code shall be treated as subject to the Excise Tax, except to the extent
that in the written opinion of independent tax counsel selected by the Company's
independent auditors (the "Tax Counsel") which opinion shall be obtained at the
Company's expense, any such payments or benefits (in whole or in part) do not
constitute parachute payments or excess parachute payments (in whole or in
part), or represent reasonable compensation for personal services to be rendered
or actually rendered before the Change of Control in excess of the base amount,
within the meaning of Section 280(b)(4)(B) of the Code; and (ii) the value of
any non-cash benefit or any deferred cash payment included in the Payments shall
be determined by the Company's independent auditors in accordance with the
principles of Section 280G(d)(3) and (4) of the Code. For purposes of
determining the amount of each Gross-Up Payment, Xx. Xxxxxxxxx shall be deemed
to pay federal income taxes at the highest marginal rate of federal income
taxation in effect during the calendar year in which the Gross-Up Payment is to
be made and state and local income taxes at the highest marginal rate of
taxation in effect in the state and locality of Xx. Xxxxxxxxx'x residence on the
date of payment, net of the maximum reduction in federal income taxes that could
be obtained from deduction of such state and local taxes, but assuming that Xx.
Xxxxxxxxx has no other deductions or credits available to reduce such taxes.
3.4 Bonuses. In addition to the Company's Bonus Program, Mr.
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Xxxxxxxxx shall be entitled to the following additional bonuses.
(a) Signing Bonus. Within thirty (30) days of the Effective
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Date, the Company will pay Xx. Xxxxxxxxx a signing bonus in the total amount of
$150,000, less applicable withholding. In the event that Xx. Xxxxxxxxx
voluntarily resigns from his employment other than for Good Reason during the
first year following the Effective Date, Xx. Xxxxxxxxx agrees that he shall
repay a pro-rata share of the signing bonus based on the time remaining in the
first year of service.
(b) January 1, 2000 Conditional Bonus. On January 1, 2000,
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provided that certain agreed to objectives have been met and Xx. Xxxxxxxxx shall
have been continuously employed full time with the Company since the Effective
Date, he shall be entitled to a bonus in the total amount of $150,000, less
applicable withholding. Within sixty (60) days of the
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Effective Date, Xx. Xxxxxxxxx shall prepare and present to the CEO, for review,
a performance bonus plan specifically for the bonus described in this
subsection. The CEO and Xx. Xxxxxxxxx shall then set forth in writing a
description of the mutually agreed upon objectives for the bonus.
(c) Conditional Bonus at Initial Public Offering or Acquisition.
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Provided that Xx. Xxxxxxxxx shall have been continuously employed full time with
the Company since the Effective Date and that certain agreed to objectives have
been met, upon an initial public offering of the Company's securities, or an
acquisition of the Company as set forth in Section 9A(i) of the Agreement, Xx.
Xxxxxxxxx shall be entitled a bonus in the total amount of $150,000, less
applicable withholding. Within sixty (60) days of the Effective Date, Xx.
Xxxxxxxxx shall prepare and present to the CEO, for review, a performance bonus
plan specifically for the bonus described in this subsection. The CEO and Xx.
Xxxxxxxxx shall then set forth in writing a description of the mutually agreed
upon objectives for the bonus.
4. Stock Options. Xx. Xxxxxxxxx shall be granted the option to purchase
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400,000 shares of the Company's Common Stock (the "Stock Options"), at an
exercise price per share equal to the fair market value of the Company's Common
Stock on the date of grant as determined by the Board in its sole discretion.
Such grant and determination shall be made no later than five (5) days after the
date on which Xx. Xxxxxxxxx'x employment with the Company commences. To the
extent possible, such option will be an incentive stock option. The Stock
Options shall vest monthly at the rate of 1/48 per month; however, there shall
be a twelve (12) month cliff, upon which the first 1/4 of the Stock Options
shall vest. Upon the termination of Xx. Xxxxxxxxx'x employment in accordance
with the provisions of Section 10, below, the Stock Options shall vest as
described in such provisions. Except as provided in Section 10, below, the
Stock Options shall be subject to the terms of the Company's Stock Option Plan
and the Company's standard incentive and non-statutory stock option agreements
(the "Standard Agreements"), provided pursuant to the Company's Stock Option
Plan. Xx. Xxxxxxxxx will be permitted to exercise the Stock Options in full
prior to vesting in the underlying shares, subject to the Company's right to
repurchase any unvested shares at Xx. Xxxxxxxxx'x original cost upon his
termination of employment, as provided in the Standard Agreements. In addition,
the Company shall permit Xx. Xxxxxxxxx to pay the option exercise price with a
full recourse loan (secured by the shares acquired with the loan) at the lowest
interest rate available to avoid the imposition of imputed income under the tax
laws to assist Xx. Xxxxxxxxx to exercise the Stock Options. Such loan shall be
repayable upon the earliest of: (i) the fifth year anniversary of the Effective
Date; (ii) the termination of Xx. Xxxxxxxxx'x employment for any reason; or
(iii) the date twelve (12) months after Xx. Xxxxxxxxx is first eligible to sell
shares of the Company's stock that he holds following an initial public offering
of the Company's shares; provided, however, that in the event of Xx. Xxxxxxxxx'x
termination without Cause or resignation for Good Reason or termination by
reason of death or Disability (as defined below), such loan shall be repayable
upon the earlier of the events stated in clauses (i) or (iii) immediately
preceding.
4.1 For purposes of the resale of the underlying shares under the
Stock Options, the Company covenants to use its good faith efforts to make
available Rule 701 under the Securities Act of 1933, as amended (the "Securities
Act"), or to register the shares on Form S-1 or S-3 under the Securities Act (in
the case where the Company registers shares for its own account or for others
holding registration rights) or on Form S-8 under the Securities Act.
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4.2 In the event that (i) any other employee of Telocity who has been
granted stock options is thereafter granted additional stock options; and (ii)
such employee is an officer or executive of the Company; and (iii) such
employee's employment contract is comparable to Xx. Xxxxxxxxx'x; then (iv) an
additional grant of stock options will be made to Xx. Xxxxxxxxx to accomplish an
equal relative increase in Xx. Xxxxxxxxx'x stock options.
5. Moving Expenses. The Company shall reimburse Xx. Xxxxxxxxx for all
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actual reasonable moving costs associated with relocating to California from New
York, including real estate closing costs, legal fees incurred for the sale of
Xx. Xxxxxxxxx'x home, accounting expenses incurred for the sale of Xx.
Xxxxxxxxx'x home, and physically moving Xx. Xxxxxxxxx'x family's personal
possessions (the "Moving Expenses"). Xx. Xxxxxxxxx shall be entitled to Gross-Up
Payments for the Moving Expenses. In addition, Company shall provide Xx.
Xxxxxxxxx at Company's expense temporary lodging at a mid-priced hotel or
apartment for up to ninety (90) days, if necessary for Xx. Xxxxxxxxx and his
spouse, during which Xx. Xxxxxxxxx will conduct his search for permanent
lodging. Company will also provide at its expense, round trip coach airfare and
temporary mid-priced lodging in New York for Xx. Xxxxxxxxx and his spouse, as
may be reasonably necessary to facilitate Xx. Xxxxxxxxx'x sale of his residence
in New York and other matters relating to the relocation.
6. Housing Loan. Beginning on October 1, 1999 and continuing for twenty-
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four (24) months, provided that Xx. Xxxxxxxxx is continuously employed as an
Officer of the Company, the Company shall make a loan each month to Xx.
Xxxxxxxxx in the principal amount of Twenty Thousand Dollars ($20,000) at no
interest (the foregoing, the "Housing Loan"). On October 1, 2001, the following
actions shall be taken:
6.1 If on October 1, 2001, shares of the Company's Common Stock are
publicly tradable and the stock issuable to Xx. Xxxxxxxxx by exercise of the
Stock Options has a fair market value of at least Forty Dollars ($40) per share
(allowing for splits, conversions and like events), then Xx. Xxxxxxxxx shall
repay the Housing Loan no more than ninety (90) days thereafter.
6.2 Alternatively, if on October 1, 2001, shares of the Company's
common stock are not publicly tradable, or if such stock is publicly tradable
but the stock issuable to Xx. Xxxxxxxxx by exercise of the Stock Options has a
fair market value of less than Forty Dollars ($40), then the Housing Loan shall
be forgiven by the Company. Such forgiveness shall be considered a Payment and
the Company shall make Gross Up Payments to Xx. Xxxxxxxxx with respect to the
same.
7. Other Loans from the Company to Xx. Xxxxxxxxx. The Company shall
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provide to Xx. Xxxxxxxxx no later than November 1, 1999, a full recourse loan,
in the principal amount of Nine Hundred Thousand Dollars ($900,000) at the
lowest interest rate available to avoid the imposition of imputed income under
the tax laws (the "1999 Loan"). Starting on November 1, 1999, the Company shall
forgive the entire amount of the principal and interest of the 1999 Loan over a
thirty-six (36) month period, with one thirty-sixth (1/36) of the aggregate
principal of the 1999 Loan to be forgiven by the Company at the conclusion of
each full month continuously worked by Xx. Xxxxxxxxx as an officer of the
Company since the Effective Date, along with the interest due on the 1999 Loan
for such month. The Company shall provide to Xx. Xxxxxxxxx no
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later than January 1, 2000, a full recourse loan, in the principal amount of One
Million One Hundred Thousand Dollars ($1,100,000) at the lowest interest rate
available to avoid the imposition of imputed income under the tax laws (the
"2000 Loan"). Starting on January 1, 2000, the Company shall forgive the entire
amount of the principal and interest of the 2000 Loan over a thirty-six (36)
month period, with one thirty-sixth (1/36) of the aggregate principal of the
2000 Loan to be forgiven by the Company at the conclusion of each full month
continuously worked by Xx. Xxxxxxxxx as an officer of the Company since the
Effective Date, along with the interest due on the 2000 Loan for such month (the
1999 Loan and the 2000 Loan sometimes referred to herein, collectively, as the
"Loans").
8. Attorneys' Fees In Negotiating Agreement. The Company shall reimburse
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Xx. Xxxxxxxxx for all reasonable attorneys' fees he incurs in the review and
negotiation of this Employment Agreement up to a maximum of $5,000.
9. Definitions:
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9.1 "Change of Control" is defined as and shall be deemed to have
occurred if:
(a) Any of the following transactions occurs with respect to the
Company, provided that with respect to the transactions described in clauses
(a), (b) and (c) below the shareholders of the Company immediately before the
transaction do not retain immediately after the transaction, in substantially
the same proportions as their ownership of shares of the Company's voting stock
immediately before the transaction, direct or indirect beneficial ownership of
more than fifty percent (50%) of the total combined voting power of the
outstanding stock of the Company or its successor, or, in the case of a
transaction described in clause (c) below, of the corporation or corporations to
which the assets of the Company were transferred: (a) the direct or indirect
sale or exchange in a single or series of related transactions by the
shareholders of the Company of more than fifty percent (50%) of the voting stock
of the Company; (b) a merger or consolidation in which the Company is a party;
(c) the sale, exchange, or transfer of all or substantially all of the assets of
the Company; or (d) a liquidation or dissolution of the Company; or
(b) Within eighteen (18) months of the Effective Date: (a) the
Company terminates Xxxxx Xxxx'x employment as CEO of the Company; or (b) Xxxxx
Xxxx resigns as CEO of the Company "involuntarily", which shall be defined as a
resignation for any of the reasons cited below in Section 9.1(b), substituting
the words "Xxxxx Xxxx" for "Xx. Xxxxxxxxx" in subsections (a) through (c) and
the word "her" for the word "this" in subsection (d) and (e).
For the purposes of Section 9.1(a), above, the Board shall have the right
to determine whether multiple sales or exchanges of the voting stock of the
Company are related, and its determination shall be final, binding and
conclusive.
9.2 "Good Reason" is defined as and shall be deemed to exist if any of
the following conditions occur:
(a) Within one (1) year following a Change in Control, provided
that such conditions persist for fifteen (15) business days after written notice
to the Board from
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Xx. Xxxxxxxxx and failure of the Company to cure within that period: (a) the
Company, its successor or assign decreases Xx. Xxxxxxxxx'x Base Salary; (b) the
Company its successor or assign makes a material, adverse change in Xx.
Xxxxxxxxx'x title, authority, responsibilities or duties, as measured against
Xx. Xxxxxxxxx'x title, authority, responsibilities or duties immediately prior
to such change; (c) the Company, its successor or assign requires the relocation
of Xx. Xxxxxxxxx'x work place to a location outside the San Francisco Bay Area
(i.e., outside Marin County, Contra Costa County, Alameda County, San Francisco
County, San Mateo County or Santa Xxxxx County); (d) the Company, its successor
or assign materially breaches any provision of this Employment Agreement; or (e)
the Company fails to obtain the assumption of this Employment Agreement by any
successor or assign of the Company; or
(b) Within one (1) year following a Change in Control described in
Section 9A(i) and within eighteen (18) months of the Effective Date, provided
that such conditions persist for fifteen (15) business days after written notice
to the Board from Xx. Xxxxxxxxx and failure of the Company to cure within that
period: (a) the Company terminates the employment of Xxxxx Xxxx as CEO of the
Company; or (b) Xxxxx Xxxx resigns as CEO of the Company "involuntarily",
defined as a resignation for any of the reasons described in Section 9B(i),
substituting the words "Xxxxx Xxxx" for "Xx. Xxxxxxxxx" in subsections (a)
through (c) and the word "her" for the word "this" in subsection (d) and (e).
9.3 For "Cause" is defined as a termination of Xx. Xxxxxxxxx based
upon: (i) theft, dishonesty, or falsification of any employment or Company
records; (ii) conviction of a felony or any act involving moral turpitude; (iii)
Xx. Xxxxxxxxx'x refusal to perform any reasonable, assigned duties after written
notice from the Company of, and a reasonable opportunity to correct, such
refusal; (iv) improper disclosure of the Company's confidential or proprietary
information; (v) any act by Xx. Xxxxxxxxx undertaken by Xx. Xxxxxxxxx with the
intent to materially harm the Company's reputation or business; or (vi) any
material breach of this Employment Agreement, which breach, if curable, is not
cured within thirty (30) days following written notice of such breach from the
Company.
10. Benefits Upon Termination. Xx. Xxxxxxxxx agrees that his employment
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may be terminated by the Company at any time, for any reason, with or without
cause. In the event of the termination of Xx. Xxxxxxxxx'x employment by the
Company for any of the reasons set forth below, he shall be entitled as his sole
remedy and compensation for such event, to the following:
10.1 Termination for Cause. If Xx. Xxxxxxxxx'x employment is
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terminated by the Company for Cause, Xx. Xxxxxxxxx shall be entitled to no
compensation or benefits from the Company other than those under Section 3
earned up to such termination and, in the case of stock options (or underlying
shares), vested through the date of termination. The Loans shall be due and
payable within ninety (90) days after such termination.
10.2 Voluntary Resignation. In the event of Xx. Xxxxxxxxx'x voluntary
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resignation from employment with the Company, other than for Good Reason, Xx.
Xxxxxxxxx shall be entitled to no compensation or benefits from the Company
other than those earned under Section 3 above through the date of his
resignation, or in the case of stock options (or underlying shares), vested
through the date of resignation. The Loans shall be due and payable within
ninety (90) days after such resignation.
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10.3 Death or Disability. In the event that Xx. Xxxxxxxxx'x
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employment terminates as a result of his death or continued disability for
ninety (90) days ("disability" being defined as the inability to perform the
essential functions of Xx. Xxxxxxxxx'x position), Xx. Xxxxxxxxx shall be
entitled to the following as of the date of death or disability:
(a) All accrued salary, benefits and vesting earned through
such date;
(b) All accrued bonuses earned through such date. If the date
of death or disability is prior to January 1, 2000, the bonus set forth in
Section 3.4(b) shall be paid pro rata based on time employed with the Company
prior to January 1, 2000. If the date of death or disability is prior to July 1,
2000, the bonus set forth in Section 3.4(c) shall be paid pro rata based on time
employed with the Company prior to July 1, 2000. If the date of death or
disability occurs prior to the date of any other bonus for which Xx. Xxxxxxxxx
may become eligible, then such bonus shall be payable pro rata based on the
amount of the applicable bonus period worked by Xx. Xxxxxxxxx prior to the date
of death or disability.
(c) Termination of any obligation Xx. Xxxxxxxxx shall have to
repay any portion of the Loans; and iv. Removal of any "cliff date" in
calculating the number of Stock Options (or underlying shares) vested upon the
date of death or disability.
10.4 Termination Without Cause or Resignation for Good Reason. Except
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as provided in Section 10E, below, if Xx. Xxxxxxxxx'x employment is terminated
by the Company without Cause, or if Xx. Xxxxxxxxx resigns as an employee of the
Company for Good Reason, then such termination shall be deemed a "Termination
Without Cause" and Xx. Xxxxxxxxx shall be entitled, on such date, to all of the
following:
(a) All accrued salary, benefits and vesting earned through the
date of termination or resignation;
(b) All accrued bonuses earned through such date. If the date of
termination or resignation is prior to January 1, 2000, the bonus set forth in
Section 3.4(b) shall be paid pro rata based on time employed with the Company
prior to January 1, 2000. If the date of termination or resignation is prior to
July 1, 2000, the bonus set forth in Section 3.4(c) shall be paid pro rata based
on time employed with the Company prior to July 1, 2000. If the date of
termination or resignation occurs prior to the date of any other bonus for which
Xx. Xxxxxxxxx may become eligible, then such bonus shall be payable pro rata
based on the amount of the applicable bonus period worked by Xx. Xxxxxxxxx prior
to the date of termination or resignation;
(c) Continued payment of Xx. Xxxxxxxxx'x salary at his Base
Salary rate, less applicable withholding, for one (1) year following his
termination or resignation ;
(d) Continued payment of the Housing Loan for one (1) year after
the date of termination or resignation;
(e) Termination of any conditional obligation that Xx. Xxxxxxxxx
may have to repay any part of the Housing Loan he has received or will receive
based on Section 10.4(d), above, and any related Gross Up Payments;
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(f) Termination of any obligation Xx. Xxxxxxxxx shall have to
repay any portion of the Loans;
(g) Removal of any "cliff date" in calculating the number of
Stock Options or underlying shares vested upon such date; and
(h) An additional six (6) months vesting in the Stock Options
(or underlying shares), or any other options (or underlying shares) granted to
Xx. Xxxxxxxxx by the Board, as if Xx. Xxxxxxxxx continued to vest in the options
for an additional six months.
10.5 Resignation or Termination following Certain Events: If: (i)
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prior to October 1, 2000, any of the events listed in Section 9.1(a) occur; and
(ii) within eighteen (18) months following such event, Xx. Xxxxxxxxx resigns for
any of the reasons listed in Sections 9.2(a)(a) through 9.2(i)(e) or Xx.
Xxxxxxxxx is terminated by the Company without Cause, he 8 9 shall be entitled
to all of the benefits listed in Sections 104(a) through 10.4(g) and, in lieu of
the benefits provided in Section 10.4(h), to the greater of: (a) the percentage
of vesting in the Stock Options (or underlying shares), or any other options (or
underlying shares) granted to him, that would result from Section 10D(viii); or
(b) fifty percent (50%) vesting in such options (or underlying shares). By way
of example, under the foregoing and assuming the Stock Options are granted on
October 1, 1999, if any such termination or resignation were to occur on
November 1, 2000, the Stock Options and/or underlying shares would be deemed to
be fifty percent (50%) vested, and if any such termination or resignation were
to occur on September 1, 2001, the Stock Options and/or underlying shares would
be deemed to be 29/48 vested.
11. Acceleration Upon Non-Assumption of Options. In the event of a Change
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of Control described in Section 9.1(a), the surviving, continuing, successor, or
purchasing corporation or parent corporation thereof, as the case may be (the
"Acquiring Corporation"), shall either assume the Company's rights and
obligations under the Stock Options and any other options granted to Xx.
Xxxxxxxxx to the extent such options are then outstanding and unexercised (the
"Outstanding Options") or substitute for the Outstanding Options substantially
equivalent options for the Acquiring Corporation's stock. If the Acquiring
Corporation fails to assume the Company's rights and obligations under the
Outstanding Options or to substitute for the Outstanding Options in connection
with the Change of Control, and provided that Xx. Xxxxxxxxx'x employment with
the Company has not terminated prior to such Change of Control, then, with
respect to each Outstanding Option which has not been assumed or substituted
for, either (a) Xx. Xxxxxxxxx shall be credited with an additional six (6)
months of employment for vesting purposes under such Outstanding Option or (b)
such Outstanding Option shall be deemed to be fifty percent (50%) vested,
whichever of (a) or (b) provides the greater benefit to Xx. Xxxxxxxxx. Any such
acceleration of vesting shall be effective immediately prior to the consummation
of the Change of Control.
12. Employee Inventions and Proprietary Rights Assignment Agreement. Mr.
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Xxxxxxxxx agrees to abide by the terms and conditions of the Company's standard
Employee Inventions and Proprietary Rights Assignment Agreement.
13. Non-Solicitation. Xx. Xxxxxxxxx agrees that for a period of one year
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after the date of the termination of his employment for any reason, he shall
not, either directly or indirectly:
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(i) solicit the services, or attempt to solicit the services, of any employee of
the Company to any other person or entity; or (ii) solicit or otherwise
encourage any customer, supplier or other business contact of the Company to
withdraw, curtail or cancel their business with the Company.
14. Indemnification. The Company agrees to make Xx. Xxxxxxxxx a party to
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its standard form of indemnification agreement as may be signed by the Company's
other officers and directors from time to time.
15. Dispute Resolution. In the event of any dispute or claim relating to
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or arising out of this Employment Agreement (including, but not limited to, any
claims of breach of contract, wrongful termination or age, sex, race or other
discrimination), Xx. Xxxxxxxxx and the Company agree that all such disputes
shall be fully and finally resolved by binding arbitration conducted by the
American Arbitration Association in Santa Xxxxx County, California in accordance
with its National Employment Dispute Resolution rules, as those rules are
currently in effect (and not as they may be modified in the future). XX.
XXXXXXXXX ACKNOWLEDGES THAT BY ACCEPTING THIS ARBITRATION PROVISION HE IS
WAIVING ANY RIGHT TO A JURY TRIAL IN THE EVENT OF SUCH DISPUTE. This arbitration
provision shall not apply to any disputes or claims relating to or arising out
of the misuse or misappropriation of trade secrets or proprietary information.
16. Attorneys' Fees. The prevailing party shall be entitled to recover
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from the losing party its attorneys' fees and costs incurred in any action
brought to enforce any right arising out of this Employment Agreement.
17. Interpretation. Xx. Xxxxxxxxx and the Company agree that this
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Employment Agreement shall be interpreted in accordance with and governed by the
laws of the State of California.
18. Successors and Assigns. This Employment Agreement shall inure to the
----------------------
benefit of and be binding upon the Company and its successors and assigns. In
view of the personal nature of the services to be performed under this
Employment Agreement by Xx. Xxxxxxxxx, he shall not have the right to assign or
transfer any of his rights, obligations or benefits under this Employment
Agreement, except as otherwise noted herein.
19. Entire Agreement. This Employment Agreement constitutes the entire
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employment agreement between Xx. Xxxxxxxxx and the Company regarding the terms
and conditions of his employment with the Company, with the exception of the
Stock Option Agreement described in Section 4. To the extent that there is any
inconsistency between this Employment Agreement and any other agreement between
Xx. Xxxxxxxxx and the Company, the terms of this Employment Agreement will
govern. This Employment Agreement supersedes all prior negotiations,
representations or agreements between Xx. Xxxxxxxxx and the Company, whether
written or oral, concerning Xx. Xxxxxxxxx'x employment by the Company.
20. Validity. If any one or more of the provisions (or any part thereof)
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of this Employment Agreement shall be held invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions (or any part thereof) shall not in any way be affected or impaired
thereby.
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21. Modification. This Employment Agreement may only be modified or
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amended by a supplemental written agreement signed by Xx. Xxxxxxxxx and the
Company.
22. Counterparts. This Employment Agreement may be executed in any number
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of counterparts, each of which shall be an original, but all of which together
shall constitute one instrument. 23. Conflicts: In the event of a conflict
between a provision of this Employment Agreement and a provision of the Standard
Agreements, the Option Plan, or the Employee Inventions and Proprietary Rights
Agreement, this Employment Agreement shall control. The parties shall take all
actions reasonably necessary to assure the realization of the rights and the
fulfillment of the obligations set forth in this Employment Agreement.
IN WITNESS WHEREOF, the parties have executed this Employment Agreement as
of the date and year written below.
Date:__________________ TELOCITY INC.
By: /s/ Xxxx Xxxxxxxxx
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XXXX XXXXXXXXX
Its: VP Legal Affairs
Date: September 21, 1999 /s/ Xxx Xxxxxxxxx
__________________ ------------------------
XXX XXXXXXXXX
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