EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into on
April 15, 2005 (the "Effective Date") by and between Tumbleweed Communications
Corp. (the "Company") and Xxxxx Xxxxxxx ("Employee") (together the "Parties").
WHEREAS, the Company desires to continue to engage Employee as its
Senior Vice President of Worldwide Sales ("SVP of Worldwide Sales") and
Employee desires to be so engaged by the Company on the terms and conditions
set forth herein.
NOW, THEREFORE, in consideration of the mutual premises, covenants and
agreements herein contained, intending to be legally bound, the Parties agree
as follows:
1. At-Will Employment. The Company hereby agrees to employ Employee,
and Employee hereby agrees to serve as the Company's SVP of Worldwide Sales, on
an at-will basis, meaning that either the Company or Employee may terminate his
employment at any time, for any reason and without prior notice, subject to the
termination and severance provisions provided in Section 7 of this Agreement.
2. Place of Performance. Except for required travel on the Company's
business, Employee's principal place of employment shall be the Company's
headquarters in Redwood City, California.
3. Compensation.
(a) Base Salary. Employee's salary shall be at the annual
rate of $180,000 (the "Base Salary"), payable in accordance with the Company's
regular payroll practices. All applicable tax withholdings shall be deducted
from such payments.
(b) Variable Compensation. Employee is eligible to earn up to
maximum of $170,000 on an annual basis based on the achievement of certain
objectives pursuant to Employee's Sales Commission Plan ("Variable
Compensation").
(c) Stock Options. Employee's current Company stock options
shall be governed by the terms and conditions of the applicable Company stock
option plan and/or stock option agreement and Section 7 of this Agreement, as
applicable.
4. Business Expenses. The Company will reimburse Employee for all
ordinary and necessary business expenses incurred by him in connection with his
employment upon timely submission by the Employee of receipts and other
documentation in accordance with the Company's normal procedures, as may be
amended from time to time.
5. Vacation, Holidays and Sick Leave. Employee shall be entitled to
paid vacation, paid holidays and sick leave in accordance with the Company's
standard policies for its employees, as may be amended from time to time.
6. Benefits. Employee shall be eligible to participate fully in all
health benefits, insurance programs, retirement plans and other employee
benefit and compensation arrangements (collectively, the "Employee Benefits")
available to employees of the Company generally, as may be amended from time to
time.
7. Compensation in Event of Termination. Upon termination of
Employee's employment, for any reason, this Agreement shall terminate and the
Company shall have no further obligation to Employee except to pay the amounts
set forth in this Section 7.
(a) Death or Disability. In the event of Employee's death or
Disability, Employee, or his estate, conservator or designated beneficiary, as
the case may be, shall be entitled to payment of any earned but unpaid Base
Salary and Variable Compensation through the date of termination, as well as
any accrued but unused vacation and vested benefits to which Employee is
entitled in accordance with the terms of any applicable Employee Benefit plan.
For purposes of this Agreement, "Disability" shall mean an illness, injury or
other incapacitating condition as a result of which Employee is unable to
perform, with reasonable accommodation, the services required to be performed
under this Agreement for more than ninety (90) days during any twelve (12)
month period. In such event, the Company, in its sole discretion, may terminate
this Agreement by giving notice to Employee of termination for Disability.
Employee agrees to submit to such medical examinations as may be necessary to
determine whether a Disability exists, pursuant to such reasonable requests
made by the Company from time to time. Any determination as to the existence of
a Disability shall be made by a physician selected by the Company.
(b) For Cause or Upon Resignation. In the event Employee's
employment is terminated by the Company for "Cause" or he resigns from his
employment with the Company for any reason, employee shall be entitled to
payment of any earned but unpaid Base Salary and Variable Compensation through
the date of termination, as well as any accrued but unused vacation and vested
benefits to which Employee is entitled in accordance with the terms of any
applicable Employee Benefit plan. For purposes of this Agreement, "Cause" shall
mean the occurrence of any of the following events, as reasonably determined by
the Company's Board of Directors: (i) Employee's gross misconduct related to
Employee's duties, which is likely to materially and adversely affect the
Company's business or financial condition; (ii) Employee's indictment or
conviction of, guilty plea to, or entry of a nolo contendere plea to, a felony
charge or other crime involving moral turpitude; or (iii) Employee's commission
of any fraud, material misappropriation, embezzlement or similar act in
connection with Employee's duties under this Agreement.
(c) Without Cause. In the event Employee's employment is
terminated by the Company without Cause, and conditioned upon Employee
executing a full waiver and release of all potential claims against the
Company, Employee shall be entitled to receive, as his sole and exclusive
remedy, the payments and benefits set forth on the schedule below, which are in
addition to any earned but unpaid Base Salary and Variable Compensation through
the date of termination, as well as any accrued but unused vacation and vested
benefits to which Employee is entitled in accordance with the terms of any
applicable Employee Benefit plan:
(i) Effective Date through October 31, 2005. If
Employee's employment is terminated by the Company without Cause
during the period beginning on the Effective Date and ending on
October 31, 2005, Employee shall be entitled to (x) a lump-sum payment
equal to Employee's Base Salary and maximum Variable Compensation
under the terms of the Employee's then-current Sales Commission Plan
for the period from the date of termination through April 30, 2006,
subject to all applicable tax withholdings, (y) reimbursement for
Employee's COBRA premiums from the date of termination through April
30, 2006, paid in accordance with the Company's normal reimbursement
procedures and policies and (z) vesting acceleration of those of
Employee's unvested Company stock options that, but for Employee's
termination, would have vested as of April 30, 2006.
(ii) November 1, 2005 through April 30, 2006. If
Employee's employment is terminated by the Company without Cause
during the period beginning on November 1, 2005 and ending on April
30, 2006, Employee shall be entitled to (x) a lump-sum payment equal
to six (6) months of Employee's Base Salary and Variable Compensation
under the terms of the Employee's then-current Sales Commission Plan,
subject to all applicable tax withholdings, (y) reimbursement for six
(6) months of COBRA premiums, paid in accordance with the Company's
normal reimbursement procedures and policies and (z) six (6) months
vesting acceleration of any of Employee's unvested Company stock
options.
(iii) On or After May 1, 2006. If Employee's
employment is terminated by the Company without Cause on or after May
1, 2006, Employee shall be entitled to (x) a lump-sum payment equal to
four (4) months of Employee's Base Salary or $45,000, whichever is
greater, subject to all applicable tax withholdings and (y)
reimbursement for four (4) months of COBRA premiums, paid in
accordance with the Company's normal reimbursement procedures and
policies.
8. Binding Agreement. This Agreement is a personal contract and the
rights and interests of Employee hereunder may not be sold, transferred,
assigned, pledged, encumbered, or hypothecated by him.
9. Confidentiality; Proprietary Information. Employee hereby
acknowledges his continuing obligations under the terms of the Company's
Proprietary Information and Invention Agreement, a copy of which is attached as
Exhibit A.
10. Entire Agreement. This Agreement, together with the Proprietary
Information and Invention Agreement, Employee's Sales Commission Plan and
applicable Company stock option plans and/or stock option agreements, contain
all the understandings between the Parties hereto pertaining to the matters
referred to herein, and supersedes all undertakings and agreements, whether
oral or in writing, previously entered into by them with respect thereto.
Employee represents that, in executing this Agreement, he does not rely and has
not relied upon any representation or statement not set forth herein made by
the Company with regard to the subject matter of this Agreement or otherwise.
11. Amendment or Modification. No provision of this Agreement may be
amended or modified unless such amendment or modification is agreed to in
writing, signed by Employee and by a duly authorized officer of the Company.
12. Notices. Any notice to be given hereunder shall be in writing and
shall be deemed given when delivered personally, sent by courier or fax or
registered or certified mail, postage prepaid, return receipt requested,
addressed to the party concerned at the address indicated below or to such
other address as such party may subsequently give notice of hereunder in
writing:
To Employee at:
Xxxxx Xxxxxxx
000 Xxxxxx Xxxxx
Xxx Xxxxx, XX 00000
To the Company at:
Tumbleweed Communications Corp.
000 Xxxxxxx Xxxxx
Xxxxxxx Xxxx, XX 00000
Attention: General Counsel
Any notice delivered personally or by courier under this Section 13
shall be deemed given on the date delivered and any notice sent by telecopy or
registered or certified mail, postage prepaid, return receipt requested, shall
be deemed given on the date telecopied or mailed.
13. Each Party the Drafter. This Agreement and the provisions
contained herein shall not be construed or interpreted for or against any party
to this Agreement because that party drafted or caused that party's legal
representative to draft any of its provisions.
14. Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of California, without regard to its
conflicts of laws principles.
15. Headings. All descriptive headings of sections and paragraphs in
this Agreement are intended solely for convenience, and no provision of this
Agreement is to be construed by reference to the heading of any section or
paragraph.
16. Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first written above.
TUMBLEWEED COMMUNICATIONS CORP. EMPLOYEE
By: /s/ Xxxxxxx X. Xxxxxxx /s/ Xxxxx Xxxxxxx
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Xxxxx Xxxxxxx
Its: Senior Vice President
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