EXHIBIT 10.20
EMPLOYMENT AGREEMENT
This AGREEMENT is entered into as of October 5, 2000 (the "Effective
Date"), by and between ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ("Executive") and Viador, Inc., a
California corporation (together with any successor by merger or otherwise, the
"Company"). In consideration of the mutual covenants and agreements
hereinafter set forth, the parties agree as follows:
1. Duties and Scope of Employment.
(a) Position and Duties. For the term of his employment under this
Agreement, the Company agrees to employ Executive as its President and Chief
Executive Officer, reporting directly to the Board of Directors (the "Board").
Executive shall have such duties and authority as are commensurate with one
employed in the position of President and Chief Executive Officer, as may be
customarily associated with such position, and as may be assigned to Executive
from time to time. Executive shall diligently, to the best of his ability, and
with the highest degree of good faith and loyalty, perform all such duties
incident to his position and use his best efforts to promote the interests of
the Company.
(b) Obligations to the Company. During the Employment Term, Executive
shall devote his full time and energy to the business of the Company and shall
not be engaged in any competitive business activity without the express written
consent of the Chairman of the Board. Executive shall comply with the
Company's policies and rules, as they may be in effect from time to time during
the term of his employment.
(c) No Conflicting Obligations. Executive represents and warrants to
the Company that he is under no obligations or commitments, whether contractual
or otherwise, that are inconsistent with his obligations under this Agreement.
Executive represents and warrants that he will not use or disclose, in
connection with his employment by the Company, any trade secrets or other
proprietary information or intellectual property in which Executive or any
other person has any right, title or interest and that his employment by the
Company as contemplated by this Agreement will not infringe or violate the
rights of any other person or entity. Executive represents and warrants to the
Company that he has returned all property and confidential information
belonging to any prior employers.
2. Term of Employment.
(a) Basic Rule. The Company agrees to continue Executive's employment,
and Executive agrees to remain in employment with the Company, from the
Effective Date until the date when Executive's employment terminates pursuant
to Subsection 2(b) below (the "Employment Period"). Executive's employment
with the Company shall be "at will," which means that either Executive or the
Company may terminate Executive's employment at any time, for any reason, with
"Cause" or "Without Cause." Any contrary representations, which may have been
made to Executive shall be superseded by this Agreement. This Agreement shall
constitute the full and complete agreement between Executive and the
Company regarding the "at will" nature of Executive's employment, which may
only be changed in an express written agreement signed by Executive and the
Chairman of the Board.
(b) Termination. The Company or Executive may terminate Executive's
employment at any time for any reason (or no reason), and with "Cause" or
"Without Cause," by giving the other party fourteen (14) days' notice in
writing. Executive's employment shall terminate automatically in the event of
his death.
3. Cash and Incentive Compensation.
(a) Base Salary. The Company shall pay Executive as compensation for
his services an annualized base salary of Two Hundred Seventy Five Thousand
Dollars ($275,000.00), less applicable deductions and withholdings, payable in
accordance with the Company's standard payroll schedule. The compensation
specified in this Subsection (a), together with any change in such compensation
that the Company may grant from time to time, are referred to in this Agreement
as "Base Salary." The Base Salary will be reviewed at least annually and shall
be subject to change from time-to-time at the sole discretion of the
Compensation Committee of the Board.
(b) Bonus. Executive will be eligible to earn an annualized bonus (the
"Target Bonus") for each calendar year equal to at least fifty percent (50%) of
his Base Salary, less applicable deductions and withholdings. The Target Bonus
shall be based upon performance criteria to be established by the Board of
Directors in consultation with Executive. If any part of the Target Bonus is
earned for a given year, it will be paid on or before February 28 of the
following year.
(c) Stock Options. As of the Effective Date of this Agreement,
Executive has been granted an option to buy 750,000 shares of Common Stock
pursuant to the Company's Stock Option Plan (the "Plan"); the exercise price
shall be the fair market value which equals the closing selling price per share
of Common Stock on October 5, 2000, as such prices are reported by the National
Association of Securities Dealers (the "Option"). The terms of the Option are
summarized in Exhibit A to this Agreement. Executive's Option shall continue
to vest in accordance with the Plan and the stock option agreements between the
Company and Executive evidencing such Option.
(d) Vacation and Executive Benefits. During the term of his employment,
Executive shall be eligible for vacation each year, in accordance with the
Company's standard policy for senior executives, as it may be amended from time
to time. Executive shall be eligible during his employment term to participate
in any employee benefit plans generally available to the other senior
executives of the Company, subject in each case to the generally applicable
terms and conditions of the plan in question and to the determinations of any
person or committee administering such plan. The Company reserves the right to
amend, modify or terminate any employee benefits at any time for any reason.
(e) Business Expenses. During the term of his employment, Executive
shall be authorized to incur necessary and reasonable travel and other business
expenses in connection with his duties hereunder. The Company shall reimburse
Executive for such
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expenses upon presentation of an itemized account and appropriate supporting
documentation, all in accordance with the Company's expense reimbursement
policies as may be established and modified from time-to-time.
4. Payments, Benefits and Acceleration Following Termination.
(a) Termination Following Change of Control. If, within one year
following a "Change of Control," Executive resigns for "Good Reason" or the
Company terminates Executive's employment "Without Cause," then Executive shall
receive:
(i) A lump sum severance payment equal to 1.25 times Executive's
Base Salary, less applicable deductions and withholdings;
(ii) The full amount of his Target Bonus for the year in which
Executive is terminated, less applicable deductions and withholdings;
(iii) Credit for twelve (12) months of vesting of the unvested
shares under all outstanding stock options then held by Executive; and
(iv) Should Executive be eligible for and elect to continue his
health insurance pursuant to COBRA, payment of COBRA premiums for fifteen (15)
months following the termination date of Executive's employment. If, however,
Executive obtains alternative coverage through new employment (irrespective of
the scope or terms), the Company's obligations under Section 4(a)(iv) shall
terminate.
(b) Termination Outside Change of Control. Subject to Section 4(e) of
this Agreement, if the Company terminates Executive's employment "Without
Cause" when no Change of Control has occurred in the prior year, then Executive
shall receive:
(i) Base Salary continuation payments for a period of six (6) months
following the termination of Executive's employment (the "Continuation
Period"), which shall be payable in accordance with the Company's normal
payroll practices;
(ii) Credit for six (6) months of vesting of each outstanding stock
option or stock then held by Executive; and
(iii) Should Executive be eligible for and elect to continue his
health insurance pursuant to COBRA following the termination date, payment of
COBRA premiums during the Continuation Period. If, however, Executive obtains
alternative coverage through new employment (irrespective of the scope or
terms), the Company's obligations under Section 4(b)(iii) shall terminate.
(c) Resignation or Termination for "Cause." In the event that (i)
Executive's employment is terminated by the Company at any time for "Cause;"
(ii) Executive resigns his employment for any reason when no Change of Control
has taken place within the prior twelve (12) months; or (iii) Executive resigns
his employment without "Good Reason" within twelve (12) months following a
Change of Control; then upon the termination of Executive's employment,
Executive will be paid his Base Salary and for all unused vacation
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earned through the date of termination, but nothing else, and all stock vesting
and benefits will cease on Executive's date of termination.
(d) Release Required. As a prior condition to Executive receiving any
payment, benefit or stock acceleration under Sections 4(a) and/or 4(b) of this
Agreement, Executive shall execute a full release of known and unknown claims
against the Company, its successors, affiliates, employees, agents, advisors
and representatives, in a form designated by the Company.
(e) Condition of Non-competition. During the Continuation Period,
Executive shall not engage in any "Competitive Activity" without first
notifying the Company of the contemplated activity. Executive agrees that if
there is any reasonable question regarding whether or not a contemplated
activity would be a Competitive Activity, Executive will consult with the Board
before engaging in the contemplated activity. The Compensation Committee of
the Board will determine in its sole discretion whether the activity
contemplated by Executive is a Competitive Activity. Immediately upon engaging
in any Competitive Activity during the Continuation Period, all payments and
benefits under Section 4(b) of this Agreement shall cease, and Executive shall
not be entitled to any further payments or benefits from the Company. During
all or part of the Continuation Period, Executive may engage in Competitive
Activity if agreed in a writing signed by all parties, and in that event, the
Company shall have no obligation to Executive under Section 4(a)(i) or (ii) or
4(b)(i) for any balance of the Continuation Period in which Executive may
engage in Competitive Activity.
(f) Termination Due to Death or Disability. If Executive's employment is
terminated due to death or Disability, then Executive, or Executive's estate,
will receive: (i) payment for all Base Salary and accrued but unused vacation
earned through the date of termination; and (ii) a lump-sum payment equal to
the pro-rata portion of Executive's full Target Bonus, based on Executive's
length of service during the year in which Executive's employment is terminated
due to death or Disability.
(g) Definitions.
(i) "Change of Control." For all purposes under this Agreement,
"Change of Control" shall mean (1) a merger or consolidation in which
securities possessing at least fifty percent (50%) of the total combined voting
power of the Corporation's outstanding securities are transferred to a person
or persons different from the persons holding those securities immediately
prior to such transaction, or (2) the sale, transfer or other disposition of
all or substantially all of the Corporation's assets in complete liquidation or
dissolution of the Corporation.
(ii) "Good Reason." For all purposes under this Agreement, "Good
Reason" for Executive's resignation will exist if he resigns within sixty (60)
days of any of the following events: (1) any reduction in his Base Salary; (2)
a change in his position with the Company or a successor company which reduces
substantially his duties or level of responsibility; (3) any requirement that
he relocate his place of employment by more than fifty (50) miles from his then
current office, provided such reduction, change or relocation is effected
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by the Company without his written consent. A resignation by Executive under
any other circumstance or for any other reason will be a resignation without
"Good Reason."
(iii) Termination for "Cause." For all purposes under this
Agreement, a termination for "Cause" shall mean a termination of Executive's
employment for any of the following reasons: (1) misappropriation of the
assets of the Company; (2) conviction of, or a plea of "guilty" or "no contest"
to a felony under the laws of the United States or any state thereof; (3)
committing an act of fraud against, or the misappropriation of property
belonging to, the Company; (4) a material breach of any confidentiality or
proprietary information agreement between Executive and the Company; or (5)
continued unsatisfactory performance after being given a written warning and,
if curable, at least thirty (90) days to improve performance. A termination of
Executive's employment in any other circumstance or for any other reason will
be a termination "Without Cause."
(iv) "Disability." For all purposes under this Agreement,
"Disability" means Executive's inability to carry out his material duties under
this Agreement for more than six (6) months in any twelve (12) consecutive
month period as a result of incapacity due to mental or physical illness or
injury.
(v) "Competitive Activity." For the purposes of this Agreement, a
"Competitive Activity" means any activity in which Executive directly or
indirectly provides services of any kind or nature (whether or not Executive is
compensated for such services), including, but not limited to, Executive
working in an employment, advisory or consulting capacity, for any Competitor
of the Company.
(vi) "Competitor." For purposes of this Agreement, "Competitor" is
defined as any company involved in the Enterprise Information Portal market.
5. Change in Control Benefit Limit.
(a) Benefit Limit. The aggregate Present Value (measured as of the
Change of Control) of the benefits to which Executive becomes entitled under
this Agreement either at the time of a Change of Control or at the time of his
subsequent termination of employment following a Change of Control and which
constitute "parachute payments" under federal tax law shall be limited to the
greater of the following dollar amounts (the "Benefit Limit"):
(i) 2.99 times Executive's Average Compensation, less the Present
Value (measured as of the Change of Control) of any Other Parachute Payments to
which Executive is entitled other than pursuant to the provisions this
Agreement, or
(ii) the amount which yields Executive the greatest after-tax amount
payable to him under this Agreement after taking into account the excise tax
(if any) imposed under Code Section 4999) on the Vesting Parachute Payment and
any Other Parachute Payments which are provided Executive under this Agreement
or otherwise.
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(b) Definitions. For purposes of applying Code Sections 280(G) and 4999
and the Treasury Regulations thereunder to determine the Benefit Limit in
effect, the following definitions shall be in effect:
Average Compensation means the average of Executive's W-2 wages or
other compensation from the Company (or any predecessor corporation) for the
five (5) calendar years (or such fewer number of calendar years of employment
with the Company or such predecessor corporation) completed immediately prior
to the calendar year in which the Change of Control is effected. Any W-2 wages
or other compensation for a partial year of employment will be annualized, in
accordance with the frequency which such wages or compensation is paid during
such partial year, before inclusion in Average Compensation.
Code means the Internal Revenue Code of 1984, as amended from time
to time.
Vesting Parachute Payment means, with respect to any of Executive's
Incentive Stock or outstanding stock options accelerated pursuant to the
provisions of this Agreement, the portion of that acceleration benefit deemed
to be a parachute payment under Code Section 280G and the Treasury Regulations
issued thereunder. The portion of the acceleration benefit which is
categorized as a Vesting Parachute Payment shall be calculated in accordance
with the valuation provisions established under Code Section 280G and the
applicable Treasury Regulations and shall include an appropriate dollar
adjustment to reflect the lapse of Executive's obligation to remain in the
Company's employ as a condition to the vesting of the accelerated Incentive
Stock or stock options. In no event, however, will the Vesting Parachute
Payment attributable to the accelerated vesting of any Incentive Stock or stock
option exceed the spread (the excess of the fair market value of the
accelerated Incentive Stock or option shares over the purchase price paid for
the Incentive Stock or the option exercise price payable for the accelerated
option shares) existing at the time of the vesting acceleration.
Other Parachute Payment means any payments in the nature of
compensation (other than the Vesting Parachute Payment) which are made to
Executive, whether under this Agreement or any other arrangement, in connection
with the Change of Control and which accordingly qualify as parachute payments
within the meaning of Code Section 280G(b)(2) and the Treasury Regulations
issued thereunder.
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Present Value means the value, determined as of the date of the
Change of Control, of any payment in the nature of compensation to which
Executive becomes entitled in connection with the Change of Control or the
subsequent termination of his employment, including (without limitation) the
Vesting Parachute Payment attributable to the accelerated vesting of his
Incentive Stock and outstanding stock options and any Other Parachute Payments
to which Executive becomes entitled. The Present Value of each such payment
shall be determined in accordance with the provisions of Code Section
280G(d)(4), utilizing a discount rate equal to one hundred twenty percent
(120%) of the applicable Federal rate in effect at the time of such
determination, compounded semi-annually to the effective date of the Change of
Control.
(c) Resolution Procedure. In the event there is any disagreement
between Executive and the Company as to whether one or more payments to which
Executive becomes entitled in connection with either the Change of Control or
his subsequent termination of employment constitute Vesting Parachute Payments
or Other Parachute Payments or as to the determination of the Present Value
thereof, such dispute will be resolved as follows:
(i) In the event temporary, proposed or final Treasury Regulations
in effect at the time under Code Section 280G (or applicable judicial
decisions) specifically address the status of any such payment or the method of
valuation therefor, the characterization afforded to such payment by the
Regulations (or such decisions) will, together with the applicable valuation
methodology, be controlling.
(ii) In the event Treasury Regulations (or applicable judicial
decisions) do not address the status of any payment in dispute, the matter will
be submitted for resolution to independent tax counsel ("Independent Counsel")
mutually acceptable to the Company and Executive. The resolution reached by
such Independent Counsel shall will be final and controlling. and all expenses
incurred in connection with the retention of Independent Counsel to resolve the
dispute shall be shared equally by the Company and Executive.
(iii) In the event Treasury Regulations (or applicable judicial
decisions) do not address the appropriate valuation methodology for any payment
in dispute, the Present Value thereof will be submitted to the Company's
independent auditors for determination, and the expenses incurred in obtaining
such valuation shall be paid by the Company.
(iv) A portion of the benefits provided under this Agreement to
Executive at the time of his termination of employment following a Change of
Control shall be allocated as compensation for his non-compete covenant
appearing in the Agreement, and to the extent the allocated benefits do not
exceed the value of the non-compete covenant to the Company, those benefits
shall not be considered to be parachute payments under Code Section 280G. The
value of the non-compete covenant shall be determined by independent appraisal
obtained at the sole cost of the Company.
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6. Non-Solicitation and Non-Disclosure.
(a) Non-Solicitation. During the period commencing on the Effective
Date of this Agreement and continuing until the first anniversary of the date
when Executive's employment terminates for any reason, Executive shall not
directly or indirectly, personally or through others, solicit or encourage, or
attempt to solicit or encourage (on Executive's own behalf or on behalf of any
other person or entity) for hire any employee or consultant of the Company or
any of the Company's affiliates.
(b) Non-Disclosure. As a condition of employment, Executive will
execute the Company's standard Proprietary Information Agreement, a copy of
which is attached.
7. Successors.
(a) Company's Successors. This Agreement shall be binding upon any
successor (whether direct or indirect and whether by purchase, lease, merger,
consolidation, liquidation or otherwise) to all or substantially all of the
Company's business and/or assets. For all purposes under this Agreement, the
term "Company" shall include any successor to the Company's business and/or
assets which becomes bound by this Agreement.
(b) Executive's Successors. This Agreement and all rights of Executive
hereunder shall inure to the benefit of, and be enforceable by, Executive's
personal or legal representatives, executors, administrators, successors,
heirs, distributees, devisees and legatees.
8. Arbitration. Executive and the Company agree to arbitrate before a
neutral arbitrator any and all disputes or claims arising from or relating to
Executive's employment with the Company, or the termination of that employment,
including disputes or claims against any current or former agent or employee of
the Company.
(a) Arbitrable Claims. Arbitrable disputes or claims include those
which arise in tort, contract, or pursuant to a statute, regulation, or
ordinance now in existence or which may in the future be enacted or recognized,
including, but not limited to, the following claims:
(i) claims for fraud, promissory estoppel, fraudulent inducement of
contract or breach of contract or contractual obligation, whether such alleged
contract or obligation be oral, written, or express or implied by fact or law;
(ii) claims for wrongful termination of employment, violation of
public policy and constructive discharge, infliction of emotional distress,
misrepresentation, interference with contract or prospective economic
advantage, defamation, unfair business practices, and any other tort or tort-
like causes of action relating to or arising from the employment relationship
or the formation or termination thereof;
(iii) claims of discrimination, harassment, or retaliation under any
and all federal, state, or municipal statutes, regulations, or ordinances that
prohibit
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discrimination, harassment, or retaliation in employment, as well as claims for
violation of any other federal, state, or municipal statute, regulation, or
ordinance, except as set forth herein; and
(iv) claims for non-payment or incorrect payment of wages,
commissions, bonuses, severance, employee fringe benefits, stock options and
the like, whether such claims be pursuant to alleged express or implied
contract or obligation, equity, the California Labor Code, the Fair Labor
Standards Act, the Employee Retirement Income Securities Act, and any other
federal, state, or municipal laws concerning wages, compensation or employee
benefits.
(b) Non-Arbitrable Claims. Executive and the Company further understand
and agree that the following disputes and claims are not covered by the
arbitration agreement contained in this Section 8 and shall therefore be
resolved as required by the law then in effect:
(i) claims for workers' compensation benefits, unemployment
insurance, or state or federal disability insurance;
(ii) claims concerning the validity, infringement, enforceability,
or misappropriation of any trade secret, patent right, copyright, trademark, or
any other intellectual or confidential property held or sought by Employee or
the Company; and
(iii) any other dispute or claim that has been expressly excluded
from arbitration by statute.
(c) Relief and Review. The Arbitrator shall have the authority to award
any relief authorized by law in connection with the asserted claims or disputes
and shall issue a written Award that sets forth the essential findings and
conclusions on which the Award is based. The Arbitrator's Award shall be final
and binding on both the Company and Employee and it shall provide the exclusive
remedy(ies) for resolving any and all disputes and claims subject to
arbitration under this Agreement. The Arbitrator's Award shall be subject to
correction, confirmation, or vacation, as provided by California Code of Civil
Procedure Section 1285.8 et seq and any applicable California case law setting
forth the standard of judicial review of arbitration Awards.
(d) Location and Rules. The arbitration shall be conducted in Santa
▇▇▇▇▇ County, California, or such location as is mutually agreeable to the
parties, in accordance with the National Rules for the Resolution of Employment
Disputes of the American Arbitration Association; provided, however, that the
Arbitrator shall allow the discovery authorized by California Code of Civil
Procedure Section 1283.05 or any other discovery required by California law.
Also, to the extent that any of the National Rules for the Resolution of
Employment Disputes or anything in this Agreement conflicts with any
arbitration procedures required by California law, the arbitration procedures
required by California law shall govern.
(e) Costs and Attorneys' Fees. The Company will bear the arbitrator's
fee and any other type of expense or cost that Executive would not be required
to bear if he were free to bring the dispute(s) or claim(s) in court as well as
any other expense or cost that is unique to arbitration. Executive and the
Company shall each bear their own attorneys' fees incurred
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in connection with the arbitration, and the arbitrator will not have authority
to award attorneys' fees unless a statute or contract at issue in the dispute
authorizes the award of attorneys' fees to the prevailing party, in which case
the arbitrator shall have the authority to make an award of attorneys' fees as
required or permitted by applicable law. If there is a dispute as to whether
the Company or Executive is the prevailing party in the arbitration, the
Arbitrator will decide this issue.
(f) WAIVER OF RIGHT TO JURY. EXECUTIVE AND THE COMPANY UNDERSTAND AND
AGREE THAT THE ARBITRATION OF DISPUTES AND CLAIMS UNDER THIS AGREEMENT SHALL BE
INSTEAD OF A TRIAL BEFORE A COURT OR JURY OR A HEARING BEFORE A GOVERNMENT
AGENCY.
9. Miscellaneous Provisions.
(a) Notice. Notices and all other communications contemplated by this
Agreement shall be in writing and shall be deemed to have been duly given when
personally delivered or when mailed by overnight courier, U.S. registered or
certified mail, return receipt requested and postage prepaid. Mailed notices
shall be addressed to Executive at the home address which he most recently
communicated to the Company in writing. In the case of the Company, mailed
notices shall be addressed to its corporate headquarters, and all notices shall
be directed to the attention of its Secretary.
(b) Modifications and Waivers. No provision of this Agreement shall be
modified, waived or discharged unless the modification, waiver or discharge is
agreed to in writing and signed by Executive and by an authorized officer of
the Company (other than Executive). No waiver by either party of any breach
of, or of compliance with, any condition or provision of this Agreement by the
other party shall be considered a waiver of any other condition or provision or
of the same condition or provision at another time.
(c) Whole Agreement. No other agreements, representations or
understandings (whether oral or written) which are not expressly set forth in
this Agreement have been made or entered into by either party with respect to
the subject matter of this Agreement. This Agreement, the Proprietary
Information Agreement, and applicable stock option agreements and stock plans,
contain the entire understanding of the parties with respect to the subject
matter hereof.
(d) Taxes. All payments made under this Agreement shall be subject to
reduction to reflect taxes or other charges required to be withheld by law.
(e) Choice of Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
California (except provisions governing the choice of law).
(f) Severability. The invalidity or unenforceability of any provision
or provisions of this Agreement shall not affect the validity or enforceability
of any other provision hereof, which shall remain in full force and effect.
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(g) No Assignment. This Agreement and all rights and obligations of
Executive hereunder are personal to Executive and may not be transferred or
assigned by Executive at any time. The Company may assign its rights under
this Agreement to any entity that assumes the Company's obligations hereunder
in connection with any sale or transfer of all or a substantial portion of the
Company's assets to such entity.
(h) Headings. The headings of the paragraphs contained in this Agreement
are for reference purposes only and shall not in any way affect the meaning or
interpretation of any provision of this Agreement.
(i) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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
____________________________________
By:_________________________________
Title:_______________________________
VIADOR, INC.
____________________________________
By:_________________________________
Title:_______________________________
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