EMPLOYMENT AGREEMENT
This Employment Agreement is made and entered into by and
between
Telocity, Inc. (the "Company") and Jim Morrissey ("Mr. Morrissey) on
September
14, 1999.
1. Position and Duties: Mr. Morrissey shall be employed by the
Company
as 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"). Mr. Morrissey 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. Mr. Morrissey 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: Mr. Morrissey's employment with the
Company will
be for no specified term, and may be terminated by Mr. Morrissey or the
Company
at any time, for any reason, with or without cause, and neither Mr.
Morrissey
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: Mr. Morrissey shall be compensated by the
Company for
his services as follows:
A. Base Salary: Mr. Morrissey shall be paid a monthly
Base Salary
of $22,917 per month ($275,000 on an annualized basis), subject to
applicable
withholding, in accordance with the Company's normal payroll procedures.
Mr.
Morrissey's 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 Mr. Morrissey's Base Salary.
B. Benefits: Mr. Morrissey shall have the right, on the
same
basis as 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, Mr. Morrissey 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. Mr. Morrissey 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.
C. "Gross-Up Payments": In the event that Mr. Morrissey
becomes
entitled to receive a payment pursuant to this Agreement (a "Payment"),
and is
entitled to a Gross-Up for
1
2
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 Mr.
Morrissey becomes entitled to receive such Payment, the Company shall
pay to Mr.
Morrissey additional amounts (the "Gross-Up Payments") such that the net
amount
retained by Mr. Morrissey, 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 Mr.
Morrissey 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 Mr. Morrissey 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 Mr. Morrissey in connection with a Change of Control (as
defined in
Section 9A(i), below) shall be treated as "parachute payments" within
the
meaning of Section 28OG(b)(2) of the Code, and all excess "parachute
payments"
within the meaning of Section 28OG(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
28OG(d)(3) and (4) of the Code. For purposes of determining the amount
of each
Gross-Up Payment, Mr. Morrissey 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 Mr. Morrissey's 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 Mr. Morrissey has no other
deductions
or credits available to reduce such taxes.
D. Bonuses: In addition to the Company's Bonus Program,
Mr.
Morrissey shall be entitled to the following additional bonuses:
i. Signing Bonus: Within thirty (30) days of the
Effective Date,
the Company will pay Mr. Morrissey a signing bonus in the
total
amount of $150,000, less applicable withholding. In the
event
that Mr. Morrissey voluntarily resigns from his
employment other
than for Good Reason during the first year following the
Effective Date, Mr. Morrissey agrees that he shall repay
a
pro-rata share of the signing bonus based on the time
remaining
in the first year of service.
ii. January 1, 2000 Conditional Bonus: On January 1,
2000,
provided that certain agreed to objectives have been met
and Mr.
Morrissey 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
2
3
withholding. Within sixty (60) days of the Effective
Date, Mr.
Morrissey shall prepare and present to the CEO, for
review, a
performance bonus plan specifically for the bonus
described in
this subsection. The CEO and Mr. Morrissey shall then set
forth
in writing a description of the mutually agreed upon
objectives
for the bonus.
iii. Conditional Bonus at Initial Public Offering or
Acquisition:
Provided that Mr. Morrissey 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, Mr.
Morrissey shall be entitled a bonus in the total amount
of
$150,000, less applicable withholding. Within sixty (60)
days of
the Effective Date, Mr. Morrissey shall prepare and
present to
the CEO, for review, a performance bonus plan
specifically for
the bonus described in this subsection. The CEO and Mr.
Morrissey
shall then set forth in writing a description of the
mutually
agreed upon objectives for the bonus.
4. Stock Options: Mr. Morrissey shall be granted the option to
purchase
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 Mr. Morrissey's 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 Mr. Morrissey's 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.
Mr. Morrissey 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 Mr. Morrissey's original cost upon his
termination of
employment, as provided in the Standard Agreements. In addition, the
Company
shall permit Mr. Morrissey 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
Mr. Morrissey 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 Mr. Morrissey's employment for any reason; or (iii) the
date
twelve (12) months after Mr. Morrissey 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 Mr.
Morrissey's
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.
3
4
A. 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.
B. 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 Mr. Morrissey's; then
(iv) an
additional grant of stock options will be made to Mr. Morrissey to
accomplish an
equal relative increase in Mr. Morrissey's stock options.
5. Moving Expenses: The Company shall reimburse Mr. Morrissey
for all
actual reasonable moving costs associated with relocating to California
from New
York, including real estate closing costs, legal fees incurred for the
sale of
Mr. Morrissey's home, accounting expenses incurred for the sale of Mr.
Morrissey's home, and physically moving Mr. Morrissey's family's
personal
possessions (the "Moving Expenses"). Mr. Morrissey shall be entitled to
Gross-Up
Payments for the Moving Expenses. In addition, Company shall provide Mr.
Morrissey at Company's expense temporary lodging at a mid-priced hotel
or
apartment for up to ninety (90) days, if necessary for Mr. Morrissey and
his
spouse, during which Mr. Morrissey 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 Mr. Morrissey and his
spouse, as
may be reasonably necessary to facilitate Mr. Morrissey's 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-four (24) months, provided that Mr. Morrissey is continuously
employed as
an Officer of the Company, the Company shall make a loan each month to
Mr.
Morrissey 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:
A. If on October 1, 2001, shares of the Company's Common
Stock
are publicly tradable and the stock issuable to Mr. Morrissey 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 Mr. Morrissey
shall
repay the Housing Loan no more than ninety (90) days thereafter.
B. 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 Mr. Morrissey 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 Mr. Morrissey with respect
to the
same.
4
5
7. Other Loans from the Company to Mr. Morrissey: The Company
shall
provide to Mr. Morrissey 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 Mr. Morrissey 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 Mr. Morrissey no 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 Mr. Morrissey 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
Mr. Morrissey 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:
A. A "Change of Control" is defined as and shall be
deemed to
have occurred if:
i. 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
5
6
ii. Within eighteen (18) months of the Effective Date:
(a) the
Company terminates Patti Hart's employment as CEO of the
Company;
or (b) Patti Hart resigns as CEO of the Company
"involuntarily",
which shall be defined as a resignation for any of the
reasons
cited below in Section 9B(i), substituting the words
"Patti Hart"
for "Mr. Morrissey" in subsections (a) through (c) and
the word
"her" for the word "this" in subsection (d) and (e).
For the purposes of Section A(i)(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.
B. "Good Reason" is defined as and shall be deemed to
exist if
any of the following conditions occur:
i. 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 Mr. Morrissey and
failure of the
Company to cure within that period: (a) the Company, its
successor or assign decreases Mr. Morrissey's Base
Salary; (b)
the Company its successor or assign makes a material,
adverse
change in Mr. Morrissey's title, authority,
responsibilities or
duties, as measured against Mr. Morrissey's title,
authority,
responsibilities or duties immediately prior to such
change; (c)
the Company, its successor or assign requires the
relocation of
Mr. Morrissey's 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 Clara 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
ii. 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 Mr.
Morrissey and failure of the Company to cure within that
period:
(a) the Company terminates the employment of Patti Hart
as CEO of
the Company; or (b) Patti Hart resigns as CEO of the
Company
"involuntarily", defined as a resignation for any of the
reasons
described in Section 9B(i), substituting the words "Patti
Hart"
for "Mr. Morrissey" in subsections (a) through (c) and
the word
"her" for the word "this" in subsection (d) and (e).
C. For "Cause" is defined as a termination of Mr.
Morrissey 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)
Mr. Morrissey's 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 Mr. Morrissey undertaken by Mr. Morrissey
with the
6
7
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. Mr. Morrissey agrees that his
employment
may be terminated by the Company at any time, for any reason, with or
without
cause. In the event of the termination of Mr. Morrissey's 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:
A. Termination for Cause: If Mr. Morrissey's employment
is
terminated by the Company for Cause, Mr. Morrissey 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.
B. Voluntary Resignation: In the event of Mr. Morrissey's
voluntary resignation from employment with the Company, other than for
Good
Reason, Mr. Morrissey 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.
C. Death or Disability In the event that Mr. Morrissey's
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 Mr. Morrissey's position), Mr. Morrissey shall be
entitled to the following as of the date of death or disability:
i. All accrued salary, benefits and vesting earned
through such
date;
ii. 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 3D(ii) 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 3D(iii) 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 Mr. Morrissey may become eligible, then such
bonus
shall be payable pro rata based on the amount of the
applicable
bonus period worked by Mr. Morrissey prior to the date of
death
or disability.
iii. Termination of any obligation Mr. Morrissey 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.
7
8
D. Termination Without Cause or Resignation for Good
Reason:
Except as provided in Section 10E, below, if Mr. Morrissey's employment
is
terminated by the Company without Cause, or if Mr. Morrissey resigns as
an
employee of the Company for Good Reason, then such termination shall be
deemed a
"Termination Without Cause" and Mr. Morrissey shall be entitled, on such
date,
to all of the following:
i. All accrued salary, benefits and vesting earned
through the
date of termination or resignation;
ii. 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 3D(ii) 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 3D(iii) 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 Mr. Morrissey may become eligible, then
such
bonus shall be payable pro rata based on the amount of
the
applicable bonus period worked by Mr. Morrissey prior to
the date
of termination or resignation;
iii. Continued payment of Mr. Morrissey's salary at his
Base
Salary rate, less applicable withholding, for one (1)
year
following his termination or resignation;
iv. Continued payment of the Housing Loan for one (1)
year after
the date of termination or resignation;
v. Termination of any conditional obligation that Mr.
Morrissey
may have to repay any part of the Housing Loan he has
received or
will receive based on Section 10D(iv), above, and any
related
Gross Up Payments;
vi. Termination of any obligation Mr. Morrissey shall
have to
repay any portion of the Loans;
vii. Removal of any "cliff date" in calculating the
number of
Stock Options or underlying shares vested upon such date;
and
viii. An additional six (6) months vesting in the Stock
Options
(or underlying shares), or any other options (or
underlying
shares) granted to Mr. Morrissey by the Board, as if Mr.
Morrissey continued to vest in the options for an
additional six
months.
E. Resignation or Termination following Certain Events:
If: (i)
prior to October 1, 2000, any of the events listed in Section 9A(i)
occur; and
(ii) within eighteen (18) months following such event, Mr. Morrissey
resigns for
any of the reasons listed in Sections 9B(i)(a) through 9(B)(i)(e) or Mr.
Morrissey is terminated by the Company without Cause, he
8
9
shall be entitled to all of the benefits listed in Sections 10D(i)
through
10D(vii) and, in lieu of the benefits provided in Section 10D(viii), 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 of Control described in Section 9A(i), 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
Mr.
Morrissey 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 Mr. Morrissey's 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) Mr. Morrissey 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 Mr. Morrissey.
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. Morrissey agrees to abide by the terms and conditions of the
Company's
standard Employee Inventions and Proprietary Rights Assignment
Agreement.
13. Non-Solicitation: Mr. Morrissey agrees that for a period of
one year
after the date of the termination of his employment for any reason, he
shall
not, either directly or indirectly: (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 Mr. Morrissey a
party to
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
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), Mr. Morrissey and the Company agree that all such
disputes
shall be fully and finally resolved by binding arbitration conducted by
9
10
the American Arbitration Association in Santa Clara 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).
MR.
MORRISSEY 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
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: Mr. Morrissey and the Company agree that this
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 Mr. Morrissey, 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
employment agreement between Mr. Morrissey 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
Mr. Morrissey and the Company, the terms of this Employment Agreement
will
govern. This Employment Agreement supersedes all prior negotiations,
representations or agreements between Mr. Morrissey and the Company,
whether
written or oral, concerning Mr. Morrissey's employment by the Company.
20. Validity: If any one or more of the provisions (or any part
thereof)
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.
21. Modification: This Employment Agreement may only be modified
or
amended by a supplemental written agreement signed by Mr. Morrissey and
the
Company.
22. Counterparts: This Employment Agreement may be executed in
any
number 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
10
11
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/ MATT STEPOVICH
-------------------------------
Its: VP Legal Affairs
------------------------------
Date: 9/21/99
---------
/s/ JIM MORRISSEY
----------------------------------
Jim Morrissey
