EXHIBIT 10.11
NETGEAR, INC.
MICHAEL WERDANN EMPLOYMENT AGREEMENT
This Agreement is entered into as of NOVEMBER 3, 2003, (the "EFFECTIVE
DATE") by and between NETGEAR, INC. (the "COMPANY"), and MICHAEL WERDANN
("EXECUTIVE").
1. Duties and Scope of Employment.
(a) Positions and Duties. As of the Effective Date,
Executive will serve as VICE PRESIDENT OF SALES, AMERICAS of the Company.
Executive will render such business and professional services in the performance
of his duties, consistent with Executive's position within the Company, as shall
reasonably be assigned to him by the Company's President and/or Board of
Directors (the "BOARD"), The period of Executive's employment under this
Agreement is referred to herein as the "EMPLOYMENT TERM." The Executive should
also recognize that promotion to this position means that he will become a
Section l6 Officer of the Company for SEC purposes. In addition to the
responsibility and accountability provisions that entails, he will have certain
additional restrictions placed upon his stock trading that apply to all Section
16 Officers of the Company. The Company's Compliance Officer, currently Rick
Fabiano, can review those restrictions.
(b) Obligations. During the Employment Term, Executive
will perform his duties faithfully and to the best of his ability and will
devote his full business efforts and time to the Company. For the duration of
the Employment Term, Executive agrees not to actively engage in any other
employment, occupation or consulting activity for any direct or indirect
remuneration without the prior approval of the Board.
(c) Further Obligations. It is expected that
approximately 50% of the Executive's time during the first 3 (three) months in
this role will necessarily be spent in the Santa Clara office to become familiar
with all of the appropriate job responsibilities and processes, as well as take
part in necessary meetings. Subsequently, expectation are that approximately 33%
of the Executive's time will regularly be spent in the Santa Clara office to
fulfill this position's responsibilities. All travel related expenses relating
to this obligation will be covered in full by NETGEAR.
2. At-Will Employment. The parties agree that Executive's
employment with the Company will be "at-will" employment and may be terminated
at any time with or without cause or notice. Executive understands and agrees
that neither his job performance nor promotions, commendations, bonuses or the
like from the Company give rise to or in any way serve as the basis for
modification, amendment, or extension, by implication or otherwise, of his
employment with the Company.
3. Compensation.
(a) Base Salary. During the Employment Term, the Company
will pay Executive as compensation for his services a base salary at the
annualized rate of ONE HUNDRED AND FIFTY THOUSAND DOLLARS ($150,000.00) (the
"BASE SALARY"). The Base Salary will be paid periodically in
accordance with the Company's normal payroll practices and be subject to the
usual, required withholding. Executive's salary will be reviewed by the Company
from time to time (but no more frequently than annually), and may be subject to
adjustment based upon various factors including, but not limited to, Executive's
performance and the Company's profitability. Any adjustment to Executive's
salary shall be in the sole discretion of the Company.
(b) Base Incentive Compensation. Executive will be
eligible to receive an annual Base Incentive Compensation of up to ONE HUNDRED
THOUSAND DOLLARS ($100,000.00) per year based on 100 percent achievement in
accordance with the Company's Sales Compensation Plan. The Base Incentive
Compensation will be paid periodically in accordance with the Company's normal
payroll practices and be subject to the usual, required withholding.
(c) Stock Option. Following Executive's written
acceptance of these terms and subject to the approval of the Board, Executive
will be granted an option, subject to the Board's approval, to purchase an
additional 15,000 (Fifteen Thousand) post split of the fully diluted post
February 2002 private placement outstanding shares of the Company's common stock
under the Company's stock option plan as approved by the Board (the "OPTION").
The vesting of the Option will be as follows: the option will vest over a four
year period with 25% of the shares vesting on the first anniversary of the date
you commence your new position with the Company, and 1/48th of the shares
vesting monthly for three years thereafter. The Option will be subject to the
terms, definitions and provisions of the Company's Stock Plan (the "OPTION
PLAN") and the stock option agreement by and between Executive and the Company
(the "OPTION AGREEMENT"), both of which documents are incorporated herein by
reference.
4. Employee Benefits. During the Employment Term, Executive will
be entitled to participate in the employee benefit plans currently and hereafter
maintained by the Company of general applicability to other senior executives of
the Company, including, without limitation, the Company's group medical, dental,
vision, and disability plans. The Company reserves the right to cancel or change
the benefit plans and programs it offers to its employees at any time.
5. Expenses. The Company will reimburse Executive for reasonable
travel, entertainment or other expenses incurred by Executive in the furtherance
of or in connection with the performance of Executive's duties hereunder, in
accordance with the Company's expense reimbursement policy as in effect from
time to time.
6. Severance.
(a) Involuntary Termination. If Executive's employment
with the Company terminates other than voluntarily or for "Cause" (as defined in
Paragraph 9 of this Agreement), and Executive signs and does not revoke a
standard release of claims with the Company, then, Executive shall be entitled
to receive severance payments at Executive's final base salary rate plus base
incentive compensation, less applicable withholding, until twenty-six (26) weeks
after the date of termination without Cause. Severance payments will be made in
accordance with the Company's normal payroll procedures. During the period in
which Executive is receiving severance payments, Company will reimburse
Executive and his family for COBRA premiums, assuming Executive remains eligible
during the entire Severance Period. In addition, if Executive's employment
terminates other than voluntarily or for "Cause" (as defined herein), Executive
will be entitled to continue to have stock options vest during the one year
period immediately following the date of such termination.
(b) Condition Precedent to Severance Benefits: As a
condition of receiving severance benefits including, but not limited to,
severance payments, continued stock vesting, acceleration of stock vesting or
other benefits described in paragraphs 6(a) and 8(a), you will be required to
sign a full release of all claims against the Company (except for any claims for
workers' compensation benefits or claims for indemnity based upon acts or
omissions committed by ou in good faith during the course and scope of your
employment with the Company) and an agreement not to compete against the Company
for a period of twenty-six weeks, and not to solicit Company employees to seek
employment outside the Company for a period of one year after your employment
with the Company terminates.
7. Voluntary Termination; Termination for Cause. If Executive's
employment with the Company terminates voluntarily by Executive or for Cause by
the Company, then all vesting of the Option and all other options granted to
Executive will terminate immediately and all payments of compensation by the
Company to Executive hereunder and all obligations with respect thereto
(including, without limitations, with respect to base salary, bonuses, employee
benefits, relocation and temporary living reimbursements and other expense
reimbursements) will terminate immediately (except as to amounts already
earned).
8. Change of Control/Good Reason.
(a) If within one year following any Change of Control
(as defined below) Executive's employment is terminated without Cause or
voluntarily by Executive for Good Reason, Executive will receive two years
acceleration of any unvested portion of the Option.
(b) For purposes of this Agreement, a "CHANGE OF CONTROL"
of the Company shall be deemed to have occurred if at any time after the
Effective Date:
(i) any "person" (as such term is used to
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT")), other than a trustee or other fiduciary holding securities of
the Company under an employee benefit plan of the Company and other than Nortel
Networks Corporation and its affiliates, becomes the "beneficial owner" (as
defined in Rule 13d-3 promulgated under the Exchange Act), directly or
indirectly, of securities of the Company representing 50% or more of (A) the
outstanding shares of common stock of the company or (B) the combined voting
power of the Company's then-outstanding securities entitled to vote generally in
the election of directors; or
(ii) the Company (A) is party to a merger,
consolidation or exchange of securities which results in the holders of voting
securities of the Company outstanding immediately prior thereto failing to
continue to hold at least 50% of the combined voting power of the voting
securities of the Company, the surviving entity or a parent of the surviving
entity outstanding immediately after such merger, consolidation or exchange, or
(B) sells or disposes of all or substantially all of the Company's assets (or
any transaction having similar effect is consummated), or (C) the individuals
constituting the Board immediately prior to such merger,
consolidation, exchange, sale or disposition shall cease to constitute at least
50% of the Board, unless the election of each director who was not a director
prior to such merger, consolidation, exchange, sale or disposition was approved
by a vote of at least two-thirds of the directors then in office who were
directors prior to such merger, consolidation, exchange, sale or disposition.
(c) For purposes of this Agreement, "GOOD REASON" means
any of the following conditions, which condition(s) remain(s) in effect 10 days
after written notice to the Board from you of such condition(s):
(i) a material decrease in your target annual
compensation; or
(ii) a material, adverse change in your
authority, responsibilities or duties, as measured against your authority,
responsibilities or duties immediately prior to such change.
(iii) notwithstanding the foregoing, for the
purposes of this Agreement in no event will you have Good Reason to resign due
merely to a change of title or a change in your reporting caused by a change of
control or discontinuance or modification of any duties and responsibilities
solely related to the operation of a public company.
9. Definition of Cause. For purposes of this Agreement, "CAUSE"
is defined as (i) an act of dishonesty made by Executive in connection with
Executive's responsibilities as an employee, (ii) Executive's conviction of, or
plea of nolo contendere to, a felony, (iii) Executive's gross misconduct, or
(iv) Executive's continued violation of his employment duties after Executive
has received a written demand for performance from the Company which
specifically sets forth the factual basis for the Company's belief that
Executive has not substantially performed his duties.
10. Confidential Information. Executive agrees to enter into the
Company's standard Confidential Information and Invention Assignment Agreement
(the "CONFIDENTIAL INFORMATION AGREEMENT") upon commencing employment hereunder,
and to abide by its terms during and after his employment with the Company.
11. Non-Solicitation. Until the date one (1) year after the
termination of Executive's employment with the Company for any reason, Executive
agrees and acknowledges that Executive's right to receive the severance payments
set forth in Section 6 (to the extent Executive is otherwise entitled to such
payments) shall be conditioned upon Executive not either directly or indirectly
soliciting, inducing, attempting to hire, recruiting, encouraging, taking away,
hiring any employee of the Company or causing an employee to leave his or her
employment either for Executive or for any other entity or person.
12. Assignment. This Agreement will be binding upon and inure to
the benefit of (a) the heirs, executors and legal representatives of Executive
upon Executive's death and (b) any successor of the Company. Any such successor
of the Company will be deemed substituted for the company under the terms of
this Agreement for all purposes. For this purpose, "successor" means any person,
firm, corporation or other business entity which at any time, whether by
purchase, merger or otherwise, directly or indirectly acquires all or
substantially all of the assets or business of
the Company. None of the rights of Executive to receive any form of compensation
payable pursuant to this Agreement may be assigned or transferred except by will
or the laws of descent and distribution. Any other attempted assignment,
transfer, conveyance or other disposition of Executive's right to compensation
or other benefits will be null and void.
13. Notices. All notices, requests, demands and other
communications called for hereunder shall be in writing and shall be deemed
given (i) on the date of delivery if delivered personally, (ii) one (1) day
after being sent by a well established commercial overnight service, or (iii)
four (4) days after being mailed by registered or certified mail, return receipt
requested, prepaid and addressed to the parties or their successors at the
following addresses, or at such other addresses as the parties may later
designate in writing:
If to the Company:
NETGEAR, Inc.
4500 Great America Parkway
Santa Clara, CA 95054
Attn: Chief Executive Officer
If to Executive:
at the last residential address known by the Company.
14. Severability. In the event that any provision hereof becomes
or is declared by a court of competent jurisdiction to be illegal, unenforceable
or void, this Agreement will continue in full force and effect without said
provision.
15. Co-Employment. Executive acknowledges and agrees that for the
purposes of the provision of human resource services including employee
relations, payroll and the provision of certain employee benefits that the
Company will be in a co-employment relationship with TriNet Employer Group, Inc.
("TRINET"), and to that extent Executive will be in an employment relationship
with the Company and TriNet. Nothing about this paragraph creates any new rights
in your favor, nor any new obligations on the part of either TriNet or the
Company not already contained in, nor otherwise modifies the terms and
conditions of, the Service agreement between the company and TriNet.
16. Arbitration.
(a) General. In consideration of Executive's service to
the Company, its promise to arbitrate all employment related disputes and
Executive's receipt of the compensation, pay raises and other benefits paid to
Executive by the Company, at present and in the future, Executive agrees that
any and all controversies, claims, or disputes with anyone (including the
Company and any employee, officer, director, shareholder or benefit plan of the
Company in their capacity as such or otherwise) arising out of, relating to, or
resulting from Executive's service to the Company under the Agreement or
otherwise or the termination of Executive's service with the Company, including
any breach of this Agreement, shall be subject to binding arbitration under the
Arbitration Rules set
Employment Opportunity Commission or the workers' compensation board. This
Agreement does, however, preclude Executive from pursuing court action regarding
any such claim.
(f) Voluntary Nature of Agreement. Executive acknowledges
and agrees that Executive is executing this Agreement voluntarily and without
any duress or undue influence by the Company or anyone else. Executive further
acknowledges and agrees that Executive has carefully read this Agreement and
that Executive has asked any questions needed for Executive to understand the
terms, consequences and binding effect of this Agreement and fully understand
it, including that Executive is waiving Executive's right to a jury trial.
Finally, Executive agrees that Executive has been provided an opportunity to
seek the advice of an attorney of Executive's choice before signing this
Agreement.
17. Integration. This Agreement, together with the Relocation
Plan, the Option Plan, Option Agreement and the Confidential Information
Agreement represents the entire agreement and understanding between the parties
as to the subject matter herein and supersedes all prior or contemporaneous
agreements whether written or oral. No waiver, alteration., or modification of
any of the provisions of this Agreement will be binding unless in writing and
signed by duly authorized representatives of the parties hereto.
18. Tax Withholding. All payments made pursuant to this Agreement
will be subject to withholding of applicable taxes.
19. Governing Laws. This Agreement will be governed by the laws of
the State of California.
20. Acknowledgment. Executive acknowledges that he has had the
opportunity to discuss this matter with and obtain advice from his private
attorney, has had sufficient time to, and has carefully read and fully
understands all the provisions of this Agreement, and is knowingly and
voluntarily entering into this Agreement.
IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case
of the Company by their duly authorized officers, as of the day and year first
above written.
COMPANY:
NETGEAR, INC.
By: /s/ Ray P. Robidoux Date: 11/3/2003
-----------------------
Title: President
EXECUTIVE
/s/ Michael Werdann
- --------------------------- Date: 11/3/2003
MICHAEL WERDANN