Exhibit 10.7
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into as of September
19, 1996 between HealthDesk Corporation, a California corporation (the
"Company"), and Timothy S. Yamauchi.
In consideration of the mutual covenants and conditions set forth
herein, the parties hereby agree as follows:
1. Employment. The Company hereby employs Timothy S. Yamauchi in the
capacity of Chief Financial Officer, Treasurer and Secretary. Timothy S.
Yamauchi accepts such employment and agrees to perform such services as are
customary to such office and as shall from time to time be assigned to him by
the President and Chief Executive Officer and/or The Board of Directors.
2. Term. The initial term shall be for a period of 15 months,
commencing on September 19, 1996 (the "Commencement Date") and shall be
automatically extended for each successive one year term, unless earlier
terminated as provided in Section 5. Timothy S. Yamauchi's employment will be on
a full-time basis requiring the devotion of such amount of his productive time
as is necessary for the efficient operation of the business of the Company.
3. Compensation and Benefits.
3.1 Salary. For the performance of Timothy S. Yamauchi's duties
hereunder, the Company shall pay Timothy S. Yamauchi an annual salary of
$110,000 payable (less required withholdings) no less frequently than twice
monthly.
3.2 Bonus. The Company shall also pay Timothy S. Yamauchi an annual
cash bonus for each employment year. Which bonus shall be payable within 30 days
following the end of the employment period for which it is earned. Commencing in
calendar year, 1997, Timothy S. Yamauchi will be eligible to participate in a
Short Term Incentive Plan. Ninety (90) days prior to the commencement of the
employment year, the Board of Directors and Timothy S. Yamauchi will establish a
mutually acceptable bonus plan, which plan will provide Timothy S. Yamauchi with
appropriate incentives and opportunity to earn bonus amounts comparable to those
available to top executives officers of similar companies and will base the
incentive award on the full year pre-tax earnings of the company and will be
paid by the end of the first quarter of the following year, subsequent to the
completion of the annual audit.
3.3 Benefits. Timothy S. Yamauchi shall be entitled to such medical,
disability and life insurance coverage and such vacation, sick leave and holiday
benefits, if any, as are made available to the Company's executive personnel,
all in accordance with the Company's benefits program in effect from time to
time.
3.4 Reimbursement of Expenses. Timothy S. Yamauchi shall be entitled
to be reimbursed for all reasonable expenses, including but not limited to
expenses for travel, meals and entertainment, incurred by Timothy S. Yamauchi in
connection with and reasonably related to the furtherance of the Company's
business.
3.5 Annual Review. On each successive annual term of the
Commencement Date, the Chief Executive Officer, with the Board of Directors
review and approval, will review Timothy S. Yamauchi's performance and
compensation hereunder (including salary, bonus and stock options and/or other
equity incentives) and will consider whether to increase such compensation, but
will not have authority, as the result of such review to decrease any portion
of such compensation without the written consent of Timothy S. Yamauchi.
4. Change of Control. In the event of a Change of Control of the
Company (as defined below), all options then granted to Timothy S. Yamauchi
which are unvested at the date of the Change of Control will be immediately
vested. In addition, notwithstanding the provisions of Section 5.2(b), in the
event of a termination of Timothy S. Yamauchi's employment hereunder for any
reason following a Change of Control, the Company will promptly pay Timothy S.
Yamauchi, in addition to the amounts required under Section 5.2(a), a lump sum
severance amount, payable immediately upon such termination of employment, equal
to six months of salary, plus at a minimum, a pro-rata portion of the maximum
amount of bonus payable for the employment year during which the termination
occurs and will be paid by the end of the first quarter of the following year,
subsequent to the completion of the annual audit.
As used herein, a "Change of Control" of the Company shall be deemed to
have occurred:
(a) Upon the consummation, in one transaction or a series of
transactions, of the sale or other transfer of voting power (including voting
power exercisable on a contingent or deferred basis as well as immediately
exercisable voting power) representing effective control of the Company to a
person or group of related persons who, on the date of this Agreement, does not
have effective voting control of the Company, whether such sale or transfer
results from a tender offer or otherwise; or
(b) Upon the consummation of a merger or consolidation in which the
Company is a constituent corporation and in which the Company's shareholders
immediately prior thereto will beneficially own, immediately thereafter,
securities of the Company or any surviving or new corporation resulting
therefrom having less than a majority of the voting power of the company or any
such surviving or new corporation; or
(c) Upon the consummation of a sale, lease, exchange or other
transfer or disposition by the "Company of all or substantially all its assets
to any person or group or related persons; or
(d) Upon an election or appointment of one or more directors as the
result of which those persons serving as directors of the Company on the date of
this Agreement (the "Current Directors") and/or their Successors (as defined
below) will not constitute a majority of the Board of Directors of the Company.
As used herein, a "Successor" means a director whose election by the company's
shareholders or whose appointment by the directors then serving the Company has
been approved by a vote of the directors then serving the Company in which at
least two-thirds of those directors who are Original Directors and previously
qualified Successors voted for approval.
5. Termination.
5.1 Termination Events. The employment hereunder will terminate upon
the occurrence of any of the following events:
(a) Timothy S. Yamauchi dies;
(b) the Company, by written notice to Timothy S. Yamauchi or
his personal representative, discharges Timothy S. Yamauchi due to the inability
to perform the duties assigned to him hereunder for a continuous period
exceeding 120 days by reason of injury, physical or mental illness or other
disability, which condition has been certified by a physician; provided,
however, that prior to discharging Timothy S. Yamauchi due to such disability,
the Company shall give a written statement of findings to Timothy S. Yamauchi or
his personal representative setting forth specifically the nature of the
disability and the resulting performance failures, and Timothy S. Yamauchi shall
have a period of ten (10) days thereafter to respond in writing to the Board of
Directors' findings;
(c) Timothy S. Yamauchi is discharged by the Board of
Directors of the Company for cause. As used in this Agreement, the term "cause"
means exclusively Timothy S. Yamauchi's conviction of (or pleading guilty or
nolo contendre to) a felony or any misdemeanor involving dishonesty or moral
turpitude; provided, however, that prior to discharging Timothy S. Yamauchi for
cause, the Company shall give a written statement of findings to Timothy S.
Yamauchi setting forth specifically the grounds on which cause is based, and
Timothy S. Yamauchi shall have a period of ten (10) days thereafter to respond
in writing to the Board of Directors' findings;
(d) Timothy S. Yamauchi is discharged by the Board of
Directors of the Company without cause, which the Company may do at any time,
with at least 30 days advance notice, or if Timothy S. Yamauchi's employment
agreement is not renewed;
(e) Timothy S. Yamauchi voluntarily terminates his employment
due to either (i) a default by the Company in the performance of any of its
obligations hereunder, or (ii) an Adverse Change in Duties (as defined below),
which default or Adverse Change in Duties remains unremedied by the Company for
a period of ten days following its receipt of written notice thereof from
Timothy S. Yamauchi; or
(f) Timothy S. Yamauchi voluntarily terminates his employment
for any reason other than the Company's default or an Adverse Change in Duties,
which Timothy S. Yamauchi may do at any time with at least 30 days advance
notice.
As used herein, "Adverse Change in Duties" means an action or series of
actions taken by the Company, without Timothy S. Yamauchi's prior written
consent, which results in:
(1) A change in Timothy S. Yamauchi's reporting responsibilities,
titles, job responsibilities or offices which, in Timothy S. Yamauchi's
reasonable judgment, results in a diminution of his status, control, or
authority; or
(2) The assignment to Timothy S. Yamauchi of any positions, duties
or responsibilities which, in Timothy S. Yamauchi's reasonable judgment, are
inconsistent with Timothy S. Yamauchi's positions, duties and responsibilities
or status with the Company or which require Timothy S. Yamauchi to travel more
than previously required; or
(3) A requirement by the Company that to Timothy S. Yamauchi be based
or perform his duties anywhere other than (i) at the Company's corporate office
location on the date of this Agreement, or (ii) if the Company's corporate
office location is moved after the date of this Agreement, at a new location
that is no more than 30 miles from such prior location; or
(4) A failure by the Company (i) to continue in effect any benefit,
whether or not qualified, or other compensation, bonus or incentive plan in
effect on the date of this Agreement or subsequently adopted or (ii) to continue
Timothy S. Yamauchi's participation in such benefits or plans at the same level
or to the same extent as on the Commencement Date or, with respect to
subsequently adopted benefits or plans, on the date of initial implementation
thereof, or (iii) to provide for Timothy S. Yamauchi's participation in any
newly adopted benefits or plans at a level or to an extent commensurate, in
Timothy S. Yamauchi's judgment, with that of other executives of the Company.
5.2 Effects of Termination.
(a) Upon termination of Timothy S. Yamauchi's employment hereunder
for any reason, the Company will, within 3 days, pay Timothy S. Yamauchi (i) all
compensation owed to Timothy S. Yamauchi and unpaid through the date of
termination (including, without limitation, salary and employee expenses
reimbursements and accrued P.T.O), plus, at a minimum, a pro rata portion of the
maximum amount of bonus payable for the employment year during which the
termination occurs, based on the percentage of the year during which Timothy S.
Yamauchi was employed before such termination and will be paid by the end of the
first quarter of the following year, subsequent to the completion of the annual
audit.
(b) In addition, if the employment is terminated under Sections 5.1
(a), (b), (d), or (e), the Company shall also pay Timothy S. Yamauchi
immediately upon such termination of employment, a lump sum severance amount
equal to one-half of the then applicable annual salary, plus a pro-rata, portion
of the incentive and will be paid by the end of the first quarter of the
following year, subsequent to the completion of the annual audit.
(c) Upon termination of Timothy S. Yamauchi's employment for any
reason, Timothy S. Yamauchi agrees that for the one (1) year period following
the Termination Event:
(i) Timothy S. Yamauchi will not directly or indirectly
encourage or solicit, or attempt to encourage or solicit, any individual to
leave the Company's employ for any reason or interfere in any other manner with
the employment relationships at the time existing between the Company and its
current or prospective employees;
(ii) Timothy S. Yamauchi will not induce or attempt to induce
any customer, supplier, distributor, licensee or other business relation of the
Company to cease doing business with the Company or in any way interfere with
the existing business relationship between any such customer, supplier,
distributor, licensee or other business relation and the Company.
(iii) Timothy S. Yamauchi will not directly or indirectly,
whether for his own account or as an individual, employee, director, consultant
or advisor, or in any other capacity whatsoever, provide services to any person,
firm corporation or other business enterprise which is involved in the design,
development or marketing of software for the healthcare consumer and/or
providers or manufactures, markets or sells any product or service that directly
or indirectly relates to medical and health related material, specifically
software that enables an end-user to track medical records and health related
activities, learn about health topics and more freely exchange health and
medical information and which is located geographically in an area where the
Company maintains its business activities, unless you obtain the prior written
consent of the Board of Directors.
Timothy S. Yamauchi acknowledges that monetary damages may not be
sufficient to compensate the Company for any economic loss which may be incurred
by reason of breach of the foregoing restrictive covenants. Accordingly, in the
event of any such breach , the Company shall, in addition to any remedies
available to the Company at law, be entitled to obtain equitable relief in the
form of an injunction precluding Timothy S. Yamauchi from continuing to engage
in such breach.
If any restriction set forth in this paragraph is held to be
unreasonable, then Timothy S. Yamauchi and the Company agree, and hereby submit,
to the reduction and limitation of such prohibition to such area or period as
shall be deemed reasonable.
6. General Provisions.
6.1 Assignment. Neither party may assign or delegate any of her rights
or obligations under this Agreement without the prior written consent of the
other party, except laws of succession in item (A).
6.2 Entire Agreement. This Agreement contains the entire agreement
between the parties with respect to the subject matter hereof and supersedes any
and all prior agreements between the parties relating to such subject matter.
6.3 Modifications. This Agreement may be changed or modified only by
an agreement in writing signed by both parties hereto.
6.4 Successors and Assigns. The provisions of this Agreement shall
inure to the benefit of, and be binding upon, the Company and its successors and
assigns and Timothy S. Yamauchi and Timothy S. Yamauchi's legal representatives,
heirs, legatees, distributees, assigns and transferees by operation of law,
whether or not any such person shall have become a party to this Agreement and
have agreed in writing to join and be bound by the terms and conditions hereof.
6.5 Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of California as such laws are applied
to agreements among California residents entered into and performed entirely
within California.
6.6 Severability. If any provision of the Agreement is held by a court
of competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions shall nevertheless continue in full force and effect.
6.7 Further Assurances. The parties will execute such further
instruments and take such further actions as may be reasonably necessary to
carry out the intent of this Agreement.
6.8 Notices. Any notices or other communications required or permitted
hereunder shall be in writing and shall be deemed received by the recipient when
delivered personally or, if mailed, five (5) days after the date of deposit in
the United States mail, certified or registered, postage prepaid and addressed,
in the case of the Company, to 2560 Ninth Street, Suite 220, Berkeley,
California 94710, and in case of Timothy S. Yamauchi, to the address shown for
Timothy S. Yamauchi on the signature page hereof, or to such other address as
either party may later specify by at least ten (10) days advance written notice
delivered to the other party in accordance herewith.
6.9 Indemnification. The company will indemnify Timothy S. Yamauchi
in his capacity as an executive officer, to the maximum amount permitted by law.
6.10 No Waiver. The failure of either party to enforce any provision
of this Agreement shall not be construed as a waiver of that provision, nor
prevent that party thereafter from enforcing that provision of any other
provision of this Agreement.
6.11 Enforcement. If any action at law or in equity or any arbitration
is brought to enforce or interpret the terms of this Agreement or to protect the
rights obtained hereunder, the prevailing party shall be entitled to recover its
reasonable attorneys' fees, costs and other expenses in addition to any other
relief to which it may be entitled.
6.12 Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
6.13 Reimbursement of Counsel Costs. Immediately upon commencement of
employment hereunder, the Company will reimburse Timothy S. Yamauchi for the
reasonable amount of all attorney's fees incurred by Timothy S. Yamauchi in
connection with the negotiation and preparation of this Agreement, up to a
maximum amount of $1,500.
IN WITNESS WHEREOF, the Company and Timothy S. Yamauchi have executed this
Agreement effective as of the day and year first above written.
COMPANY TIMOTHY S. YAMAUCHI
HealthDesk Corporation, _________________________________
a California corporation Timothy S. Yamauchi
By: Address:
Name: 161 Stetson Avenue
Title: Corte Madera, CA 94925
_____________________________
_____________________________
_____________________________