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EXHIBIT
10.17
EMPLOYMENT
AGREEMENT
This Employment Agreement
(this “Agreement”), by and between Saba Software, Inc.,
a Delaware corporation (the “Company”), and Michael
Martini (“Executive”), is effective as of July 9,
2007 (the “Effective Date”).
RECITALS
A. The Company desires to
employ Executive and Executive desires to accept such employment on
the terms and conditions set forth in this Agreement.
AGREEMENT
NOW, THEREFORE, based on the
foregoing recitals and in consideration of the commitments set
forth below, Executive and the Company agree as follows:
1. Term, Position, Duties
and Responsibilities
1.1. Term . The
Company hereby employs Executive to render services to the Company,
reporting directly to the Chief Executive Officer of the Company,
for the period commencing on the Effective Date and ending on the
date Executive’s employment is terminated under this
Agreement (the “Term”). Commencing on July 12,
2007, Executive shall serve in the position of Chief Financial
Officer of the Company. The Company and Executive hereby
acknowledge that either of them may terminate Executive’s
term of Employment for any reason or no reason at al1.
1.2. Position .
The duties of this position shall include such duties and
responsibilities as are reasonably assigned to Executive by the
Chief Executive Officer, including but not limited to those
customarily perform by chief financial officers of similarly
situated corporations. Executive agrees to serve in a similar
capacity for the benefit of any of the Company’s direct or
indirect, wholly-owned or partially-owned subsidiaries or
affiliates. Additional1y, Executive shall serve in such other
capacity or capacities as the Chief Executive Officer may from time
to time prescribe. During his employment by the Company,
Executive” shall, subject to Section 1.3, devote his
full energies, interest, abilities and productive time to the
proper and efficient performance of his duties under this
Agreement.
1.3. Other
Activities . Except upon the prior written consent of the
Chief Executive Officer of the Company, Executive will not
(i) accept any other employment, or (ii) engage, directly
or indirectly, in any other business activity (whether or not
pursued for pecuniary advantage) that is or may be in conflict
with, or that might place Executive in a conflicting position to
that of, the Company. Notwithstanding the foregoing, Executive
shall be permitted to engage in occasional professional or
charitable activities outside the scope of his employment with the
Company so long as such activities (A) do not conflict with
the actual or proposed business of the Company or any of its
subsidiaries or affiliates, and (B) do not affect the
performance of his duties hereunder. In addition, subject to the
prior written consent of the Chief Executive Officer and the Board
of Directors of the Company and subject to Executive’s
fiduciary duties to the Company, Executive shall be permitted to
serve as a director of other corporations provided that their
businesses are not competitive with the actual or proposed business
of the Company or any of its subsidiaries or affiliates and
provided further that Executive’s service as a director of
such other corporations does not interfere with his performance of
his duties hereunder. Any such prior written consent may be
subsequently revoked in the event that the Board of Directors
determines, in good faith, that Executive’s position as a
director of any such other corporation has developed into a
conflict of interest.
1.4. Proprietary
Information . Executive recognizes that his employment with
the Company will involve contact with information of substantial
value to the Company, which is not generally known in the trade,
and which gives the Company an advantage over its competitors who
do not know or use it. Executive is executing and delivering to the
Company, concurrently with the execution and delivery to the
Company of this Agreement, a copy of the Company’s standard
form of Employee Proprietary Information and Inventions Agreement
(the “Employee Proprietary Information and Inventions
Agreement”).
2 Compensation of
Executive
2.1. Base
Salary . In consideration of the services to be rendered
under this Agreement, while employed by the Company, Company shall
pay Executive an initial base annual salary of two hundred sixty
thousand dollars ($260,000), less standard deductions and
withholdings, payable in regular periodic payments in accordance
with Company payroll policy. Such salary shall be prorated for any
partial month of employment on the basis of a 30-day fiscal month.
Such base salary shall be subject to usual review by the Board of
Directors in consultation with the Chief Executive
Office.
2.2. Bonus .
Executive will be eligible to receive bonuses totaling one hundred
forty thousand dollars ($140,000) annually (such annual amount, the
“Target Bonus”), the exact amount of each such bonus to
be determined by the Board of Directors in consultation with the
Chief Executive Officer based upon Executive achieving certain
performance criteria and the Company achieving specific financial
goals, in each case to be determined by the Board of Directors in
consultation with the Chief Executive Officer. Any such bonus shall
be payable quarterly after the end of each fiscal quarter, and
shall be prorated for partial fiscal quarters. In addition,
Executive shall be eligible for such additional bonuses as may be
awarded by the Board of Directors in its sole discretion from time
to time in consultation with the Chief Executive
Officer.
2.3. Stock
Options . Subject to approval by the Board of Directors,
Executive will be granted a stock option to purchase 275,000 shares
of the Company’s Common Stock at the market price in effect
the date Board of Directors approves the grant pursuant to the
Company’s standard form of Stock Option Agreement to be
entered into by and between Executive and the Company (the
“Stock Op on Agreement”). Twenty-five percent
(25%) of the shares subject to the stock option will vest on
the one (1) year anniversary of the Effective Date and the
remaining seventy-five percent of the shares subject to the stock
option will vest in 12 equal quarterly installments with the first
installment vesting one quarter after the first anniversary of the
Effective Date of this employment agreement.
2.4. Benefits .
Executive shall be entitled to participate in the Company’s
group medical, dental, life insurance, 401(k), deferred
compensation or other benefit plans and programs on the same terms
and conditions as other members of the Company’s senior
executive management. Executive shall be provided such perquisites
of employment, including paid vacation, and all paid holidays and
sick leave as are provided to all other members of the
Company’s senior executive management. Executive shall be
entitled to reimbursement of all reasonable expenses incurred by
Executive in the performance of his duties hereunder, in accordance
with the policies and procedures established by the Company from
time to time, and as may be amended from time to time.
3 . Employment At
Will
Company or Executive may
terminate Executive’s employment with Company at any time for
any reason, including no reason at all, notwithstanding anything to
the contrary contained in or arising from any statements, policies,
or practices of Company relating to the employment, discipline, or
termination of its employees. This at-will employment relationship
cannot be changed except in writing signed by a duly authorized
officer of the Company other than Executive. This Section 3
shall survive any termination or expiration of this
Agreement.
4 . Termination of
Employment
4.1. Termination of
Executive . Executive may terminate his employment upon
notice to the Company. In the event that Executive elects to
terminate his employment other than for Good Reason (as defined
below), the Company shall pay Executive all base salary due and
owing and all other accrued but unpaid benefits (e.g., accrued
vacation) through the last day actually worked and thereafter the
Company’s obligations under this Agreement shall
terminate.
4.2. Termination by the
Company for Cause . In the event that the Company
terminates Executive’s employment for Cause, the Company
shall pay Executive all base salary due and owing and all other
accrued but unpaid benefits (e.g., accrued vacation) through the
last day actually worked and thereafter the Company’s
obligations under this Agreement shall terminate. For the purposes
of this Agreement, termination shall be for “Cause” if
(i) Executive refuses or fails to act in accordance with any
lawful order or instruction of the Chief Executive Officer, and
such refusal or failure to act has not been cured within 30 days of
notice of such disobedience, (ii) Executive fails
to
devote reasonable attention and time
during normal business hours to the business affairs of the Company
or Executive is reasonably determined by the Board of Directors to
have been unfit (other than as a result of an Incapacity),
unavailable for service (other than as a result of an Incapacity)
or grossly negligent in connection with the performance of his
duties on behalf of the Company, which unfitness, unavailability or
gross negligence has not been cured within 3 days of notice of the
same; (iii) Executive is reasonably determined by the Board of
Directors to have committed a material act of dishonesty or willful
misconduct or to have acted in bad faith to the material detriment
of the Company in connection with the performance of his duties on
behalf of the Company; (iv) Executive is convicted of a felony
or other crime involving dishonesty, breach of trust, moral
turpitude or physical harm to any person, or (v) Executive
materially breaches any agreement with the Company which breach has
not been cured within 30 days notice of the same. For purposes of
this Agreement, the term “without Cause” shall mean
termination of Executive’s employment for reasons other than
for “Cause.”
4.3. Termination by the
Company without Cause or Termination by Executive for Good
Reason . In the event that the Company terminates
Executive’s employment without Cause or Executive terminates
his employment for Good Reason, the Company shall pay Executive all
base salary due and owing and all other accrued but unpaid benefits
(e.g., accrued vacation) through the last day actually work and
Executive shall be entitled to receive the severance payments and
benefits set forth below in this Section 4.3; provided,
however, that such severance and benefits are conditioned on
Executive’s execution and non-revocation of a release
agreement, the form of which is attached hereto as Exhibit A
and thereafter the Company’s obligations under this Agreement
shall terminate. For the purposes of this Agreement, termination
shall be for “Good Reason” if (i) there is a material
diminution of Executive’s reporting responsibilities without
Executive’s consent; (ii) there is a reduction by the
Company in Executive’s annual base salary then in effect
without Executive’s consent; or (iii) Executive’s
principal work location is relocated outside of the San Francisco
Bay Area without Executive’s consent. For purposes of the
foregoing, any change in title from Chief Financial Officer to an
executive officer that reports to the Company s Chief Executive
Officer shall not be deemed a material change in Executive’s
reporting responsibilities. Executive agrees that he may be
required to travel from time to time as required by the
Company’s business and that such travel shall not constitute
grounds for Executive to terminate his employment for Good
Reason.
4.3.1. Target Bonus and
Base Salary . On the date of the termination of
Executive’s employment, the Company shall pay to Executive,
or to Executive’s beneficiaries or estate as appropriate, in
a single lump-sum payment, subject to standard deductions and
withholdings, Executive’s Target Bonus, as if the applicable
performance criteria and Company financial goals had been achieved
completely, pro rated based on the number of days actually elapsed
through the date of termination in the year in which such
termination occurs. In addition, the Company shall pay to
Executive, or to Executive’s beneficiaries or estate, as
appropriate, the sum of (i) an amount equal to that number of
months of Executive’s then current base salary equal to the
sum of six (6) months plus one month for every twelve month
period Executive has been employed by the Company prior to the date
of termination (which sum shall not exceed twelve (12) months)
(collectively, the “Severance Months”), and
(ii) an amount equal to the product of (x) the quotient
of the number of Severance Months divided by 12, and (y) the
Target Bonus amount (the “Bonus Severance Amount”),
less all applicable standard deductions and withholdings. Such
amounts payable in the preceding sentence shall be payable either
as a lump-sum or in the form of salary continuation (with amounts
attributable to the Target Bonus pro rated monthly), whichever the
Company shall determine in its sole discretion.
4.3.2. Acceleration of
Vesting of Stock Option . On the date of termination of
Executive’s employment, 100% of the shares subject to any
stock option then held by Executive, including without limitation,
the option described in Section 2.3, shall vest and become
immediately exercisable.
4.3.3. Group Medical
Coverage . The Company shall, following the
Executive’s timely election, provide the Executive with
continued coverage for one year after termination of
Executive’s employment under the Company’s group health
insurance plans in effect upon termination of Executive’s
employment without Cause or for Good Reason in accordance with the
provisions of the Consolidated Omnibus Budget Reconciliation Act of
1985 (“COBRA”), at no cost to Executive. If COBRA or
similar benefits are not available by law during any portion of the
remainder of such one year period, then the Company shall pay
Executive each month during which COBRA or similar benefits are not
available by law an amount equal to the premium paid by Executive
for the last month during which such COBRA or similar benefits were
available.
4.4. Termination for
Incapacity. In the event that Executive suffers an
Incapacity during Executive’s employment, the Company may
elect to terminate Executive’s employment pursuant to this
Section 4.4. In such event, the Company shall pay Executive,
or to Executive’s beneficiaries or estate if applicable, all
base salary due and owing and all other accrued but unpaid benefits
(e.g., accrued vacation) through the date on which an Incapacity is
determined to exist (the “Determination Date ‘), less
applicable standard deductions and withholdings. In addition,
within ten days of such termination of Executive’s
employment, the Company shall pay to Executive, or to
Executive’s beneficiaries or estate if applicable, in a
single lump-sum payment, subject to applicable standard deductions
and withholdings, an amount equal to the Target Bonus, pro rated
based on the number of days through the Determination Date in the
year in which such termination occurs, less amounts of the Target
Bonus previously paid to Executive for the year in which such
termination occurs. In addition, the Company shall pay to
Executive, or to Executive’s beneficiaries or estate, as
appropriate, the sum of (i) an amount equal to that number of
months of Executive’s then current base salary equal to the
Severance Months and, (ii) the Bonus Severance Amount, less
all applicable standard deductions and withholdings and disability
payment otherwise payable by or pursuant to plans provided by the
Company and actually paid to Executive. Such amounts payable in the
preceding sentence shall be payable either as a lump-sum or in the
form of salary continuation (with amounts attributable to the Bonus
Severance Amount prorated monthly), whichever the Company shall
determine in its sole discretion. Thereafter the Company’s
obligations under this Agreement shall terminate; provided,
however, that nothing contained in this Agreement shall limit
Executive’s right to payments or other benefits under any
long-term disability plans of the Company in which Executive
participates, if any. For the purposes of this Agreement, Executive
shall be deemed to have suffered an “Incapacity” if
Executive shall, due to illness or mental or physical incapacity,
be unable to perform the duties and responsibilities required to be
performed by him on behalf of the Company for a period of at least
180 days.
4.5. Termination Upon
Death . In the event that Executive dies during
Executive’s employment, Executive’s employment shall be
deemed to have terminated upon the date of death. In such event,
the Company s shall pay Executive’s estate all base salary
due and owing and all other accrued but unpaid benefits (e.g.,
accrued vacation) through the date of death. In addition, within
ten days of such termination of Executive’s employment, the
Company shall pay to Executive’s estate, in a single 1ump-sum
payment, subject to applicable standard deductions and
withholdings, an amount equal to the Target Bonus, pro rated based
on the number of days actually elapsed during the year in which
such termination occurs, less amounts of the Target Bonus
previously paid to Executive for the year in which
Executive’s death occurs. In addition, the Company shall pay
to Executive’s estate the sum of (i) an amount equal to
that number of months of Executive’s then current base salary
equal to the Severance Months, and (ii) the Bonus Severance
Amount, less all applicable standard deductions and withholdings.
Such amounts payable in the preceding senten
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