Sample Business Contracts

Employment Agreement - NetZero Inc. and Charles Hilliard

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                              EMPLOYMENT AGREEMENT

                  This Employment Agreement (the "Agreement") is made and
entered into effective as of the 17th day of April, 1999, by and between
NetZero, Inc., a California corporation (the "Company"), with principal
corporate offices at 31416 Agoura Road #150, Westlake Village, CA 91362, and
Charles Hilliard, whose address is ___________________, California ________

1.       EMPLOYMENT.

         1.1      The Company hereby agrees to employ Employee, and Employee
                  hereby accepts such employment, on the terms and conditions
                  set forth herein, commencing April 17, 1999 (the "Effective
                  Date"), and continuing through April 17, 2003 (the "Term"),
                  unless such employment is terminated earlier as provided in
                  Section 4 below.


         2.1      Employee shall serve as the Senior Vice President, Finance and
                  Chief Financial Officer of the Company. In this capacity,
                  Employee shall perform such customary, appropriate and
                  reasonable executive duties as are usually performed by a
                  Chief Financial Officer, including such duties as are
                  delegated to him from time to time by the Board of Directors
                  of the Company (the "Board"). Employee shall report directly
                  to the Company's Chief Executive Officer.

         2.2      Employee agrees to devote Employee's full time, attention,
                  skill and efforts to the performance of his duties for the
                  Company during the Term.


         3.1      BASE SALARY. During the Term, the Company shall pay to
                  Employee a base salary of One Hundred Forty Thousand Dollars
                  ($140,000) per fiscal year (the "Base Salary"), payable at
                  the rate of Eleven Thousand Six Hundred Sixty-Six and 67/100
                  Dollars ($11,666.67) per month, with payments to be made in
                  accordance with the Company's standard payment policy and
                  subject to such withholding as may be required by law.

         3.2      BONUS. During the Term, the Employee shall also be eligible to
                  receive an annual cash bonus of up to 50% of Employee's base
                  salary for each fiscal year (the "Annual Bonus"), less
                  withholding required by law, based on performance criteria
                  established by the Board. Employee shall not be eligible to
                  receive any unpaid Annual Bonus if his employment hereunder is
                  terminated pursuant to either Section 4.1, or if Employee
                  voluntarily resigns.


         3.3      VACATION. Employee shall be entitled to four (4) weeks paid
                  vacation in accordance with the Company's standard vacation

         3.4      OTHER BENEFITS. Employee shall be eligible to participate, as
                  of the date of Employee's employment, in all group life,
                  health, medical, dental or disability insurance or other
                  employee, health and welfare benefits made available generally
                  to other executives of the Company. If Employee elects to
                  participate in any of such plans, Employee's portion of the
                  premium(s) will be deducted from Employee's paycheck.

         3.5      BUSINESS EXPENSES. The Company shall promptly reimburse
                  Employee for all reasonable and necessary business expenses
                  incurred by Employee in connection with the business of the
                  Company and the performance of his duties under this
                  Agreement, subject to Employee providing the Company with
                  reasonable documentation thereof.

         3.6      OPTION GRANT. Employee shall be granted an immediately
                  exercisable, non-qualified stock option (the "Option") under
                  the Company's 1999 Stock Option/Stock Incentive Plan (the
                  "Plan"), for 800,000 shares of the Company's Common Stock, at
                  an exercise price of $0.50 per share. Employee shall acquire a
                  vested interest in twenty-five percent of the Option shares
                  upon the first-year anniversary of the commencement of
                  Employee's employment with the Company and in the remaining
                  seventy-five percent of the Option shares in thirty-six (36)
                  equal monthly installments, beginning one month following such
                  first-year anniversary. The Option shall also be subject to
                  accelerated vesting as set forth below.

         3.7      LOAN. The Company will lend Employee up to such amount as is
                  necessary to exercise the Option in full. The loan (a) will
                  bear interest at the minimum interest rate required to avoid
                  imputation of interest under applicable IRS guidelines, (b)
                  will become due and payable five (5) years from the date the
                  loan is made and Employee shall use the proceeds received by
                  him from the sale of the Option shares to repay the loan, (c)
                  will be secured by the underlying Option shares, and (d) will
                  be recourse with respect to the personal assets of Employee
                  with respect to at least 50% of the principal amount of the

         3.8      PARTICIPATION IN FINANCING. The Company will allow Employee to
                  purchase up to 150,000 shares of the Company's Preferred Stock
                  in the Company's next round of financing, if and when such
                  stock is issued, at the same price per share paid by other
                  purchasers participating in such financing.


         4.1      TERMINATION FOR CAUSE.



                  (a)               Termination "for cause" is defined as
                                    follows: the Company terminates Employee's
                                    employment with the Company (1) if Employee
                                    is convicted of a felony or commits an act
                                    of moral turpitude, in either case which
                                    adversely impacts the Company, (2) if
                                    Employee materially breaches the Company's
                                    Confidentiality and Proprietary Agreement,
                                    or (3) if Employee fails, after receipt of
                                    detailed written notice and after receiving
                                    a period of at least thirty (30) days
                                    following such notice to cure such failure,
                                    to use his reasonable good faith efforts to
                                    follow the direction of the Company's Board
                                    of Directors and to perform his obligations

                  (b)      The Company may terminate this Agreement for any of
                           the reasons stated in Section 4.1(a) by giving
                           written notice to Employee without prejudice to any
                           other remedy to which the Company may be entitled.
                           The notice of termination shall specify the grounds
                           for termination. If Employee's employment hereunder
                           is terminated "for cause" pursuant to this Section
                           4.1, Employee shall be entitled to receive hereunder
                           his accrued but unpaid Base Salary and vacation pay
                           through the date of termination, and reimbursement
                           for any expenses as set forth in Section 3.5, through
                           the date of termination, but shall not be entitled to
                           receive any unpaid portion of the Annual Bonus or any
                           other amount.

         4.2      TERMINATION WITHOUT CAUSE. If Employee's employment is
                  terminated without "cause" as defined in Section 4.1(a), or if
                  Employee is Involuntarily Terminated (as defined below), the
                  Company (or its successor, as the case may be) shall pay to
                  Employee (i) any accrued but unpaid Base Salary and vacation
                  through the date of termination, (ii) reimbursement for any
                  expenses as set forth in Section 3.5, through the date of
                  termination, (iii) Employee's Annual Bonus, prorated through
                  the date of termination, and (iv) a severance payment in an
                  amount equal to Two Hundred Eighty Thousand Dollars
                  ($280,000.00), payable in one lump sum, subject to withholding
                  as may be required by law. In addition, if Employee's
                  employment is terminated without cause (other than if Employee
                  is Involuntarily Terminated) or if Employee's employment is
                  terminated due to death or permanent disability, Employee will
                  be credited with an additional twelve (12) months of service
                  toward vesting in the Option shares in addition to the service
                  he has accrued toward vesting through the date of termination.
                  If Employee is Involuntarily Terminated, vesting of the Option
                  shares will be accelerated in full; provided, however,
                  Employee will only vest in 75% of the Option shares if the
                  Corporate Transaction takes place in the first nine months
                  following the date of commencement of Employee's employment.

                  As used in this Section 4.2, Employee shall be deemed
                  "Involuntarily Terminated" if (i) the Company or any successor
                  to the Company terminates



                  Employee's employment without cause in connection with or
                  following a Corporate Transaction (as defined in the
                  Company's stock option plan); or (ii) in connection with or
                  following a Corporate Transaction there is (a) a decrease
                  in Employee's title or responsibilities (it being deemed to
                  be a decrease in title and/or responsibilities if Employee
                  is not offered the position of Senior Vice President and
                  Chief Financial Officer of the Company or its successor as
                  well as the acquiring and ultimate parent entity, if any,
                  following the Corporate Transaction), (b) a decrease in pay
                  and/or benefits from those provided by the Company
                  immediately prior to the Corporate Transaction or (c) a
                  requirement that Employee re-locate out of the greater Los
                  Angeles metropolitan area.

5.                ASSIGNMENT. Neither the Company nor Employee may assign this
                  Agreement or any rights or obligations hereunder. This
                  Agreement will be binding upon the Company and its successors
                  and assigns. In the event of a Corporate Transaction, the
                  Company shall cause this Agreement to be assumed by the
                  Company's successor as well as any acquiring or ultimate
                  parent entity, if any, following any Corporate Transaction.


         6.1      This Agreement supersedes any and all other agreements, either
                  oral or in writing, between the parties hereto with respect to
                  the employment of Employee by the Company, other than the
                  Confidentiality and Proprietary Agreement, and constitutes the
                  entire agreement between the Company and the Employee with
                  respect to its subject matter.

         6.2      This Agreement may not be amended, supplemented, modified or
                  extended, except by written agreement which expressly refers
                  to this Agreement, which is signed by each of the parties
                  hereto and which is authorized by the Company's Board of

         6.3      This Agreement is made in and shall be governed by the laws of
                  California, without giving effect to its conflicts-of-law

         6.4      In the event that any provision of this Agreement is
                  determined to be illegal, invalid or void for any reason, the
                  remaining provisions hereof shall continue in full force and

         6.5      Employee represents and warrants to the Company that there is
                  no restriction or limitation, by reason of any agreement or
                  otherwise, upon Employee's right or ability to enter into this
                  Agreement and fulfill his obligations under this Agreement.

         6.6      All notices and other communications required or permitted
                  hereunder shall be in writing and shall be mailed by
                  first-class mail, postage prepaid, registered or certified, or
                  delivered either by hand, by messenger or by overnight courier



                  service, and addressed to the receiving party at the
                  respective address set forth in the heading of this Agreement,
                  or at such other address as such party shall have furnished to
                  the other party in accordance with this Section 6.6 prior to
                  the giving of such notice or other communication.

                  IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the first date written above.

                             NETZERO, INC.

                             By:   /s/ MARK GOLDSTON
                                   Mark Goldston, Chief Executive Officer

                             /s/ CHARLES HILLIARD
                             Charles Hilliard