EXHIBIT 10.22
EMPLOYMENT AGREEMENT (U.S.)
THIS EMPLOYMENT AGREEMENT ("Agreement") by and between Lineo, Inc., a
Delaware corporation (the "Company"), and Xxxxx Xxxxxx ("Employee") is dated and
entered into as of this 16th day of May 2000.
RECITALS
A. The Company desires to employ and ensure itself of the continued
services of Employee.
B. Employee is willing to render services to the Company in accordance
with and subject to the terms and conditions of this Agreement.
ACCORDINGLY, the parties hereby agree as follows:
AGREEMENT
1. EMPLOYMENT. The Company will employ Employee and Employee, upon
accepting such employment, agrees to perform and discharge his duties hereunder
diligently, faithfully, and in accordance with the highest professional
standards. Employee's initial assignment shall be as President and Chief
Executive Officer and he will perform such duties as are customarily associated
with such position. Employee will have the authority as may be granted from time
to time by the President of the Company. Employee may be reassigned or required
to perform such other duties of a similar nature as the Company in its sole
discretion may request.
2. DEVOTION OF TIME AND ENERGY. Employee will devote his entire working
time, ability, effort, and attention to the affairs of the Company and will
skillfully serve its interests during the term of this Agreement; provided,
however, that the foregoing shall not prevent Employee from serving as a member
of the board of directors of a corporation if the Company determines that such
membership is not adverse to the interests of the Company.
3. DUTY OF LOYALTY. During Employee's engagement with the Company,
Employee will bring to the Company any bona fide corporate opportunity of which
Employee becomes aware that relates to the Company's current or potential
business.
4. COMPENSATION. During the term of this Agreement, the Company agrees to
pay or cause to be paid to Employee, and Employee agrees to accept in exchange
for the services rendered hereunder by him, the following compensation:
4.1 BASE SALARY. Employee's compensation shall consist of an annual
base salary of one hundred fifty thousand ($150,000.00) before all customary
payroll deductions. Such annual base salary shall be paid in substantially
equal installments and at the same intervals as other employees of the
Company are paid. The Company shall determine increases, if any, in the
amount of the annual base salary in future years.
4.2 BENEFITS. The Company also agrees to provide Employee with
benefits pursuant to Company policy and practice for its employees and their
dependents, including participation in the Company's group health, life, and
disability insurance plans. Details about these benefits will be provided to
Employee.
4.3 BONUS. The Company may, but has no obligation to, also award
Employee discretionary compensation or bonuses ("Additional Compensation"). The
amount of any Additional Compensation, if any, and the criteria for determining
the amount of the Additional Compensation, if any, shall be at the sole
discretion of the Company.
5. TERM. The period of employment under this agreement shall be deemed to
have commenced as of the ____ day of May 2000, and shall continue for a period
of 24 full calendar months thereafter, unless or until it ceases or is
terminated sooner as provided in Section 6 ("Termination"); provided, however,
that the employment hereunder may be renewed one or more times upon agreement
between the Company and Employee, on such terms and conditions as agreed between
them.
6. TERMINATION. Employment of Employee pursuant to this Agreement may be
terminated as follows, but in any case, the provisions of Sections 7, 8, and 9
hereof shall survive the termination of this Agreement and the termination of
Employee's employment hereunder:
6.1 UPON NOTICE. Either party may terminate the employment of
Employee at any time during the term of employment upon mailing or delivering
written notice not less than two weeks prior to the date when termination
is to become effective; provided, however, that during such period, the Company
will not be obligated to provide any work for Employee, or to assign to or vest
in Employee any powers, duties, or functions, and may in its discretion suspend
Employee on full salary and other contractual benefits. During such period, the
Company may also require Employee:
6.1.1 not to enter any premises of the Company or any subsidiary,
division, or affiliated company; and
6.1.2 to abstain from contacting any customers, clients,
employees, or suppliers of the Company or any subsidiary, division,
or affiliated company.
Employee shall not be employed by or provide services to any third party during
the period for which he is suspended with compensation pursuant to this clause.
6.2 AUTOMATIC TERMINATION. This Agreement and Employee's employment
hereunder shall terminate automatically upon the death or total disability of
Employee. The term "total disability" as used herein shall mean Employee's
inability to perform, even with reasonable accommodation, substantially all of
the duties required of him as set forth in Section 1 hereof as a result of
physical or mental illness, loss of legal capacity, or any other cause beyond
Employee's control, and such inability shall continue for a period or periods
aggregating 120 calendar days in any 12-month period. Termination hereunder
shall be deemed to be effective (a) at the end of the calendar month in which
Employee's death occurs or (b) immediately upon a determination by the Company
of Employee's total disability, as defined herein.
6.3 FOR CAUSE. Either party may terminate this agreement for cause.
Cause shall include any material breach of the terms of this Agreement by either
party. Actions by Employee that may constitute cause include, but are not
limited to, actions taken in conflict with the Company's best interests or that
may tend to damage the Company's business or reputation, violations of any
material Company policy or practice, the failure or refusal to carry out the
lawful duties of Employee as described in Section 1 herein (for reasons other
than "total disability"), or actions in violation of Employee's fiduciary duties
to the Company.
6.4 SEVERANCE. In the event that Employee is terminated pursuant to
Section 6.1 herein, the Company will continue Employee's salary (minus all
deductions required by law) for twelve
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(12) months from the date of termination; provided, however, that Employee
will not be entitled to any such compensation for any period during which he
is receiving comparable compensation from a third party.
7. CONFIDENTIALITY.
7.1 CONFIDENTIAL INFORMATION. Employee recognizes that the Company
now possesses or will possess information of a confidential or secret nature
that has commercial value in the business in which the Company is engaged
(hereinafter referred to as "Confidential Information"). Confidential
Information for this purpose is information that Employee obtains during and in
the course of his employment, including, but not limited to, trade secrets,
processes, formulas, computer programs, data, know-how, inventions,
improvements, techniques, marketing plans, product plans, strategies, forecasts,
and customer lists. Employee understands that his employment with the Company
creates a relationship of trust and confidence between him and the Company with
respect to the Confidential Information that he may learn or develop during the
period of his employment with the Company.
7.2 OBLIGATION NOT TO DISCLOSE. At all times, both during and after
the termination of Employee's employment with the Company, Employee agrees to
keep in strict confidence all Confidential Information and not to use or
disclose any Confidential Information or anything relating to it in whole or in
part, nor permit others to use or disclose it in any way, without the prior
written consent of the Company, except as may be necessary in the ordinary
course of performing Employee's duties under this Agreement.
7.3 THIRD PARTY INFORMATION. Employee recognizes that the Company has
received and in the future will receive from third parties their confidential or
proprietary information subject to a duty on the Company's part to maintain
confidentiality of such information and to use it only for limited purposes.
Employee agrees to hold all such confidential or proprietary information in the
strictest confidence and not to disclose it to any person, firm, or corporation,
or to use it except as necessary in carrying out his work for the Company in a
manner consistent with the Company's agreement with the third party.
7.4 RETURN OF MATERIALS. Upon termination of employment with the
Company, or at any other time at the Company's request, Employee agrees to
promptly deliver to the Company all drawings, blueprints, manuals, letters,
notes, notebooks, reports, sketches, formulas, computer programs or files,
memoranda, customer lists, and all other materials, and all copies thereof,
relating in any way to the Company's business and in any way obtained by
Employee during the period of employment with the Company, that are in
Employee's possession or control. Employee further agrees not to make or retain
any copies of any of the foregoing and will so represent to the Company upon
termination of employment.
7.5 REVERSE ENGINEERING. Employee agrees that Employee will not
engage, nor cause any other person, firm, corporation or other entity to engage,
in the reproduction of Confidential Information through the techniques of
"reverse engineering," as described in Xxxxx 00, Xxxxxx Xxxxxx Code, Section
906, as such statute may be amended from time to time.
8. COVENANT NOT TO COMPETE/NONSOLICITATION.
8.1 COVENANT. Employee agrees not to directly or indirectly compete
(as defined in Section 8.2, below) with the Company in the noncompetition area
(as defined in Section 8.3, below) during the term of employment with the
Company and for a period of twelve (12) months from the date of termination of
employment for any reason. This twelve-month period will be tolled during the
period of any breach of the covenants herein.
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8.2 DIRECT AND INDIRECT COMPETITION. Employee agrees that the phrase
"directly or indirectly compete" shall include:
8.2.1 owning, managing, operating, or controlling, or
participating in the ownership, management, operation, or control of,
or being connected with or having any interest in, as a stockholder,
director, officer, employee, agent, consultant, assistant, advisor,
sole proprietor, partner, or otherwise, any business (other than the
Company's) that is involved in the development, marketing, and/or sale
of Linux-based embedded software components and applications
(including, but not limited to, traditional embedded devices, handheld
devices, personal digital assistants, thin clients, and thin servers),
provided, however, that this prohibition shall not apply to the
ownership of less than five percent (5%) of the voting stock in
companies whose stock is traded on a national securities exchange or
in the over-the-counter market;
8.2.2 soliciting, causing to be solicited, contracting with, or
otherwise engaging in business with any person or business entity,
whom or which at the time is a current client of the Company, and whom
or which is known to Employee and with whom or which Employee has
dealt, directly or indirectly, in the 12 months prior to the
termination of employment, for the purpose of the development,
marketing, and/or sale of Linux-based embedded software components or
applications;
8.2.3 soliciting, persuading, inducing, or otherwise causing
employees of the Company to leave the Company's employ; or
8.2.4 while an employee of the Company, soliciting or engaging in
any employment or other activity that is the same or similar to any
business in which the Company is now, or has plans to become, engaged.
8.3 NONCOMPETITION AREA. Employee agrees that the phrase
"noncompetition area" means any national market in which the Company, during
employment and as of the date of termination of employment hereunder, (a) has
developed, marketed, or sold Linux-based embedded software components or
applications, or (b) has made material commitments to do so; provided, however,
that the "noncompetition area" shall not include any such national market in
which the Company, as of the date of commencement of any directly or indirectly
competitive action(s), has ceased such activities or withdrawn such commitments.
9. INVENTIONS.
9.1 DISCLOSURE OF INVENTIONS. If Employee conceives, learns, makes,
or first reduces to practice either alone or jointly with others, any
inventions, improvements, original works or authorship, formulas, processes,
computer programs, techniques, know-how, or data (hereinafter referred to as
"Inventions") relating to the business and/or technology of the Company while
employed by the Company, Employee will promptly disclose such Inventions to the
Company or to any person designated by it.
9.2 MAINTENANCE OF RECORDS. Employee agrees to keep, maintain, and
ensure proper and secure storage of adequate and current written records of all
Inventions made by Employee (alone or jointly with others) during the term
employment. The records may be in the form of notes, sketches, drawings, flow
charts, electronic data or recordings, laboratory notebooks, or any other
format. The records will be available to and remain the sole property of the
Company at all times. Employee agrees not to remove such records from the
Company's place of business except as expressly permitted by
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Company policy, which may, from time to time, be revised at the sole election of
the Company for the purpose of furthering the Company's business.
9.3 OWNERSHIP, ASSIGNMENT, ASSISTANCE, AND POWER OF ATTORNEY. All
Inventions that are related to or useful in the Company's business or in the
research and development of the Company's business and that result from work
performed by Employee for the Company during the period of employment shall be
the sole and exclusive property of the Company, and the Company shall have the
right to use and to apply for patents, copyrights, or other statutory or common
law protections for such Inventions in any country. Employee hereby assigns to
the Company any rights that he has acquired or may acquire in such Inventions.
Furthermore, Employee will assist the Company in every proper way at the
Company's expense to obtain patents, copyrights, and other statutory or common
law protections for such Inventions in any country and to enforce such rights
from time to time. Specifically, Employee will execute all documents as the
Company may use in applying for, obtaining, or enforcing such patents,
copyrights, and other statutory or common law protections, together with any
assignments thereof to the Company or to any person designated by the Company.
Employee's obligations under this paragraph shall continue beyond the
termination of employment with the Company in regards to Inventions resulting
from work performed by Employee for the Company during employment with the
Company. The Company shall compensate Employee at a reasonable rate after such
termination for time spent at the Company's request in rendering such
assistance. In the event the Company is unable for any reason whatsoever to
secure Employee's signature to any lawful document required to apply for or to
enforce any patent, copyright, or other statutory or common law protections for
such Inventions, Employee hereby irrevocably and severally designates and
appoints the Company and its duly authorized officers and agents as his agents
and attorneys-in-fact to act in his stead to execute such documents. Employee
agrees that such documents or such acts shall have the same legal force and
effect as if he executed such documents or he did such acts.
9.4 WORKS MADE FOR HIRE. Employee acknowledges that all original
works of authorship that are made by Employee (solely or jointly with others)
within the scope of his employment and that are protectable by copyright are
"works made for hire," as that term is defined in the United States Copyright
Act (17 U.S.C. Section 101). To the extent that any original works of authorship
created by Employee for the Company and in furtherance of his employment by the
Company would be deemed not to be "works made for hire" unless specially ordered
or commissioned, Employee and the Company hereby mutually agree that such works
are specially ordered or commissioned. To the extent that such works are not
deemed to be "works made for hire" as that term is defined in the Copyright Act
because, for example, Employee is deemed to be an independent contractor and/or
such works do not fall within the category of works that are commissionable as
"works made for hire," Employee hereby assigns to the Company, as author, all of
Employee's right, title, and interest in the Copyright to such works.
9.5 NOTICE OF EMPLOYEE RIGHT TO INVENTIONS. This Agreement does not
apply to an invention if no equipment, supplies, facilities, or trade secret
information of the Company was used, and the invention was developed entirely on
Employee's own time, unless (a) the invention relates (i) directly to the
business of the Company, or (ii) to the Company's actual or demonstrably
anticipated research or development, or (b) results from any work that Employee
has performed for the Company.
9.6 EXCLUSION OF PRIOR INVENTIONS. Employee has identified on Exhibit
A attached hereto a complete list of all Inventions that he has conceived,
learned, made, or first reduced to practice, either alone or jointly with
others, prior to employment with the Company and that Employee desires to
exclude from the operation of this Agreement. If no Inventions are listed on
this Exhibit A, Employee represents that he has made no such Inventions at the
time of signing this Agreement.
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10. NOTIFICATION TO OTHER PARTIES. In the event that Employee leaves the
employ of the Company, he hereby consents to notification by the Company to
Employee's new employer or parties with whom Employee has a consulting
relationship about Employee's rights and obligations under Sections 7, 8, and 9
of this Agreement.
11. CONFLICTS.
11.1 PRIOR AGREEMENTS OR DUTIES. Employee represents that, to the best
of his knowledge, his performance of all the terms of this Agreement and his
work as an employee of the Company does not breach any oral or written agreement
that Employee has made, or violate a duty, to keep in confidence proprietary or
trade secret information acquired by him prior to employment with the Company.
Attached as Exhibit B to this Agreement are copies of any such written
agreements and descriptions of any such oral agreements.
11.2 MATERIALS OR CONFIDENTIAL INFORMATION OF PRIOR EMPLOYERS.
Employee represents that he has not used, nor will he use, in the performance of
his duties for the Company, any materials or documents, or confidential or trade
secret information, of a former employer that are not generally available to the
public, unless Employee has first obtained written authorization from the former
employer allowing their possession and/or use and has delivered a copy of such
written authorization to the Company before using such materials or documents,
or confidential or trade secret information, in connection with the performance
of Employee's duties for the Company.
11.3 OTHER AGREEMENTS. While employed by the Company, Employee will
not enter into any oral or written agreement that conflicts with his obligations
under this Agreement or with the performance of his work as an employee of the
Company.
12. REMEDIES.
12.1 INJUNCTIVE RELIEF. Employee acknowledges that any violation by
him of this Agreement may cause the Company irreparable injury that may not be
adequately compensated by money damages. Therefore, Employee agrees that the
Company will be entitled, in addition to any remedies it may have under this
Agreement or at law, to injunctive and other equitable relief to prevent or
curtail any breach of this Agreement by Employee. Employee consents to venue and
jurisdiction in the State of Utah in any action brought by the Company to obtain
such relief, and agrees that no bond will be required.
12.2 SEVERABILITY. If any provision (or subpart) of this Agreement
shall be held invalid, illegal, or unenforceable in any jurisdiction, for any
reason, including, without limitation, the duration of such provision, its
geographical scope, or the extent of the activities prohibited or required by
it, then, to the full extent permitted by law (a) all other provisions (or
subparts) hereof shall remain in full force and effect in such jurisdiction and
shall be liberally construed in order to carry out the intent of the parties
hereto as nearly as may be possible, (b) such invalidity, illegality or
unenforceability shall not affect the validity, legality or enforceability of
any other provision hereof, and (c) any court or arbitrator having jurisdiction
thereover shall have the power to reform such provision to the extent necessary
for such provision to be enforceable under applicable law.
12.3 SURVIVAL OF REMEDIES. Employee agrees that his covenants and
agreements made in and the requirements imposed on him by Sections 7, 8, and 9
and this Section 12 will be construed as an agreement independent of any of the
provisions of this Agreement as set forth in the respective provisions. The
existence of any claim or cause of action of Employee against the Company or any
of its affiliates, irrespective of whether predicated on the terms of this
Agreement, will not constitute a defense
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to the enforcement of the covenants and agreements of Employee contained in
Sections 7, 8, or 9 or the requirements imposed on him by this Section 12.
12.4 ATTORNEYS' FEES. If any breach of or default under this Agreement
results in litigation, the substantially prevailing party shall be entitled to
costs, expenses, and reasonable attorneys' fees.
12.5 ARMS' LENGTH AGREEMENT. The provisions of this Agreement have
been negotiated by both parties at arms' length. Employee acknowledges that he
has carefully read and reviewed the provisions of this final Agreement,
including the provisions contained in Sections 7, 8, and 9 and this Section 12,
has had an opportunity to discuss the meaning and effect of these provisions
with counsel, and agrees that they are reasonable.
12.6 ARBITRATION. Subject to the provisions of Section 12.1 hereof,
any controversies or claims arising out of or relating to this Agreement shall
be fully and finally settled by arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association then in effect (the
"AAA RULES"), conducted by one arbitrator either mutually agreed upon by
Employer and Employee or chosen in accordance with the AAA Rules, except that
the parties thereto shall have any right to discovery as would be permitted by
the Federal Rules of Civil Procedure for a period of 90 days following the
commencement of such arbitration and the arbitrator thereof shall resolve any
dispute which arises in connection with such discovery. The prevailing party
shall be entitled to costs, expenses and reasonable attorneys' fees, and
judgment upon the award rendered by the arbitrator may be entered in any court
having jurisdiction thereof.
13. GENERAL PROVISIONS.
13.1 GOVERNING LAW. This Agreement shall in all respects, including
all matters of construction, validity, and performance, be governed by, and
construed and enforced in accordance with, the laws of the State of Utah.
13.2 ASSIGNMENT. This Agreement is personal to Employee and shall not
be assignable by Employee. The Company may assign its rights hereunder to (a)
any corporation resulting from any merger, consolidation, or other
reorganization to which the Company is a party or (b) any corporation,
partnership, association, or other person to which the Company may transfer all
or substantially all of the assets and business of the Company existing at such
time. All of the terms and provisions of this Agreement shall be binding upon
and shall inure to the benefit of and be enforceable by the parties hereto and
their respective successors and permitted assigns.
13.3 WAIVERS. No delay or failure by any party hereto in exercising,
protecting, or enforcing any of its rights, titles, interests, or remedies
hereunder, and no course of dealing or performance with respect thereto, shall
constitute a waiver thereof. The express waiver by a party hereto of any right,
title, interest, or remedy in a particular instance or circumstance shall not
constitute a waiver thereof in any other instance or circumstance. All rights
and remedies shall be cumulative and not exclusive of any other rights or
remedies.
13.4 AMENDMENTS IN WRITING. No amendment, modification, or waiver of
this Agreement will be binding or effective unless agreed by both parties. It
may not be changed orally but only by an Agreement in writing signed by the
party against whom enforcement of any waiver, change, modification, extension,
or discharge is sought. The course of dealing between the parties will not be
deemed to affect, modify, amend, or discharge any provision or term of this
Agreement.
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13.5 ENTIRE AGREEMENT. This Agreement on and as of the date hereof
constitutes the entire agreement between the Company and Employee with respect
to the subject matter hereof and all prior or contemporaneous oral or written
communications, understandings or agreements between the Company and Employee
with respect to such subject matter are hereby superseded and nullified in their
entireties.
13.6 HEADINGS. All headings used herein are for convenience only and
shall not in any way affect the construction of, or be taken into consideration
in interpreting, this Agreement.
13.7 NOTICE. All notices permitted or required hereunder shall be in
writing and shall be delivered in person, sent by email, sent by electronic
facsimile (fax), or mailed by certified or registered mail, postage prepaid and
return receipt requested, and addressed as set forth immediately following the
signature blocks in this Agreement. Either party may change the address of
notice by giving proper notice to the other party according to the terms of this
section. If notice is given in person, email, or by fax, it shall be effective
upon confirmed receipt; and if notice is given by mail, it shall be effective
three business days after deposit in the mail.
IN WITNESS WHEREOF, the parties have executed and entered into this
Agreement on the date set forth above.
LINEO, INC. EMPLOYEE
By /s/ Xxxxxxx X. Xxxxxx /s/ Xxxxx Xxxxxx
--------------------------------- -----------------------------------
Type Name: Xxxxxxx X. Xxxxxx Type Name: Xxxxx Xxxxxx
Title: General Counsel
Address: 000 Xxxxx 000 Xxxx Address: 000 Xxxxx 000 Xxxx
Xxxxxx, Xxxx 00000 Xxxxxx, Xxxx 00000
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