EXHIBIT 10.18
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is entered into as of May 28, 2002, (the
"Effective Date") by and between EXTENDED SYSTEMS, INCORPORATED., a Delaware
corporation (hereinafter referred to as the "Employer"), and Xxxxxxxx Xxxxxx
hereinafter referred to as the "Employee").
W I T N E S S E T H:
The Employer, Venus Acquisition Corporation, a Delaware corporation and
wholly-owned subsidiary of Employer (the "Merger Sub"), , ViaFone,Inc. a
Delaware corporation (the "Company"), and certain other parties have entered
into an Agreement and Plan of Merger and Reorganization (the "Reorganization
Agreement"), dated May 28, 2002, whereby the Merger Sub will merge with and into
the Company on the closing date of the transactions contemplated by the
Reorganization Agreement (the "Closing Date"). Immediately following the Closing
Date, Employer wishes to employ the Employee, and the Employee agrees to accept
such employment, on the terms and conditions set forth herein.
NOW THEREFORE, based on the foregoing premises and for and in consideration
of the mutual promises contained herein, the Employer and Employee agree as
follows:
1. Employment. From and after the Closing Date, Employer agrees to employ
the Employee and Employee agrees to accept such employment as a Vice President
of Products of Extended Systems, Incorporated (the "Employer"). Employee and
Employer acknowledge and agree that such employment will be in accordance with
Employer's standard employment policies, and Employee agrees to be bound by such
employment policies, which shall be in addition to the terms and conditions
contained herein. Employee further acknowledges that Employer policy manual or
other similar documents are to be explanations of benefits or programs, and they
do not change the terms of this Employment Agreement.
2. At-Will Employment. The parties agree that Employee's employment with
the Employer will be "at-will" employment and may be terminated at any time with
or without cause or notice. Employee understands and agrees that neither his/her
job performance nor promotions, commendations, bonuses or the like from the
Employer give rise to or in any way serve as the basis for modification,
amendment, or extension, by implication or otherwise, of his/her employment with
the Employer.
3. Duties of Employee. Employee agrees to perform the duties commensurate
with employee's position and experience and as shall be assigned to employee
from time to time by the Employer. Employee shall perform such duties in a
diligent and loyal manner, shall devote his/her entire business time, attention,
and efforts to the affairs of Employer within the scope of his/her employment as
is reasonably necessary for the proper rendition of such services and shall
diligently promote the interest of Employer. Employee shall not intentionally
take any action against the best interest of Employer, or of Employer's parent,
any other subsidiary, or affiliate of Employer. Employee 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 Employer.
4. Scope of Employment. The general scope of Employee's employment shall be
to serve as a Vice President of Products for Employer and to perform such duties
as described in Exhibit "A" (to be mutually agreed upon prior to the Closing
Date), attached hereto, and such other duties as may be mutually agreed upon by
the parties in accordance therewith as Employer may reasonably request.
5. Compensation.
(a) Base Salary. While employed hereunder, the Employer will pay Employee
as compensation for his services a base salary at the monthly rate of $15,000
(the "Base Salary"). The Base Salary will be paid periodically in accordance
with the Employer's normal payroll practices and be subject to the usual,
required withholding. The employee shall also be entitled to participate in any
generally
applicable executive stock and cash compensation bonus plans, when put in place
by the CEO and compensation committee of the company.
(b) Stock Option. As soon as practicable following the Effective Date,
Employee will be granted a stock option, which will be a non-qualified option,
to purchase 60,000 shares at an exercise price per share equal to the per share
FMV of ESI Stock on the date of grant (the "Option"). The Option will vest as to
25% of the shares on the day this Agreement becomes effective, and as to 1/48th
of the shares subject to the Option monthly thereafter, so that the Option will
be fully vested and exercisable three (3) years from the date of grant, subject
to Employee's continued service to the Employer on the relevant vesting dates.
Employee shall be entitled to a second stock option grant of at least thirty
thousand shares (30,000) at the time of the Employer's annual stock option grant
for FY 03, no later than December 2003. The Option will vest as to 25% of the
shares on the day the option is granted, and as to 1/48th of the shares subject
to the Option monthly thereafter, so that the Option will be fully vested and
exercisable three (3) years from the date of grant, subject to Employee's
continued service to the Employer on the relevant vesting dates. The Option will
be subject to the terms, definitions and provisions of the Employer's Stock Plan
and the stock option agreement by and between Employee and the Employer, both of
which documents are incorporated herein by reference; provided, that Employee
shall have until the first anniversary of his termination date to exercise any
options which are vested or deemed vested as of such date. In addition, the
Employee shall not be deemed to be an "officer" for purposes of Section 16 of
the Securities Exchange Act of 1934 unless he meets the criteria set forth in
the definition of officer pursuant to Rule 16a-1(f) thereof and the related
interpretations of the Securities and Exchange Commission with respect thereto,
in the reasonable opinion of Employer's counsel, which shall include Employer's
in-house counsel.
(c) Employee Benefits. While employed hereunder, Employee will be entitled
to participate in the employee benefit plans currently and hereafter maintained
by the Employer of general applicability to other employees of the Employer,
including, without limitation, the Employer's group medical, dental, vision,
disability, and life insurance plans. The Employer reserves the right to cancel
or change the benefit plans and programs it offers to its employees at any time.
6. Vacation. Employee shall receive, as of the date of this Agreement, of
accrued vacation to be taken in accordance with Employer's time-off policy. For
purposes of vacation accrual only, Employee shall be treated as though he has 38
months of service as of the date of this Agreement. Employee shall accrue
vacation in accordance with Employer's time-off policy. Vacation is subject to
the requirements of Employer's time-off policy. In the event Employee is
terminated for any reason, Employee shall be paid his/her accrued vacation.
7. Notice of Termination. Each party agrees to provide the other with 14
days notice of termination, provided, however, this shall not alter any other
term of this Agreement.
8. Severance Pay. In the event Employee is involuntarily terminated by the
Employer without cause, Employee shall be entitled to six (6) months of pay, at
Employee's current base salary, to be paid periodically in accordance with
Employer's normal payroll practices and subject to the usual and required
withholding, plus a lump sum equal to the cost of current COBRA benefits for six
(6) months, and payout of accrued vacation, to be paid at or as soon as
practicable following such termination. In order to receive such salary and lump
sum payment, Employee must execute and not revoke the employer's then current
"Release of All Employment Claims," (Participation in all stock option plans,
stock purchase plans, and other company personnel benefits shall cease on the
Employee's date of termination, subject to the specific provisions of option
agreements or plans that may extend Employee's rights beyond date of
termination. Should employee violate any of the provisions of this agreement,
engage in any criminal activity, or engage in any activity which employer deems
to be detrimental to its business, employer may terminate this agreement for
cause and employee will not be entitled to a severance package. In the event of
a Change of Control, as defined below, the six (6) month base salary termination
and COBRA payment shall be increased to twelve (12) months. Employee is
responsible for any tax consequences triggered by severance payment or a Change
in Control.
For purposes of this Section 8, a "Change of Control" will include: (a) the
acquisition of the Employer by another entity by means of any transaction or
series of related transactions (including, without limitation, any stock
acquisition, reorganization, merger or consolidation) other than a transaction
or series of transactions in which the holders of the voting securities of the
Employer outstanding immediately prior to such transaction continue to retain
(either by such voting securities remaining outstanding or by such voting
securities being converted into voting securities of the surviving entity), as a
result of shares in the Employer held by such holders prior to such
transactions, at least fifty percent (50%) of the total voting power represented
by the voting securities of the Employer or such surviving entity outstanding
securities immediately after such transaction or series of transactions; or (b)
a sale, lease or other conveyance of all or substantially all of the assets of
the Employer
If Employee's employment with the Employer is terminated by the Employee ,
then (i) all vesting of the Option will terminate immediately and all payments
of compensation by the Employer to Employee hereunder will terminate immediately
(except as to amounts already earned), and (ii) Employee will only be eligible
for severance benefits in accordance with the Employer's established policies as
then in effect.
Effective the date the Employee's employment with the Employer is
terminated by either the Employer or the Employee, the Employee shall have a
period of one (1) year following such termination date to fully exercise any
remaining vested shares that resulted from option grants during the duration of
the employment. Employee understands that this provision of employment makes all
option grants non-qualified options.
9. Covenant to Amend Restricted Stock Purchase Agreement. Between the
Effective Date and the Closing Date, Employee agrees to amend that certain
Restricted Stock Purchase Agreement by and between Employee and the Company,
dated as of September 14, 1999, as amended February 25, 2000 (the "Purchase
Agreement"), to provide that, as of the effective date of the merger of the
Merger Sub with and into the Company, one hundred percent (100%) of the shares
subject to the Company's Repurchase Option (as defined therein) shall be
released from the Repurchase Option. The Employer's obligations pursuant to this
Employment Agreement shall be conditioned upon Employee's compliance with the
covenant contained in this Section 9.
10. Confidential Information. Employee agrees to sign the Nondisclosure
Agreement.
11. Return of Property. On termination of his/her employment with Employer,
Employee will immediately surrender to Employer, in good condition, all sales
manuals, price lists, customer account lists, copies of invoices, mailing lists,
letters, notes, memoranda, design specifications, drawings, minutes of meetings,
financial reports, computer software programs, source codes, works in progress
and any other similar items that have been supplied to Employee by Employer, or
generated by Employee for the Employer's use or business and that are in
Employee's possession, custody, or control wherever located, including all
reproductions or copies of such materials.
12. Equitable Relief. In the event of a breach of any covenant contained in
this Agreement, the non-breaching party shall be entitled to an injunction
restraining such breach in addition to any other remedies provided by law or in
equity.
13. Assignment of Inventions.
(a) Inventions Retained and Licensed. The Employee has attached to this
Employment Agreement, as Exhibit "B," a list describing all inventions, original
works of authorship, developments, improvements, and trade secrets that were
made by him/her prior to his/her employment with the Employer, that relate to
the Employer's proposed business, products or research and development, and that
are not assigned to the Employer under this Employment Agreement (collectively,
"Prior Inventions"). If no such list is attached, the Employee represents that
there are no Prior Inventions. If in the course of the Employee's employment
with the Employer, he/she incorporates into an Employer product, process or
machine a Prior Invention owned by him/her or in which he/she have an interest,
the
Employer is granted a nonexclusive, royalty-free, irrevocable, perpetual,
worldwide license to make, have made, modify, use and sell the Prior Invention
as part of or in connection with the Employer's product, process or machine.
(b) Assignment of Inventions. The Employee will promptly make a full
written disclosure to the Employer, will hold in trust for the sole right and
benefit of the Employer, and hereby assigns to the Employer, or its designee,
all his/her right, title, and interest in and to any and all inventions,
original works of authorship, developments, concepts, improvements, designs,
discoveries, ideas, trademarks or trade secrets, whether or not patentable or
registrable under copyright or similar laws, that he/she may solely or jointly
conceive or develop or reduce to practice, or cause to be conceived or developed
or reduced to practice, during the period of time the Employee is in the employ
of the Employer (collectively referred to as "Inventions"). The Employee further
acknowledges that all original works of authorship that are made by him/her
(solely or jointly with others) within the scope of and during the period of
his/her employment with the Employer and that are protectable by copyright are
"works made for hire," as that term is defined in the United States Copyright
Act. The decision whether or not to commercialize or market any Invention
developed by the Employee solely or jointly with others is within the Employer's
sole discretion and for the Employer's sole benefit. Neither the Employer nor
any other entity will pay the Employee a royalty as a result of the Employer's
efforts to commercialize or market any such Invention. The Employee will not
incorporate any original work of authorship, development, concept, improvement,
or trade secret owned, in whole or in part, by any third party, into any
Invention without the Employer's prior written permission signed by the
President of the Employer.
(c) Inventions Assigned to the United States. The Employee agrees to assign
to the United States government all his/her right, title, and interest in and to
any and all Inventions whenever such full title is required to be in the United
States by a contract between the Employer and the United States or any of its
agencies.
(d) Maintenance of Records. The Employee will keep and maintain adequate
and current written records of all Inventions made by him/her (solely or jointly
with others) during the term of his/her employment with the Employer. The
records will be in the form of notes, sketches, drawings, laboratory notebooks,
and any other format that may be specified by the Employer. At all times, the
records will (a) be available to Employer, and (b) remain the sole property of
the Employer.
(e) Patent and Copyright Registrations. The Employee will assist the
Employer, or its designee, at the Employer's expense, in every proper way to
secure and protect the Employer's rights in the Inventions and any related
copyrights, patents, mask work rights or other intellectual property rights in
any and all countries. The Employee will disclose to the Employer all pertinent
information and data. The Employee will execute all applications,
specifications, oaths, assignments and all other instruments that the Employer
deems necessary in order to apply for and obtain such rights and in order to
assign and convey to the Employer, its successors, assigns, and nominees the
sole and exclusive rights, title and interest in and to such Inventions, and any
related copyrights, patents, mask work rights or other intellectual property
rights. The Employee's obligation to execute or cause to be executed, when it is
in his/her power to do so, any such instrument or papers will continue after the
termination of this Employment Agreement. If the Employer is unable because of
the Employee's mental or physical incapacity or for any other reason to secure
the Employee's signature to apply for or to pursue any application for any
United States or foreign patents or copyright registrations covering Inventions
or original works of authorship assigned to the Employer as above, then the
Employee hereby irrevocably designates and appoints the Employer and its duly
authorized officers and agents as his/her agent and attorney-in-fact.
Accordingly, the Employer may act for and in the Employee's behalf to execute
and file any applications and to do all other lawfully permitted acts to further
the prosecution and issuance of letters patent or copyright registrations with
the same legal force and effect as if executed by the Employee.
14. Conflicting Employment. During the term of the Employee's employment
with the Employer, he/she will not engage in any other employment, occupation,
consulting or other business activity directly related to the business that the
Employer is now involved or becomes involved during the
term of the Employee's employment. The Employee will also not engage in any
other activities that conflict with his/her obligations to the Employer.
15. Survival. The provisions of paragraphs 8, 9, 10, 11 and 12 hereof shall
survive the termination of the Agreement.
16. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity and enforceability of the other provisions hereof. If any
provision of this Agreement is unenforceable for any reason whatsoever, such
provision shall be appropriately limited and given effect to the extent that it
may be enforceable.
17. Governing Law. All rights and obligations of the parties arising out of
this Agreement will be construed and enforced in accordance with the laws of the
state of Idaho, without reference to its rules as to conflicts of laws.
18. Prevailing Party's Fees. If the parties hereto become parties to any
litigation, commenced by or against one another involving the enforcement of any
rights or remedies under this Agreement, or arising on account of a default of
the other party in its performance of such party's obligations hereunder, the
prevailing party in such litigation shall be entitled to reimbursement of all of
its legal fees, costs, and expenses incurred in connection with such litigation,
and interest accrued thereon from the date of judgment, at the maximum rate
permitted by law.
19. Assignment. This Agreement may not be assigned or otherwise transferred
by Employer without the prior written consent of Employee, which consent shall
not be unreasonably withheld. No such consent shall be required for a transfer
of value of all or substantially all of Employer's assets, whether such transfer
is effected by asset sale, merger, stock sale or otherwise. Any attempted
assignment in violation of the provisions of this section will be void. Subject
to the foregoing, this Agreement shall be binding on and inure to the benefit of
the parties and their respective successors and assigns.
20. 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 Employer:
Extended Systems, Inc.
0000 X. Xxxxxx Xxx
Xxxxx, XX 00000
Attn: Xxxxxx Xxxxxx
If to Employee: At the last residential address known by the Employer.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.
EMPLOYER: EXTENDED SYSTEMS, INCORPORATED
By /s/ Xxxxxx X. Xxxxxxx
--------------------------------------------
Xxxxxx X. Xxxxxxx, President/CEO
EMPLOYEE:
/s/ Xxxxxxxx Xxxxxx
----------------------------------------------
Print Name
EXHIBIT A
DUTIES OF EMPLOYEE
As a Vice President of Products of ESI, the employee will:
- Drive the overall product roadmap that derives from the company's strategy and
objectives communicated by the CEO and Functional Management Team
- Manage a team of product managers that will define and prioritize features and
drive the roadmap for all the mobility product lines of the company including
XTNDConnect Server, XTNDConnect Mobile Objects and OneBridge
- Help the gathering of product requirements based on various sources including
customers, partners, competitors and internal users
- Provide support to other functional areas for sales and business
development opportunities
- Work closely with the R&D organization during the making of the product
- Co-drive product packaging, offering and pricing matters along with the
Marketing organization
The above job description is a general description of duties and
responsibilities. Further refinement of responsibilities and definition of goals
and objectives will be mutually agreed upon by Employee and Employer.
EXHIBIT B
INVENTIONS
