October 31, 2008 Evan Kaplan Re: Employment Offer Letter Agreement Dear Evan,
EXHIBIT
10.28
[IPASS
LETTERHEAD]
October
31, 2008
Xxxx
Xxxxxx
Dear
Xxxx,
iPass
Inc. (the “Company”) is
pleased to offer you the positions of President and Chief Executive Officer of
the Company, reporting to the Company’s Board of Directors (the “Board”). The
following letter agreement (the “Agreement”) provides the terms
of our offer of employment.
I. GENERAL
TERMS OF EMPLOYMENT.
(1) Duties and
Position. You will be employed in the positions of President
and Chief Executive Officer of the Company (“CEO”), reporting to the
Board. You shall perform the duties of President and CEO as commonly
associated with this position in the Company, as specified in the Bylaws of the
Company, and as directed by the Board. The Company will use its
best efforts to have you elected to serve as a director on the
Board. If your employment with the Company terminates for any reason,
you agree to promptly tender your resignation from the Board.
(2) Start Date. Your
first date of employment will be November 3, 2008 (“Start Date”); provided,
however, that you shall not assume the title or role of President and CEO until
the first business day after the Company’s filing with the Securities Exchange
Commission of a Form 10-Q for the quarter ended September 30,
2008. You and the Company agree that your consulting relationship
with the Company pursuant to our consulting agreement dated August 19, 2008 will
terminate effective as of the Start Date by our mutual agreement, without the
necessity for any other notice of termination, and that the remaining unpaid
consulting fee payable to you will be paid in accordance with the terms of the
consulting agreement.
(3) Work Location and Other
Activities. You will work at the Company’s corporate
headquarters which are currently located in Redwood Shores, California, subject
to necessary business travel. You will move to the San Francisco Bay
Area as soon as is feasible. During your employment with the Company, you will
devote your best efforts and substantially all of your business time and
attention (except for vacation periods and reasonable periods of illness or
other incapacity permitted by the Company’s general employment policies) to the
business of the Company; provided, however, that you may serve as a director of
one other corporation, provided that the name of this other corporation is
disclosed in advance to the Board and the Board has determined that your
director position with such other corporation will not present a conflict of
interest with the Company. You may also spend time on
charitable and other such activities, so long as they do not materially impact
your ability to perform your duties under this Agreement.
(4) Company Policies and
Procedures. Your employment relationship with the Company also
shall be governed by the general employment policies and procedures of the
Company (including the Company’s Code of Conduct)(as may be changed from time to
time in the discretion of the Company), and you agree to comply with these
polices and procedures, except that if the terms of this Agreement differ from
or are in conflict with the Company’s general employment policies or procedures,
this Agreement will control.
II. BASE
SALARY AND BONUS.
(1) Base Salary. You
will be paid an initial annual salary of $350,000 per year (or $14,583.33
semi-monthly), less standard deductions and withholdings. Your cash
compensation will next be reviewed by the Board for potential adjustment
beginning in calendar year 2010, and will be reviewed annually thereafter in
conjunction with the annual Board review of executive compensation, and will be
based upon the Board’s assessment of both your performance and the Company’s
performance.
(2) Annual Bonus. You
also will be eligible to earn an annual bonus for each calendar year beginning
with calendar year 2009 during your employment if you achieve the performance
goals established each year as part of the management incentive
plan. The initial annual bonus target amount will be $250,000, less
standard deductions and withholdings, and the performance goals for 2008 will be
based upon short-term objectives. The Board, in consultation with
you, will set the performance goals for each year. The Board will have the sole
discretion to determine whether the goals have been achieved and to determine
the amount of any bonus. The annual bonus will be paid to you on a
quarterly basis for 2009 and 2010 (and thereafter on the same timing as the then
current executive management program), with the final payment made no later than
30 days after the conclusion of the annual audit for the year in which the bonus
was earned. Effective January 1, 2010, your annual bonus target will
be at least $350,000 if your performance meets the expectations of the
Board.
(3) 2008 Guaranteed
Bonus. Notwithstanding the foregoing, if you remain an
employee in good standing through the end of calendar year 2008, the Company
will pay you a guaranteed 2008 annual performance bonus based on the target
amount of $250,000 and prorated based on the Start Date to reflect your mid-year
hire (the “Guaranteed
Bonus”). The Guaranteed Bonus will be paid to you at the time
other members of management are paid their fourth quarter bonus.
III. RELOCATION
AND RELATED BENEFITS.
(1) Monthly Reimbursement of Temporary
Living Expenses. The Company will reimburse your reasonable
temporary living expenses incurred during the first six (6) months after the
Start Date up to a maximum monthly reimbursement amount of $10,000, provided
that these reimbursements will cease earlier if you close on the purchase of a
residence in the San Francisco Bay Area prior to six (6) months after the Start
Date. The Company will consider and implement reasonable measures to
minimize any adverse income tax effect to you of the reimbursements for
temporary living expenses to be provided hereunder upon the advice of its tax
advisors, which may include, for example, direct payment of expenses to third
parties. In addition, to the extent that you are required to
recognize in taxable income any payments under this Section III(1) (the “Taxable Living Expenses”), you
shall be entitled to receive an additional payment from the Company (the “Taxable Living Expenses
Gross-Up”), such that after the payment of all federal and state income
and employment taxes on the Taxable Living Expenses and the Taxable Living
Expenses Gross-Up, you shall retain an amount equal to the Taxable Living
Expenses. For purposes of determining the amount of the Taxable
Living Expenses Gross-Up, you shall be deemed to have (i) paid federal income
taxes at the highest marginal rate of federal income taxation for the calendar
year in which the Taxable Living Expenses Gross-Up is to be made; (ii) paid
federal employment taxes at your actual marginal rate for the calendar year in
which the Taxable Living Expenses Gross-Up is to be made; and (iii) paid
applicable state and local income taxes at the highest rate of taxation for the
calendar year in which the Taxable Living Expenses Gross-Up is to be made, net
of the maximum reduction in federal income taxes which could be obtained from
deduction of such state and local taxes.
(2) Relocation-Related Expenses.
The Company will either (as elected by the Company) pay directly to third
parties or reimburse your reasonable expenses incurred for: (a) the reasonable
and customary costs associated with moving your typical personal and household
goods to the San Francisco Bay Area, including shipment of no more than two (2)
automobiles, furniture, and personal effects, excluding any unusually large or
expensive items such as pianos, work-out equipment, or the like; (b) airfare,
rental car and hotel costs (covering you and your immediate family) for up to
two (2) house
hunting trips to the San Francisco Bay Area; and (c) the reasonable and
customary brokerage fee for the sale of your residence in Seattle, provided that
such residence is sold no later than fifteen (15) months after the Start
Date. In the event you are able to sell your Seattle residence
without incurring a brokerage fee, the Company will pay you an amount equivalent
to the fee that would otherwise have been incurred. The Company will consider
and implement reasonable measures to minimize any adverse income tax effect to
you associated with payment of the brokerage fee hereunder upon the advice of
its tax advisors, which may include, for example, direct payment of such fee to
third parties. In addition, to the extent that you are required to
recognize in taxable income any payments under this Section III(2) (the “Taxable Relocation Expenses”),
you shall be entitled to receive an additional payment from the Company (the
“Taxable Relocation Expenses
Gross-Up”), such that after the payment of all federal and state income
and employment taxes on the Taxable Relocation Expenses and the Taxable
Relocation Expenses Gross-Up, you shall retain an amount equal to the Taxable
Relocation Expenses. For purposes of determining the amount of the
Taxable Relocation Expenses Gross-Up, you shall be deemed to have (i) paid
federal income taxes at the highest marginal rate of federal income taxation for
the calendar year in which the Taxable Relocation Expenses Gross-Up is to be
made; (ii) paid federal employment taxes at your actual marginal rate for the
calendar year in which the Taxable Relocation Expenses Gross-Up is to be made;
and (iii) paid applicable state and local income taxes at the highest rate of
taxation for the calendar year in which the Taxable Relocation Expenses Gross-Up
is to be made, net of the maximum reduction in federal income taxes which could
be obtained from deduction of such state and local taxes.
(3) Additional Relocation-Related
Reimbursements. In addition to the above, the Company will
reimburse you an additional amount of $12,000 to cover other ancillary
reasonable expenses that may be incurred by you related to your relocation to
the San Francisco Bay Area, such as additional temporary living expenses or
expenses related to the sale of your current residence and purchase of a new
residence in the San Francisco Bay Area. No “tax gross-up” shall
apply to this additional amount, regardless of whether or not any such expenses
are taxed as income.
(4) Moving Expenses for Return To
Seattle. In the event that the Company terminates your
employment prior to November 1, 2012 other than for Cause, or if you resign for
Good Reason, and no Corporate Transaction (as defined below) has been closed
prior to your termination date, and you move to the Seattle Metropolitan Area
within six months after such termination, the Company will either (as elected by
the Company) pay directly to third parties or reimburse your reasonable expenses
incurred solely for the reasonable and customary costs associated with moving
your typical personal and household goods back to the Seattle Metropolitan Area,
including shipment of no more than two (2) automobiles, furniture, and personal
effects, excluding any unusually large or expensive items such as pianos,
work-out equipment, or the like. Such payments, if any,
shall be paid no later than your second taxable year following termination of
your employment.
(5) General Terms For Relocation and
Related Benefits. To qualify for reimbursement or payment
under this Agreement, all expenses incurred by you or costs must be fully
documented (including receipts) on a properly completed expense reimbursement
report and otherwise comply with the Company’s standard expense reimbursement
policy and practice. Other than with respect to expenses incurred
prior to the Start Date and moving expenses incurred for your return to Seattle
provided under Section III(4), you must remain an employee in good standing of
the Company as of the date that the cost or expenses is incurred.
IV. EQUITY
AWARDS.
(1) Stock Option
Grant. Subject to the approval of the Board, you will be
granted an option to purchase 500,000 shares of Company common stock (the “Option”), with an exercise
price equal to the fair market value of the Company’s common stock as of the
date of grant, pursuant to the Company’s 2003 Equity Incentive Plan (the “Plan”). The Option
will be an incentive stock option to the fullest extent permissible, with the
remainder being a nonstatutory stock option. The Option will vest
with respect to 25% of the shares subject to the Option on the first anniversary
of the Start Date, and thereafter in a series of thirty-six (36) successive
equal monthly installments over the three-year period measured from the first
anniversary of the Start Date, so long as you remain in continuous service with
the Company on each applicable vesting date. The Option shall be
governed by the terms and conditions set forth in the Plan, and in the
applicable stock option agreement and grant document.
(2) Performance
Shares. Subject to the approval of the Board, you will be
granted performance shares covering 500,000 shares of Company common stock (the
“Performance Shares”)
pursuant to the Plan. The Performance Shares will vest in five
installments, as set forth on Annex A hereto. In order to vest in any
Performance Shares, you must remain in continuous service with the Company on
each applicable vesting date. The Performance Shares
shall be governed by the terms and conditions set forth in the Plan, and in the
applicable performance shares award agreement and grant document, and will
contain a tax withholding right to permit the Company to pay the withholding tax
in exchange for the return of shares to the Company to cover such withholding
tax payment.
V. EMPLOYEE
BENEFITS AND VACATION.
You will
be entitled to participate in the Company’s standard employee benefit plans
pursuant to the terms and conditions of the benefit plans. The
Company currently offers its employees health, dental, vision, life, AD&D,
short term and long term disability insurance, and 401(k) plan
participation. You will accrue vacation at an initial annual rate of
four (4) weeks, subject to the terms and conditions of the Company’s vacation
policy and practices. The Company may modify benefits from time to
time in its discretion.
VI. CONFIDENTIALITY
AND INVENTIONS ASSIGNMENT AGREEMENT.
As a
condition of employment, you are required to sign and abide by the Company’s
standard Employee Confidentiality and Inventions Assignment Agreement (the
“Confidentiality
Agreement”), a form of which is attached hereto as Exhibit
A.
VII. AT-WILL
EMPLOYMENT STATUS, SEVERANCE AND CORPORATE TRANSACTION BENEFITS.
(1) At-Will Employment Status.
Your employment with the Company is at the will of each party, is not for
a specific term and can be terminated by you or by the Company at any time, with
or without Cause, and with or without advance notice.
(2) Severance. If: (i)
the Company terminates your employment without Cause, you resign for Good
Reason, and provided such termination or resignation, as applicable, qualifies
as a “separation from service” within the meaning of Treasury Regulation
1.409A-1(h) (each, a “Covered
Termination”); and (ii) you sign, date, return to the Company within
forty-five (45) days following the Covered Termination and allow to become
effective a general release of all known and unknown claims in the form as shall
be provided to you by the Company (which may, at the Company’s election, be
contained in a separation agreement) (the “Release”); and (iii) you
promptly tender your resignation as a director on the Board; then you will be
eligible to receive, as your sole severance benefits (the “Severance
Benefits”):
(a) Base Salary Severance. You
will receive cash severance equal to twelve (12) months of your base salary in
effect as of the date of the Covered Termination (the “Termination Date”), subject to
required payroll deductions and withholdings, paid in a lump sum within ten (10)
business days after the effective date of the Release.
(b) Additional Lump Sum Severance Bonus
Payment. You will receive an additional lump sum cash
severance payment, with the amount of such additional lump sum severance payment
to be (i) the pro rata portion of the annual bonus for the year served to the
Termination Date, less any amounts already paid for that year, such pro rata
portion to be paid to be calculated using the same percentage of target bonus as
average percentage of target bonus with respect to prior bonus amounts in that
year (or if first quarter bonus has not yet been determined, the percentage
target bonus paid for the prior year) plus (ii) target bonus for that year
multiplied by the percentage equal to the actual bonus paid over the prior four
quarters divided by target bonus for the prior four quarters (collectively, the
“Additional Severance
Payment”). If paid, the Additional Severance Payment will be
subject to required payroll deductions and withholdings and paid in a lump sum
within ten (10) business days after the effective date of the
Release.
(c) Health Insurance. If you
timely elect continued group health insurance coverage pursuant to federal COBRA
law or comparable state insurance laws (collectively, “COBRA”),
the Company will pay your COBRA premiums sufficient to continue group health
insurance coverage for you and your covered dependents (if applicable) at the
level of coverage in effect as of the Termination Date, through the earlier of
either (i) eighteen (18) months after the Termination Date, or (ii) the date
that you become eligible for group health insurance coverage through another
employer. In the event you receive the Severance Benefits, you must
promptly notify the Company in writing if you become eligible for group health
insurance coverage through another employer within eighteen (18) months after
the Termination Date.
(d) Equity Award Acceleration and
Extended Exercisability. Subject to Section VII(3)
below, you will receive accelerated vesting of the time-based component of any
equity awards (including but not limited to restricted stock which have
time-based vesting) which are not fully vested as of the Termination Date
(collectively, the “Equity
Awards”), in the amount of twelve (12) months of vesting acceleration,
effective as of the Termination Date, and with respect to Equity Awards that are
stock options, each vested stock option shall remain exercisable for the lesser
of (i) the maximum term provided in the option grant or (ii) the period ending
nine (9) months following the Termination Date.
(3) Additional Corporate Transaction
Benefits. In addition to the benefits provided in Section
VII(2)(a-c) above, and in lieu of the benefits provided in Section VII (2)(d)
above, immediately upon the closing of a Corporate Transaction, any specified
performance target or other vesting condition, whether determined by passage of
time or by reference to performance targets or operations of the Company or an
Affiliate (as defined below), in any Equity Awards issued to you pursuant to any
equity incentive plan of the Company shall immediately be deemed
satisfied.
(4) Definitions. For
purposes of this Agreement, the following definitions will apply:
(a) Definition of
Affiliate. “Affiliate” means a “parent corporation” of the
Company or a “subsidiary corporation” of the Company (whether now or hereafter
existing), as those terms are defined in Sections 424(e) and (f), respectively,
of the Internal Revenue Code of 1986, as amended (the “Code”).
(b) Definition of Cause. “Cause” shall mean the
occurrence of any of the following (and only the following): (i) your conviction
of any felony involving fraud or act of dishonesty against the Company or its
Affiliates; (ii) conduct by you which, based upon good faith and reasonable
factual investigation and determination of the Board, demonstrates gross
unfitness to serve; or (iii) intentional, material violation by you of any
contractual, statutory or fiduciary duty owed by you to the Company or its
Affiliates.
(c) Definition of Good Reason.
“Good Reason”
shall mean any of the following actions or events: (i) the Company requires you
to relocate to a worksite that is more than sixty (60) miles from its principal
executive office as of the Start Date; (ii) the Company materially reduces your
base salary and bonus potential below its then-existing gross rate; or (iii)
following a Corporate Transaction, you are not the Chief Executive Officer of
the surviving entity (unless you agree in writing not to be the Chief Executive
Officer of the surviving entity), or otherwise have your duties/responsibilities
materially reduced as a result of the Corporate Transaction. A
Corporate Transaction which results in the Company being private in which you
remain as Chief Executive Officer does not constitute a material reduction in
responsibilities. Notwithstanding the foregoing, in order to qualify
as “Good Reason,” you must submit to the Company or its successor (as
applicable) a written notice, within ninety (90) days after the initial
occurrence of any of the actions or events described in the preceding sentence,
describing the applicable actions or events, and provide the Company or its
successor with at least thirty (30) days from its receipt of your written notice
in which to cure such actions or events prior to termination of your employment,
and provided that, your
employment must terminate no later than twelve (12) months after the applicable
actions or events described in (i), (ii) and (iii) above.
(d) Definition of Corporate
Transaction. “Corporate Transaction” shall
mean the occurrence of either of the following events: (i) the sale of all or
substantially all of the assets of the Company; or (ii) a merger of the Company
with or into another entity in which the stockholders of the Company immediately
prior to the closing of the transaction own less than a majority of the
ownership interest of the Company immediately following such closing; provided, however, for
purposes of determining whether the stockholders of the Company prior to the
occurrence of a transaction described above own less than fifty percent (50%) of
the voting securities of the relevant entity afterwards, only the lesser of the
voting power held by a person either before or after the transaction shall be
counted in determining that person’s ownership afterwards.
VIII. PARACHUTE
PAYMENTS AND DEFERRED COMPENSATION.
(1) Parachute
Payments. If any payment or benefit you would receive from the
Company pursuant to a Corporate Transaction or otherwise (“Payment”) would (i) constitute
a “parachute payment” within the meaning of Section 280G of the Code, and (ii)
but for this sentence, be subject to the excise tax imposed by Section 4999 of
the Code (the “Excise
Tax”), then such Payment shall be equal to the Reduced
Amount. The “Reduced Amount” shall be either (x) the largest portion
of the Payment that would result in no portion of the Payment being subject to
the Excise Tax, or (y) the largest portion, up to and including the total, of
the Payment, whichever amount, after taking into account all applicable federal,
state and local employment taxes, income taxes, and the Excise Tax (all computed
at the highest applicable marginal rate), results in your receipt of the
greatest economic benefit notwithstanding that all or some portion of the
Payment may be subject to the Excise Tax. If a reduction in payments
or benefits constituting “parachute payments” is necessary so that the Payment
equals the Reduced Amount, reduction shall occur in a manner necessary to
provide you with the greatest economic benefit. If more than one
manner of reduction of payments or benefits necessary to arrive at the Reduced
Amount yields the greatest economic benefit, the payments and benefits shall be
reduced pro
rata. The independent registered public accounting firm
engaged by the Company for general audit purposes as of the day prior to the
effective date of the event described in Section 280G(b)(2)(A)(i) of the Code
shall perform the foregoing calculations. The Company shall bear all
expenses with respect to the determinations by such independent registered
public accounting firm required to be made hereunder, and any good faith
determinations of the independent registered public accounting firm made
hereunder shall be final, binding and conclusive upon the Company and
you.
(2) Deferred
Compensation. All payments provided under this Agreement are
intended to constitute separate payments for purposes of Treasury Regulation
Section 1.409A-2(b)(2). The cash severance payment provided under
Section VII(2) shall be paid no later than the later of: (i) December 31st of
the calendar year in which the Covered Termination occurs, or (ii) the fifteenth
(15th) day of the third calendar month following the date of the Covered
Termination. It is the intention of the preceding sentence to apply
the “short-term deferral rule” set forth in Treasury Regulation Section
1.409A-1(b)(4) to such payments.
IX. MISCELLANEOUS.
(1) Attorneys’
Fees. The Company will reimburse your reasonable attorneys’
fees and costs associated with review of this Agreement, up to a maximum total
reimbursement of $3,000 (in the aggregate). These expenses must be
fully documented (including receipts) on a properly completed expense
reimbursement report, and will be reimbursed within thirty (30) days after the
Start Date.
(2) Legal Right to Work. Your
employment pursuant to this offer is contingent on you providing the Company
with the legally required proof of your identity and authorization to work in
the United States.
(3) General Terms. This
Agreement, including the attached Confidentiality Agreement, constitutes the
complete, final and exclusive embodiment of the entire agreement between you and
the Company with regard to the subject matter hereof. It is entered
into without reliance on any promise or representation, written or oral, other
than those expressly contained herein, and it supersedes any other agreements,
promises, warranties or representations concerning its subject
matter. Changes in your employment terms, other than those expressly
reserved herein to the Company’s or the Board’s discretion herein, can only be
made in a writing approved by the Board and signed by a duly-authorized member
of the Board and you. This Agreement will bind the heirs, personal
representatives, successors and assigns of both you and the Company, and inure
to the benefit of both you and the Company, their heirs, successors and
assigns. If any provision of this Agreement is determined to be
invalid or unenforceable, in whole or in part, this determination shall not
affect any other provision of this Agreement and the provision in question shall
be modified so as to be rendered enforceable in a manner consistent with the
intent of the parties insofar as possible under applicable law. This
Agreement shall be construed and enforced in accordance with the laws of the
State of California without regard to conflicts of law
principles. Any ambiguity in this Agreement shall not be construed
against either party as the drafter. Any waiver of a breach of this
Agreement, or rights hereunder, shall be in writing and shall not be deemed to
be a waiver of any successive breach or rights hereunder. This
Agreement may be executed in counterparts which shall be deemed to be part of
one original, and facsimile signatures or those transmitted by PDF shall be
equivalent to original signatures.
Xxxx, we
all look forward to working with you. Please signify your acceptance
by signing and dating below and signing the Confidentiality Agreement, and
returning both fully signed agreements to me within five (5) business
days. If we do not receive these fully signed agreements from you
within this timeframe, the Company’s offer contained herein will
expire.
Sincerely,
By: /s/
Xxxx Xxxxxxx
Xxxx
Xxxxxxx
Chairman
of the Board of Directors
Annex
A – Performance Criteria For Performance Shares
Exhibit
A – Employee Confidentiality and Inventions Assignment Agreement
Understood
and Accepted By:
/s/ Xxxx Xxxxxx
Xxxx
Xxxxxx
Annex
A
PERFORMANCE
CRITERIA FOR PERFORMANCE SHARES
1. 100,000
shares shall vest on the close of business on the date of the public
announcement of the Company’s quarterly earnings which reflect that the Company
has achieved $11.0 million of EBITA over the four full fiscal quarters preceding
the date of the announcement.*
2. 100,000
shares shall vest on the close of business on the date of the public
announcement of the Company’s quarterly earnings which reflect that the Company
has achieved $22.0 million of EBITA over the four full fiscal quarters preceding
the date of the announcement.*
3. 100,000
shares shall vest on the close of business on the date of the public
announcement of the Company’s quarterly earnings which reflect that the Company
has achieved $33.0 million of EBITA over the four full fiscal quarters preceding
the date of the announcement.*
4. 100,000
shares shall vest on the close of business on the date of the public
announcement of the Company’s quarterly earnings which reflect that the Company
has achieved $44.0 million of EBITA over the four full fiscal quarters preceding
the date of the announcement.*
5. 100,000
shares shall vest on the close of business on the date of the public
announcement of the Company’s quarterly earnings which reflect that the Company
has achieved $55.0 million of EBITA over the four full fiscal quarters preceding
the date of the announcement.*
* For
the purposes hereof, 1.) EBITA shall mean earnings before interest, taxes and
amortization from the Company’s current business (i.e. excluding any financial
results from any businesses that the Company may acquire after the date of
grant); 2) any losses incurred in quarters prior to your appointment as CEO will
be excluded from the calculation; and 3.) in the event of a purchase or sale of
assets that will materially impact the EBITA calculation, the performance
criteria will be revised so as to provide you an incentive generally equivalent
with that provided herein.
Exhibit
A
EMPLOYEE
CONFIDENTIALITY AND INVENTIONS ASSIGNMENT AGREEMENT
In
consideration of my employment or continued employment by iPass,
Inc. (“Company”),
and the compensation now and hereafter paid to me, I hereby agree as
follows:
1. Confidentiality.
1.1 Nondisclosure; Recognition of
Company’s Rights. At all times during my employment and
thereafter, I will hold in confidence and will not disclose, use, lecture upon,
or publish any of Company’s Confidential Information (defined below), except as
such use is required in connection with my work for Company, or unless the Chief
Executive Officer (the “CEO”) of Company expressly
authorizes in writing such disclosure or publication. I will obtain
the CEO’s written approval before publishing or submitting for publication any
material (written, oral, or otherwise) that relates to my work at Company and/or
incorporates any Confidential Information. I hereby assign to Company
any rights I have or acquire in any and all Confidential Information and
recognize that all Confidential Information shall be the sole and exclusive
property of Company and its assigns.
1.2 Confidential
Information. The term “Confidential Information”
shall mean any and all confidential knowledge, data or information related to
Company’s business or its actual or demonstrably anticipated research or
development, including without limitation: (a) trade secrets, inventions, ideas,
processes, computer source and object code, data, formulae, programs, other
works of authorship, know-how, improvements, discoveries, developments, designs,
and techniques; (b) information regarding products, plans for research and
development, marketing and business plans, budgets, financial statements,
contracts, prices, suppliers, and customers; (c) information regarding the
skills and compensation of Company’s employees, contractors, and any other
service providers of Company; and (d) the existence of any business discussions,
negotiations, or agreements between Company and any third party.
1.3 Third Party
Information. I understand, in addition, that Company has
received and in the future will receive from third parties confidential or
proprietary information (“Third
Party Information”) subject to a duty on Company’s part to maintain the
confidentiality of such information and to use it only for certain limited
purposes. During the term of my employment and thereafter, I will
hold Third Party Information in strict confidence and will not disclose to
anyone (other than Company personnel who need to know such information in
connection with their work for Company) or use, except in connection with my
work for Company, Third Party Information, unless expressly authorized by an
officer of Company in writing.
1.4 No
Improper Use of Information of Prior
Employers and
Others. I represent that my employment by Company does not and
will not breach any agreement with any former employer, including any noncompete
agreement or any agreement to keep in confidence information acquired by me in
confidence or trust prior to my employment by Company. I further
represent that I have not entered into, and will not enter into, any agreement,
either written or oral, in conflict herewith. During my employment by
Company, I will not improperly use or disclose any confidential information or
trade secrets of any former employer or other third party to whom I have an
obligation of confidentiality, and I will not bring onto the premises of Company
or use any unpublished documents or any property belonging to any former
employer or other third party to whom I have an obligation of confidentiality,
unless consented to in writing by that former employer or person. I
will use in the performance of my duties only information that is generally
known and used by persons with training and experience comparable to my own, is
common knowledge in the industry or otherwise legally in the public domain, or
is otherwise provided or developed by Company.
2. Inventions.
2.1 Inventions and Intellectual Property
Rights. As used in this Agreement, the term “Invention” means any ideas,
concepts, information, materials, processes, data, programs, know-how,
improvements, discoveries, developments, designs, artwork, formulae, other
copyrightable works, and techniques and all Intellectual Property Rights
therein. The term “Intellectual Property Rights”
means all trade secrets, copyrights, trademarks, mask work rights, patents and
other intellectual property rights recognized by the laws of any jurisdiction or
country.
2.2 Prior Inventions. I
agree that I will not incorporate, or permit to be incorporated, Prior
Inventions (defined below) in any Company Inventions (defined below) without
Company’s prior written consent. In addition, I agree that I will not
incorporate into any Company software or otherwise deliver to Company any
software code licensed under the GNU GPL or LGPL or any other license that, by
its terms, requires or conditions the use or distribution of such code on the
disclosure, licensing, or distribution of any source code owned or licensed by
Company. I have disclosed on Exhibit A a complete list of all
Inventions that I have, or I have caused to be, alone or jointly with others,
conceived, developed, or reduced to practice prior to the commencement of my
employment by Company, in which I have an ownership interest or which I have a
license to use, and that I wish to have excluded from the scope of this
Agreement (collectively referred to as “Prior
Inventions”). If no Prior Inventions are listed in Exhibit A, I warrant that
there are no Prior Inventions. If, in the course of my employment
with Company, I incorporate a Prior Invention into a Company process, machine or
other work, I hereby grant Company a non-exclusive, perpetual, fully-paid and
royalty-free, irrevocable and worldwide license, with rights to sublicense
through multiple levels of sublicensees, to reproduce, make derivative works of,
distribute, publicly perform, and publicly display in any form or medium,
whether now known or later developed, make, have made, use, sell, import, offer
for sale, and exercise any and all present or future rights in, such Prior
Invention.
2.3 Assignment of Company
Inventions. Subject to the section titled “Government or Third Party” and
except for Inventions that I can prove qualify fully under the provisions of
California Labor Code section 2870 and I have set forth in Exhibit A, I hereby assign and
agree to assign in the future (when any such Inventions or Intellectual Property
Rights are first reduced to practice or first fixed in a tangible medium, as
applicable) to Company all my right, title, and interest in and to any and all
Inventions (and all Intellectual Property Rights with respect thereto) made,
conceived, reduced to practice, or learned by me, either alone or with others,
during the period of my employment by Company. Inventions assigned to
Company or to a third party as directed by Company pursuant to the section
titled “Government or Third Party” are referred to in this Agreement as “Company
Inventions.”
2.4 Obligation to Keep Company
Informed. During the period of my employment and for one (1)
year thereafter, I will promptly and fully disclose to Company in writing (a)
all Inventions authored, conceived, or reduced to practice by me, either alone
or with others, including any that might be covered under California Labor Code
section 2870, and (b) all patent applications filed by me or in which I am named
as an inventor or co-inventor.
2.5 Government or Third
Party. I also agree to assign all my right, title, and
interest in and to any particular Company Invention to a third party, including
without limitation the United States, as directed by Company.
2.6 Enforcement of Intellectual Property
Rights and Assistance. During the period of my employment and
thereafter, I will assist Company in every proper way to obtain and enforce
United States and foreign Intellectual Property Rights relating to Company
Inventions in all countries. In the event Company is unable to secure
my signature on any document needed in connection with such purposes, I hereby
irrevocably designate and appoint Company and its duly authorized officers and
agents as my agent and attorney in fact, which appointment is coupled with an
interest, to act on my behalf to execute and file any such documents and to do
all other lawfully permitted acts to further such purposes with the same legal
force and effect as if executed by me.
3. Records. I
agree to keep and maintain adequate and current records (in the form of notes,
sketches, drawings and in any other form that is required by Company) of all
Inventions made by me during the period of my employment by Company, which
records shall be available to, and remain the sole property of, Company at all
times.
4. Additional
Activities. I agree that (a)
during the term of my employment by Company, I will not, without Company’s
express written consent, engage in any employment or business activity that is
competitive with, or would otherwise conflict with my employment by, Company,
and (b) for the period of my employment by Company and for one (l) year
thereafter, I will not, either directly or indirectly, solicit or attempt to
solicit any employee, independent contractor, or consultant of Company to
terminate his, her or its relationship with Company in order to become an
employee, consultant, or independent contractor to or for any other person or
entity.
5. Return Of
Company Property. Upon termination of my employment or upon Company’s
request at any other time, I will deliver to Company all of Company’s property,
equipment, and documents, together with all copies thereof, and any other
material containing or disclosing any Inventions, Third Party Information or
Confidential Information of Company and certify in writing that I have fully
complied with the foregoing obligation. I agree that I will not copy,
delete, or alter any information contained upon my Company computer before I
return it to Company. I further agree that any property situated on
Company’s premises and owned by Company is subject to inspection by Company
personnel at any time with or without notice. Prior to leaving, I
will cooperate with Company in attending an exit interview and completing and
signing Xxxxxxx’s termination statement.
6. Notification
Of New Employer. In the event that
I leave the employ of Company, I hereby consent to the notification of my new
employer of my rights and obligations under this Agreement, by Company’s
providing a copy of this Agreement or otherwise.
7. General
Provisions.
7.1 Governing Law and
Venue. This Agreement and any action related thereto will be
governed, controlled, interpreted, and defined by and under the laws of the
State of California, without giving effect to any conflicts of laws principles
that require the application of the law of a different state. I hereby
expressly consent to the personal jurisdiction and venue in the state and
federal courts for the county in which Company’s principal place of business is
located for any lawsuit filed there against me by Company arising from or
related to this Agreement.
7.2 Severability. If
any provision of this Agreement is, for any reason, held to be invalid or
unenforceable, the other provisions of this Agreement will be unimpaired and the
invalid or unenforceable provision will be deemed modified so that it is valid
and enforceable to the maximum extent permitted by law.
7.3 Survival. This
Agreement shall survive the termination of my employment and the assignment of
this Agreement by Company to any successor-in-interest or other assignee and be
binding upon my heirs and legal representatives.
7.4 At-Will Employment. I agree
and understand that nothing in this Agreement shall confer any right with
respect to continuation of employment by Company, nor shall it interfere in any
way with my right or Company’s right to terminate my employment at any time,
with or without cause and with or without advance notice.
7.5 Notices. Each party must
deliver all notices or other communications required or permitted under this
Agreement in writing to the other party at the address listed on the signature
page, by courier, by certified or registered mail (postage prepaid and return
receipt requested), or by a nationally-recognized express mail
service. Notice will be effective upon receipt or refusal of
delivery. If delivered by certified or registered mail, any such
notice will be considered to have been given five (5) business days after it was
mailed, as evidenced by the postmark. If delivered by courier or
express mail service, any such notice shall be considered to have been given on
the delivery date reflected by the courier or express mail service receipt. Each
party may change its address for receipt of notice by giving notice of such
change to the other party.
7.6 Injunctive Relief. I
acknowledge that, because my services are personal and unique and because I will
have access to the Confidential Information of Company, any breach of this
Agreement by me would cause irreparable injury to Company for which monetary
damages would not be an adequate remedy and, therefore, will entitle Company to
injunctive relief (including specific performance). The rights and
remedies provided to each party in this Agreement are cumulative and in addition
to any other rights and remedies available to such party at law or in
equity.
7.7 Waiver. Any waiver or failure
to enforce any provision of this Agreement on one occasion will not be deemed a
waiver of any other provision or of such provision on any other
occasion.
7.8 Export. I agree not to export,
directly or indirectly, any U.S. technical data acquired from Company or any
products utilizing such data, to countries outside the United States, because
such export could be in violation of the United States export laws or
regulations.
7.9 Entire
Agreement. The obligations pursuant to sections of this
Agreement titled “Confidentiality” and “Inventions” shall apply to any time
during which I was previously employed, or am in the future employed, by Company
as an independent contractor if no other agreement governs nondisclosure and
assignment of inventions during such period. This Agreement is the
final, complete and exclusive agreement of the parties with respect to the
subject matters hereof and supersedes and merges all prior communications
between us with respect to such matters. No modification of or
amendment to this Agreement, or any waiver of any rights under this Agreement,
will be effective unless in writing and signed by me and the CEO of
Company. Any subsequent change or changes in my duties, salary or
compensation will not affect the validity or scope of this
Agreement.
This
Agreement shall be effective as of the first day of my employment with
Company.
|
EMPLOYEE:
I
acknowledge that I have read and understand this agreement and have been
given the opportunity to discuss it with independent legal
counsel.
(Signature)
By:
_______________________________________________
Title:
______________________________________________
Date:
______________________________________________
Address:
___________________________________________
|
COMPANY:
Accepted
and agreed:
(Signature)
By:
_______________________________________________
Title:
______________________________________________
Date:
______________________________________________
Address:
___________________________________________
|
.
EXHIBIT
A
INVENTIONS
1. Prior Inventions
Disclosure. The following is a complete list of all Prior
Inventions:
None
See immediately below:
2. Limited
Exclusion Notification.
This is to
notify you in accordance with Section 2872 of the California Labor Code
that the foregoing Agreement between you and Company does not require you to
assign or offer to assign to Company any Invention that you develop entirely on
your own time without using Company’s equipment, supplies, facilities or trade
secret information, except for those Inventions that either:
a. Relate
at the time of conception or reduction to practice to Company’s business, or
actual or demonstrably anticipated research or development; or
b. Result
from any work performed by you for Company.
To the
extent a provision in the foregoing Agreement purports to require you to assign
an Invention otherwise excluded from the preceding paragraph, the provision is
against the public policy of this state and is unenforceable.
This
limited exclusion does not apply to any patent or Invention covered by a
contract between Company and the United States or any of its agencies requiring
full title to such patent or Invention to be in the United
States.
