EXHIBIT 10.2
AMENDED EMPLOYMENT AGREEMENT
This amended employment agreement (the "Agreement") amends and restates
in its entirety that certain Employment Agreement (the "Agreement") between
Notify Technology Corporation (the "Company") and Xxxxxx Xxxxxx (the "Employee")
dated as of August 1, 1997 and as amended on February 23, 2000 and June 29,
2001, and is made and entered into effective as of November 4, 2002 (the
"Effective Date").
RECITALS
A. The Company desires to retain the services of Employee, and
Employee desires to be employed by the Company, on the terms and conditions set
forth in this Agreement.
B. Certain capitalized terms used in the Agreement are defined in
Section 8 below.
In consideration of the mutual covenants herein contained, and in
consideration of the continuing employment of Employee by the Company, the
parties agree as follows:
1 . Duties and Scope of Employment.
(a) Position. The Company shall employ the Employee in
the position of Vice President of Operations, with such duties, responsibilities
and compensation as in effect as of the Effective Date; provided, however, that
the Board shall have the right, prior to the occurrence of a Change of Control,
to revise such responsibilities and compensation from time to time as the Board
may deem necessary or appropriate.
(b) Obligations. The Employee shall devote his full
business efforts and time to the Company and its subsidiaries. The foregoing,
however, shall not preclude the Employee from engaging in such activities and
services as do not interfere or conflict with his responsibilities to the
Company.
2. At-Will Employment. The Company and the Employee acknowledge
the Employee's employment is and shall continue to be at-will, as defined under
applicable law. If the Employee's employment terminates for any reason, the
Employee shall not be entitled to any payments, benefits, damages, awards or
compensation other than as provided by this Agreement, or as may otherwise be
available in accordance with the Company's established employee plans and
practices or other agreements with the Company at the time of termination.
3. Compensation and Benefits.
(a) Base Compensation. The Employee will work a minimum
of 24 hours per week and the Company shall pay the Employee as compensation for
services a base salary at an annualized rate of $96,000. Such salary shall be
paid periodically in accordance with normal Company payroll. The annual
compensation specified in this Section 3(a), is referred to in this Agreement as
"Base Compensation".
(b) PTO and Holidays. On an annual basis, the Employee
shall be eligible for six Company paid holidays and will accrue PTO (Personal
Time Off) at a rate of 3.69 hours per pay period.
(c) Medical and Insurance Benefits. The Employee shall
be eligible for any life, disability, health, accident and other insurance
programs currently offered by the Company.,
(d) Expenses. The Company will pay or reimburse Employee
for reasonable travel, entertainment or other expenses incurred by Employee in
the furtherance of or in connection with the performance of Employee's duties
hereunder in accordance with the Company's established policies. Employee shall
furnish the Company with evidence of such expenses within a reasonable period of
time from the date that they were incurred.
4. Severance Benefits.
(a) Termination Following A Change of Control. If the
Employee's employment with the Company terminates at any time within twenty-four
(24) months after a Change of Control, then, subject to Section 5, the Employee
shall be entitled to receive severance benefits as follows:
(i) Involuntary Termination. If the Employee's
employment terminates as a result of an Involuntary Termination (as defined in
Section 8) other than for Cause (as defined in Section 8), then the Employee
shall be entitled to receive a continuation of the Employee's Base Compensation
for a period equal to six (6) months.
(ii) Voluntary Resignation; Termination for
Cause. If the Employee voluntarily terminates employment with the Company, other
than as a result of an Involuntary Termination, or if the Employee is terminated
for Cause, then the Employee shall not be entitled to receive severance or other
benefits.
(iii) Disability; Death. If the Company
terminates the Employee's employment as a result of the Employee's Disability,
or such Employee's employment is terminated due to the death of the Employee,
then the Employee shall not be entitled to receive severance or other benefits
except those (if any) as may then be established under the Company's then
existing severance and benefits plans and policies at the time of such
Disability or death.
(b) Termination Apart from Change of Control. If, during
the term of this Agreement, the Employee's employment with the Company
terminates, either prior to the occurrence of a Change of Control or after the
twenty-four (24) month period following a Change of Control, then the Employee
shall be entitled to receive severance benefits as follows:
(i) Involuntary Termination. If the Employee's
employment terminates as a result of an Involuntary Termination other than for
Cause, then the Employee shall be entitled to receive continuation of the
Employee's Base Compensation for the period of ninety (90) days.
(ii) Voluntary Resignation; Termination for
Cause. If the Employee voluntarily terminates employment with the Company, other
than as a result of an Involuntary Termination, or if the Employee is terminated
for Cause, then the Employee shall not be entitled to receive severance or other
benefits except for those (if any) as may then be established under
the Company's then existing severance and benefits plans and policies at the
time of such termination.
(iii) Disability; Death. If the Company
terminates the Employee's employment as a result of the Employee's Disability,
or such Employee's employment is terminated due to the death of the Employee,
then the Employee shall not be entitled to receive severance or other benefits
except those (if any) as may then be established under the Company's then
existing severance and benefits plans and policies at the time of such
Disability or death.
(c) Benefits. In the event the Employee is entitled to
severance benefits pursuant to Section 4(a)(i) or Section 4(b)(i), then in
addition to such severance benefits, the Employee shall receive 100%
Company-paid health, dental and life insurance coverage as provided to such
employee immediately prior to the Employee's termination ( the "Company-Paid
Coverage"). If such coverage included the Employee's dependents immediately
prior to the Employee's termination, such dependents shall also be covered at
Company expense. Company-Paid Coverage shall continue until the earlier of (i)
twelve (12) months following termination in the case of a termination described
in Section 4(a)(i), (ii) ninety (90) days following termination in the case of a
termination described in Section 4(b)(i), or (iii) the date the Employee becomes
covered under another employer's group health, dental or life insurance plan (to
the extent covered under such plans). In addition, without regard to the reason
for termination of the Employee's employment: (i) the Company shall pay the
Employee any unpaid salary due for periods prior to the Termination Date; (ii)
the Company shall pay the Employee all of the Employee's accrued and unused PTO
("Personal Time Off") through the Termination Date; and (iii) following
submission of proper expense reports by the Employee, the Company shall
reimburse the Employee for all expenses reasonably and necessarily incurred by
the Employee in connection with the business of the Company prior to
termination. These payments shall be made promptly upon termination and within
the period of time mandated by law.
(d) Restricted Stock. In the event the Employee is
entitled to severance benefits pursuant to Section 4(a)(i) of this Agreement,
then all Company stock purchased by the Employee subject to a repurchase right
in favor of the Company shall vest and any such repurchase right shall lapse.
5. Limitations on Payments. In the event that the severance and
other benefits provided for in this Agreement or otherwise payable to the
Employee (i) constitute "parachute payments" within the meaning of Section 280G
of the Internal Revenue Code of 1986, as amended (the "Code") and (ii) but for
this Section, would be subject to the excise tax imposed by Section 4999 of the
Code, then the Employee's severance benefits under Section 4(a)(i), as
applicable, shall be payable to the extent such payment, after taking into
account the applicable federal, state and local income taxes and the excise tax
imposed by Section 4999, results in the receipt by the Employee on an after-tax
basis, of the greatest amount of severance benefits under Section 4(a)(i),
notwithstanding that all or some portion of such severance benefits may be
taxable under Section 4999 of the Code. Unless the Company and the Employee
otherwise agree in writing, any determination required under this Section shall
be made in writing by the Company's independent public accountants (the
"Accountant"), whose determination shall be conclusive and binding upon the
Employee and the Company for all purposes. For the purposes of making
calculation required by this Section, the Accountants may make reasonable
assumptions and approximations concerning applicable taxes and may rely on
reasonable, good faith interpretations concerning the application of Sections
280G and 4999 of the Code. The
Company and the Employee shall furnish to the Accountants such information and
documents as the Accountants may reasonably request in order to make a
determination under this Section. The Company shall bear all costs the
Accountant may reasonably incur in connection with any calculations contemplated
by this Section.
6. Confidential Information.
(a) Company Information. Employee agrees at all times
during the term of Employee's employment and thereafter, to hold in strictest
confidence, and not to use, except for the benefit of the Company, or to
disclose to any person, firm or corporation without written authorization of the
Board of Directors of the Company, any Confidential Information of the Company.
Employee understands that "Confidential Information" means any Company
proprietary information, trade secrets or know-how, including, but not limited
to, market research, product plans, products, services, customer lists and
customers (including, but not limited to, customers of the Company on whom
Employee will call), markets, developments, marketing, finances or other
business information disclosed to Employee by the Company either directly or
indirectly in writing, orally or by drawings or observation of parts or
equipment. Employee further understands that Confidential Information does not
include any of the foregoing items which is based on either Employee's prior
knowledge or the experience of the Employee or has become publicly known and
made generally available through no wrongful act of Employee or of others who
were under confidentiality obligations as to the item or items involved.
(b) 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 the confidentiality of such information and to use it only for
certain 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
Employee's work for the Company consistent with the Company's agreement with
such third party.
7. Covenant Not to Solicit.
(a) Until one year after termination of Employee's
employment with the Company for any reason, the Employee agrees that he shall
not solicit, induce, attempt to hire, recruit, encourage, take away, or hire any
employee of the Company or cause an employee to leave his or her employment
either for Employee or for any other entity or person.
(b) The Employee represents that he (i) is familiar with
the foregoing covenant not to solicit, and (ii) is fully aware of his
obligations hereunder, including, without limitation, the reasonableness of the
length of time and scope of this covenant.
8. Definition of Terms. The following terms referred to in this
Agreement shall have the following meanings:
(a) Change of Control. "Change of Control" shall mean the
occurrence of any of the following events:
(i) Any "person" (as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing 30% or more of the
total voting power represented by the Company's then outstanding voting
securities; provided, however, that an initial public offering of the Company's
Common Stock shall not constitute a Change of Control; or
(ii) A change in the composition of the Board of
Directors of the Company occurring within a two-year period, as a result of
which fewer than a majority of the directors are Incumbent Directors. "Incumbent
Directors" shall mean directors who either (A) are directors of the Company as
of the date hereof, or (B) are elected, or nominated for election, to the Board
of Directors of the Company with the affirmative votes of at least a majority of
the Incumbent Directors at the time of such election or nomination (but shall
not include an individual whose election or nomination is in connection with an
actual or threatened proxy contest relating to the election of directors to the
Company); or
(iii) The stockholders of the Company approve a
merger or consolidation of the Company with any other corporation, other than a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least fifty percent (50%) of the total voting power
represented by the voting securities of the Company or such surviving entity
outstanding immediately after such a merger or consolidation, or the
stockholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all or
substantially all the Company's assets.
(b) Involuntary Termination. "Involuntary Termination"
shall mean, without the Employee's express written consent, (i) a significant
reduction of the Employee's duties, position or responsibilities, or the removal
of the Employee from such position and responsibilities, unless the Employee is
provided with a comparable position (i.e., a position of equal or greater
organizational level, duties, authority, compensation and status); (ii) a
substantial reduction, without good business reasons, of the facilities and
perquisites (including office space and location) available to the Employee
immediately prior to such reduction; (iii) a reduction by the Company in the
Base Compensation of the Employee as in effect immediately prior to such
reduction, other than a reduction which is part of and generally consistent with
a general reduction of comparable employee salaries; (iv) a material reduction
by the Company in the kind or level of employee benefits to which the Employee
is entitled immediately prior to such reduction with the result that the
Employee's overall benefits package is significantly reduced, other than a
reduction which is part of and generally consistent with a general reduction of
comparable employee benefits packages; (v) the relocation of the Employee to a
facility or a location more than 25 miles from the Employee's then present
location, without the Employee's express written consent; (vi) any purported
termination of the Employee by the Company which is not effected for death,
Disability or Cause, or (vii) the failure of the Company to obtain the
assumption of this agreement by any successors contemplated in Section 9 below.
(c) Cause. "Cause" shall mean (i) any act of personal
dishonesty taken by the Employee in connection with his responsibilities as an
employee and intended to result in substantial personal enrichment of the
Employee, (ii) the conviction of a felony which the Company's Board of Directors
reasonably believes had or will have a material detrimental effect on the
Company's reputation or business, (iii) a willful act by the Employee which
constitutes gross misconduct and which is injurious to the Company, and (iv)
continued violations by the
Employee of the Employee's obligations which are demonstrably willful and
deliberate on the Employee's part after there has been delivered to the Employee
a written demand for performance from the Company which describes the basis for
the Company's belief that the Employee has not substantially performed his
duties.
(d) Disability. "Disability" shall mean that the Employee
has been unable to perform his duties under this Agreement as the result of his
incapacity due to physical or mental illness, and such inability, at least 26
weeks after its commencement, is determined to be total and permanent by a
physician selected by the Company or its insurers and acceptable to the Employee
or the Employee's legal representative (such Agreement as to acceptability not
to be unreasonably withheld). Termination resulting from Disability may only be
effected after at least 30 days' written notice by the Company of its intention
to terminate the Employee's employment. In the event that the Employee resumes
the performance of substantially all of his duties hereunder before the
termination of his employment becomes effective, the notice of intent to
terminate shall automatically be deemed to have been revoked.
(e) Termination Date. "Termination Date" shall mean (i)
if this Agreement is terminated by the Company for Disability, thirty (30) days
after notice of termination is given to the Employee (provided that the Employee
shall not have returned to the performance of the Employee's duties on a
full-time basis during such thirty (30) day period), (ii) if the Employee's
employment is terminated by the Company for any other reason, the date on which
a notice of termination is given or such other date specified in the notice of
termination, or (iii) if the Agreement is terminated by the Employee, the date
on which the Employee delivers the notice of termination to the Company.
9. Successors.
(a) Company's Successors. Any successor to the Company
(whether direct or indirect and whether by purchase, lease, merger,
consolidation, liquidation or otherwise) to all or substantially all of the
Company's business and/or assets shall assume the obligations under this
Agreement and agree expressly to perform the obligations under this Agreement in
the same manner and to the same extent as the Company would be required to
perform such obligations in the absence of a succession. For all purposes under
this Agreement, the term "Company" shall include any successor to the Company's
business and/or assets which executes and delivers the assumption agreement
described in this Section or which becomes bound by the terms of this Agreement
by operation of law.
(b) Employee's Successors. The terms of this Agreement
and all rights of the Employee hereunder shall inure to the benefit of, and be
enforceable by, the Employee's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.
10. Returning Company Documents. Employee agrees that, at the time
of leaving the employ of the Company, Employee will deliver to the Company (and
will not keep in Employee's possession, recreate or deliver to anyone else) any
and all devices, records, data, notes, reports, proposals, lists,
correspondence, specifications, materials, equipment, other documents or
property, or reproductions of any aforementioned items developed by Employee
pursuant to Employee's employment with the Company or otherwise belonging to the
Company, its successors or assigns.
11. Notice.
(a) General. Notices and all other communications
contemplated by this Agreement shall be in writing and shall be deemed to have
been duly given when personally delivered or when mailed by U.S. registered or
certified mail, return receipt requested and postage prepaid. In the case of the
Employee, mailed notices shall be addressed to him at the home address which he
most recently communicated to the Company in writing. In the case of the
Company, mailed notices shall be addressed to its corporate headquarters, and
all notices shall be delivered to the attention of its Secretary.
(b) Notice of Termination. Any termination by the Company
for Cause or by the Employee as a result of a voluntary resignation or an
Involuntary Termination shall be communicated by a notice of termination to the
other party hereto given in accordance with this Section. Such notice shall
indicate the specific termination provision in this Agreement relied upon, shall
set forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination under the provision so indicated, and shall specify the
termination date (which shall be not more than 30 days after the giving of such
notice). The failure by the Employee to include in the notice any fact or
circumstance which contributes to a showing of Involuntary Termination shall not
waive any right of the Employee hereunder or preclude the Employee from
asserting such fact or circumstance in enforcing his right hereunder.
12. Mediation; Arbitration.
(a) Mediation. The Employee agrees that any dispute or
controversy arising out of, relating to, or in connection with this Agreement,
or the interpretation, validity, construction, performance, breach or
termination thereof, shall first be submitted to mediation. The mediation shall
be conducted within 45 days of either party notifying the other party of a
dispute or controversy regarding this Agreement or Employee's employment
relationship with the Company. Unless otherwise provided for by law, the Company
and Employee shall each pay half the costs and expenses of the mediation.
(b) Arbitration. In the event mediation pursuant to
subsection (a) above fails, Employee agrees that any dispute or controversy
arising out of, relating to, or in connection with this Agreement, or the
interpretation, validity, construction, or breach thereof, shall be finally
settled by binding arbitration to be held in San Jose, California under the
National Rules for the Resolution of Employment Disputes supplemented by the
Supplemental Procedures for Large Complex Disputes, of the American Arbitration
Association as then in effect (the "Rules"). The arbitrator may grant
injunctions or other equitable relief in such dispute or controversy. The
decision of the arbitrator shall be final, conclusive and binding on the parties
to the arbitration. Judgment may be entered on the arbitrator's decision in any
court having jurisdiction.
(c) The arbitrator(s) shall apply California law to the
merits of any dispute or claim, without reference to rules of conflicts of law.
The arbitration proceedings shall be governed by the Rules.
(d) Unless otherwise provided for by law, the Company and
the Employee shall each pay half of the costs and expenses of such arbitration.
(e) The arbitrator shall be selected as follows: in the
event the Company and the Employee agree on one arbitrator, the arbitration
shall be conducted by such arbitrator. In
the event the Company and the Employee do not do agree, the Company and the
Employee shall each select one independent, qualified arbitrator and the two
arbitrators so selected shall select the third arbitrator. The Company reserves
the right to object to any individual arbitrator who shall be employed by or
affiliated with a competing organization.
(f) At the request of either party, arbitration
proceedings will be conducted in the utmost secrecy; in such case all documents,
testimony and records shall be received, heard and maintained by the arbitrators
in secrecy under seal, available for the inspection only of the Company or the
Employee and their respective attorneys and their respective experts who shall
agree in advance and in writing to receive all such information confidentially
and to maintain such information in secrecy until such information shall become
generally known.
(g) The decree or judgment of an award rendered by the
arbitrators maybe entered in any court having jurisdiction thereof.
(h) Reasonable notice of the time and place of
arbitration shall be given to all persons, other than the parties, as shall be
required by law, in which case such persons or those authorized representatives
shall have the right to attend and/or participate in all the arbitration
hearings in such manner as the law shall require.
(i) EMPLOYEE HAS READ AND UNDERSTANDS THIS SECTION, WHICH
DISCUSSES ARBITRATION. EMPLOYEE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT,
EMPLOYEE AGREES TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN
CONNECTION WITH THIS EMPLOYMENT AGREEMENT, OR THE INTERPRETATION, VALIDITY,
CONSTRUCTION, OR BREACH THEREOF TO BINDING ARBITRATION, AND THAT THIS
ARBITRATION CLAUSE CONSTITUTES A WAIVER OF EMPLOYEE'S RIGHT TO A JURY TRIAL AS
TO THESE ISSUES ONLY.
13. Miscellaneous Provisions.
(a) No Duty to Mitigate. The Employee shall not be
required to mitigate the amount of any payment contemplated by this Agreement,
nor shall any such payment be reduced by any earnings that the Employee may
receive from any other source.
(b) Waiver. No provision of this Agreement shall be
modified, waived or discharged unless the modification, waiver or discharge is
agreed to in writing and signed by the Employee and by an authorized officer of
the Company (other than the Employee). No waiver by either party of any breach
of, or of compliance with, any condition or provision of this Agreement by the
other party shall be considered a waiver of any other condition or provision or
of the same condition or provision at another time.
(c) Whole Agreement. No agreements, representations or
understandings (whether oral or written and whether express or implied) which
are not expressly set forth in this Agreement have been made or entered into by
either party with respect to the subject matter hereof.
(d) Choice of Law. The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws of
the State of California.
(e) Severability. The invalidity or unenforceability of
any provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision hereof, which shall remain in full force
and effect.
(f) No Assignment of Benefits. The rights of any person
to payments or benefits under this Agreement shall not be made subject to option
or assignment, either by voluntary or involuntary assignment or by operation of
law, including (without limitation) bankruptcy, garnishment, attachment or other
creditor's process, and any action in violation of this Section shall be void.
(g) Employment Taxes. All payments made pursuant to this
Agreement will be subject to withholding of applicable income and employment
taxes.
(h) Assignment by Company. The Company may assign its
rights under this Agreement to an affiliate, and an affiliate may assign its
rights under this agreement to another affiliate of the Company or to the
Company; provided, however, that no assignment shall be made if the net worth of
the assignee is less than the net worth of the Company at the time of the
assignment. In the event of any such assignment, the term "Company" when used in
a section of this Agreement shall mean the corporation that actually employs the
Employee.
(i) Amendments. This Agreement shall not be changed or
modified in whole or in part except by an instrument in writing signed by each
party hereto.
(j) Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together will constitute one and the same instrument.
(k) Effect of Headings. The section headings herein are
for convenience only and shall not affect the construction or interpretation of
this Agreement.
(l) Restatement of Prior Agreement. The parties hereto
acknowledge that this Agreement amends and restates that Certain Employment
Agreement between the Company and the Employee dated as of August 1, 1997 and as
amended on February 23, 2000 and June 29, 2001.
IN WITNESS WHEREOF, each of the parties has executed this Agreement, in
the case of the Company by its duly authorized officer, as of the day and year
first above written.
COMPANY NOTIFY TECHNOLOGY CORPORATION
By: /s/ Xxxx X. XxXxxx
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Title: Chief Executive Officer
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Date: November 4, 2002
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EMPLOYEE /s/ Xxxxxx Xxxxxx
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Xxxxxx Xxxxxx
Date: November 4, 2002
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