Exhibit 10.24
ESPS, Inc.
Employment Agreement
To Xxxx Xxxxx:
This Agreement establishes the terms of your employment with ESPS, Inc., a
Delaware corporation (the "Company").
Employment and Duties You and the Company agree to your employment as
Vice President, New Initiatives & Business
Development on the terms contained herein. You
agree to perform whatever duties the Company's
Board of Directors (the "Board") or person the
Board or the Company's Chief Executive Officer
specifies as your direct report (the "Direct
Report") may assign you from time to time that are
reasonably consistent with your position as Vice
President, New Initiatives & Business Development.
During your employment, you agree to devote your
full business time, attention, and energies to
performing those duties (except as your Direct
Report otherwise agrees from time to time). You
agree to comply with the noncompetition, secrecy,
and other provisions of Exhibit A to this
Agreement.
Term of Employment Your employment under this Agreement begins as of
your execution of this Agreement (the "Effective
Date"). Unless sooner terminated under this
Agreement, your employment ends at 6:00 p.m.
Eastern Time on the second anniversary of the
Effective Date.
The period running from the Effective Date to the
second anniversary of the Effective Date in the
preceding sentence is the "Term."
Termination or expiration of this Agreement ends
your employment but does not end your obligation
to comply with Exhibit A or the Company's
obligation, if any, to make payments
Page 1 of 25
under the Payments on Termination and Severance
provisions as specified below.
Compensation
Salary The Company will pay you an annual salary (the
"Salary") from the Effective Date at the rate of
not less than $170,000 in accordance with its
generally applicable payroll practices. The Board
or your Direct Report will review your Salary
annually and consider you for increases.
Bonus You will be eligible for an annual bonus equal to
up to $60,000. The Board or your Direct Report
will review your bonus annually and consider you
for increases. This bonus will be calculated
according to annual incentive plan formulas
adopted on an annual basis by the Company. It is
the Company's good faith intention to provide
formulas for future fiscal years within 90 days of
the commencement of such fiscal year.
Sales Commissions You will be eligible for sales commissions based
on sales volume in your business unit. This
commission will be calculated according to
mutually agreeable formulas to be developed
annually.
Car Allowance You will receive a car allowance equal to $500 per
month.
Relocation Expenses In the event the Company relocates your principal
place of business in excess of 25 miles, but not
more than 50 miles from Fort Washington,
Pennsylvania, the Company will reimburse you for
reasonable and necessary relocation expenses, not
to exceed $15,000.
Vacation You will be eligible for four weeks vacation per
annum. In addition, you will be eligible for
personal days and sick days the Company makes
generally available from time to time to the
Company's employees, as those benefits are amended
or terminated from time to time.
Page 2 of 25
Employee Benefits While the Company employs you under this
Agreement, the Company will provide you with the
same benefits as it makes generally available from
time to time to the Company's employees, as those
benefits are amended or terminated from time to
time. Your participation in the Company's benefit
plans will be subject to the terms of the
applicable plan documents and the Company's
generally applied policies, and the Company in its
sole discretion may from time to time adopt,
modify, interpret, or discontinue such plans or
policies. It is the Company's good faith intention
to provide information on additional executive
benefits, if any, within 90 days of the execution
of this agreement.
Place of Employment Your principal place of employment will be within
50 miles of Fort Washington, Pennsylvania.
Expenses The Company will reimburse you for reasonable and
necessary travel and other business-related
expenses you incur for the Company in performing
your duties under this Agreement. You must itemize
and substantiate all requests for reimbursements.
You must submit requests for reimbursement in
accordance with the policies and practices of the
Company.
No Other Employment While the Company employs you, you agree that you
will not, directly or indirectly, provide services
to any person or organization for which you
receive compensation or otherwise engage in
activities that would conflict or interfere
significantly with your faithful performance of
your duties as an employee without the Board's
prior written consent. (This prohibition excludes
any work performed at the Company's direction.)
You may manage your personal investments, as long
as the management takes only minimal amounts of
time and is consistent with the provisions of the
No Conflicts of Interest Section and the No
Competition Section in Exhibit A.
You represent to the Company that you are not
subject to any agreement, commitment, or policy of
any third party that would prevent you from
entering into or performing your duties under this
Agreement, and you agree that you will not enter
into any
Page 3 of 25
agreement or commitment or agree to any policy
that would prevent or hinder your performance of
duties and obligations under this Agreement,
including Exhibit A.
No Conflicts of Interest You confirm that you have fully disclosed to the
Company, to the best of your knowledge, all
circumstances under which you, your spouse, and
other persons who reside in your household have or
may have a conflict of interest with the Company.
You further agree to fully disclose to the Company
any such circumstances that might arise during
your employment upon your becoming aware of such
circumstances. You agree to fully comply with the
Company's policy and practices relating to
conflicts of interest.
No Improper You will neither pay nor permit payment of any
remuneration to or
Payments on behalf of any governmental official other than
payments required or permitted by applicable law.
You will comply fully with the Foreign Corrupt
Practices Act of 1977, as amended. You will not,
directly or indirectly,
make or permit any contribution, gift, bribe,
rebate, payoff, influence payment, kickback,
or other payment to any person or entity,
private or public, regardless of what form,
whether in money, property, or services
to obtain favorable treatment for
business secured,
to pay for favorable treatment for
business secured,
to obtain special concessions or for
special concessions already obtained, or
in violation of any legal requirement,
or
establish or maintain any fund or asset
related to the Company that is not recorded
in the Company's books and records, or
Page 4 of 25
take any action that would violate (or would
be part of a series of actions that would
violate) any U.S. law relating to
international trade or commerce, including
those laws relating to trading with the
enemy, export control, and boycotts of Israel
or Israeli products (as is sought by certain
Arab countries).
Termination Subject to the provisions of this section, you and
the Company agree that it may terminate your
employment, or you may resign, except that, if you
voluntarily resign, you must provide the Company
with 90 days' prior written notice (unless the
Board or your Direct Report has previously waived
such notice in writing or authorized a shorter
notice period).
For Cause The Company may terminate your employment for
"Cause" if you:
(i) commit a material breach of your
obligations or agreements under this
Agreement, including Exhibit A;
(ii) commit an act of gross negligence
with respect to the Company or otherwise
act with willful disregard for the
Company's best interests, or materially
violate the Company's business practices
and policies as set forth in its
Employee Handbook;
(iii) fail or refuse to perform any
duties delegated to you that are
reasonably consistent with the duties of
similarly-situated senior executives or
are otherwise required under this
Agreement, provided that these duties do
not conflict with any other provision of
this Agreement;
(iv) seize a corporate opportunity for
yourself instead of offering such
opportunity to the Company if within the
scope of the Company's or its
subsidiaries' business; or
Page 5 of 25
(v) are convicted of or plead guilty or
no contest to a felony (or to a felony
charge reduced to misdemeanor), or, with
respect to your employment, commit
either a material dishonest act or
common law fraud or knowingly violate
any federal or state securities or tax
laws.
Your termination for Cause will be effective
immediately upon the Company's mailing or written
transmission of notice of such termination. Before
terminating your employment for Cause under
clauses (i) - (iv) above, the Company will specify
in writing to you the nature of the act, omission,
refusal, or failure that it deems to constitute
Cause and, unless the Board or your Direct Report
reasonably concludes the situation could not be
corrected, give you 30 days after you receive such
notice to correct the situation (and thus avoid
termination for Cause), unless the Company agrees
to extend the time for correction. You agree that
the Board or your Direct Report will have the
discretion to determine in good faith whether your
correction is sufficient, provided that this
decision does not foreclose you from using the
Dispute Resolution provisions of Exhibit B.
Without Cause Subject to the provisions below under Payments on
Termination and Severance, the Company may
terminate your employment under this Agreement
before the end of the Term without Cause.
Disability If you become "disabled" (as defined below), the
Company may terminate your employment. You are
"disabled" if you are unable, despite whatever
reasonable accommodations the law requires, to
render services to the Company because of mental
disability, incapacity, or illness, for more than
the sum of:
a) 90 consecutive days,
b) the number of earned but unused vacation
days (see the Vacation paragraph of this
Agreement for the number of vacation days
available per year), and
c) the number of earned but unused personal
and sick days generally available from
time to time to the Company's
Page 6 of 25
employees, as those benefits are amended
or terminated from time to time.
You are also disabled if you are found to be
disabled within the meaning of the Company's long-
term disability insurance coverage as then in
effect (or would be so found if you applied for
the coverage), and you have no remaining:
a) earned but unused vacation days (see the
Vacation paragraph of this Agreement for
the number of vacation days available per
year), and
b) earned but unused personal and sick days
generally available from time to time to
the Company's employees, as those benefits
are amended or terminated from time to
time.
Good Reason You may resign for Good Reason with 45 days'
advance written notice. "Good Reason" for this
purposes means, without your consent, (i) the
Company materially breaches this Agreement or (ii)
the Company relocates your primary office by more
than 50 miles from Fort Washington, Pennsylvania.
You must give notice to the Company of your
intention to resign for Good Reason within 30 days
after the occurrence of the event that you assert
entitles you to resign for Good Reason. In that
notice, you must state the condition that you
consider provides you with Good Reason and, if
such reason relates to clause (i) above, must give
the Company an opportunity to cure the condition
within 30 days after your notice. Before or during
the 30 day period, either party may request
mediation under Exhibit B to resolve any such
disputes, and, if so requested, the parties agree
to cooperate to arrange a prompt mediation during
no more than a 30 day period. If the Company fails
to cure the condition, your resignation will be
effective on the 45th day after your notice
(unless the Board has previously waived such
notice period in writing or agreed to a shorter
notice period or unless mediation is proceeding in
good faith), in which case such resignation xxxx
Xxxx 7 of 25
become effective 15 days after the end of such
mediation, if not previously cured.
You will not be treated as resigning for Good
Reason if the Company already had given notice of
termination for Cause as of the date of your
notice of resignation.
In addition, you will not be treated as resigning
for Good Reason if the Company changes your
position as Vice President, New Initiatives &
Business Development, to another Vice President
position suitable for your skills, provided that
the terms of such position do not violate any
other provisions of this Agreement.
Death If you die during the Term, the Term will end as
of the date of your death.
Payments on If you resign or the Company terminates your
Termination employment with or without Cause or because of
disability or death, the Company will pay you any
unpaid portion of your Salary pro-rated through
the date of actual termination (and any annual
bonuses already determined by such date but not
yet paid unless your employment is terminated with
Cause), reimburse any substantiated but
unreimbursed business expenses, pay any accrued
and unused vacation time (to the extent consistent
with the Company's policies), and provide such
other benefits as applicable laws or the terms of
the benefits require. Except to the extent the law
requires otherwise or as provided in the Severance
paragraph or in your option agreements, neither
you nor your beneficiary or estate will have any
rights or claims under this Agreement or otherwise
to receive severance or any other compensation, or
to participate in any other plan, arrangement, or
benefit, after such termination or resignation.
Severance In addition to the foregoing payments, if the
Company terminates your employment without Cause
or you resign for Good Reason, the Company xxxx
Xxxx 8 of 25
pay you severance equal to your Salary, as
then in effect, for six months on the same
schedule as though you had remained employed
during such period, even though you are no
longer employed;
pay the after-tax premium cost for you to
receive any group health coverage the Company
must offer you under Section 4980B of the
Internal Revenue Code of 1986 ("COBRA
Coverage") for the period of such coverage
(unless the coverage is then provided under a
self-insured plan);
pay you, at the time the Company would
otherwise pay your annual bonus, your pro
rata share of the bonus for the year of your
termination, where the pro rata factor is
based on days elapsed in your year of
termination till date of termination over
365, less any portion of the bonus for the
year of your termination already paid; and
It is the Company's good faith intention to
provide you, within 90 days of this agreement, a
proposal of the number of unvested options that
will be subject to accelerated vesting upon either
termination without cause, resignation for good
reason, or as a result of a change of control. In
the event you do not find such proposal
acceptable, you will be entitled to cancel this
agreement within 30 days of receipt of the
Company's proposal, provided such cancellation is
effected according to the Notices paragraph of
this Agreement. In the event of such cancellation,
the provisions of your previous employment
agreement, if any, will be reinstated, and you
will not be eligible for any additional
compensation or benefits offered under this
Agreement.
You are not required to mitigate amounts payable
under the Severance paragraph by seeking other
employment or
Page 9 of 25
otherwise, nor must you return to the Company
amounts earned under subsequent employment.
Change of Control A Change of Control for this purpose means the
occurrence of any one or more of the following
events: a person, entity, or group (other than the
Company, any Company subsidiary, any Company
benefit plan, or any underwriter temporarily
holding securities for an offering of such
securities) acquires ownership of more than 50% of
the undiluted total voting power of the Company's
then-outstanding securities eligible to vote to
elect members of the Board ("COMPANY VOTING
SECURITIES"); consummation of a merger or
consolidation of the Company with or into any
other entity -- unless the holders of the Company
Voting Securities outstanding immediately before
such consummation, together with any trustee or
other fiduciary holding securities under a Company
benefit plan, hold securities that represent
immediately after such merger or consolidation at
least 50% of the combined voting power of the then
outstanding voting securities of either the
Company or the other surviving entity or its
parent; or the stockholders of the Company approve
(i) a plan of complete liquidation or dissolution
of the Company or (ii) an agreement for the
Company's sale or disposition of all or
substantially all the Company's assets, AND such
liquidation, dissolution, sale, or disposition is
consummated.
Expiration Expiration of this Agreement, whether because of notice
of non-renewal or otherwise, does not constitute
termination without Cause nor provide you with Good
Reason and does not entitle you to Severance, unless
the Company's general severance practices entitle you
to severance in that situation.
This Agreement shall automatically renew for an
additional two year period unless, no less than 90 days
before the end of the
Page 10 of 25
Term, either party to this Agreement notifies the other
party, in accordance with the Notices paragraph, of its
intention to not renew the contract upon expiration of
the Term.
If you remain employed at the end of the Term and your
employment then ends as a result of the Company's non-
renewal of this Agreement with substantially similar
terms to this Agreement, the Company will pay you
severance equal to your Salary, as then in effect, for
6 months on the same schedule as though you had
remained employed during such period, even though you
are no longer employed, which payments you agree
compensate you for the restrictions under Exhibit A
upon contract expiration.
Severability If the final determination of an arbitrator or a court
of competent jurisdiction declares, after the
expiration of the time within which judicial review (if
permitted) of such determination may be perfected, that
any term or provision of this Agreement, including any
provision of Exhibit A, is invalid or unenforceable,
the remaining terms and provisions will be unimpaired,
and the invalid or unenforceable term or provision will
be deemed replaced by a term or provision that is valid
and enforceable and that comes closest to expressing
the intention of the invalid or unenforceable term or
provision.
Amendment; Waiver Neither you nor the Company may modify, amend, or waive
the terms of this Agreement other than by a written
instrument signed by you and an executive officer of
the Company duly authorized by the Board. Either
party's waiver of the other party's compliance with any
provision of this Agreement is not a waiver of any
other provision of this Agreement or of any subsequent
breach by such party of a provision of this Agreement.
Withholding The Company will reduce its compensatory payments to
you for withholding and FICA taxes and any other
withholdings and contributions required by law.
Page 11 of 25
Governing Law The laws of the State of Pennsylvania (other than its
conflict of laws provisions) govern this Agreement.
Notices Notices must be given in writing by personal delivery,
by certified mail, return receipt requested, by
telecopy, or by overnight delivery. You should send or
deliver your notices to the Company's corporate
headquarters. The Company will send or deliver any
notice given to you at your address as reflected on the
Company's personnel records. You and the Company may
change the address for notice by like notice to the
others. You and the Company agree that notice is
received on the date it is personally delivered, the
date it is received by certified mail, the date of
guaranteed delivery by the overnight service, or the
date the fax machine confirms effective transmission.
Superseding Effect This Agreement supersedes any prior oral or written
employment, severance, or fringe benefit agreements
between you and the Company, other than with respect to
your eligibility for generally applicable employee
benefit plans, and other than with respect to any
previously executed option agreements between you and
the Company. This Agreement supersedes all prior or
contemporaneous negotiations, commitments, agreements,
and writings with respect to the subject matter of this
Agreement, except with respect to any previously
executed option agreements between you and the Company.
All such other negotiations, commitments, agreements,
and writings will have no further force or effect; and
the parties to any such other negotiation, commitment,
agreement, or writing will have no further rights or
obligations thereunder.
Page 12 of 25
If you accept the terms of this Agreement, please sign in the space indicated
below. We encourage you to consult with any advisors you choose.
ESPS, Inc.
By: /s/ R. Xxxxxxx Xxxx
I accept and agree to the terms of employment set
forth in this Agreement:
/s/ Xxxxxxx Xxxxx
Dated: December 28, 2000
Page 13 of 25
Exhibit A
---------
No Competition You agree to the provisions of this Exhibit A in
consideration of your employment by the Company and salary
and benefits under this Agreement and the training you
will receive in connection with such employment, and you
agree that Exhibit A should be considered ancillary to the
option agreements by which you will receive options from
the Company. While the Company (or its successor or
transferee) employs you and to the end of the Restricted
Period (as defined below), you agree as follows:
You will not, directly or indirectly, be employed by, lend
money to, or engage in any Competing Business within the
Market Area (each as defined below). That prohibition
includes, but is not limited to, acting, either singly or
jointly or as agent for, or as an employee of or
consultant to, any one or more persons, firms, entities,
or corporations directly or indirectly (as a director,
independent contractor, representative, consultant,
member, or otherwise) that constitutes such a Competing
Business. You also will not invest or hold equity or
options in any Competing Business, provided that you may
own up to 3% of the outstanding capital stock of any
corporation that is actively publicly traded without
violating this No Competition covenant, so long as you
have no involvement beyond passive investing in such
business and you comply with the second sentence of this
paragraph.
If, during the Restricted Period, you are offered and want
to accept employment with a business that engages in
activities similar to the Company's, you will inform your
Direct Report in writing of the identity of the business,
your proposed duties with that business, and the proposed
starting date of that employment. You will also inform
that business of the terms of this Exhibit A. The Company
will analyze the proposed employment and make a good faith
determination as to whether it would threaten the
Company's legitimate competitive interests. If the Company
Page 14 of 25
determines that the proposed employment would not pose an
unacceptable threat to its interests, the Company will
notify you that it does not object to the employment.
You acknowledge that, during the portion of the Restricted
Period that follows your employment, you may engage in any
business activity or gainful employment of any type and in
any place except as described above. You acknowledge that
you will be reasonably able to earn a livelihood without
violating the terms of this Agreement.
You understand and agree that the rights and obligations
set forth in this No Competition Section will continue and
will survive through the Restricted Period.
Definitions
Competing Competing Business means any service or product of any
Business person or organization other than the Company and its
successors, assigns, or subsidiaries (collectively, the
"Company Group") that competes with any service or product
of the Company Group provided by any member of the Company
Group during your employment. Competing Business includes
any enterprise engaged in the creation or sale of
knowledge publishing software, and other related services
to assist clients in integrating and maintaining their
knowledge publishing solutions.
Market The Market Area consists of the United States and Canada.
Area You agree that the Company provides services both at its
facilities and at the locations of its customers or
clients and that, by the nature of its business, it
operates globally.
Restricted For purposes of this Agreement, the Restricted Period ends
Period at the first anniversary of the date your employment with
the Company Group ends for any reason.
No Interference; During the Restricted Period, you agree that you will not,
directly
Page 15 of 25
No Solicitation or indirectly, whether for yourself or for any other
individual or entity (other than the Company or its
affiliates or subsidiaries), intentionally
solicit any person or entity who is, or was, within
the 24 months preceding your date of termination or
resignation, a customer, prospect (with respect to
which any member of the Company Group has incurred
substantial costs or with which you have been
involved), or client of the Company Group within the
Market Area, with the 24 month period reduced to 12
months for prospects with which you have not been
involved;
hire away or endeavor to entice away from the Company
Group any employee or any other person or entity whom
the Company Group engages to perform services or
supply products and including, but not limited to,
any independent contractors, consultants, engineers,
or sales representatives or any contractor,
subcontractor, supplier, or vendor; or
hire any person whom the Company Group employs or
employed within the prior 12 months.
Secrecy
Preserving Your employment with the Company under and, if applicable,
Company before this Agreement (with a predecessor to a member of
Confidences the Company Group), has given and will give you access to
Confidential Information (as defined below). You
acknowledge and agree that using, disclosing, or
publishing any Confidential Information in an unauthorized
or improper manner could cause the Company or Company
Group to incur substantial loss and damages that could not
be readily calculated and for which no remedy at law would
be adequate. Accordingly, you agree with the Company that
you will not at any time, except in performing your
employment duties to the Company or the Company Group
under this Agreement (or with the Board's or your Direct
Page 16 of 25
Report's prior written consent), directly or indirectly,
use, disclose, or publish, or permit others not so
authorized to use, disclose, or publish any Confidential
Information that you may learn or become aware of, or may
have learned or become aware of, because of your prior or
continuing employment, ownership, or association with the
Company or the Company Group or any of their predecessors,
or use any such information in a manner detrimental to the
interests of the Company or the Company Group.
Preserving You agree not to use in working for the Company Group and
Others' not to disclose to the Company Group any trade secrets or
Confidences other information you do not have the right to use or
disclose and that the Company Group is not free to use
without liability of any kind. You agree to promptly
inform the Company in writing of any patents, copyrights,
trademarks, or other proprietary rights known to you that
the Company or the Company Group might violate because of
information you provide.
Confidential "Confidential Information" includes, without limitation,
Information information that the Company or the Company Group has not
previously disclosed to the public or to the trade with
respect to the Company's or the Company Group's present or
future business, including its operations, services,
products, research, inventions, discoveries, drawings,
designs, plans, processes, models, technical information,
facilities, methods, trade secrets, copyrights, software,
source code, systems, patents, procedures, manuals,
specifications, any other intellectual property,
confidential reports, price lists, pricing formulas,
customer lists, financial information (including the
revenues, costs, or profits associated with any of the
Company's or the Company Group's products or services),
business plans, lease structure, projections, prospects,
opportunities or strategies, acquisitions or mergers,
advertising or promotions, personnel matters, legal
matters, any other confidential and proprietary
information, and any other information not generally known
outside the Company or the Company Group that may be of
value to the Company or the
Page 17 of 25
Company Group but, notwithstanding anything to the
contrary, excludes any information already properly in the
public domain. "Confidential Information" also includes
confidential and proprietary information and trade secrets
that third parties entrust to the Company or the Company
Group in confidence.
You understand and agree that the rights and obligations
set forth in this Secrecy Section will continue
indefinitely and will survive termination of this
Agreement and your employment with the Company or the
Company Group.
Exclusive Property You confirm that all Confidential Information is and must
remain the exclusive property of the Company or the
relevant member of the Company Group. Any office equipment
(including computers) you receive from the Company Group
in the course of your employment and all business records,
business papers, and business documents you keep or make,
whether on digital media or otherwise, in the course of
your employment by the Company relating to the Company or
any member of the Company Group must be and remain the
property of the Company or the relevant member of the
Company Group. Upon the termination of this Agreement with
the Company or upon the Company's request at any time, you
must promptly deliver to the Company or to the relevant
member of the Company Group any such office equipment
(including computers) and any Confidential Information or
other materials (written or otherwise) not available to
the public or made available to the public in a manner you
know or reasonably should recognize the Company did not
authorize, and any copies, excerpts, summaries,
compilations, records, or documents you made or that came
into your possession during your employment. You agree
that you will not, without the Company's consent, retain
copies, excerpts, summaries, or compilations of the
foregoing information and materials. You understand and
agree that the rights and obligations set forth in this
Exclusive Property Section will continue indefinitely and
will survive termination of this Agreement and your
employment with the Company Group.
Page 18 of 25
Copyrights, You agree that all records, in whatever media (including
Discoveries, written works), documents, papers, notebooks, drawings,
Inventions, and designs, technical information, source code, object code,
Patents processes, methods or other copyrightable or otherwise
protected works you conceive, create, make, invent, or
discover that relate to or result from any work you
perform or performed for the Company or the Company Group
or that arise from the use or assistance of the Company
Group's facilities, materials, personnel, or Confidential
Information in the course of your employment (whether or
not during usual working hours), whether conceived,
created, discovered, made, or invented individually or
jointly with others, will be and remain the absolute
property of the Company (or another appropriate member of
the Company Group, as specified by the Company), as will
all the worldwide patent, copyright, trade secret, or
other intellectual property rights in all such works. (All
references in this section to the Company include the
members of the Company Group, unless the Company
determines otherwise.) You irrevocably and unconditionally
waive all rights, wherever in the world enforceable, that
vest in you (whether before, on, or after the date of this
Agreement) in connection with your authorship of any such
copyrightable works in the course of your employment with
the Company Group or any predecessor. Without limitation,
you waive the right to be identified as the author of any
such works and the right not to have any such works
subjected to derogatory treatment. You recognize any such
works are "works for hire" of which the Company is the
author.
You will promptly disclose, grant, and assign ownership to
the Company for its sole use and benefit any and all
processes, inventions, discoveries, improvements,
technical information, and copyrightable works (whether
patentable or not) that you develop, acquire, conceive or
reduce to practice (whether or not during usual working
hours) while the Company or the Company Group employs you.
You will promptly disclose and hereby grant and assign
ownership to the Company of all patent applications,
letters patent, utility and design patents, copyrights,
and reissues thereof or any foreign equivalents thereof,
that may at any time
Page 19 of 25
be filed or granted for or upon any such invention,
improvement, or information. In connection therewith:
You will, without charge but at the Company's
expense, promptly execute and deliver such
applications, assignments, descriptions, and other
instruments as the Company may consider reasonably
necessary or proper to vest title to any such
inventions, discoveries, improvements, technical
information, patent applications, patents,
copyrightable works, or reissues thereof in the
Company and to enable it to obtain and maintain the
entire worldwide right and title thereto; and
You will provide to the Company at its expense all
such assistance as the Company may reasonably require
in the prosecution of applications for such patents,
copyrights, or reissues thereof, in the prosecution
or defense of interferences that may be declared
involving any such applications, patents, or
copyrights and in any litigation in which the Company
may be involved relating to any such patents,
inventions, discoveries, improvements, technical
information, or copyrightable works or reissues
thereof. The Company will reimburse you for
reasonable out-of-pocket expenses you incur and pay
you reasonable compensation for your time if the
Company Group no longer employs you.
To the extent, if any, that you own rights to works,
inventions, discoveries, proprietary information, and
copyrighted or copyrightable works, or other forms of
intellectual property that are incorporated in the work
product you create for the Company Group, you agree that
the Company will have an unrestricted, non-exclusive,
royalty-free, perpetual, transferable license to make,
use, sell, offer for sale, and sublicense such works and
property in whatever form, and you hereby grant such
license to the Company (and the Company Group).
This Copyrights, Discoveries, Inventions and Patents
section does not apply to an invention or discovery for
which no
Page 20 of 25
equipment, supplies, facility or trade secret information
of the Company Group (including its predecessors) was used
and that was developed entirely on your own time, unless
(a) the invention relates (i) directly to the business of
the Company Group, or (ii) the Company Group's actual or
then reasonably anticipated research or development, or
(b) the invention results from any work you performed for
the Company Group or any predecessor.
Maximum Limits If any of the provisions of Exhibit A are ever deemed to
exceed the time, geographic area, or activity limitations
the law permits, you and the Company agree to reduce the
limitations to the maximum permissible limitation, and you
and the Company authorize a court or arbitrator having
jurisdiction to reform the provisions to the maximum time,
geographic area, and activity limitations the law permits;
provided, however, that such reductions apply only with
respect to the operation of such provision in the
particular jurisdiction with respect to which such
adjudication is made.
Injunctive Relief Without limiting the remedies available to the Company,
you acknowledge
that a breach of any of the covenants in this Exhibit
A may result in material irreparable injury to the
Company and Company Group for which there is no
adequate remedy at law, and
that it will not be possible to measure damages for
such injuries precisely.
You agree that, if there is a breach or threatened breach,
the Company or any member of the Company Group may be
entitled to obtain a temporary restraining order and/or a
preliminary or permanent injunction restraining you from
engaging in activities prohibited by any provisions of
this Exhibit A or such other relief as may be required to
specifically enforce any of the covenants in this Exhibit
A. The Company or any member of the Company Group will, in
addition to the remedies provided in this
Page 21 of 25
Agreement, be entitled to avail itself of all such other
remedies as may now or hereafter exist at law or in equity
for compensation and for the specific enforcement of the
covenants contained in this Agreement. Resort to any remedy
provided for in this Section or provided for by law will not
prevent the concurrent or subsequent employment of any other
appropriate remedy or remedies, or preclude the Company's or
the Company Group's recovery of monetary damages and
compensation. You also agree that the Restricted Period or
such longer period during which the covenants hereunder by
their terms survive will extend for any and all periods for
which a court with personal jurisdiction over you finds that
you violated the covenants contained in this Exhibit A.
Exhibit B
---------
Dispute Resolution
Mediation If either party has a dispute or claim relating to this Agreement
or their relationship and except as set forth in Alternatives,
the parties must first seek to mediate the same before an
impartial mediator the parties mutually designate, and the
parties must equally share the expenses of such proceeding (other
than their respective attorneys' fees). Subject to the
mediator's schedule, the mediation must occur within 45 days of
either party's written demand. However, in an appropriate
circumstance, a party may seek emergency equitable relief from a
court of competent jurisdiction notwithstanding this obligation
to mediate.
Binding If the mediation reaches no solution or the parties agree to
Arbitration forego mediation, the parties will promptly submit their disputes
to binding arbitration before one or more arbitrators
(collectively or singly, the "Arbitrator") the parties agree to
select (or whom, absent agreement, a court of competent
jurisdiction selects). The arbitration must follow applicable law
related to arbitration proceedings and, where appropriate, the
Commercial Arbitration Rules of the American Arbitration
Association.
Page 22 of 25
Arbitration All statutes of limitations and substantive laws applicable to a
Principles court proceeding will apply to this proceeding. The Arbitrator
will have the power to grant relief in equity as well as at law,
to issue subpoenas duces tecum, to question witnesses, to
consider affidavits (provided there is a fair opportunity to
rebut the affidavits), to require briefs and written summaries of
the material evidence, and to relax the rules of evidence and
procedure, provided that the Arbitrator must not admit evidence
it does not consider reliable. The Arbitrator will not have the
authority to add to, detract from, or modify any provision of
this Agreement. The parties agree (and the Arbitrator must agree)
that all proceedings and decisions of the Arbitrator will be
maintained in confidence, to the extent legally permissible, and
not be made public by any party or the Arbitrator without the
prior written consent of all parties to the arbitration, except
as the law may otherwise require.
Discovery; The parties have selected arbitration to expedite the resolution
of disputes
Evidence; and to reduce the costs and burdens associated with litigation.
Presumptions The parties agree that the Arbitrator should take these concerns
into account when determining whether to authorize discovery and,
if so, the scope of permissible discovery and other hearing and
pre-hearing procedures. The Arbitrator may permit reasonable
discovery rights in preparation for the arbitration, provided
that it should accelerate the scheduling of and responses to such
discovery so as not to unreasonably delay the arbitration.
Exhibits must be marked and left with the Arbitrator until it has
rendered a decision. Either party may elect, at its expense, to
record the proceedings by audiotape or stenographic recorder (but
not by video). The Arbitrator may conclude that the applicable
law of any foreign jurisdiction would be identical to that of
Texas on the pertinent issue(s), absent a party's providing the
Arbitrator with relevant authorities (and copying the opposing
party) at least five business days before the arbitration
hearing.
Nature of The Arbitrator must render its award, to the extent feasible,
Award within 30 days after the close of the hearing. The award must set
forth the material findings of fact and legal conclusions
supporting the award. The parties agree that it will be final,
binding, and enforceable by any court of competent jurisdiction.
Where necessary or appropriate to
Page 23 of 25
effectuate relief, the Arbitrator may issue equitable orders as
part of or ancillary to the award. The Arbitrator must equitably
allocate the costs and fees of the proceeding and may consider in
doing so the relative fault of the parties. The Arbitrator may
award reasonable attorneys' fees to the prevailing party to the
extent a court could have made such an award.
Appeal The parties may appeal the award based on the grounds allowed by
statute, as well as upon the ground that the award misapplies the
law to the facts, provided that such appeal is filed within the
applicable time limits law allows. If the award is appealed, the
court may consider the ruling, evidence submitted during the
arbitration, briefs, and arguments but must not try the case de
novo. The parties will bear the costs and fees associated with
the appeal in accordance with the arbitration award or, in the
event of a successful appeal, in accordance with the court's
final judgment.
Alternatives This Dispute Resolution provision does not preclude a party from
seeking equitable relief from a court (i) to prevent imminent or
irreparable injury or (ii) pending arbitration, to preserve the
last peaceable status quo, nor does it preclude the parties from
agreeing to a less expensive and faster means of dispute
resolution. It does not prevent the Company from immediately
seeking in court an injunction or other remedy with respect to
Exhibit A.
Page 24 of 25
