THIS AGREEMENT IS SUBJECT TO ARBITRATION] EMPLOYMENT AGREEMENT FOR CHIEF TECHNOLOGY OFFICER
EXHIBIT 10(j)
[THIS AGREEMENT IS SUBJECT TO ARBITRATION]
EMPLOYMENT AGREEMENT FOR CHIEF TECHNOLOGY OFFICER
THIS AGREEMENT is made and entered into as of the 22 day of May, 1996, by and between
Interphase Corporation (the “Corporation”), and Xxxxx Xxxx (“Executive”).
WHEREAS, the Corporation desires to enter into an employment relationship with Executive on
certain terms and conditions as set forth herein; and
WHEREAS, Executive is willing to accept such employment;
NOW, THEREFORE, the parties hereto, in consideration of the mutual covenants and promises
hereinafter contained, do hereby agree as follows:
1. Employment. The Corporation hereby
employs Executive and Executive hereby accepts the employment, on the terms and conditions
hereinafter set forth. Executive’s general duties and
responsibilities as chief Technology
Officer. Executive agrees to review and comply with all policies and procedures in the
Corporation’s Employee Handbook.
2. Term. Executive’s employment with the Corporation will be at-will, and thus,
either party may terminate the relationship at any time for any reason, subject to the termination
provisions in paragraphs 6 and 7. Executive understands and agrees that no employee or agent of
the Corporation, other than the Corporation’s Chief Executive Officer, has any authority to enter
into any agreement for employment for any specified period of time or to make any agreement
contrary to the at-will
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AGREEMENT FOR CHIEF TECHNOLOGY OFFICER— Page 1
relationship and that any such modifications or agreements must be in writing and signed by
the Chief Executive Officer of the Corporation.
3. Salary
and Other Compensation. As compensation for the services to be rendered by
Executive to the Corporation pursuant to this Agreement, Executive shall be paid the following
compensation and other benefits:
a.
Salary: $10,000.00 per month, less deductions as may be required by law,
payable in semi-monthly installments. The Corporation reserves the right to: (i) make
periodic increases or decreases in Executive’s salary, in the sole discretion of the
Corporation; (ii) make deductions from Executive’s pay to satisfy any outstanding
obligations; and/or (iii) make deductions from Executive’s pay to satisfy any losses
resulting from unlawful activities.
b. Signing Bonus: Executive shall be paid a ten thousand dollar ($10,000.00) signing
bonus as consideration for his agreement to abide by the covenant not to compete provisions
and nondisclosure requirements contained in paragraphs 4 and 5 of this Agreement.
c. Stock Options: The Corporation shall, in accordance with the Corporation’s Amended
and Restated Stock Option Plan, grant to Executive a qualified stock option to purchase
10,000 shares of common stock of the Corporation as consideration for his agreement to abide
by the covenant not to compete provisions and nondisclosure requirements contained in
paragraphs 4 and 5 of this Agreement.
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d. Bonus: Executive shall be eligible for an annual bonus of up to thirty
thousand dollars ($30,000.00) based upon the guidelines contained in the Corporation’s
Executive Bonus Plan; less deductions as may be required by law. The Corporation reserves
the right to: (i) make periodic increases or decreases in Executive’s bonus, in the sole
discretion of the Corporation; (ii) make deductions from Executive’s bonus to satisfy any
outstanding obligations and/or (iii) make deductions from Executive’s bonus to satisfy any
losses resulting from unlawful activities.
e.
Office Furnishings: The Corporation agrees to provide office space and
furnishings to Executive commensurate with the Corporation’s decor and culture.
f. Executive Benefit Plans: Executive shall be allowed to participate, to the
extent he may be eligible, in any profit sharing, stock options,
retirement, insurance or
other Executive benefit plan maintained by the Corporation. Executive must comply with all
requirements regarding purchasing the Corporation’s Common Stock and exercising stock
options, including, without limitation, requirements promulgated by the Corporation and the
Security and Exchange Commission. In this regard, Executive must
report to the Corporation
any activity such as selling, purchasing or exercising the Corporation’s Common Stock
and/or stock options. Any questions regarding reporting requirements should be directed to
the Corporation’s Chief Financial Officer.
EMPLOYMENT AGREEMENT FOR CHIEF TECHNOLOGY OFFICER — Page 3
g. Vacations and Leave: Executive shall be entitled to three (3) weeks of
vacation per year and six (6) sick days per year, and any other paid leave benefits
provided for in the Corporation’s Employee Handbook.
4. Non-Disclosure
of Confidential Information. Executive acknowledges that in
and as a result of his employment by the Corporation, he will be making use of, acquiring, and/or
adding to confidential information of a special and unique nature and value relating to such
matters as the Corporation’s patents, copyrights, proprietary information, trade secrets, systems,
product developments, procedures, manuals, confidential reports, lists of customers (which are
deemed for all purposes confidential and proprietary), as well as the nature and type of services
rendered by the Corporation, the equipment and methods used and preferred by the Corporation’s
customers, and the fees paid by them. Executive further agrees that if a third party (e.g.,
vendors, customers and manufacturers) contracts with the Corporation the information obtained or
received from a third party including, but not limited to its patents, copyrights, proprietary
information, trade secrets, systems, product development, procedures, manuals, and confidential
reports will be treated in the same manner and subject to the same protection as other Confidential
Trade Secret Information (as hereinafter defined) of the Corporation.
As a material inducement to the Corporation to enter into this Agreement and to pay
Executive the compensation and benefits stated herein and as a condition of employment and
continued employment, Executive shall keep confidential all such
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confidential and proprietary information which Executive learns or acquires as a result of
his employment with the Corporation. By way of example, “Confidential Trade Secret Information” may
consist of any idea, process, design, concept, formula, pattern, device, development, customer
information or compilation of information which is used in the Corporation’s business, which gives
the Corporation an advantage over a competitor who does not know or
use it.
Executive
agrees that the appropriate remedy for any breach of this paragraph 4 is a suit for
injunctive relief and specific performance in any court of competent jurisdiction. Executive agrees
that damages for use of any identified Confidential Trade Secret Information in violation of this
paragraph 4 shall be 100% of the gross amount of revenue derived from unauthorized use of such
information.
5. Covenants
Not to Compete. Executive acknowledges that the service he/she is to
render to the Corporation are of a special and unusual character with
a unique value to the
Corporation, the loss of which cannot adequately be compensated by damages in action at law.
Accordingly, Executive agrees that during the term of his/her employment and for a period of one (1)
year from the date this Agreement is terminated, for whatever reason:
a. Executive shall not, directly or indirectly, without the express written
consent of the Corporation, solicit or induce, or attempt to solicit or induce, any
employee of the Corporation, current or future, to leave or cease their relationship
with the Corporation, for any reason
whatsoever, or hire any current or future employee of the Corporation.
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b. Executive shall not, directly or indirectly, without the express written content
of the Corporation: (i) engage in any business or activity that is competitive with the
business of the Corporation; and/or (ii) be employed by, or provide competitive services or
assistance to, a “Competing Business” (hereinafter defined) which would potentially
involve, directly or indirectly, the use and/or disclosure of the Corporation’s
Confidential Trade Secret Information, as defined in paragraph 4. For purposes of this
Agreement, a Competing Business means any person or firm that offers services or products
that are directly competitive with those marketed, offered for sale and/or under any stage
of development by the Corporation as of the date of Executive’s separation from employment.
If Executive desires to work for a Competing Business in an area that is not competitive
with the business of the Corporation, Executive must give written notice to the Chief
Executive Officer and obtain his approval that the employment will not violate the terms
and conditions of this paragraph 5 before beginning employment with the Competing Business.
c. Executive will not solicit or attempt to solicit the Corporation’s existing or
prospective customers to purchase services or products that are competitive with those
marketed, offered for sale and/or under any stage of development by the Corporation as of
the date of Executive’s separation from the Corporation. For purposes of the
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Agreement, existing customers shall mean those persons or firms that the Corporation has
made a sale to in the twelve (12) months preceding Executive’s separation from employment;
prospective customers shall mean those persons or firms that the Corporation has solicited
and/or negotiated to sell the Corporation’s products or services to within the twelve (12)
months preceding Executive’s separation from the Corporation.
d. In the event that, notwithstanding the foregoing, any of the provisions of this
paragraph 5 shall be held to be invalid or unenforceable, the remaining provisions thereof
shall nevertheless continue to be valid and enforceable as though the invalid or
unenforceable parts had not been included therein. In the event that any provision of this
paragraph 5 relating to the time period and/or the areas of restriction and/or related
aspects shall be declared by a court of competent jurisdiction to exceed the maximum
restrictiveness such court deems reasonable and enforceable, the time period and/or areas
of restriction and/or related aspects deemed reasonable and enforceable by the court shall
become and thereafter be the maximum restriction in such regard, and the restriction shall
remain enforceable to the fullest extent deemed reasonable by such court.
e. Executive agrees that the appropriate remedy for any breach of this paragraph 5 is
a suit for injunctive relief and specific performance
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in any court of competent jurisdiction. Executive agrees that the Corporation also
has the right to seek damages for any breach of this paragraph 5, and that the
damages for breach of this paragraph shall be 100% of the gross amount of revenue
derived from the breach of the covenant in this paragraph 5. The Corporation has
sole discretion regarding whether to seek a remedy for breach of this paragraph in a
Court of competent jurisdiction and/or through arbitration procedures outlined in
paragraph 8.
1.
Termination. This Agreement will terminate as follows:
a. Death. Executive’s employment hereunder shall automatically terminate upon
his death.
b. Disability. The Corporation may terminate the Executive’s employment hereunder in
the event of the Executive’s Disability (as hereinafter defined). For purposes of this
Agreement, “Disability” shall mean that, as a result of the Executive’s incapacity due to
illness or injury, Executive shall have been absent from his duties
under this Agreement on
a substantially full-time basis for a period of three (3) or more consecutive months, and
thereafter, within thirty (30) days after the Corporation notifies Executive in writing
that it intends to replace him, Executive shall not have returned to the performance of such
duties on a full-time basis. Should Executive be diagnosed as permanently disabled by his
treating physician, the Corporation can terminate his
employment without waiting for the expiration of the three-month period.
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Without
limiting the foregoing, until the Corporation terminates
Executive’s employment
hereunder on account of Disability, the Executive shall receive his full compensation as
provided in Paragraph 3 of this Agreement.
c. By Executive. Executive may resign at any time upon thirty (30) days notice to the
Chief Executive Officer of the Corporation.
d. By the Corporation.
(1) The Corporation may terminate Executive for any reason or no
reason upon thirty (30) days written notice to Executive.
(2) The Corporation may terminate Executive immediately for overt
misconduct. For purposes of this Agreement, “Overt Misconduct” means
willful violation of any rule or regulation that may be established from
time to time for the conduct of the Corporation’s business, for neglect
of the interests of the Corporation, breach of fiduciary duty involving
personal profit, willful violation of any law, rule, regulation (other
than traffic violations or similar minor offenses), or material breach of
any provision of this Agreement.
2. Payments
Upon Termination. Payments to Executive upon termination shall be as
follows:
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a. Upon Death. Executive’s estate shall be entitled to his earned, but unpaid base salary, pro
rata bonus, and to exercise vested stock options as of the date of death.
b. Upon Disability. Executive shall be entitled to his earned, but unpaid base salary, pro
rata bonus, and to exercise vested stock options through the effective date of termination.
c. Upon Resignation by Executive. In the event of any resignation by Executive, Executive
shall be entitled to his earned, but unpaid salary and to exercise vested stock options
through the effective date of the resignation.
d. Upon Termination for Overt Misconduct. Executive shall be entitled to his earned but
unpaid base salary and to exercise vested stock options through the effective date of
termination for Overt Misconduct.
e. Upon Termination by the Corporation for Other than Overt Misconduct. If the Corporation
terminates Executive’s employment for any reason other than Overt Misconduct, Executive
will be eligible for three (3) months’ severance pay at his base annual rate. Eighty
percent of this severance payment will be allocated to Executive’s agreement to abide by
the convenant not to compete provisions and nondisclosure requirements contained in
paragraphs 4 and 5 of this Agreement. Executive will be entitled to the severance payment
only if he executes a general release of all claims against the Corporation.
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3.
Arbitration. Subject to the provisions of paragraphs 4 and 5, Executive and
Corporation agree that all Disputes, as defined in Article
I of the Alternative Dispute Resolution Procedure (the “ADR Procedure”), regarding the
termination of employment or other covered Dispute shall be resolved exclusively in accordance
with the Corporation’s ADR Procedure. The parties, however, agree that the ADR
Procedure does not apply to claims for unemployment compensation benefits or claims by the
Corporation for injunctive relief, specific performance, and/or damages as provided for in
paragraphs 4 and 5 of this Agreement. Executive represents, warrants and agrees that (a)
Executive has received, read and understands the Corporations ADR Procedure; (b) Executive must
file a claim, if any,
under the ADR Procedure within one-hundred and eighty(180) days of being notified of the
termination or other adverse employment decision; (c) arbitration may be compelled and enforced
under the Federal Arbitration Act; (d) any arbitration award is final and binding
upon both Executive and the Corporation; (e) the ADR Procedure shall survive the
employer-employee relationship and applies to any Dispute whether it is asserted during or after
Executive’s separation of employment; and (f) the ADR Procedure does not alter the parties’
“at-will” employment relationship.
4. Resignation
Upon Termination. In the event of separation of Executive’s
employment with the Corporation, Executive hereby agrees to resign from all positions held
in the Corporation, including, without limitation, any position of director, officer,
agent, trustee, or consultant of the Corporation.
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5. Waiver.
A party’s failure to insist on compliance or enforcement of any
provision of this Agreement, shall not affect the validity or enforceability or constitute
a waiver of future enforcement of that provision or of any other provision of this
Agreement by that party or any other party.
6. Governing
Law. This Agreement shall in all respects be subject to, and governed
by, the laws of the State of Texas.
7. Sererability. The invalidity or unenforceability of any provision in the
Agreement shall not in any way affect the validity or enforceability of any other provision
and this Agreement shall be construed in all respects as if such invalid or unenforceable
provision had never been in the Agreement.
8. Notice.
Any and all notices required or permitted herein shall be deemed
delivered if delivered personally or if mailed by
registered or certified mail to the Corporation at its principal place of business and to
Executive at the address hereinafter set forth following Executive’s signature, or at such
other address or addresses as either party may hereafter designate in writing to the other.
9. Assignment. This Agreement, together with any amendments hereto, shall be binding upon
and shall inure to the benefit of the parties hereto and their respective successors,
assigns, heirs and personal representatives, except that the rights and benefits of either
of the parties under this Agreement may not be assigned without the prior written consent
of the other party.
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10. Amendments. This Agreement may be amended at any time by mutual consent of the
parties hereto, with any such amendment to be invalid unless in writing, signed by the
Corporation and Executive.
11. Entire Agreement. This Agreement contains the entire agreement and
understanding by and between Executive and the Corporation with respect to the employment
of Executive, and no representations, promises, agreements, or understandings, written or
oral, relating to the employment of Executive by the Corporation not contained herein shall
be of any force or effect.
12. Burden and Benefit. This Agreement shall be binding upon, and shall inure to the benefit
of, the Corporation and Executive, and their respective heirs, personal and legal representatives,
successors, and assigns.
13. References to Gender and Number Terms. In construing this Agreement, feminine
or number pronouns shall be substituted for those masculine in form and vice versa, and
plural terms shall be substituted for singular and singular for plural in any place which
the context so requires.
14. Headings. The various headings in this Agreement are inserted for convenience
only and are not part of the Agreement.
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IN WITNESS WHEREOF, the Corporation and Executive have duly executed this Agreement as of the
day and year first above written.
| INTERPHASE CORPORATION: | EXECUTIVE’S NAME | |||||||
By: |
/s/ R. Xxxxxxx Xxxxxx | /s/ Xxxxx X. Xxxx | ||||||
Its:
|
Chairman, C.E.O. & President | |||||||
| Address for Notice Purposes: | Address for Notice Purposes: | |||||||
| Interphase Corporation | ||||||||
| 00000 Xxxxxx Xxxx | ||||||||
| Xxxxxx, Xxxxx 00000 | ||||||||
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