EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") between SURPLUS SOFTWARE,
INC., an Oregon corporation ("Employer"), and XXXXXXX XXXXXXXX ("Employee")
is dated and entered into as of May 15, 1996.
In consideration of the mutual covenants and promises contained herein,
Employer and Employee agree as follows:
1. EMPLOYMENT
Employer shall employ Employee and Employee shall accept employment by
Employer in the position of Chief Executive Officer. Employee shall perform
such duties as may be assigned to him from time to time by the Employer's
Board of Directors (the "Board") which relate to the business of Employer,
its subsidiaries, its parent corporation, or any business ventures in which
Employer, its subsidiaries or its parent corporation may participate.
2. ATTENTION AND EFFORT
Employee shall devote Employee's full time, attention and effort to
Employer's business and shall skillfully serve its interests.
3. EMPLOYMENT AT WILL
Employee understands and agrees that his employment with Employer is at
will, and that either party may terminate such employment at any time
pursuant to Section 7.
4. COMPENSATION
4.1 BASE SALARY
Employee's starting annual base salary shall be one hundred twenty-five
thousand dollars ($125,000), before all customary payroll deductions. At no
time shall Employee's annual base salary be below $125,000. Such annual base
salary shall be paid in substantially equal installments at the same
intervals as other employees of Employer are paid. The Board shall determine
any increases in the annual base salary in future years.
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4.2 BONUS
In addition to the base salary provided in Section 4.1, Employee shall
be entitled to an annual bonus based upon attainment of budgeted income
before income tax ("Annual Target") as set forth in the annual budget
approved by the Board. Such bonus shall be paid within ninety (90) days of
year-end based on the following schedule:
BONUS
EMPLOYER PERFORMANCE (% OF BASE SALARY)
-------------------- ------------------
Equal to or greater than 70% of 10%
Annual Target
For each additional increment of 6.7% additional for each such 10%
10% above 70% of Annual Target increment
5. BENEFITS
During the term of this Agreement, Employee shall be entitled to
participate, subject to and in accordance with applicable eligibility
requirements, in such fringe benefit programs as may be provided from time to
time by the Employer and shall be reimbursed for reasonable and necessary
travel and other expenses incurred in connection with Employer's business in
accordance with Employer's reimbursement policy.
6. LIFE INSURANCE POLICY
Employer shall apply and pay for a life insurance policy in the amount
of $2 million on the life of Employee; provided, however, that Employer shall
not be required to obtain such insurance if Employer is required to pay
unreasonably high premiums for such insurance due to any unusual risks
associated with insuring Employee. Employee shall be the owner of this life
insurance policy and shall have the right to designate the beneficiary of
such policy. Employee agrees to pay any and all federal and state taxes
which may be required to be paid with respect to payment of insurance
premiums by Employer under this Section 6.
7. TERMINATION
7.1 BY EMPLOYER
Employer may terminate the employment of Employee, with or without
cause, (as defined below) at any time during the term of employment upon
giving thirty (30) days' prior notice to Employee. Employer may also
terminate this Agreement for cause at any time without notice.
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7.2 BY EMPLOYEE
Employee may terminate Employee's employment at any time upon giving
thirty (30) days' prior notice to Employer.
7.3 AUTOMATIC TERMINATION
Employment shall terminate automatically upon death or total disability
of Employee. The term "total disability" as used herein shall mean an
inability to perform the duties set forth in Section 1 of this Agreement
because of illness or physical or mental disability for a period or periods
aggregating ninety (90) calendar days in any 12-month period, unless Employee
is granted a leave of absence by the Board. The parties hereto acknowledge
that Employee's ability to perform the duties specified in Section 1 hereof
is of the essence of this Agreement. Termination hereunder shall be deemed
to be effective thirty (30) days following Employee's death or immediately
upon a determination by the Board of Employee's total disability, as defined
herein.
7.4 NOTICE
In the event that Employee's employment is terminated upon thirty (30)
days' prior notice as provided for in Sections 7.1 or 7.2 of this Agreement,
the parties agree that Employee's employment and performance of services
shall continue for the duration of such notice period; PROVIDED, HOWEVER,
that Employer may, at its own election and without reducing Employee's
compensation during such period, excuse Employee from any or all of
Employee's duties during such period. The effective date of the termination
of Employee's employment hereunder shall be the date on which such thirty
(30) day period expires, unless Employer and Employee agree in writing to a
different date.
7.5 CAUSE
Wherever reference is made in this Agreement to termination being with
or without cause, "cause" means cause given by Employee to Employer and
includes the following: (a) failure or refusal to carry out the directions
of the Board, which directions are reasonably consistent with the duties
herein set forth to be performed by Employee; (b) violation of a state or
federal criminal law involving the commission of a crime against Employer or
a felony; (c) misuse of alcohol or controlled substances; (d)
misrepresentation, deception, fraud or dishonesty; (e) any incident
compromising Employee's reputation or ability to represent Employer with the
public; (f) any act or omission which substantially impairs Employer's
business, good will or reputation; or (g) any other material breach of this
Agreement. The parties hereto agree that a
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determination of cause pursuant to this paragraph shall be committed solely
to the discretion of Employer.
7.6 TERMINATION PAYMENTS
In the event of termination of the employment of Employee by Employer
without cause, Employee shall be paid, upon delivery to Employer of a general
release of liability by Employee, in a form acceptable to Employer, 75
percent of his annual base monthly salary for a period of eighteen (18)
months from the date of termination, payable in substantially equal
installments at the same intervals as other employees of the Employer are
paid. During such eighteen (18) month period, the Employer shall continue to
provide health insurance coverage for Employee at Employer's cost. In the
event of termination of the employment of Employee for any other reason, all
salary, bonuses, benefits and other compensation set forth in this Agreement
shall cease as of the effective date of such termination; PROVIDED, HOWEVER,
that if the employment of Employee is automatically terminated due to death
or disability pursuant to Section 7.3 hereof, Employee or Employee's personal
representative shall receive termination payments in the form of Employee's
annual base salary through the conclusion of the calendar month of the
termination of employment because of such death or disability.
8. ASSIGNMENT OF INVENTIONS AND CONFIDENTIALITY AGREEMENT
Employee agrees to execute the Assignment of Inventions and
Confidentiality Agreement attached hereto as Exhibit A.
9. CONFLICTING AGREEMENTS
Employee is not a party to any existing or proposed agreements that may
adversely affect Employee's ability to render services to the Employer
hereunder.
10. GENERAL PROVISIONS
10.1 NO WAIVER
No provision of this Agreement shall be deemed to have been waived
unless such waiver is in writing signed by the waiving party. No failure by
any party to insist upon the strict performance of any provision of this
Agreement, or to exercise any right or remedy consequent upon a breach
thereof, shall constitute a waiver of any such breach, of such provision or
of any other provision. No waiver of any provision of this Agreement shall
be deemed a waiver of any other provision of this Agreement or a waiver of
such provision with respect to any subsequent breach, unless expressly
provided in writing.
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10.2 NOTICES
All notices required or permitted to be given under this Agreement shall
be in writing. Notices may be served by certified or registered mail,
postage paid with return receipt requested; by private courier, prepaid; by
telex, facsimile, or other telecommunication device capable of transmitting
or creating a written record; or personally. Mailed notices shall be deemed
delivered two (2) days after mailing, properly addressed. Couriered notices
shall be deemed delivered on the date that the courier warrants that delivery
will occur. Telex, facsimile or telecommunication notices shall be deemed
delivered when receipt is either confirmed by confirming transmission
equipment or acknowledged by the addressee or its office. Personal delivery
shall be effective when accomplished. Unless a party changes its address by
giving notice to the other party as provided herein, notices shall be
delivered to the parties at the following addresses:
Surplus Software, Inc.
000 Xxxxx 0xx Xxxxxx
Xxxx Xxxxx, XX 00000
Attn: President
Xxxxxxx Xxxxxxxx
0000 Xxxxxxxx Xx.
Xxxx Xxxxx, XX 00000
10.3 INTEGRATION; AMENDMENT
This Agreement constitutes the entire agreement of the parties relating
to the subject matter hereof. There are no promises, terms, conditions,
obligations, or warranties other than those contained in this Agreement.
This Agreement supersedes all prior communications, representations, or
agreements, verbal or written, among the parties relating to the subject
matter hereof. This Agreement may not be amended except in a writing
executed by the parties.
10.4 SEVERABILITY
Any provision of this Agreement that is deemed invalid or unenforceable
shall be ineffective to the extent of such invalidity or unenforceability,
without rendering invalid or unenforceable the remaining provisions of this
Agreement. Furthermore, in lieu of each such invalid or unenforceable
provision, there shall be added automatically as a part of this Agreement a
provision as similar in terms to such invalid or unenforceable provision as
may be possible and be valid and enforceable.
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10.5 ASSIGNMENT
Employee shall not assign, sell, subcontract, delegate or otherwise
transfer his rights or obligations under this Agreement without the prior
written consent of the Employer, and any attempted assignment or delegation
shall be void and without effect.
10.6 GOVERNING LAW, SERVICE OR PROCESS AND VENUE
The parties hereto intend that this Agreement shall be governed by and
construed in accordance with the laws of the State of Oregon applicable to
contracts made and wholly performed within Oregon by persons domiciled in
Oregon.
10.7 ATTORNEYS' FEES AND COURT COSTS
If any suit or action arising out of or related to this Agreement is
brought by any party, the prevailing party or parties shall be entitled to
recover the costs and fees (including without limitation reasonable attorney
fees, the fees and costs of experts and consultants, copying, courier and
telecommunication costs, and deposition costs and all other costs of
discovery) incurred by such party or parties in such suit or action,
including without limitation any post-trial or appellate proceeding.
10.8 COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one agreement binding on all the
parties, notwithstanding that all parties are not signatories to the same
counterpart.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
EMPLOYER SURPLUS SOFTWARE, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
EMPLOYEE
----------------------------------------
Xxxxxxx Xxxxxxxx
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EXECUTIVE OFFICER
ASSIGNMENT OF INVENTIONS AND
CONFIDENTIALITY AGREEMENT
This EXECUTIVE OFFICER ASSIGNMENT OF INVENTIONS AND CONFIDENTIALITY
AGREEMENT ("Agreement") is entered into as of May 25, 1996 between Surplus
Software, Inc., an Oregon corporation (the "Company") and Xxxxxxx Xxxxxxxx
("Employee").
RECITAL
WHEREAS, Employee desires to obtain a position with the Company, and the
Company desires to obtain the services of Employee, but only expressly
subject to and conditioned upon Employee's agreeing to certain inventions and
confidentiality provisions set forth herein;
AGREEMENT
NOW, THEREFORE, in consideration of the Company's agreement to employ
Employee, the agreements herein expressed, and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties agree
as follows:
1. NONCOMPETE
Employee covenants that during the period of his or her employment and
for the next two (2) years following termination of employment, Employee
shall not, directly or indirectly, either as a principal, agent, employee,
employer, consultant, stockholder, partner or in any other personal or
representative capacity whatsoever, be connected with in any manner, any
business whose products or services are in competition with, or may in the
future be in competition with, products then being produced or marketed or
services then being provided or marketed by the Company, or products or
services the feasibility of which the Company is actually studying, and shall
not, directly or indirectly, divert any customer of the Company or induce any
employee or consultant of the Company to terminate his or her employment or
relationship with the Company; provided however, that nothing contained in
this Section 1 shall prevent Employee from buying and selling at wholesale or
retail, products similar to those marketed and sold by the Company, provided
that Employee shall not market or sell such products through catalogues,
direct mail or any on-line services. The covenant contained in this Section 1
is intended to be a series of
Page 1
separate covenants, one set for the State of Oregon and for each country,
state or foreign country in which the Company shall be engaged in any
definable business in which Employee shall have been involved on any date
during the period of his or her employment. Employee agrees that the
restraints imposed in this Section 1 are necessary for the reasonable and
proper protection of the Company and that each and every one of the
restraints is reasonable in terms of duration and geographic scope.
2. ASSIGNMENT OF INVENTIONS
Employee hereby assigns and transfers to the Company his or her entire
right, title and interest in and to all inventions, including but not be
limited to, products, ideas, improvements, designs and discoveries, including
computer software programs, internet applications and other intellectual
property, or improvements or enhancements to any of the forgoing, whether or
not patentable or copyrightable and whether or not reduced to practice
("Inventions"), made or conceived by Employee (whether made solely by
Employee or jointly with others) during the period of his or her employment
with the Company which relate in any manner to the actual or demonstrably
anticipated business, work, or research and development of the Company and
its affiliates, or result from or are suggested by any task assigned to him
or her or any work performed by him or her for or on behalf of the Company.
Employee agrees that all such Inventions and all associated United States and
foreign patent, copyright, trademark, trade secret and any other proprietary
rights, including, but not limited to, all rights of registrations and
renewal are the sole property of the Company.
3. DISCLOSURE OF INVENTIONS, PATENTS
Employee agrees that in connection with any Invention as defined in
Section 2 above:
3.1 Employee will disclose such Invention promptly in writing to his or
her immediate superior at the Company in order to permit the Company to claim
rights to which it may be entitled under this Agreement. Such disclosure
shall be received in confidence by the Company.
3.2 Employee will, at the Company's request, promptly execute a written
assignment of title to the Company for any Invention required to be assigned
by Section 2 ("Assignable Invention") and Employee will preserve any such
Assignable Invention as confidential information of the Company.
3.3 Upon request, Employee agrees to assist the Company or its nominee
(at the Company's expense) during and at any time subsequent to his or her
employment in every reasonable way to obtain for the Company's own benefit
patents and
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copyrights for such Assignable Invention in any and all countries, which
Assignable Invention shall be and remain the sole and exclusive property of
the Company or its nominee whether or not patented or copyrighted. Employee
agrees to execute such papers and perform such lawful acts as the Company
deems to be necessary to allow it to exercise all rights, title and interest
in such patents and copyrights.
4. EXECUTION OF DOCUMENTS
In connection with Section 3.3, Employee further agrees to execute,
acknowledge and deliver to the Company or its nominee upon request and at its
expense all such documents, including applications for patents and copyrights
and assignments of Inventions, patents and copyrights to be issued therefor,
as the Company may determine necessary or desirable to apply for and obtain
patents and copyrights on such Assignable Inventions in any and all countries
and/or to protect the interest of the Company or its nominee in such
Inventions, patents and copyrights and to vest title thereto in the Company
or its nominees. In the event that the Company is unable for any reason
whatsoever to secure Employee's signature to any lawful necessary document
required to apply for or execute any patent, copyright or other application
with respect to such Assignable Inventions, patents and copyrights, including
renewals, extensions, continuations, divisions or continuations in part
thereof, Employee hereby irrevocably constitutes and appoints the Company and
its duly authorized officers and agents, any one of them, as his or her
lawful and true attorneys-in-fact in his or her name, place and xxxxx, to
execute and file any such application and do all other lawfully permitted
acts to further the prosecution and issue of patents, copyrights or other
rights thereon with the same legal force and effect as if executed by
Employee.
5. PROPRIETARY INFORMATION
Employee agrees that all Proprietary Information of which Employee may
acquire knowledge is the sole and exclusive property of the Company, and that
the Company shall retain all right, title and interest to the Proprietary
Information. Employee further agrees that Employee is not entitled to use
Proprietary Information for his or her own benefit or for the benefit of
others during or after the period of his or her employment, without the prior
written consent of the Company. As used herein, "Proprietary Information"
shall include, without limitation, information that has been created,
discovered, developed, or otherwise become known to the Company and/or in
which property rights have been assigned or otherwise conveyed to the
Company, which information has commercial value in the Company's business or
proposed business, including any trade secrets, confidential information,
knowledge, data or other information of the Company relating to products,
processes, know-how, designs, research, formulae, test procedures and
results, improvements, inventions or
PAGE 3
techniques, finances, customers, vendors, services, business plans, marketing
plans and strategies, pricing strategies, or other subject matter pertaining
to any business of the Company for any of its clients, customers,
consultants, licensees or affiliates. Employee further agrees not to
reproduce or in any way allow any such Proprietary Information, knowledge,
data or other information, or any documentation relating thereto, to be
delivered or used by any third party without specific direction or consent of
a duly authorized representative of the Company. In the event of the
termination of Employee's employment for any reason whatsoever, Employee
shall promptly return all records, materials, equipment, drawings and the
like pertaining to any Proprietary Information and Employee shall not take
any description or documents containing or pertaining to any Proprietary
Information, which Employee may have produced or obtained during the course
of employment with the Company. In the event of termination of employment,
Employee agrees to promptly sign and deliver to the Company a certificate
acknowledging the return of such Proprietary Information and such other
information as the Company requests.
6. CONFIDENTIAL RELATIONSHIP
Employee understands that his or her employment creates a relationship
of confidence and trust between Employee and the Company with respect to any
information: (a) applicable to the business of the Company; or (b) applicable
to the business of any supplier, consultant, independent contractor,
licensor, licensee, client, customer or affiliate of the Company, which
information may be made known to Employee by the Company or by any supplier,
consultant, independent contractor, licensor, licensee, client, customer or
affiliate of the Company, or information learned by Employee during the
period of his or her employment. Employee agrees to keep confidential, and
not disclose or make any use of, except for the benefit of the Company, at
any time either during or subsequent to Employee's employment, any
Proprietary Information of which Employee may acquire knowledge. Employee
also agrees to employ all reasonable measures to prevent the unauthorized use
of the Proprietary Information. Employee agrees that, in the event that
Employee is served with a subpoena or other compulsory judicial or
administrative process calling for production of Proprietary Information,
Employee will immediately notify the Company in order that the Company may
take such action as it deems necessary to protect its interests.
7. MAINTENANCE OF RECORDS
Employee agrees to keep and maintain adequate and current written
records of all Inventions made by him or her (in the form of notes, sketches,
drawings and as may be specified by the Company), which records shall be
available to and remain the sole property of the Company at all times.
PAGE 4
8. PRIOR INVENTIONS
It is understood that all Inventions, if any, patented or unpatented or
copyrighted or uncopyrighted, which Employee made prior to his or her
employment by the Company or its affiliates, are excluded from the scope of
this Agreement. To preclude any possible uncertainty, Employee has set forth
on Exhibit A attached hereto a complete list of all of his or her prior
Inventions, including numbers of all patents and patent applications, and a
brief description of all unpatented Inventions which are not the property of
a previous employer. Employee represents and covenants that the list is
complete and that, if no items are on the list, Employee has no such prior
Inventions. Employee agrees to notify the Company in writing before Employee
makes any disclosure or performs any work on behalf of the Company which
appears to threaten or conflict with proprietary rights Employee claims in
any Invention or idea. In the event of his or her failure to give such
notice, Employee agrees that he or she will make no claim against the Company
with respect to any such Inventions or ideas.
9. TRADE SECRETS OF OTHERS
Employee represents and warrants that his or her performance of all of
the terms of this Agreement and as an employee of the Company does not and
will not breach any agreement to keep in confidence Proprietary Information,
knowledge or data acquired by him or her in confidence or in trust prior to
his or her employment with the Company, and Employee will not disclose to the
Company, or induce the Company to use, any confidential or proprietary
information or material belonging to any previous employer or others.
Employee agrees not to enter into any agreement either written or oral in
conflict herewith.
10. BUSINESS OPPORTUNITIES
Employee will promptly disclose to the Company any business opportunity
of which Employee becomes aware of during his or her employment with the
Company which relates (i) to any products or services planned, under
development, developed, produced or marketed by the Company or (ii) of which
Employee becomes aware in the course of or as a result of his or her
employment with the Company. Employee will not take advantage of or divert
any such opportunity for the gain, profit or benefit of himself or herself or
any other person or entity without the written consent of the Company.
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11. GENERAL PROVISIONS
11.1 GOVERNING LAW
This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Oregon applicable to contracts made
and wholly performed within Oregon by persons domiciled in Oregon.
11.2 ENTIRE AGREEMENT
This Agreement sets forth the entire agreement and understanding of the
parties relating to the subject matter hereof. No representation, promise or
inducement has been made by either party that is not embodied in this
Agreement, and neither party shall be bound by or liable for any alleged
representation, promise or inducement not so set forth.
11.3 ASSIGNABILITY
This Agreement, and Employee's rights and obligations hereunder, may not
be assigned or delegated by Employee. The Company may assign its rights
hereunder in connection with any sale, transfer or other disposition of all or
substantially all of its business or assets.
11.4 MODIFICATION
This Agreement may be amended, modified, superseded, canceled, renewed
or extended, and the terms or covenants hereof may be waived, only by a
written instrument executed by the Company. The failure of the Company at
any time or times to require performance of any provision hereof shall in no
manner affect the right at a later time to enforce the same. No waiver by
the Company of the breach of any term or covenant contained in this
Agreement, whether by conduct or otherwise, in any one or more instances
shall be deemed to be, or construed as, a further or continuing waiver of any
such breach, or a waiver of the breach of any other term or covenant
contained in this Agreement.
11.5 ATTORNEYS' FEES
If any suit or action is instituted to enforce any of the terms of this
Agreement, or if any appeal is taken from any decision rendered hereunder,
the prevailing party shall be entitled to recover from the other party the
costs and fees (including, without limitation, attorneys' fees, the fees and
costs of experts and consultants, copying, courier and telecommunication
costs and deposition costs and all other costs of
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discovery) incurred by such party in such suit or action, including without
limitation, any post-trial or appellate proceeding.
11.6 SPECIFIC PERFORMANCE
Employee is obligated to render services of a special, unique, unusual,
extraordinary, and intellectual character to the Company pursuant to his or
her employment with the Company, thereby giving this Agreement which is
executed in connection with such employment obligations peculiar value so
that the loss of any obligations under this Agreement could not be reasonably
or adequately compensated in damages in an action at law. Therefore, in
addition to other remedies provided by law, the Company shall have the right
to compel specific performance hereof by Employee and/or to obtain injunctive
relief or other equitable relief to prevent or curtail any breach of this
Agreement.
11.7 SEVERANCE
If any provision of this Agreement is or become invalid, illegal or
unenforceable, the remaining provisions shall remain in full force and
effect, and for the invalid, illegal or unenforceable provision shall be
substituted a valid, legal and enforceable provision which shall be as
similar as possible in economic and business objectives as intended by the
parties.
11.8 TERMINATION
This Agreement shall remain in full force and effect and survive
termination, for whatever reason, of Employee's employment with the Company.
11.9 COUNTERPARTS
This Agreement may be executed in counterparts, all of which when taken
together shall constitute one Agreement binding on all parties,
notwithstanding that all parties are not signatories to the same counterpart.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the date first written above.
SURPLUS SOFTWARE, INC.
By: /s/ XXXXXXXX XXXXXXX
----------------------------------
Name: Xxxxxxxx Xxxxxxx
-------------------------------
Title: President
-------------------------------
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/s/ XXXXXXX XXXXXXXX
----------------------------------
Xxxxxxx Xxxxxxxx
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EXHIBIT A
LIST OF PRIOR INVENTIONS
Identifying Number of Brief
Title Date Descriptions
------------------------ -------------- ----------------------------
Page 1
