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Exhibit 10.26
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT is made as of the 14th day of February, 1996, between XXXXX X.
XXXXX, a Washington resident ("Executive"), and DIGITAL SYSTEMS INTERNATIONAL,
INC., a Washington corporation ("Company").
IN CONSIDERATION of the mutual covenants and promises contained herein, the
parties agree as follows:
1. EMPLOYMENT.
The Company hereby employs Executive, and Executive hereby accepts employment by
the Company, as Company's Senior Vice President, Marketing and Business
Development, responsible for the management and direction of the Marketing and
Business Development of the Company, subject to the direction and control of the
President and Chief Executive Officer of the Company. The Executive will perform
such additional duties as may be assigned from time to time by the President &
CEO of the Company which relate to the business of the Company, its subsidiaries
or any business ventures in which the Company or its subsidiaries may
participate.
2. ATTENTION AND EFFORT.
Executive will devote his full business time, attention and effort to the
Company's business and will use his skills and render services to the best of
his ability to serve the interests of the Company.
3. TERM.
Unless otherwise terminated as provided in Section 6 of this Agreement,
Executive's term of employment under this Agreement shall commence as of the
date hereof and shall expire upon Executive's resignation or termination.
4. COMPENSATION.
4.1 BASE SALARY
Executive's compensation shall consist, in part, of an annual base
salary of $162,000 before all customary payroll deductions (the "Base
Salary"). The Base Salary shall be paid in substantially equal
installments at the same interval as other officers of the Company are
paid, or otherwise in conformance with the Company's standard payroll
practices. The Board of Directors of the Company shall determine any
increases in the Base Salary in future years.
4.2 BONUS
Executive may be entitled to receive, in addition to the Base Salary, an
annual bonus (the "Bonus") in an amount to be determined pursuant to the
Company's Management Bonus Plan, at appropriate level, as approved by
the Board of Directors of the Company, in effect for each calendar year.
4.3 STOCK OPTIONS
Executive has been granted incentive stock options &/or nonqualified
stock options to purchase100,000 shares of common stock of the Company
pursuant to the terms of the Company's Restated 1987 Stock Option Plan
(the "Option Plan"). With reference to Section 7.1.3 of the Option Plan,
the right of the Company to take any action to prevent, or limit in any
way, acceleration of such options in the event of any Change in Control,
as defined in the Option Plan, is hereby waived.
5. BENEFITS AND EXPENSES.
5.1 EXPENSES
The Company shall promptly reimburse Executive for all reasonable and
necessary business expenses incurred and advanced by him in carrying out
his duties under this Agreement, consistent with Company policies in
connection therewith. Executive shall present to the Company from time
to time an itemized account of such expenses in such form as Company
policies may require.
5.2 BENEFITS
During the term of employment hereunder, Executive shall be entitled to
participate fully in any benefit plans, programs, policies and fringe
benefits which may be made available to the senior executives of the
Company generally, including medical, dental, disability, pension and
retirement benefits, life insurance and other death benefits. Executive
will initially be entitled to 2 weeks vacation per year and any other
vacation or personal time off in accordance with Company policy.
5.3 OTHER
The Company shall provide Executive an office and with secretarial
support suitable to the position of Vice President
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5.4 MOVING EXPENSES
To the extent required, the Company will reimburse Executive for normal
and reasonable household moving expenses in accordance with standard
Company policy or as otherwise agreed between the parties.
6. TERMINATION.
6.1 BY THE COMPANY
With or without "Cause" (defined for the purposes of this Agreement as
any act by Executive that would disqualify him from indemnification by
the Company by virtue of his position as an officer and director of the
Company, in accordance with the Articles of Incorporation and Bylaws of
the Company and the laws of the state of Washington), the Company may
terminate the employment of Executive at any time during the term upon
giving Notice of Termination (as defined below).
6.2 BY EXECUTIVE
Executive may terminate his employment at any time for Good Reason (as
defined below) or otherwise upon giving Notice of Termination.
6.3 AUTOMATIC TERMINATION
Employment shall terminate automatically upon death or total disability
of Executive. The term "total disability" as used herein means an
inability to perform the duties set forth in paragraph 1 of this
Agreement because of illness or physical or mental disability for a
period or periods aggregating 180 calendar days in any 12-month period,
unless Executive is granted a leave of absence by the President or the
Board of Directors of the Company. Executive and Company hereby
acknowledge that Executive's ability to perform the duties specified in
paragraph 1 hereof is of the essence of this Agreement. Termination
hereunder shall be deemed to be effective immediately upon Executive's
death or 30 days following a Notice of Termination based upon a
determination by the Board of Directors of the Company of Executive's
total disability as defined herein.
6.4 NOTICE
The term "Notice of Termination" means written notice of termination of
Executive's employment. At the election of the Company, as set forth in
its Notice of Termination or in a written response to Executive's Notice
of Termination, Executive's employment and performance of services shall
continue for a period of 30 days following the Notice of Termination.
Otherwise Executive's employment shall terminate effective upon receipt
of the Notice of Termination, provided however that, in either case, the
Executive shall be entitled to termination payments in accordance with
paragraph 7.
6.5 GOOD REASON
For the purposes of this Agreement, "Good Reason" means, as a result of
or following a "Change of Control" of the Company (as defined in the
Company's 1987 Restated Stock Option Plan), a material alteration of
Executive's position or duties, a reduction of Executive's Base Salary,
or a requirement that Executive move more than 100 miles, provided that
Executive gives Notice of Termination within 30 days of such change.
7. SEVERANCE PAYMENTS.
In the event of termination of the employment of Executive, all compensation and
benefits set forth in this Agreement shall terminate as of the effective date of
termination, provided, however, that if the Company terminates Executive's
employment without Cause, or if Executive terminates his employment for Good
Reason, the Company shall be obligated to pay to Executive his regular Base
Salary for a period of 6 months after the effective date of termination of
employment.
8. AGREEMENT NOT TO COMPETE
As a condition of his employment hereunder, Executive has executed and delivered
to the Company an agreement addressing his obligation not to compete with the
business of the Company (the "Non-Compete Agreement") in accordance with
standard Company policy, which Non-Compete Agreement shall survive termination
of Executive's employment.
9. AGREEMENT NOT TO DISCLOSE CONFIDENTIAL INFORMATION
As a condition of his employment hereunder, Executive has executed and delivered
to the Company an agreement addressing the nondisclosure of confidential
information and ownership of inventions (the "Non-Disclosure Agreement") in
accordance with standard Company policy, which Non-Disclosure Agreement shall
survive termination of Executive's employment.
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10. FORM OF NOTICE.
Every notice required by the terms of this Agreement shall be given in writing
by serving the same upon the party to whom it was addressed personally, by
courier, by facsimile transmission (with hard copy delivered by overnight
courier) or by registered or certified mail, return receipt requested, at the
address set forth below or at such other address as may hereafter be designated
by notice given in compliance with the terms hereof:
If to Executive: Xxxxx X. Xxxxx
To address on DSI file
If to Company: Digital Systems International, Inc.
0000 000xx Xxx XX
Xxxxxxx, XX 00000
Attn.: Wm. Xxxxxxxx Xxxxxx,
General Counsel
Notice shall be effective upon personal delivery, delivery by courier, receipt
of facsimile transmission or three days after mailing.
11. ASSIGNMENT.
Executive agrees that this Agreement may be transferred or assigned by the
Company to (a) any corporation resulting from any merger, consolidation or other
reorganization to which the Company is a party or (b) any corporation,
partnership, association or other person to which the Company may transfer all
or substantially all of the assets and business, and such assignee or transferee
shall succeed to the rights and obligations of the Company hereunder.
This Agreement may not be assigned by Executive.
12. WAIVER.
No waiver of any of the provisions of this Agreement shall be valid unless in
writing, signed by the party against whom such claim or waiver is sought to be
enforced, nor shall failure to enforce any right hereunder constitute a
continuing waiver of the same of a waiver of any other right hereunder.
13. AMENDMENTS IN WRITING.
No amendment, modification, waiver, termination or discharge of any provision of
this Agreement, nor consent to any departure therefrom by either party hereto,
shall in any event be effective unless the same shall be in writing,
specifically identifying this Agreement and the provision intended to be
amended, modified, waived, terminated or discharged, and signed by the Company
and Executive. No provision of this Agreement shall be varied, contradicted or
explained by any oral agreement, course of dealing or performance or any other
matter not set forth in an agreement in writing and signed by the Company and
Executive.
14. APPLICABLE LAW -- VENUE.
This Agreement shall be governed by the laws of the state of Washington, without
regard to its conflicts of laws provisions. Venue of any action brought to
enforce or interpret this Agreement shall be in Seattle, Washington, and the
parties consent to jurisdiction in the federal and state courts in such venue.
15. SEVERABILITY.
In the event that any provision of this Agreement shall be determined by any
court or arbitrator of competent jurisdiction to be unenforceable or otherwise
invalid for any reason, such provision shall be enforced and validated to the
extent permitted by law, and the court or arbitrator shall have the power to
reform such provision to the extent necessary for such provision to be
enforceable under applicable law. All provisions of this Agreement are
severable, and the unenforceability of any single provision hereof shall not
affect the remaining provisions.
16. HEADINGS.
All headings or titles in this Agreement are for the purpose of reference only
and shall not in any way affect the interpretation or construction of this
Agreement
17. ATTORNEYS FEES & COSTS.
In any action or proceeding brought by either party against the other arising
out of or in any way relating to this Agreement, the prevailing party shall, in
addition to other allowable costs and remedies, be entitled to an award of
reasonable attorneys' fees and costs incurred in connection with such action or
proceeding.
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IN WITNESS WHEREOF, the parties have executed and entered into this Agreement as
of the date above first written.
EXECUTIVE: COMPANY:
DIGITAL SYSTEMS INTERNATIONAL, INC.,
a Washington Corporation
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XXXXXX X. XXXXX By: XXXX X. XXXXXX
Its Sr. Vice President, Finance &
Administration
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