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EXHIBIT 10.4
This Employment Agreement ("Agreement"), dated this ___4th__ day of December,
1995, is by and between TOUCHSTONE SOFTWARE CORPORATION (the "Corporation") and
XXXXX XXXXXX("EMPLOYEE").
RECITALS
A. The Corporation desires to employ the Employee on a full-time
basis in the following capacity: Chief Executive Officer.
B. Employee desires to be so employed by the Corporation.
Therefore, in consideration of the mutual covenants contained herein, the
parties agree as follows:
ARTICLE 1
EMPLOYMENT DUTIES AND BENEFITS
Section 1.1 - Employment
The Corporation hereby employs the Employee as Chief Executive Officer. The
Employee accepts such employment and agrees to abide by the Articles of
Incorporation, By-Laws and the decisions of the Board of Directors of the
Corporation.
Section 1.2 - Duties and Responsibilities
The Employee is employed pursuant to the terms of this Agreement and agrees to
devote his/her attention and energies to the business of the Corporation. The
Employee shall perform such duties as may be reasonably determined and assigned
to him/her by the Officers and Senior Management of the Corporation.
Section 1.3 - Working Facilities
The Employee shall be furnished with facilities and services suitable to the
position and adequate for the performance of the duties of the Employee under
this Agreement. Unless Employee otherwise consents, his/her principal place of
employment shall be at the Corporation's headquarter offices where he/she will
be furnished with a private office, and such other facilities and services
suitable to his/her position and adequate to perform his/her duties during the
entire time of this Agreement.
Section 1.4 - Time Devoted to Corporation
The Employee shall devote such time as is necessary to satisfactorily perform
his/her duties to the Corporation. Unless otherwise specified in Schedule A
attached hereto, Employee shall be free to pursue any other employment or
ventures during the term hereof so long as such other employment or ventures do
not unreasonably interfere with the provision of services by Employee to the
Corporation hereunder, and are not competitive with the Corporation's business.
Section 1.5 - Vacations and Benefits
The Employee shall be entitled each year to one or more reasonable vacations in
accordance with the established practices of the Corporation now or hereafter in
effect for executive personnel, during which time Employee's compensation shall
be paid in full. In no event shall the amount of annual vacation time to which
the Employee is entitled be less than three weeks per year. Nothing in this
Agreement shall be construed to impair or limit the Employee's rights to
participate in all employee benefit plans of the Corporation of every nature and
he/she shall, in fact, be entitled to participate in and be a member of all such
benefit plans in proportion to his/her seniority and compensation. These shall
include, but not be limited to, company-paid life insurance payable to the
beneficiary the Employee shall designate from time to time, private
hospitalization and major medical insurance coverage for the Employee and
participation in stock option plans and pension and profit sharing plans. In the
event Employee continues his/her employment with any successor-in-interest to
the Corporation resulting from any sale by the Corporation of substantially all
of its assets or any merger or consolidation of the Corporation, Employee shall
remain entitled to benefits at least as favorable as those provided herein and
shall be accorded seniority and benefits with such successor-in-interest based
upon the aggregate period of time Employee was employed by the Corporation and
by any such successor-in-interest.
Section 1.6 - Expenses
The Employee is authorized to incur reasonable business expenses for promoting
the business of the travel. The Corporation will reimburse Employee from time to
time for all such business expenses provided that the Employee presents to the
Corporation:
1. An expense report in which the Employee recorded at or near the
time each expenditure was made: (a) the amount of the
expenditure: (b) the time, place and designation of the type of
the entertainment and travel or other expense, or the date and
description of the gift (gifts made to one
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individual are not to exceed a total of Twenty-Five Dollars
($25.00 in any taxable year); (c) the business reason for the
expenditure and the nature of the business benefit derived or
expected to be derived as a result of the expenditure; and (d)
on request, the names, occupations, addresses and other
information concerning each person who was entertained or given
a gift sufficient to establish the business relationship to the
Corporation; and
2. Documentary evidence (such as a receipt or paid xxxx), which
states sufficient information to establish the amount, date
place and essential character of the expenditure, for each
expenditure: (a) of Twenty-Five Dollars ($25.00) or more (except
for transportation charges if not readily available); and (b)
lodging while traveling away from home.
Section 1.7 - Loyal and Conscientious Performance of Duties
The Employee agrees that to the best of his/her ability and experience he/she
will at all times loyally and conscientiously perform all of the duties and
obligations either expressly or implicitly required of him/her by the terms of
this Agreement.
ARTICLE 2
COMPENSATION
Section 2.1 - Basic Salary
The Corporation shall pay to the Employee a basic salary during the term of this
Agreement in accordance with the amount set forth on Schedule B of this
Agreement. This amount will be paid consistent with standard operating procedure
for employee payroll and may be increased from time to time by action of the
Board of Directors.
ARTICLE 3
TERM OF EMPLOYMENT AND TERMINATION
Section 3.1 - Term
This Agreement shall be for an initial term of three (3) years and continuing
through January 16, 1999, commencing on its effective date, subject, however, to
termination during such period as provided in this Article 3. The term of this
Agreement shall be renewed automatically for succeeding periods of one (1) year
on the same terms and conditions as contained in this Agreement unless either
the Corporation, or the Employee shall, at least thirty days prior to the
expiration of any one year period, give written notice of the intention not to
renew this Agreement. Such renewals shall be effective in subsequent years on
the same day of the same month as the original effective date of this Agreement.
Section 3.2 - Termination by Corporation Without Cause
The Board of Directors, without cause, may terminate the Employee at any time,
but in such event Employee's salary shall continue to be paid to the Employee
for the longer of (a) the remainder of the then current term of this Agreement
as set forth in Section 3.1 notwithstanding such termination or (b) for nine (9)
months following such termination without cause.
Section 3.3 - Termination With Cause
For purposes of this Article 3, Employee shall be deemed to be terminated "for
cause" in the event such termination results from: (i) the willful misconduct or
bad faith of Employee with respect to the performance of his/her duties under
this agreement; (ii) the repeated material failure of Employee to perform duties
reasonably required of him/her by the Corporation; (iii) Employee's repeated
breach of the provisions of Article 5 of this Agreement pertaining to
confidentiality; (iv) the conviction of Employee for the commission of a felony
or criminal offense including moral turpitude; or (v) a repeated material breach
of Employee's fiduciary obligations to the Corporation. For purposes of the
foregoing, breaches or failures shall be deemed "repeated" if two (2) separate
breaches occur within any six (6) month period, provide written notice of the
first such breach has been given to Employee, or if any continuous or ongoing
breach is not cured within one (1) month of notice to Employee during the term
hereof. The Board of Directors of the Corporation may terminate the Employee
"for cause" as defined above upon thirty (30) days written notice to the
Employee, and in such event Employee shall have no right to any compensation
hereunder following the date of such termination.
Section 3.4 - Disability or Death
Employee shall be deemed to be "permanently disabled" for purposes of this
Section 3.4 if, during any period of three (3) consecutive months, he/she shall
be unable, due to illness or injury, to perform his/her duties hereunder for at
least fifty percent (50%) of the number of full regular business days during
such three (3) month period. Employee shall be deemed to be permanently disabled
on the last day of such three (3) month period. The Corporation may elect upon
written notice to terminate this Agreement upon the permanent disability of
Employee, and this Agreement shall automatically terminate, without notice, upon
the death of Employee. In the event of a termination resulting from Employee's
death or permanent disability, Employee or Employee's heirs shall be entitled to
payment of salary for three (3) months following such termination.
Section 3.5 - Termination Upon Sale of Business
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The Board of Directors or the Employee may terminate this Agreement upon ten
(10) days notice to the other party upon the occurrence of any of the following
events:
(a) The sale by the Corporation of substantially all of the assets to a
single purchaser or to a group of associated purchasers;
(b) The sale, exchange or other disposition in one transaction of one-half or
more of the outstanding common shares of the Corporation;
(c) A bona fide decision by the shareholders of the Corporation to terminate
its business and liquidate its assets; or
(d) The merger or consolidation of the Corporation in a transaction in which
the shareholders of the Corporation receive less than fifty percent (50%)
of the outstanding voting shares of the new or continuing corporation.
Section 3.6 - Effect of Termination on Compensation
In the event the Corporation elects to terminate this Agreement pursuant to
Section 3.5 hereof, the Employee shall be entitled to the compensation as
provided for in this Agreement for the longer of (a) the remainder of the then
current term of this Agreement or (b) nine (9) months. In the event Employee
elects to terminate this Agreement pursuant to Section 3.5 hereof, the Employee
shall be entitled to compensation, as provided for in this Agreement, for the
longer of (a) one-half (1/2) of the remainder of the then current term of this
Agreement or (b) six (6) months.
Section 3.7 - Effect of Termination on Stock Options and Warrants
In the event the Corporation or Employee elects to terminate this Agreement
pursuant to Section 3.5 hereof, the Employee shall be entitled to exercise all
vested and non-vested options or warrants with a promissory note at a rate of
interest not to exceed the prime interest rate plus 2 points and for a term of 2
years. If the Company stock is exchanged for stock in another corporation and a
stock lock-up period is required, the term shall be the longer of (a) 2 years or
(b) 180 days after the stock lock-up period ends.
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ARTICLE 4
CORPORATION RIGHTS OF CONTRACT CONTINUATION
Section 4.1 - Right of Continuation
If the Corporation shall at any time be merged or consolidated into or with any
other corporation or entity, or if substantially all of the assets of the
Corporation are transferred to another corporation or entity, the provisions of
this Agreement shall survive any such transaction and shall be binding upon and
inure to the benefit of the corporation resulting from such merger or
consolidation of the corporation to which such assets will be transferred.
ARTICLE 5
DISCLOSURE OF INFORMATION
Section 5.1 - Trade Secrets and Confidential Information
The Employee during the term of employment under this Agreement may have access
to and become acquainted with various trade secrets and confidential
information, consisting of formulas, patterns, devices, secret inventions,
processes and compilations of information, records, computer programs and
specifications, trademarks, and copyrights, which are owned by the Corporation
and which are regularly used in the operation of the business of the
Corporation. The Employee shall not disclose any of the aforesaid trade secrets
or confidential information, directly or indirectly, or use them in any way
outside the acknowledged business of the Corporation, either during the term of
this Agreement or at any time thereafter. All files, records, documents,
drawings, specifications, marks, copyrights, equipment and similar items
relating to the business of the Corporation, whether prepared by the Employee or
otherwise coming into his/her possession, shall remain the exclusive property of
the Corporation and shall not be removed from the premises of the Corporation
under any circumstances whatsoever without the prior written consent of the
Corporation.
Section 5.2 - Employee Shall Not Disclose Information
The Employee recognizes and acknowledges that much of the information concerning
the Corporation's business is a valuable, special and unique asset of the
corporation. The Employee will not, during or for a period of five (5) years
after the term of his/her employment, disclose confidential information
concerning the Corporation's business, or any part thereof, to any person, firm,
corporation, association or other entity for any reason or purpose whatsoever,
except as required by Employee's employment by the Corporation, nor shall make
use of such information in any manner for any other purpose.
Section 5.3 - Exclusions
The restrictions and limitations set forth in this Article 5 shall not apply to
information publicly known that is generally employed by the trade at or after
the time the Employee first learns of such information, or generic information
or knowledge which the Employee would have learned in the course of similar
employment or work elsewhere in the trade, or information already known to
Employee at the time of first disclosure by the Corporation to Employee.
ARTICLE 6
INVENTIONS, PATENTS AND COPYRIGHTS
Section 6.1 - Inventions, Copyrights and Patents
The Employee agrees that as to any inventions or works of authorship made by
him/her during the term of his/her employment, solely or jointly with others,
which are made with the Corporation's equipment, supplies, facilities, trade
secrets or time, or which relate to the business of the Corporation or the
Corporation's actual or demonstrably anticipated research or development, or
which result from any work performed by the Employee for the Corporation, such
inventions and works of authorship and all proprietary rights therein, including
patents, copyrights and trade secrets, shall belong to the Corporation and
he/she promises to assign such
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inventions and rights to the Corporation. The Employee also agrees that the
Corporation shall have the right to keep such inventions as trade secrets, if
the Corporation chooses. This Agreement does not apply to any inventions which
are the subject of Section 2870 of the California Labor Code. Further, this
Article 6 does not apply to any inventions or works of authorship, if any,
identified in Schedule C attached hereto.
Section 6.2 - Disclosure of Inventions
In order to permit the Corporation to claim rights to which he/she may be
entitled, the Employee agrees to disclose to the Corporation in confidence all
inventions which the Employee makes during the course of his/her employment and
all patent or copyright applications filed by the Employee within a year after
termination of his/her employment.
Section 6.3 - Employee's Assistance
The Employee shall assist the Corporation in obtaining patents and/or copyrights
on all inventions, works of authorship, designs, improvements and discoveries
deemed patentable or copyrightable by the Corporation in the United States and
in all foreign countries, and shall execute all documents and do all things
necessary to obtain letters patent, or copyrights, to vest the Corporation with
full and extensive title thereto, and to protect the same against infringement
by others.
Section 6.4 - During Employment Defined
For purposes of this Agreement, an invention or work of authorship is deemed to
have been made during the period of the Employee's employment if, during such
period, the invention was first actually reduced to practice or the work of
authorship was first embodied in a tangible medium of expression.
ARTICLE 7
SOLICITING CUSTOMERS OR EMPLOYEES BEFORE OR AFTER TERMINATION OF EMPLOYMENT
The employee shall not during employment or for a period of one (1) year
immediately following the termination of his/her employment with the
Corporation, either directly or indirectly, unless Employee has received
permission from the Board of Directors:
1. Make known to any person, firm or corporation the names or addresses of
any of the customers or employees of the Corporation or any other
information pertaining to them; or
2. entice away or attempt to entice away, any of the customers or employees
of the Corporation on whom the Employee called or with whom he/she became
acquainted during his/her employment with the Corporation, either on the
Employee's own behalf or for any other person, firm or corporation, with
substantially similar products or services which would complete with
products and services sold by the Corporation.
ARTICLE 8
BREACH OF ARTICLES 5, 6, AND 7
In the event of a breach or threatened breach by the Employee of the provisions
of Articles 5, 6 or 7 hereof, the Corporation shall be entitled to an injunction
restraining the Employee from breaching such provisions. Nothing herein shall be
construed as prohibiting the Corporation from protecting, to the full extent of
the law, its rights and property.
ARTICLE 9
RETURN OF CORPORATION'S PROPERTY
On the termination of his/her employment or whenever requested by the
Corporation, the Employee shall immediately deliver to the Corporation all
property in his/her possession or under his/her control belonging to the
Corporation in good condition, ordinary wear and tear and damage by any cause
beyond the reasonable control of the Employee excepted.
ARTICLE 10
ARBITRATION
Section 10.1
Except as otherwise provided in this Article, the parties hereby submit all
controversies, claims and matters of difference arising under or related to this
Agreement to arbitration in Orange County, California, according to the
California Arbitration Act, Sections 1280 through 1294.2 of the California Code
of Civil Procedure as it now exists or is hereinafter enacted. This submission
and Agreement to arbitrate shall be specifically enforceable. Notwithstanding
anything to the contrary set forth herein, the parties shall not be obligated to
submit to arbitration, and either party shall be free to pursue litigation in a
court of competent jurisdiction with respect to, any controversies, disputes or
differences relating to any breach or alleged breach of, or question of
interpretation regarding, Article 5 or Article 6 hereof.
Section 10.2 - Controversies
For purposes of this Agreement, controversies shall include, but not be limited
to, the following:
(a) All questions relating to the breach of any obligation, warranty
or condition hereunder;
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(b) Failure of any party to deny or reject a claim or demand of any
other party; and
(c) All questions as to whether the right to arbitrate exists.
Section 10.3 - Appointment of Arbitrators
Within thirty (30) days after the date on which a controversy is submitted to
arbitration, the Corporation and the Employee shall appoint a single arbitrator
who is acceptable to each. If the Corporation and the Employee cannot agree upon
a single arbitrator during such 30-day period, the Corporation shall choose an
arbitrator and the Employee shall choose an arbitrator.
The two arbitrators so selected shall choose an additional arbitrator. The
decision of the majority shall be final and binding.
Section 10.4 - Awards
Arbitration may proceed in the absence of any party if notice of the proceedings
has been given to such party. The parties agree to abide by all awards rendered
in such proceedings. Such awards shall be final and binding on all parties to
the extent and in the manner provided by the laws of California. All awards may
be filed with the clerk of one or more courts having jurisdiction over the party
against whom such an award is rendered or his property, as a basis of judgment
and of the issuance of execution for its collection.
ARTICLE 11
GENERAL MATTERS
Section 11.1 - California Law
This Agreement shall be governed by the laws of the State of California and
shall be construed in accordance therewith.
Section 11.2 - No Waiver and Notification
No provision of this Agreement may be waived except by an agreement in writing
signed by the waiving party. A waiver of any term or provision shall not be
construed as a waiver of any other term or provision.
Section 11.3 - Amendment
This Agreement may be amended, altered or revoked at any time, in whole or in
part, by filing with this Agreement a written instruction setting forth such
changes, signed by all of the parties.
Section 11.4 - Benefit
This Agreement shall be binding upon the Employee and the Corporation, and shall
not be assignable by the Corporation except as provided in Section 4.1.
Section 11.5 - Construction
Throughout this Agreement the singular shall include the plural, and the plural
shall include the singular, and the neuter shall include the masculine/feminine,
wherever the context so requires.
Section 11.6 - Text to Control
The headings of articles and sections are included solely for convenience of
reference. If any conflict between any heading and the text of this Agreement
exists, the text shall control.
Section 11.7 - Severability
If any provision of this Agreement is declared by any court of competent
jurisdiction to be invalid for any reason, such invalidity shall not affect the
remaining provision. On the contrary, such remaining provision shall be fully
severable, and this Agreement shall be construed and enforced as if such invalid
provisions never had been inserted in this Agreement.
The effective date of this Agreement shall be 1/15/96.
TOUCHSTONE SOFTWARE EMPLOYEE:
CORPORATION:
Signature:_________________________ Signature:____________________________
Print Name:________________________ Print Name:___________________________
Title:_____________________________ Title:________________________________
Date:______________________________ Date:_________________________________
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TOUCHSTONE SOFTWARE CORPORATION
EMPLOYMENT AGREEMENT
SCHEDULE A
EXCLUDED EMPLOYMENT OR VENTURES
None
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TOUCHSTONE SOFTWARE CORPORATION
EMPLOYMENT AGREEMENT
SCHEDULE B
The current compensation plan is set forth in the most recent Employee
status form.
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TOUCHSTONE SOFTWARE CORPORATION
EMPLOYMENT AGREEMENT
SCHEDULE C
EXCLUDED INVENTIONS OR WORKS OF AUTHORSHIP
1. __________________________________________________________________
2. __________________________________________________________________
3. __________________________________________________________________
4. __________________________________________________________________
5. __________________________________________________________________
6. __________________________________________________________________
7. __________________________________________________________________
8. __________________________________________________________________
9. __________________________________________________________________
10. __________________________________________________________________
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