Exhibit 10.13
ESPS, Inc.
Employment Agreement
To Xxxx Xxxx:
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
Executive Vice President, and General Manager of Life
Sciences 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
Executive Vice President, and General Manager of Life
Sciences. 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 24
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 $200,000 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 $100,000. 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.
Car Allowance You will receive a car allowance equal to $500 per
month.
Housing In lieu of relocation and associated expenses, during
the Term, the Company will lease a corporate apartment
for use by you and other Company employees as needed.
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 24
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 24
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 24
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 24
(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 24
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 24
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 Executive
Vice President and General Manager of Life Sciences, to
another Executive 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 employment with
Termination 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 24
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 24
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 24
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 24
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, except with respect to:
a) your eligibility for generally applicable
employee benefit plans, and
b) the remaining balance of any unpaid signing
bonus or guaranteed incentive pay under the
terms of your signed offer letter dated May 10,
2000
c) 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 items (a) through (c) above. 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 24
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: R. Xxxxxxx Xxxx
I accept and agree to the terms of employment set
forth in this Agreement:
/s/ Xxxxxx X. Xxxx
Dated: December 20, 2000
Page 13 of 24
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 24
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 Area The Market Area consists of the United States and Canada.
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
Period ends 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 24
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 24
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
Page 17 of 24
Company or the 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 24
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 24
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 24
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 24
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 24
Arbitration All statutes of limitations and substantive laws applicable to
Principle a 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
Evidence; resolution of disputes and to reduce the costs and burdens
Presumptions associated with litigation. 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 Award The Arbitrator must render its award, to the extent feasible,
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 24
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 24