Exhibit 10.34
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made and entered into as of
November 12, 1998 (the "Effective Date"), by and between CIDCO Incorporated, a
Delaware corporation (the "Company"), and Xxxx X. Xxxxxxx ("Executive").
Recitals
The Company and Executive desire to enter into this Agreement in order to
provide compensation and benefits to Executive and to encourage Executive to
devote his full attention and dedication to the Company and to continue his
employment with the Company. The Company believes that the existence of this
Agreement will serve as an incentive to Executive to remain in the employ of the
Company and will enhance its ability to call on and rely upon Executive to
continue to provide services to the Company.
Definitions. As used in this Agreement, unless the context requires a
different meaning, the following terms shall have the meanings set forth herein:
"Cause" means: Executive's theft, material act of dishonesty, fraud, or
intentional falsification of any employment or Company records, or Executive's
commission of any criminal act which impairs Executive's ability to perform his
duties under this Agreement; the neglect or refusal of Executive to
substantially fulfill his material duties as an employee; improper disclosure of
the Company's confidential, business or proprietary information by Executive; a
material breach of any fiduciary duty by Executive with respect to the Company
resulting in material harm to the Company; or Executive's conviction (including
any plea of guilty or nolo contendere) for a crime involving moral turpitude or
which causes material harm to the reputation and standing of the Company, as
determined by the Company in good faith.
"Change in Control" means the occurrence of either: the sale, exchange or
transfer of all or substantially all of the property and assets of the Company;
or a merger or consolidation in which the Company is a party or the direct or
indirect sale or exchange by the stockholders of the Company of a majority of
the voting stock of the Company which, in any such event, constitutes a "Change
in Control," as defined in Second Amended and Restated 1993 Stock Option Plan as
in effect on the Effective Date.
"Constructive Termination" means the occurrence of any of the following
conditions, which condition(s) remain(s) in effect thirty (30) days after
written notice to the Company's Corporate Secretary, with a copy to the
Company's Corporate Counsel from Executive of such condition(s), which written
notice of condition(s) shall be delivered by Executive to such persons within
ten (10) days following the occurrence of the alleged condition(s): a material
decrease in Executive's annual base salary which is made without Executive's
written consent, except that, in the event of a reduction in base salary that is
initiated for all executives, such action can be taken and will not constitute
Constructive Termination for purposes of this Agreement nor will it require
Executive's written consent; a demotion, a material reduction in Executive's
position, responsibilities or duties or a material, adverse change in
Executive's substantive functional responsibilities or duties, as measured
against Executive's position, responsibilities or duties immediately prior to
such change causing it to be of materially less stature or responsibility; the
relocation of Executive's work place for the Company to a location more than
twenty-five (25) miles from Executive's principal place of employment prior to
such relocation; any material breach of this Agreement by the Company; or any
failure or refusal of a successor company to assume the Company's obligations
under this Agreement as required by Section 16.
"Permanent Disability" means that: Executive has been incapacitated by
bodily injury or disease so as to be prevented thereby from engaging in the
performance of Executive's duties; such incapacity shall have continued for a
period of four (4) consecutive months or six (6) months in any twelve (12) month
period; and such incapacity will, in the opinion of a qualified physician, be
permanent and continuous during the remainder of Executive's life.
Position and Duties. Executive shall continue to be an at-will employee of
the Company. Executive shall also be entitled to continue to participate in and
to receive benefits on the same basis as other executive or senior staff members
under any of the Company's employee benefit plans as in effect from time to
time. In addition, Executive shall be entitled to the benefits afforded to other
employees similarly situated under the Company's vacation, holiday and business
expense reimbursement policies. Executive agrees to devote his full business
time, energy and skill to his duties at the Company. These duties shall include,
but not be limited to, any duties consistent with his position, which may be
assigned to Executive from time to time.
Benefits Upon Executive's Termination for Cause, Voluntary Termination,
Permanent Disability or Death. In the event that Executive voluntarily
terminates his employment relationship with the Company at any time and his
termination is not for nor deemed for Constructive Termination, or in the event
that Executive's employment terminates as a result of his death or Permanent
Disability or for Cause, Executive shall be entitled to no compensation or
benefits from the Company other than those earned under Section 2 above through
the date of his termination of employment.
Termination for Other Than Cause and/or for Constructive Termination. If
Executive's employment is terminated by the Company for any reason other than
Cause or if Executive terminates his employment with the Company for
Constructive Termination, Executive shall be entitled to the following
separation benefits: twelve (12) months of Executive's annual base salary in
effect as of the date of such termination, less applicable withholding, paid in
a lump sum payment; and Executive shall be entitled to elect continued medical
insurance coverage in accordance with the applicable provisions of federal law
(COBRA) and the Company shall pay for the cost of such COBRA coverage for twelve
(12) months. This payment shall be made in a lump sum together with the payment
described in subsection 4(a). If such coverage included Executive's dependents
immediately prior to the date of termination, such dependents shall also be
covered at the Company's expense for the same time period as Executive's COBRA
coverage described above.
Additional Benefit Upon Certain Termination After Change in Control. If,
within six (6) months following the date of consummation (i.e., the closing) of
a Change in Control, Executive either (i) is given notice of termination of his
employment by the Company for any reason other than Cause or (ii) gives notice
to the Company of the occurrence of one or more conditions constituting
Constructive Termination and subsequently terminates his employment with the
Company on the basis of such Constructive Termination, then in either such event
Executive shall be entitled to the Stock Option Acceleration Benefit described
below in addition to the payments and benefits provided by Section 4. Except as
otherwise provided below, the Stock Option Acceleration Benefit shall apply to
each option (an "Option") to purchase shares of stock of the Company or its
successor granted to Executive by the Company or its successor and outstanding
as of the date ten (10) business days prior to the effective date of the
termination of Executive's employment (the "Effective Termination Date") for a
reason described in this Section 5, regardless of whether such Option was
granted before, on or after the Effective Date of this Agreement.
Pursuant to the Stock Option Acceleration Benefit: the vesting and
exercisability of each Option shall be computed on the basis of monthly vesting
periods commencing on the date contemplated by the stock option agreement
evidencing such Option (the "Vesting Commencement Date") notwithstanding that
such agreement provides for vesting on the basis of one or more periods of
different length, such as a year; and in addition to the number of actual full
months of Executive's employment with the Company from the Vesting Commencement
Date through the Effective Termination Date, Executive shall be credited,
effective as of the date ten (10) business days prior to the Effective
Termination Date, with an additional number of full months of employment for
Option vesting purposes equal to the lesser of (i) twelve (12) months or (ii)
the number of actual full months of Executive's employment with the Company
beginning on the Vesting Commencement Date and ending on the Effective
Termination Date. This Section 5 shall not be applied or construed in any manner
that would reduce the degree of vesting or exercisability of any Option
determined in the absence of this Section. Notwithstanding any provision of this
Section 5 to the contrary, if it is determined that the provisions or operation
of this Section 5 would preclude treatment of a Change in Control as a
"pooling-of-interests" for accounting purposes and provided further that in the
absence of this Section 5 such Change in Control would be treated as a
"pooling-of-interests" for accounting purposes, then this Section 5 shall be
void ab initio, and the vesting and exercisability of each Option shall be
determined under any other applicable provision of the stock option agreement
evidencing such Option.
Required Advance Notice of Termination for Other Than Cause. No termination
of Executive's employment by the Company for any reason other than Cause shall
be effective prior to the tenth (10th) business day following the date on which
Executive is given written notice of such termination.
Excess Parachute Payment. In the event that any payment or benefit received
or to be received by Executive pursuant to this Agreement or otherwise would
subject Executive to any excise tax pursuant to Section 4999 of the Internal
Revenue Code of 1986, as amended (the "Code"), due to the characterization of
such payment or benefit as an excess parachute payment under Section 280G of the
Code, Executive may elect in his sole discretion to reduce the amounts of any
payments or benefits otherwise called for under this Agreement in order to avoid
such characterization.
Conflict of Interest/Non-Solicitation. Executive agrees that for a period
of one (1) year following termination of his employment with the Company, he
will not, directly or indirectly, solicit the services of or in any manner
persuade employees, customers or vendors of the Company to discontinue that
person's or entity's relationship with or to the Company as an employee,
customer or vendor, as the case may be. Payment of Taxes. All payments made to
Executive under this Agreement shall be subject to all applicable federal and
state income, employment and payroll taxes.
Exclusive Remedy. Under any claim for breach of this Agreement or wrongful
termination, the payments and benefits provided for in Section 4 and Section 5
as applicable shall constitute Executive's sole and exclusive remedy for any
alleged injury or other damages arising out of the cessation of the employment
relationship between Executive and the Company in the event of Executive's
termination. Except as expressly set forth herein, Executive shall be entitled
to no other compensation, benefits, or other payments from the Company as a
result of any termination of employment with respect to which the payments
and/or benefits described in Section 4 and Section 5 as applicable have been
provided to Executive.
Proprietary and Confidential Information. Executive agrees to continue to
abide by the terms and conditions of the Company's confidentiality and/or
proprietary rights agreement between Executive and the Company. Arbitration.
Pursuant to the Federal Arbitration Act, any claim, dispute or controversy
arising out of this Agreement, the interpretation, validity or enforceability of
this Agreement or the alleged breach thereof shall be submitted by the parties
to binding arbitration in Santa Xxxxx County, California or elsewhere by mutual
agreement. The selection of the arbitrator and procedure shall be governed by
the Employment Arbitration Rules of the American Arbitration Association. The
arbitrator shall be someone with an employment law background and from the AAA
Commercial Arbitration Panel, or if both parties agree, the Judicial Arbiters
Group. Notwithstanding the above, this arbitration provision shall not preclude
the Company from seeking injunctive relief from any court having jurisdiction
with respect to any disputes or claims relating to or arising out of the misuse
or misappropriation of the Company's trade secrets or confidential and
proprietary information or the breach of any provisions by Executive of the
Company's confidentiality and/or proprietary rights agreement between Executive
and Company. Each party shall bear its own costs and expenses of arbitration or
litigation, including but not limited to attorneys fees and other costs.
Judgment may be entered on the award of the arbitration in any court having
jurisdiction. Interpretation. Executive and the Company agree that this
Agreement shall be interpreted in accordance with and governed by the laws of
the State of California.
Conflict in Benefits. This Agreement shall supersede all prior
arrangements, whether written or oral, and understandings regarding the subject
matter of this Agreement including but not limited to any severance plans or
arrangements or prior employment agreements, and shall be the exclusive
agreement for the determination of any payments due upon Executive's termination
of employment; provided, however, that this Agreement is not intended to and
shall not affect, limit or terminate (i) any plans, programs, or arrangements of
the Company that are regularly made available to a significant number of
employees of the Company, (ii) any agreement or arrangement with Executive that
has been reduced to writing and which does not relate to the subject matter
hereof, (iii) any indemnification rights described below, or (iv) any agreements
or arrangements hereafter entered into by the parties in writing, except as
otherwise expressly provided herein.
Release of Claims. Except for the Stock Option Acceleration Benefit
described in Section 5, no severance benefits shall be paid to Executive under
this Agreement unless and until Executive shall, in consideration of the payment
of such severance benefit, execute a release of claims in the form attached
hereto as Exhibit A and all applicable waiting periods thereunder shall have
expired; provided, however, that such release shall not apply to any right of
Executive to be indemnified by the Company for the period during which Executive
was employed by the Company.
Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns. In view of the personal
nature of the services to be performed under this Agreement by Executive, he
shall not have the right to assign or transfer any of his rights, obligations or
benefits under this Agreement, except as otherwise noted herein.
Notices. All notices and other communications required or permitted to be
given under this Agreement shall be in writing and shall be deemed to have been
duly given when delivered in person or sent by confirmed facsimile transmission,
when received if given by Federal Express or other internationally recognized
overnight courier service, or five (5) business days after deposit in the United
States Post Office, postage prepaid, by first-class registered or certified
mail, return receipt requested, addressed as follows: if to the Company: CIDCO
Incorporated, 000 Xxxxxxxx Xxxxxx, Xxxxxx Xxxx, XX 00000 Attn: Corporate
Secretary cc: Corporate Counsel and if to Executive at the address specified at
the end of this Agreement. Notice may also be given at such other address as
either party may have furnished to the other in writing in accordance herewith,
except that notices of change of address shall be effective only upon receipt.
No Representations. Executive acknowledges that he is not relying and has
not relied on any promise, representation or statement made by or on behalf of
the Company which is not set forth in this Agreement.
Validity. If any one or more of the provisions (or any part thereof) of
this Agreement shall be held invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions (or any
part thereof) shall not in any way be affected or impaired thereby.
Modification. This Agreement may only be modified or amended by a
supplemental written agreement signed by Executive and the Company.
Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which together will constitute one and
the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and
year written below.
CIDCO Incorporated
Date: November 12, 1998
By:/s/ Xxxxxxx X. Xxxx
Title: COO/CFO
EXECUTIVE: Xxxx X. Xxxxxxx
Date: November 12, 1998
Executive's Signature
/s/ Xxxx X. Xxxxxxx
