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Exhibit 10.15
9/4/97
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made and entered into this ___
day of September, 1997, by and between Xionics, Inc. (the "Employer") and Xxxxx
Xxxxxxx (the "Employee").
WHEREAS, the Employer is a wholly-owned subsidiary of Xionics Document
Technologies, Inc. a Delaware corporation; and
WHEREAS, the Employer intends to purchase from the Employee all of the shares
held by the Employee in Seaport Imaging ("Seaport"), a California corporation
which, it is intended, will become a wholly-owned subsidiary of the Employer on
the date of closing of the Employer's purchase of all of the shares in Seaport
from their current owners (the "Closing Date"); and
WHEREAS, Employer wishes to employ the Employee as Senior Director of Imaging,
and the Employee wishes to work for the Employer in that capacity, on the terms
and conditions set forth below;
NOW THEREFORE, the parties hereby agree as follows:
1. EMPLOYMENT. The Employer hereby employs the Employee, and the Employee
hereby accepts employment, upon the terms and subject to the conditions
hereinafter set forth.
2. DUTIES.
2.1 The Employee shall be employed as Senior Director of Imaging of the
Employer, provided that the Employer reserves the right, in its discretion,
to reassign the Employee to another position that, in the reasonable
judgment of the Employer, calls for similar skills, experience and/or
knowledge. Such reassignment may, at the Employer's discretion, include
assignment of Employee to a subsidiary or other affiliate of the Employer.
The Employee shall have such specific duties and responsibilities as are
assigned by the President or Vice President and General Manager, Imaging,
of the Parent Corporation, or the delegee(s) of any of them (collectively,
the "Authorized Officers"). Except for vacations in accordance with Section
4.2 below and absences due to temporary illness, the Employee agrees to
devote his full working time, attention and energies to the performance of
his duties to the Employer.
2.2 The Employee's duties shall be performed substantially at Seaport's current
California offices or at some other offices in the Silicon Valley. The
Employee will undertake business travel to the extent required for the
performance of his duties hereunder, as determined by an Authorized
Officer.
3. TERM. The initial term of employment of the Employee hereunder shall
commence on the Closing Date and shall continue until the third anniversary
of the Closing Date (the "Initial Term"), unless earlier terminated
pursuant to the provisions of Section 8. below. Thereafter the Employee may
remain employed by Employer if both parties so desire, but shall be
considered an employee at will in accordance with applicable state law.
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4. COMPENSATION AND BENEFITS. For so long as this Agreement remains in effect,
and in consideration of the services to be supplied by the Employee
hereunder, the Employer shall compensate the Employee as follows:
4.1 BASE SALARY. The Employer shall pay the Employee, in accordance with the
Employer's then-current payroll practices, a base salary (the "Base
Salary"). The Base Salary will initially be paid at an annual rate of One
Hundred and Fifty Thousand Dollars ($150,000.00 U.S.), and may be increased
from time to time in the discretion of the Employers' Board of Directors or
the Authorized Officers, or any of them.
4.2 VACATION. The Employee shall be entitled to paid vacation in accordance
with the Employer's vacation policy as such policy is in effect from time
to time. Any vacation shall be taken at the reasonable and mutual
convenience of the Employer and the Employee.
4.3 INSURANCE, ETC. Accident, disability, life and health insurance for the
Employee and his dependents shall be provided by the Employer under the
group policies maintained by the Employer for its full-time salaried
employees, on the same terms (including terms requiring reasonable employee
contributions to the costs of such coverage) on which such benefits are
made available to Employer's other full-time salaried employees from time
to time.
4.4 (a) (i) The term "SeaWorthy Products" shall mean those products listed
in Exhibit A hereto under the title SeaWorthy Products.
(ii) The term "Cruise Line Products" shall mean shall mean those
products listed in Exhibit A hereto under the title Cruise Line
Products.
(iii) The term "SeaBars Products" shall mean shall mean those products
listed in Exhibit A hereto under the title SeaBars Products.
(iv) The term "individual Seaport Product" shall mean any individual
product of the SeaWorthy Products, Cruise Line Products or SeaWorthy
Products.
(v) The term "Seaport Products" shall mean SeaWorthy Products,
Cruise Line Products and SeaBars Products, collectively.
(b) In addition to the Base Salary described in 4.1 above, and as a
material inducement to Employee's willingness to enter into this Agreement,
Employer shall pay to Employee a portion (the "Additional Salary") of Employer's
income from the SeaWorthy Products, SeaBars Products and Cruise Line Products in
the manner described below:
(i) SeaWorthy Products - Employer shall pay to Employee twenty
percent (20%) of the revenue received by Employer for the direct sale
of Seaworthy Products for the first three (3) years following
commencement of this Agreement, and ten percent (10%) of the revenue
received by Employer for the direct sale of Seaworthy Products for the
two (2) years following the third anniversary of the commencement of
this Agreement;
(ii) SeaBars Products - Employer shall pay to Employee twenty percent
(20%) of the revenue received by Employer for the direct sale of
SeaBars Products for the first three (3) years following commencement
of this Agreement, and ten percent (10%) of the revenue received by
Employer for the
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direct sale of SeaBars Products for the two (2) years following the
third anniversary of the commencement of this Agreement;
(iii) Cruise Line Products - Employer shall pay to Employee ten
percent (10%) of the revenue received by Employer for the direct sale
of Cruise Line Products for the first three (3) years following
commencement of this Agreement; provided, however, that such revenue
shall be calculated after deduction of amounts due by Seaport or
Employer to Optimis Systems, Inc. for such products pursuant to that
certain Marketing and License Agreement dated June 17, 1997 between
Optimis Systems, Inc. and Seaport Imaging, Inc. (the "Optimis
Agreement"), as the same may be amended from time to time.
(c) All revenue described above shall be calculated after deduction of
credits, returns, stock rotations and warranty replacements. The Additional
Salary payments shall be made on a monthly basis, in arrears, and shall be
accompanied by such reasonable documentation as shall evidence the
calculation of the amounts paid. "Direct sale" as used in 4.4(b) above
shall mean any sale and/or license by Seaport or Employer of the individual
Seaport Products and any successor products (for instance updates and
upgrades) or any other form in which the individual Seaport Product may be
recast or transformed during the term of employment referenced above .
(d) For and with respect to the individual Seaport Products or their
successor products which are at a later date incorporated (whether embedded
or as an add-on product) into any other product(s) of Employer or its
affiliates (such product into which any or all of such individual Seaport
Products are incorporated is hereinafter referred to as a "Xionics
Product"), Xionics shall pay the employee Additional Salary calculated in
the following manner:
(i) SeaWorthy Products- Employer shall pay to employee 20% of the
calculated revenue (as hereinafter described), if any, for the
first three (3) years of the term of this Agreement, and 10% of
the calculated revenue, if any, for the next two (2) years of
this Agreement.
(ii) SeaBars Products - Employer shall pay to employee 20% of the
calculated revenue (as hereinafter described), if any, for the
first three (3) years of the term of this Agreement, and 10% of
the calculated revenue, if any, for the next two (2) years of
this Agreement.
(iii) Cruise Line Products- Employer shall pay to employee 10% of the
Cruise Line calculated revenue (hereinafter described), if any,
for the first (3) years of the term of this agreement.
(e) (i) "Calculated revenue" shall mean the result of (a) the actual
sale price of the Xionics Product multiplied by (b) the amount which is the
result of dividing (1) the list price of the individual Seaport Product by
(2) the total of list prices of all components of the Xionics Product.
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As an example:
(List Price of individual Seaport
Products included in Xionics Product) X (the actual sale price = calculated revenue
---------------------------------------- of the Xionics Product)
(Total of List Prices of all components
in the Xionics Product)
(ii) If the Xionics Product is an embedded product, the pricing for
the embedded product will include line item pricing, and such line item
prices will be maintained on a published price list for the period of time
during which the Additional Salary payments are due.
(iii) Cruise Line calculated revenue shall mean the result of (a) the
actual sale price for the Cruise Line Product, less amounts due by Seaport
or Employer to Optimis Systems, Inc. pursuant to the Optimis Agreement, for
such product, multiplied by (b) the amount which is the result of dividing
(1) the list price of the Cruise Line Product included in the Xionics
Product by (2) the total of list prices of all components of the Xionics
Product.
(f) In the event the total actual sales for all products which comprised
products of the company Seaport Imaging prior to the Closing Date
("Seaport's traditional products"), other than the Seaport Products, during
the first six (6) months after the date of execution of the Stock Purchase
Agreement ("Total Sales") is less than $1,100,000.00, then two times the
difference between the Total Sales and $900,000.00 shall be deemed to be
"Earned Credit". The difference between the Earned Credit, if any, and
$400,000.00 shall be the "Offset Amount". After calculation of the Offset
Amount, the Offset Amount, if any, will be deducted from future monthly
payments of Additional Salary otherwise due to Employee as described in
4.4(b) above until the Offset Amount has been completely exhausted. (As an
example only, if Total Sales equals $1,050,000.00 for the period, the
Earned Credit would be $300,000.00, and the amount deducted from future
monthly payments of Additional Salary would be $100,000.00).
Notwithstanding the foregoing, in no event shall the Offset Amount exceed
$400,000.00.
(g) Except as set forth below, the Additional Salary payments described
in Section 4.4(b) shall continue for the full period anticipated under
Section 4.4(b) regardless of whether or not this Agreement is sooner
terminated for any reason whatsoever or expires or whether Employee is
employed by the Employer as anticipated by this Agreement at the time such
payment is due to Employee. In the event of employees death or disability
during the period when Additional Salary payments would otherwise be due,
employer shall continue to pay the Additional Salary to the Employee or his
estate or heirs, as the case may be. Notwithstanding the foregoing, in the
event that employee resigns his position with Employer prior to the
expiration of the Initial Term, then the Additional Salary payments will
continue, but will be reduced as follows: the total Additional Salary,
after calculation, will be reduced by 10% for the period of months
remaining in the Initial Term (in other words, Additional Salary payments
will be calculated at 18% of the applicable revenue rather than 20% for the
remainder of the Initial Term with respect to SeaWorthy Products and
SeaBars Products, and 9% of the applicable revenue rather than 10% with
respect to Cruise Line Products).
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(h) Employer will keep and maintain, for a period of two years, proper
records and books of account relating to Employers marketing and
distribution of products for which Additional Salary is payable here under.
Employer will have conducted, as a part of the independent review of its
corporate books, quarterly during the first year of this Agreement and
thereafter on an annual basis (or quarterly if so requested by Employee),
an independent review of the Additional Salary calculations payable and
paid to Employee under this Agreement. Upon completion of the independent
review, the auditor performing the review will provide to Employee a
certification of the accuracy of the Additional Salary payments made during
the period covered by the review. If the payments made were less than that
which was due, the balance due will be paid with the next monthly
Additional Salary payment. If the payments were in excess of what should
have been paid, the over payment will be deducted from the next months
Additional Salary payment. The cost to perform this independent review will
be born by the Employer and will continue for the period the Additional
Salary payments are due pursuant to the terms of this Agreement.
5. RELOCATION. The Employee is currently resident in California. In the event
Employee's permanent presence in Employer's Burlington, MA office is
desired by Xionics, Employee may at his discretion relocate to
Massachusetts at the earliest feasible date following such request. The
Employer agrees to pay the mutually agreed upon, reasonable, customary and
ordinary expenses of such relocation.
6. INVENTION DISCLOSURE AND CONFIDENTIALITY. The Employee understands that his
position with the Employer is one of high trust and confidence, by reason
of his access to and contact with the trade secrets and confidential and
proprietary information of the Employer. Therefore, the Employee agrees
that he will execute the Employer's standard Employee Invention and
Non-Disclosure Agreement, in the form attached hereto as Exhibit B; and
that upon its execution such Employee Invention and Non-Disclosure
Agreement will be incorporated in and made a part of this Agreement.
7. TERMINATION. Notwithstanding Section 3. above, the Employee's employment
shall terminate:
7.1 DEATH OR DISABILITY. Upon the death of the Employee during the term of his
employment hereunder or, at the option of the Employer, upon thirty (30)
days' prior written notice from the Employer in the event of the Employee's
disability. The Employee shall be deemed disabled if an independent medical
doctor (selected by the Employer's health or disability insurance carrier)
certifies that the Employee has, for ninety (90) days, consecutive or
non-consecutive, in any twelve (12)-month period been materially impaired
in his ability to perform his duties under this Agreement.
7.2 FOR CAUSE. For Cause, as defined below, immediately upon written notice
given to the Employee by the Employer. For purposes of this Agreement,
"Cause" shall mean any one or more of the following:
(a) An act of fraud, embezzlement, misappropriation or breach of fiduciary
duty committed by the Employee against the Employer, including but not
limited to the offer, payment, solicitation or acceptance of any unlawful
bribe or kickback with respect to the Employer's business;
(b) The Employee's conviction by a court of competent jurisdiction of any
felony;
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(c) The Employee's breach of any of the covenants, terms or provisions of
the Employee Invention and Non-Disclosure Agreement to be executed pursuant
to Section 6. above;
(d) The Employee's substantial failure to perform (whether because of
inability, unwillingness, negligence, or any other reason based upon the
act or failure to act of Employee) the duties and responsibilities
reasonably assigned to him by the Employer in a manner reasonably
satisfactory to the Employer, which failure continues for sixty (60) days
after notice of such failure from an Authorized Officer; or
(e) The Employee's refusal to obey any lawful direction by an Authorized
Officer which is consistent with his duties and responsibilities hereunder,
which refusal continues for five (5) days after written notice to the
Employee specifying such refusal in reasonable detail.
7.3 RIGHTS AND REMEDIES ON TERMINATION. If the Employer shall terminate the
Employee's employment hereunder other than as provided in Sections 7.1 and
7.2 above, then the Employee shall be entitled to receive, as severance pay
and in consideration of his ongoing obligations under the Employee
Invention and Non-Disclosure Agreement referred to above, in accordance
with the Employer's then-current payroll practices, payment of his Base
Salary in effect at the time of termination for the shorter of one (1) year
or the remainder of the Initial Term (the "termination payment period");
provided, however, that in the event of any such termination, half way
through the termination payment period, the parties shall determine
Employee's employment status, and if at such time Employee has secured
other employment, then no additional payments for the balance of the
termination payment period shall be due from Employer to Employee.
7.4 EFFECT OF NO CLOSING. Notwithstanding any of the other provisions of this
Agreement, in the event the Closing Date does not occur on or before
September 10, 1997, this Agreement shall become null and void, as if the
same had never been entered into between the parties, and no obligations of
either party hereto shall be enforceable against the other, and no amounts
otherwise due from Employer to Employee under any section of this Agreement
shall be due or payable.
8. GENERAL.
8.1 NO RIGHTS IN SOFTWARE/HARDWARE. Except for that certain patent number
5,557,091 (which employee will assign to Employer pursuant to the terms of
the Stock Purchase Agreement between Employer and Employee, as one of the
Sellers under that agreement), Employee represents that Employee has no
right, title or interest of any kind or nature in the Seaworthy Products,
SeaBars Products or Cruise Line Products, or any other software or hardware
products of Seaport Imaging, Micro Machines, Inc. or any other related
entity, whether by ownership, license or otherwise.
8.2 ASSIGNMENT. This Agreement shall be binding on and inure to the benefit of
the heirs and successors of each of the parties hereto. This Agreement
shall not be assignable by the Employee, it being understood and agreed
that this is a contract for the Employee's personal services. This
Agreement shall not be assignable by the Employer except to a subsidiary or
affiliate of the Employer, or in connection with a merger involving, or a
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sale or transfer of all or substantially all of the assets and business of,
the Employer; provided, that assignment in such instances shall be
permitted only if the conditions and circumstances of the Employee's
employment would not be materially altered as the result of the assignment,
or if the Employee agrees in advance to any material alterations that would
result from the assignment.
8.3 ENTIRE AGREEMENT. This Agreement contains the entire understanding of the
parties relating to the Employee's employment by the Employer; supersedes
all prior agreements and understandings relating to the subject matter
hereof; and shall not be amended except by a writing signed by each of the
parties hereto.
8.4 GOVERNING LAW. This Agreement shall be construed and governed in accordance
with the laws of the Commonwealth of Massachusetts, without giving effect
to principles of choice of laws.
IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties hereto
have caused this Agreement to be duly executed as of the date first written
above.
EMPLOYER:
XIONICS, INC.
By: /s/ Xxxx Xxxxxxxxx
Title:
EMPLOYEE:
/s/ Xxxxx Xxxxxxx
Xxxxx Xxxxxxx
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