EXHIBIT 10.19
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made and entered into
effective as of August 15, 2001, by and between Mobility Electronics, Inc., a
Delaware corporation ("Employer"), and Xxxx Xxxxxxxxx ("Employee").
WITNESSETH:
WHEREAS, Employer desires to employ Employee as provided herein, and
Employee desires to accept such employment; and
WHEREAS, Employee shall, as an employee of Employer, have access to
confidential information with respect to Employer and its affiliates;
NOW THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1. Employment. Employer hereby employs Employee and Employee hereby
accepts employment with Employer upon the terms and conditions hereinafter set
forth with a start date of August 15, 2001.
2. Duties. Subject to the power of the Board of Directors of Employer
to elect and remove officers, Employee shall serve Employer as Vice President
and Chief Financial Officer of Employer, and shall perform, faithfully and
diligently, the services and functions relating to such office or otherwise
reasonably incident to such office as may be designated from time to time by the
Chief Executive Officer or Board of Directors (the "Board") of Employer.
Employee shall report directly to the Chief Executive Officer of Employer.
Employee shall be based in Scottsdale, Arizona, but shall travel as required by
his duties under this Agreement. Employee shall devote his full time, attention,
energies and business efforts to his duties hereunder and to the promotion of
the business and interests of Employer and its affiliates.
3. Term. Unless earlier terminated pursuant to Section 6 below, the
term of this Agreement shall commence as of August 15, 2001, and shall end on
August 14, 2003; provided, however, that the term shall automatically renew for
an additional one-year period at the end of the original two-year term and any
additional one-year term, unless either party gives written notice to the other
party, at least ninety (90) days prior to the end of the applicable term, of
such party's termination of this Agreement at the end of the applicable term. As
used herein, "Term" shall mean the original term and any additional renewal
term(s).
4. Compensation. As compensation for services rendered under this
Agreement, during the Term Employee shall be entitled to receive the
compensation as provided in Exhibit A attached hereto. In addition, Employer
shall reimburse Employee for all reasonable and necessary out-of-pocket travel
and other expenses incurred by Employee in rendering services required under
this Agreement, on a monthly basis upon submission of a detailed monthly
statement and reasonable documentation.
5. Confidentiality.
(a) Acknowledgment of Proprietary Interest. Employee recognizes the
proprietary interest of Employer and its affiliates in any Trade
Secrets (as hereinafter defined) of Employer and its affiliates.
Employee acknowledges and agrees that any and all Trade Secrets
currently known by Employee or learned by Employee during the course of
his engagement by Employer or otherwise, whether developed by Employee
alone or in conjunction with others or otherwise, shall be and is the
property of Employer and its affiliates. Employee further acknowledges
and understands that his disclosure of any Trade Secrets will result in
irreparable injury and damage to Employer and its affiliates. As used
herein, "Trade Secrets" means all confidential and proprietary
information of Employer and its affiliates, now owned or hereafter
acquired, including, without limitation, information derived from
reports, investigations, experiments, research, work in progress,
drawings, designs, plans, proposals, codes, marketing and sales
programs, client lists, client mailing lists, financial projections,
cost summaries, pricing formula, and all other concepts, ideas,
materials, or information prepared or performed for or by Employer or
its affiliates and information related to the business, products or
sales of Employer or its affiliates, or any of their respective
customers, other than information which is otherwise publicly
available.
(b) Covenant Not-to-Divulge Trade Secrets. Employee acknowledges and
agrees that Employer and its affiliates are entitled to prevent the
disclosure of Trade Secrets. As a portion of the consideration for the
employment of Employee and for the compensation being paid to Employee
by Employer, Employee agrees at all times during the Term and
thereafter to hold in strict confidence and not to disclose or allow to
be disclosed to any person, firm or corporation, other than to persons
engaged by Employer and its affiliates to further the business of
Employer and its affiliates, and not to use except in the pursuit of
the business of Employer and its affiliates, the Trade Secrets, without
the prior written consent of Employer, including Trade Secrets
developed by Employee.
(c) Return of Materials at Termination. In the event of any
termination or cessation of his employment with Employer for any reason
whatsoever, Employee will promptly deliver to Employer all documents,
data and other information pertaining to Trade Secrets. Employee shall
not retain any documents or other information, or any reproduction or
excerpt thereof, containing or pertaining to any Trade Secrets.
(d) Competition During Employment. Employee agrees that during the
Term, neither he, nor any of his affiliates, will directly or
indirectly: (i) compete with Employer or its affiliates in the portable
or handheld computer power, docking, and connectivity business, which
is defined as product lines or businesses that are competitive with
products that are manufactured, marketed or sold by Employer and its
affiliates during the Term or under development during the Term (the
"Business"); or (ii) act as an officer, director, employee, consultant,
shareholder, lender, or agent of any entity which is in competition
with Employer; provided, however, that this Section 5(d) shall not
prohibit Employee or any of his affiliates from purchasing or holding
an aggregate equity interest of up to 1% in any publicly-traded company
which is in competition with Employer.
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Furthermore, Employee agrees that during the Term, he will undertake no
planning for the organization of any business activity competitive with
the Business and Employee will not combine or conspire with any other
employees of Employer and its affiliates for the purpose of the
organization of any such competitive business activity.
(e) Competition Following Employment. Employee agrees that for a
period of one-year after the termination or cessation of his employment
for Employer for any reason whatsoever, neither he, nor any of his
affiliates, will directly or indirectly: (i) compete with Employer or
its affiliates in the Business; (ii) act as an officer, director,
employee, consultant, shareholder, lender, or agent of any entity which
is in competition with Employer; or (iii) undertake or plan for the
organization of any business activity in competition with Employer and
Employee will not combine or conspire with any other employees of
Employer or its affiliates for the purpose of the organization of any
such competitive business activity; provided, however, that this
Section 5(e) shall not prohibit Employee or any of his affiliates from
purchasing or holding an aggregate equity interest of up to 1% in any
publicly-traded company which is in competition with Employer.
6. Termination. This Agreement and the employment relationship created
hereby shall terminate upon the occurrence of any of the following events (each,
a "Termination Event"):
(a) The expiration of the Term;
(b) The death of Employee;
(c) The excessive absence (as hereinafter defined) of Employee;
(d) Written notice to Employee from Employer of termination for
"just cause" (as hereinafter defined);
(e) Written notice to Employee from Employer of termination for any
reason other than (a), (b), (c), (d), or (f) in this subsection;
or
(f) Termination by Employee for any reason.
In the event of the termination of Employee's employment pursuant to
(a), (b), (c), (d) or (f), then Employee shall be entitled to only the
compensation earned by Employee as of, and payable for the period prior to, the
date of such Termination Event. In the event of the termination of Employee's
employment pursuant to (f) above, Employee shall (i) continue to receive the
salary provided for in Exhibit A for a period of six (6) months following the
date of termination. Notwithstanding anything to the contrary in this Agreement,
the provisions of Section 5 above shall survive any termination, for whatever
reason, of Employee's employment under this Agreement.
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For purposes of this Section 6 the following terms of the following
meanings:
"excessive absence" of Employee shall mean his inability, for
whatever reason, to perform his duties under this Agreement for a
continuous period of 60 days or for 120 days out of a continuous period
of 240 days.
"just cause" shall mean (a) conviction of a felony or
commission of any act of fraud, moral turpitude or dishonesty, (b) an
intentional, material violation of a statutory or fiduciary duty not
corrected within ten days after notice from Employer, (c) any material
breach by Employee of any of the terms or conditions of, or the failure
to perform any material covenant contained in, this Agreement and
Employee does not cure such breach or failure within ten days following
notice from Employer; provided, however, that Employee will not be
entitled to cure any breach or failure under this subclause (c) more
than one time in any consecutive three (3) month period, or (d) the
violation by Employee of reasonable instructions or policies
established by Employer with respect to the operation of its business
and affairs or Employee's failure to carry out the reasonable
instructions of the Chief Executive Officer, or Board of Directors of
Employer and following notice thereof from Employer to Employee,
Employee does not cure any such violation or failure within ten days
following notice from Employer; provided, however, that Employee will
not be entitled to cure any breach or failure under this subclause (d)
more than one time in any consecutive three (3) month period.
7. Remedies. Employee recognizes and acknowledges that in the event of
any default in, or breach of any of, the terms, conditions or provisions of this
Agreement (either actual or threatened) by Employee, Employer's and its
affiliates remedies at law shall be inadequate. Accordingly, Employee agrees
that in such event, Employer and its affiliates shall have the right of specific
performance and/or injunctive relief in addition to any and all other remedies
and rights at law, in equity or provided herein, and such rights and remedies
shall be cumulative.
8. Acknowledgments. Employee acknowledges and recognizes that the
enforcement of any of the provisions set forth in Section 5 above by Employer
and its affiliates will not interfere with Employee's ability to pursue a proper
livelihood. Employee recognizes and agrees that the enforcement of this
Agreement is necessary to ensure the preservation and continuity of the business
and good will of Employer and its affiliates.
9. Notices. Any notices, consents, demands, requests, approvals and
other communications to be given under this Agreement by either party to the
other shall be deemed to have been duly given if given in writing and personally
delivered or sent by facsimile
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transmission, courier service, overnight delivery service or by mail, registered
or certified, postage prepaid with return receipt requested, as follows:
If to Employer: Mobility Electronics, Inc.
0000 X. Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx
Fax: (000) 000-0000
with a copy to: Xxxxxxx X. Xxxxxxx, Esq.
Xxxxxxx Xxxxxx L.L.P.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Fax: (000) 000-0000
If to Employee: Xxxx Xxxxxxxxx
Mobility Electronics, Inc.
0000 X. Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx 00000
Fax: (000)000-0000
Notices delivered personally or by facsimile transmission, courier service or
overnight delivery shall be deemed communicated as of actual receipt; mailed
notices shall be deemed communicated as of three days after the date of mailing.
10. Entire Agreement. This Agreement contains the entire agreement of
the parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings, oral or written between the parties hereto
with respect to the subject matter hereof. No modification or amendment of any
of the terms, conditions or provisions herein may be made otherwise than by
written agreement signed by the parties hereto.
11. Governing Law and Venue. THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE INTERPRETED, CONSTRUED, AND ENFORCED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF ARIZONA, WITHOUT REGARD TO ITS CHOICE OF LAW PRINCIPLES.
12. Parties Bound. This Agreement and the rights and obligations
hereunder shall be binding upon and inure to the benefit of Employer and
Employee, and their respective heirs, personal representatives, successors and
assigns. Employer shall have the right to assign this Agreement to any affiliate
or to its successors or assigns. The terms "successors" and "assigns" shall
include any person, corporation, partnership or other entity that buys all or
substantially all of Employer's assets or all of its stock, or with which
Employer merges or consolidates. The rights, duties or benefits to Employee
hereunder are personal to him, and no such right or benefit may be assigned by
him. The parties hereto acknowledge and agree that Employer's affiliates are
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third-party beneficiaries of the covenants and agreements of Employee set forth
in Section 5 above.
13. Estate. If Employee dies prior to the payment of all sums owed, or
to be owed, to Employee pursuant to Section 4 above, then such sums, as they
become due, shall be paid to Employee's estate.
14. Enforceability. If, for any reason, any provision contained in this
Agreement should be held invalid in part by a court of competent jurisdiction,
then it is the intent of each of the parties hereto that the balance of this
Agreement be enforced to the fullest extent permitted by applicable law.
Accordingly, should a court of competent jurisdiction determine that the scope
of any covenant is too broad to be enforced as written, it is the intent of each
of the parties that the court should reform such covenant to such narrower scope
as it determines enforceable.
15. Waiver of Breach. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach by any party.
16. Captions. The captions in this Agreement are for convenience of
reference only and shall not limit or otherwise affect any of the terms or
provisions hereof.
17. Costs. If any action at law or in equity is necessary to enforce or
interpret the terms of this Agreement, the prevailing party shall be entitled to
reasonable attorneys' fees, costs and necessary disbursements in addition to any
other relief to which he or it may be entitled.
18. Other Obligations. Employee represents and warrants that he is not
subject to any agreement which would be violated or breached as a direct or
indirect result of Employee executing this Agreement or Employee becoming an
employee of Employer.
19. Affiliate. An "affiliate" of any party hereto shall mean any person
controlling, controlled by or under common control with such party.
20. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which shall
constitute one and the same instrument, but only one of which need be produced.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
MOBILITY ELECTRONICS, INC.
By:
/s/ XXXXXXX X. XXXXX
------------------------------------
Xxxxxxx X. Xxxxx,
Chief Executive Officer
/s/ XXXX XXXXXXXXX
-------------------------------------
Xxxx Xxxxxxxxx
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EXHIBIT A
1. Annual Salary: Annual Salary will be at the rate of $150,000 per year,
subject to periodic increase at the discretion of the Board. A minimum
raise of 13% will be effective on January 1, 2002. The Annual Salary
shall be payable bi-weekly.
2. Bonuses: Employee shall be eligible to receive an annual calendar year
bonus, if earned, per the Employer's Executive Bonus Plan, as the same
may be in force and effect from time to time.
3. Benefits: Employee shall be entitled to receive such group benefits as
Employer may provide to its other employees at comparable salaries and
responsibilities to those of Employee, which shall specifically include
three weeks of paid vacation per calendar year (pro rated for partial
years).
4. Stock Options: In addition to any other options currently held by
Employee, on January 19, 2002 employee will receive a new option to
purchase 20,000 shares of Employer's common stock at its current fair
market value. The option will vest 14.29% on date of issue and ratably
each 6 months thereafter through January 19, 2005.
A-1
