EXHIBIT 10.23
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Employment Agreement" or "Agreement"),
dated this 14th day of January 2004, is by and between eLinear, Inc., a Delaware
corporation, Houston, Texas (the "Company"), and Xxxxxxx Xxxxx (the "Executive")
an individual for employment beginning May 25, 2004.
WHEREAS, the Executive is willing to enter into an agreement with the
Company upon the terms and conditions herein set forth.
NOW, THEREFORE, in consideration of the premises and covenants herein
contained, the parties hereto agree as follows:
1. Term of Agreement. Subject to the terms and conditions hereof, the term
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of employment of the Executive under this Employment Agreement shall be for the
period commencing on the date hereof (the "Commencement Date") and terminating
two years from the Commencement Date, unless sooner terminated in accordance
with the provisions of Section 6 hereof. (Such term of employment is herein
sometimes called the "Employment Term.")
2. Employment. As of the Commencement Date, the Company hereby agrees to
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employ the Executive as Executive Vice President of Sales and Operations of
eLinear, Inc. with such duties as assigned from time to time by the Company, and
the Executive hereby accepts such employment and agrees to perform his duties
and responsibilities hereunder in accordance with the terms and conditions
hereinafter set forth.
3. Duties and Responsibilities.
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(a) Duties. Executive shall perform such duties as are usually performed by
a Chief Operating Officer, Senior Vice President with such duties as assigned
from time to time by the Company of a business similar in size and scope as the
Company and such other reasonable additional duties as may be prescribed from
time-to-time by the Company's Chief Executive Officer which are reasonable and
consistent with the Company's operations, taking into account Executive's
expertise and job responsibilities. This agreement shall survive any job title
or responsibility change. All actions of Executive shall be subject and
subordinate to the review and approval of the Chief Executive Officer and board
of directors of the Company. The Chief Executive Officer of the Company shall
be the final and exclusive arbiter of all policy decisions relative to the
Company's business (including their subsidiaries).
(b) Devotion of Time. During the term of this agreement, Executive agrees
to devote his exclusive and full-time service during normal business hours to
the business and affairs of the Company (including their subsidiaries) to the
extent necessary to discharge the responsibilities assigned to Executive and to
use reasonable best efforts to perform faithfully and efficiently such
responsibilities. During the term of this Agreement it shall not be a violation
of this Agreement for Executive to manage personal investments or companies in
which personal investments are made so long as such activities do not
significantly interfere with the performance of Executive's responsibilities
with the Company and which companies are not in direct competition with the
Company.
4. Compensation and Benefits During the Employment Term.
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(a) Salary. Executive will be compensated by the Company at a monthly base
salary of $8,000, from which shall be deducted income tax withholdings, social
security, and other customary employee deductions in
conformity with the Company's payroll policy in effect.
(b) Relocation Allowance. Executive will receive a relocation allowance of
$18,000.00, such bonus will be payable on or before June 7, 2004. Executive
shall also be entitled to receive a $5000.00 quarterly performance bonus.
Executive will also be eligible for an additional bonus set by the Compensation
Committee of up to one half of Executive's base salary. Executive acknowledges
that the Compensation Committee will set the bonus parameters to be achieved in
their sole discretion, and that Executive has not been given any guidance as to
the criteria to be used by the Compensation Committee, nor has the Executive
entered into this Agreement based on any representations as to the criteria to
be used by the Compensation Committee.
(c) Option. The Executive shall receive an employee option expiring five
years from the date hereof to purchase 450,000 shares at an exercise price of $
2.00 per share. The vesting schedule shall be 25% upon the one-year anniversary
of the execution of this Agreement and 25% each subsequent year thereafter;
provided that no vesting shall occur unless Executive is employed by the Company
on the respective vesting date; provided further that if the Company terminates
the Executive during the Employment Term for any reason other than for Cause,
for vesting calculation purposes, the options due the Executive at year-end will
be prorated in relation to the date of Executive's employment termination and
such prorated amount will vest immediately at the date of Executive's employment
termination. For the avoidance of doubt, if Executive is terminated for Cause,
resigns, or dies, Executive will not be entitled to any prorated vesting as set
forth in the previous sentence. In addition, if Executive is terminated for any
reason, resigns, or dies this option shall expire on the earlier of: (i) four
years from the date hereof, or (ii) six months from the date of the termination,
resignation, or death. The option shall be evidenced by an option agreement,
shall expire in five years, and shall be subject to the terms of the Company's
2003 Stock Option Plan and such option agreement. The term of the option is not
intended to extend or otherwise modify the Employment Term.
(d) Executive Allowance. The Executive will receive a $1,000.00 expense
allowance per month for home office and car.
5. Change of Control
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In the case of a change of control of the Company, all unvested options,
those described in paragraph 4(c) and any others granted since the effective
date of this Agreement, shall be accelerated and will vest immediately. Change
of control is defined as the sale of over 50.1% of eLinear common stock to a
single entity.
6. Termination
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(a) Executive's employment under the Agreement may be terminated under any
of the following circumstances:
(i) Immediately by the Company, upon the death of Executive.
(ii) By the Executive at any time, upon 14 days written notice.
(iii) Immediately, upon written notice by the Company for Cause which
for purposes of the Agreement shall be defined as (i) Executive's willful and
persistent inattention to his reasonable duties which amounts to gross
negligence or willful dishonesty towards, fraud upon, or deliberate injury or
attempted injury to, the Company, (ii) Executive's willful breach of any term or
provision of the Agreement which breach shall have remained substantially
uncorrected for 15 days with an opportunity to cure following written notice to
the Executive; or (iii) the commission by Executive of any act or any failure by
Executive to act involving criminal conduct or moral turpitude, whether or not
directly relating to the business and affairs of the Company.
(b) Effects of Termination. In the event that the Agreement is terminated
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pursuant to Section 6(a) or upon expiration of the term of the Agreement,
neither the Executive nor the Company shall have any further obligations
hereunder except for (a) obligations occurring prior to the date of termination,
and (b) obligations, promises or covenants contained herein which are expressly
made to extend beyond the term of the Agreement.
(c) Improper Termination. In the event of the Executive's termination by
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the Company for any reason other than for Cause or the death of the Executive,
Executive shall continue to be paid, as severance pay, an amount equal to his
salary at the time of termination until the earlier of: (i) the end of the
Employment Term, or (ii) 90 calendar days from the date of the termination.
7. Revealing of Trade Secrets, etc. Executive acknowledges the interest of
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the Company in maintaining the confidentiality of information related to its
business and shall not at any time during the Employment Term or thereafter,
directly or indirectly, reveal or cause to be revealed to any person or entity
the supplier lists, customer lists or other confidential business information of
the Company; provided, however, that the parties acknowledge that it is not the
intention of this paragraph to include within its subject matter (a) information
not proprietary to the Company, (b) information which is then in the public
domain through no fault of Executive, or (c) information required to be
disclosed by law.
8. Non-Competition Agreement. As part of the consideration for the
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compensation and benefits to be paid and extended to Executive hereunder, and as
an additional incentive for the Company to enter into this employment
relationship, Executive agrees to the non-competition provisions of this
section.
(a) Executive hereby agrees that for a period commencing on the date hereof
and ending 1 year following the termination of Executive's employment with the
Company for whatever reason, he will not, directly or indirectly, as employee,
agent, consultant, stockholder, director, co-partner or in any other individual
or representative capacity, own, operate, manage, control, engage in, invest in
or participate in any manner in, act as a consultant or advisor to, render
services for, or otherwise assist any person or entity (other than the Company)
that engages in or owns, invests in, operates, manages or controls any venture
or enterprise that engages or proposes to engage in the business of technology
consulting and IT equipment sales within Xxxxxx County (the "Territory").
(b) Restrictions on Future Employment. Executive understands that the
foregoing restrictions may limit his ability to engage in certain businesses in
the Territory during the period provided for above, but acknowledges that
Executive will receive sufficiently high remuneration and other benefits (e.g.,
high remuneration during the term of the Agreement and access to certain
confidential and proprietary information and trade secrets) under this Agreement
to justify such restriction. Executive acknowledges that money damages would
not be sufficient remedy for any breach of this section by Executive, and
Company or any of its subsidiaries or affiliates shall be entitled to enforce
the provisions of this section by terminating any payments then owing to
Executive under this Agreement and/or to specific performance and injunctive
relief as remedies for such breach or any threatened breach, without any
requirement for the securing or posting of any bond in connection with such
remedies. Such remedies shall not be deemed the exclusive remedies for a breach
of this section, but shall be in addition to all remedies available at law or in
equity to Company or any of its subsidiaries or affiliates, including, without
limitation, the recovery of damages from Executive and his agents involved in
such breach.
(c) Acknowledgement by Parties. It is expressly understood that the
restrictions contained in this
section are related to and result from the agreements of the Company and
Executive in this section and it is agreed that the Company and Executive
consider the restrictions contained in this section to be reasonable and
necessary to protect the confidential and proprietary information and trade
secrets of the Company and its subsidiaries and affiliates.
9. Survival. In the event that this Agreement shall be terminated, then
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notwithstanding such termination, the obligations of Executive pursuant to
Section 7 and 8 of this Agreement shall survive such termination.
10. Contents of Agreement, Parties in Interest, Assignment, etc. This
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Agreement sets forth the entire understanding of the parties hereto with respect
to the subject matter hereof. All of the terms and provisions of this Agreement
shall be binding upon and inure to the benefit of and be enforceable by the
respective heirs, representatives, successors and assigns of the parties hereto,
except that the duties and responsibilities of Executive hereunder which are of
a personal nature shall neither be assigned nor transferred in whole or in part
by Executive. This Agreement shall not be amended except by a written
instrument duly executed by the parties.
11. Severability; Construction. If any term or provision of this Agreement
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shall be held to be invalid or unenforceable for any reason, such term or
provision shall be ineffective to the extent of such invalidity or
unenforceability without invalidating the remaining terms and provisions hereof,
and this Agreement shall be construed as if such invalid or unenforceable term
or provision had not been contained herein. The parties have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties and no presumption or burden
of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any of the provisions of this Agreement.
12. Notices. Any notice, request, instruction or other document to be given
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hereunder by any party to the other party shall be in writing and shall be
deemed to have been duly given when delivered personally; or five (5) days after
dispatch by registered or certified mail, postage prepaid, return receipt
requested; or one (1) day after dispatch by overnight courier service; in each
case, to the party to whom the same is so given or made:
IF TO THE COMPANY ADDRESSED TO:
eLinear, Inc.
0000 Xxxx Xxx Xxxxxxx Xxxxxxx Xxxxx, Xxx. X-000
Xxxxxxx, Xxxxx 00000
Attn: Chief Executive Officer
IF TO EXECUTIVE ADDRESSED TO:
Xxxx Xxxxx
___________________
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or to such other address as the one party shall specify to the other party in
writing.
13. Counterparts and Headings. This Agreement may be executed in one or
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more counterparts, each of which shall be deemed an original and all which
together shall constitute one and the same instrument. All
headings are inserted for convenience of reference only and shall not affect the
meaning or interpretation of this Agreement.
14. Governing Law; Venue. This Agreement shall be construed and enforced in
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accordance with, the laws of the State of Texas, without regard to the conflict
of laws provisions thereof. Venue of any dispute concerning this Agreement
shall be exclusively in Xxxxxx County, Texas.
15. Waiver. The failure of either party to enforce any provision of
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this Agreement shall not be construed as a waiver or limitation of that party's
right to subsequently enforce and compel strict compliance with every provision
of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
Executive ELINEAR, INC.
___________________________ ___________________________
Xxxx Xxxxx Xxxxx Xxxxx, CEO
