September 19, 2001
[ ] Employee's Copy
[X] Company's Copy
ENGLISH LANGUAGE LEARNING & INSTRUCTION SYSTEM, INC.
EMPLOYMENT AGREEMENT
To Xxxxxx Xxxxxx:
This Agreement establishes the terms of your continued employment with
English Language Learning & Instruction System, Inc., a Delaware corporation
(the "Company").
Employment and Duties
You and the Company agree to your continuing employment as Chief Operating
Officer on the terms contained below. In such position, you will report
directly to the Company's Chief Executive Officer and the Board of Directors
(the "Board"). You agree to perform whatever duties the Board or the 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. During your
employment, you agree to devote your full business time, attention, and
energies to performing those duties. You agree to comply with the non-
competition, secrecy, and other provisions of Exhibit A to this Agreement. You
agree that the Board may change your title without your consent as long as it
does not significantly diminish your duties through the change.
Term of Employment
Your employment under this Agreement begins as of September 19, 2001 (the
"Effective Date"). Unless sooner terminated or later extended under this
Agreement, your employment ends at 6:00 p.m. Eastern Time on the second
anniversary of the Effective Date (the "Initial Term"). Unless, at least 120
days before the Initial Term (and any extensions) would otherwise expire (an
"Expiration Date"), either you or the Company has notified the other of an
intent to terminate this Agreement as of the next Expiration Date, the Term
will automatically extend until each succeeding second anniversary of the
Effective Date following such Expiration Date. (As an example, absent earlier
termination, the Initial Term would end on September 19, 2003, the first
extension would end on September 19, 2005, the second extension on September
19, 2007, etc.)
XXXXX/Form of Employment Agreement
The period running from the Effective Date to the end of your employment under
this Agreement is the "Term."
Termination or expiration of this Agreement ends your employment under this
Agreement but does not end your obligation to comply with Exhibit A or the
Company's obligation, if any, to make payments under the Payments on
Termination and Severance provisions as specified below. If the Company
continues to employ you after the Term (such as after a notice of nonrenewal),
you will continue to be an at-will employee, but with no Severance, as
provided under Expiration below.
Compensation
Salary -- The Company will pay you a monthly salary beginning on the
Effective Date at the rate of not less than $10,833.33 in accordance with the
Company's generally applicable payroll practices, which is equivalent on an
annualized basis to $130,000.00 (the "Salary"). The Board will review your
Salary annually and consider you for increases, which will be no less than
five percent 5% annually.
Bonus -- The Company may pay a discretionary bonus payment in addition to the
Salary. The Board will set Bonus targets for the years 2002 and beyond upon
acceptance of the annual budget. The Board will award Bonuses paid for 2001
after completion of the year-end audited financial statements.
Employee Benefits -- While the Company employs you under this Agreement, the
Company will provide you with the same benefits as the Company makes generally
available from time to time to the Company's senior executives, 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.
Place of Employment
Your principal place of employment will be at such offices as the Company may
establish from time to time and to which it assigns you in its sole
discretion. You understand and agree that your employment will require travel
from time to time.
Expenses
The Company will reimburse you for reasonable and necessary travel and other
business-related expenses you incur in performing your duties for the Company
under this Agreement. You must itemize and substantiate all requests for
reimbursements. You
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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, without the
Board's or your Direct Report's prior written consent, directly or indirectly,
provide services for which you receive compensation to any other person or
organization, nor will you otherwise engage in activities that would conflict
or interfere signicantly with your faithful performance of your duties as an
employee of the Company. (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 and is otherwise consistent with the policies and
practices of the Company.
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 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, your immediate
relatives, 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 comply fully
with the Company's policy and practices relating to conflicts of interest.
No Improper
Payments
You will neither pay nor knowingly or negligently permit payment of any
remuneration to or 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 knowingly or negligently 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
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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 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.
Termination
The Company may terminate your employment or you may resign at any time in
accordance with this section.
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 fraud, material dishonesty, or gross negligence
with respect to the Company or otherwise act with willful disregard for
the Company's best interests;
(iii) fail or refuse to perform any duties delegated to you that are
consistent with the duties of similarly-situated senior executives or are
otherwise required under this Agreement;
(iv) seize a corporate opportunity for yourself instead of offering such
opportunity to the Company if it is within the scope of the Company's or
its subsidiaries' or parent's business; or
(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, to any misdemeanor
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(other than a traffic violation) or, with respect to your employment,
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, if the Board or
your Direct Report reasonably considers the situation to be correctable, 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. Before or during the 30 day period, either party may request
mediation (under the procedure described in Exhibit B of this Agreement) to
resolve any such disputes, and, if so requested, the parties agree to
cooperate to arrange a prompt mediation. You agree that the Board or your
Direct Report will have the discretion to determine whether your correction is
sufficient, provided that this decision does not foreclose you from invoking
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 without Cause.
Disability -- If you become "disabled" (as defined below), the Company may
terminate your employment. You are "disabled" if you are unable, for more than
90 consecutive days, despite whatever reasonable accommodations the law
requires, to render services to the Company because of physical or mental
disability, incapacity, or illness. 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 or benefits).
Without Good Reason -- You may resign upon 60 days' prior written notice to
the Company (unless the Board has, in writing, previously waived such notice
or authorized a shorter notice period).
Death -- If you die during the Term, the Term will end as of the date of your
death.
Payments on Termination -- Upon any termination of this Agreement, the Company
will pay you any unpaid portion of your Salary pro-rated through the last day
of the Term (and any annual bonuses already determined by
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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, before the next
scheduled Expiration Date, the Company terminates your employment without
Cause, the Company will pay you severance equal to your Salary, as then in
effect, for 12 months on the same schedule as though you had remained employed
during such period, even though you are no longer employed. In addition, the
Company will pay you upon termination a cash amount equal to 12 months of the
premiums it paid on your behalf for medical and health insurance coverage,
with the premium rate determined as of the month preceding your termination.
If the Company gives notice that it intends to terminate this Agreement on any
Expiration Date, the Company will pay you severance equal to your Salary, as
then in effect, for 3 months on the same schedule as though you had remained
employed during such period, even though you are no longer employed. You are
not required to mitigate amounts payable under the Severance paragraph by
seeking other employment or otherwise, nor need you pay over to the Company
amounts earned under subsequent employment; however, you agree to return any
Severance payments if you fail to comply with Exhibit A. You agree that the
Company's payment of Severance is conditioned on your providing a customary
release of all claims relating to your employment, compensation, and
termination and such other matters as the Company normally requests on
termination.
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.
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Assignment
The Company may assign or otherwise transfer this Agreement and any and all of
its rights, duties, obligations, or interests under it to
any of its affiliates or subsidiaries or
to any business entity that at any time by merger, consolidation, or
otherwise acquires all or substantially all of the Company's stock or
assets or to which the Company transfers all or substantially all of its
assets or that acquires all or substantially all of the stock or assets
of the division or subsidiary to which you primarily provide services.
Upon such assignment or transfer, any such business entity will be deemed to
be substituted for the Company for all purposes. You agree that assignment or
transfer does not by itself entitle you to Severance. This Agreement binds and
benefits the Company, its successors or assigns, and your heirs and the
personal representatives of your estate. Without the Board's or your Direct
Report's prior written consent, you may not assign or delegate this Agreement
or any rights, duties, obligations, or interests under it.
You specifically agree that the assignment will, unless the Company provides
otherwise, include the restrictive covenants Of Exhibit A, including the
noncompetition and nonsolicitation provisions.
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 or amend the terms of this Agreement
other than by a written instrument signed by you and by another 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.
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Withholding
The Company will reduce its compensatory payments to you for withholding and
FICA taxes and any other withholdings and contributions required by law.
Third Party Beneficiary
You understand and agree that Camden Partners Incorporated is a third party
beneficiary of this Agreement, which means that Camden Partners Incorporated
may enforce this Agreement even though not a party to it.
Governing Law
The laws of the State of Utah (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 other. 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, other than with respect
to your eligibility for generally applicable employee benefit plans,
including, without limitation, the Employment Agreement between the Company
and you dated as of December __, 1999 (the "Original Employment Agreement").
This Agreement supersedes all prior or contemporaneous negotiations,
commitments, agreements (including the Original Employment Agreement), and
writings with respect to the subject matter of this Agreement. 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.
Specifically, you agree that the Original Employment Agreement, including but
not limited to Section 4(e)(providing a bonus on the sale of assets of the
Company), is of no further force and effect.
Release of Claims
You, for yourself and your heirs, executors, administrators, representatives,
and assigns, as a free and voluntary act, release and discharge the Company,
Camden Partners Incorporated ("Camden") and any related entities including
parent, divisions,
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subsidiaries, or affiliates of the Company or Camden, and their present,
former, and future employees, officers, directors, stockholders, counsel, and
anyone acting or purporting to act on behalf of any of them, from any and all
debts, obligations, demands, claims, judgments or causes of action of any kind
whatsoever, whether now known or unknown, in tort, in contract, by statute, or
any other basis for compensatory, punitive or other damages, expenses,
reimbursements or costs of any kind relating to any provisions of any
predecessor version of this employment agreement, specifically including
Section 4(e) of the Original Employment Agreement (providing a bonus on sale
of the assets), provided that nothing in this release applies to any statutory
claim that cannot be released in this manner.
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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 to help you
understand your obligations Under this Agreement.
ENGLISH LANGUAGE LEARNING & INSTRUCTION SYSTEM, INC.
By: /s/ Xxx Xxxx
--------------------------------------------------
Name: Xxx XXXX
Title: PRESIDENT, CEO
I accept and agree to the terms of employment
set forth in this Agreement:
/S/ Xxxxxx Xxxxxx
----------------------------
Xxxxxx Xxxxxx
Dated: 9/19/01
XXXXX/Employment Agreement Page 10
Exhibit A
You agree to the provisions of this Exhibit A in consideration of your
employment by the Company and salary and benefits under this Agreement. You
acknowledge that you perform services for the Company in a position that
allows you access to various trade secrets and confidential information
belonging to the Company and its affiliates. You agree that the Company has a
legitimate business interest in preserving its confidential information and
business secrets from unauthorized disclosure, in protecting its goodwill, and
in protecting is special investment in your extensive and specialized
training. 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:
No Competition
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. You further agree not
to use, incorporate, or otherwise create any business organization or domain
name using any name confusingly similar to "English Language Learning &
Instruction System, Inc." or "XXXXX" or any other name under which the
Company does business.
If, during the Restricted Period, you are offered and want to accept
employment with an existing business or start a new business that engages in
activities similar to the Company's, you will inform the Board or your Direct
Report in writing of the identity of the business, your proposed duties with
an existing business or the proposed business plan of your new business, and
the proposed starting date of your employment or that new business. You will
also inform any existing business of the terms of this Exhibit A. The Company
will analyze the proposed employment or the creation of your new business and
make a good faith determination as to whether it would threaten the Company's
legitimate
XXXXX/Employment Agreement Page 11
competitive interests. If the Company determines that the proposed employment
or the creation of your new business would not pose an unacceptable threat to
its interests, the Company will notify you that it does not object to the
employment or the creation of your new business.
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 Business -- Competing Business means any service or product of any
person Business 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 or upon which or with which you have
worked for the Company or the Company Group or about which you acquire
knowledge while working for the Company or the Company Group. Competing
Business includes any enterprise engaged in the development or marketing or
sale of English as a second language software or products.
Market Area -- The Market Area consists of the United States. You agree that
the Company provides goods and services both at its facilities and at the
locations of its customers or clients and that, by the nature of its business,
it operates throughout the Market Area.
Restricted Period -- For purposes of this Agreement, the Restricted Period
begins on Period the Effective Date and ends at the first anniversary of the
date your employment with the Company Group ends for any reason.
No Interference; No Solicitation -- During the Restricted Period, you agree
that you will not, directly or indirectly, whether for yourself or for any
other individual or entity (other than the Company or its affiliates or
subsidiaries), intentionally
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solicit any person or entity who is, or was, within the 24 months
preceding the end of your employment with the Company, 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 Company Confidences -- Your employment with the Company under and
before this Agreement 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 Report's prior written consent), directly or indirectly, use, disclose,
or publish, or knowingly or negligently 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 Others' Confidences -- You agree not to use in working for the
Company Group and not to disclose to the Company Group any trade secrets or
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.
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You agree to inform the Company promptly 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 information -- "Confidential Information" includes, without
limitation, any information protected under the Uniform Trade Secrets Act and
any 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, invention disclosures, discoveries,
drawings, designs, plans, processes, models, technical information,
facilities, methods, systems, trade secrets, copyrights, software, source
code, object code, patent applications, 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 Company
or the Company Group, but 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 create, 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
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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.
Copyrights, Discoveries, Inventions, and Patents
You agree that all records, in whatever media (including written works),
documents, papers, notebooks, drawings, designs, technical information, source
code, object code, processes, methods or other copyrightable or otherwise
protected works you conceive, create, author, prepare derivative works from,
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, authored, 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, trademark, service xxxx, 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, inventor, creator, or facilitator (whether solely
or jointly) of any such works and the right not to have any such copyrightable
works subjected to derogatory treatment. You recognize any such works are
"works for hire" for which the Company Group retains all rights, title, and
interest to any underlying intellectual property rights, including copyright
protections,
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You will promptly disclose, and hereby grant, and assign all rights, title,
and interest in ownership to the Company (or other member of the Company
Group, as specified by the Company) for its or their sole use and benefit any
and all intellectual property, including all ideas, processes, inventions,
invention disclosures, discoveries, improvements, technical information,
trademarks, service marks, and copyrightable works (whether patentable or not)
that you develop, acquire, conceive, reduce to practice, author, or prepare
derivative works from (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 intellectual property,
including utility and design patents, copyrights, and trademarks, or service
marks, including any associated registrations, applications, renewals,
extensions, continuations, continuations-in-part art, divisions, or reissues
thereof or any foreign equivalents thereof (such intellectual property and
related rights being referred to collectively as "Protected Interests"), that
may at any time be filed or granted for or upon any such intellectual
property. 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 Protected Interests 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 Protected Interests, in the prosecution or defense of interferences
that may be declared involving any such Protected Interests, and in any
litigation in which the Company or the Company Group may be involved
relating to any such Protected Interests. 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.
You and the Company agree that Exhibit C lists and briefly describes works,
inventions, discoveries, proprietary information, patents and patent
applications, and copyrighted or copyrightable works (including contemplated
works) that the Company will not
XXXXX/Employment Agreement Page 16
contest are owned (or will be owned) by you or any entity to which you have
assigned them. You agree that you have no ownership interest in any other such
works or related patents or copyrights that relate in any way to the business
of the Company or the Company Group. 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 have been or become incorporated in the work product you create for the
Company Group, you agree that the Company (and/or, as the Company specifies,
other members of the Company Group) will have an unrestricted, non-exclusive,
royalty-free, perpetual, transferable license in such intellectual property,
including the rights to make, use, sell, offer for sale, and sublicense
(through multiple tiers), reproduce, prepare derivative works from, distribute
copies of, publicly perform, or publicly display 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 that you conceived, developed, reduced to practice, or created
entirely on your own time except for any invention that is, in whole or part,
an "employment invention" because (a) you conceived, developed, reduced to
practice, or created it (i) within the scope of your employment, (ii) on your
employer's time, or (iii) with the aid, assistance, or use of the Company's
property, equipment, facilities, supplies, or intellectual property, (b) it
results from any work, services, or duties you performed for the Company, (c)
it relates to the Company's industry or trade, or (d) it relates to the
Company's current or demonstrably anticipated business research or
development. You agree for this purposes of this paragraph that the Company
includes any member of the Company Group for which you have provided services.
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.
XXXXX/Employment Agreement Page 17
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 may 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 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
all periods for which a court with personal jurisdiction over you finds that
you violated the covenants contained in this Exhibit X.
XXXXX/Employment Agreement Page 18
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, at the Company's expense (other than your 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. The mediation will be
in the Salt Lake City, UT metropolitan area.
Binding Arbitration.
If the mediation reaches no solution or the parties agree to forgo 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. The arbitration will be in the Salt Lake
City, UT metropolitan area.
Arbitration Principles
All statutes of limitations and substantive laws applicable to 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; Evidence; Presumptions
The parties have selected arbitration to expedite the resolution of disputes
and to reduce the costs and burdens 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
XXXXX/Employment Agreement Page 19
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 Utah 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 effectuate relief,
the Arbitrator may issue equitable orders as part of or ancillary to the
award. The Arbitrator may 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 X.
XXXXX/Employment Agreement Page 20
Exhibit C
Disclosure of Intellectual Property
[None]
