EMPLOYMENT AGREEMENT
Exhibit
10.19
THIS
EMPLOYMENT AGREEMENT (the “Agreement”), dated January 28, 2005, shall be
effective upon the closing of the acquisition transaction between Acacia and
Global Patent Holdings LLC, and is entered into by and between Acacia
Technologies Services Corporation, a Delaware corporation ("Acacia”), and
Xxxxxxx Xxx, (“You”), on the following terms and conditions.
BACKGROUND
Acacia
and You desire to enter into this Agreement, subject to the terms and conditions
as set forth below.
NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants set forth
herein, Acacia and You, intending to be legally bound, hereby agree as
follows:
1. Position and Responsibilities.
As of the effective date of the Agreement, You shall be employed as
Executive Vice President of Business Development of Acacia, working full time
from Acacia’s Newport Beach offices within seven (7) months of your employment.
For the earlier of (i) the initial period of Your employment during which you
have not relocated to Southern California or (ii) the first seven (7) months
from the effective date of this Agreement, You shall be available to work from
Acacia’s Newport Beach offices for five (5) business days per month. You agree
that at all times during your employment hereunder, You shall be subject to and
comply with Acacia's personnel policies including Acacia's Xxxxxxx Xxxxxxx
Policy (attached hereto as Exhibit A), Sexual Harassment Policy (attached hereto
as Exhibit B) and Employee Handbook, all as may be modified from time to
time. You shall devote your full working time and efforts to Acacia's
business to the exclusion of all other employment or active participation in
other business interests, unless otherwise consented to in writing by
Acacia.
2. (a.) Employment. Your
employment will be at-will, and may be terminated by Acacia or You upon thirty
(30) days notice to the other party for any reason. This at-will
arrangement can not be changed during your employment, unless agreed to in
writing by an authorized officer of Acacia.
2. (b). Severance/Payment to
Acacia. Notwithstanding Your at-will employment, in the
event that Acacia terminates Your employment other than for Cause (as defined
below), (i) prior to You relocating to Southern California, Acacia shall pay You
a lump sum amount equal to three (3) months base salary; or (ii) within one (1)
year of You relocating to Southern California, Acacia shall pay You a lump sum
amount equal to six (6) months base salary. Any severance that may be due as a
result of Acacia terminating your employment after one (1) year following You
relocating to Southern California shall be covered by Acacia’s then existing
Executive Severance Policy. In the event that You terminate Your
employment with Acacia within one (1) year of You relocating to Southern
California (other than as a result of Acacia’s breach of this Agreement, after
providing Acacia with notice and a reasonable opportunity to cure such breach),
You shall pay Acacia a lump sum payment equal to six (6) months base salary, in
consideration for Acacia reimbursing You for relocation expenses.
3. Compensation. For all
services rendered by You pursuant to this Agreement, Acacia shall pay You,
subject to your adherence to all of the terms of this Agreement, and You shall
accept as full compensation hereunder, the following:
3.1
Salary. An
annual salary (the “Salary”) of Two Hundred Seventy Thousand Dollars ($
270,000). The Salary shall be subject to all appropriate federal and state
withholding taxes and shall be payable bi-weekly, in accordance with the normal
payroll procedures of Acacia. The Salary will be subject to annual review and
increase at Acacia’s sole discretion.
3.2 Options. The Board
of Directors of Acacia Research Corporation will grant You stock options to
purchase Two Hundred and Twenty Five Thousand (225,000) shares of Acacia
Research - Acacia Technologies Group common stock (Nasdaq: ACTG) pursuant to and
subject to the terms of Acacia's existing stock option plan. Such
options have a ten (10) year term and will vest over a thirty-six (36) month
period, with Seventy Five Thousand (75,000) shares vesting twelve
months after your start date, and with the remainder vesting monthly over the
subsequent twenty four (24) month period. The exercise price of the
options shall be the closing price on the later of (i) your first day of
employment; and (ii) the date of the Board approval of such grant. Additional
annual option grants are subject to the recommendation of Acacia’s CEO and are
at the discretion of the Board of Directors.
3.3 Home Sale/Purchase
Reimbursement. Acacia shall reimburse You for the
taxes (including state and federal capital gains taxes and city/county
tax/stamps) and closing costs (including sales commissions) actually incurred
and paid by You in connection with the sale of Your New Jersey residence in
connection with your relocation to Southern California. Acacia shall
reimburse You for reasonable incidental costs in connection with purchasing a
residence in Southern California including any applicable title insurance,
survey, and mortgage application charges. Such reimbursements shall
occur within 30 days of You submitting appropriate documentation evidencing the
payment of such reimbursable expenses. Such reimbursements will be
grossed up to cover any applicable federal and state taxes.
3.4 Moving
Expenses. Acacia shall reimburse You for reasonable moving,
packing and storage (if any) expenses for the contents of a single dwelling and
two (2) automobiles, and shall reimburse You for travel and lodging expenses for
You and Your family on the day of the relocation. Acacia shall also reimburse
You for all reasonable travel, lodging, and meal expenses incurred by You and
one other person for one trip to the Newport Beach area for the purpose of
investigating relocation options. Such reimbursements will be grossed
up to cover any applicable federal and state taxes. All expenses
shall be supported by appropriate documentation and reimbursed in accordance
with Acacia’s policies and procedures.
3.5
Relocation
Bonus. A one time, relocation bonus equal to Fifteen Thousand
Dollars ($15,000), payable at the time of relocation, to cover moving expenses
and any and all other costs and expenses of relocation, other than as expressly
set forth herein. The relocation bonus shall be subject to all appropriate
federal and state withholding taxes in accordance with the normal payroll
procedures of Acacia.
3.6 Travel
Expenses. Acacia shall reimburse You for all reasonable
travel, lodging, and meal expenses incurred on behalf of Acacia, including
travel to Acacia’s Newport Beach offices prior to Your
relocation. All expenses shall be supported by appropriate
documentation and reimbursed in accordance with Acacia’s policies and
procedures.
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3.7 Discretionary Annual
Bonus. At the end of each calendar year, You shall be
eligible for a discretionary bonus equal in value of up to Fifty Thousand
Dollars ($50,000). Such bonus shall be at the sole discretion of the
Compensation Committee of Acacia Research Corporation, and shall be based upon
personal performance, overall company performance, and any other factors that
the Compensation Committee elects to consider. This bonus is solely
within the discretion of the Compensation Committee, which may elect to pay You
no bonus in any given year or years. The Compensation Committee may
increase the amount of the discretionary bonus, but has no obligation to do so.
In order to be eligible for the discretionary annual bonus, this Agreement must
be in full force and effect at the time of the payment of such bonus. The
discretionary annual bonus shall be subject to all appropriate federal and state
withholding taxes in accordance with the normal payroll procedures of
Acacia.
3.8 Benefits and Perquisites.
Acacia shall make benefits available to You, including, but not limited to,
vacation and holidays, sick leave, health insurance, and the like, to the extent
and on the terms made available to other similarly situated employees of Acacia.
This provision does not alter Acacia's right to modify or eliminate any employee
benefit and does not guarantee the continuation of any kind or level of
benefits. All such benefits shall cease upon the termination of your
employment under this Agreement. Acacia shall reimburse You for any reasonable
work related expenses, in accordance with Acacia’s reimbursement policies and
procedures.
4. Termination. The
employment relationship between You and Acacia created hereunder shall terminate
upon the occurrence of any one of the following events:
4.1 Death or Permanent
Disability. Acacia may terminate this Agreement and any
further obligations to You if You die or, due to physical or mental disability,
You are either (a) unable to reasonably and effectively carry out your duties
with reasonable accommodations by Acacia or (b) unable to reasonably and
effectively carry out your duties because any reasonable accommodation which may
be required would cause Acacia undue hardship. In the event of a
disagreement concerning your perceived disability, You shall submit to such
examinations as are deemed appropriate by three practicing physicians
specializing in the area of your disability, one selected by You, one selected
by Acacia, and one selected by both such physicians. The majority
decision of such three physicians shall be final and binding on the
parties.
4.2 Termination for Cause.
Acacia may immediately terminate this Agreement and any further obligations to
You upon the occurrence of any of the following:
(a) You
fail or refuse to perform your duties hereunder, or breach any of your
obligations under this Agreement other than due to Death or Permanent
Disability;
(b) You
commit any act (including a misdeameanor offense) which is likely to have the
effect of injuring the reputation, business or business relationship of
Acacia;
(c)
You are charged with convicted of or plead guilty or nolo contendre to any felony;
or
(d)
You embezzle or misuse any of Acacia's funds or assets or commit any act of
fraud or dishonesty with respect to any aspect of Acacia's
business;
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5. Compensation Upon
Termination;
5.1 Cause. Upon termination
of your employment under this Agreement due to Cause, You shall be entitled only
to payment of the Salary earned by You before the effective date of termination,
and any reimbursements as provided in Sections 3.3, 3.4, 3.6 and 3.8, for
expenses incurred prior to the effective date of termination.
5.2 Other Than
Cause. Upon termination of your employment by Acacia under
this Agreement other than for Cause, or upon termination of your employment by
You as a result of Acacia’s breach of this Agreement after providing Acacia with
notice and a reasonable opportunity to cure such breach, You shall be entitled
only to (i) payment of the Salary earned by you before the effective date of
termination, as provided in Section 3 hereof; (ii) any accrued and unused
vacation pay earned as of the effective date of termination; (iii) any
reimbursements under Sections 3.3, 3.4, 3.6, and 3.8, for expenses incurred
prior to the date of termination, and any unpaid relocation bonus under Section
3.5 (if You relocated prior to the effective date of termination) and (iv) any
severance payments as provided in Section 2(b) above if such termination occurs
prior to You relocating to Southern California or within one (1) year of
relocation, or if such termination occurs after such one (1) year period, as
provided by Acacia's then current severance plan, if any. In the event that You
terminate Your employment with Acacia at any time (other than as a result of
Acacia’s breach of this Agreement, after providing Acacia with notice and a
reasonable opportunity to cure such breach), You shall be entitled only to (i)
payment of the Salary earned by You before the effective date of termination, as
provided in Section 3 hereof; (ii) any accrued and unused vacation pay earned as
of the effective date of termination; (iii) any reimbursements under Sections
3.3, 3.4, 3.6, and 3.8, for expenses incurred prior to the date of termination,
and any unpaid relocation bonus under Section 3.5 (if You relocated prior to the
effective date of termination); provided, however, that if such termination by
You occurs within one (1) year of your relocation to Southern California, in
addition to You receiving any payments set forth in (i), (ii), and (iii), You
shall also pay Acacia a lump sum payment equal to six (6) months base salary as
set forth in Section 2(b) above.
5.3 Remedy. Should
Acacia terminate your employment for Cause, and it is later determined that
Acacia did not have Cause for the termination, then Acacia’s decision to
terminate You shall be deemed to have been made without Cause and Acacia shall
pay You the compensation as set forth in this Agreement, as your sole and
exclusive remedy.
6. Confidentiality.
6.1 Confidential
Information. Acacia and You recognize that You will acquire certain
confidential and proprietary information relating to Acacia's business and the
business of Acacia's affiliates. Such confidential and proprietary information
is information that derives independent economic value, actual or potential,
from not being generally known to the public or to other persons who can obtain
economic value from its disclosure or use, and is the subject of efforts that
are reasonable under the circumstances to maintain its secrecy ("Confidential
Information"). Confidential Information may include, without
limitation, the following: business plans, projections, planning and strategies,
marketing plans, materials, pricing, programs and related data, product
information, services, budgets, acquisition plans, the names or addresses of any
employees, independent contractors or customers, licensing strategy, statistical
data, financial information or arrangements, manuals, forms, techniques,
know-how, trade secrets, software, any method or procedure of Acacia's business,
whether developed by Acacia or developed, or contributed to, by You during the
course of your employment, or made available to You by Acacia or any of Acacia's
affiliates in the course of your employment, or any market development, research
or expansion projects, business systems and procedures and other confidential
business and proprietary information. Confidential Information may be
contained in written materials, verbal communications, the unwritten knowledge
of employees, or any other tangible medium, such as tape, computer, or other
means of electronic storage of information.
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6.2 Obligation of Confidentiality.
You acknowledge and agree that (a) all of the Confidential Information
constitutes special, unique and valuable assets of Acacia and trade secrets, the
disclosure of which would cause irreparable harm and substantial loss to Acacia
and/or its affiliates. In view of the foregoing, You agree that at no
time will You, directly or indirectly, and whether during or after your
employment with Acacia, use, reveal, disclose or make known any Confidential
Information without specific written authorization from or written direction by
Acacia. You further agree that, immediately upon termination or
expiration of your employment for any reason whatsoever, or at any time upon
request by Acacia, You will return to Acacia all Confidential
Information.
7. Intellectual
Property. You agree that any and all discoveries, concepts, ideas,
inventions, writings, plans, articles, devices, products, designs, treatments,
structures, processes, methods, formulae, techniques and drawings, and
improvements or modifications related to the foregoing that are in any way
related to Acacia's audio and video patent portfolio or any other intellectual
property owned by Acacia or its affiliates or subsidiaries, whether patentable,
copyrightable or not, which are made, developed, created, contributed to,
reduced to practice, or conceived by You during the term of this Agreement,
whether solely or jointly with others, in connection with your employment with
Acacia (collectively, the “Intellectual Property”) shall be and remain the
exclusive property of Acacia, and, to the extent applicable, a “work made for
hire,” and Acacia shall own all rights, title and interests thereto, including,
without limitation, all rights under copyright, patent, trademark, statutory,
common law and/or otherwise. By your execution of this Agreement, You hereby
irrevocably and unconditionally assign to Acacia all right, title and interest
in any such Intellectual Property. You further agree to take all such steps and
all further action as Acacia may reasonably request to effectuate the foregoing,
including, without limitation, the execution and delivery of such documents and
applications as Acacia may reasonably request to secure the rights to
Intellectual Property worldwide by patent, copyright or otherwise to Acacia or
its successors and assigns. You further agree promptly and fully to disclose any
Intellectual Property to the officers of Acacia and to deliver to such officers
all papers, drawings, models, data and other material (collectively, the
“Material”) relating to any Intellectual Property made, reduced to practice,
developed, created or contributed to by You and, upon termination, or expiration
of your employment with Acacia, to turn over to Acacia all such
Material. Any intellectual property which was developed by You prior
to the date of this agreement, or which is developed by You during or after the
termination of this Agreement and is not in any way related to any of Acacia's
or any of its subsidiaries' or affiliates' intellectual property, shall be owned
by You.
8. Other Activities,
Non-Solicitation. During the term of this Agreement, You
shall not engage in any activities that are competitive with Acacia, or any of
its affiliates or subsidiaries, or that would result in a conflict of
interest. You are not prohibited from engaging in any other
activities. In the event of the termination of your employment for
any reason, You, for a period of one year shall not: (a) solicit for employment
and then employ any employee of Acacia or any of its affiliates or subsidiaries
or any person who is an exclusive independent contractor involved in any of its
affiliates or subsidiaries; (b) make any derogatory public statement concerning
Acacia, or any of its affiliates or subsidiaries, or your employment, unless
previously approved by Acacia, except as may be required by law; or (c) induce,
attempt to induce or knowingly encourage any Customer of Acacia or any of its
affiliates or subsidiaries to divert any business or income from Acacia or any
of its affiliates or subsidiaries or to stop or alter the manner in which they
are then doing business with Acacia or any of its affiliates or
subsidiaries. The term “Customer” shall mean any individual or
business firm that was or is a customer or client of, or one that was or is a
party in a investor agreement with, or whose business was actively solicited by,
Acacia or any of its affiliates or subsidiaries at any time, regardless of
whether such customer was generated, in whole or in part, by your
efforts.
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9. Remedies. Each of the
parties to this Agreement will be entitled to enforce its rights under this
Agreement specifically, to recover damages by reason of any breach of any
provision of this Agreement and to exercise all other rights existing in its
favor. The parties agree and acknowledge that money damages may not be an
adequate remedy for any breach of the provisions of this Agreement and that any
party may in its sole discretion apply to any court of law or equity of
competent jurisdiction for injunctive relief without the need for an undertaking
in order to enforce or prevent any violations of the provisions of this
Agreement.
10. Assignment. This
Agreement is personal to You and may not be assigned in any way by You without
the prior written consent of Acacia. Any such attempted
assignment without Acacia's written consent shall be void.
11. Severability and
Reformation. The parties intend all provisions of this Agreement to
be enforced to the fullest extent permitted by law. If, however, any provision
of this Agreement is held to be illegal, invalid, or unenforceable under present
or future law, such provision shall be fully severable, and this Agreement shall
be construed and enforced as if such illegal, invalid, or unenforceable
provision were never a part hereof and the remaining provisions shall remain in
full force and effect. Moreover, any provision so affected shall be
limited only to the extent necessary to bring the Agreement within the
applicable requirements of law.
12. Governing Law and
Venue. This Agreement is to be governed by and construed in
accordance with the laws of the State of California applicable to contracts made
and to be performed wholly within such State, and without regard to the
conflicts of laws principles thereof. Any suit brought and any and
all legal proceedings to enforce this Agreement whether in contract, tort,
equity or otherwise, shall be brought in the state or federal courts sitting in
Los Angeles County, California, the parties hereto hereby waiving any claim or
defense that such forum is not convenient.
13. Arbitration. Any
controversy, claim or dispute arising out of or in any way relating to this
Agreement, the alleged breach thereof, and/or your employment with Acacia or its
termination including, without limitation, claims for breach of any express or
implied contract, tort claims, claims for violation of any federal, state or
other governmental law, statute, ordinance, Executive Order or regulation, and
any and all claims for employment discrimination or harassment, shall be
determined by binding arbitration administered by the American Arbitration
Association under its National Rules for Resolution of Employment Disputes
("Rules") which are in effect at the time of the arbitration. The
Rules are hereby incorporated by reference. California Code of Civil
Procedure § 1283.05, which provides for certain discovery rights, shall
apply to any such arbitration, and said code section is also hereby incorporated
by reference. In reaching a decision, the arbitrator shall have no
authority to change, extend, modify or suspend any of the terms of this
Agreement. The arbitration shall be commenced and heard in Los
Angeles County, California. The arbitrator shall apply the
substantive law (and the law of remedies, if applicable) of California or
federal law, or both, as applicable to the claim(s) asserted. The
Arbitrator shall issue a written decision explaining his/his
award. Judgment on the award may be entered in any court of competent
jurisdiction, even if a party who received notice under the Rules fails to
appear at the arbitration hearing(s). The parties may seek, from a
court of competent jurisdiction, provisional remedies or injunctive relief in
support of their respective rights and remedies hereunder without waiving any
right to arbitration. However, the merits of any action that involves
such provisional remedies or injunctive relief, including, without limitation,
the terms of any permanent injunction, shall be determined by arbitration under
this paragraph. Notwithstanding the foregoing, claims for workers'
compensation benefits, unemployment compensation benefits, or claims based upon
an employee benefit plan which provides by its own terms for arbitration are
exempted from the provisions of this Paragraph. In any arbitration
hereunder, the parties will each pay for their costs and attorneys' fees, if
any. However, if either party prevails on a statutory claim which
entitles the prevailing party to attorneys' fees, the arbitrator may award
reasonable attorneys' fees to the prevailing party in accordance with that
statute. If any claim or class of claim is determined by applicable
law not to be subject to arbitration, this Agreement to arbitrate shall remain
in full force and effect with respect to all other claims asserted between the
parties.
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14. Entire Agreement, Amendment and
Waiver. This Agreement contains the entire understanding and
agreement between the parties, and supersedes any other agreement between Acacia
and You, whether oral or in writing, with respect to the subject matter hereof.
This Agreement may not be altered or amended, nor may any of its provisions be
waived, except by a writing signed by both parties hereto or, in the case of an
asserted waiver, by the party against whom the waiver is sought to be
enforced. Waiver of any provision of this Agreement, or any breach
thereof, shall not be deemed to be a waiver of any other provision or any
subsequent alleged breach of this Agreement.
15. Survival and
Counterparts. The provisions of Sections 2(b), 3.3, 3.4, 3.5, 3.6,
4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14 and 15 of this Agreement shall survive the
termination of this Agreement. This Agreement may be executed in counterparts,
with the same effect as if both parties had signed the same
document. All such counterparts shall be deemed an original, shall be
construed together and shall constitute one and the same
instrument.
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
above written.
ACACIA
TECHNOLOGIES SERVICES COPRORATION
By /s/ Xxxxxx X.
Xxxxxx
Name:
Xxxxxx X.
Xxxxxx
Its:____COO_________
/s/ Dooyong
Lee_______________
Xxxxxxx
Xxx
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ADDENDUM TO EMPLOYMENT AGREEMENT
This
Addendum amends your Employment Agreement dated January 28, 2005 (the
“Employment Agreement”). Unless specifically modified by the terms of
this Addendum, the terms of the Employment Agreement remain unchanged and in
full force and effect.
At the
end of each calendar year, You shall be eligible for a discretionary bonus equal
in value of up to Thirty percent (30%) of your annual salary. Such
bonus shall be at the sole discretion of the Compensation Committee of Acacia
Research Corporation, and shall be based upon personal performance, overall
company performance, and any other factors that the Compensation Committee
elects to consider. This bonus is solely within the discretion of the
Compensation Committee, which may elect to pay You no bonus in any given year or
years. The Compensation Committee may increase the amount of the
discretionary bonus, but has no obligation to do so. In order to be eligible for
the discretionary annual bonus, this Agreement must be in full force and effect
at the time of the payment of such bonus. The discretionary annual bonus shall
be subject to all appropriate federal and state withholding taxes in accordance
with the normal payroll procedures of Acacia.
Acknowledged
and Agreed:
/s/
Xxxxxxx Xxx
Xxxxxxx
Xxx
/s/ Xxxx
X. Xxxx
Xxxx X.
Xxxx
Chairman
and CEO
Dated:
March 6, 2008
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