EXHIBIT 10.9
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into as
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of the Effective Time (as defined below), by and among Xxxxx, Mohaddes
Associates, Inc., a California corporation ("MMA"), Odetics ITS, Inc., a
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Delaware corporation ("ITS"), and Xxxxx Xxxxxxxx (the "Employee"). All
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capitalized terms used herein and not otherwise defined shall have the meanings
ascribed to such terms in the Reorganization Agreement (as defined below).
WHEREAS, Odetics, ITS, Merger Sub, MMA and Shareholders have
entered into an Agreement and Plan of Reorganization dated as of October 16,
1998 (the "Reorganization Agreement"), pursuant to which Merger Sub will merge
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(the "Merger") with and into MMA and MMA will become a wholly-owned subsidiary
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of ITS at the Effective Time (as defined in the Reorganization Agreement).
WHEREAS, prior to the consummation of the Reorganization
Agreement, the Employee was a shareholder and officer of MMA.
WHEREAS, ITS, MMA and the Employee desire to enter into an
employment relationship pursuant to which subsequent to the consummation of the
Reorganization Agreement the Employee will continue to be employed by MMA or, in
the event MMA should merge with and into ITS, the Employee will become an
employee of ITS.
WHEREAS, as a condition to consummation of the transactions
contemplated by the Reorganization Agreement and concurrently herewith, the
Employee, MMA and ITS have entered into a Noncompetition Agreement (the
"Noncompetition Agreement"), pursuant to which the Employee has agreed to
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refrain from competing with MMA and ITS or taking certain other actions as
provided in the Noncompetition Agreement.
WHEREAS, it is a condition to consummation of the transactions
contemplated by the Reorganization Agreement that MMA, ITS and the Employee
enter into this Agreement, and the parties have been materially induced to enter
into the Reorganization Agreement on account of this Agreement.
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
covenant and agree as follows:
1. Employment and Performance. During the Term (as defined below),
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MMA hereby agrees to employ, and ITS hereby agrees to cause MMA to employ, the
Employee full-time as an officer of MMA, or, in the event MMA should merge with
and into ITS, as an upper-management level officer of ITS, and the Employee
hereby accepts such employment. The Employee agrees to faithfully and diligently
perform such related duties and services as may be reasonably determined and
assigned to him from time to time by MMA and/or ITS. The Employee's initial
duties shall be to act as the President of MMA, reporting to and subject to the
direction of a Vice President of ITS. The Employee agrees to abide by the
Articles of
Incorporation and Bylaws of ITS and MMA and all applicable laws and regulations,
as each shall be amended and in effect from time to time, in performing the
duties and services described herein.
2. No Conflict. The Employee covenants and represents that he is not a
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party to any agreement or understanding which impairs or prohibits his ability
to enter into, and perform services under, this Agreement.
3. Term. The Employee shall be employed by MMA (or ITS in the event MMA
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merges with and into ITS) on a full-time basis for a term of four (4) years plus
additional one (1)-year terms as set forth herein (the "Term"), commencing at
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the Effective Time; subject, however, to earlier termination as hereinafter
provided. Following the initial four (4)-year term, this Agreement shall
automatically renew for successive one (1)-year periods unless either party
gives the other at least sixty (60) days prior written notice of its intent not
to renew this Agreement. The Employee shall devote all of his working time and
attention to the affairs of MMA and/or ITS, except as may be specifically
approved by the Board of Directors of MMA or ITS (the "Board"). The Term shall
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terminate upon the Employee's death or Total Disability. For purposes of this
Agreement, "Total Disability" shall mean the Employee's disability for a
continuous period of one hundred twenty (120) days, if such disability prevents
him from performing his duties for MMA and/or ITS (the existence of such Total
Disability shall be determined in good faith by the Board in the exercise of its
reasonable judgment).
4. Compensation. During the Term, the Employee shall be entitled
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to receive the following compensation for his services:
a. Base Salary. The Employee shall receive a salary equal to
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Ten Thousand Dollars ($10,000) per month (the "Base Salary"), which Base Salary
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shall only be reduced in connection with a general decrease in the salary of all
other executive officers of ITS and then in accordance with the average
percentage decrease as applicable to all other executive officers of ITS. Such
Base Salary shall be paid on a regular basis in accordance with ITS's normal
payroll procedures and policies (including any deductions required by law (such
as state and federal withholding taxes, social security taxes and other taxes)
or deductions elected by the Employee (such as health care insurance premiums)).
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b. Employee Benefits. The Employee shall be entitled to
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participate, subject to the provisions, rules and regulations applicable
thereto, including provisions empowering the Board to modify and/or terminate
any such plan or programs, in all Odetics', MMA's or ITS's, at the sole
discretion of ITS, employee benefit and equity plans or programs (including
bonuses, stock options, employee stock purchase plans, 401(k) plans, employee
profit sharing plans, optional ITS-assisted vehicle ownership plan, vacation
time, sick leave, health coverage, insurance and holidays) in accordance with
the terms and conditions thereof, and, except as otherwise provided herein, such
benefits shall be substantially similar to the benefits provided to similarly
situated employees of ITS or Odetics whose primary function is to provide
employment-related services for the benefit of ITS and/or the ITS business unit
of Odetics (which business unit shall exist until such time as Odetics transfers
to ITS all of the assets currently comprising such unit) as determined in good
faith by ITS (the "Employee Benefits"). With respect to the ITS-assisted
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vehicle ownership plan, the Employee shall be entitled to a vehicle with an
annual value of no greater than Seven Thousand Dollars ($7,000). With respect to
Employee's vacation time and notwithstanding the foregoing, the number of
vacation days per year to which the Employee is entitled as of the Closing Date
under MMA's vacation policy shall be the number of vacation days per year to
which Employee will be entitled after the Closing Date under ITS's vacation
policy until such time as Employee is entitled to additional vacation days under
the ITS vacation policy. For the purposes of determining the number of
additional vacation days to which Employee is entitled under the ITS vacation
policy, Employee's "start date" shall be deemed to be the date Employee
commenced accruing vacation days under the MMA vacation policy.
c. Expenses. In accordance with MMA's or ITS's policies
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established from time to time, MMA or ITS will also continue to pay or reimburse
the Employee for all reasonable and necessary out-of-pocket expenses incurred by
him in the performance of his duties under this Agreement, subject to the prior
authorization thereof or subsequent presentment of appropriate receipts and
vouchers therefor.
d. Insurance. During the Term of this Agreement, the errors and
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omissions insurance coverage in effect for ITS during such period shall apply to
and provide coverage for Employee with respect to claims made for occurrences
not previously disclosed to ITS by MMA which occurred after September 1, 1997.
ITS or its parent, Odetics, Inc. ("Odetics") will continue to carry professional
liability insurance covering Employee during the Term with policy limits in an
amount not less than $1.0 million per occurrence or $2.0 million in the
aggregate.
5. Termination.
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a. Termination by MMA or ITS for Cause. At any time MMA and/or
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ITS shall have the right to immediately terminate the Employee's employment
hereunder by written notice to the Employee upon a good faith finding by the MMA
or ITS Board, in its reasonable judgment, of any of the following occurrences:
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(i) the Employee's conviction of (a) a felony,
or (b) another serious crime involving material harm to the
standing or reputation of MMA and/or ITS;
(ii) the Employee's misconduct or negligence in
the performance of his duties for MMA and/or ITS which causes
or may cause material harm to MMA and/or ITS;
(iii) the Employee's intentional conduct bringing
MMA and/or ITS into public disgrace or disrepute, including,
but not limited to, dishonesty, fraud, material and deliberate
injury or attempted injury, in each case related to MMA and/or
ITS or their respective businesses; or
(iv) a material breach by the Employee of any
of the terms or conditions of this Agreement or the
Noncompetition Agreement which, if curable, is not cured to
MMA's and/or ITS's reasonable satisfaction within fifteen (15)
days (or such other time period as the parties may mutually
agree in writing) of written notice thereof.
b. Voluntary Termination by the Employee (other than for Good
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Reason) Payments Upon Voluntary Termination or Termination for Cause. The
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Employee shall have the right to voluntarily terminate this Agreement at any
time upon fifteen (15) days prior written notice. In the event that the Employee
voluntarily terminates his employment hereunder (other than for Good Reason) or
this Agreement is terminated pursuant to Section 5.a above, MMA or ITS shall
pay the Employee's Base Salary through the date of such termination only and
shall have no responsibility for the payment of any other compensation or
benefits to the Employee for any time period subsequent to such termination,
including, without limitation, any bonuses. Nothing herein shall affect MMA's or
ITS's obligation to provide benefits as required by COBRA or any other
applicable federal or state law.
c. Termination by MMA and/or ITS Without Cause: Termination by
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Employee for Good Reason. MMA and/or ITS may terminate this Agreement upon
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fifteen (15) days written notice "without cause" (i.e. , other than pursuant to
Section 5.a above). Employee may terminate this Agreement for Good Reason by
written notice to ITS. If MMA and/or ITS exercises this right, or if the
Employee terminates employment for Good Reason, MMA or ITS shall pay to the
Employee, as his sole and exclusive remedy for termination of his employment
pursuant to this Section 5.c, the Base Salary and Employee Benefits that the
Employee would have received had he remained in the employ of MMA or ITS, as the
case may be, through and until the earlier to occur of (i) twelve (12) months
from the effective date of Employee's termination or (ii) the expiration of the
Term. Any amounts payable under this Section shall be paid according to the same
schedule as would have applied if the Employee had remained in the employ of MMA
or ITS, as the case may be, for such period, regardless of whether the Employee
finds other employment. For purposes of this Agreement, "Good Reason" means the
occurrence of any of the following (unless the Employee consents thereto in
writing) which, if curable, is not cured to the Employee's reasonable
satisfaction within fifteen (15) days (or such
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other time period as the parties may mutually agree in writing) of written
notice thereof: (i) the assignment to the Employee of any duties materially
inconsistent with his status as a senior executive of MMA or ITS, as the case
may be, or a substantial alteration in the nature or status of his
responsibilities (except alterations contemplated by MMA, ITS and the Employee
at the Effective Time, including but not limited to the integration of the
finance and accounting functions of MMA with ITS's finance and accounting
functions); (ii) MMA's or ITS's material breach of any of the terms or
conditions of this Agreement; (iii) the failure by MMA or ITS to pay the
Employee the Base Salary payable under Section 4.a; (iv) the failure by MMA or
ITS to provide the Employee with the Employee Benefits under Section 4.b; (v)
the material breach by ITS of any of the terms and provisions of that certain
Registration Rights Agreement of even date herewith among ITS, Employee and the
other shareholders of MMA immediately prior to the Merger; (vi) the material
breach by Odetics of any of the terms and provisions of that certain
Registration Rights Agreement of even date herewith among Odetics, Employee and
the other shareholders of MMA immediately prior to the Merger; (vii) the failure
of ITS or Odetics to pay to Employee any consideration due Employee under the
Reorganization Agreement; or (viii) the failure by MMA or ITS to provide the
Employee with the Employee Benefits under Section 4.b.
d. Payments Upon Death or Total Disability. In the event that
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the Employee's employment hereunder is terminated on account of his death or
Total Disability, MMA or ITS shall pay to the Employee's estate or the Employee,
as the case may be, the Base Salary to which the Employee was entitled through
the date of such death or Total Disability (the date of Total Disability shall
mean the one hundred twentieth (120th) day of the Employee's disability for a
continuous period, if such disability prevents him from performing his duties
for MMA or ITS, as the case may be, as determined by the Board in the exercise
of its reasonable judgment).
6. Place of Employment. Employee shall be primarily assigned
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throughout the Term of this Agreement to a site located in either the County of
Los Angeles or the County of Orange, California.
7. Successors and Assigns. This Agreement shall be binding upon and
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inure to the benefit of the successors and assigns of ITS and MMA, and, unless
clearly inapplicable, all references herein to ITS and MMA shall be deemed to
include any such successor. In addition, this Agreement shall be binding upon
and inure to the benefit of the Employee and his heirs, executors, legal
representatives and assigns; provided, that this Agreement and any provision
hereunder shall not be assigned, transferred or delegated by the Employee
without the prior written approval of the Board.
8. Covenants. During the term of this Agreement, the Employee
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will faithfully and diligently do and perform the acts and duties required in
connection with his employment hereunder.
9. Entire Agreement: Waivers. This Agreement constitutes the
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entire agreement between the parties pertaining to the contemporaneous
agreements, representations, and understandings of the parties. No supplement,
modification, or amendment of this Agreement
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shall be binding unless executed in writing by all parties. No waiver of any of
the provisions of this Agreement shall be deemed, or shall constitute, a waiver
of any other provision, whether or not similar, nor shall any waiver constitute
a continuing waiver. No waiver shall be binding unless executed in writing by
the party making the waiver.
10. Severability. All provisions contained herein are severable and
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in the event that any of them shall be held to be to any extent invalid or
otherwise unenforceable by any court of competent jurisdiction, such provision
shall be construed as if it were written so as to effectuate to the greatest
possible extent the parties' expressed intent; and in every case the remainder
of this Agreement shall not be affected thereby and shall remain valid and
enforceable, as if such affected provision were not contained herein.
11. Notices. Unless otherwise expressly provided herein, all
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notices, requests, demands, instructions, documents and other communications to
be given hereunder by either party to the other shall be in writing, shall be
sent to the address or fax number set forth below (provided that any party may
at any time change its address for notice or other such information by giving
written notice thereof in accordance with this Section), and shall be deemed to
be duly given upon the earliest of (a) hand delivery, (b) the first business day
after sending by reputable overnight delivery service for next-day delivery, (c)
the third business day after sending by first class United States mail, properly
addressed, postage prepaid, certified or registered, (d) the time of successful
facsimile transmission (or in the event the time of receipt of the fax in the
city where the fax is received is not during regular business hours on a
business day, then at the customary hour for the opening of business on the next
business day), but in either case only if a complete copy is also sent by first
class United States mail (postage prepaid) on the same day as facsimile
transmission or on the next business day, or (e) the date actually received by
the other party: All notices shall be properly addressed as follows:
To the Employee at: Xxxxx Xxxxxxxx
0000 Xxxxxxx Xxxxx
Xxxxxx Xxxxx Xxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
With a copy to: Xxxxx & Lord, a professional corporation
0000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx xxx Xxx, XX 00000
Attn: Xxxx Xxxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
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To MMA or ITS: Odetics ITS, Inc.
0000 Xxxxx Xxxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Chief Executive Officer
Tel: (000) 000-0000
Fax: (000) 000-0000
With a copy to: Xxxxxxx, Phleger & Xxxxxxxx LLP
00 Xxxxxxxxxx Xxxxx
Xxxxxx, XX 00000-0000
Attn: Xxxxxxx Xxxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Any party may change its address, fax number or the person designated to receive
notice by giving notice of the new address to each of the other parties hereto
in the manner set forth above. Rejection or other refusal to accept, or the
inability to deliver because of a changed address of which no notice was given,
shall not affect the date of such notice sent in accordance with this Section.
12. Applicable Law. The terms of this Agreement shall be governed by
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and construed in accordance with the laws of the State of California without
reference to the choice of law principles thereof.
13. Disputes. If the parties are unable, after good faith negotiations,
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which each hereby covenants to undertake, to resolve any dispute arising between
them within fifteen (15) days after notice is given of such dispute, then the
dispute will be referred to arbitration (which the parties agree is the parties'
exclusive means of resolving any such dispute) before one (1) arbitrator in
Orange County, California, or any other place mutually agreed upon by the
parties hereto, in accordance with the applicable rules then in effect of the
Judicial Arbitration and Mediation Service (the "JAMS Rules") (or under any
other form of arbitration mutually acceptable to the parties). Such arbitrator
shall be selected by the mutual agreement of ITS and Employee, or if no mutual
agreement can be reached within ten (10) days after the termination of the 15
day period referenced above in this Section, then such arbitrator shall be
appointed by the arbitration service. The civil discovery statutes of the State
of California shall apply to such arbitration. The determination made in
accordance with the rules of JAMS (or such other form of arbitration as the
parties may mutually agree) shall be delivered in writing to the parties hereto
and shall be final and binding and conclusive upon the parties hereto and the
amount of the claim, if any, determined to exist shall be a valid claim and no
further remedy shall be available to either party with respect to such dispute
and judgment may be entered upon such decision in accordance with applicable law
in any court having jurisdiction thereof. The arbitration award shall include
(i) a provision that the prevailing party in such arbitration recover its costs
relating to the arbitration and reasonable attorneys' fees from the other party,
(ii) the amount of such costs and fees, and (iii) an order that the losing party
pay the fees and expenses of the arbitrator.
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14. Indemnification. In the event ITS enters into an
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Indemnification Agreement with any of its other executive officers, ITS agrees
to enter into an Indemnification Agreement, in substantially the same form, with
Employee at the same time.
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COUNTERPART SIGNATURE PAGE TO MOHADDES EMPLOYMENT AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
ODETICS ITS, INC.
By: /s/ Xxxx Xxxxxxx
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Xxxx Xxxxxxx, President
By: /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx, Secretary
XXXXX, MOHADDES ASSOCIATES, INC.
By: /s/ Xxxx Xxxxxxx
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Xxxx Xxxxxxx, Chairman
By: /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx, Secretary
EMPLOYEE
/s/ Xxxxx Xxxxxxxx
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Xxxxx Xxxxxxxx
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NONCOMPETITION AGREEMENT
THIS NONCOMPETITION AGREEMENT (this "Agreement") is entered into as of
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the Effective Time (as defined below), by and among Odetics ITS, Inc., a
California corporation ("ITS"), and Xxxxx, Mohaddes Associates, Inc., a
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California corporation ("MMA") (ITS and MMA are sometimes hereinafter referred
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to collectively as the "Company"), on the one hand, and Xxxxx Xxxxxxxx (the
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"Employee"), on the other hand. All capitalized terms used herein and not
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otherwise defined shall have the meanings ascribed to such terms in the
Reorganization Agreement (as defined below).
WHEREAS, Odetics, ITS, Merger Sub, Shareholders and MMA have entered
into an Agreement and Plan of Reorganization dated as of October 16, 1998 (the
"Reorganization Agreement"), pursuant to which Merger Sub will merge with and
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into MMA and MMA will become a wholly-owned subsidiary of ITS (the
"Reorganization") at the Effective Time (as defined in the Reorganization
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Agreement);
WHEREAS, prior to the consummation of the Reorganization Agreement,
Employee was an officer and shareholder of MMA and, upon consummation of the
transactions contemplated by the Reorganization Agreement, will receive
significant benefit;
WHEREAS, contemporaneously herewith ITS, MMA and Employee have entered
into an Employment Agreement (the "Employment Agreement"), pursuant to which
MMA or ITS will employ Employee and provide certain benefits to Employee, as
further described in such agreement;
WHEREAS, Employee possesses valuable knowledge of the business and
affairs of the Company and its Affiliates (as defined below) and their policies,
procedures, proprietary information and personnel and will be in a position to
obtain such knowledge after the date hereof relating to the Company;
WHEREAS, Employee has agreed to enter into this Agreement as a
material inducement to the Company to enter into and consummate the transactions
contemplated by the Reorganization Agreement on the terms and conditions set
forth therein;
WHEREAS, it is a condition to the Company's obligations under the
Reorganization Agreement that Employee enter into this Agreement;
NOW, THEREFORE, in consideration of the mutual promises in this
Agreement and in the Reorganization Agreement, the parties agree as follows:
1 . Agreement Not to Compete.
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a. Employee hereby agrees that he or she shall not, during the
Restricted Period (as defined below), for any reason, directly or indirectly,
engage in any business that Competes (as defined below) with the Company or any
of its Affiliates, and shall not, directly or indirectly,
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have any interest in, own, manage, operate, control, be connected with as a
stockholder (other than as a stockholder of less than five percent (5%) of the
issued and outstanding stock of a publicly-held corporation), joint venture,
officer, partner, employee, consultant, other representative or agent or
otherwise in any other capacity engage or invest or participate in, any business
that Competes with the Company or any of its Affiliates. As used herein, the
term "Competes" with the Company or any of its Affiliates shall mean selling,
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offering for sale or assisting a third party to sell or offer for sale any
product or service which competes with a product or service of the Company or
its Affiliates, or otherwise competing with any of the businesses or reasonably
anticipated businesses conducted by the Company or any of its Affiliates in any
county or any other political subdivision of any state of the United States of
America or in any other country in the world where the Company or any of its
Affiliates conducts such business on the date hereof or at any time during the
Restricted Period. Notwithstanding the foregoing definition of "Compete," the
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Company hereby acknowledges and agrees that Employee's employment or other
engagement by a governmental entity or agency and teaching activities are not
prohibited under the terms of this Agreement. Employee acknowledges that the
Company's business currently serves all geographic and customer markets
throughout the United States and the rest of the world. The term "Restricted
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Period" shall mean the longer of (i) the four year period following the
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Effective Time, or (ii) the Employee's term of employment with MMA or ITS or any
of their respective Affiliates plus the following: (A) in the event of
termination of the Employee's employment pursuant to Sections 5.a or 5.b of the
Employment Agreement, the twelve month period following the Employee's
termination of employment, and (B) in the event of termination of the Employee's
employment pursuant to Section 5.c of the Employment Agreement, the period
through the conclusion of the Term.
b. The parties expressly acknowledge and agree that the duration and
geographic area for which the covenant not to compete set forth in this Section
1 is to be effective are reasonable. In the event that any court determines that
the time period or the geographic areas provided for in this Section 1, or both
of them, are illegal or unenforceable, the parties intend that such court shall
limit such time period or geographic scope to the minimum extent necessary so
that such covenant shall remain in full force and effect for the greatest time
period and in the greatest geographical area that would not render it
unenforceable. The parties intend that this covenant shall be deemed to be a
series of separate covenants, one for each and every county of each and every
state or other political subdivision of the United States of America and for any
other country in the world where this covenant is intended to be effective.
c. The parties agree that damages would be an inadequate remedy for the
Company in the event of a breach or threatened breach of any provision of this
Agreement and thus, in any such event, the Company may, either with or without
pursuing any potential damage remedies, immediately obtain and enforce an
injunction prohibiting Employee from violating this Agreement.
d. As used in this Agreement, "Affiliates" shall mean a person or
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entity who directly or indirectly through one or more intermediaries controls,
is controlled by, or is under common control with, such specified person or
entity (and shall be deemed to include the Parent).
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e. Notwithstanding anything to the contrary in this Agreement, the
Restricted Period shall terminate ten (10) business days following the receipt
by the Company of written notice from Employee of a Termination Event, provided
that the Termination Event is not cured by the end of such ten day period. In
order to constitute valid notice, such notice must identify the Termination
Event and the specific actions necessary for the Company to cure the Termination
Event. For the purposes of this Section l.e, a "Termination Event" shall mean
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(i) the Company's failure to make any payments required under Section 4 of the
Employment Agreement, unless such payments have been disputed in good faith by
the Company, (ii) the Company's failure to pay any of the consideration due to
Employee under the Reorganization Agreement, unless such payments have been
disputed in good faith by the Company, (iii) the Company's failure to comply
with its obligations to register Employee's shares of the Company's Common Stock
under that certain Registration Rights Agreement of even date herewith among the
Company, Employee and the other Shareholders, unless the Company in good faith
disputes its obligation to register such shares, or (iv) the failure of Odetics,
Inc., a Delaware corporation ("Odetics"), to comply with its obligations to
register Employee's shares of Odetics' Class A Common Stock under that certain
Registration Rights Agreement of even date herewith among Odetics, Employee and
the other investors listed on the signature pages thereof, unless Odetics in
good faith disputes its obligation to register such shares.
2. Agreement Not to Solicit.
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During the Restricted Period, Employee shall not, acting in any capacity,
directly or indirectly: (i) solicit, offer employment to, otherwise attempt to
hire, or assist in the hiring of, any person employed by, or acting as a
representative or agent of or consultant or adviser to, the Company or any
Affiliate either on the date hereof or within the year preceding any such action
on behalf of any person or entity other than the Company and its Affiliates,
(ii) encourage or induce, directly or indirectly, any person to leave the
employment or engagement by the Company or any Affiliate; (iii) divert, or
attempt to divert any person which is furnished services by the Company or any
Affiliate or furnishes services for or to the Company or any Affiliate from
doing business with the Company or any Affiliate (including any person or entity
known by Employee to be a prospective customer, supplier or material service
provider of the Company or Affiliate); or (iv) induce or attempt to induce any
customer, supplier or material service provider of the Company or any Affiliate
to cease being (or not become) a customer, supplier or material service provider
of the Company and its Affiliates (including any person or entity known by
Employee to be a prospective customer, supplier or material service provider of
the Company or any Affiliate).
3. Nondisclosure of Confidential Information.
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a. Employee acknowledges that, as between the parties, the Company and
its Affiliates, own all right, title and interest in and to their respective
Confidential Information (as defined below) and Employee agrees to assign and
does hereby assign any and all rights Employee may have or acquire in such
Confidential Information to the Company or its Affiliates, as applicable,
without further compensation or award of any kind to Employee from the Company
or any third party. Except as may be required by law or Employee's duties with
respect to his employment with the Company, Employee shall not at any time,
directly or
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indirectly, use, communicate, disclose, disseminate, lecture upon, publish
articles or otherwise put in the public domain, any Confidential Information.
b. All documents, records, notebooks, notes, memoranda, computer records
and other repositories of or containing Confidential Information or any other
information of a secret, proprietary, confidential or unpublished or undisclosed
nature relating to the Company or any of its Affiliates, or to their respective
products, operations or activities made or compiled by Employee at any time or
made available to Employee, including any and all copies, extracts and summaries
thereof, shall be the property of the Company or its Affiliates, as appropriate,
shall be held by Employee in trust solely for the benefit of the Company or its
Affiliates, as appropriate, and shall be delivered to the Company or its
Affiliates, as appropriate, by Employee immediately on request.
"Confidential Information" means any and all information received, developed,
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created or discovered by or for the Company which has value in the Company's
business or is of a secret, proprietary, confidential or unpublished or
undisclosed nature relating to the Company or any of its Affiliates, or their
respective products, operations or activities, including, without limitation,
all trade secret information and other information relating to the Company or
any Affiliates' performance, sales, financial, pricing, cost, manufacturing,
contractual, and marketing information, ideas, knowledge and data, and all
processes, products, formulae, designs, practices, methods, techniques,
research, know-how, computer software and algorithms, customer lists, technical
requirements of customers and identity and purchasing terms of suppliers, unless
such information is in the public domain to such an extent as to be readily
available to competitors without a violation of any confidentiality obligation.
4. Disclosure and Assignment of Inventions.
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a. Employee shall make full disclosure to the Company and its
Affiliates (as appropriate) and will hold in trust for the sole right and
benefit of the Company and its Affiliates (as appropriate) any Inventions (as
defined below) which Employee may (in whole or in part, either alone or jointly
with others) conceive, or develop, or reduce to practice, or cause to be
conceived or developed or reduced to practice at any time during the term of his
employment with the Company. For purposes of this Section 4, the term
"Invention" shall mean discoveries, developments, improvements, trade secrets,
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computer software, concepts and ideas, whether patentable or not, including
processes, methods, designs, practices, formulae and techniques, as well as
improvements thereof or know-how related thereto, concerning any past, present
or prospective activities of the Company or its Affiliates with which Employee
has or may become acquainted as a result of his or her involvement with the
Company or any of its Affiliates.
b. With respect to (i) Inventions made or conceived by Employee either
during the term of Employee's employment or thereafter for so long as such
information does not legally become public knowledge (whether or not with the
use of the facilities, materials or personnel of the Company or any of its
Affiliates) in whole or in part, either alone or jointly with others, and which
are based on or related to Confidential Information, or (ii) Inventions made or
conceived by Employee during the term of his employment with the Company
(whether or not with the use of the facilities, materials or personnel of the
Company or any of its Affiliates), in
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whole or in part, either alone or jointly with others, which relate to the
business of the Company or Affiliate or to the Company's or any of its
Affiliates' actual or reasonably anticipated research or development, or result
from any work performed by Employee for the Company or any Affiliates, Employee
hereby agrees:
(1) that, as between the parties, the Company or its Affiliates
(as appropriate) own all the right, title and interest in and to all such
Inventions and all patent rights, copyright rights, trade secret rights, mask
work rights and all other intellectual property and proprietary right anywhere
in the world ("Rights") therein; and
------
(2) to perform, during and after employment with the Company, all
acts deemed necessary or desirable by the Company to permit and assist it, at
the Company's expense but without any charge by Employee to the Company, in
evidencing, perfecting, obtaining, maintaining, defending and enforcing
Employee's assignment of Inventions and Rights pursuant to this Agreement in any
and all countries, without further consideration to Employee above and beyond
his previously agreed salary (if the services are performed during Employee's
employment with the Company) or without further consideration above and beyond a
reasonably and mutually agreeable compensation (if the services are performed
after Employee's employment with the Company).
In this regard, if the Company or its Affiliates (as appropriate) are
unable for any reason whatsoever (other than by reason of a good faith dispute
between the Company, or any of its Affiliates, and Employee concerning
Employee's rights to any Inventions of which Employee has notified the Company
in accordance with Section 5.g hereof) to secure Employee's signature to any
lawful and necessary documents for the above purposes, Employee hereby
irrevocably constitutes and appoints the Company or its Affiliates (as
appropriate) and its officers, and each of them, as its agent and attorney in
fact, with full power of substitution, to act for and on behalf, to execute and
file any such applications and to do all other lawfully permitted acts to
further the above purposes with the same legal force and effect as if executed
by Employee.
5. Miscellaneous.
-------------
a. This Agreement is not a contract of employment and does not give
Employee any right to employment for any specific period of time. Unless and
until Employee shall have entered into a written employment agreement with MMA
or ITS, Employee shall remain an employee at will during the term of Employee's
employment at the Company. If there is a contract of employment between the
Employee and MMA or ITS in effect at any time (e.g., the Employment
Agreement), whether effective before or after this Agreement becomes effective,
this Agreement shall be deemed to be an amendment to such contract of employment
unless such contract of employment expressly cancels this Agreement.
b. All of the provisions set forth in this Agreement are continuing
terms and shall survive both the execution of this Agreement and the
Reorganization Agreement.
C. This Agreement constitutes the entire agreement between the parties
with respect to its subject matter and supersedes any prior agreement or
understanding; provided, however,
5
that Employee's obligations pursuant to any proprietary information and
inventions agreement executed for the benefit of the Company shall not be
affected except to the extent such agreement conflicts with the provisions of
this Agreement. No supplement, modification, or amendment of this Agreement
shall be binding unless executed in writing by all parties. No waiver of any of
the provisions of this Agreement shall be deemed, or shall constitute, a waiver
of any other provision, whether or not similar, nor shall any waiver constitute
a continuing waiver. No waiver shall be binding unless executed in writing by
the party making the waiver.
d. This Agreement shall be governed by and interpreted in accordance
with the laws of the State of California without regard to its conflict of law
provisions.
e. Each provision of this Agreement shall be considered severable and if
a provision is for any reason held to be invalid, all remaining provisions shall
be enforceable. If any provision of this Agreement is held to impose a
restriction upon Employee which is unenforceable in scope but could be made
enforceable by limiting the scope, Employee and the Company agree to a
modification of the invalid or unenforceable provision to the extent required
for enforceability.
f. This Agreement shall be binding and inure to the benefit of the
parties and their respective successors in interest of any kind whatsoever.
g. If the parties are unable, after good faith negotiations, which each
hereby covenants to undertake, to resolve any dispute arising between them
within fifteen (15) days after notice is given of such dispute, then the dispute
will be referred to arbitration (which the parties agree is the exclusive means
of resolving any such dispute) before one (1) arbitrator in Orange County,
California, or any other place mutually agreed upon by the parties hereto, in
accordance with the applicable rules then in effect of the Judicial Arbitration
and Mediation Service (the "JAMS Rules") (or any other form of arbitration
----------
mutually acceptable to the parties). Such arbitrator shall be selected by the
mutual agreement of the Company and Employee, or if no mutual agreement can be
reached within ten (10) days after the termination of the fifteen day period
referenced above, then such arbitrator shall be appointed by the arbitration
service. The civil discovery statutes of the State of California shall apply to
such arbitration. The determination made in accordance with the rules of JAMS
(or such other form of arbitration as the parties may mutually agree) shall be
delivered in writing to the parties hereto and shall be final, binding and
conclusive on the parties hereto, and the amount of the claim, if any,
determined to exist shall be a valid claim and no further remedy shall be
available to either party with respect to such dispute and judgment may be
entered upon such decision in accordance with applicable law in any court having
jurisdiction thereof. The arbitration award shall include (i) a provision that
the prevailing party in such arbitration recover its costs relating to the
arbitration and reasonable attorneys' fees from the other party, (ii) the amount
of such costs and fees, and (iii) an order that the losing party pay the fees
and expenses of the arbitrator.
h. Unless otherwise expressly provided herein, all notices, requests,
demands, instructions, documents and other communications to be given hereunder
by either party to the other shall be in writing, shall be sent to the
address/fax number set forth below (provided that any party may at any time
change its address for notice or other such information by giving
6
written notice thereof in accordance with this Section), and shall be deemed to
be duly given upon the earliest of (i) hand delivery, (ii) the first business
day after sending by reputable overnight delivery service for next-day delivery,
(iii) the third business day after sending by first class United States mail,
properly addressed, postage prepaid, certified or registered, (iv) the time of
successful facsimile transmission (or in the event the time of receipt of the
fax in the city where the fax is received is not during regular business hours
on a business day, then at the customary hour for the opening of business on the
next business day), but in either case only if a complete copy is also sent by
first class United States mail (postage prepaid) on the same day as facsimile
transmission or on the next business day, or (v) the date actually received by
the other party. All notices shall be properly addressed as follows:
To Employee at: Xxxxx Xxxxxxxx
0000 Xxxxxxx Xxxxx
Xxxxxx Xxxxx, Xxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
With a copy to: Xxxxx & Lord, a professional corporation
0000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx xxx Xxx, XX 00000
Attn: Xxxx Xxxxxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
To the Company at: Odetics ITS, Inc.
0000 Xxxxx Xxxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Chief Executive Officer
Tel: (000) 000-0000
Fax: (000) 000-0000
With a copy to: Xxxxxxx, Phleger & Xxxxxxxx LLP
00 Xxxxxxxxxx Xxxxx
Xxxxxx, XX 00000-0000
Attn: Xxxxxxx Xxxxxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
Any party may change its address or fax number for the purposes of this
paragraph by giving notice of the new address to each of the other parties
hereto in the manner set forth above. Rejection or other refusal to accept, or
the inability to deliver because of a changed address of which no notice was
given, shall not affect the date of such notice sent in accordance with this
Section.
[SIGNATURE PAGE TO MOHADDES NONCOMPETITION AGREEMENT]
The parties have agreed to and executed this Noncompetition Agreement as of the
date first set forth above.
"ITS" ODETICS ITS, INC.,
a California corporation
By: /s/ Xxxx Xxxxxxx
---------------------------
Xxxx Xxxxxxx, President and Chief
Executive Officer
By: /s/ Xxxxxxx X. Xxxxx
---------------------------
Xxxxxxx X. Xxxxx, Secretary
"MMA" XXXXX, MOHADDES ASSOCIATES, INC.,
a California corporation
By: /s/ Xxxxx Xxxxxxxx
---------------------------
Xxxxx Xxxxxxxx, Chief Executive
Officer
By: /s/ Xxxxxxx X. Xxxxx
---------------------------
Xxxxxxx X. Xxxxx, Secretary
"EMPLOYEE" /s/ Xxxxx Xxxxxxxx
--------------------------------
XXXXX XXXXXXXX
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