SENTO CORPORATION
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is executed this 10th day
of June 2005 and is intended by the parties to be made effective as of the 12th
day of July 2004, by and between Sento Corporation, a Utah corporation (the
"Company"), and Xxxxxxx Xxxxxxx ("Xx. Xxxxxxx").
RECITALS
WHEREAS, the Company is engaged in the business of designing,
implementing and managing high-tech solutions for customer acquisition, customer
care, technical support and help-desk functions. The Company uses modern
customer contact centers, coupled with our state-of-the-art proprietary software
systems, to provide domestic and international support services for Fortune 1000
companies, multinational companies, product manufacturers, and software
companies; and
WHEREAS, Xx. Xxxxxxx has acknowledged knowledge, skill and experience;
and
WHEREAS, the Company desires to obtain the benefit of Xx. Xxxxxxx'x
knowledge, skill, and experience and, therefore, is willing to engage the
services of Xx. Xxxxxxx upon the terms set forth in this Agreement; and
WHEREAS, Xx. Xxxxxxx is willing to render services to the Company on
the terms set forth herein;
AGREEMENTS
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the Company and Xx. Xxxxxxx agree as follows:
1. Employment.
(a) Employment. The Company hereby employs Xx. Xxxxxxx and Xx.
Xxxxxxx hereby accepts employment by the Company, subject to the terms set forth
in this Agreement.
(b) Employment Term. The term of Xx. Xxxxxxx'x employment
under this Agreement ("Employment Term") shall begin on July 12, 2004 and shall
continue for a period of two (2) consecutive calendar years, unless terminated
sooner in accordance with this Agreement. The Employment Term shall be
automatically extended for successive one-year periods unless a notice of
non-extension is given by one party to the other at least one hundred eighty
(180) days prior to the expiration of the then current term.
(c) Title and Duties. Xx. Xxxxxxx'x title shall be Senior Vice
President and Chief Financial Officer of the Company, and he shall possess such
powers and duties as are normally incident to such position, as he currently
exercises and performs and as provided in the By-laws, all in accordance with
Utah General Corporation Law. Xx. Xxxxxxx'x title, powers and duties may be
changed by the Board of Directors of the Company. During the Employment Term,
Xx. Xxxxxxx shall faithfully discharge his duties and responsibilities in a
diligent manner, devoting substantially all of his working time to the affairs
of the Company and its subsidiaries (collectively, "Sento"). Xx. Xxxxxxx shall
promptly communicate with all members of the Company's board of directors on all
material Company events and matters.
2. Compensation and Related Matters.
(a) Salary. For services rendered by Xx. Xxxxxxx to Sento and
upon the condition that Xx. Xxxxxxx fully and faithfully perform all of his
duties and obligations owed during the Employment Term under this Agreement. The
Company shall pay Xx. Xxxxxxx an annual base salary equal to $135,000, payable
in twenty-six equal bi-weekly installments per year less income tax withholdings
and other normal employee deductions. The base salary set forth herein shall be
reviewed annually by the Compensation Committee (the "Compensation Committee")
of the Board of Directors of the Company at the end of each fiscal year of the
Company beginning with the fiscal year ending on or about March 31, 2005
(hereafter "Fiscal Year"), or at such other times as may be deemed appropriate
by the Compensation Committee, and may, at the sole discretion of the
Compensation Committee, be left unchanged or increased by an amount which it
deems appropriate.
(b) Bonuses. Xx. Xxxxxxx shall be eligible to receive with
respect to each Fiscal Year during the Employment Term bonuses under the
Company's bonus program, if any, which may be subsequently adopted or amended by
the Compensation Committee ("Compensation Committee") of the Board of Directors
(or the full Board as the case may be). The Company's current bonus program for
Xx. Xxxxxxx is set forth on Exhibit A which is attached hereto and incorporated
herein by this reference.
(c) Stock Options and Restricted Stock Grants. Xx. Xxxxxxx
shall receive such options to purchase the common stock of the Company, or such
grants of restricted stock of the Company, if any, as shall be granted by the
Compensation Committee, in its discretion, pursuant to the Company's 1999
Omnibus Stock Incentive Plan or any other stock option plan which may be
applicable.
(d) Fringe Benefits. During the Employment Term, Xx. Xxxxxxx
shall be eligible to receive reasonable amounts of paid, noncumulative vacation
per year, to be taken at a time or times reasonably agreeable to both Xx.
Xxxxxxx and the Company, and shall be eligible to participate in and receive
coverage and benefits under all group insurance, pension, profit sharing, bonus,
stock option, stock ownership and other employee benefit plans, programs and
arrangements of Sento which are now or hereafter adopted by Sento for the
benefit of its similarly situated executive employees, subject to and on a basis
consistent with the terms, conditions and overall administration of such plans,
programs and arrangements.
(e) Business Expenses. The Company shall reimburse Xx. Xxxxxxx
for the reasonable and necessary business expenses incurred by Xx. Xxxxxxx in
connection with the performance of his duties and obligations as set forth
herein during the Employment Term. Such expenses shall include, but are not
limited to, cellular telephone expenses and all expenses of travel and living
expenses while away from home on business or at the request and in the service
of the Company, provided that such expenses are properly incurred and accounted
for in accordance with the applicable policies and procedures established by the
Company. Reimbursement shall be made upon the presentation by Xx. Xxxxxxx to the
Company of reasonably detailed statements of such expenses.
(f) Proration of Compensation. Any compensation payable to Xx.
Xxxxxxx under this Section 2 in respect of any Fiscal Year during which the
Employment Term terminates prior to the last day of such Fiscal Year shall,
unless otherwise provided in the applicable plan, program or arrangement, be
prorated in accordance with the number of days in such Fiscal Year during which
he is so employed.
3. Benefits Following Employment Term or Termination. For the shorter
of the following periods: (i) a period of twelve (12) months following the Date
of Termination of the Employment Term, or (ii) a period from the Date of
Termination of the Employment Term and continuing until the date Xx. Xxxxxxx
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accepts other employment with comparable benefits, and provided that Xx. Xxxxxxx
was not terminated for cause as provided in Subsection (a) of Section 5 herein,
the Company shall permit, at the Company's expense, Xx. Xxxxxxx, his spouse and
dependents, as applicable (the "Benefit Participants") to participate in all
group medical and health insurance plans then made available to the executive
employees of the Company (the "Plans") (including but not limited to such Plans
in which Xx. Xxxxxxx was entitled to participate immediately prior to the Date
of Termination) in the same manner as provided to its other executive employees;
provided, however, that this Section 3 shall not apply in the event that (i)
Sento shall hereafter terminate the applicable Plan, or (ii) the participation
of the Benefit Participants in such Plan is prohibited by law or, if applicable,
would disqualify such Plan as a tax qualified plan pursuant to the Internal
Revenue Code of 1986, as amended, or any successor thereto (the "Code") or (iii)
the participation of the Benefit Participants violates the general terms and
provisions of such applicable Plan. In the event that any of the Benefit
Participants' participation in such Plans is prohibited by law or, if
applicable, would disqualify the Plan as a tax qualified plan, the Company shall
pay the monthly COBRA premiums otherwise payable by Xx. Xxxxxxx with respect to
continuation coverage of such Plans or permit the Benefit Participants to
acquire substantially comparable coverage at the Company's expense, from a
source of Xx. Xxxxxxx'x or his spouse's choosing, notwithstanding the fact that
such coverage or benefit will result in a higher cost than if provided under an
Sento Plan. However, in no event will the Benefit Participants receive from the
Company the coverage contemplated by this Section 3 if the Benefit Participants
receive such coverage from any other source.
4. Compensation upon Termination or During Disability.
(a) Compensation upon Termination for Cause. If the Employment
Term shall be terminated "for cause," as provided in Subsection (a) of Section 5
herein, the Company shall have no further liability under this Agreement except
to pay Xx. Xxxxxxx (i) the value of any accrued salary or other compensation due
to Xx. Xxxxxxx pursuant to Section 2 herein (including any earned and awarded
but unpaid bonus payment, subject to set-off of amounts owed to the Company, but
excluding any deferred bonus payments based upon quarterly Fiscal Year
performance) upon the date of delivery of Notice of Termination to Xx. Xxxxxxx,
at the rate in effect at the time such Notice of Termination is delivered, and
(ii) any benefits payable under all employee benefit plans, programs and
arrangements of Sento in which Xx. Xxxxxxx is a participant on the date of
delivery of Notice of Termination.
(b) Compensation upon Death. If the Employment Term is
terminated by Xx. Xxxxxxx'x death, the Company shall have no further liability
under this Agreement except to pay Xx. Xxxxxxx'x spouse, or if he leaves no
spouse, his estate or devisee, legatee or other designee, as applicable, (i) the
value of any accrued salary or other compensation due to Xx. Xxxxxxx pursuant to
Section 2 herein (including any earned put unpaid bonus payment or prorata share
of such earned bonus payment, but excluding deferred bonus payments based upon
annual Fiscal Year performance) at the time of his death, (ii) any death benefit
payable under all employee benefit plans, programs and arrangements of Sento in
which Xx. Xxxxxxx is a participant on the date of his death, and (iii) any Plan
coverage continuation for Xx. Xxxxxxx'x spouse and dependents, as applicable,
under Section 3 herein.
(c) Compensation upon Disability. During any period that Xx.
Xxxxxxx fails to perform his duties hereunder as a result of incapacity due to
an "impaired condition," as such term is defined in Subsection (c) of Section 5
herein (the "disability period"), Xx. Xxxxxxx shall continue to receive his full
salary at the rate then in effect for the disability period until the Employment
Term is terminated pursuant to Subsection (c) of Section 5 herein; provided,
however, that such salary payments so made to Xx. Xxxxxxx pursuant hereto shall
be reduced by the sum of the amounts, if any, payable to Xx. Xxxxxxx prior to or
during this period, as the result of such incapacity, under any disability
benefit plan or insurance program of Sento in which Xx. Xxxxxxx participates.
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In the event of termination of the Employment Term pursuant to
Subsection (c) (disability) of Section 5 herein, the Company shall have no
further responsibilities under this Agreement except (i) to pay the value of any
accrued salary or other compensation due under Section 2 herein (including any
earned but unpaid bonus payment or prorata share of such earned bonus payment,
but excluding deferred bonus payments based upon annual Fiscal Year performance)
on the Date of Termination to Xx. Xxxxxxx (or in the event of Xx. Xxxxxxx'x
subsequent death, to his estate or devisee, legatee or other designee, as
applicable), together with any benefits payable under all employee benefit
plans, programs or arrangements of Sento in which Xx. Xxxxxxx is a participant
on the Date of Termination, and (ii) to provide for any Plan coverage
continuation for Xx. Xxxxxxx, his spouse and dependents, as applicable under
Section 3 herein.
(d) Compensation upon Termination by Xx. Xxxxxxx. If Xx.
Xxxxxxx terminates the Employment Term due to "impaired health" or for Good
Reason, as such terms are defined in Subsection (d) of Section 5 herein, the
Company shall have no further responsibility under this Agreement except (i) to
pay the value of any accrued salary or other compensation due under Section 2
herein (including any earned but unpaid bonus payment or prorata share of such
earned bonus payment, but excluding deferred bonus payments based upon annual
Fiscal Year performance) on the Date of Termination to Xx. Xxxxxxx (or in the
event of Xx. Xxxxxxx'x subsequent death, to his estate or devisee, legatee or
other designee, as appropriate), together with any benefits payable under all
employee benefit plans, programs or arrangements of Sento in which Xx. Xxxxxxx
is a participant on the Date of Termination, (ii) to pay the value of any
severance compensation owed to Xx. Xxxxxxx (or in the event of Xx. Xxxxxxx'x
subsequent death, to his estate or devisee, legatee or other designee, as
appropriate) as set forth in Subsection (f) of this Section 4 (which shall
survive the termination of the Employment Term), and (iii) to provide for any
Plan coverage continuation for Xx. Xxxxxxx, his spouse and dependents, as
applicable, under Section 3 herein.
(e) Compensation upon Termination by Company. If the Company
breaches this Agreement by terminating the Employment Term, other than pursuant
to Subsections (a) (cause), (b) (death), or (c) (disability) of Section 5
herein, including but not limited to termination without "cause" (as such term
is defined in Subsection (a) of Section 5 herein), the Company shall (i) pay the
value of any accrued salary or other compensation due under Section 2 herein
(including any earned but unpaid bonus payment or prorata share of such earned
bonus payment, but excluding deferred bonus payments based upon annual Fiscal
Year performance) on the Date of Termination to Xx. Xxxxxxx (or in the event of
Xx. Xxxxxxx'x subsequent death, to his estate or devisee, legatee or other
designee, as appropriate), together with any benefits payable under all employee
benefit plans, programs or arrangements of Sento in which Xx. Xxxxxxx is a
participant on the Date of Termination, (ii) pay the value of any severance
compensation owed to Xx. Xxxxxxx (or in the event of Xx. Xxxxxxx'x subsequent
death, to his estate or devisee, legatee or other designee, as appropriate) as
set forth in Subsection (f) of this Section 4 (which shall survive the
termination of the Employment Term), and (iii) provide for any Plan coverage
continuation for Xx. Xxxxxxx, his spouse and dependents, as applicable, under
Section 3 herein.
(f) Severance Compensation.
(i) Termination by Company or by Xx. Xxxxxxx for Good Reason.
If the Company breaches this Agreement by terminating the Employment
Term other than pursuant to Subsections (a) (cause), (b) (death), or
(c) (disability) of Section 5 herein, including but not limited to
termination without "cause" (as such term is defined in Subsection (a)
of Section 5 herein), or if Xx. Xxxxxxx terminates the Employment Term
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for Good Reason, as such term is defined in Subsection (d)(i) of
Section 5 herein (other than due to a Change in Control, as hereinafter
defined), then the Company shall pay as severance compensation to Xx.
Xxxxxxx an amount equal to one-half of Xx. Xxxxxxx'x annual base salary
in effect as of the Date of Termination, payable by continuing Xx.
Xxxxxxx'x regular salary at the regular bi-weekly payment intervals for
a period of twenty six weeks after the Date of Termination, until the
aggregate amount payable has been paid. Such severance compensation
shall not be subject to mitigation or offset due to other earnings of
Xx. Xxxxxxx.
(ii) Termination Following a Change in Control. If the
Employment Term is terminated by Xx. Xxxxxxx or by the Company within
one hundred eighty (180) days following a Change in Control, as such
term is defined in Subsection (d)(ii) of Section 5 herein, then the
Company shall pay as severance compensation to Xx. Xxxxxxx an amount
equal to one-half of Xx. Xxxxxxx'x annual base salary in effect as of
the Date of Termination. Such severance compensation shall be payable
by continuing Xx. Xxxxxxx'x regular salary at the regular bi-weekly
payment intervals for a period of twenty six weeks after the Date of
Termination, until the aggregate amount payable has been paid. Such
severance compensation shall be subject to mitigation or offset due to
other earnings of Xx. Xxxxxxx.
5. Termination.
(a) Cause. The Employment Term may be terminated at any time
at the option of the Company "for cause" (as such term is hereinafter defined),
effective upon the giving of written notice of termination to Xx. Xxxxxxx. As
used herein, the term "for cause" shall mean and be limited to: (i) any felony
conviction, (ii) willful misconduct or gross negligence in connection with the
performance of Xx. Xxxxxxx'x duties, responsibilities, agreements and covenants
hereunder, which shall continue for a period of thirty (30) days after the
receipt of notice from the Company, (iii) refusal to comply with reasonable
rules, regulations, policies, directions and restrictions as may be established
from time to time by the Board of Directors of Sento, whereby such refusal
continues for thirty (30) days after the receipt of notice from the Company, or
(iv) repeated abuse (following at least one written warning from the Company) of
alcohol or any illegal use of narcotics or other controlled substances. If Xx.
Xxxxxxx is advised that he is being terminated for cause, he may submit to the
Board of Directors of Sento a written objection to such determination.
(b) Death. The Employment Term shall terminate automatically
upon the death of Xx. Xxxxxxx.
(c) Disability. In the event Xx. Xxxxxxx becomes mentally or
physically "disabled" during the Employment Term, the Employment Term shall
terminate on the Date of Termination (as such term is defined in Subsection (f)
of this Section 5) once the disability is "established." As used in this
Subsection, the term "disabled" means suffering from any mental or physical
condition, other than that resulting from the use of alcohol or illegal use of
narcotics or other controlled substances, which renders Xx. Xxxxxxx unable to
substantially perform all of his material duties and services under this
Agreement in a satisfactory manner (an "impaired condition") for a period of one
hundred twenty (120) consecutive days or for more than one hundred eighty (180)
days in any twelve (12) month period. For purposes of this Subsection, the date
that Xx. Xxxxxxx'x disability is "established" shall be, in the case of an
impaired condition which exists for a period of one hundred twenty (120)
consecutive days, the one hundred twenty-first (121st) day on which such
impaired condition exists, and, in the case of an impaired condition existing
for more than one hundred eighty (180) days in any twelve (12) month period, the
one hundred eighty-first (181st) day on which such impaired condition exists.
(d) Termination by Xx. Xxxxxxx. Xx. Xxxxxxx may terminate the
Employment Term (1) for Good Reason, or (2) if his health should become impaired
to an extent that makes his continued performance of his duties and obligations
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hereunder hazardous to his physical or mental health or his life ("impaired
health"), provided that Xx. Xxxxxxx shall have furnished the Company with a
written statement from a qualified doctor to such effect and provided further
that, at the Company's request, Xx. Xxxxxxx shall submit to an examination by a
doctor selected by the Company and such doctor shall have concurred in the
conclusion of Xx. Xxxxxxx'x doctor, or (3) voluntarily, without Good Reason and
not due to "impaired health." In the event that Xx. Xxxxxxx voluntarily
terminates the Employment Term without Good Reason and not due to "impaired
health," such termination shall be treated as if it were a termination "for
cause" by the Company.
(i) Good Reason Defined. For purposes of this Agreement, "Good
Reason" shall mean:
a. a Change in Control of the Company (as defined in
Subsection (d)(ii) below);
b. a failure by the Company to comply with any
material provision of this Agreement which has not been cured
within thirty (30) days after written notice of such
noncompliance has been given by Xx. Xxxxxxx to the Company; or
c. any purported termination of Xx. Xxxxxxx'x
employment which is not effected pursuant to a Notice of
Termination satisfying the requirements of Subsection (e) of
this Section 5 (and for purposes of this Agreement no such
purported termination shall be effective);
d. a change in Xx. Xxxxxxx'x title or duties which
are in material respects inconsistent with Xx. Xxxxxxx'x
position as set forth in Section 1(c);
or
e. a required move of Xx. Xxxxxxx'x residence to a
location that is more than 50 miles from his existing
residence.
For the purpose of this Subsection (d)(i), no action or
inaction by Xx. Xxxxxxx within ninety (90) days following the
occurrence of the foregoing events shall be deemed a consent by Xx.
Xxxxxxx to such events, absent written consent from Xx. Xxxxxxx to the
Company.
(ii) Change in Control Defined. A "Change in Control" shall be
deemed to have occurred:
a. upon any "person" as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934 (the
"Exchange Act") (other than any trustee or other fiduciary
holding securities under any employee benefit plan of the
Company, or any company owned, directly or indirectly, by the
stockholders of the Company in substantially the same
proportions as their ownership of common stock of the
Company), becoming the owner (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of
the Company representing twenty-five percent (25%) or more of
the combined voting power of the Company's then outstanding
securities;
b. if, during any period of two consecutive years,
individuals who at the beginning of such period constitute the
Board of Directors, and any new director (other than a
director designated by a person who has entered into an
agreement with the Company to effect a transaction described
6
in paragraph (a), (c) or (d) of this Subsection or a director
whose initial assumption of office occurs as a result of
either an actual or threatened election contest (as such terms
are used in Rule 14a-11 of Regulation 14A promulgated under
the Exchange Act) or other actual or threatened solicitation
of proxies or contests by or on behalf of a person other than
the Board of Directors of the Company) whose election by the
Board of Directors or nomination for election by the Company's
stockholders was approved by a vote of at least two-thirds of
the directors then still in office who either were directors
at the beginning of the two-year period or whose election or
nomination for election was previously so approved, cease for
any reason to constitute at least a majority of the Board of
Directors;
c. upon the merger or consolidation of the Company
with any other corporation, other than a merger or
consolidation which would result in the voting securities of
the Company outstanding immediately prior thereto continuing
to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) more
than fifty percent (50%) of the combined voting power of the
voting securities of the Company or such surviving entity
(which entity shall thereafter be the "Company" as defined
herein) outstanding immediately after such merger or
consolidation; provided, however, that a merger or
consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no person (other
than those covered by the exceptions in (a) above) acquires
more than twenty-five percent (25%) of the combined voting
power of the Company's then outstanding securities shall not
constitute a Change of Control of the Company; or
d. if the stockholders of the Company approve a plan
of complete liquidation of the Company or an agreement for the
sale or disposition by the Company of all or substantially all
of the Company's assets other than the sale of all or
substantially all of the assets of the Company to a person or
persons who beneficially own, directly or indirectly, at least
fifty percent (50%) or more of the combined voting power of
the outstanding voting securities of the Company at the time
of the sale.
(e) Notice of Termination. Any termination of the Employment
Term by the Company or by Xx. Xxxxxxx (other than termination pursuant to
Subsection (b) (death) of this Section 5) shall be communicated by written
Notice of Termination to the other party hereto. For purposes of this Agreement,
a "Notice of Termination" shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Employment Term under the Section and Subsection so
indicated.
(f) Date of Termination. "Date of Termination" shall mean the
following, respectively, if the Employment Term is terminated by: (i) Subsection
(a) (cause) of this Section 5, the date specified in the Notice of Termination,
(ii) Subsection (b) (death) of this Section 5, the date of Xx. Xxxxxxx'x death,
(iii) Subsection (c) (disability) of this Section 5, thirty (30) days after
Notice of Termination is given (provided that Xx. Xxxxxxx shall not have
returned to the satisfactory performance of his duties on a full-time basis
during such thirty (30) day period), and (iv) if for any other reason, the date
on which a Notice of Termination is given.
6. Other Business Activities. During the Employment Term and continuing
thereafter for the period during which severance compensation is being paid, Xx.
Xxxxxxx shall not, without the prior written authorization of the Board of
Directors of the Company, directly or indirectly render services of a business,
professional or commercial nature (whether for compensation or otherwise) to any
person or entity competitive or adverse to Sento's business welfare or engage in
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any activity whether alone, as a partner, or as an officer, director, employee,
consultant, independent contractor, or stockholder in any other corporation,
person, or entity which is competitive with or adverse to Sento's business
welfare. This Section 6 shall not, however, prevent Xx. Xxxxxxx from investing
in securities issued by any such competitive or adverse corporation, provided
the holdings thereof by Xx. Xxxxxxx do not constitute more than five percent
(5%) of any one class of such securities. The Company covenants and agrees that
it will not assert the "inevitable disclosure doctrine" primarily in an attempt
to lengthen the term of the non-competition covenant of Xx. Xxxxxxx as set forth
in this Section 6.
7. Confidential Information.
(a) Disclosure and Use. Xx. Xxxxxxx shall not disclose or use
at any time, either during or subsequent to the Employment Term, any trade
secrets or other confidential information, whether patentable or not, of Sento,
including but not limited to, any technical or non-technical data, any formula,
pattern, compilation, program, device, method, technique, drawing, process,
financial data, or any list of actual or potential customers or suppliers, of
which Xx. Xxxxxxx is or becomes informed or aware during the Employment Term,
whether or not developed by Xx. Xxxxxxx, except (i) as may be reasonably
required for Xx. Xxxxxxx to perform Xx. Xxxxxxx'x employment duties with the
Company, (ii) to the extent such information becomes generally available to the
public through no wrongful act of Xx. Xxxxxxx, (iii) information which has been
disclosed as a result of a subpoena or other legal process, provided that Xx.
Xxxxxxx has provided the Company with prompt written notice of the receipt
thereof, or (iv) unless Xx. Xxxxxxx shall first secure the Company's prior
written authorization. This covenant shall survive the termination of Xx.
Xxxxxxx'x employment hereunder, and shall remain in effect and be enforceable
against Xx. Xxxxxxx for so long as any such Sento secret or confidential
information retains economic value, whether actual or potential, from not being
generally known to other persons who can obtain economic value from its
disclosure or use. Xx. Xxxxxxx agrees to execute such further agreements and/or
confirmations of Xx. Xxxxxxx'x obligations to Sento concerning non-disclosure of
Sento trade secrets and confidential information as Sento may reasonably require
from time to time.
(b) Return of Materials. Upon termination of the Employment
Term, Xx. Xxxxxxx (or in the event of termination due to Xx. Xxxxxxx'x death,
his estate or devisee, legatee or other designee, as applicable) shall promptly
deliver to the Company all materials of a secret or confidential nature relating
to Sento's business which are in the possession or under the control of Xx.
Xxxxxxx.
8. Inventions and Discoveries. Xx. Xxxxxxx hereby assigns to the
Company or its designee all of Xx. Xxxxxxx'x rights, title and interest in and
to all inventions, discoveries, processes, designs, works of authorship and
other intellectual property and all improvements on existing inventions,
discoveries, processes, designs, works and other intellectual property made or
discovered by Xx. Xxxxxxx during the Employment Term. Promptly upon the
development, making, creation, or discovery of any invention, discovery,
process, design, work, intellectual property or improvement, Xx. Xxxxxxx shall
disclose the same to the Company and shall execute and deliver to the Company or
its designee such reasonable documents as the Company may request to confirm the
assignment of Xx. Xxxxxxx'x rights therein, and if requested by the Company,
shall assist the Company or its designee in applying for and prosecuting any
patents and any trademark or copyright registration which may be available in
respect thereof. Any invention, discovery or other work for which none of
Sento's equipment, supplies, facilities, or confidential information was used
and which was developed entirely on Xx. Xxxxxxx'x own time, is exempted from
this Section 8 so long as it (i) does not relate in any way to Sento's business,
or actual or demonstrably anticipated research and development; and (ii) does
not result in any way from Xx. Xxxxxxx'x work for the Company.
9. Severability. If any provision of this Agreement is held invalid or
unenforceable, either in its entirety or by virtue of its scope or application
to given circumstances, such provision shall thereupon be deemed (i) modified
8
only to the extent necessary to render the same valid, or (ii) not applicable to
given circumstances, or (iii) excised from this Agreement, as the situation may
require, and this Agreement shall be construed and enforced as if such provision
had been included herein as so modified in scope or application, or had not been
included herein, as the case may be.
10. Enforcement. The Company will be entitled to institute proceedings
and avail itself of all remedies at law or in equity to recover damages
occasioned by a breach or threatened breach of any of the provisions of this
Agreement by Xx. Xxxxxxx and shall have the right to pursue one or more of such
proceedings and remedies simultaneously or from time to time. Xx. Xxxxxxx hereby
acknowledges that the Company would suffer irreparable injury if the provisions
of Sections 6, 7 and 8 herein, which shall survive the termination of this
Agreement, were breached and that the Company's remedies at law would be
inadequate in the event of such breach or threatened breach. Accordingly, Xx.
Xxxxxxx hereby agrees that any such breach or threatened breach may, in addition
to any and all other available remedies, be preliminarily and permanently
enjoined by any court of competent jurisdiction without any requirement that the
Company post a bond.
11. Legal Fees and Expenses. In the event of litigation proceedings
under this Agreement, both the Company and Xx. Xxxxxxx shall pay their own
attorneys' fees and other legal expenses and costs.
12. General Provisions.
(a) Notices. Any notice, request, demand or other
communication required or permitted to be given hereunder shall be in writing
and personally delivered or sent by registered or certified mail, return receipt
requested, or by a facsimile, telegram or telex followed by a confirmation
letter sent by registered or certified mail, return receipt requested, addressed
as follows:
To the Company: Sento Corporation
Attention: Chief Executive Officer
000 Xxxx Xxxx Xxxxxx Xxxxx
Xxxxxxxx Xxxx, Xxxx 00000
To Xx. Xxxxxxx: Xxxxxxx Xxxxxxx
0000 Xxxxxxxx Xxxxxx
Xxxxx, Xxxx 00000
Either the Company or Xx. Xxxxxxx may, at any time, by notice to the other,
designate another address for service of notice on such party. When the letter,
facsimile, telegram or telex is dispatched as provided for above, the notice
shall be deemed to be made when the addressee actually receives the letter,
facsimile, telegram or telex, or upon the third (3rd) business day after the
date it is sent, whichever is earlier.
(b) Amendments. Neither this Agreement nor any of the terms or
conditions hereof may be waived, amended or modified except by means of a
written instrument duly executed by the party to be charged therewith.
(c) Captions and Headings. The captions and Section headings
used in this Agreement are for convenience of reference only, and shall not
affect the construction or interpretation of this Agreement or any of the
provisions hereof.
9
(d) Governing Law. This Agreement, and all matters or disputes
relating to the validity, construction, performance or enforcement hereof, shall
be governed, construed and controlled by and under the laws of the State of Utah
without regard to principles of conflicts of law.
(e) Successors and Assigns. In light of the unique personal
services to be performed by Xx. Xxxxxxx hereunder, it is acknowledged and agreed
that any purported or attempted assignment or transfer by Xx. Xxxxxxx of this
Agreement or any of Xx. Xxxxxxx'x duties, responsibilities, or obligations
hereunder shall be void. The Company shall not assign this Agreement to any
third party entity which is not affiliated with the Company or any of its direct
or indirect subsidiaries. Subject to the foregoing, this Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective heirs, executors, administrators, personal representatives,
successors and permitted assigns.
(f) Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original hereof, but all
of which together shall constitute one and the same Instrument.
(g) Entire Agreement. Except as otherwise set forth or
referred to in this Agreement, this Agreement constitutes the sole and entire
agreement and understanding between the parties hereto as to the subject matter
hereof and supersedes all prior discussions, agreements and understandings of
every kind and nature between them as to such subject matter.
(h) Reliance by Third Parties. This Agreement is intended for
the sole and exclusive benefit of the parties hereto and their respective heirs,
executors, administrators, personal representatives, successors and permitted
assigns, and no other person or entity shall have any right to rely on this
Agreement or to claim or derive any benefit therefrom absent the express written
consent of the party to be charged with such reliance or benefit.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
SENTO CORPORATION
By: /s/ Xxxxxxx X. X'Xxxx
---------------------------
Title: Chief Executive Officer
/s/ Xxxxxxx Xxxxxxx
------------------------------
XXXXXXX XXXXXXX
10
Exhibit A
Bonus Plan
Quarterly Bonus Award
---------------------
A quarterly bonus award for the first three quarters of each fiscal year during
the term hereof shall be paid to Xx. Xxxxxxx according to the following table:
------------------------------------------------- ------------------------------
Description of Results Amount of Quarterly Bonus
------------------------------------------------- ------------------------------
If actual quarterly results equal or exceed 4.375% of annual salary
100% (but are less than 110%) of plan for
both revenue and operating income, then Xx.
Xxxxxxx shall be entitled to receive a bonus
equal to the amount shown in the cell to the
immediate right
------------------------------------------------- ------------------------------
If actual quarterly results equal or exceed 5.03125% of annual salary
110% (but are less than 120%) of plan for
both revenue and operating income, then Xx.
Xxxxxxx shall be entitled to receive a bonus
equal to the amount shown in the cell to the
immediate right
------------------------------------------------- ------------------------------
If actual quarterly results equal or exceed 5.90625% of annual salary
120% (but are less than 130%) of plan for
both revenue and operating income, then Xx.
Xxxxxxx shall be entitled to receive a bonus
equal to the amount shown in the cell to the
immediate right
------------------------------------------------- ------------------------------
If actual quarterly results equal or exceed 6.5625% of annual salary
130% of plan for both revenue and operating
income, then Xx. Xxxxxxx shall be entitled
to receive a bonus equal to the amount shown
in the cell to the immediate right
------------------------------------------------- ------------------------------
Provided, however, that no quarterly bonus shall be payable to Xx. Xxxxxxx: (i)
for any quarter in which the Company has an operating loss or (ii) if the
Company fails to achieve plan results for both revenue and operating income.
Such quarterly bonus shall be accrued and owing at quarter end and payable
within 30 days after the end of each quarter.
Such quarterly bonus award amounts shall not be pro rated pursuant to paragraph
2(f) of the Agreement.
Annual Bonus Award
------------------
An annual bonus award for each fiscal year during the term hereof shall be paid
to Xx. Xxxxxxx according to the following table:
------------------------------------------- ------------------------------------
Description of Results Amount of Annual Bonus
------------------------------------------- ------------------------------------
If actual annual results equal or exceed 25.00% of annual salary minus the
100% (but are less than 110%) of plan aggregate amount of all previously
for both revenue and operating income, paid quarterly bonuses
then Xx. Xxxxxxx shall be entitled to
receive a bonus equal to the amount
shown in the cell to the immediate right
------------------------------------------- ------------------------------------
If actual annual results equal or 28.75% of annual salary minus the
exceed 110% (but are less than 120%) aggregate amount of all previously
of plan for both revenue and operating paid quarterly bonuses
income, then Xx. Xxxxxxx shall be
entitled to receive a bonus equal to
the amount shown in the cell to the
immediate right
------------------------------------------- ------------------------------------
If actual annual results equal or 33.75% of annual salary minus the
exceed 120% (but are less than 130%) aggregate amount of all previously
of plan for both revenue and operating paid quarterly bonuses
income, then Xx. Xxxxxxx shall be
entitled to receive a bonus equal to
the amount shown in the cell to the
immediate right
------------------------------------------- ------------------------------------
If actual annual results equal or 37.50% of annual salary minus the
exceed 130% of plan for both revenue aggregate amount of all previously
and operating income, then Xx. Xxxxxxx paid quarterly bonuses
shall be entitled to receive a bonus
equal to the amount shown in the cell
to the immediate right
------------------------------------------- ------------------------------------
Provided, however, that no annual bonus shall be payable to Xx. Xxxxxxx: (i) for
any fiscal year in which the Company has an operating loss, or (ii) if the
Company fails to achieve plan results for both revenue and operating income.
Such annual bonus shall be accrued and owing at end of such fiscal year and
payable on the date that is 15 days after the Company's audited financial
statements are issued.
Such annual bonus award amounts shall not be pro rated pursuant to paragraph
2(f) of the Agreement.
For purposes of the calculations to be made pursuant to this bonus plan, the
Plans for the 2006 and subsequent fiscal years shall be those which are timely
adopted and approved by the board of directors (i.e., prior to the end of the
first quarter of the fiscal year). In the absence of a plan that is timely
approved by the board, if such failure is due to management's failure to timely
prepare and present an acceptable plan to the board, no quarterly or annual
bonuses shall be due or payable. If such failure is due to the board's failure
to adopt the plan that management has timely presented to the board, the plan to
be used for calculation of the bonuses due hereunder shall be 122% of the
revenue and operating income numbers contained in the plan for the immediately
preceding fiscal year.
