EMPLOYMENT AGREEMENT
Exhibit
10.1
THIS
EMPLOYMENT AGREEMENT ("Agreement") is by and between Patriot Scientific
Corporation, a Delaware corporation ("Employer" or the "Company") and Xxxxxxxx
Xxxxxxx ("Executive").
In
consideration of the promises and mutual covenants contained herein, and for
other good and valuable consideration, receipt of which is hereby acknowledged,
the parties hereto do hereby agree as follows:
1. Employment.
Upon
the terms and
conditions hereinafter set forth, Employer hereby employs Executive to serve
as
the Chief Financial Officer of the Company ("CFO"), and Executive hereby accepts
such employment under the terms and conditions set forth herein.
2. Effective
Date. The
effective date of the Agreement shall be September 17, 2007 (the "Effective
Date"). The employment relationship pursuant to this Agreement shall be for
an
initial one hundred twenty (120) day period commencing on the Effective Date
set forth above ("Initial Term"), unless sooner terminated in accordance with Section 7 below.
On completion of the Initial Term specified above, and if not terminated
pursuant to Section 7 below, this Agreement will extend for a one year term
("One Year Term") and will be terminable by either party, with or without cause
as set forth in Sections 4 and 7 of this Agreement. If neither party has
terminated the Agreement within one year of the expiration of the Initial Term,
the employment relationship as set forth in this Agreement shall continue in
accordance with the terms of this Agreement on a day to day basis.
3. Duties.
Executive
shall perform such duties as are customarily performed by a Chief Financial
Officer, and such other duties and responsibilities that may be assigned to
him
by the Chief Executive Officer ("CEO") and/or the Board of Directors.
Specifically, Executive shall manage the Company's budget, business development,
financial affairs, and perform such duties and responsibilities as set forth
in
the CFO job description, a current copy of which is attached hereto as Exhibit
"B".
Executive
shall report to the President/CEO and Audit Committee and have such authority
as
is delegated by the President/CEO and Audit Committee. Executive shall be
governed by the policies and practices established by the Company. Employer
requires that: (1) Executive will devote his utmost knowledge and best skill
to
the performance of his duties; (ii) Executive shall devote his full business
time (not less than 40 hours per week) to the rendition of such services,
subject to absences for customary vacations and for temporary illness; and
(iii)
Executive will not engage in any other gainful occupation which requires his
personal attention and/or creates a conflict of interest with his job
responsibilities under this Agreement without the prior written consent of
the
Board of Directors of the Company, with the exception that Executive may
personally trade in stock, bonds, securities, commodities or real estate
investments for his own benefit to the extent permitted by the provisions herein
and applicable law.
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Executive's
job performance will be reviewed annually. Executive acknowledges and
understands that performance reviews do not necessitate or correlate with salary
increases and that a favorable performance review neither guarantees continued
employment nor increased compensation.
4. At-Will
Employment. . Executive and Employer agree that
Executive's employment may be terminated by Executive or by Employer, with
or
without cause any time prior to the expiration of the Initial Term and/or the
One Year Term and any time after the One Year Term in accordance with paragraph
7 of this Agreement. Executive and Employer expressly agree that this provision
is intended by Executive and Employer to be the complete and final expression
of
their understanding regarding the terms and conditions under which Executive's
employment may be terminated. Executive and Employer further understand and
agree that no representation contrary to this provision is valid, and that
this
provision may not be augmented, contradicted or modified in any way, except
in
writing signed by Executive, the President/CEO and the Chairperson of the
Auditing Committee.
5. Compensation.
5.1 Base
Salary.
Executive shall be paid an annual base salary of Two Hundred Twenty-Five
Thousand Dollars ($225,000), payable according to Employer's payroll schedule
and subject to applicable state and federal withholdings and other payroll
deductions.
5.2 Bonus.
In
addition
to Executive's base salary, Executive shall be eligible to receive an additional
annual discretionary bonus of up to fifty percent (50%) of his then in effect
base salary, as determined by the CEO and Board of Directors/Compensation
Committee in their sole discretion. Executive acknowledges that although a
discretionary bonus may be provided by the Company, any such bonus is neither
required nor guaranteed by this Agreement.
5.3 Stock
Options.
Employer agrees to provide stock options to Executive as follows
(collectively, the "Options"):
(i) The
Company shall provide Executive with a non-qualified stock option
for exercise into One Hundred Fifty Thousand (150,000) shares of the Company's
common stock effective as of the Effective Date (the "Signing Bonus Option").
The xxxxx xxxxx of the Signing Bonus Option shall be the closing sales price
of
the Company's common stock on September 17, 2007 as quoted on the OTC Bulletin
Board, or if there is no closing sales price on that date, the closing selling
price on the last preceding date for which such quotation exists. 100% of the
shares subject to the Signing Bonus Option will vest immediately upon the
expiration of the Initial Term, provided that Executive is still employed by
the
Company at such time.
(ii) Effective
as of the Effective Date, the Company shall provide Executive
with a non-qualified stock option for exercise into Six Hundred Thousand
(600,000) shares of the Company's common stock, with a xxxxx xxxxx equal to
the
closing sales price of the Company's common stock on September 17, 2007 as
quoted on the OTC Bulletin Board, or if there is no closing sales price on
that
date, the closing selling price on the last preceding date for which such
quotation exists, to vest as follows: (i) regular vesting to commence after
twelve
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(12)
months employment at 1/48th
over a period of four (4) years; and (ii) automatic accelerated vesting to
occur
for a percentage of unvested options, which amount shall be determined by the
CEO and the Board of Directors, but in no event, less than twenty-five percent
(25%), upon the "effective date" of a major event which shall include an
acquisition of the Company or merger or the listing of the Company on the Amex
or NASDAQ stock exchanges. Any remaining unvested options, if any, will vest
according to the regular vesting schedule set forth above in this Section 5.3
(ii).
(iii) The
options referenced above will be granted pursuant to, and will be subject to
the
terms of the Company's Stock Option Plan.
6. Fringe
Benefits.
6.1 Benefits.
Executive shall, in accordance with Company policy and the terms
of
the applicable plan documents, be eligible to participate in benefits under
any
Company benefit plan or arrangement which may be in effect from time to time
and
made available to its management employees. Such benefits currently include:
health insurance, which is a PPO plan with the Company paying 90% of employee
cost and 50% of dependent cost; life insurance with disability coverage, 401K
plan with Employer matching up to 6% of employee's annual salary, with 3 year
vesting on Employer match. 401K vesting to accelerate in the case of a Change
of
Control in accordance with the terms of the applicable plan.
6.2 Vacation.
Upon the expiration of the Initial Term, Executive shall begin to
earn
and accrue vacation days at the rate of fifteen (15) days per year. Unused
vacation shall carry over to the next year, but Executive shall cease accruing
further vacation at any time Executive has accrued twenty-three (23) vacation
days, and shall not accrue further vacation days until Executive has used some
or all of the accrued vacation days. Unused vacation days which are not in
excess of twenty-three (23) vacation days shall be paid in a cash lump sum
payment promptly after Executive's termination of employment. Executive shall
earn vacation days at the rate of twenty (20) days per year after five (5)
years
of employment.
6.3 Expenses.
Employer shall reimburse Executive on a monthly basis for receipts Executive
submits for all reasonable and necessary travel and other business expenses
incurred by Executive in the performance of Executive's duties hereunder,
consistent with Employer's normal expense reimbursement policy. Such expenses
shall include professional society membership dues. Additionally, Employer
will
reimburse Executive up to a maximum of One Thousand Five Hundred Dollars
($1,500) per year for successful completion (with a passing grade) of
job-related continuing education courses.
7. Termination.
7.1 Termination
With Cause. If Executive (a) breaches in any material respect or fails
to fulfill any fiduciary duty owed to Employer; (b) breaches in any material
respect this Agreement or any other confidentiality or non-solicitation,
non-competition agreement between Employer and Executive; (c) pleads guilty
to
or is convicted of a felony, a crime of moral turpitude or any other crime;
(d)
is found to have engaged in any reckless, fraudulent, dishonest or grossly
negligent misconduct, or act of moral turpitude, (e) fails to satisfactorily
perform his
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duties
to
the Company or comply with Company policies and rules (excluding those policies
set forth in paragraph 7.1(f) for which no opportunity to cure is requires),
provided that Executive fails to cure any such failure within thirty (30) days
after written notice from Employer of such failure, provided further, however,
that such right to cure shall not apply to any repetition of the same failure
previously cured hereunder; or (f) violates any material rule, regulation or
policy of the Company relating to harassment, discrimination, retaliation,
violence, theft/embezzlement, business ethics, and drug and alcohol use, that
may be established and made known to Employer's employees from time to time,
including without limitation, the Company Employee Handbook, a copy of which
has
been provided to Executive, Employer may terminate immediately his employment
and Executive shall have no right to receive any compensation or benefit
hereunder after such termination other than base salary and vacation earned
or
accrued but unpaid as of the date of termination. Executive shall not be
entitled to any bonus, or proration thereof, if terminated under this
paragraph.
7.2 Termination
Without Cause. As stated in Section 4 of this Agreement, Executive or
the Company may at any time terminate Executive's employment with or without
cause. If the Company terminates Executive's employment within two years of
the
Effective Date and such termination is not a Termination With Cause as defined
above, the Company shall continue to pay Executive's base salary then in effect
as of the date of such termination on a prorated basis according to
Employer's payroll schedule and subject to applicable withholdings for a period
of six (6) months or the remainder of the one-year time period from the
Effective Date, whichever time period is greater (and if the Company, terminates
Executive's employment any time after two (2) years of continuous employment
without Cause as defined above, the Company shall continue to pay Executive's
base salary for twelve (12) months) (collectively "Severance"), provided only
if
Executive signs a general release. Such Severance does not include the
continuation of the benefits allowance after termination or the proration of
any
bonus. At the Company's sole option, any Severance to which Executive is
entitled may be paid in a lump sum less applicable withholdings in lieu of
payment made over time in accordance with Employer's payroll
schedule.
In
order
to be entitled to the Severance reflected herein, Executive must sign a general
release of all claims known and unknown, against Employer, its officers and
directors, agents and employees and any related entities or persons. Although
a
copy of the Company's current standard general release shall be available for
Executive's review upon his request, Executive acknowledges that such release
is
subject to change at the Company's discretion. Nothing herein will be construed
to limit or modify the duty of Executive to mitigate Executive's damages in
the
event Employer terminates Executive's employment without Cause.
7.3 Termination
Upon
Death or Disability. Executive's employment shall terminate upon his
death or disability ("disability" being defined as any mental or physical
condition which, in the reasonable opinion of a mutually agreed upon licensed
physician and/or psychiatrist (as the case may be), renders Executive unable
or
incompetent to carry out Executive's duties under this Agreement, with or
without reasonable accommodation, for a period of at least three months). In
the
event of a termination of Executive's employment for death or disability,
Executive shall have no right to receive any further compensation or benefit
hereunder after such termination other than base salary and vacation earned
or
accrued but unpaid as of the date of termination.
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7.4 Change
of Control.
In the event of any merger, acquisition .or consolidation of the
Company where
the Company is not the surviving or resulting corporation, or upon transfer
of
all or substantially all of the assets of the Company, and Employee is not
retained by the surviving or resulting corporation in a substantially similar
position or position satisfactory to Employee ("Change of Control"), Employee
shall be paid a lump sum equivalent to six (6) months of Employee's base salary
then in effect (or twelve (12) months if such Change of Control occurs after
two
continuous years of employment) upon the execution of a general release. Such
lump sum payment shall be considered to be in full and complete satisfaction
of
any and all rights which Employee may enjoy under the terms of this Agreement,
except that any and all of Executive's unvested stock options shall become
fully
vested and exercisable.
7.5 Resignation
For Good
Reason. In the event Executive resigns his employment and such
resignation is with "Good Reason" as defined below, Executive will be entitled
to receive Severance in accordance with the terms set forth in paragraph 7.2
above, provided Executive complies with the conditions in paragraph 7.2 above.
In the event Executive resigns without Good Reason, Executive will not be
entitled to receive the Severance described in paragraph 7.2 above. Executive
will be deemed to have resigned with "Good Reason" upon the occurrence of any
of
the following events without Executive's consent: (i) a material reduction
in
Executive's duties, authority, or responsibilities relative to the duties,
authority, or responsibilities in effect immediately prior to such reduction;
(ii) the relocation of Executive's principal place of business to a point more
than sixty (60) miles from Carlsbad, California; or (iii) a material reduction
by the Company of Executive's base salary as initially set forth herein or
as
the same may be increased from time to time. Provided however
that, such termination by Executive shall only be deemed
for Good Reason pursuant to the foregoing definition if: (i) Executive gives
the
Company written notice of the intent to terminate for Good Reason within thirty
(30) days following the first occurrence of the condition(s) that Executive
believes constitutes Good Reason, which notice shall describe such condition(s);
(ii) the Company fails to remedy such condition(s) within thirty (30) days
following receipt of the written notice (the "Cure Period"); and (iii) Executive
terminates his employment within thirty (30) days following the end of the
Cure
Period.
7.6 280G
Limitation on Payments.
(i) In
the event
that the severance and other benefits provided for in this Agreement or
otherwise payable to the Executive (i) constitute "parachute payments" within
the meaning of Section 280G of the Internal Revenue Code of 1986, as amended
(the "Code") and (ii) but for this Section 7.6 would be subject to the excise
tax imposed by Section 4999 of the Code, then the Executive's severance and
other benefits provided under this Agreement shall be payable either (i) in
full, or (ii) as to such lesser amount which would result in no portion of
such
benefits being subject to excise tax under Section 4999 of the Code, whichever
of the foregoing amounts, taking into account the applicable federal, state
and
local income taxes and the excise tax imposed by Section 4999, results in the
receipt by the Executive on an after-tax basis, of the greatest amount of
benefits under this Agreement, notwithstanding that all or some portion of
such
benefits may be taxable under Section 4999 of the Code.
(ii) If
a
reduction in the payments and benefits that would otherwise be paid or provided
to the Executive under the terms of this Agreement is necessary to comply
with
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the
provisions of Section 7.6(i), the Executive shall be entitled to select which
payments or benefits will be reduced and the manner and method of any such
reduction of such payments or benefits (including but not limited to the number
of options that would vest under Sections 5.3 or 7.4) subject to reasonable
limitations (including, for example, express provisions under the Company's
benefit plans) so long as the requirements of Section 7.6(i) are met. Within
thirty (30) days after the amount of any required reduction in payments and
benefits is finally determined in accordance with the provisions of Section
7.6(iii), the Executive shall notify the Company in writing regarding which
payments or benefits are to be reduced. If no notification is given by the
Executive, the Company will determine which amounts to reduce. If, as a result
of any reduction required by Section 7.6(i), amounts previously paid to the
Executive exceed the amount to which the Executive is entitled, the Executive
will promptly return the excess amount to the Company.
(iii) Any
determination required under this Section 7.6(iii) shall be made
in
writing by a nationally recognized accounting or consulting firm appointed
by
the Company, which firm shall not then be serving as accountant or auditor
for
or consultant to the Company or the person or entity that effected the Change
in
Control and whose determinations shall be conclusive and binding upon the
Executive and the Company for all purposes. For purposes of making the
calculations required by this Section 7.6, such firm may make reasonable
assumptions and approximations concerning applicable taxes and may rely on
reasonable, good faith interpretations concerning the application of Sections
280G and 4999 of the Code. The Company and the Executive shall furnish to such
firm such information and documents as such firm may reasonably request in
order
to make a determination under this Section 7.6. The Company shall bear all
costs
such firm may reasonably incur in connection with any calculations contemplated
by this Section 7.6.
7.7 Application
of
Internal Revenue Code Section 409A. Severance payable under Sections
7.2 and 7.5 of this Agreement are intended to be payable pursuant to the "short-
term deferral" rule set forth in Section 1.409A-1(b)(4) of the Treasury
Regulations. Severance payable pursuant to Section 7.4 of this Agreement are
intended to be payable pursuant to a window program pursuant to Section
1.409A-1(b)(9)(iii) of the Treasury Regulations to the maximum extent permitted
by said provision, with any excess amount being regarded as subject to the
distribution requirements of Section 409A(a)(2)(A) of the Code, including,
without limitation, the requirement of Section 409A(a)(2)(B)(i) of the Code
that
payment to Executive be delayed until 6 months after Executive's separation
from
service if Executive is a "specified employee' within the meaning of the
aforesaid section of the Code at the time of such separation from
service
8. Trade
Secrets, Confidential Information and Inventions.
8.1 Trade
Secrets In General. During the course of Executive's employment, Executive
will have access to various trade secrets, confidential information and
inventions of Employer as defined below.
(i) "Confidential
Information" means all information and material which is proprietary to the
Company, whether or not marked as "confidential" or "proprietary" and which
is
disclosed to or obtained from the Company by the Executive, which relates to
the
Company'
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past,
present or future research, development or business activities. Confidential
Information is all information or materials prepared by or for the Company
and
includes, without limitation, all of the following: designs, drawings,
specifications, techniques, models, data, source code, object code,
documentation, diagrams, flow charts, research, development, processes, systems,
methods, machinery, procedures, "know-how", new product or new technology
information, formulas, patents, patent applications, product prototypes, product
copies, cost of production, manufacturing, developing or marketing techniques
and materials, cost of production, development or marketing time tables,
customer lists, strategies related to customers, suppliers or personnel,
contract forms, pricing policies and financial information, volumes of sales,
and other information of similar nature, whether or not reduced to writing
or
other tangible form, and any other Trade Secrets, as defined by subparagraph
(iii), or non-public business information. Confidential Information does not
include any information which (1) was in the lawful and unrestricted possession
of the Executive prior to its disclosure by the Company, (2) is or becomes
generally available to the public by acts other than those of the Executive
after receiving it, or (3) has been received lawfully and in good faith by
the
Executive from a third party who did not derive it from the
Company.
(ii) "Inventions"
means all discoveries, concepts and ideas, whether patentable or not, including
but not limited to, processes, methods, formulas, compositions, techniques,
articles and machines, as well as improvements thereof or "know-how" related
thereto, relating at the time of conception or reduction to practice to the
business engaged in by the Company, or any actual or anticipated research or
development by the Company.
(iii) "Trade
Secrets" shall mean any scientific or technical data, information, design,
process, procedure, formula or improvement that is commercially available to
the
Company and is not generally known in the industry.
This
section includes not only information belonging to Employer which existed before
the date of this Agreement, but also information developed by Executive for
Employer or its employees during his employment and thereafter.
8.2 Restriction
on Use of Confidential Information. Executive agrees that his use of
Trade Secrets and other Confidential Information is subject to the following
restrictions during the term of the Agreement and for an indefinite period
thereafter so long as the Trade Secrets and other Confidential Information
have
not become generally known to the public.
8.2.1 Non-Disclosure.
Except as required by the performance of the Executive's services to the Company
under the terms of this Agreement, neither the Executive nor any of his agents
or representatives, shall, directly or indirectly, publish or otherwise
disclose, or permit others to publish, divulge, disseminate, copy or otherwise
disclose the Company's Trade Secrets, Confidential Information and/or Inventions
as defined above.
8.2.2 Use
Restriction. Executive shall use the Trade Secrets, other Confidential
Information and/or Inventions only for the limited purpose for which they were
disclosed. Executive shall not disclose the Trade Secrets, other Confidential
Information and/or Inventions to any third party without first obtaining written
consent from the CEO and shall disclose the Trade Secrets, other Confidential
Information and/or Inventions only to Employer's
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own
employees having a need know. Executive shall promptly notify the CEO of any
items of Trade Secrets prematurely disclosed.
8.2.3 Surrender
Upon Termination. Upon termination of his employment with Employer for
any reason, Executive will surrender and return to Employer all documents and
materials in his possession or control which contain Trade Secrets, Inventions
and other Confidential Information. Executive shall immediately return to the
Company all lists, books, records, materials and documents, together with all
copies thereof, and all other Company property in his possession or under his
control, relating to or used in connection with the past, present or anticipated
business of the Company, or any affiliate or subsidiary thereof. Executive
acknowledges and agrees that all such lists, books, records, materials and
documents, are the sole and exclusive property of the Company.
8.2.4 Prohibition
Against Unfair Competition. At any time after the termination of his
employment with Employer for any reason, Executive will not engage in
competition with Employer while making use of the Trade Secrets of
Employer.
8.2.5 Patents
and Inventions. The Executive agrees that any inventions made,
conceived or completed by him during the term of his service, solely or jointly
with others, which are made with the Company's equipment, supplies, facilities
or Confidential Information, or which relate at the time of conception or
reduction to purpose of the invention to the business of the Company or the
Company's actual or demonstrably anticipated research and development, or which
result from any work performed by the Executive for the Company, shall be the
sole and exclusive property of the Company. The Executive promises to assign
such inventions to the Company. The Executive also agrees that the Company
shall
have the right to keep such inventions as trade secrets, if the Company chooses.
The Executive agrees to assign to the Company the Executive's rights in any
other inventions where the Company is required to grant those rights to the
United States government or any agency thereof. In order to permit the Company
to claim rights to which it may be entitled, the Executive agrees to disclose
to
the Company in confidence all inventions which the Executive makes arising
out
of the Executive's service and all patent applications filed by the Executive
within one year after the termination of his service.
The
Executive shall assist the Company in obtaining patents on all inventions,
designs, improvements and discoveries patentable by the Company in the United
States and in all foreign countries, and shall execute all documents and do
all
things necessary to obtain letters patent, to vest the Company with full and
extensive title thereto, and to protect the same against infringement by
others.
9. Solicitation
of Employees or Customers.
9.1 Information
About
Other Employees. Executive will be called upon to work closely with
employees of Employer in performing services under this Agreement. All
information about such employees which becomes known to Executive during the
course of his employment with Employer, and which is not otherwise known to
the
public, including compensation or commission structure, is a Trade Secret of
Employer and shall not be used by
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Executive
in soliciting employees of Employer at any time during or after termination
of
his employment with Employer.
9.2 Solicitation
of
Employees Prohibited. During Executive's employment and for one year
following the termination of Executive's employment, Executive shall not,
directly or indirectly ask, solicit or encourage any employee(s) of Employer
to
leave their employment with Employer. Executive further agrees that he shall
make any subsequent employer aware of this non-solicitation
obligation.
9.3 Solicitation
of
Customers Prohibited. For a period of one year following the
termination of Executive's employment, Executive shall not, directly or
indirectly solicit the business of any of Employer's customers in any way
competitive with the business or demonstrably anticipated business of the
Company. Executive further agrees that he shall make any subsequent employer
aware of this non-solicitation obligation.
10. Non-Competition.
During the course of Executive's employment with the Company, Executive shall
not directly or indirectly own any interest in (other than owning less than
5%
of a publicly held company), manage, control, participate in (whether as an
officer, director, employee, partner, agent, representative, volunteer or
otherwise), consult with, render services for or in any manner engage (whether
or not during business hours) anywhere in the Restricted Territories (as defined
below) in any business activity that is in any way competitive with the business
or demonstrably anticipated business of the Company, Further, Executive will
not
during the course of his employment with the Company assist any other person
or
organization in competing or in preparing to compete with any business or
demonstrably anticipated business of the Company anywhere in the Restricted
Territories.
"Restricted
Territories" shall mean any county in the State of California or any other
state
or territory in the United States or any other similar political subdivision
in
any state or foreign country in which the Company has done business or has
actually investigated doing business or where its products are sold or
distributed whether or not for compensation.
11. Unfair
Competition, Misappropriation of Trade Secrets and Violation of
Solicitation/Noncompetition Clauses. Executive acknowledges that
unfair competition, misappropriation of trade secrets or violation of any of
the
provisions contained in paragraphs 8 through 10 would cause irreparable injury
to Employer, that the remedy at law for any violation or threatened violation
thereof would be inadequate, and that Employer shall be entitled to temporary
and permanent injunctive or other equitable relief without the necessity of
proving actual damages.
12. Representation
Concerning Prior Agreements. Executive represents to Employer that he
is not bound by any non-competition and/or non-solicitation agreement that
would
preclude, limit or in any manner affect his employment with Employer. Executive
further represents that he can fully perform the duties of his employment
without violating any obligations he may have to any former employer, including
but not limited to, misappropriating any proprietary information acquired from
a
prior employer. Executive agrees that he will indemnify and hold Employer
harmless from any and all liability and damage, including attorneys' fees and
costs, resulting from any breach of this provision.
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13. Personnel
Policies and Procedures. The Employer shall have the authority to
establish from time to time personnel policies and procedures to be followed
by
its employees. Executive agrees to comply with the policies and procedures
of
the Employer. To the extent any provisions in Employer's personnel policies
and
procedures differ with the terms of this Agreement, the terms of this Agreement
shall apply.
14. Amendments.
No amendment or modification of the terms or conditions of this Agreement shall
be valid unless in writing and signed by the parties hereto.
15. Successors
and Assigns. The rights and obligations of the Employer under this
Agreement shall inure to the benefit of and shall be binding upon the successors
and assigns of Employer. Executive shall not be entitled to assign any of his
rights or obligations under this Agreement.
16. Governing
Law. This Agreement shall be interpreted, construed, governed and
enforced in accordance with the laws of the State of California.
17. Severability.
Each term, condition, covenant or provision of this Agreement shall be viewed
as
separate and distinct, and in the event that any such term, covenant or
provision shall be held by a court of competent jurisdiction to be invalid,
the
remaining provisions shall continue in full force and effect.
18. Survival.
The provisions in paragraphs 8 through 11, 14 through 23, inclusive, of this
Agreement shall survive termination of Executive's employment, regardless of
who
causes the termination and under what circumstances.
19. Waiver.
Neither party's failure to enforce any provision or provisions of this Agreement
shall be deemed or in any way construed as a waiver of any such provision or
provisions, nor prevent that party thereafter from enforcing each and every
provision of this Agreement. A waiver by either party of a breach of provision
or provisions of this Agreement shall not constitute a general waiver, or
prejudice the other party's right otherwise to demand strict compliance with
that provision or any other provisions in this Agreement.
20. Notices.
Any notice required or permitted to be given under this Agreement shall be
sufficient, if in writing, sent by mail to Executive's residence in the case
of
Executive, or hand delivered to the Executive, and, in the case of Employer,
to
the Board of Directors at the principal corporate office.
21. Arbitration.
The parties agree that disputes concerning the terms of this Agreement and
Executive's employment under this Agreement are subject to arbitration in
accordance with the Employee Arbitration Agreement attached hereto as Exhibit
"A" and incorporated by this reference as though fully set forth
herein.
22. Entire
Agreement. Executive acknowledges receipt of this Agreement and agrees
that this Agreement represents the entire agreement with Employer concerning
the
subject matter hereof, and supersedes any previous oral or written
communications, representations, understandings or agreements with Employer
or
any officer or agent thereof through the date the Agreement is executed by
the
parties, except the Employee Arbitration Agreement which is
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incorporated
herein as set forth in paragraph 21 of this Agreement and attached hereto as
Exhibit "A." Executive understands that no representative of the Employer has
been authorized to enter into any agreement or commitment with Executive which
is inconsistent in any way with the terms of this Agreement.
23. Construction.
This Agreement shall not be construed against any party on the grounds that
such
party drafted the Agreement or caused it to be drafted.
24. Counterparts.
This Agreement may be executed simultaneously in two or more counterparts,
each
of which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument. Further, facsimiles of signatures may
be
taken as the actual signatures, and each party agrees to furnish the other
with
documents bearing the original signatures within ten days of the facsimile
transmission.
25. Acknowledgment.
Executive acknowledges that he has been advised by Employer to consult with
independent counsel of his own choice, at his expense, concerning this
Agreement, that he has had the opportunity to do so, and that he has taken
advantage of that opportunity to the extent that he desires. Executive further
acknowledges that he has read and understands this Agreement, is fully aware
of
its legal effect, and has entered into it freely based on his own
judgment.
IN
WITNESS HEREOF, the parties have executed this Agreement as of the date set
forth below.
|
XXXXXXXX
XXXXXXX
|
|
|
Dated:
9-17-07
|
/s/ Xxxxxxxx Xxxxxxx |
| PATRIOT SCIENTIFIC CORPORATION | |
| Dated: 17-Sept. 07 |
By: /s/
Xxxxx X.
Xxxxxx
Name:
Xxxxx X.
Xxxxxx
Title:
President/CEO
|
11
EXHIBIT
A
EXECUTIVE
ARBITRATION AGREEMENT
THIS
ARBITRATION AGREEMENT ("Agreement") is made by and between Patriot Scientific
Corporation ("Employer") and Xxxxxxxx Xxxxxxx ("Executive").
The
purpose of this Agreement is to establish final and binding arbitration for
all
disputes arising out of Executive's relationship with Employer, including
without limitation Executive's employment or the termination of Executive's
employment. Executive and Employer desire to arbitrate their disputes on the
terms and conditions set forth below to gain the benefits of a speedy, impartial
dispute-resolution procedure. Executive and Employer agree to the
following:
2. Claims
Covered by the Agreement. Executive and Employer mutually consent to
the resolution by final and binding arbitration of all claims or controversies
("claims") that Employer may have against Executive or that Executive may have
against Employer or against its officers, directors, partners, employees,
agents, pension or benefit plans, administrators, or fiduciaries, or any
subsidiary or affiliated company or corporation (collectively referred to as
"Employer"), relating to, resulting from, or in any way arising out of
Executive's relationship with Employer, Executive's employment relationship
with
Employer and/or the termination of Executive's employment relationship with
Employer, to the extent permitted by law. The claims covered by this Agreement
include, but are not limited to, claims for wages or other compensation due;
claims for breach of any contract or covenant (express or implied); tort claims;
claims for unfair competition, misappropriation of trade secrets, breach of
fiduciary duty, usurpation of corporate opportunity or similar claims; claims
for discrimination and harassment (including, but not limited to, race, sex,
religion, national origin, age, marital status or medical condition, disability,
sexual orientation, or any other characteristic protected by federal, state
or
local law); claims for benefits (except where an employee benefit or pension
plan specifies that its claims procedure shall culminate in an arbitration
procedure different from this one); and claims for violation of any public
policy, federal, state or other governmental law, statute, regulation or
ordinance.
3. Required
Notice of Claims and Statute of Limitations. Executive may initiate
arbitration by serving or mailing a written notice to the Board of Directors.
Employer may initiate arbitration by serving or mailing a written notice to
Executive at the last address recorded in Executive's personnel file. The
written notice must specify the claims asserted against the other party. Notice
of any claim sought to be arbitrated must be served within the limitations
period established by applicable federal or state law.
4. Arbitration
Procedures.
a. After
demand
for arbitration has been made by serving written notice under the terms of
Section 2 of this Agreement, the party demanding arbitration shall file a demand
for arbitration with the American Arbitration Association ("AAA") in San Diego
County.
EXHIBIT
"A"
b. Except
as
provided herein, all rules governing the arbitration shall be the then
applicable rules set forth by the AAA. If the dispute is employment-related,
the
dispute shall be governed by the AAA's then current version of the national
rules for the resolution of employment disputes. The AAA's then applicable
rules
governing the arbitration may be obtained from the AAA's website which currently
is xxx.xxx.xxx.
c. The
arbitrator shall apply the substantive law (and the law of remedies, if
applicable) of the state in which the claim arose, or federal law, or both,
as
applicable to the claim(s) asserted. The arbitrator shall have exclusive
authority to resolve any dispute relating to the interpretation, applicability,
enforceability or formation of this Agreement, including but not limited to
any
claim that all or any part of this Agreement is void or voidable.
d. Either
party may file a motion for summary judgment with the arbitrator. The arbitrator
is entitled to resolve some or all of the asserted claims through such a motion.
The standards to be applied by the arbitrator in ruling on a motion for summary
judgment shall be the applicable laws as specified in Section 3(c) of this
Agreement.
e. Discovery
shall be allowed and conducted pursuant to the then applicable arbitration
rules
of the AAA. The arbitrator is authorized to rule on discovery motions brought
under the applicable discovery rules.
5. Application
for Emergency Injunctive and/or Other Equitable Relief. Claims by Employer
or Executive for emergency injunctive and/or other equitable relief relating
to
unfair competition and/or the use and/or unauthorized disclosure of trade
secrets or confidential information shall be subject to the then current version
of the AAA's Optional Rules for Emergency Measures of Protection set forth
within the AAA's Commercial Dispute Resolution Procedures. The AAA shall appoint
a single emergency arbitrator to handle the claim(s) for emergency relief.
The
emergency arbitrator selected by the AAA shall be either a retired judge or
an
individual experienced in handling matters involving claims for emergency
injunctive and/or other equitable relief relating to unfair competition and
the
use or unauthorized disclosure of trade secrets and/or confidential
information.
6. Arbitration
Decision. The arbitrator's decision will be final and binding. The
arbitrator shall issue a written arbitration decision revealing the essential
findings and conclusions upon which the decision and/or award is based. A
party's right to appeal the decision is limited to grounds provided under
applicable federal or state law.
7. Place
of Arbitration. The arbitration will be at a mutually convenient location
that must be within 50 miles of Executive's last company employment location.
If
the parties cannot agree upon a location, then the arbitration will be held
at
the AAA's office nearest to Executive's last employment
location.
8. Administrative
Agencies. Nothing in this Agreement is intended to prohibit Employee from
filing a claim or communicating with the United States Equal Employment
Opportunity Commission ("EEOC"), the National Labor Relations Board ("NLRB")
or
the California Department of Fair Employment and Housing ("DFEH").
EXHIBIT
"A"
9. Construction. Should
any portion of this Agreement be found to be unenforceable, such portion will
be
severed from this Agreement, and the remaining portions shall continue to be
enforceable.
10.
Representation,
Fees and Costs. Each party may be represented by an attorney or other
representative selected by the party. Except as otherwise provided for by
statute, the arbitrator shall award reasonable attorneys' fees and costs
(including without limitation, costs for depositions, experts, etc.) to the
prevailing party except that Employer shall be responsible for the arbitrator's
fees and costs, or any fees or costs charged by the AAA, to the extent they
exceed any fee or cost that Executive would be required to bear if the action
were brought in court.
11.
Waiver
of Jury Trial/Exclusive Remedy. EXECUTIVE AND EMPLOYER KNOWINGLY AND
VOLUNTARILY WAIVE ANY CONSTITUTIONAL RIGHT TO HAVE ANY DISPUTE BETWEEN THEM
DECIDED BY A COURT OF LAW AND/OR BY A JURY IN COURT.
12.
Sole
and Entire Agreement. This Agreement expresses the entire Agreement of the
parties and shall supersede any and all other agreements, oral or written,
concerning arbitration. This Agreement is not, and shall not be construed to
create, any contract of employment, express or implied.
13.
Requirements
for Modification or Revocation. This Agreement to arbitrate shall survive
the termination of Executive's employment. It can only be revoked or modified
by
a writing signed by the Chairperson of the Board of Directors of Employer
and Executive that specifically states an intent to revoke or modify this
Agreement.
14. Voluntary
Agreement. EXECUTIVE ACKNOWLEDGES THAT EXECUTIVE HAS CAREFULLY READ THIS
AGREEMENT, UNDERSTANDS ITS TERMS, AND AGREES THAT ALL UNDERSTANDINGS AND
AGREEMENTS BETWEEN EMPLOYER AND EXECUTIVE RELATING TO THE SUBJECTS COVERED
IN
THE AGREEMENT ARE CONTAINED IN IT. EXECUTIVE HAS KNOWINGLY AND VOLUNTARILY
ENTERED INTO THE AGREEMENT WITHOUT RELIANCE ON ANY PROVISIONS OR REPRESENTATIONS
BY EMPLOYER, OTHER THAN THOSE CONTAINED IN THIS AGREEMENT.
EXHIBIT
"A"
EXECUTIVE
FURTHER ACKNOWLEDGES THAT EXECUTIVE HAS BEEN GIVEN THE OPPORTUNITY TO DISCUSS
THIS AGREEMENT WITH EXECUTIVE'S PRIVATE LEGAL COUNSEL AND EXECUTIVE HAS UTILIZED
THAT OPPORTUNITY TO THE EXTENT DESIRED.
|
EXECUTIVE:
|
EMPLOYER:
|
|
PATRIOT
SCIENTIFIC CORPORATION, a Delaware corporation
|
|
| /s/ Xxxxxxxx Xxxxxxx |
By:
/s/ Xxxxx X.
Xxxxxx
|
| Xxxxxxxx Xxxxxxx |
Name:
Xxxxx X. Xxxxxx
|
|
Title:
President/CEO
|
EXHIBIT
"A"
PATRIOT
SCIENTIFIC CORPORATION CFO JOB DESCRIPTION
PRIMARY
RESPONSIBILITIES
|
|
1.
|
Create,
coordinate, and evaluate the financial programs and supporting information
systems of the company to include budgeting, tax planning, real estate,
and conservation of assets.
|
|
|
2.
|
Approve
and coordinate changes and improvements in automated financial and
management information systems for the
company.
|
|
|
3.
|
Oversee
and full responsibility for SEC compliance and timely filings of
quarterly
10 Q's, annual 10K's and all other related SEC required
filings.
|
|
|
4.
|
Establish
a close working relationship with CEO as a right hand person and
work
closely and effectively with the Patriot Board members and committee
groups, in particular the Audit Committee. Retention of outside resources,
ie consultants in connection with financial reporting must be approved
by
the Audit Committee.
|
|
|
5.
|
Ensure
compliance with local, state, and federal budgetary reporting
requirements.
|
|
|
6.
|
Oversee
the approval and processing of revenue, expenditure, and position control
documents, department budgets, mass salary updates, ledger, and account
maintenance and data entry.
|
|
|
7.
|
Coordinate
the preparation of financial statements, financial reports, special
analyses, and information reports.
|
|
|
8.
|
Develop
and implement finance, accounting, billing, and auditing
procedures.
|
|
|
9.
|
Establish
and maintain appropriate internal control
safeguards.
|
|
10.
|
Interact
with CEO and Controller to provide consultative support to planning
initiatives through financial and management information analyses,
reports, and recommendations.
|
|
11.
|
Ensure
records systems are maintained in accordance with generally accepted
auditing standards and GAAP
reporting.
|
|
12.
|
Work
closely with CEO to develop and direct the implementation of strategic
business and/or operational plans, projects, programs, and
systems.
|
|
13.
|
Analyze
cash flow, cost controls, and expenses to guide business leaders.
Analyze
financial statements to pinpoint potential weak
areas.
|
|
14.
|
Establish
and implement short- and long-range departmental goals, objectives,
policies, and operating procedures.
|
|
15.
|
Oversee
financial management of foreign operations to include developing
financial
and budget policies and procedures.
|
|
16.
|
Other
duties as assigned.
|
ADDITIONAL
RESPONSIBILITIES
|
|
1.
|
Represent
the company externally to media, government agencies, funding agencies,
and the general public.
|
|
|
2.
|
Recruit,
train, supervise, and evaluate department
staff.
|
KNOWLEDGE
AND SKILL REQUIREMENTS
|
|
1.
|
Strong
background in SEC and Sarbanes compliance and filings. Experience
in
strategic planning and execution. Knowledge of contracting, negotiating,
and change management. Knowledge of finance, accounting, budgeting,
and
cost control principles including Generally Accepted Accounting
Principles. Knowledge of automated financial and accounting reporting
systems. Knowledge of federal and state financial regulations. Ability
to
analyze financial data and prepare financial reports, statements,
and
projections.
|
|
|
2.
|
Work
requires professional written and verbal communication and interpersonal
skills. Ability to motivate teams to produce quality materials within
tight timeframes and simultaneously manage several projects. Ability
to
participate in and facilitate group
meetings.
|
|
|
3.
|
This
is normally acquired through a combination of the completion of a
Masters
Degree in Finance or Accounting, and no less than ten years of experience
in a senior-level finance or accounting position, and a
CPA.
|
|
|
4.
|
Work
requires willingness to work a flexible
schedule.
|
Acknowledged
Receipt by:
|
/s/
Xxxxxxxx Xxxxxxx
|
9-17-07
|
|
Xxxxxxxx
Xxxxxxx
|
Date
|
SEPARATION
AGREEMENT AND RELEASE OF CLAIMS
In
consideration of the promises, terms, conditions, provisions and covenants
described below, the sufficiency of which consideration is hereby acknowledged,
the parties agree as follows:
1. Parties.
This Separation Agreement and Release of Claims ("Agreement") is made by and
between_______________("Mr._____________") on the one hand and Patriot
Scientific Corporation ("PTSC" or the "Company") on the other hand. Mr. _____and
the Company shall collectively be referred to as the "Parties".
2. Purpose
of Agreement. The purpose of this Agreement is to settle completely and
cause the release of PTSC and all persons and entities being released herein
from every claim or cause of action which Mr. has or may have against PTSC
and
all persons and entities being released herein.
3. Consideration.
In consideration of the covenants and releases given herein, PTSC agrees to
pay
Mr._____ severance equivalent to ___________ months his current base salary,
less standard payroll taxes and deductions (the "Severance Payment").
___________ is in consideration of Mr. _______'s release of all claims other
than Age Discrimination Employment Act of 1967 ("ADEA") claims, given herein.
__________ is in consideration of Mr. ____________'s release of all ADEA claims,
given herein. The Severance Payment will be tendered to Mr.___________ in
installments per the Company's regular payroll schedule eight (8) days after
PTSC has received the original of this Agreement executed by Mr. ___________
without Mr. _____________ having revoked his ADEA release addressed in Paragraph
5 of this Agreement. The parties agree Mr.___________ is not entitled to any
other consideration, compensation or benefits under any employment contract
or
otherwise.
4. Release
of All Claims Except ADEA Claims.
(a) Mr.______for
himself and for his successors, assigns, heirs, executors, administrators and
representatives, in consideration of the covenants contained herein, hereby
releases and discharges PTSC, and each of its past and present officers,
directors, employees, shareholders, agents, predecessors, affiliated entities,
successors, assigns, joint venturers, attorneys, heirs, executors,
administrators and representatives ("Releasees") from any and all claims,
charges and causes of action which Mr. has or may have against PTSC or any
of
the Releasees, accruing or arising on or before the date of this Agreement,
including, (b)but
not
limited to, any claims arising out of or related to Mr. ___________'s employment
with PTSC, PTSC's actions or representations concerning Mr.__________'s
employment, the termination of his employment, the payment of wages, claims
for
breach of contract, breach of implied covenant of good faith and fair dealing,
negligent misrepresentation, fraud, infliction of emotional distress, invasion
of privacy, defamation, employment discrimination in violation of the California
Fair Employment and Housing Act, Title VII
of the Civil Rights Act of 1964, or the Americans with
Disabilities Act or similar state or federal law, violation of public policy,
violation of the California Labor Code, violation of the California Business
and
Professions Code, violation of the Fair Credit Reporting Act, violation of
the
California Consumer Credit Reporting Agencies Act, violation of the California
Investigative Consumer Reporting Agencies
Act
and
violation of constitutional rights. This release provision specifically excludes
any and all loss, liability, claims, demands, causes of action or suits of
any
type arising under the ADEA. Mr._________ 's release of ADEA claims will be
separately addressed in Paragraph 5 of this Agreement. The Parties expressly
acknowledge that PTSC would not enter into this Agreement but for the
representation and warranty of Mr.__________ that he is hereby releasing any
and
all claims of any nature whatsoever, known or unknown, whether statutory or
at
common law, which he now has or could assert directly or indirectly against
any
of the persons or entities being released herein except as expressly reserved
herein.
(b) Mr.____________expressly
agrees that neither he nor his spouse, employees, agents, representatives,
successors, assigns or attorneys will continue and/or institute any legal or
administrative proceedings against any party to this Agreement, or any person
or
entity released in this Agreement, before any court, administrative agency,
arbitrator or any other tribunal whatsoever, by reason of any claim, liability
or cause of action, whether known or unknown, being released
herein.
5. Release
of All ADEA Claims.
(a) This
section of the Agreement exclusively addresses Mr.__________ 's release of
claims arising under federal law involving discrimination on the basis of age
in
employment (age forty and above). This section is provided separately, in
compliance with federal law, including but not limited to the Older Workers'
Benefit Protection Act of 1990, to ensure that Mr. clearly understands his
rights so that any release of age discrimination claims under federal law (the
"ADEA Release") is knowing and voluntary on the part of
Mr._____________
(b) Mr.
________ represents, acknowledges and agrees that he has been advised in
writing, to discuss this Agreement with an attorney, and to the extent, if
any,
that Mr. __________ has desired, Mr.____________ has done so; that
Mr.____________ has been given twenty-one (21) days from receipt of
this Agreement to review and consider this ADEA Release before signing it;
that
Mr. understands that he may use as much of this twenty-one (21) day
period as he wishes prior to releasing the ADEA claims; that no promise,
representation, warranty or agreement not contained herein has been made by
or
with anyone to cause him to sign this Agreement; that this Agreement has been
read and interpreted for him by counsel to the extent desired, and that he
fully
understands and is aware of its meaning, intent, content and legal effect;
and
that he is executing this release voluntarily and free of any duress or
coercion. Mr.__________ further understands and agrees that he is not
waiving any rights or claims under the ADEA which might arise after the date
he
signs this Agreement.
(c) The
Parties acknowledge that for a period of seven (7) days following the execution
of this Agreement, Mr. may revoke the ADEA Release, and the ADEA
Release shall not become effective or enforceable until the revocation period
has expired. This ADEA Release shall become effective eight {8) days after
it
has been signed by the Parties, and in the event the Parties do not sign on
the
same date, then this ADEA Release shall become effective eight (8) days after
the date it is signed by Mr. _________.
(d) In
consideration of the payment to be made to Mr.___________described in Paragraph
3 of this Agreement, which Mr.___________would otherwise not be entitled to
except for signing this Agreement and releasing his ADEA claims, Mr.___________
does hereby unconditionally, irrevocably and absolutely release and discharge
PTSC, its past and present directors, officers, employees, shareholders, agents,
predecessors, affiliated entities, successors, assigns, joint venturers,
attorneys, heirs, executors, administrators and representatives ("Releasees")
from any and all loss, liability, claims, demands, causes of action or suits
of
any type arising under ADEA.
6. Waiver
of Known and Unknown Claims. It is the intention of the parties in executing
this instrument that it shall be effective as a bar to each and every claim,
demand and cause of action herein above specified. In furtherance of this
intention, Mr. has agreed to and does expressly waive any and all
rights and benefits conferred upon him by the provisions of section 1542 of
the
California Civil Code, which provides:
A
general
release does not extend to claims which the creditor does not know or suspect
to
exist in his or her favor at the time of executing the release, which if known
by him or her, must have materially affected this settlement with the
debtor.
Notwithstanding
the provisions of section 1542, this Agreement shall be in full settlement
of
all claims and disputes being released herein, including unknown claims. Having
received advice from counsel to the extent desired, Mr._______ expressly waives
all rights under section 1542, which he fully understands. Mr. _______ waives
all rights which he may have by virtue of Section 1542 and any similar law
of
any state or territory of the United States, or federal law.
7. Future
Employment. Mr._______ agrees that neither PTSC nor any of its affiliates or
related entities are obligated to offer employment to him or to hire him for
any
reason, regardless of the circumstances, at any time on or after the date of
this Agreement. Mr._______ acknowledges that he shall not knowingly apply for
nor accept such employment. Mr. _______acknowledges that any such application
for employment may be denied and he agrees to waive any and all claims arising
out of or related to his application and/or the denial of such
employment.
8. Cooperation.
In further consideration of the promises and covenants described herein,
Mr._______ agrees to assist and cooperate in connection with any dispute between
PTSC and third parties where there are allegations of which Mr. _______ would
have any knowledge based on his relationship with PTSC. Such cooperation
includes but is not limited to appearing as a witness on behalf of PTSC in
any
deposition, trial, arbitration or other dispute resolution forum; and assisting
with the preparation of this defense or prosecution of any such claims.
Mr. shall be entitled to reimbursement of his reasonable out of
pocket expenses incurred as a result of any such cooperation but only as to
those expenses pre-approved by PTSC.
9. No
Admission of Liability. This Agreement is a compromise and settlement of
potential or disputed claims being released herein. This Agreement and the
covenants made in this Agreement do not constitute an admission of liability
on
the part of PTSC or its past or present officers, directors, partners, agents,
affiliated entities, successors, assignees, employees, attorneys or
representatives, or an admission, directly or by implication, that PTSC or
any
of the Releasees have violated any law, rule, regulation, policy or any
contractual right or other obligation owed to any Party. PTSC and the Releasees
specifically deny all allegations of improper or unlawful conduct. PTSC intends
merely to avoid litigation.
10. No
Assignment or Transfer of
Claims. Mr. _____ represents and warrants that
he
has not heretofore assigned, transferred or purported to assign or transfer
to
any other person or entity, any rights, claims or causes of action herein
released and discharged, and that no other person or entity has any interest
in
the matters herein released and discharged, except as expressly stated herein.
Furthermore, Mr._____shall indemnify and hold PTSC, and all persons or entities
released herein, harmless
from and against any rights, claims or causes of action which arise from or
have
been assigned or transferred contrary to the foregoing representations, or
in
violation of the foregoing warranties, and shall hold such persons or entities
harmless from any and all loss, expense and/or liability arising directly or
indirectly out of the breach of any of the foregoing representations or
warranties.
11. Confidentiality.
(a) Mr.
_______warrants and represents that, as of the date of his execution of this
Agreement, he has not disclosed or discussed the terms of this Agreement, either
directly or through others, with any person or entity except his attorney,
PTSC's board members and/or current senior management, members of immediate
family and accountants or other tax advisors.
(b) Mr.
_____
stipulates, agrees and promises that the terms and conditions of this Agreement
(including, but not limited to, the fact and amount of consideration), all
communications relating to this Agreement, and all documents relating thereto
(collectively the "Confidential Matters"), shall not be described, discussed
or
disseminated or caused to be described, discussed, or disseminated in any
manner, either written or oral, directly or indirectly, with any person,
organization, company or entity without the prior written consent of the President of PTSC, except
as
provided herein.
(c) Mr.
_____ stipulates, agrees and promises to avoid any and all publicity
with respect to the Confidential Matters, and specifically stipulates, agrees
and promises not to describe or discuss the Confidential Matters with any member
of the news media, or any other person or entity.
(d) Mr.
_____ hereby stipulates and agrees not to make, induce or attempt to influence
anyone to make, any statement whatsoever, whether written or oral, directly
or
indirectly, to any member of any media, or any other person or entity,
including, but not limited to, statements made or sent on the Internet via
e-mail, chat room or message board, which is derogatory or disparaging with
respect to Releasees or in any way which would reflect upon the legal liability
or responsibility of the Releasees in connection with any of the released
claims, any other Confidential Matters, or any other disparaging comments about
the Releasees. Mr. further agrees and promises not to encourage or
facilitate in any future litigation or claims against any of the
Releasees
(e) In
the
event that Mr. _______ is contacted by any member of any media, or any other
person or entity asking to comment on any Confidential Matters, he stipulates,
agrees and promises that he shall say nothing more the "no comment" and
specifically shall not refer in any other manner to the terms, conditions,
or
amounts paid or to be paid pursuant to the Agreement, or that any amount has
been paid, whether in specific or general terms.
(f) It
shall not
be a violation for Mr. to disclose the Confidential Matters to his
professional legal and tax advisors, or spouse, so long as the advisors and
spouse maintain the confidentiality, or in litigation required to enforce the
terms of this Agreement should Company or its representatives breach the terms
hereof. Nothing in this Paragraph 11 of this Agreement shall be construed as
prohibiting any disclosure of information pursuant to a lawful subpoena, order
of a court or administrative agency or as otherwise required by
law.
(g) The
parties
expressly agree that the provisions of this Paragraph 11 of this Agreement
are of material importance and were a material inducement to PTSC's execution
of
this Agreement. The parties stipulate and agree that the provisions stated
in
this Paragraph 11 of this Agreement are to be liberally construed and that
any
violation of the provisions herein, shall be deemed a material breach of this
Agreement, and in the event Mr. _____________ violates any provision of this
Paragraph 11 of this Agreement, he shall be subject to all available civil
remedies, including, but not limited to, an action for damages and/or injunctive
relief and shall pay for reasonable attorneys' fees and costs incurred by PTSC
in seeking enforcement of the terms of this Paragraph 11, including reasonable
attorneys' fees and costs incurred in recovering damages. Further, since the
actual damages which would result from any breach of this Paragraph 11 are
uncertain and would be extremely difficult to ascertain, Mr. _____ shall pay
the
sum of $25,000 as liquidated and agreed damages for each individual breach
of
this Paragraph. The Parties also agree that the prevailing party will pay for
reasonable attorneys' fees and costs incurred by the other party in seeking
enforcement of the terms of this Paragraph 11, including reasonable attorneys'
fees and costs incurred in recovering said liquidated and agreed
damages.
12. Non-Solicitation
of Employees. Mr. agrees not to solicit or attempt to solicit any
employees, consultants, or independent contractors of the Company to terminate
their existing employment, consulting or contractor relationships with the
Company for a period of one year from the date he executes this
Agreement.
13. No
External or Prior Representations. Mr. represents and warrants
that he is not relying, and has not relied, on any representations or
statements, verbal or written, made by any other party with regard to his rights
or asserted rights or the execution and terms of this Agreement, except as
provided herein. He has consulted with an attorney to the extent he has desired
regarding the terms of this Agreement and has entered into this Agreement
freely, willingly and without any coercion or duress.
14. Entire
Agreement. This Agreement constitutes the entire written agreement of
compromise and settlement between the parties. There are no other agreements,
whether oral or written, modifying its terms. This Agreement supersedes any
and
all prior written or oral agreements or negotiations between the parties, except
the restrictive covenants stated in paragraphs through of
Mr. 's Employment Agreement, dated _______ provisions of the
Proprietary Information, Inventions and Non-Solicitation Agreement previously
signed by Mr. , remain in full force and effect, and are hereby incorporated
by
this reference as though fully set forth herein. Copies of these respective
agreement are attached as Exhibits "A" and "B" hereto. In the event there is
any
discrepancy between this Agreement and the attached Exhibits, the provisions
of
this Agreement shall govern. The terms of this Agreement can only be modified
by
a writing signed by the Parties expressly stating that such modification is
intended.
15. Cooperation
in Executing Settlement Documentation. The Parties to this Agreement shall
execute any and all further documents that may be required to effectuate the
purposes of this Agreement.
16. Binding
on
Successors. This Agreement shall be binding upon and shall inure to the
benefit of the Parties hereto and to their respective representatives,
successors, heirs, agents and assigns.
17. Counterparts.
This Agreement may be executed in counterparts, and if so executed each such
counterpart shall have the force and effect of an original.
18. Severability.
The invalidity of any provision of this Agreement as determined by a court
of
competent jurisdiction shall in no way affect the validity of any other
provision hereof.
19. Waiver.
No
breach of any provision of this Agreement can be waived unless in writing.
Waiver of any one breach shall not be deemed to be a waiver of any other breach
of the same or any other provision of this Agreement.
20. Construction.
This Agreement shall not be interpreted for or against any party on the basis
that such party or its legal representative caused part or all of this Agreement
to be drafted.
21. Section
Headings. The section headings of this Agreement are intended solely for
convenience of reference and shall not in any manner amplify, limit, modify
or
otherwise be used in the interpretation of any of the provisions
hereof.
22. Arbitration. In
the event of any dispute between Mr. _______ and PTSC concerning any aspect
of
this Agreement, all such disputes shall be resolved by binding arbitration
before a single neutral arbitrator in San Diego, California. The arbitrator
shall be selected from the American Arbitration Association according to its
procedures. All rules governing the arbitration shall be the rules set forth
in
the American Arbitration Association. The Parties shall bear their own costs
and
attorneys' fees incurred in any such action, except as provided in Paragraph
11,
above.
23. Venue.
The parties to this Agreement expressly agree that the only proper venue for
any
action arising out of a breach of this Agreement shall be in San Diego County,
California. The parties to this Agreement expressly agree that the laws of
the
State of California will control all issues arising in such action.
24 Governing
Law, This
Agreement shall be construed in accordance with, and be deemed governed by,
the
laws of the State of California.
WE,
THE
UNDERSIGNED, HAVE READ THE FOREGOING AND, HAVING BEEN ADVISED BY OUR COUNSEL
TO
THE EXTENT DESIRED, FULLY UNDERSTAND AND AGREE TO ITS TERMS.
DATED:_____________,
20__
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________________
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|
|
[Employee
Name]
|
|
|
DATED:_______
__, 20__
|
Patriot
Scientific Corporation
|
|
By:_____________________
|
|
|
Title:____________________
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