EMPLOYMENT AGREEMENT
Exhibit 10.2
This Employment Agreement is entered into as of November 1, 2000 (the “Effective Date”),
by and between Xxxxxxxxx.xxx Sales, Inc., a California corporation (the “Company”), with principal
corporate offices at 000 X. Xx Xxxxxx Xxxx, Xxxxx 000, Xxxxxxxx Xxxx, XX 00000, and Xxxxxx X.
Xxxxxxx, whose address is xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx (“Employee”). The Company
and Employee are collectively referred to herein as “the Parties.”
WHEREAS, the Company desires to retain Employee as Vice President Engineering, and Employee
desires to perform such service for the Company, on the terms and conditions as set forth herein;
NOW, THEREFORE, in consideration of the promises and mutual covenants herein contained, and
other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged,
it is mutually agreed by the parties as follows:
1. Duties and Scope of Employment.
(a) Position. Employee shall be employed as Vice President Engineering.
(b) Duties. During the term of Employee’s employment with the Company, Employee
shall devote her full time, skill and attention to her duties and responsibilities, which
Employee shall perform faithfully, diligently and competently, and Employee shall use her
best efforts to further the business of the Company. During the term of the Agreement,
Employee agrees not to actively engage in any other employment, occupation or consulting
activity for any direct or indirect remuneration without the prior approval of the Board,
except that this provision shall not be interpreted to prohibit Employee from involvement in
any charitable or community activity/organization that he is currently involved in and that
does not materially interfere with her ability to perform her duties under this Agreement.
Employee shall report to Chief Executive Officer. Employee shall be permitted, to the extent
such activities do not materially and adversely affect the ability of Employee to fully
perform her duties and responsibilities hereunder, to (i) manage Employee’s personal,
financial and legal affairs, (ii) serve on civic or charitable boards or committees, and
(iii) with the consent of the Board of Directors (which consent shall not be unreasonably
withheld), serve as a member of the board of directors of any noncompeting business.
2. Nature of Employment. Employee agrees not to leave or discontinue her employment
with the Company during the first three (3) months of her employment. Similarly, the Company
agrees not to terminate Employee during the first three (3) months of employment with the Company,
except for cause as defined in paragraph 2(b). After the three month period has ended, Employee
will become an “at-will” employee which means that the employment relationship may be terminated at
any time, with or without cause, at the option of either the Company or Employee, upon two weeks
written notice to the other party.
(a) Termination by Company without Cause. If Employee is terminated by the
Company without Cause (as defined in paragraph 2(b)) after the initial three months of
employment, Employee shall receive her salary and benefits earned through the date of
termination.
(b) Termination for Cause. If Employee is terminated for “Cause” as defined
herein at any time, Employee will receive only payment of her salary and benefits through the
date of termination. For purposes of this Agreement, “Cause” is defined as (i) gross
misconduct by Employee that is materially injurious to the Company’s business; (ii) the
commission by Employee of a felony; or (3) the willful failure or refusal of the Employee,
following receipt of an explicit directive from the Company, to comply with the material
terms of this Agreement.
3. Compensation and Fringe Benefits
(a) Base Salary. Employee will receive a base salary at the annualized rate of
$120,000.00 (the “Base Salary”), which shall be paid periodically in accordance with normal
Company payroll practices and subject to the usual and applicable required withholding.
Employee understands and agrees that neither her job performance nor promotions,
commendations, bonuses or the like from the Company give rise to or in any way serve as the
basis for modification, amendment, or extension, by implication or otherwise, of this
Agreement.
(b) Productivity Bonus Plan. In addition to the Base Salary, Employee shall participate
in the company’s Productivity Bonus Plan. A copy of the bonus plan is attached.
(c) Vacation and Holiday Pay. Employee shall receive two weeks of paid vacation per
year, which accrues over the course of the year. In addition, the Company provides eight (8)
paid holidays each year, along with two (2) “floating holidays” which can be used by Employee
at any time.
(d) Health Insurance. The Company shall pay Employee up to $600.00 per month (upon
submission of receipts or other proof of payment) as reimbursement for the costs of
Employee’s health insurance.
(e) Other Benefits. Employee will be entitled to participate in or receive such
benefits under the Company’s employee benefit plans and policies and such other benefits
which may be made available as in effect from time to time and as are provided to similarly
situated employees of the Company, subject in each case to the generally applicable terms and
conditions of the plans and policies in question.
4. Expenses. The Company will pay or reimburse Employee for reasonable travel,
entertainment or other expenses incurred by Employee in the furtherance of or in connection with
the performance of Employee’s duties hereunder in accordance with the Company’s established
policies.
5. Certain Covenants.
(a) Intellectual Property Rights.
(i) Employee agrees that the Company will be the sole owner of any and all of
Employee’s “Discoveries” and “Work Product,” hereinafter defined, made during the term
of her employment with the Company, whether pursuant to this Agreement or otherwise.
For purposes of this Agreement, “Discoveries” means all inventions, discoveries,
improvements, and copyrightable works (including, without limitation, any information
relating to the Company’s software products, source code, know-how, processes, designs,
algorithms, computer programs and routines, formulae, techniques, developments or
experimental work, work-in-progress, or business trade secrets) made or conceived or
reduced to practice by Employee during the term of her employment by the Company,
whether or not potentially patentable or copyrightable in the United States or
elsewhere. For purposes of this Agreement, “Work Product” means any and all work
product relating to Discoveries.
(ii) Employee shall promptly disclose to the Company all Discoveries and Work
Product. All such disclosures must include complete and accurate copies of all source
code, object code or machine-readable copies, documentation, work notes, flow-charts,
diagrams, test data, reports, samples, and other tangible evidence or results
(collectively, “Tangible Embodiments”) of such Discoveries or Work Product. All
Tangible Embodiments of any Discoveries or Work Project will be deemed to have been
assigned to the Company as a result of the act of expressing any Discovery or Work
Product therein.
(iii) Employee hereby assigns and agrees to assign to the Company all of her
interest in any country in any and all Discoveries and Work Product, whether such
interest arises under patent law, copyright law, trade-secret law, semiconductor chip
protection law, or otherwise. Without limiting the generality of the preceding
sentence, Employee hereby authorizes the Company to make any desired changes to any
part of any Discovery or Work Product, to combine it with other materials in any manner
desired, and to withhold Employee’s identity in connection with any distribution or use
thereof alone or in combination with other materials. This assignment and assignment
obligation applies to all Discoveries and Work Product arising during Employee’s
employment with the Company (or its predecessors), whether pursuant to this Agreement
or otherwise. Employee’s agreement to assign to the Company any of her rights as set
forth in this Section 5(a)(iii) shall not apply to any invention that qualifies fully
under the provisions of California Labor Code Section 2870, where no equipment,
supplies, facility or trade secret information of the Company was used and that was
developed entirely upon Employee’s own time, and (i) that does not relate to Company
business or to the Company’s actual or anticipated research or development, or (ii)
that does not result from any work performed by Employee for the Company.
(iv) At the request of the Company, Employee shall promptly and without additional
compensation execute any and all patent applications, copyright registration
applications, waivers of moral rights, assignments, or other
instruments that the Company deems necessary or appropriate to apply for or obtain
Letters Patent of the United States or any foreign country, copyright registrations or
otherwise to protect the Company’s interest in such Discovery and Work Product, the
expenses for which will be borne by the Company. Employee hereby irrevocably
designates and appoints the Company and its duly authorized officers and agents as her
agents and attorneys-in-fact to, if the Company is unable for any reason to secure
Employee’s signature to any lawful and necessary document required or appropriate to
apply for or execute any patent application, copyright registration application, waiver
of moral rights, or other similar document with respect to any Discovery and Work
Product (including, without limitation, renewals, extensions, continuations, divisions,
or continuations in part), (i) act for and in her behalf, (ii) execute and file any
such document, and (iii) do all other lawfully permitted acts to further the
prosecution of the same legal force and effect as if executed by him; this designation
and appointment constitutes an irrevocable power of attorney coupled with an interest.
(v) To the extent that any Discovery or Work Product constitutes copyrightable or
similar subject matter that is eligible to be treated as a “work made for hire” or as
having similar status in the United States or elsewhere, it will be so deemed. This
provision does not alter or limit Employee’s other obligations to assign intellectual
property rights under this Agreement.
(vi) The obligations of Employee set forth in this Section 5 (including, without
limitation, the assignment obligations) will continue beyond the termination of
Employee’s employment with respect to Discoveries and Work Product conceived or made by
Employee alone or in concert with others during Employee’s employment with the Company,
whether pursuant to this Agreement or otherwise. Those obligations will be binding
upon Employee, her assignees permitted under this Agreement, executors, administrators,
and other representatives.
(b) Exposure to Proprietary Information.
(i) As used in this Agreement, “Proprietary Information” means all information of
a business or technical nature that relates to the Company including, without
limitation, all information about software products whether currently released or in
development, all inventions, discoveries, improvements, copyrightable work, source
code, know-how, processes, designs, algorithms, computer programs and routines,
formulae and techniques, and any information regarding the business of any customer or
supplier of the Company or any other information that the Company is required to keep
confidential. Notwithstanding the preceding sentence, the term “Proprietary
Information” does not include information that is or becomes publicly available through
no fault of Employee, or information that Employee learned prior to the Effective Date.
(ii) In recognition of the special nature of her employment under this Agreement,
including her special access to the Proprietary Information, and in consideration of
her employment pursuant to this Agreement, Employee agrees to the covenants and
restrictions set forth in Section 5 of this Agreement.
(c) Use of Proprietary Information; Restrictive Covenants.
(i) Employee acknowledges that the Proprietary Information constitutes a
protectible business interest of the Company, and covenants and agrees that during the
term of her employment, whether under this Agreement or otherwise, and after the
termination of such employment, he will not, directly or indirectly, disclose, furnish,
make available or utilize any of the Proprietary Information, other than in the proper
performance of her duties for the Company.
(ii) Employee will not, during the term of this Agreement or, solely with respect
to clauses 2 and 3 of this subparagraph (ii), for a period of one year thereafter (the
“Restricted Period”), anywhere within the United States (the “Restricted Territory”),
directly or indirectly (whether as an owner, partner, shareholder, agent, officer,
director, employee, independent contractor, consultant, or otherwise):
1. perform services for, or engage in, any business that develops or sells
products or services which are competitive with any products or services sold or
developed by the Company for which Employee has provided any assistance in
planning, development, marketing, training, support, or maintenance during the
period of Employee’s employment with the Company (the “Products”);
2. except on behalf of the Company, solicit any person or entity who is, or
was at any time during the twelve-month period immediately prior to the
termination of Employee’s employment with the Company, a customer of the Company
for the sale of the Products or any product or service of a type then sold by the
Company for which Employee provided any assistance in planning, development,
marketing, training, support, or maintenance; or
3. solicit for employment any person who is, or was at any time during the
twelve-month period immediately prior to the termination of Employee’s employment
with the Company, an employee of the Company.
(d) Scope/Severability. The Parties acknowledge that the business of the Company is
and will be national and international in scope and thus the covenants in this Section 5 would be
particularly ineffective if the covenants were to be limited to a particular geographic area of the
United States. If any court of competent jurisdiction at any time deems the Restricted Period
unreasonably lengthy, or the Restricted Territory unreasonably extensive, or any of the covenants
set forth in this Section 5 not fully enforceable, the other provisions of this Section 5, and this
Agreement in general, will nevertheless stand and to the full extent consistent with law continue
in full force and effect, and it is the intention and desire of the parties that the court treat
any provisions of this Agreement which are not fully enforceable as having been modified to the
extent deemed necessary by the court to render them reasonable and enforceable and that the court
enforce them to such extent (for example, that the Restricted Period be deemed to be the longest
period permissible by law, but not in excess of the length provided for in Section 5(c), and the
Restricted Territory be deemed to comprise the largest territory permissible by law under the
circumstances).
(e) Return of Company Materials upon Termination. Employee acknowledges that all
records, documents, and Tangible Embodiments containing or of Proprietary Information prepared by
Employee or coming into her possession by virtue of her employment by the Company are and will
remain the property of the Company. Upon termination of her employment with the Company, Employee
shall immediately return to the Company all such items in her possession and all copies of such
items.
6. Equitable Remedies.
(a) Employee acknowledges and agrees that the agreements and covenants set forth in Sections
5(a), (b), (c), (d) and (e) are reasonable and necessary for the protection of the Company’s
business interests, that irreparable injury will result to the Company if Employee breaches any of
the terms of said covenants, and that in the event of Employee’s actual or threatened breach of any
such covenants, the Company will have no adequate remedy at law. Employee accordingly agrees that,
in the event of any actual or threatened breach by him of any of said covenants, the Company will
be entitled to immediate injunctive and other equitable relief, without bond and without the
necessity of showing actual monetary damages. Nothing in this Section 6 will be construed as
prohibiting the Company from pursuing any other remedies available to it for such breach or
threatened breach, including the recovery of any damages that it is able to prove.
(b) Each of the covenants in Sections 5(a), (b), (c), (d) and (e) will be construed as
independent of any other covenants or other provisions of this Agreement.
(c) In the event of any judicial determination that any of the covenants in Sections 5(a),
(b), (c), (d), and (e) are not fully enforceable, it is the intention and desire of the parties
that the court treat said covenants as having been modified to the extent deemed necessary by the
court to render them reasonable and enforceable, and that the court enforce them to such extent.
7. Assignment. This Agreement shall be binding upon and inure to the benefit of (a)
the heirs, executors and legal representatives of Employee upon Employee’s death and (b) any
successor of the Company. Any such successor of the Company shall be deemed substituted for the
Company under the terms of this Agreement for all purposes. As used herein, “successor” shall
include any person, firm, corporation or other business entity which at any time, whether by
purchase, merger or otherwise, directly or indirectly, acquires all or substantially all of the
assets or business of the Company. None of the rights of Employee to receive any form of
compensation payable pursuant to this Agreement shall be assignable or transferable except through
a testamentary disposition or by the laws of descent. Any attempted assignment, transfer,
conveyance or other disposition (other than as aforesaid) of any interest in the rights of Employee
to receive any form of compensation hereunder shall be null and void.
8. Notices. All notices, requests, demands and other communications called for
hereunder shall be in writing and shall be deemed given if delivered personally, one (1) day after
mailing via Federal Express overnight or a similar overnight delivery service, or three (3) days
after being mailed by registered or certified mail, return receipt requested, prepaid and addressed
to the parties or
their successors in interest at the addresses listed above, or at such other addresses as the
parties may designate by written notice in the manner aforesaid.
9. Severability. In the event that any provision hereof becomes or is declared by a
court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue
in full force and effect without said provision.
10. Entire Agreement. This Agreement, and the Stock Option Agreement, represent the
entire agreement and understanding between the Company and Employee concerning Employee’s
employment relationship with the Company, and supersede in their entirety any and all prior
agreements and understandings concerning Employee’s employment relationship with the Company.
11. Resolution of Disputes Regarding Employment.
(a) The Parties agree to submit any dispute or controversy arising out of, relating to, or in
connection with this Agreement, or the interpretation, validity, construction, performance, breach,
or termination thereof, to mediation. The Parties shall mutually select the mediator and shall
equally pay for the costs of the mediator.
(a) If and only if a mediation is unsuccessful, and the dispute or controversy is not resolved
within 30 days after a mediation, either party may submit the matter to binding arbitration, to the
extent permitted by law, to be held in or near San Jose, California in accordance with the National
Rules for the Resolution of Employment Disputes then in effect of the American Arbitration
Association (the “Rules”). The arbitrator may grant injunctions or other relief in such dispute or
controversy. The decision of the arbitrator shall be final, conclusive and binding on the parties
to the arbitration. Judgment may be entered on the arbitrator’s decision in any court having
jurisdiction. The arbitrator may award the prevailing party in any such attorneys’ fees and costs
incurred in connection therewith.
(b) The arbitrator shall apply California law to the merits of any dispute or claim, without
reference to rules of conflict of law. Employee hereby expressly consents to the personal
jurisdiction of the state and federal courts located in Santa Xxxxx County, California or the
Northern District of California for any action or proceeding arising from or relating to this
Agreement and/or relating to any arbitration in which the Parties are participants.
(c) Employee understands that nothing in this Section modifies Employee’s at-will status.
Either the Company or Employee can terminate the employment relationship at any time, with or
without cause, subject only to the restrictions set forth in Section 2 above.
(d) Employee has read and understands Section 11, which discusses arbitration. employee
understands that by signing this agreement, employee agrees to submit any future claims arising out
of, relating to, or in connection with this agreement, or the interpretation, validity,
construction, performance, breach, or termination thereof to binding arbitration to the extent
permitted by law, and that this arbitration clause constitutes a waiver of employee’s right to a
jury trial and relates to the resolution of all disputes relating to all aspects of the
employer/employee relationship, including but not limited to, the following claims:
(i) Any and all claims for wrongful discharge of employment; breach of contract,
both express and implied; breach of the covenant of good faith and fair dealing, both
express and implied; negligent or intentional infliction of emotional distress;
negligent or intentional misrepresentation; negligent or intentional interference with
contract or prospective economic advantage; and defamation;
(ii) Any and all claims for violation of any federal state or municipal statute,
including, but not limited to the California Fair Employment and Housing Act, the Civil
Rights Act of 1991, the Age Discrimination in Employment Act of 1967, the Americans
with Disabilities Act of 1990, and the Fair Labor Standards Act;
(iii) Any and all claims arising out of any other laws and regulations relating to
employment or employment discrimination.
(e) The Parties may apply to any court of competent jurisdiction for a temporary restraining
order, preliminary injunction, or other interim or conservatory relief, as necessary, without
breach of this arbitration agreement and without abridgment of the powers of the arbitrator.
12. No Oral Modification, Cancellation or Discharge. This Agreement may only be
amended, canceled or discharged in writing signed by Employee and the Company.
13. Governing Law. This Agreement shall be governed by the internal substantive laws,
but not the choice of law rules, of the State of California.
14. Acknowledgment. Employee acknowledges that he has had the opportunity to discuss
this matter with and obtain advice from her private attorney, has had sufficient time to, and has
carefully read and fully understands all the provisions of this Agreement, and is knowingly and
voluntarily entering into this Agreement,
IN WITNESS WHEREOF, the undersigned have executed this Agreement on the respective dates set
forth below.
| COMPANY: | ||||||
| XXXXXXXXX.XXX SALES, INC. | ||||||
| By: | ||||||
| Title: | ||||||
| Date: | ||||||
| EMPLOYEE: | ||||||
| Xxxxxx X. Xxxxxxx | ||||||
| Date: | ||||||
