Exhibit 10.3
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of the 25th day of October, 1999 between
Aladdin Systems Holdings, Inc., a Nevada corporation with its principal offices
at 000 Xxxxxxxxx, Xxxxxxxxxxx, Xxxxxxxxxx (the "Company") and Xxxxxx Xxxxxx, an
individual residing at c/o Aladdin Systems 000 Xxxxxxxxx, Xxxxxxxxxxx,
Xxxxxxxxxx (the "Employee").
In consideration of their mutual promises and covenants set forth herein,
and intending to be legally bound hereby, Company and Employee agree as follows:
1. Employment. The Company hereby employs the Employee and the Employee
accepts such employment on the terms and conditions hereinafter set forth.
2. Term. The term of this Agreement shall begin on October 25, 1999 and
shall terminate on October 24, 2002, unless sooner terminated in accordance with
Paragraph 7 below.
3. Duties. The Employee is engaged herein as President and agrees to
perform the duties and services incident to that position and such other or
further duties and services of a similar nature as may be reasonably required of
him by the Board of Directors of the Company or the Board's designee. Employee
shall at all times be subject to the supervision of the Board of Directors of
the Company and of such other person as the Board may designate.
The Employee shall devote his full business time, attention, energies and
best efforts to the performance of his duties hereunder and to the promotion of
the business and interests of the Company and of any corporate subsidiaries or
affiliated companies. The foregoing shall not be construed, however, as
preventing the Employee from (a) investing his assets in the operations of the
business in which such investment is made and provided such business (i) is not
in competition with the Company or, (ii) if in competition, such business has a
class of securities registered under the Securities Exchange Act of 1934 and the
interest of Employee therein is solely that of an investor owning not more than
10% of any class of the outstanding equity securities of such business or (b)
from serving on the Board of Directors of any company which does not compete
with the Company or (c) providing consulting services to any company which does
not compete with the Company provided that the providing of such services does
not materially interefere with the performance of Employee duties hereunder.
4. Compensation; Expenses.
(a) Base Salary. The Employee shall be paid a salary at the rate of
not less than $150,000.00 per year (the "Base Salary"). The Base Salary shall be
paid in installments in arrears in accordance with the Company's regular payroll
practices. The Company may, at its discretion,
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increase the Employee's Base Salary and his other compensation provided for
herein. Employee shall be entitled to annual increases in Base Salary as
determined by the Board of Directors.
(b) Fringe Benefits.
(i) The Employee shall be entitled to participate in all
insurance, vacation and other fringe benefit programs of the Company to the
extent and on the same terms and conditions as are accorded to other management
employees of the Company, provided, however, that nothing herein shall be deemed
to require grants or awards to Employee under any benefit plans which provide
for awards or grants at the discretion of the Board of Directors or of any
committee or administrator, and that entitlement to vacations shall be governed
solely by clause (ii) of this subparagraph (b).
(ii) The Employee shall be entitled in each calendar year
commencing with 1999 to a vacation in accordance with Aladdin's standard
vacation policy of not less than three (3) weeks (pro rated during 1999),
without loss of or reduction in his compensation. Each vacation shall be taken
by the Employee at such time or times as agreed upon by the Company and
Employee. Any portion of Employee's vacation not used during any calendar year
shall be carried forward, provided that Employee may not take more than six (6)
weeks paid vacation during any calendar year.
(c) Business Expenses. The Company will pay, or reimburse the
Employee, for all ordinary and reasonable out-of-pocket business expenses
incurred by Employee in connection with his performance of services hereunder
during the Employment Term in accordance with the Company's expense
authorization and approval procedures then in effect upon presentation to the
Company of an itemized account and written proof of such expenses.
(d) Options. Employee shall be entitled to receive options and
other equity based incentives, pursuant to the Company's 1999 Long Term
Incentive Program, as and if determined by the Board of Directors.
(e) Entire Compensation. The compensation provided for in this
Agreement is in full payment of the services to be rendered by the Employee to
the Company hereunder.
5. Death or Total Disability of the Employee.
(a) Death. In the event of the death of the Employee during the term of
this Agreement, this Agreement shall terminate effective as of the date of the
Employee's death, and the Company shall not have any further obligation or
liability hereunder except that the Company shall pay to Employee's designated
beneficiary or, if none, his estate, the portion, if any, of the Employee's Base
Salary for the period up to the Employee's date of death which remains unpaid.
(b) Total Disability. In the event of the Total Disability (as that term
is hereinafter defined) of the Employee, the Company shall have the right to
terminate the Employee's employment hereunder by giving the Employee 10 days'
written notice thereof and, upon expiration of such 10-day period, the Company
shall not have any further obligation or liability under this Agreement except
that the Company shall pay to the Employee the portion, if any, of the
Employee's Base Salary for the period up to the date of termination which
remains unpaid, provided that if the Employee,
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during any period of disability, receives any periodic payments representing
lost compensation under any health and accident policy or under any salary
continuation insurance policy, the premiums for which have been paid by the
Company, the amount of Base Salary that the Employee would be entitled to
receive from the Company during such period of disability shall be decreased by
the amounts of such payments.
The term "Total Disability," when used herein, shall mean a mental,
emotional or physical condition which either (i) has rendered the Employee for a
period of 120 consecutive days, or for a total of 180 days during any period of
24 consecutive months, during the term of this Agreement, or (ii) in the
reasonable opinion of the Company is expected to render the Employee, for a
period of 4 months, unable or incompetent to carry out, on a substantially
full-time basis, the job responsibilities he held or tasks that he was assigned
at the time the disability was incurred. The Employee agrees, in the event of
any dispute as to the determination made pursuant to this paragraph, to submit
to a physical or other examination by a licensed physician selected by the
Company, the cost of which examination shall be paid by the Company.
Any question as to the existence of the Disability of the Employee as to
which the Company and the Employee cannot agree shall be determined in writing
by a qualified independent physician mutually acceptable to the Employee and the
Company. If the Employee and the Company cannot agree as to a qualified
independent physician, each shall appoint a physician and those two physicians
shall select a third who shall make such termination.
6. Termination of Employment. In addition to termination pursuant to
paragraph 5, the Company may discharge the Employee and thereby terminate his
employment hereunder for the following reasons ("For Cause"): (i) habitual
intoxication which materially affects the Employee's performance; (ii) drug
addiction; (iii) conviction of a felony adversely affecting the Company or the
Employee's ability to perform his duties hereunder; (iv) adjudication as an
incompetent; (v) misappropriation of corporate funds or other acts of
dishonesty; or (vi) the Employee's breach of this Agreement in any other
material respect.
In the event that the Company shall discharge the Employee pursuant to
this paragraph 6, the Company shall not have any further obligations or
liability under this Agreement.
In the event of either a breach of this Agreement by the Company or a
change in control of the Company, as defined below, at Employee's option,
Employee shall have the right to terminate this Agreement. Upon such election to
terminate by Employee: (a) the provisions of Section 8 herein shall be deemed
terminated and (b) Employee shall receive a lump sum payment from the Company
which shall equal to (i) the total of Employee's salary plus all incentive
compensation for the remaining portion of the term of this Agreement, plus (ii)
the cash value of all benefits which would have been received by Employee for
the remaining portion of the term of this Agreement, plus (ii) the cash value of
all unexercised stock options (whether or not vested) or the cashless exercise
value thereof. For the purposes of this Section, a "change in control of the
Company" shall be deemed to occur upon the transfer of ownership of 35% or more
of the voting control of the Company.
7. Non-Disclosure.
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(a) Non-Disclosure. The Employee recognizes and acknowledges that he
will have access to certain confidential information of the Company and that
such information constitutes valuable, special and unique property of the
Company. The Employee agrees that he will not, for any reason or purpose
whatsoever, during or after the term of his employment, use any of such
confidential information or disclose any of such confidential information to any
party without express authorization of the Company, except as necessary in the
ordinary course of performing his duties hereunder. The obligation of
confidentiality imposed by this subparagraph shall not apply to information
which appears in issued patents or printed publications or which otherwise
becomes generally known in the industry through no act of the Employee in breach
of this Agreement.
(b) Inventions, Designs and Product Developments. All inventions,
discoveries, concepts, improvements, formulas, processes, devices, methods,
innovations, designs, ideas and product developments (collectively, the
"Developments"), developed or conceived by Employee, solely or jointly with
others, whether or not patentable or copyrightable, at any time during the
Employment Term or within one year after the termination hereof and which relate
to the actual or planned business activities of the Company and all of the
Employee's right, title and interest therein, shall be the exclusive property of
the Company. The Employee hereby assigns, transfers and conveys to the Company
all of his right, title and interest in and to any and all such Developments.
Employee shall disclose fully, as soon as practicable and in writing, all
Developments to the Board of Directors of the Company. At any time and from time
to time, upon the request of the Company, the Employee shall execute and deliver
to the Company any and all instruments, documents and papers, give evidence and
do any and all other acts which, in the opinion of counsel for the Company, are
or may be necessary or desirable to document such transfer or to enable the
Company to file and prosecute applications for and to acquire, maintain and
enforce any and all patents, trademark registrations or copyrights under United
States or foreign law with respect to any such Developments or to obtain any
extension, validation, reissue, continuance or renewal of any such patent,
trademark or copyright. The Company will be responsible for the preparation of
any such instruments, documents and papers and for the prosecution of any such
proceedings and will reimburse the Employee for all reasonable expenses the
Employee incurs upon authorization of the Board of Directors of the Company.
8. Non-competition. The Employee agrees that during the term of this
agreement and for a period of one (1) year thereafter, the Employee shall not,
unless acting pursuant hereto or with the prior written consent of the Board of
Directors of the Company, directly or indirectly own, manage, operate, finance,
join, control or participate in the ownership, management, operation, financing
or control of, or be connected as an officer, director, employee, partner,
principal, agent, representative, consultant or otherwise with any business or
enterprise engaged in the business of publishing computer software which
competes with the products of the Company;
provided, however, that this provision shall not be-construed to prohibit
the ownership by the Employee of not more than 10% of any class of the
outstanding equity securities of any corporation which is engaged in any of the
foregoing businesses having a class of securities registered pursuant to the
Securities Exchange Act of 1934. In the event that the provisions of this
Section should ever be adjudicated to exceed the time, geographic, service or
product limitations permitted by applicable law in any jurisdiction, then such
provisions shall be deemed reformed in such jurisdiction to the maximum time,
geographic, service or product limitations permitted by applicable law.
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9. Equitable Relief; Survival.
(a) The Employee acknowledges that the restrictions contained in
paragraphs 7(a), 7(b) and 8 hereof are, in view of the nature of the business of
the Company, reasonable and necessary to protect the legitimate interests of the
Company, and that any violation of any provisions of those Sections will result
in irreparable injury to the Company. The Employee also acknowledges that the
Company shall be entitled to temporary and permanent injunctive relief, without
the necessity of proving actual damages, and to an equitable accounting of all
earnings, profits and other benefits arising from any such violation, which
rights shall be cumulative and in addition to any other rights or remedies to
which the Company may be entitled. In the event of any such violation, the
Company shall be entitled to commence an action for temporary and permanent
injunctive relief and other equitable relief in any court of competent
jurisdiction and Employee further irrevocably submits to the jurisdiction of any
California State court or Federal court sitting in the Northern District of
California over any suit, action or proceeding arising out of or relating to
paragraph 7 or 8. The Employee hereby waives, to the fullest extent permitted by
law, any objection that he may now or hereafter have to such jurisdiction or to
the venue of any such suit, action or proceeding brought in such a court and any
claim that such suit, action or proceeding has been brought in any inconvenient
forum. Effective service of process may be made upon the Employee by mail under
the notice provisions contained in paragraph 12 hereof.
(b) Survival of Covenants. The provisions of paragraphs 7 and 8
shall survive the termination of this Agreement.
10. Remedies Cumulative; No Waiver. No remedy conferred upon the Company
by this Employment Agreement is intended to be exclusive of any other remedy,
and each and every such remedy shall be cumulative and shall be in addition to
any other remedy given hereunder or now or hereafter existing at law or in
equity. No delay or omission by the Company in exercising any right, remedy or
power hereunder or existing at law or in equity shall be construed as a waiver
thereof;, and any such right, remedy or power may be exercised by the Company
from time to time and as often as may be deemed expedient or necessary by the
Company in its sole discretion.
11. Enforceability. If any provision of this Agreement shall be invalid or
unenforceable, in whole or in part, then such provision shall be deemed to be
modified or restricted to the extent and in the manner necessary to render the
same valid and enforceable, or shall be deemed excised from this Agreement, as
the case may require, and this Agreement shall be construed and enforced to the
maximum extent permitted by law, as if such provision had been originally
incorporated herein as so modified or restricted, or as if such provision had
not been originally incorporated herein, as the case may be.
12. Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if (and then two
business days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:
If to Company: Copy to:
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Aladdin Holdings, Inc. Xxxxx Xxxxxxx Xxxxxx & Zizmor, LLP
165 Westridge 000 Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, XX00000-0000 19th Floor
Attention: Xxxxxxxx Xxxx Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxxxx, Esq.
If to Employee:
Xxxxxx Xxxxxx
c/o Aladdin Systems
000 Xxxxxxxxx
Xxxxxxxxxxx, XX00000-0000
Any party hereto may give any notice, request, demand, claim or other
communication hereunder using any other means (including personal delivery,
expedited courier, messenger service, telecopy, telex, ordinary mail, or
electronic mail), but no such notice, request, demand, claim, or other
communication shall be deemed to have been duly given unless and until it
actually is received by the individual for whom it is intended. Any party hereto
may change the address to which notices, requests, demands, claims, and other
communications hereunder are to be delivered by giving the other parties hereto
notice in the manner herein set forth.
13. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws (and not the law of conflicts) of the State of
California.
14. Contents of Agreement; Amendment and Assignment. This Agreement sets
forth the entire understanding between the parties hereto with respect to the
subject matter hereof and supersedes and is instead of all other employment
arrangement between the Employee and the Company. This agreement cannot be
changed, modified or terminated except upon written amendment duly executed by
the parties hereto. All of the terms and provisions of this Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
heirs, representatives, successors and assigns of the parties hereto, except
that the duties and responsibilities of the Employee hereunder are of a personal
nature and shall not be assignable in whole or in part by the Employee.
IN WITNESS WHEREOF, this Agreement has been executed by the parties on the
date first above written.
ALADDIN SYSTEMS HOLDINGS, INC.
By: /s/ Xxxxxxxx Xxxx
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Its Chief Executive Officer
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EMPLOYEE:
/s/ Xxxxxx Xxxxxx
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