EMPLOYMENT AGREEMENT
Exhibit
10.1
This
Employment Agreement (the “Agreement”)
is
entered into by and between Rim Semiconductor Company (the “Company”), and Xxxxx
Xxxxxx (the “Employee”).
The
Company desires to employ the Employee, and the Employee desires to be employed
by the Company. Therefore, in consideration of the mutual promises and
agreements contained herein, the parties hereby agree as follows:
SECTION
1 - EMPLOYMENT
1.1 Employment.
The
Company hereby employs the Employee and the Employee hereby accepts employment
by the Company for the period and upon the terms and conditions contained in
this Agreement. Employment will commence on September 1, 2006. The Employee
is employed at-will, which means that either the Company or the Employee can
end
the employment relationship at any time, with or without reason or notice,
however Employee will be eligible for a Severance Payment, (a) if the Company
ends his employment for any reason other than Good Cause following a written
notice and a thirty (30) day “cure” period excluding 2, 4, 5 & 6 within the
definition of Good Cause below; or (b) if the Employee resigns for Good Reason.
“Good Cause” is defined as (1) willful failure or neglect by the Employee
to substantially perform his assigned duties following a written notice and
a
thirty (30) day “cure” period (other than a failure to perform resulting from
Employee’s disability due to his illness or injury); (2) engaging in
criminal conduct or conduct constituting moral turpitude; (3) willful
insubordination; (4) embezzlement, theft or misappropriation of the
Company’s property; (5) fraud, acts of dishonesty or misrepresentation or
other acts (including any breach of the Employee’s covenants contained in this
Agreement) that cause harm to the Company or substantial damage to its
reputation (other than as a consequence of good faith decisions made by the
Employee in the normal performance of his duties); (6) conviction for or
plea of no contest to a felony offense; (7) material breach of this
Agreement or any written policies of the Company; (8) breach of the
Employee’s fiduciary obligations to the Company; or (9) any substance abuse
which materially affects the performance of Employee’s duties and
responsibilities to the Company. “Good Reason” is defined as (1) the Company’s
material breach of this Agreement following a thirty (30) day “cure period”; (2)
a material and adverse change in Employee’s duties and responsibilities with the
Company which change is inconsistent with his current title; (3) if Employee
moves to Portland, OR, any relocation of Employee’s principal business location
to more than fifty (50) miles from Portland, OR; or (4) a Change in Control
as
defined in the Stock Option Agreement between the Company and the Employee.
The
“Severance Payment” is defined as twelve months of Employee’s base salary in
effect on the date of termination of employment.
1.2 Office
and Duties.
The
Employee shall serve the Company as Senior Vice President, with the authority,
duties and responsibilities customarily incident to such office. The Employee
shall perform such other services commensurate with his position as may from
time to time be assigned to the Employee by the President and CEO of the
Company. Further, the Employee’s actions shall at all times be subject to the
direction of the President and CEO of the Company.
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1.3 Performance.
While
employed under this Agreement, the Employee shall devote on a full-time basis
his best efforts to the performance of his duties hereunder in a manner that
will faithfully and diligently further the business and interests of the
Company. The Employee shall comply with the employee policies or written manuals
of the Company as they exist from time to time as applicable generally to the
Company’s employees. The Employee shall not work either on a part-time or
independent contractor basis for any other business or enterprise while employed
under this Agreement, provided however, nothing herein shall preclude Employee
from serving on the Boards of other companies or charitable organizations and
so
long as such service does not interfere with the performance of the Employee’s
duties hereunder.
1.4 Place
of Work.
The
Employee shall perform services under this Agreement [Option:
at the Company’s principal office in Portland, Oregon],
and at
such other place or places as the Employee and the Company shall mutually agree.
In addition, the Employee understands and agrees that he may be required to
travel extensively in connection with the performance of his
duties.
SECTION
2 - COMPENSATION FOR EMPLOYMENT
2.1 Base
Salary.
The
base annual compensation of the Employee for all of his employment services
to
the Company under this Agreement shall be $225,000.00, which the Company shall
pay to the Employee in equal installments and in accordance with the normal
payroll policies of the Company. The base annual compensation may be increased
at the sole discretion of the President and CEO of the Company.
2.2 Quarterly
Bonus.
The
Employee shall be entitled to receive a quarterly bonus of $40,000.00 per fiscal
quarter, to be determined by the Compensation Committee or designee which has
the right to set objectives and review the Employee’s accomplishment toward
those objectives, and pay the bonus or portion thereof, if earned. Further,
the
Employee must remain employed by the Company through the end of any fiscal
quarter, in order to be eligible for the bonus arising from services performed
during that quarter. Any such bonus will be paid to Employee no later than
the
fifth business day of the ensuing calendar quarter. The Company agrees that
Employee may be eligible for the full amount of bonus for the quarter ending
October 31, 2006 and it will not be prorated in proportion to the days
actually worked in that quarter.
2.3 Commission.
TBD.
2.4 Stock
Options.
All
options previously granted to Employee to purchase Company common stock are
deemed immediately vested. The Company agrees to grant Employee an option to
purchase up to an additional 3.5 million shares of Company common stock at
an exercise price of $0.158 per share, in accordance with the vesting and other
provisions of an Option Agreement substantially in the form provided to
Employee.
2.5 Payment
and Reimbursement of Expenses.
The
Company shall pay or reimburse the Employee for all reasonable travel and other
expenses incurred by the Employee in performing his obligations under this
Agreement in accordance with the policies and procedures of the Company,
provided that the Employee properly accounts for such expenses in accordance
with the regular policies of the Company.
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2.6 Other
Benefits.
While
employed under this Agreement, the Employee shall be entitled to participate
in
or receive benefits under any health and welfare or retirement type plan or
arrangement made available by the Company and on terms no less favorable than
those afforded to its senior executive employees (including any medical, dental,
short-term and long-term disability, life insurance and 401(k) programs),
subject to and on a basis consistent with the terms, conditions and overall
administration of such plans and arrangements. Any such plan or arrangement
shall be revocable and subject to termination or amendment at any time. The
Employee shall be entitled to twenty (20) business days of vacation per calendar
year.
2.7 Relocation
Expenses.
If the
Employee agrees to relocate, the Company agrees to relocate Employee and his
immediate family from Denver, CO to Portland, OR and to provide a relocation
bonus of $100,000.00 and reimburse the Employee for covered costs, up to a
limit
of $25,000.00. Covered costs include: (1) air fare, lodging, meals and
local transportation incurred during two trips by Employee and Employee’s spouse
to Portland, OR to search for housing; (2) a licensed brokers’ commission
and closing costs on Employee’s current primary residence; (3) movement of
household effects including up to two motor vehicles; and (4) temporary
lodging for up to three months while searching for or preparing the residence
in
Portland, OR. Other costs, if any, may be approved in advance by the President
and CEO upon written request by the Employee. The Company agrees to gross up
payments to Employee under this paragraph that exceeds limits imposed by the
Internal Revenue Service. Employee will sign a separate Relocation Agreement,
in
which Employee agrees to repay the Company for a prorated amount of the
reimbursed covered costs, should he leave employment with the Company within
six
months of the effective date of this Agreement, unless such termination of
employment was due to Employee’s death, disability or a reduction in
force.
SECTION
3 - CONFIDENTIAL INFORMATION
3.1 Confidential
Information.
The
Company agrees that it will provide Employee with specialized knowledge
regarding the Company’s business, and will provide Employee with initial and
ongoing confidential information and trade secrets of the Company and its
subsidiaries (hereinafter referred to as “Confidential Information”). For
purposes of this Agreement, Confidential Information includes, but is not
limited to, any software developed by the Company and documentation relating
to
such software, product specifications and documentation related to such
specifications, technology developed by the Company and documentation related
to
such technology, recruiting methodology, sales methodology, information
regarding the Company’s customers/clients, pricing information, sales
procedures, operating procedures, marketing plans and procedures, financial
information, engineering information, other technical or business information
of
the Company, and any other information which Employee has reason to believe
the
Company would not want disclosed to the public or to a third party. Employee
understands and acknowledges that such Confidential Information gives the
Company a competitive advantage over others who do not have the information,
and
that the Company would be harmed if the Confidential Information were
disclosed.
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3.2 Disclosure
Of Confidential Information.
Employee agrees that he will hold all Confidential Information in trust for
the
Company and will not: (1) use the information for any purpose other than
the benefit of the Company; or (2) disclose to any person or entity any
Confidential Information except as necessary during Employee’s employment with
the Company to perform services on behalf of the Company. Employee will also
take reasonable steps to safeguard such Confidential Information and to prevent
its disclosure to unauthorized persons.
3.3 Return
Of Information.
Upon
termination of employment, or at any earlier time as directed by the Company,
Employee shall immediately deliver to the Company any and all Confidential
Information in Employee’s possession, any other documents or information which
Employee acquired as a result of his employment with the Company and any copies
of any such documents/information. Employee shall not retain any originals
or
copies of any documents or materials related to the Company’s business which
employee came into possession of or created as a result of his employment with
the Company. Employee acknowledges that such information, documents and
materials are the exclusive property of the Company. In addition, upon
termination of employment, or at any time earlier as directed by the Company,
Employee shall immediately deliver to the Company any property of the Company
in
the Employee’s possession.
SECTION
4 - OWNERSHIP OF INFORMATION,
INVENTIONS
AND ORIGINAL WORK
4.1 Ownership
Of Information, Inventions And Original Work.
Employee agrees that any creative works, discoveries, designs, software,
computer programs, inventions, improvements, modifications, enhancements,
know-how, formulation, concept or idea which is conceived, created or developed
by Employee, either alone or with others (collectively referred to as “Work
Product”) is the exclusive property of the Company if either:
a. it
was
conceived or developed in any part on Company time;
b. any
equipment, facilities, materials or Confidential Information of the Company
was
used in its conception or development; or
c. it
either: (i) relates, at the time of conception or reduction to practice, to
the Company’s business or to an actual or demonstrably anticipated research or
development project of the Company, or (ii) results from any work performed
by Employee for the Company.
With
respect to any such Work Product, Employee agrees as follows:
a. Employee
shall promptly disclose the Work Product to the Company;
b. Employee
agrees to assign, and hereby does assign, all proprietary rights to such Work
Product to the Company without further compensation;
c. Employee
agrees not to file any patent or copyright applications related to such Work
Product except with the written consent of the President and CEO of the
Company;
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d. Employee
agrees to assist the Company in obtaining any patent or copyright on such Work
Product, and to provide such documentation and assistance as is necessary to
the
Company to obtain such patent or copyright; and
e. Employee
shall maintain adequate written records of such Work Product, in such a format
as may be specified by the Company. Such records will be available to and remain
the sole property of the Company at all times.
Any
Work
Product disclosed by Employee within one (1) year following the termination
of
employment from the Company shall be deemed to be owned by the Company under
the
terms of this Agreement, unless proved by the Employee to have been conceived
after such termination.
SECTION
5 - RESTRICTIVE COVENANTS
5.1 Restrictive
Covenants.
Employee acknowledges that in order to effectuate the promise to hold
Confidential Information in trust for the Company, it is necessary to enter
into
the following restrictive covenants. Without the prior written consent of the
Company, Employee shall not, during employment at the Company or for a period
of
one year following the termination of employment:
a. Solicit,
induce or attempt to solicit or induce, on behalf of himself or any other person
or entity, any employee of the Company to terminate their employment with the
Company;
b. Solicit
business from, attempt to do business with, or do business with any person
or
entity that was a customer/client of the Company during Employee’s employment
with the Company, if such business is in the scope of services or products
provided by the Company. The geographic area for purposes of this restriction
is
the area where the customer/client is located and/or does business;
c. Engage
in
or perform services for a Competing Business. For purposes of this Agreement,
“Competing Business” is one which provides the same or substantially similar
products and services as those provided by the Company during Employee’s
employment, including but not limited to providers of semiconductor technology.
The geographic area for purposes of this restriction is the area(s) within
a 50
mile radius of any Company office in existence during Employee’s employment with
the Company; or
d. Have
any
indirect or direct financial interest in a Competing Business; provided,
however, that the ownership by Employee of any stock listed on any national
securities exchange of any corporation conducting a competing business shall
not
be deemed a violation of this Agreement if the aggregate amount of such stock
owned by Employee does not exceed one percent (1%) of the total outstanding
stock of such corporation.
Employees
agrees that these restrictive covenants (1) are reasonable in scope for the
purpose of protecting the Company’s business interests; (2) will not
interfere with the Employee’s ability to pursue his livelihood after termination
of the Agreement; (3) do not impose a greater restraint than is necessary
to protect the Confidential Information, goodwill and other business interests
of the Company and that the Employee has received adequate consideration under
this Agreement to support his return promises.
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SECTION
6 - REMEDIES
6.1 Remedies.
In the
event of a breach of this Agreement by Employee, the Company shall be entitled
to all appropriate equitable and legal relief, including, but not limited to:
(1) injunction to enforce this Agreement or prevent conduct in violation of
this
Agreement; (2) damages incurred by the Company as a result of the breach; and
(3) attorneys’ fees and costs incurred by the Company in enforcing the terms of
this Agreement. Additionally, any period or periods of breach of Section 5
of this Agreement shall not count toward the one (1) year restriction, but
shall
instead be added to the one (1) year restrictive period.
SECTION
7 - REPRESENTATION BY EMPLOYEE
7.1 Representation
by Employee.
Employee hereby represents and warrants to the Company that the execution of
this Agreement by Employee and Employee’s performance of his duties hereunder
will not conflict with, cause a default under, or give any party a right to
damages under any other agreement to which Employee is a party or is
bound.
SECTION
8 - GENERAL
8.1 Governing
Law.
This
Agreement shall be governed by and construed under the laws of the State of
Oregon or, at the Company’s sole option, by the laws of the state or states
where this Agreement may be at issue in any litigation involving the Company.
Venue of any litigation arising from this Agreement shall be in a court of
competent jurisdiction in Multnomah County, Oregon.
8.2 Binding
Effect.
All of
the terms and provisions of this Agreement shall be binding upon and inure
to
the benefit and be enforceable by the respective heirs, representatives,
successors (including any successor as a result of a merger or similar
reorganization) 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, and the Company may
not
assign its rights, duties, or responsibilities without the consent of the
Employee.
8.3 Notices.
All
notices required to be given under this Agreement shall be in writing and shall
be deemed to have been given and received when personally delivered, or when
mailed by registered or certified mail, postage prepaid, return receipt
requested, or when sent by overnight delivery service, addressed as
follows:
|
If
to the Employee:
|
Xxxxx
Xxxxxx
c/o
Rim Semiconductor Company
000
X.X. 000xx Xxxxxx, Xxx. 000
Xxxxxxxx,
XX 00000
|
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|
If
to the Employer:
|
Xxxx
Xxxxx
President
and CEO
Rim
Semiconductor Company
000
X.X. 000xx Xxxxxx, Xxx. 000
Xxxxxxxx,
XX 00000
|
Such
addresses may be changed from time to time by written notice to the other
party.
8.4 Entire
Agreement; Modification.
This
Agreement constitutes the entire agreement of the parties hereto with respect
to
the subject matter hereof and supersedes all other agreements (oral or written)
with respect to the subject matter hereof. This Agreement may not be modified
or
amended in any way except in writing by the parties hereto.
8.5 Duration.
Notwithstanding the termination of Employee’s employment by the Company, this
Agreement shall continue to bind the parties for so long as any obligations
remain under the terms of this Agreement.
8.6 Waiver.
No
waiver of any breach of this Agreement shall be construed to be a waiver as
to
succeeding breaches.
8.7 Severability.
In the
event any court of competent jurisdiction holds any provision of this Agreement
to be invalid, the remaining provisions shall not be affected or invalidated
and
shall remain in full force and effect.
8.8 Subsidiaries.
Wherever the term Company is referred to in this Agreement, it shall include
all
subsidiaries of the Company even where the term “subsidiaries” is not explicitly
stated in connection with such reference, as such subsidiaries may exist from
time to time.
IN
WITNESS WHEREOF, the parties hereto, intending to be legally bound, have duly
executed this Agreement as of the day and year first written above.
EMPLOYEE:
/s/
Xxxxx
Xxxxxx
Xxxxx
Xxxxxx
Date:
9/1/06
RIM
SEMICONDUCTOR
COMPANY:
By:
/s/
Xxxx Xxxxx
Xxxx
Xxxxx
President
and
CEO
Date:
September
1, 2006
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