August 18, 2010
August
18, 2010
Re: Terms of
Resignation
Dear
Xxxx:
This letter confirms the
agreement (“Agreement”) between you and Lyris, Inc. (the “Company”) concerning
the terms of your resignation and offers you the separation compensation we
discussed in exchange for a general release of claims and covenant not to
sue.
1. Resignation Date: August 18, 2010 is your last day of
employment with the Company (the “Resignation Date”). As of the
Resignation Date, you resign as an employee of the Company, from the Company’s
Board of Directors and from all other positions that you hold or committees on
which you serve with respect to the Company.
2. Acknowledgment of Payment of
Wages: The Company will
promptly provide you with your final paycheck in the amount equal to all wages,
salary, bonuses, reimbursable expenses, accrued vacation and any similar
payments due to you from the Company as of the Resignation Date (the “Accrued
Compensation”). By signing below, you acknowledge that the Company does not owe
you any other amounts.
3. Severance: The Company agrees to pay you, following
the Effective Date (as defined in paragraph 18 below) of this Agreement, 1.5
times your current annual base salary pursuant to Section 4(c) of your
Employment Agreement with the Company, dated May 6, 2005, attached hereto
as Exhibit A (the “Employment Agreement”), with the
payment to be made in a single lump sum, less applicable state and federal
payroll deductions.
4. Separation Compensation: In exchange for your agreement to the
general release and waiver of claims and covenant not to sue set forth in
paragraphs 7 and 8 below and your other promises herein, the Company agrees to
provide you with the following:
a. Repurchase of Company Common
Stock. The Company
shall purchase 170,000 shares of Company Common Stock that you hold at a
purchase price of $0.33 per share for an aggregate purchase price of
$56,100.00.
b. Extension of Option Exercise
Period. Pursuant to
your Stock Option Agreement with the Company, dated May 6, 2005, and the
Company’s 2005 Equity-Based Compensation Plan (hereafter collectively referred
to as the “Stock Option Agreement”), you have been granted an option to purchase
3,600,000 shares of the Company’s common stock (the “Option”). The Option has
vested as to all of the shares (the “Vested Shares”) and all such shares are
unexercised Vested Shares (the “Unexercised Vested Shares”). Pursuant to your
Stock Option Agreement, you will have only 90 days after the Resignation Date to
exercise the Unexercised Vested Shares. The Company hereby amends the Stock
Option Agreement to extend the period in which you may exercise the Unexercised
Vested Shares to one year following the Resignation Date and after such date,
you will no longer have a right to exercise the Option as to any
shares.
By signing below, you
acknowledge that you are receiving the separation compensation outlined in this
paragraph in consideration for waiving your rights to claims referred to in this
Agreement and that you would not otherwise be entitled to the separation
compensation.
5. Return of Company
Property: Upon
termination of employment, you are obligated to return to the Company
immediately all property or data of Company of any type whatsoever that has been
in your possession, custody, or control.
6. Confidential Information: As a result of your employment with
Company you have had access to the Company’s Confidential Information (as
defined in the Employment Agreement) and we remind you that you continue to be
bound by the confidentiality and intellectual property terms of your Employment
Agreement. By signing below, you confirm that you will hold all Confidential
Information in the strictest confidence, that you will not make use of such
Confidential Information on behalf of yourself or any other person or entity,
that you have delivered to the Company all documents and data of any nature
containing or pertaining to such Confidential Information, and that you have not
retained any such documents or data or any reproduction
thereof.
7. General Release and Waiver
of Claims:
a. The payments and promises set forth in this
Agreement are in full satisfaction of all accrued salary, vacation pay, bonus
and commission pay, profit-sharing, stock options, termination benefits or other
compensation to which you may be entitled by virtue of your employment with the
Company or your separation from the Company. To the fullest extent permitted by
law, you hereby release and waive any other claims you may have against the
Company and its owners, agents, officers, shareholders, employees, directors,
attorneys, subscribers, subsidiaries, affiliates, successors and assigns
(collectively “Releasees”), whether known or not known, including, without
limitation, claims under any employment laws, including, but not limited to,
claims of unlawful discharge, breach of contract, breach of the covenant of good
faith and fair dealing, fraud, violation of public policy, defamation, physical
injury, emotional distress, claims for additional compensation or benefits
arising out of your employment or your separation of employment, claims under
Title VII of the 1964 Civil Rights Act, as amended, the California Fair
Employment and Housing Act and any other laws and/or regulations relating to
employment or employment discrimination, including, without limitation, claims
based on age or under the Age Discrimination in Employment Act or Older Workers
Benefit Protection Act, and/or claims based on disability or under the Americans
with Disabilities Act.
b. By signing below, you
expressly waive any benefits of Section 1542 of the Civil Code of the State of
California, which provides as follows:
“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 HIS OR HER
SETTLEMENT
WITH THE DEBTOR.”
c. You and the Company do not intend to
release claims that you may not release as a matter of law, including but not
limited to claims for indemnity under California Labor Code section 2802. To the
fullest extent permitted by law, any dispute regarding the scope of this general
release shall be determined by an arbitrator under the procedures set forth in
the arbitration clause below.
8. Covenant Not to
Sue:
a.
To the fullest extent permitted by
law, at no time subsequent to the execution of this Agreement will you pursue,
or cause or knowingly permit the prosecution of, in any state, federal or
foreign court, or before any local, state, federal or foreign administrative
agency, or any other tribunal, any charge, claim or action of any kind, nature
and character whatsoever, known or unknown, which you may now have, have ever
had, or may in the future have against Releasees, which is based in whole or in
part on any matter covered by this Agreement.
b.
Nothing in this section shall
prohibit you from filing a charge or complaint with a government agency such as
but not limited to the Equal Employment Opportunity Commission, the National
Labor Relations Board, the Department of Labor, the California Department of
Fair Employment and Housing, or other applicable state agency. However, you
understand and agree that, by entering into this Agreement, you are releasing
any and all individual claims for relief, and that any and all subsequent
disputes between you and the Company shall be resolved through arbitration as
provided below.
c.
Nothing in this section shall
prohibit or impair you or the Company from complying with all applicable laws,
nor shall this Agreement be construed to obligate either party to commit (or aid
or abet in the commission of) any unlawful act.
9. Nondisparagement: You agree that you will not disparage
Releasees or their products, services, agents, representatives, directors,
officers, shareholders, attorneys, employees, vendors, affiliates, successors or
assigns, or any person acting by, through, under or in concert with any of them,
with any written or oral statement. Nothing in this paragraph shall prohibit you
from providing truthful information in response to a subpoena or other legal
process.
10. Arbitration: Except for any claim for injunctive
relief arising out of a breach of a party’s obligations to protect the other’s
proprietary information, the parties agree to arbitrate, in Alameda County,
California through JAMS, any and all disputes or claims arising out of or
related to the validity, enforceability, interpretation, performance or breach
of this Agreement, whether sounding in tort, contract, statutory violation or
otherwise, or involving the construction or application or any of the terms,
provisions, or conditions of this Agreement. Any arbitration may be initiated by
a written demand to the other party. The arbitrator's decision shall be final,
binding, and conclusive. The parties further agree that this Agreement is
intended to be strictly construed to provide for arbitration as the sole and
exclusive means for resolution of all disputes hereunder to the fullest extent
permitted by law. The parties expressly waive any entitlement to have such
controversies decided by a court or a jury.
11. Attorneys’ Fees: If any action is brought to enforce the
terms of this Agreement, the prevailing party will be entitled to recover its
reasonable attorneys’ fees, costs and expenses from the other party, in addition
to any other relief to which the prevailing party may be
entitled.
12. Confidentiality: The contents, terms and conditions of
this Agreement must be kept confidential by you and may not be disclosed except
to your immediate family, accountant or attorneys or pursuant to subpoena or
court order. You agree that if you are asked for information concerning this
Agreement, you will state only that you and the Company reached an amicable
resolution of any disputes concerning your separation from the Company. Any
breach of this confidentiality provision shall be deemed a material breach of
this Agreement.
13. No Admission of
Liability: This
Agreement is not and shall not be construed or contended by you to be an
admission or evidence of any wrongdoing or liability on the part of Releasees,
their representatives, heirs, executors, attorneys, agents, partners, officers,
shareholders, directors, employees, subsidiaries, affiliates, divisions,
successors or assigns. This Agreement shall be afforded the maximum protection
allowable under California Evidence Code Section 1152 and/or any other state or
federal provisions of similar effect.
14. Complete and Voluntary
Agreement: This
Agreement, together with Exhibit A hereto, constitute the entire agreement
between you and Releasees with respect to the subject matter hereof and
supersedes all prior negotiations and agreements, whether written or oral,
relating to such subject matter. You acknowledge that neither Releasees nor
their agents or attorneys have made any promise, representation or warranty
whatsoever, either express or implied, written or oral, which is not contained
in this Agreement for the purpose of inducing you to execute the Agreement, and
you acknowledge that you have executed this Agreement in reliance only upon such
promises, representations and warranties as are contained herein, and that you
are executing this Agreement voluntarily, free of any duress or
coercion.
15. Severability: The provisions of this Agreement are
severable, and if any part of it is found to be invalid or unenforceable, the
other parts shall remain fully valid and enforceable. Specifically, should a
court, arbitrator, or government agency conclude that a particular claim may not
be released as a matter of law, it is the intention of the parties that the
general release, the waiver of unknown claims and the covenant not to sue above
shall otherwise remain effective to release any and all other
claims.
16. Modification; Counterparts; Facsimile/PDF
Signatures: It is
expressly agreed that this Agreement may not be altered, amended, modified, or
otherwise changed in any respect except by another written agreement that
specifically refers to this Agreement, executed by authorized representatives of
each of the parties to this Agreement. This Agreement may be executed in any
number of counterparts, each of which shall constitute an original and all of
which together shall constitute one and the same instrument. Execution of a
facsimile or PDF copy shall have the same force and effect as execution of an
original.
17. Governing Law: This Agreement shall be governed by and
construed in accordance with the laws of the State of
California.
18. Effective Date: This Agreement is effective on the date
it is signed by both parties.
This offer of separation compensation in
exchange for a release of claims will expire at 6:00 p.m. (PDT) on August 18,
2010.
If you agree to abide by the terms outlined
in this letter, please sign this letter below and also sign the attached copy
and return it to me. I wish you the best in your future
endeavors.
| Sincerely, | |||||
| Lyris, Inc. | |||||
| By: | /s/Xxxxxxx X. Xxxxxxx | ||||
| Xxxxxxx X. Xxxxxxx, III | |||||
| Chairman of the Board | |||||
| READ, UNDERSTOOD AND AGREED | |||||
| Xxxx Xxxxxx | Date: | August 18, 2010 | |||
| Xxxx Xxxxxx | |||||
EXHIBIT A
EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT AGREEMENT (the
“Agreement”) is made and entered into as of
May 6, 2005, by and between Lyris Technologies, Inc., a Delaware
corporation (together with its successors and assigns permitted hereunder, the
“Company”), and Xxxx Xxxxxx (“Employee”).
RECITALS
WHEREAS, Employee is currently
employed by the Company, which develops software and services for e-mail
marketing, e-mail filtering and spam prevention (as the Company currently
conducts and does so during the term of this Agreement, the “Business”);
WHEREAS, the Company is,
concurrently with the execution hereof, entering into a stock purchase agreement
with the Commodore Resources, Inc. a Delaware corporation (“Commodore”), and the
other parties thereto (the “Stock Purchase
Agreement”);
and
WHEREAS, Employee and the Company
desire to set forth herein the terms of employment for Employee, which
employment shall be effective as of the closing of the transactions contemplated
by the Stock Purchase Agreement (the “Effective Date”).
NOW, THEREFORE, in consideration of
the premises and the mutual covenants and agreements contained herein, the
sufficiency of which is hereby acknowledged, the parties agree as
follows:
AGREEMENTS:
1. Employment
Period.
Subject to Section 3 or mutual written agreement between
the Company and Employee, the Company hereby agrees to employ Employee, and
Employee hereby agrees to be employed by the Company, in accordance with the
terms and provisions of this Agreement, for the period commencing as of the
Effective Date and ending on the fifth anniversary of the Effective Date (the
“Initial Term”); provided that, at the expiration of the
Initial Term, and on each anniversary of such expiration thereafter, the
Employment Period shall automatically be extended in one year increments (the
“Extended Term”) unless at least three months
prior to the ensuing expiration date (but no more than 9 months prior to such
expiration date), the Company or Employee shall have given written notice to the
other party that it or he does not wish to extend this Agreement (a
“Non-Renewal
Notice”). The
term “Employment Period,” as utilized in this Agreement,
shall refer to the Employment Period as so automatically extended.
2. Terms of
Employment.
(a)
Position and
Duties.
(i)
During the Employment Period, Employee shall serve as President and Chief
Executive Officer of the Company and, in so doing, shall report to the Board of
Directors of the Company (the “Board”). Employee agrees to perform
whatever duties the Board may assign to Employee from time to
time, consistent with Employee’s position with the Company. Employee shall have
supervision and control over, and responsibility for, such management and
operational functions of the Company as are usual and customary for such
position, and shall have such other powers and duties as may from time to time
be prescribed by the Board.
(ii) During the Employment Period,
and excluding any periods of vacation and sick leave to which Employee is
entitled, Employee agrees to devote all of his business time to the business and
affairs of the Company and, to the extent necessary to discharge the
responsibilities assigned to Employee hereunder, to use Employee’s reasonable
best efforts to perform faithfully, effectively and efficiently such
responsibilities. During the Employment Period it shall not be a violation of
this Agreement for Employee to (A) serve on corporate, civic or charitable
boards or committees, (B) deliver lectures or fulfill speaking engagements and
(C) manage personal investments, so long as such activities do not materially
interfere with the performance of Employee’s responsibilities as an employee of
the Company in accordance with this Agreement.
(b)
Compensation.
(i) Base Salary. During the Employment Period,
Employee shall receive a minimum annual base salary per calendar year of two
hundred thousand dollars ($200,000) (“Annual Base
Salary”), which
shall be paid in accordance with the customary payroll practices of the Company
and shall be prorated for the year ending December 31, 2005 and for any other
partial year of service. The Company may review and adjust upward Employee’s
Annual Base Salary. The term Annual Base Salary as utilized in this Agreement
shall refer to Annual Base Salary as so adjusted.
(ii)
Annual Bonus. Employee shall be eligible to
receive an annual bonus (“Annual Bonus”) at the end of each calendar year
during the Employment Period in accordance with the terms set forth on
Schedule I hereto.
(iii) Incentive, Savings and Retirement
Plans. During
the Employment Period, Employee shall be entitled to participate in all
incentive, savings and retirement plans, practices, policies and programs of the
Company applicable generally to other employees of the Company (“Investment Plans”).
(iv) Welfare Benefit
Plans. During
the Employment Period, Employee and/or Employee’s family or dependents, as the
case may be, shall be eligible for participation in the welfare benefit plans,
practices, policies and programs (“Welfare Plans”) provided by the Company
(including, without limitation, medical, prescription, dental, vision,
short-term disability, long-term disability, salary continuance, employee life,
group life, accidental death and travel accident insurance plans and programs)
to the extent applicable generally to other employees of the Company. The
Company will pay any required co-pay for health insurance for Employee and his
family under the Company’s health plan.
(v) Expenses. During the Employment Period,
Employee shall be entitled to receive prompt reimbursement for all reasonable
travel, entertainment and other business-related expenses incurred by Employee
in accordance with the policies, practices and procedures of the Company or the
Business, as applicable.
(vi) Vacation and
Holidays. During
the Employment Period, Employee shall be entitled to a minimum of four weeks
vacation.
3. Termination of
Employment.
(a) Death or
Disability.
Employee’s employment shall terminate automatically upon Employee’s death during
the Employment Period. If the Disability of Employee has occurred during the
Employment Period (pursuant to the definition of Disability set forth below),
the Company may give to Employee written notice in accordance with Section 11(b) of its intention to terminate
Employee’s employment. In such event, Employee’s employment with the Company
shall terminate effective on the 30th day after receipt of such notice by
Employee (the “Disability Effective
Date”),
provided that, within 30 days after such
receipt, Employee shall not have returned to full-time performance of Employee’s
duties. For purposes of this Agreement, “Disability” shall mean Employee’s inability to
perform his duties and obligations hereunder for a period of 180 consecutive
days due to mental or physical incapacity as determined by a physician selected
by the Company or its insurers and acceptable to Employee or Employee’s legal
representative (such agreement as to acceptability not to be withheld
unreasonably).
(b) Termination by the Company for
Cause. The
Company may terminate the Employee’s employment during the Employment Period for
Cause. For purposes of this Agreement, “Cause” shall mean: (i) the failure of
Employee to materially perform his obligations and duties hereunder to the
satisfaction of the Company, which failure is not remedied within 45 days after
receipt of written notice from the Company; (ii) commission by Employee of an
act of fraud upon, or willful gross misconduct toward, the Company or any of its
affiliates; (iii) a material breach by Employee of Section 6, Section 7 or Section 9, which in either case is not
remedied within 15 business days after receipt of written notice from the Board
or the Company; (iv) the conviction of Employee of any felony (or a plea of
nolo contendere thereto) or any crime involving
moral turpitude; or (v) the failure of Employee to carry out, or comply with, in
any material respect any directive of the Board consistent with the terms of
this Agreement, which is not remedied within 30 business days after receipt of
written notice from the Board or the Company. Any written notice from the Board
or the Company pursuant to this Section 3(b) shall specifically identify the
failure that it deems to constitute Cause.
(c) Termination by Company Without
Cause. The
Company may terminate Employee’s employment during the Employment Period without
Cause beginning on the date that is sixty (60) days after the Effective Date.
For purposes of this Agreement, “without Cause” shall mean a termination by the
Company of Employee’s employment during the Employment Period for any other
reason other than a termination based upon Cause, death or
Disability.
(d) Termination by the
Employee.
Employee’s employment may be terminated during the Employment Period by Employee
for Good Reason or without Good Reason; provided, however, that Employee agrees not to
terminate his employment for Good Reason unless (i) Employee has given the
Company at least 30 days’ prior written notice of his intent to terminate his
employment for Good Reason, which notice shall specify the facts and
circumstances constituting Good Reason, and (ii) such facts and circumstances
constituting Good Reason have not been remedied within such 30 day period. For
purposes of this Agreement, “Good Reason” shall mean any material breach by the
Company of any provision of this Agreement and shall also include Company (or
its successors and assigns) substantially altering the position, geographic
location, or responsibilities of Employee during the Employment
Period.
(e) Date of
Termination.
“Date of
Termination”
means (i) if Employee’s employment is terminated for any reason other than
Employee’s death, the termination date set forth in the written notice to that
effect given by Employee to the Company or by the Company to Employee, as the
case may be (taking into account any notice or cure period required hereunder),
and (ii) if Employee’s employment is terminated by reason of death or
Disability, the date of death of Employee or the Disability Effective Date, as
the case may be.
4. Obligations of the Company Upon
Termination.
(a) Termination Because of Death or
Disability. If
Employee’s employment is terminated by reason of Employee’s death or Disability
during the Employment Period, the Company shall pay to Employee or his legal
representatives within 20 days after the Date of Termination (except as
otherwise noted with respect to paragraphs (v) and (vi) below) (and the Company
shall have no further obligations hereunder with respect to
Employee):
(i) Employee’s Annual Base Salary
through the Date of Termination to the extent not theretofore paid;
(ii) Any Annual Bonus awarded to
Employee prior to the Date of Termination but not yet paid;
(iii) Any compensation previously
deferred by Employee (together with any accrued interest and earnings
thereon);
(iv)
Any unreimbursed business expenses;
(v) Any amount arising from
Employee’s participation in, or benefits under, any Investment Plans
(“Accrued
Investments”),
which amounts shall be payable in accordance with the terms and conditions of
such Investment Plans; and
(vi) Any amounts to which Employee
is entitled from Employee’s participation in, or benefits under, any Welfare
Plan (“Accrued Welfare
Benefits”),
which amounts shall be payable in accordance with the terms and conditions of
such Welfare Plans, and any amounts owed as a result of accrued vacation, which
amounts shall be payable in accordance with the policies of the Company.
(b) Termination for Cause; Other than
for Good Reason.
If Employee’s employment shall be terminated by the Company for Cause or by
Employee without Good Reason, the Company shall pay to Employee within 20 days
after the Date of Termination (except as otherwise noted with respect to
paragraphs (v) and (vi) below) (and the Company shall have no further
obligations hereunder with respect to Employee):
(i) Employee’s Annual Base Salary
through the Date of Termination to the extent not theretofore paid;
(ii) Any Annual Bonus awarded to
Employee prior to the Date of Termination but not yet paid;
(iii) Any compensation previously
deferred by Employee (together with any accrued interest and earnings thereon);
(iv)
Any unreimbursed business expenses;
(v) Any Accrued Investments, which
amounts shall be payable in accordance with the terms and conditions of such
Investment Plans; and
(vi) Any Accrued Welfare Benefits,
which amounts shall be payable in accordance with the terms and conditions of
such Welfare Plans, and any amounts owed as a result of accrued vacation, which
amounts shall be payable in accordance with the policies of the Company.
(c) Termination for Good Reason; Without
Cause. If the
Company shall terminate Employee’s employment without Cause or Employee shall
terminate his employment for Good Reason, the Company shall pay to Employee
within 20 days of the Date of Termination (except as otherwise noted with
respect to paragraphs (v) and (vi) below) (and the Company shall have no further
obligations hereunder with respect to Employee):
(i) Employee’s Annual Base Salary
through the Date of Termination to the extent not theretofore paid;
(ii) Any Annual Bonus awarded to
Employee prior to the Date of Termination but not yet paid;
(iii) Any compensation previously
deferred by Employee (together with any accrued interest and earnings thereon);
(iv)
Any unreimbursed business expenses;
(v) Any Accrued Investments, which
amounts shall be payable in accordance with the terms and conditions of such
Investment Plans;
(vi) Any Accrued Welfare Benefits,
which amounts shall be payable in accordance with the terms and conditions of
such Welfare Plans, and any amounts owed as a result of accrued vacation, which
amounts shall be payable in accordance with the policies of the Company; and
(vii)
An amount equal to 1.5 times the Employee’s then current Annual Base Salary.
5. Full
Settlement. Neither Employee nor the Company shall be liable to the other party for
any damages in addition to the amounts payable under Section 4 arising out of the termination of
Employee’s employment prior to the end of the Employment Period; provided, however, that the Company shall be entitled
to seek damages for any breach of Section 6, Section 7, or Section 9 or for Employee’s criminal
misconduct.
6. Confidential
Information.
(a) Employee acknowledges that the
Company and its affiliates have trade, business and financial secrets and other
confidential and proprietary information (collectively, the “Confidential
Information”)
and that during the course of Employee’s employment with the Company he has
received, shall receive or shall contribute to the Confidential Information.
Confidential Information includes technical information, processes and
compilations of information, records, specifications and information concerning
assets, and information regarding methods of doing business. As defined herein,
Confidential Information shall not include (i) information that is publicly and
generally known to other persons or entities; provided that, such information has not been
made publicly and generally known by Employee in violation of this Agreement or,
to the knowledge of Employee, by others in violation of comparable agreements,
(ii) information required to be disclosed by Employee pursuant to a subpoena or
court order, or pursuant to a requirement of a governmental agency or law of the
United States of America or a state thereof or any governmental or political
subdivision thereof; provided, however, that Employee shall take
all reasonable steps to prohibit disclosure pursuant to clause (ii) above, and (iii) information already
known to Employee without obligation to keep it confidential, or independently
developed by Employee without use of Confidential Information of Company or
received by Employee in good faith from a third party lawfully in possession
thereof without obligation to keep such information confidential.
(b) During and following Employee’s
employment by the Company, Employee agrees (i) to hold such Confidential
Information in confidence and (ii) not to release such information to any person
(other than Company employees and other persons to whom the Company has
authorized Employee to disclose such information and then only to the extent
that such Company employees and other persons authorized by the Company have a
need for such knowledge). Employee agrees to use reasonable efforts to give the
Company notice of any and all attempts to compel disclosure of any Confidential
Information, in such a manner so as to provide the Company with written notice
at least five days before disclosure or within one business day after Employee
is informed that such disclosure is being or shall be compelled, whichever is
earlier. Such written notice shall include a description of the information to
be disclosed, the court, government agency, or other forum through which the
disclosure is sought, and the date by which the information is to be disclosed,
and shall contain a copy of the subpoena, order or other process used to compel
disclosure.
(c) Employee further agrees not to
use any Confidential Information for the benefit of any person or entity other
than the Company.
7. Intellectual Property Rights;
Surrender of Materials Upon Termination.
(a) In consideration of the
Company’s agreement to employ Employee and the receipt by Employee of the
Confidential Information, Employee hereby assigns to the Company all his right,
title and interest in all Intellectual Property (as defined below) that Employee
makes or conceives, whether as a sole inventor or author or as a joint inventor
or author, whether made within or outside working hours or upon the premises of
the Company or elsewhere, as work for hire or otherwise, at any time during his
employment with the Company or its affiliates (including prior to the Effective
Date). “Intellectual
Property” means
any information of a technical and/or business nature such as ideas,
discoveries, inventions, trade secrets, know-how, and writings and other works
of authorship that relate directly in any manner to the actual or anticipated
business or research and development of the Company and its affiliates. During
and subsequent to Employee’s employment, upon the request and at the expense of
the Company or its nominee and for no additional personal remuneration, Employee
agrees to execute any instrument that the Company considers necessary to secure
or maintain for the benefit of the Company adequate patent, copyright, trademark
and other property rights in the United States and all foreign countries with
respect to any Intellectual Property. Employee also agrees to assist the Company
as required to draft said instruments and to obtain and enforce such rights.
Employee agrees to promptly disclose to the Company any Intellectual Property
when conceived or made by Employee, in whole or in part, and to make and
maintain adequate and current records thereof.
(b) Employee agrees that all
Confidential Information and other files, documents, materials, records,
customer lists, business proposals, contracts, agreements and other repositories
containing information concerning the Company or the business of the Company, in
whatever form, tangible or intangible (including all copies thereof), that
Employee shall prepare, or use, or be provided with as a result of his
employment with the Company, shall be and remain the sole property of the
Company. Upon termination of Employee’s employment hereunder, Employee agrees
that all Confidential Information and other files, documents, materials,
records, customer lists, business proposals, contracts, agreements and other
repositories containing information concerning the Company or the business of
the Company (including all copies thereof) in Employee’s possession, custody or
control, whether prepared by Employee or others, shall remain with or be
returned to the Company promptly (within 24 hours) after the Date of
Termination. The materials required to be returned pursuant to this Section 7 shall not include personal
correspondence that does not relate to the Company or the business of the
Company.
8. Successors.
(a) This Agreement is personal to
Employee and without the prior written consent of the Company shall not be
assignable by Employee otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable by
Employee’s legal representatives.
(b) This Agreement shall inure to
the benefit of and be binding upon the Company and its successors and assigns.
Employee agrees that the Company may assign this Agreement to any directly or
indirectly owned subsidiary or affiliate (affiliate shall have the same meaning
as in the Stock Purchase Agreement) of the Company, in which event “Company” as used in this Agreement shall
thereafter mean such subsidiary or affiliate (except where reference is made to
benefit plans that are maintained by the Company, in which event the Company
shall remain obligated with respect thereto under this Agreement), and in
connection with such assignment, such subsidiary shall expressly assume this
Agreement and the Company shall be released therefrom except to the extent
referenced above.
(c) The Company will require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company to assume expressly and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it
if no such succession had taken place. As used in this Agreement, “Company” shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
9. Non-Competition;
Non-Solicitation.
(a) During his employment by the
Company, including the Employment Period, Employee shall have access to and
become acquainted with Confidential Information of the Company as described in
Section 6. Employee acknowledges and agrees
that his use of Confidential Information in the conduct of business on behalf of
a competitor of the Company would constitute unfair competition with the Company
and would adversely affect the business goodwill of the Company. Accordingly, as
a material inducement to the Company to enter into this Agreement; to protect
the Company’s Confidential Information that may be disclosed or entrusted to
Employee (the disclosure of which by Employee in violation of this Agreement
would adversely affect the business goodwill of the Company), the business
goodwill of the Company that may be developed in Employee and the business
opportunities that may be disclosed or entrusted to Employee by the Company; in
consideration for the compensation and other benefits payable hereunder to
Employee, for the benefits to Employee of having access to Confidential
Information during the Employment Period (the disclosure of which by Employee in
violation of this Agreement would adversely affect the business goodwill of the
Company); and for other good and valuable consideration, Employee hereby
covenants and agrees that, during the Term of Non-Competition, Employee shall
not, directly or indirectly, individually or as an officer, director, manager,
employee, shareholder, consultant, contractor, partner, member, joint venturer,
agent, equity owner or in any capacity whatsoever:
(i) own, engage in, manage, operate,
join, control, be employed by, provide Competing Services to, or participate in
the ownership, management, operation or control of or provision of Competing
Services to, a Competing Business operating in the Geographic Area;
(ii) recruit, hire, assist in
hiring, attempt to hire, or contact or solicit with respect to hiring any person
who, at any time during the 12 month period ending on the Date of Termination,
was an employee of the Company or its affiliates;
(iii) induce or attempt to induce
any employee of the Company or its affiliates to terminate, or in any way
interfere with, the relationship between such parties and any employee thereof;
or
(iv) induce or attempt to induce any
customer, client, supplier, service provider, or other business relation of the
Company or its affiliates in the Geographic Area to cease doing business with
such parties, or in any way interfere with the relationship between such parties
and any such person.
Notwithstanding the foregoing, the
Company agrees that Employee may own less than five percent of the outstanding
voting securities of any publicly traded company that is a Competing Business so
long as Employee does not otherwise participate in such competing business in
any way prohibited by this Section 9.
(b) Employee acknowledges that the
geographic boundaries, scope of prohibited activities, and time duration of the
preceding paragraphs in this Section 9 (including the defined terms for
“Competing
Business,”
“Competing
Services,”
“Geographic Area,” and “Term of
Non-Competition”
set forth in Section 9(c)) are reasonable in nature and are
no broader than are necessary to maintain the goodwill of the Company and the
confidentiality of its Confidential Information and to protect the goodwill and
other legitimate business interests of the Company, and also that the
enforcement of such covenants would not cause Employee any undue hardship or
unreasonably interfere with Employee’s ability to earn a livelihood. If Employee
violates the covenants and restrictions in this Section 9 and the Company brings legal action
for injunctive or other equitable relief, Employee agrees that the Company shall
not be deprived of the benefit of the full period of the restrictive covenant,
as a result of the time involved in obtaining such relief. Accordingly, Employee
agrees that the provisions in this Section 9 shall have a duration determined
pursuant to Section 9(a), computed from the date the legal
or equitable relief is granted.
(c) As
used in this Agreement:
(i) “Competing
Business” means
any service or product of any person or organization other than the Company or
its affiliates in existence or then under development, that competes or could
potentially compete, directly or indirectly, with any service or product of the
Company or its affiliates.
(ii) “Competing
Services” means
services that, if provided to a business other than a Competing Business, would
constitute the conduct of a Competing Business.
(iii)
“Geographic Area” means the United States.
(iv) “Term of
Non-Competition”
means the period of time beginning on the date hereof and continuing until (A)
if this Agreement is terminated during the Employment Period by either the
Company for Cause or Employee without Good Reason, two years after the Date of
Termination, (B) if this Agreement is terminated during the Employment Period by
either the Company without Cause or Employee for Good Reason, one year after the
Date of Termination, or (C) if the Employment Period expires by reason of a
Non-Renewal Notice, one year after the last day of the Employment
Period.
(d) If any court or arbitrator
determines that any portion of this Section 9 is invalid or unenforceable, the
remainder of this Section 9 shall not thereby be affected and
shall be given full effect without regard to the invalid or unenforceable
provisions. If any court or arbitrator construes any of the provisions of this
Section 9 to be invalid or unenforceable
because of the duration or scope of such provision, such court or arbitrator
shall be required to reduce the duration or scope of such provision, to the
minimum extent necessary so as to be enforceable, and to enforce such provision
as so reduced.
10. Non-Disparagement. Employee agrees to refrain from
engaging in any conduct, or making any comments or statements, during the
Employment Period and thereafter, that have the purpose or effect of harming the
reputation or goodwill of the Company or its affiliates.
11. Miscellaneous.
(a) Construction. This Agreement shall be governed
by and construed in accordance with the laws of the State of California without
reference to principles of conflict of laws. The captions of this Agreement are
not part of the provisions hereof and shall have no force or effect. Whenever
the terms “hereof”, “hereby”, “herein”, or words of similar import are used in
this Agreement they shall be construed as referring to this Agreement in its
entirety rather than to a particular section or provision, unless the context
specifically indicates to the contrary. Any reference to a particular “Section”
or “paragraph” shall be construed as referring to the indicated section or
paragraph of this Agreement unless the context indicates to the contrary. The
use of the term “including” herein shall be construed as meaning “including
without limitation.” This Agreement may not be amended or modified otherwise
than by a written agreement executed by the parties hereto or their respective
successors and legal representatives.
(b) Notices. All notices and other
communications hereunder shall be in writing and shall be given by hand delivery
to the other party or by registered or certified mail, return receipt requested,
postage prepaid, addressed as follows:
| If to Employee: | 00 Xxxxxxx Xxxxxx | |
| Mill Valley, CA 94941 | ||
| If to the Company: | Lyris Technologies, Inc. | |
| 00000 Xxxxxxx Xxx, Xxxxx 000 | ||
| Berkeley, CA 94704 | ||
| With a copy to: | Xxxxxx & Xxxxxx L.L.P. | |
| 3700 Xxxxxxxx Xxxx Center | ||
| 0000 Xxxx Xxxxxx | ||
| Dallas, Texas 75201 | ||
| Attention: Xxxxxxx X. Xxxxxxx | ||
or to such
other address as either party shall have furnished to the other in writing in
accordance herewith. Notice and communications shall be effective when actually
received by the addressee.
(c) Severability. If any provision of this Agreement
is held to be illegal, invalid or unenforceable under present or future laws
effective during the term of this Agreement, such provision shall be fully
severable; this Agreement shall be construed and enforced as if such illegal,
invalid or unenforceable provision had never comprised a portion of this
Agreement; and the remaining provisions of this Agreement shall remain in full
force and effect and shall not be affected by the illegal, invalid or
unenforceable provision or by its severance from this Agreement. Furthermore, in
lieu of such illegal, invalid or unenforceable provision there shall be added
automatically as part of this Agreement a provision as similar in terms to such
illegal, invalid or unenforceable provision as may be possible and be legal,
valid and enforceable.
(d) Withholding. The Company may withhold from any
amounts payable under this Agreement such Federal, state or local taxes as shall
be required to be withheld pursuant to any applicable law or
regulation.
(e) No Waiver. Employee’s or the Company’s
failure to insist upon strict compliance with any provision of this Agreement or
the failure to assert any right Employee or the Company may have hereunder,
including, without limitation, the right of Employee to terminate employment for
Good Reason, shall not be deemed to be a waiver of such provision or right or
any other provision or right of this Agreement.
(f) Equitable and Other
Relief. Employee
acknowledges that money damages would be both incalculable and an insufficient
remedy for a breach of Section 6, Section 7, Section 9 or Section 10 by Employee and that any such
breach would cause the Company irreparable harm. Accordingly, the Company, in
addition to any other remedies at law or in equity it may have, shall be
entitled, without the requirement of posting of bond or other security, to
equitable relief, including injunctive relief and specific performance, in
connection with a breach of Section 6, Section 7, Section 9 or Section 10 by Employee.
(g) Entire Agreement. The provisions of this Agreement
constitute the complete understanding and agreement between the parties with
respect to the subject matter hereof, and supersede all prior and
contemporaneous oral and written agreements, representations and understandings
of the parties, which are hereby terminated. Employee and the Company
acknowledge and represent that there are no other promises, terms, conditions or
representations (oral or written) regarding any matter relevant hereto.
(h)
Counterparts. This Agreement may be executed in
two or more counterparts.
(i)
Arbitration.
(i) In the event any dispute or
controversy arises under this Agreement and is not resolved by mutual written
agreement between Employee and the Company within 30 days after notice of the
dispute is first given, then Employee and the Company will mutually select an
arbitrator and submit such dispute or controversy to arbitration by such
arbitrator; provided, however, if the Company and Employee have
not mutually selected an arbitrator within 90 days after notice of the dispute
is first given, or if Employee and the Company decide at any earlier date not to
mutually select an arbitrator, then, upon the written request of Employee or the
Company, such dispute or controversy shall be submitted to arbitration by an
arbitrator to be selected by the American Arbitration Association (“AAA”). The arbitration will be
conducted in accordance with the Rules for Resolution of Employment Disputes of
the AAA. Judgment may be entered thereon and the results of the arbitration will
be binding and conclusive on the parties hereto. Any arbitrator’s award or
finding or any judgment or verdict thereon will be final and unappealable. All
parties agree that venue for arbitration will be in San Francisco County,
California, or such other place as may be agreed upon in writing at the time by
the parties and that any arbitration commenced in any other venue will be
transferred to San Francisco County, California, upon the written request of any
party to this Agreement. All arbitrations will have one individual acting as
arbitrator. Any arbitrator selected will not be affiliated, associated or
related to either Employee of the Company in any matter whatsoever. The decision
of the arbitrator will be binding on all parties. The prevailing party in the
arbitration (as determined by the arbitrator) shall be reimbursed, by the other
party, its reasonable attorneys fees, costs and other expenses pertaining to any
such arbitration and enforcement.
(ii) THE ARBITRATOR SHALL HAVE NO
AUTHORITY TO AWARD PUNITIVE DAMAGES UNDER ANY CIRCUMSTANCES (WHETHER IT BE
EXEMPLARY DAMAGES, TREBLE DAMAGES, OR ANY OTHER PENALTY OR PUNITIVE TYPE OF
DAMAGES). REGARDLESS OF WHETHER SUCH DAMAGES MAY BE AVAILABLE UNDER CALIFORNIA
LAW, EMPLOYEE AND THE COMPANY EACH HEREBY WAIVE THE RIGHT, IF ANY, TO RECOVER
PUNITIVE DAMAGES IN CONNECTION WITH ANY CLAIMS. EMPLOYEE AND THE COMPANY
ACKNOWLEDGE THAT BY SIGNING THIS AGREEMENT EMPLOYEE AND THE COMPANY ARE WAIVING
ANY RIGHT THAT EMPLOYEE OR THE COMPANY MAY HAVE TO A JURY TRIAL.
(j) Survival. Sections 4, 5, 6, 7, 8, 9, and 10 of this Agreement shall survive the
termination of Employee’s employment.
(k) Amendments. This Agreement may not be amended
or modified at any time except by a written instrument executed by the Company
and Employee.
(l) Effectiveness. If the Effective Date has not
occurred by May 25, 2005, this Agreement shall be null and void and of no force
or effect.
(m) Employee
Acknowledgment.
Employee acknowledges that he has read and understands this Agreement, is fully
aware of its legal effect, has not acted in reliance upon any representations or
promises made by the Company other than those contained in writing herein, and
has entered into this Agreement freely based on his own judgment.
[SIGNATURE
PAGE FOLLOWS]
IN WITNESS WHEREOF, Employee has
hereunto set Employee’s hand and the Company has caused this Agreement to be
executed in its name on its behalf, all as of the day and year first above
written.
| EMPLOYEE: | ||||
| /s/ Xxxx Xxxxxx | ||||
| COMPANY: | ||||
| LYRIS TECHNOLOGIES, INC. | ||||
| By: | /s/ Xxxxx X. Xxxx | |||||
| Name: Xxxxx X. Xxxx | ||||||
| Title: | ||||||
[SIGNATURE
PAGE TO EMPLOYMENT AGREEMENT]
SCHEDULE
I
Annual Bonus
1.
Profit Sharing
Bonus
Company shall
pay to Employee a bonus based on the profitability of the Company as set forth
below:
- Bonus will be paid
quarterly within 30 days after the end of each fiscal quarter for the
Company.
- Bonus will be based on Company accomplishing its “Profit Target” for such quarter.
Profit Target for the quarter ended June 30, 2005 shall be
$1,250,000.00.
Profit Target for the quarter ended September 30, 2005 shall be
$1,500,000.00.
Profit Target for the quarter ended December 31, 2005 shall be
$1,500,000.00.
Profit Target for the quarter ended March 31, 2006 shall be
$1,750,000.00.
If Company
accomplishes its Profit Target for a quarter, Employee shall be entitled to a
bonus equal to $62,500 for the June 30, 2005 quarter, bonus equal to $62,500 for
the September 30, 2005 quarter, bonus equal to $62,500 for the December 31, 2005
quarter and bonus equal to $62,500 for the March 31, 2006 quarter.
If the Company
does not accomplish its Profit Target in a quarter but exceeds its Profit Target
in a subsequent quarter, the Profit Sharing Bonus can be increased pro rata by
an amount sufficient to make up for a shortfall in a prior quarter. For the four
quarters ended March 31, 2006, if the Profit Target equals $6,000,000 the full
Profit Sharing Bonus of $250,000 will be paid.
