EXHIBIT 10.24
AGREEMENT
This Agreement is made by and between SCM Microsystems, Inc. ("SCM"),
and you, Xxxxx Xxxxxxxx, as of May 22, 2003 (the "EFFECTIVE DATE"). References
herein to the term "AGREEMENT" include Exhibit A hereto.
1. Employment; Term. During the term of this Agreement, you will
serve as Special Advisor to SCM. The term of this Agreement (the "EMPLOYMENT
TERM") shall expire on the earlier of July 31, 2003, or the date that you or SCM
terminates the Employment Term by giving the other party written notice of such
termination. The last day of the Employment Term is referred to as the "END
DATE". As of the Effective Date, you resign as Executive Vice President of
Retail Brands and, although you will remain an employee of SCM, you relinquish
all other officer and director positions with SCM and its affiliates. You will
render such business and professional services in the performance of your
duties, consistent with your position within SCM, as shall reasonably be
assigned to you by SCM's Board of Directors (the "BOARD") or its Chief Executive
Officer ("CEO"). You will devote your business efforts and time to SCM and such
of its subsidiaries as the Board or CEO may designate. It is understood that you
will continue to provide operational services to SCM's Digital Media and Video
("DMV") division on a basis consistent with your previous responsibilities. Your
primary managerial focus will be on the Guilford, Connecticut facilities and
operations. You will also provide assistance in connection with the controlled
exit or sale of the DMV business (including dealing with DMV customers, vendors
and employees and assisting in the closing of the DMV facilities in Connecticut
and Japan). However, in connection with any sale of the DMV business, you will
only be required to provide information related to the DMV business to SCM's
representatives and will not be required to directly meet with, or provide
information to, potential third party DMV acquirers.
2. Employee Benefits. During the Employment Term, you will be
eligible to participate in accordance with the terms of all SCM employee benefit
plans that are generally applicable to other U.S. employees of SCM who are
Executive Vice President level or below, as such plans and terms may exist from
time to time, provided you are determined to be an employee of SCM according to
the terms of such plans. In the event you are determined to be ineligible to
participate in SCM's employee benefit plans and subject to compliance with the
terms of this Agreement (including Exhibit A), SCM shall provide you with the
same level of SCM subsidized health (i.e., medical, vision and dental) coverage
and executive benefits as in effect for you on the day of such determination
through the End Date. You will continue to have the right to use the SCM company
car you are currently using until the End Date, at which time you will deliver
the car to an SCM designee in Connecticut.
3. COBRA. After the End Date, you agree to elect continued health
coverage pursuant to the Consolidated Budget Reconciliation Act of 1985, as
amended ("COBRA"). Subject to you making such election and executing and not
revoking and delivering to the Company, on or around such date, a release in
substantially the form attached as Exhibit A, the Company will reimburse you for
the amount of such COBRA premiums from the End Date until December 31, 2003
relating to the SCM-paid coverage provided by SCM prior to the End.
4. Compensation.
(a) Base Salary. During the Employment Term and beginning
on the Effective Date, SCM will pay you as compensation for your services at a
monthly rate of $25,000 (the "BASE SALARY"); provided, however, that for the
month of May 2003 you will receive a pro rata portion of your current monthly
base salary with SCM ($________) for the period from May 1 to the Effective Date
and a pro rata portion of the Base Salary from the Effective Date until May 31,
2003. The Base Salary will be paid through payroll periods that are consistent
with SCM's normal payroll practices, assuming that you are in compliance with
all of your obligations under this Agreement.
If SCM terminates the Employment Term prior to June 1, 2003,
the entire pro rata amount of the Base Salary will be paid to you during the
month of May 2003, but SCM will not be obligated to pay you the Base Salary or
any other salary, bonus or other compensation for the month of June or
thereafter. If you terminate the Employment Term prior to June 1, 2003, you will
only be entitled to a pro rata portion of the Base Salary earned from the
Effective Date through the End Date. If SCM terminates the Employment Term
during the month of June 2003, SCM will pay you the entire amount of the Base
Salary for the month of June 2003 (together with any earned but unpaid Base
Salary from May 2003), but SCM will not be obligated to pay you the Base Salary
or any other salary, bonus or other compensation for the month of July or
thereafter. If you terminate the Employment Term during the month of June 2003,
you will only be entitled to a pro rata portion of the Base Salary earned from
June 1, 2003 through the End Date (together with any earned but unpaid Base
Salary from May 2003). If SCM terminates the Employment Term during the month of
July 2003, SCM will pay you the entire amount of the Base Salary for the month
of July 2003 (together with any earned but unpaid Base Salary from May or June
2003). If you terminate the Employment Term during the month of July 2003, you
will only be entitled to a pro rata portion of the Base Salary earned from July
1, 2003 through the End Date (together with any earned but unpaid Base Salary
from May or June 2003).
(b) Stock Options. During the Employment Term, your
unexpired stock options will continue to vest and become exercisable pursuant to
the terms and conditions of the stock option plans and the applicable stock
option agreements by and between you and SCM, assuming that you are providing
services to SCM on each vesting date and that you are in compliance with all of
your obligations under this Agreement.
5. Indemnification and D&O Insurance. The parties agree that (i)
you will continue to be covered by the terms and conditions of the Indemnity
Agreement entered into between you and SCM on [INDEMNITY AGREEMENT DATE] (the
"INDEMNITY AGREEMENT"), (ii) the parties' rights and obligations thereunder are
unaffected by this Agreement and (iii) the Indemnity Agreement will cover your
activities performed hereunder during the Employment Term.
6. Settlement Agreement and Release. On the date you sign this
Agreement, you will sign and deliver to SCM a Settlement Agreement and Release
in the form attached as Exhibit A. SCM's obligation to perform under this
Agreement is contingent upon your signing and not revoking the Settlement
Agreement and Release.
7. Removal of Files. Following your termination of employment,
you may remove your personal files from SCM's premises. Any file containing
"Employment Information" (as defined in
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Section 11) may not be removed from SCM's premises without the written consent
of the Board or the CEO.
8. Assignment. This Agreement will be binding upon and inure to
the benefit of (a) your heirs, executors and legal representatives upon your
death and (b) any successor of SCM. Any such successor of SCM will be deemed
substituted for SCM under the terms of this Agreement for all purposes. For this
purpose, "SUCCESSOR" means 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 SCM.
None of your rights to receive any form of compensation payable pursuant to this
Agreement may be assigned or transferred except by will or the laws of descent
and distribution. Any other attempted assignment, transfer, conveyance or other
disposition of your right to compensation or other benefits will be null and
void.
9. Notices. All notices, requests, demands and other
communications called for hereunder shall be in writing and will be deemed given
(a) on the date of delivery if delivered personally or by facsimile, (b) one (1)
day after being sent by a well established commercial overnight service, or (c)
four (4) days after being mailed by registered or certified mail, return receipt
requested, prepaid and addressed to the parties or their successors at the
following addresses, or at such other addresses as the parties may later
designate in writing:
If to SCM:
SCM Microsystems, Inc.
000 Xxxx Xxxxxxx
Xxxxxxx, XX 00000
Fax: (000) 000-0000
Telephone: (000) 000-0000
Attn: Xxxxxx Xxxxxx
With a copy to:
Xxxxxx Xxxxxxx Good rich & Xxxxxx, P.C.
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000
Fax: (000) 000-0000
Telephone: (000) 000-0000
Attn: Xxxx X. Xxxxxx, Esq.
If to you:
at the last residential address known by SCM.
10. 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 will continue in full force and effect without said
provision.
11. Confidentiality. During the Employment Term and thereafter,
you agree to use your best efforts to maintain in confidence the existence of
this Agreement, the contents and terms of this
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Agreement, including any documents incorporated by reference, the consideration
for this Agreement, any SCM proprietary information, technical data, trade
secrets or know-how, including, but not limited to, research, product plans,
products, services, customer lists and customers (including, but not limited to,
customers of SCM on whom you called or with whom you became acquainted during
the term of your employment), markets, software, developments, inventions,
processes, formulas, technology, designs, drawings, engineering, hardware
configuration information, marketing, finances or other business information
disclosed to you by SCM either directly or indirectly in writing or orally
(hereinafter collectively referred to as "EMPLOYMENT INFORMATION"). You agree to
take every reasonable precaution to prevent disclosure of any Employment
Information to third parties, and agree that there will be no publicity,
directly or indirectly, concerning any Employment Information. You agree to take
every precaution to disclose Employment Information only to those attorneys,
accountants, governmental entities and family members who have a reasonable need
to know of such Employment Information.
12. Non-Disparagement. You and SCM agree to refrain from making
any negative comments about the other concerning their respective business,
products or services, officers, employees and directors and to refrain from any,
defamation, libel or slander of the other and their respective officers,
directors, employees, investors, shareholders, administrators, affiliates,
divisions, subsidiaries, predecessor and successor corporations, and assigns or
tortious interference with the contracts and relationships of the other and
their respective officers, directors, employees, investors, shareholders,
administrators, affiliates, divisions, subsidiaries, predecessor and successor
corporations, and assigns.
13. Entire Agreement. This Agreement (including Exhibit A),
together with the Indemnity Agreement, the Invention and Assignment Agreement to
which you are a party and your stock option agreements, represents the entire
agreement and understanding between SCM and you concerning your employment
relationship with SCM or any of its subsidiaries, and supersedes and replaces
any and all prior agreements and understandings concerning your employment
relationship with SCM.
14. Submission to Jurisdiction; Expenses.. The parties submit to
jurisdiction of any state or federal court sitting in Santa Clara, California in
any action or proceeding arising out of or relating to this Agreement and agree
that all claims in respect of such action or proceeding may be heard and
determined in such court. Any final judgment in any action or proceeding so
brought shall be conclusive and may be enforced by suit on the judgment or in
any other manner provided by law or in equity. The prevailing party in any such
judgment will be entitled to recover its costs and expenses, including the costs
of litigation and court fees, plus reasonable attorneys' fees, incurred in
connection with such an action.
(i)
15. Cooperation with SCM. During and after the Employment Term,
you will cooperate fully with SCM, including, but not limited to, responding to
the reasonable requests of SCM's Board or counsel, in connection with any and
all existing or future litigation, arbitrations, mediations or investigations
brought by or against SCM or any of its affiliates, agents, officers, directors
or employees, whether administrative, civil or criminal in nature, in which SCM
reasonably deems your cooperation necessary or desirable. You agree to provide
reasonable advice, assistance and
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information, including offering and explaining evidence, providing sworn
statements, participating in discovery and trial preparation and testimony as
may reasonably be deemed necessary or desirable by SCM relating to its position
in any such legal proceedings. You also agree to promptly send SCM copies of all
correspondence (for example, but not limited to, subpoenas) received by you in
connection with any such legal proceedings, unless you are expressly prohibited
by law from so doing. You will act in good faith to furnish the information and
cooperation required by this Section 15 and SCM will act in good faith so that
the requirement to furnish such information and cooperation does not create an
undue hardship for you. SCM will reimburse you for reasonable out-of-pocket
expenses incurred by you as a result of your cooperation, within ten (10) days
of the presentation of appropriate documentation thereof, in accordance with
SCM's standard reimbursement policies and procedures. The failure by you to
cooperate fully with SCM in accordance with this Section 15 will be a material
breach of the terms of this Agreement, which will result in all commitments of
SCM to make additional payments to you becoming null and void. Notwithstanding
anything in this Section, it is agreed that if possible SCM will provide you
with reasonable advance notice regarding these activities, and that any requests
made hereunder by SCM will be made in good faith and reasonable.
16. No Oral Modification, Cancellation or Discharge. This
Agreement may be changed or terminated only in writing (signed by you and the
CEO of SCM (on behalf of SCM)).
17. Withholding. SCM is authorized to withhold, or cause to be
withheld, from any payment or benefit under this Agreement the full amount of
any applicable withholding taxes.
18. Governing Law. This Agreement will be governed by the laws of
the State of California (with the exception of its conflict of laws provisions).
19. Authority. SCM represents and warrants that the person signing
this Agreement on its behalf has full authority to act for SCM.
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20. Acknowledgment. You acknowledge that you (i) have read this
Agreement, (ii) have been represented in the preparation, negotiation, and
execution of this Agreement by legal counsel of your own choice or that you
voluntarily have declined to seek counsel, (iii) understand the terms and
consequences of this Agreement, and (iv) are fully aware of the legal and
binding effect of this Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Agreement on the
respective dates set forth above.
XXXXX XXXXXXXX
/s/ Xxxxx Xxxxxxxx
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Xxxxx Xxxxxxxx 5/22/03
SCM MICROSYSTEMS, INC.
By: /s/ Xxxxxx Xxxxxxxxx
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Title: CEO
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