EXHIBIT 10.19
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is entered into as of May 28, 2002, (the
"Effective Date") by and between EXTENDED SYSTEMS, INCORPORATED., a Delaware
corporation (hereinafter referred to as the "Employer"), and Xxxxxxx Xxxxxx,
hereinafter referred to as the "Employee").
W I T N E S S E T H:
The Employer, Venus Acquisition Corporation, a Delaware corporation and
wholly-owned subsidiary of Employer (the "Merger Sub"), ViaFone, Inc., a
Delaware corporation (the "Company"), and certain other parties have entered
into an Agreement and Plan of Merger and Reorganization (the "Reorganization
Agreement"), dated May 28, 2002, whereby the Merger Sub will merge with and into
the Company on the closing date of the transactions contemplated by the
Reorganization Agreement (the "Closing Date"). Immediately following the Closing
Date, Employer wishes to employ the Employee, and the Employee agrees to accept
such employment, on the terms and conditions set forth herein.
NOW THEREFORE, based on the foregoing premises and for and in consideration
of the mutual promises contained herein, the Employer and Employee agree as
follows:
1. Employment. From and after the Closing Date, Employer agrees to employ
the Employee and Employee agrees to accept such employment as a Vice President,
Solutions Group of Extended Systems, Incorporated (the "Employer"). Employee and
Employer acknowledge and agree that such employment will be in accordance with
Employer's standard employment policies, and Employee agrees to be bound by such
employment policies, which shall be in addition to the terms and conditions
contained herein. Employee further acknowledges that Employer policy manual or
other similar documents are to be explanations of benefits or programs, and they
do not change the terms of this Employment Agreement.
2. At-Will Employment. The parties agree that Employee's employment with
the Employer will be "at-will" employment and may be terminated at any time with
or without cause or notice. Employee understands and agrees that neither his/her
job performance nor promotions, commendations, bonuses or the like from the
Employer give rise to or in any way serve as the basis for modification,
amendment, or extension, by implication or otherwise, of his/her employment with
the Employer.
3. Duties of Employee. Employee agrees to perform the duties commensurate
with employee's position and experience and as shall be assigned to employee
from time to time by the Employer. Employee shall perform such duties in a
diligent and loyal manner, shall devote his/her entire business time, attention,
and efforts to the affairs of Employer within the scope of his/her employment as
is reasonably necessary for the proper rendition of such services and shall
diligently promote the interest of Employer. Employee shall not intentionally
take any action against the best interest of Employer, or of Employer's parent,
any other subsidiary, or affiliate of Employer. Employee agrees not to actively
engage in any other employment, occupation or consulting activity for any direct
or indirect remuneration without the prior approval of the Employer.
4. Scope of Employment. The general scope of Employee's employment shall
be to serve as a Vice President, Solutions Group for Employer and to perform
such duties as described in Exhibit "A" (to be mutually agreed upon prior to the
Closing Date), attached hereto, and such other duties as may be mutually agreed
upon by the parties in accordance therewith as Employer may reasonably request.
5. Compensation.
(a) Base Salary. While employed hereunder, the Employer will pay
Employee as compensation for his services a base salary at the monthly rate of
$11,667 (the "Base Salary"). The Base Salary will be paid periodically in
accordance with the Employer's normal payroll practices and be subject to the
usual, required withholding. In addition to base pay, employee will be entitled
to a commission plan which represents 20% of base pay at 100% of target.
Commission plan targets and details to be mutually agreed upon at the beginning
of each fiscal year by employee and employer. The employee shall also be
entitled to participate in any generally applicable Executive Compensation Bonus
Plan when put in place by the CEO and compensation committee of the company.
(b) Stock Option. As soon as practicable following the Effective
Date, Employee will be granted a stock option, which will be a non-qualified
option, to purchase 70,000 shares of the Employer's Common Stock at an exercise
price per share equal to the per share FMV of ESI Stock on the date of grant
(the "Option"). The Option will vest as to 25% of the shares subject to the
Option on the day this Agreement becomes effective, and as to 1/48th of the
shares subject to the Option monthly thereafter, so that the Option will be
fully vested and exercisable three (3) years from the date of grant, subject to
Employee's continued service to the Employer on the relevant vesting dates.
Employee shall be entitled to a second stock option grant at the time of the
company's annual stock option grant for FY 03, no later than December 2003.This
grant will be in line with other grants awarded to members of the Employer's
executive team. The Option will be subject to the terms, definitions and
provisions of the Employer's Stock Plan and the stock option agreement by and
between Employee and the Employer, both of which documents are incorporated
herein by reference.
(c) Employee Benefits. While employed hereunder, Employee will be
entitled to participate in the employee benefit plans currently and hereafter
maintained by the Employer of general applicability to other employees of the
Employer, including, without limitation, the Employer's group medical, dental,
vision, disability, and life insurance plans. The Employer reserves the right to
cancel or change the benefit plans and programs it offers to its employees at
any time.
6. Vacation. Employee shall receive, as of the date of this Agreement, of
accrued vacation to be taken in accordance with Employer's time-off policy. For
purposes of vacation accrual only, Employee shall be treated as though he has 26
months of service as of the date of this Agreement. Employee shall accrue
vacation in accordance with Employer's time-off policy. Vacation is subject to
the requirements of Employer's time-off policy. In the event Employee is
terminated for any reason, Employee shall be paid his/her accrued vacation.
7. Notice of Termination. Each party agrees to provide the other with 14
days notice of termination, provided, however, this shall not alter any other
term of this Agreement.
8. Severance Pay: In the event Employee is involuntarily terminated by
the Employer without Cause (as defined below), Employee shall be entitled to six
(6) months of pay, at Employee's current base salary, to be paid periodically in
accordance with Employer's normal payroll practices and subject to the usual and
required withholding, plus a lump sum equal to the cost of current COBRA
benefits for six (6) months, and payout of accrued vacation, to be paid at or as
soon as practicable following such termination. In order to receive such salary
and lump sum payment, Employee must execute and not revoke the employer's then
current "Release of All Employment Claims," (Participation in all stock option
plans, stock purchase plans, and other company personnel benefits shall cease on
the Employee's date of termination, subject to the specific provisions of option
agreements or plans that may extend Employee's rights beyond date of
termination. Should employee violate any of the provisions of this agreement,
engage in any criminal activity, or engage in any activity which Employer deems
to be detrimental to its business referred to herein as "Cause"), employer may
terminate this agreement for Cause and employee will not be entitled to a
severance package.
In the event of a Change of Control, as defined below, the six (6) month
base salary termination and COBRA payment shall be increased to twelve (12)
months. Employee is responsible for any tax consequences triggered by severance
payment or a Change in Control.
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For purposes of this Section 8, a "Change of Control" will include: (a) the
acquisition of the Employer by another entity by means of any transaction or
series of related transactions (including, without limitation, any stock
acquisition, reorganization, merger or consolidation) other than a transaction
or series of transactions in which the holders of the voting securities of the
Employer outstanding immediately prior to such transaction continue to retain
(either by such voting securities remaining outstanding or by such voting
securities being converted into voting securities of the surviving entity), as a
result of shares in the Employer held by such holders prior to such
transactions, at least fifty percent (50%) of the total voting power represented
by the voting securities of the Employer or such surviving entity outstanding
securities immediately after such transaction or series of transactions; or (b)
a sale, lease or other conveyance of all or substantially all of the assets of
the Employer.
If Employee's employment with the Employer is terminated by the Employee, then
(i) all vesting of the Option will terminate immediately and all payments of
compensation by the Employer to Employee hereunder will terminate immediately
(except as to amounts already earned), and (ii) Employee will only be eligible
for severance benefits in accordance with the Employer's established policies as
then in effect.
Effective the date the Employee's employment with the Employer is terminated by
either the Employer or the Employee, the Employee shall have a period of one (1)
year following such termination date to fully exercise any remaining vested
shares that resulted from option grants during the duration of the employment.
Employee understands that this provision of employment makes all option grants
non-qualified options.
9. Confidential Information. Employee agrees to sign the Nondisclosure
Agreement.
10. Return of Property. On termination of his/her employment with
Employer, Employee will immediately surrender to Employer, in good condition,
all sales manuals, price lists, customer account lists, copies of invoices,
mailing lists, letters, notes, memoranda, design specifications, drawings,
minutes of meetings, financial reports, computer software programs, source
codes, works in progress and any other similar items that have been supplied to
Employee by Employer, or generated by Employee for the Employer's use or
business and that are in Employee's possession, custody, or control wherever
located, including all reproductions or copies of such materials.
11. Equitable Relief. In the event of a breach of any covenant contained
in this Agreement, the non-breaching party shall be entitled to an injunction
restraining such breach in addition to any other remedies provided by law or in
equity.
12. Assignment of Inventions.
(a) Inventions Retained and Licensed. The Employee has attached to
this Employment Agreement, as Exhibit "B," a list describing all inventions,
original works of authorship, developments, improvements, and trade secrets that
were made by him/her prior to his/her employment with the Employer, that relate
to the Employer's proposed business, products or research and development, and
that are not assigned to the Employer under this Employment Agreement
(collectively, "Prior Inventions"). If no such list is attached, the Employee
represents that there are no Prior Inventions. If in the course of the
Employee's employment with the Employer, he/she incorporates into an Employer
product, process or machine a Prior Invention owned by him/her or in which
he/she have an interest, the Employer is granted a nonexclusive, royalty-free,
irrevocable, perpetual, worldwide license to make, have made, modify, use and
sell the Prior Invention as part of or in connection with the Employer's
product, process or machine.
(b) Assignment of Inventions. The Employee will promptly make a full
written disclosure to the Employer, will hold in trust for the sole right and
benefit of the Employer, and hereby assigns to the Employer, or its designee,
all his/her right, title, and interest in and to any and all inventions,
original works of authorship, developments, concepts, improvements, designs,
discoveries, ideas, trademarks or trade secrets, whether or not patentable or
registrable under copyright or similar laws, that he/she may solely or jointly
conceive or develop or reduce to practice, or cause to be conceived or developed
or reduced to practice, during the period of time the Employee is in the employ
of the Employer
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only when such inventions relate to the Employer's proposed business, products
or research and development (collectively referred to as "Inventions"). The
Employee further acknowledges that all original works of authorship that are
made by him/her (solely or jointly with others) within the scope of and during
the period of his/her employment with the Employer and that are protectable by
copyright are "works made for hire," as that term is defined in the United
States Copyright Act. The decision whether or not to commercialize or market any
Invention developed by the Employee solely or jointly with others is within the
Employer's sole discretion and for the Employer's sole benefit. Neither the
Employer nor any other entity will pay the Employee a royalty as a result of the
Employer's efforts to commercialize or market any such Invention. The Employee
will not incorporate any original work of authorship, development, concept,
improvement, or trade secret owned, in whole or in part, by any third party,
into any Invention without the Employer's prior written permission signed by the
President of the Employer.
(c) Inventions Assigned to the United States. The Employee agrees to
assign to the United States government all his/her right, title, and interest in
and to any and all Inventions whenever such full title is required to be in the
United States by a contract between the Employer and the United States or any of
its agencies.
(d) Maintenance of Records. The Employee will keep and maintain
adequate and current written records of all Inventions made by him/her (solely
or jointly with others) during the term of his/her employment with the Employer.
The records will be in the form of notes, sketches, drawings, laboratory
notebooks, and any other format that may be specified by the Employer. At all
times, the records will (a) be available to Employer, and (b) remain the sole
property of the Employer.
(e) Patent and Copyright Registrations. The Employee will assist the
Employer, or its designee, at the Employer's expense, in every proper way to
secure and protect the Employer's rights in the Inventions and any related
copyrights, patents, mask work rights or other intellectual property rights in
any and all countries. The Employee will disclose to the Employer all pertinent
information and data. The Employee will execute all applications,
specifications, oaths, assignments and all other instruments that the Employer
deems necessary in order to apply for and obtain such rights and in order to
assign and convey to the Employer, its successors, assigns, and nominees the
sole and exclusive rights, title and interest in and to such Inventions, and any
related copyrights, patents, mask work rights or other intellectual property
rights. The Employee's obligation to execute or cause to be executed, when it is
in his/her power to do so, any such instrument or papers will continue after the
termination of this Employment Agreement. If the Employer is unable because of
the Employee's mental or physical incapacity or for any other reason to secure
the Employee's signature to apply for or to pursue any application for any
United States or foreign patents or copyright registrations covering Inventions
or original works of authorship assigned to the Employer as above, then the
Employee hereby irrevocably designates and appoints the Employer and its duly
authorized officers and agents as his/her agent and attorney-in-fact.
Accordingly, the Employer may act for and in the Employee's behalf to execute
and file any applications and to do all other lawfully permitted acts to further
the prosecution and issuance of letters patent or copyright registrations with
the same legal force and effect as if executed by the Employee.
13. Conflicting Employment. During the term of the Employee's employment
with the Employer, he/she will not engage in any other employment, occupation,
consulting or other business activity directly related to the business that the
Employer is now involved or becomes involved during the term of the Employee's
employment. The Employee will also not engage in any other activities that
conflict with his/her obligations to the Employer.
14. Survival. The provisions of paragraphs 8, 9, 10, and 11 hereof shall
survive the termination of the Agreement.
15. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity and enforceability of the other provisions hereof. If any
provision of this Agreement is unenforceable for any reason whatsoever, such
provision shall be appropriately limited and given effect to the extent that it
may be enforceable.
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16. Governing Law. All rights and obligations of the parties arising out
of this Agreement will be construed and enforced in accordance with the laws of
the state of Idaho, without reference to its rules as to conflicts of laws.
17. Prevailing Party's Fees. If the parties hereto become parties to any
litigation, commenced by or against one another involving the enforcement of any
rights or remedies under this Agreement, or arising on account of a default of
the other party in its performance of such party's obligations hereunder, the
prevailing party in such litigation shall be entitled to reimbursement of all of
its legal fees, costs, and expenses incurred in connection with such litigation,
and interest accrued thereon from the date of judgment, at the maximum rate
permitted by law.
18. Assignment. This Agreement may not be assigned or otherwise
transferred by Employer without the prior written consent of Employee, which
consent shall not be unreasonably withheld. No such consent shall be required
for a transfer of value of all or substantially all of Employer's assets,
whether such transfer is effected by asset sale, merger, stock sale or
otherwise. Any attempted assignment in violation of the provisions of this
section will be void. Subject to the foregoing, this Agreement shall be binding
on and inure to the benefit of the parties and their respective successors and
assigns.
19. Notices. All notices, requests, demands and other communications
called for hereunder shall be in writing and shall be deemed given (i) on the
date of delivery if delivered personally, (ii) one (1) day after being sent by a
well established commercial overnight service, or (iii) 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 the Employer:
Extended Systems, Inc.
0000 X. Xxxxxx Xxx
Xxxxx, XX 00000
Attn: Xxxxxx Xxxxxx
If to Employee: At the last residential address known by the Employer.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
EMPLOYER: EXTENDED SYSTEMS, INCORPORATED
By /s/ Xxxxxx X. Xxxxxxx
-----------------------------------------------
Xxxxxx X. Xxxxxxx, President/CEO
EMPLOYEE:
/s/ Xxxxxxx Xxxxxx
--------------------------------------------------
__________________________________________________
Print Name
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EXHIBIT A
DUTIES OF EMPLOYEE
TO BE FINALIZED BETWEEN XXXXX AND RAPHAEL
EXHIBIT B
INVENTIONS
In general, any invention that has no applicability for ESI businss shall fall
under here.
At minimum, the two following inventions should be listed. To be
filled more in detail but two areas of inventions are:
1) Patent on internet-based/telecommunication-based
customer-retention/customer-loyalty programs.
Patent registered and issued in Europe. Patent to be expanded
worldwide.
2) Invention on use of advanced technologies (computing, sensors,) for
improvement of human sleep patterns. Invention in the process of being
patented
