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EXHIBIT 2.8
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made and entered
into as of this _______th day of January 1999, to become effective at the time
set forth in Section 1 hereof, between eSoft, Inc., a Delaware corporation (the
"Company"), and XXXX XXXXXXXX, an individual person (the "Executive").
RECITAL
A. The Company desires to employ the Executive as DIRECTOR OF
PRODUCT MANAGEMENT, and the Executive desires to be employed by the Company in
such position upon the terms and conditions set forth in this Agreement.
B. The Executive acknowledges that during the course of the
Executive's employment the Executive will receive or be exposed to certain
confidential information and trade secrets (collectively referred to as
"Confidential Information") of the Company. The Executive also acknowledges
that this Confidential Information is among the Company's most important assets
and that the value of this Confidential Information would be diminished or
extinguished by disclosure.
AGREEMENT
In consideration of the mutual promises contained herein, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
1. Employment; Position; Term. The Company hereby employs the
Executive and the Executive hereby accepts employment with the Company in the
capacity of DIRECTOR OF PRODUCT MANAGEMENT. Subject to Section 4, the term of
Executive's employment under this Agreement (the "Term") shall be for 12
months, beginning on the first calendar day following the date on which the
Company acquires Apexx Technology, Inc.
2. Duties, Responsibilities and Authority. In the capacity as
DIRECTOR OF PRODUCT MANAGEMENT for the Company, the Executive shall have
primary responsibility for product management activities, product line
strategies, product packaging, product positioning, and product programs. The
Executive shall report to and be subject to the direction and control of the
Vice President of Product Development and Support of the Company. The Executive
shall devote substantially all of Executive's full professional and managerial
time and effort to the performance of the duties as DIRECTOR OF PRODUCT
MANAGEMENT and shall not engage in other business activity or activities which,
in the reasonable good-faith judgement of the President of the Company,
conflict with the performance of duties under this Agreement.
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3. Compensation
(a) Salary. For services rendered under this Agreement,
the Company shall pay the Executive a salary at the rate of $7,500.00 per
month.
(b) Bonus. The Executive shall be eligible to receive a
performance bonus based upon mutually agreed company and department performance
criteria for each fiscal quarter of the Company completed during the term of
this Agreement. The target bonus pay at 100% of attainment is $10,000 per
quarter. The payment of the Executive's incentive pay shall be made as soon as
practicable but no later than sixty (60) days following the end of the quarter.
The Company will also consider implementing an incentive commission plan of up
to one percent (1%) of the net OEM sales revenue in the event that the
Executive has primary responsibility for OEM sales for the Company. This
incentive commission plan may be in lieu of the Bonus contained in 3(b) herein
and will be agreed mutually between the Executive and the Company.
(c) Stock Options. The Executive will be granted incentive
stock options pursuant to the Company's Stock Option Plan to purchase up to
25,000 shares of the Company's common stock at an exercise price equal to the
fair market value of the Company's common stock on the day of the grant,
subject to board approval. The day of the grant will be the first calendar day
following the date on which the Company acquires Apexx Technology, Inc. Shares
shall vest over a 36 month period with no vesting until the beginning of the
eighth month at which time seven-thirty-sixths (7/36) of the options will vest,
and then one-thirty-sixth (1/36) will vest after the beginning of each month
thereafter. Vesting shall occur as long as the Executive remains an employee of
the Company. The options, once vested shall have an expiration date of 4 years
from the date of grant of the option. In addition, the Executive may
participate in stock option programs of the Company upon such terms as the
administrators of such programs in their discretion determine.
(d) Annual Review. The Executive's salary, bonus, options
and terms of the severance in Section 7 of this Agreement shall be reviewed
annually beginning January 1, 2000 and may be increased as the Board deems
appropriate, but shall not be decreased during the term without mutual
agreement.
(e) Benefits and Vacation. The Executive shall be eligible
to participate in such insurance programs (health, disability or life) or such
other health, dental, retirement or similar employee benefits programs as the
Board may approve, on a basis comparable to that available to other officers
and executive employees of the Company. The Executive shall be entitled to a
minimum of three (3) weeks of paid vacation per year. Vacation time may be
accumulated for up to one year beyond the year for which it is accrued and may
be used any time during such year. Any vacation time not used during such
additional year shall be forfeited. The value of any accrued but unused and
unforfeited vacation time shall be paid in cash to the Executive upon
termination of Executive's employment for any reason.
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(f) Reimbursement of Expenses. The Company shall reimburse
the Executive in a timely manner for all reasonable out-of-pocket expenses
incurred by the Executive in connection with the performance of Executive's
duties under this Agreement; provided that the Executive presents to the
Company an itemized accounting of such expenses including reasonable supporting
data.
4. Termination.
(a) Termination by the Company without Cause.
Notwithstanding anything to the contrary contained herein but subject to
Section 7 hereof, the Company may, by delivering thirty (30) days' prior
written notice to the Executive, terminate the Executive's employment at any
time without Cause (as hereinafter defined).
(b) Termination by the Executive without Cause.
Notwithstanding anything to the contrary contained herein but subject to
Section 7 hereof, the Executive may, by delivering thirty (30) days' prior
written notice to the Company, terminate the Executive's employment hereunder.
(c) Termination by the Company for Cause. The Company may
terminate the Executive's employment for Cause immediately upon written notice
stating the basis for such termination. "Cause" for termination of the
Executive's employment shall only be deemed to exist if the Executive has (i)
breached this Agreement and if such breach continues or recurs more than thirty
(30) days after notice from the Company specifying the action which constitutes
the breach and demanding its discontinuance, (ii) exhibited willful
disobedience of lawful directions of the President or of the Board, or (iii)
committed gross malfeasance in performance of Executive's duties hereunder or
acts resulting in an indictment charging the Executive with the commission of a
felony; provided that the commission of acts resulting in such an indictment
shall constitute Cause only if a majority of the directors who are not also
subject to any such indictment determine that the Executive's conduct has
substantially adversely affected the Company or its reputation. A material
failure to perform Executive's duties hereunder that results from the
disability of the Executive shall not be considered Cause for Executive's
termination.
(d) Termination by the Executive for Cause. The Executive
may terminate employment for Cause immediately upon written notice stating the
basis for such termination. "Cause" for termination of employment by the
Executive shall only be deemed to exist if the Company has breached this
Agreement and if such breach continues or recurs more than thirty (30) days
after notice from the Executive specifying the action which constitutes the
breach and demanding its discontinuance, or if the Company is engaged in
unlawful activity or requests the Executive to engage in unlawful activity.
5. Disability. In the event of disability of the Executive
during the term hereof, the Company shall, during the continuance of
Executive's disability but only for a maximum of 90 days following the
determination of disability, pay the Executive the Executive's then current
salary, as provided for in Section 3(a), and adjusted pursuant to Section 3(b),
and
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continue to provide the Executive all other benefits provided hereunder. As
used herein, the term "disability" shall mean the complete and total inability
of the Executive, due to illness, physical or comprehensive mental impairment,
to substantially perform all of Executive's duties as described herein for a
consecutive period of thirty (30) days or more.
6. Death. In the event of the death of the Executive, except
with respect to any benefits which have accrued and have not been paid to the
Executive hereunder, the provisions of this Agreement shall terminate
immediately. The Executive's estate shall have the right to receive
compensation due to the Executive as of and to the date of Executive's death
and shall have the right to receive an additional amount equal to one-twelfth
(1/12th) of the Executive's annual compensation then in effect.
7. Severance. In the event that the Executive's employment is
terminated by the Company other than for Cause or death of the Executive, or in
the event there is either a material change in the responsibilities of the
Executive or a loss of position within six (6) months after a Change of Control
(as defined in Section 12 of this Agreement), or if Executive terminates this
Agreement for Cause, the Executive shall be entitled to receive Executive's
then current salary and benefits, as provided for in Sections 3(a) and 3(e),
payable in semi-monthly installments, for the greater of three (3) months or
that number of months which equals the number of years that have elapsed from
the initial date of this Agreement until the date of the Executive's
termination by the Company; provided, however, that if any of such payments
would (i) constitute a "parachute payment" within the meaning of Section 280G
of the Intemal Revenue Code of 1986 (the "Code") and (ii) but for this
provision, be subject to the excise tax imposed by Section 4999 of the Code
(the "Excise Tax"); the amount payable hereunder shall be reduced to the
largest amount which the Executive determines would not result in any portion
of the payments hereunder being subject to the Excise Tax. If the Executive
voluntarily resigns Executive's employment hereunder or if Executive's
employment is terminated for Cause, the Executive shall not be entitled to any
severance pay or other compensation beyond the date of termination of
Executive's employment.
8. Covenant Not to Compete.
(a) During the continuance of the Executive's employment
hereunder and for a period of twelve (12) months after termination of the
Executive's employment hereunder, pursuant to section 4.b or 4.c hereof, the
Executive shall not engage in any business which directly competes with the
Company or its affiliates anywhere in the United States or Canada during the
Executive's employment hereunder or at the time of termination. Hewlett-Packard
Printer Business Units are not considered direct competition.
(b) The Executive shall not, for a period of twelve (12)
months after termination of the Executive's employment hereunder, pursuant to
section 4.b or 4.c hereof, employ, engage or seek to employ or engage for
himself or any other person or entities, any individual who is or was employed
or engaged by the Company or any of its affiliates until the expiration of six
(6) months following the termination of such person's or entity's employment or
engagement with the Company or any of its affiliates.
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9. Trade Secrets and Confidential Information. During
Executive's employment by the Company and for a period of three (3) years
thereafter, the Executive shall not, directly or indirectly, use, disseminate,
or disclose for any purpose other than for the purposes of the Company's
business, any Confidential Information of the Company or its affiliates, unless
such disclosure is compelled in a judicial proceeding. Upon termination of
Executive's employment, all documents, records, notebooks, and similar
repositories of records containing information relating to any Confidential
Information then in the Executive's possession or control, whether prepared by
him or by others, shall be left with the Company or, if requested, returned to
the Company.
10. Severability. It is the desire and intent of the
undersigned parties that the provisions of Sections 8 and 9 shall be enforced
to the fullest extent permissible under the laws in each jurisdiction in which
enforcement is sought. Accordingly, if any particular sentence or portion of
either Section 8 or 9 shall be adjudicated to be invalid or unenforceable, the
remaining portions of such section nevertheless shall continue to be valid and
enforceable as though the invalid portions were not a part thereof. In the
event that any of the provisions of Section 8 relating to the geographic areas
of restriction or the provisions of Sections 8 or 9 relating to the duration of
such Sections shall be deemed to exceed the maximum area or period of time
which a court of competent jurisdiction would deem enforceable, the geographic
areas and times shall, for the purposes of this Agreement, be deemed to be the
maximum areas or time periods which a court of competent jurisdiction would
deem valid and enforceable in any state in which such court of competent
jurisdiction shall be convened.
11. Injunctive Relief. The Executive agrees that any
violation by Executive of the provisions contained in Sections 8 and 9 are
likely to cause irreparable damage to the Company, and therefore Executive
agrees that if there is a breach or threatened breach by the Executive of the
provisions of said sections, the Company shall be entitled to pursue an
injunction restraining the Executive from such breach, and Executive will make
no objection to the form of relief sought. Nothing herein shall be construed as
prohibiting the Company from pursuing any other available remedies for such
breach or threatened breach.
12. Miscellaneous.
(a) Notices. Any notice required or permitted to be given
under this Agreement shall be directed to the appropriate party in writing and
mailed or delivered, if to the Company, to eSoft, Inc., to the attention of the
President, at 0000-X Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, and if to the
Executive, at 0000 Xxxxx Xxxxxxxx Xxx Xxxxx Xxxxx 00000. Notification addresses
may be changed with written notice.
(b) Binding Effect. This Agreement is a personal service
agreement and may not be assigned by the Company or the Executive, except that
the Company may assign this Agreement to a successor of the Company by merger,
consolidation, sale of substantially all of the
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Company's assets or other reorganization (a "Change of Control"). Subject to
the foregoing, this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors, assigns, and legal
representatives.
(c) Amendment. This Agreement may not be amended except by
an instrument in writing executed by each of the undersigned parties.
(d) Applicable Law. This Agreement is entered into in the
State of Colorado and for all purposes shall be governed by the laws of the
State of Colorado.
(e) Attorney's Fees. In the event either party takes legal
action to enforce any of the terms of this Agreement, the unsuccessful party to
such action will pay the successful party's reasonable expenses, including
attorney's fees, incurred in such action.
(f) Entire Agreement. This Agreement supersedes and
replaces all prior agreements between the parties related to the employment of
the Executive by the Company.
SIGNATURES
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the first date mentioned above.
THE COMPANY:
By:
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Name: Xxxxxxx Xxxx
Title: Chief Executive Officer
THE EXECUTIVE:
By:------------------------------------------
Xxxx Xxxxxxxx
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