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EXHIBIT 4
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement"), dated as of January 21,
1999, between Wall Data Incorporated, a Washington corporation ("Employer"), and
Xxxxx X. Xxxxxx ("Employee");
RECITALS
WHEREAS, Employer desires to continue to employ Employee upon the terms
and conditions set forth herein; and
WHEREAS, Employee is willing to provide services to Employer upon the
terms and conditions set forth herein;
AGREEMENT
NOW, THEREFORE, for and in consideration of the foregoing premises and
for other good and valuable consideration, the sufficiency and receipt of which
are hereby acknowledged, Employer and Employee hereby agree as follows:
1. EMPLOYMENT
Employer will employ Employee and Employee will accept employment by
Employer as its Controller. Employee will have the authority, subject to
Employer's Articles of Incorporation and Bylaws, as may be granted from time to
time by the Board of Directors of Employer. Employee will perform the duties
customarily performed by the Controller of a corporation which is similar to
Employer and such other duties as may be assigned from time to time by the Board
of Directors of Employer, which relate to the business of Employer, its
subsidiaries, its parent corporation, or any business ventures in which
Employer, its subsidiaries or its parent corporation may participate.
2. ATTENTION AND EFFORT
Employee will devote all his productive time, ability, attention and
effort to the business and affairs of Employer and the discharge of the
responsibilities assigned to him hereunder, and will use his reasonable best
efforts to perform faithfully and efficiently such responsibilities. It shall
not be a violation of this Agreement for Employee to (a) serve on corporate,
civic or charitable boards or committees approved in advance by Employer's
President, (b) deliver lectures, fulfill speaking engagements or teach at
educational institutions, (c) manage personal investments, so long as such
activities do not significantly interfere with the performance of Employee's
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responsibilities in accordance with this Agreement and (d) other activities
approved in advance by Employer.
3. TERM
Unless otherwise terminated pursuant to Section 6 hereof, Employee's
term of employment under this Agreement shall expire on the second anniversary
of the date of this Agreement (the "Initial Term"). At the end of the Initial
Term and each subsequent Renewal Term (as hereinafter defined), the term of this
Agreement shall be automatically renewed and extended for a period of one year
(the "Renewal Term"), unless either party hereto delivers a written termination
notice to the other party at least 12 months prior to the end of the Initial
Term or the then-current Renewal Term (as the case may be).
4. COMPENSATION
During the term of this Agreement, Employer agrees to pay or cause to
be paid to Employee, and Employee agrees to accept in exchange for the services
rendered hereunder by him, the following compensation:
4.1. BASE SALARY
Employee's compensation shall consist, in part, of an annual base
salary of One Hundred Sixteen Thousand Dollars ($116,000), before all customary
payroll deductions. Such annual base salary shall be paid in substantially equal
installments and at the same intervals as other officers of Employer are paid.
The Board of Directors of Employer, or a committee thereof, shall determine any
increases in the annual base salary in future years.
4.2. BONUS
Employee may be entitled to receive, in addition to the annual base
salary described above, an annual bonus in an amount to be determined by the
Board of Directors of Employer, or a committee thereof, in its sole discretion
and consistent with bonus plans then in effect.
5. BENEFITS
During the term of this Agreement, Employee will be entitled to
participate, subject to and in accordance with applicable eligibility
requirements, in fringe benefit programs as shall be provided from time to time
by Employer.
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6. TERMINATION
Employee's employment pursuant to this Agreement may be terminated as
follows:
6.1. BY EMPLOYER
With or without Cause (as defined below), Employer may terminate
Employee's employment at any time during the term of employment upon giving
Notice of Termination (as defined below).
6.2. BY EMPLOYEE
With or without Good Reason (as defined below), Employee may terminate
his employment at any time upon giving Notice of Termination.
6.3. AUTOMATIC TERMINATION
This Agreement and Employee's employment hereunder shall terminate
automatically upon the death or Total Disability of Employee. The term "Total
Disability" as used herein shall mean Employee's inability (with such
accommodation as may be required by law and which places no undue burden on
Employer), as determined by a physician selected by Employer and acceptable to
Employee, to perform the duties set forth in Section 1 hereof for a period or
periods aggregating 120 calendar days in any 12-month period as a result of
physical or mental illness, loss of legal capacity or any other cause beyond
Employee's control, unless Employee is granted a leave of absence by the Board
of Directors of Employer. Employee and Employer hereby acknowledge that the
duties specified in Section 1 hereof are essential to Employee's position and
that Employee's ability to perform those duties is the essence of this
Agreement.
6.4. NOTICE
The term "Notice of Termination" shall mean at least 30 days' written
notice of termination of Employee's employment, during which period Employee's
employment and performance of services will continue; provided, however, that
Employer may, upon notice to Employee and without reducing Employee's
compensation during such period, excuse Employee from any or all of his duties
during such period. The effective date of the termination of Employee's
employment hereunder shall be the date on which such 30-day period expires.
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7. TERMINATION PAYMENTS
In the event of termination of Employee's employment, all compensation
and benefits set forth in this Agreement shall terminate, except as specifically
provided in this Section 7:
7.1. TERMINATION BY EMPLOYER
If Employer terminates Employee's employment without Cause prior to the
end of the term of this Agreement, Employee shall be entitled to receive (a)
severance payments equal to (i) one times Employee's annual base salary for the
year in which such termination occurred, plus (ii) a percentage of such annual
base salary equal to the percentage paid under Employer's Executive Incentive
Plan (or any successor plan) for the prior fiscal year, (b) any unpaid annual
base salary which has accrued for services already performed as of the date
termination of Employee's employment becomes effective and any compensation
previously deferred by Employee (together with accrued interest or earnings
thereon, if any) and any accrued vacation pay which would be payable under
Employer's standard policy, in each case to the extent not theretofore paid, and
(c) for 18 months from the termination date, premiums for health insurance
benefit continuation for Employee and his family members, if applicable, which
Employer provides to Employee under the provisions of the federal Comprehensive
Omnibus Budget Reconciliation Act of 1986, as amended ("COBRA"), to the extent
that Employer would have paid such premiums had Employee remained employed by
Employer. If employment is terminated by Employer for Cause, Employee shall not
be entitled to receive any of the foregoing benefits, other than those set forth
in clause (b) above.
7.2. TERMINATION BY EMPLOYEE
In the case of termination of Employee's employment for Good Reason,
Employee shall be entitled to receive those payments set forth in Sections
7.1(a), (b) and (c) hereof. In the case of the termination of Employee's
employment by Employee other than for Good Reason, Employee shall not be
entitled to any payments hereunder, other than those set forth in Section 7.1(b)
hereof.
7.3. DEATH AND TOTAL DISABILITY
In the case of a termination of Employee's employment as a result of
the Employee's death or Employee's Total Disability, Employee shall not be
entitled to receive any payments hereunder, other than those set forth in
Section 7.1(b) hereof.
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7.4. TERMINATION IN CONNECTION WITH A CHANGE OF CONTROL
Employee and Employer shall enter into a Change of Control Agreement,
in the form attached hereto as Exhibit A. Notwithstanding Sections 7.1 and 7.2
hereof and in full substitution of all payments otherwise due thereunder, if a
Change of Control (as defined in such agreement) of Employer occurs, this
Agreement shall terminate and the relationship between Employee and Employer
shall be governed in all respects by the Change of Control Agreement.
7.5. PAYMENT SCHEDULE
All payments under this Section 7 shall be made to Employee within
thirty working days of the effective date of termination except that payments
for COBRA premiums pursuant to Section 7.1(c) shall be made on a monthly basis.
7.6. CAUSE
Wherever reference is made in this Agreement to termination being with
or without Cause, "Cause" is limited to the occurrence of one or more of the
following events:
(a) Failure or refusal to carry out the lawful duties of
Employee described in Section 1 hereof or any directions of the Board
of Directors of Employer, which directions are reasonably consistent
with the duties herein set forth to be performed by Employee;
(b) Violation by Employee of a state or federal criminal law
involving the commission of a crime against Employer or any of its
subsidiaries;
(c) Deception, fraud, misrepresentation or dishonesty by
Employee; any incident materially compromising Employee's reputation or
ability to represent Employer with the public; any act or omission by
Employee which substantially impairs Employer's business, good will or
reputation; or
(d) Any other material violation of any provision of this
Agreement.
7.7. GOOD REASON
Wherever reference is made in this Agreement to termination being with
or without Good Reason, "Good Reason" is limited to the occurrence of one or
more of the following events:
(a) the reduction in Employee's annual base salary as
specified in Section 4.1 hereof or the reduction in the value of bonus
payments that Employee
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is eligible to receive under Section 4.2 hereof (provided, however,
that Good Reason shall not exist under this Section 7.7(a), in the
event Employee does not actually realize such values because of failure
to satisfy performance or other criteria applicable to such bonus
payments or equity awards);
(b) the material and substantial diminution or reduction
without his consent of Employee's authority, duties or
responsibilities;
(c) Employer requiring Employee without his consent to be
based at any offices or locations outside of King County, Washington;
or
(d) any breach by Employer of any other material provision of
this Agreement.
8. REPRESENTATIONS AND WARRANTIES
In order to induce Employer to enter into this Agreement, Employee
represents and warrants to Employer that neither the execution nor the
performance of this Agreement by Employee will violate or conflict in any way
with any other agreement by which Employee may be bound, or with any other
duties imposed upon Employee by corporate or other statutory or common law.
9. NOTICE AND CURE OF BREACH
Whenever a breach of this Agreement by either party is relied upon as
justification for any action taken by the other party pursuant to any provision
of this Agreement, other than pursuant to the definition of Cause set forth in
Section 7.6 hereof, before such action is taken, the party asserting the breach
of this Agreement shall give the other party at least 20 days' prior written
notice of the existence and the nature of such breach before taking further
action hereunder and shall give the party purportedly in breach of this
Agreement the opportunity to correct such breach during the 20-day period.
10. CONFIDENTIALITY AGREEMENT
Employer and Employee agree that the Confidential Information,
Inventions and Nonsolicitation Agreement, dated December 13, 1988, between
Employer and Employee and attached hereto as Exhibit B shall remain in full
force and effect and survive the termination of Employee's employment.
11. FORM OF NOTICE
All notices given hereunder shall be given in writing, shall
specifically refer to this Agreement and shall be personally delivered or sent
by telecopy or other electronic
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facsimile transmission or by reputable overnight courier, at the address set
forth below or at such other address as may hereafter be designated by notice
given in compliance with the terms hereof. Such notice shall be effective upon
receipt or upon refusal of the addressee to accept delivery.
If to Employee: Xxxxx X. Xxxxxx
00000 XX 000xx Xx.
Xxxxxxxxxxx, XX 00000
If to Employer: Wall Data Incorporated
00000 XX 000xx Xxx
Xxxxxxxx, XX 00000-0000
Attn: General Counsel
Phone: (000) 000-0000
Facsimile: (000) 000-0000
Copy to: Xxxxxxx Coie LLP
0000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000-0000
Attn: L. Xxxxxxxx Xxxxxx
Phone: (000) 000-0000
Facsimile: (000) 000-0000
12. ASSIGNMENT
This Agreement is personal to Employee and shall not be assignable by
Employee. Employer may assign its rights hereunder to (a) any corporation
resulting from any merger, consolidation, spin-off or other reorganization to
which Employer is a party or (b) any corporation, partnership, association or
other person to which Employer may transfer all or substantially all the assets
and business of Employer existing at such time. All the terms and provisions of
this Agreement shall be binding upon and shall inure to the benefit of and be
enforceable by the parties hereto and their respective successors and permitted
assigns.
13. WAIVERS
No delay or failure by any party hereto in exercising, protecting or
enforcing any of its rights, titles, interests or remedies hereunder, and no
course of dealing or performance with respect thereto, shall constitute a waiver
thereof. The express waiver by a party hereto of any right, title, interest or
remedy in a particular instance or circumstance shall not constitute a waiver
thereof in any other instance or circumstance. All rights and remedies shall be
cumulative and not exclusive of any other rights or remedies.
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14. AMENDMENTS IN WRITING
No amendment, modification, waiver, termination or discharge of any
provision of this Agreement, nor consent to any departure therefrom by either
party hereto, shall in any event be effective unless the same shall be in
writing, specifically identifying this Agreement and the provision intended to
be amended, modified, waived, terminated or discharged and signed by Employer
and Employee, and each such amendment, modification, waiver, termination or
discharge shall be effective only in the specific instance and for the specific
purpose for which given. No provision of this Agreement shall be varied,
contradicted or explained by any oral agreement, course of dealing or
performance or any other matter not set forth in an agreement in writing and
signed by Employer and Employee.
15. ARBITRATION
Any dispute arising under this Agreement shall be subject to
arbitration. The arbitration proceeding shall be conducted in accordance with
the Commercial Arbitration Rules of the American Arbitration Association (the
"AAA Rules") then in effect, conducted by one arbitrator either mutually agreed
upon or selected in accordance with the AAA Rules, except that the parties
thereto shall have any right to discovery as would be permitted by the Federal
Rules of Civil Procedure for a period of 90 days following the commencement of
such arbitration and the arbitrator thereof shall resolve any dispute which
arises in connection with such discovery. The arbitration shall be conducted in
King County, Washington under the jurisdiction of the Seattle office of the
American Arbitration Association. The arbitrator shall have authority only to
interpret and apply the provisions of this Agreement and shall have no authority
to add to, subtract from, or otherwise modify the terms of this Agreement. Any
demand for arbitration must be made within 60 days of the event(s) giving rise
to the claim that this Agreement has been breached. The arbitrator's decision
shall be final and binding, and each party agrees to be bound by the
arbitrator's award subject, only to an appeal therefrom in accordance with the
laws of state of Washington. Either party may obtain judgment upon the
arbitrator's award in the Superior Court of King County, Washington.
16. APPLICABLE LAW
This Agreement shall in all respects, including all matters of
construction, validity and performance, be governed by, and construed and
enforced in accordance with, the laws of the state of Washington, without regard
to any rules governing conflicts of laws.
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17. SEVERABILITY
If any provision of this Agreement shall be held invalid, illegal or
unenforceable in any jurisdiction, for any reason, then, to the full extent
permitted by law (a) all other provisions hereof shall remain in full force and
effect in such jurisdiction and shall be liberally construed in order to carry
out the intent of the parties hereto as nearly as may be possible, (b) such
invalidity, illegality or unenforceability shall not affect the validity,
legality or enforceability of any other provision hereof, and (c) any court or
arbitrator having jurisdiction thereover shall have the power to reform such
provision to the extent necessary for such provision to be enforceable under
applicable law.
18. HEADINGS
All headings used herein are for convenience only and shall not in any
way affect the construction of, or be taken into consideration in interpreting,
this Agreement.
19. COUNTERPARTS
This Agreement, and any amendment or modification entered into pursuant
to Section 14 hereof, may be executed in any number of counterparts, each of
which counterparts, when so executed and delivered, shall be deemed to be an
original and all of which counterparts, taken together, shall constitute one and
the same instrument.
20. ENTIRE AGREEMENT
This Agreement on and as of the date hereof constitutes the entire
agreement between Employer and Employee with respect to the subject matter
hereof and all prior or contemporaneous oral or written communications,
understandings or agreements between Employer and Employee with respect to such
subject matter are hereby superseded and nullified in their entireties.
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IN WITNESS WHEREOF, the parties have executed and entered into this
Agreement on the date set forth above.
EMPLOYEE:
/s/ Xxxxx X. Xxxxxx
-----------------------------------------
Xxxxx X. Xxxxxx
EMPLOYER:
WALL DATA INCORPORATED
By /s/ Xxxxxx X. Xxxxxxxxxxx
--------------------------------------
Xxxxxx X. Xxxxxxxxxxx
Chairman of the Board
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EXHIBIT A
CHANGE OF CONTROL AGREEMENT
This Change of Control Agreement (this "Agreement"), dated as of
January 21, 1999, is between WALL DATA INCORPORATED, a Washington corporation
(the "Company"), and XXXXX X. XXXXXX (the "Employee").
RECITAL
The Board of Directors of the Company (the "Board") has determined that
it is in the best interests of the Company and its shareholders to ensure that
the Company will have the continued dedication of the Employee, notwithstanding
the possibility, threat or occurrence of a Change of Control (as defined in
Section 1.1 hereof) of the Company. The Board believes it is imperative to
diminish the inevitable distraction of the Employee arising from the personal
uncertainties and risks created by a pending or threatened Change of Control, to
encourage the Employee's full attention and dedication to the Company currently
and in the event of any threatened or pending Change of Control, and to provide
the Employee with reasonable compensation and benefit arrangements upon a Change
of Control.
AGREEMENT
In order to accomplish these objectives, the Board has caused the
Company to enter into this Agreement.
1. DEFINITIONS
1.1 CHANGE OF CONTROL
"Change of Control" shall have the definition set forth in Appendix A
to this Agreement, which is hereby incorporated by reference.
1.2 CHANGE OF CONTROL DATE
"Change of Control Date" shall mean the first date on which a Change of
Control occurs.
1.3 EMPLOYMENT PERIOD
"Employment Period" shall mean the two-year period commencing on the
Change of Control Date and ending on the second anniversary of such date.
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2. TERM
The term of this Agreement ("Term") shall be for the Initial Term and
any Renewal Term, as such terms are defined in the Employment Agreement, dated
the date hereof, between the Company and the Employee; provided, however, that
if a Change of Control occurs during the Term, the Term shall automatically
extend for the duration of the Employment Period.
3. EMPLOYMENT
3.1 EMPLOYMENT PERIOD
During the Employment Period, the Company hereby agrees to continue the
Employee in its employ or in the employ of its affiliated companies, and the
Employee hereby agrees to remain in the employ of the Company or its affiliated
companies, in accordance with the terms and provisions of this Agreement;
provided, however, that either the Company or the Employee may terminate the
employment relationship subject to the terms of this Agreement.
3.2 POSITION AND DUTIES
During the Employment Period, the Employee's title, position,
authority, duties and responsibilities shall be at least commensurate in all
material respects with the most significant of those held, exercised and
assigned at any time during the 90-day period immediately preceding the Change
of Control Date.
3.3 LOCATION
During the Employment Period, the Employee's services shall be
performed at the Company's headquarters on the Change of Control Date or any
office which is subsequently designated as the headquarters of the Company and
is located in King County, Washington.
3.4 TERMINATION PRIOR TO CHANGE OF CONTROL
If prior to the Change of Control Date, the Employee's employment with
the Company or its affiliated companies terminates for any reason, then the
Employee shall have no further rights under this Agreement; provided, however,
that the Company may not avoid liability for any termination payments which
would have been required during the Employment Period pursuant to Section 8
hereof by terminating the Employee prior to the Employment Period where such
termination is carried out in anticipation of a Change of Control and the
principal motivating purpose is to avoid liability for such termination
payments.
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4. ATTENTION AND EFFORT
During the Employment Period, and excluding any periods of vacation and
sick leave to which the Employee is entitled, the Employee will devote all his
productive time, ability, attention and effort to the business and affairs of
the Company and the discharge of the responsibilities assigned to him hereunder,
and he will use his reasonable best efforts to perform faithfully and
efficiently such responsibilities. It shall not be a violation of this Agreement
for the Employee to (a) serve on corporate, civic or charitable boards or
committees approved in advance by the Company's President, (b) deliver lectures,
fulfill speaking engagements or teach at educational institutions, (c) manage
personal investments, so long as such activities do not significantly interfere
with the performance of the Employee's responsibilities in accordance with this
Agreement and (d) other activities approved in advance by the Company. It is
expressly understood and agreed that to the extent any such activities have been
conducted by the Employee prior to the Employment Period, the continued conduct
of such activities (or the conduct of activities similar in nature and scope
thereto) during the Employment Period shall not thereafter be deemed to
interfere with the performance of the Employee's responsibilities to the
Company.
5. COMPENSATION
As long as the Employee remains employed by the Company during the
Employment Period, the Company agrees to pay or cause to be paid to the
Employee, and the Employee agrees to accept in exchange for the services
rendered hereunder by him, the following compensation:
5.1 SALARY
The Employee shall receive an annual base salary (the "Annual Base
Salary") at least equal to the annual salary established by the Board or a
committee of the Board (the "Compensation Committee") for the fiscal year in
which the Change of Control Date occurs. The Annual Base Salary shall be paid in
substantially equal installments and at the same intervals as the salaries of
other employees of the Company are paid. The Board or the Compensation Committee
shall review the Annual Base Salary at least annually and shall determine in
good faith and consistent with any generally applicable Company policy any
increases for future years.
5.2 BONUS
In addition to Annual Base Salary, the Employee shall be awarded, for
each fiscal year ending during the Employment Period, an annual bonus (the
"Annual Bonus") in cash at least equal to the average annualized (for any fiscal
year consisting of less than 12 full months) bonus paid or payable, including by
reason of any
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deferral, to the Employee by the Company and its affiliated companies in respect
of the three fiscal years immediately preceding the fiscal year in which the
Change of Control Date occurs. Each such Annual Bonus shall be paid no later
than 90 days after the end of the fiscal year for which the Annual Bonus is
awarded, unless the Employee shall elect to defer the receipt of such Annual
Bonus.
6. BENEFITS
6.1 INCENTIVE, RETIREMENT AND WELFARE BENEFIT PLANS;
VACATION
During the Employment Period, the Employee shall be entitled to
participate, subject to and in accordance with applicable eligibility
requirements, in such fringe benefit programs as shall be generally made
available to other employees of the Company and its affiliated companies from
time to time during the Employment Period by action of the Board (or any person
or committee appointed by the Board to determine fringe benefit programs and
other emoluments), including, without limitation, paid vacations; any stock
purchase, savings or retirement plan, practice, policy or program; and all
welfare benefit plans, practices, policies or programs (including, without
limitation, medical, prescription, dental, disability, salary continuance,
employee life, group life, accidental death and travel accident insurance plans
or programs).
6.2 EXPENSES
During the Employment Period, the Employee shall be entitled to receive
prompt reimbursement for all reasonable employment expenses incurred by him in
accordance with the policies, practices and procedures of the Company and its
affiliated companies in effect for the employees of the Company and its
affiliated companies during the Employment Period.
7. TERMINATION
During the Employment Period, employment of the Employee may be
terminated as follows:
7.1 BY THE COMPANY OR THE EMPLOYEE
At any time during the Employment Period, the Company may terminate the
employment of the Employee with or without Cause (as defined below), and the
Employee may terminate his employment for Good Reason (as defined below) or for
any reason, upon giving Notice of Termination (as defined below).
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7.2 AUTOMATIC TERMINATION
This Agreement and the Employee's employment during the Employment
Period shall terminate automatically upon the death or Total Disability of the
Employee. The term "Total Disability" as used herein shall mean the Employee's
inability (with such accommodation as may be required by law and which places no
undue burden on the Company), as determined by a physician selected by the
Company and acceptable to the Employee, to perform the duties set forth in
Section 3.2 hereof for a period or periods aggregating 120 calendar days in any
12-month period as a result of physical or mental illness, loss of legal
capacity or any other cause beyond the Employee's control, unless the Employee
is granted a leave of absence by the Board. The Employee and the Company hereby
acknowledge that the duties specified in Section 3.2 hereof are essential to the
Employee's position and that Employee's ability to perform those duties is the
essence of this Agreement.
7.3 NOTICE OF TERMINATION
Any termination by the Company or by the Employee during the Employment
Period shall be communicated by Notice of Termination to the other party given
in accordance with Section 11 hereof. The term "Notice of Termination" shall
mean a written notice which (a) indicates the specific termination provision in
this Agreement relied upon and (b) to the extent applicable, sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Employee's employment under the provision so indicated. The
failure by the Employee or the Company to set forth in the Notice of Termination
any fact or circumstance which contributes to a showing of Good Reason or Cause
shall not waive any right of the Employee or the Company hereunder or preclude
the Employee or the Company from asserting such fact or circumstance in
enforcing the Employee's or the Company's rights hereunder.
7.4 DATE OF TERMINATION
During the Employment Period, "Date of Termination" means (a) if the
Employee's employment is terminated by reason of death, at the end of the
calendar month in which the Employee's death occurs, (b) if the Employee's
employment is terminated by reason of Total Disability, immediately upon a
determination by the Company of the Employee's Total Disability, and (c) in all
other cases, five days after the effective date of notice pursuant to Section 11
hereof. The Employee's employment and performance of services will continue
during such five-day period; provided, however, that the Company may, upon
notice to the Employee and without reducing the Employee's compensation during
such period, excuse the Employee from any or all of his duties during such
period.
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8. TERMINATION PAYMENTS
In the event of termination of the Employee's employment during the
Employment Period, all compensation and benefits set forth in this Agreement
shall terminate, except as specifically provided in this Section 8.
8.1 TERMINATION BY THE COMPANY OTHER THAN FOR CAUSE OR BY
THE EMPLOYEE FOR GOOD REASON
If during the Employment Period the Company terminates the Employee's
employment other than for Cause or the Employee terminates his employment for
Good Reason, the Employee shall be entitled to:
(a) receive payment of the following accrued obligations (the
"Accrued Obligations"):
(i) the Employee's Annual Base Salary through the Date of
Termination to the extent not theretofore paid; and
(ii) any compensation previously deferred by the Employee
(together with accrued interest or earnings thereon, if any) and any
accrued vacation pay which would be payable under the Company's
standard policy, in each case to the extent not theretofore paid;
(b) for 18 months after the Date of Termination, Employee's
premiums for health insurance benefit continuation for Employee and his family
members, if applicable, which the Company provides to the Employee under the
provisions of the federal Comprehensive Omnibus Budget Reconciliation Act of
1986, as amended ("COBRA"), to the extent that the Company would have paid such
premiums had the Employee remained employed by the Company; and
(c) an amount as severance pay equal to one and one-half times
the Annual Base Salary for the fiscal year in which the Date of Termination
occurs, plus a percentage of such Annual Base Salary equal to the percentage
paid under the Company's Executive Incentive Plan (or any successor plan) for
the prior fiscal year (the "Severance Obligation").
8.2 TERMINATION FOR CAUSE OR OTHER THAN FOR GOOD REASON
If during the Employment Period the Employee's employment shall be
terminated by the Company for Cause or by the Employee for other than Good
Reason, this Agreement shall terminate without further obligation on the part of
the Company to the Employee, other than the Company's obligation to pay the
Employee
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(a) his Annual Base Salary through the Date of Termination, (b) the amount of
any compensation previously deferred by the Employee, and (c) any accrued
vacation pay which would be payable under the Company's standard policy, in each
case to the extent theretofore unpaid.
8.3 EXPIRATION OF TERM
In the case of a termination of the Employee's employment as a result
of the expiration of the Term of this Agreement, this Agreement shall terminate
without further obligation on the part of the Company to the Employee, other
than the Company's obligation to pay the Employee the Accrued Obligations.
8.4 TERMINATION BECAUSE OF DEATH OR TOTAL DISABILITY
If during the Employment Period the Employee's employment is terminated
by reason of the Employee's death or Total Disability, this Agreement shall
terminate automatically without further obligation on the part of the Company to
the Employee or his legal representatives under this Agreement, other than the
Company's obligation to pay the Employee the Accrued Obligations (which shall be
paid to the Employee's estate or beneficiary, as applicable in the case of the
Employee's death).
8.5 PAYMENT SCHEDULE
All payments of the Accrued Obligations and the Severance Obligation,
or any portion thereof payable pursuant to this Section 8, shall be made to the
Employee within thirty working days of the Date of Termination, except that
payments for COBRA premiums pursuant to Section 8.1(b) shall be made on a
monthly basis.
8.6 CAUSE
For purposes of this Agreement, "Cause" means cause given by the
Employee to the Company and shall be limited to the occurrence of one or more of
the following events:
(a) A clear refusal to carry out any material lawful duties of
the Employee or any directions of the Board, all reasonably consistent with the
duties described in Section 3.2 hereof, provided the Employee has been given
reasonable notice and opportunity to correct any such failure;
(b) Violation by the Employee of a state or federal criminal
law involving the commission of a crime against the Company or any of its
subsidiaries;
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(c) Deception, fraud, misrepresentation or dishonesty by the
Employee; any incident materially compromising the Employee's reputation or
ability to represent the Company with investors, customers or the public; or
(d) Any other material violation of any provision of this
Agreement by the Employee, subject to the notice and opportunity to cure
requirements of Section 10.
8.7 GOOD REASON
For purposes of this Agreement, "Good Reason" means
(a) The assignment to the Employee of any duties materially
inconsistent with the Employee's position, authority, duties or responsibilities
as contemplated by Section 3.2 hereof or any other action by the Company which
results in a material diminution in such position, authority, duties or
responsibilities;
(b) Any failure by the Company to comply with any of the
provisions of Section 5 or 6 hereof;
(c) The Company's requiring the Employee to be based at any
office or location other than that described in Section 3.3 hereof;
(d) Any failure by the Company to comply with and satisfy
Section 12 hereof, provided that the Company's successor has received at least
ten days' prior written notice from the Company or the Employee of the
requirements of Section 12 hereof; or
(e) Any other material violation of any provision of this
Agreement by the Company.
8.8 EXCESS PARACHUTE LIMITATION
If either the Company or the Employee receives confirmation from the
Company's independent tax counsel or its certified public accounting firm, or
such other accounting firm retained as independent certified public accountants
for the Company (the "Tax Advisor"), that any payment by the Company to the
Employee under this Agreement or otherwise would be considered to be an "excess
parachute payment" within the meaning of Section 280G of the Internal Revenue
Code of 1986, as amended, or any successor statute then in effect (the "Code"),
then the aggregate payments by the Company pursuant to this Agreement shall be
reduced to the highest amount that may be paid to the Employee by the Company
under this Agreement without having any portion of any amount payable to the
Employee by the Company or a related entity under this Agreement or otherwise
treated as such an "excess
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19
parachute payment," and, if permitted by applicable law and without adverse tax
consequence, such reduction shall be made to the last payment due hereunder. Any
payments made by the Company to the Employee under this Agreement which are
later confirmed by the Tax Advisor to be "excess parachute payments" shall be
considered by all parties to have been a loan by the Company to the Employee,
which loan shall be repaid by the Employee upon demand, together with interest
calculated at the lowest interest rate authorized for such loans under the Code,
without a requirement that further interest be imputed.
9. REPRESENTATIONS, WARRANTIES AND OTHER CONDITIONS
In order to induce the Company to enter into this Agreement, the
Employee represents and warrants to the Company that neither the execution nor
the performance of this Agreement by the Employee will violate or conflict in
any way with any other agreement by which the Employee may be bound or with any
other duties imposed upon Employee by corporate or other statutory or common
law.
10. NOTICE AND CURE OF BREACH
Whenever a breach of this Agreement by either party is relied upon as
justification for any action taken by the other party pursuant to any provision
of this Agreement, other than pursuant to the definition of Cause set forth in
Section 8.6 hereof, before such action is taken, the party asserting the breach
of this Agreement shall give the other party at least ten days' prior written
notice of the existence and the nature of such breach before taking further
action hereunder and shall give the party purportedly in breach of this
Agreement the opportunity to correct such breach during the ten-day period.
11. FORM OF NOTICE
All notices given hereunder shall be given in writing, shall
specifically refer to this Agreement and shall be personally delivered or sent
by telecopy or other electronic facsimile transmission or by reputable overnight
courier, at the address set forth below or at such other address as may
hereafter be designated by notice given in compliance with the terms hereof.
Such notice shall be effective upon receipt or upon refusal of the addressee to
accept delivery.
If to Employee: Xxxxx X. Xxxxxx
00000 XX 000xx Xx.
Xxxxxxxxxxx, XX 00000
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If to Company: Wall Data Incorporated
00000 XX 000xx Xxx
Xxxxxxxx, XX 00000-0000
Attn: General Counsel
Phone: (000) 000-0000
Facsimile: (000) 000-0000
Copy to: Xxxxxxx Coie LLP
0000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000-0000
Attn: L. Xxxxxxxx Xxxxxx
Phone: (000) 000-0000
Facsimile: (000) 000-0000
12. ASSIGNMENT
This Agreement is personal to the Employee and shall not be assignable
by the Employee. The Company shall assign to and require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all 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 Wall Data Incorporated
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. All the
terms and provisions of this Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their respective
successors and permitted assigns.
13. WAIVERS
No delay or failure by any party hereto in exercising, protecting or
enforcing any of its rights, titles, interests or remedies hereunder, and no
course of dealing or performance with respect thereto, shall constitute a waiver
thereof. The express waiver by a party hereto of any right, title, interest or
remedy in a particular instance or circumstance shall not constitute a waiver
thereof in any other instance or circumstance. All rights and remedies shall be
cumulative and not exclusive of any other rights or remedies.
14. AMENDMENTS IN WRITING
No amendment, modification, waiver, termination or discharge of any
provision of this Agreement, nor consent to any departure therefrom by either
party hereto, shall in any event be effective unless the same shall be in
writing, specifically
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21
identifying this Agreement and the provision intended to be amended, modified,
waived, terminated or discharged and signed by the Company and the Employee, and
each such amendment, modification, waiver, termination or discharge shall be
effective only in the specific instance and for the specific purpose for which
given. No provision of this Agreement shall be varied, contradicted or explained
by any oral agreement, course of dealing or performance or any other matter not
set forth in an agreement in writing and signed by the Company and the Employee.
15. APPLICABLE LAW
This Agreement shall in all respects, including all matters of
construction, validity and performance, be governed by, and construed and
enforced in accordance with, the laws of the state of Washington, without regard
to any rules governing conflicts of laws.
16. ARBITRATION
Any dispute arising under this Agreement shall be subject to
arbitration. The arbitration proceeding shall be conducted in accordance with
the Commercial Arbitration Rules of the American Arbitration Association (the
"AAA Rules") then in effect, conducted by one arbitrator either mutually agreed
upon or selected in accordance with the AAA Rules, except that the parties
thereto shall have any right to discovery as would be permitted by the Federal
Rules of Civil Procedure for a period of 90 days following the commencement of
such arbitration and the arbitrator thereof shall resolve any dispute which
arises in connection with such discovery. The arbitration shall be conducted in
King County, Washington under the jurisdiction of the Seattle office of the
American Arbitration Association. The arbitrator shall have authority only to
interpret and apply the provisions of this Agreement and shall have no authority
to add to, subtract from, or otherwise modify the terms of this Agreement. Any
demand for arbitration must be made within 60 days of the event(s) giving rise
to the claim that this Agreement has been breached. The arbitrator's decision
shall be final and binding, and each party agrees to be bound by the
arbitrator's award subject, only to an appeal therefrom in accordance with the
laws of the state of Washington. Either party may obtain judgment upon the
arbitrator's award in the Superior Court of King County, Washington.
17. SEVERABILITY
If any provision of this Agreement shall be held invalid, illegal or
unenforceable in any jurisdiction, for any reason, then, to the full extent
permitted by law, (a) all other provisions hereof shall remain in full force and
effect in such jurisdiction and shall be liberally construed in order to carry
out the intent of the parties hereto as nearly as may be possible, (b) such
invalidity, illegality or
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22
unenforceability shall not affect the validity, legality or enforceability of
any other provision hereof, and (c) any court or arbitrator having jurisdiction
thereover shall have the power to reform such provision to the extent necessary
for such provision to be enforceable under applicable law.
18. ENTIRE AGREEMENT
This Agreement on and as of the date hereof constitutes the entire
agreement between the Company and the Employee with respect to the subject
matter hereof and all prior or contemporaneous oral or written communications,
understandings or agreements between the Company and the Employee with respect
to such subject matter are hereby superseded and nullified in their entireties,
except that the Confidential Information, Inventions and Nonsolicitation
Agreement between the Employee and the Company, dated December 13, 1988, shall
continue in full force and effect and survive the termination of the Employee's
employment.
19. COUNTERPARTS
This Agreement may be executed in counterparts, each of which
counterpart shall be deemed an original, but all of which together shall
constitute one and the same instrument.
20. HEADINGS
All headings used herein are for convenience only and shall not in any
way affect the construction of, or be taken into consideration in interpreting,
this Agreement.
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23
IN WITNESS WHEREOF, the parties have executed and entered into this
Agreement effective on the date first set forth above.
EMPLOYEE
/s/ Xxxxx X. Xxxxxx
-----------------------------------------
Xxxxx X. Xxxxxx
WALL DATA INCORPORATED
By /s/ Xxxx X. Xxxx
---------------------------------------
Xxxx X. Xxxx
Chief Executive Officer
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APPENDIX A TO
CHANGE OF CONTROL AGREEMENT BETWEEN
WALL DATA INCORPORATED
AND XXXXX X. XXXXXX
For purposes of this Agreement, a "Change of Control" shall mean:
(a) A "Board Change" which, for purposes of this Agreement, shall have
occurred if a majority (excluding vacant seats) of the seats on the Company's
Board are occupied by individuals who were neither (i) nominated by a majority
of the Incumbent Directors nor (ii) appointed by directors so nominated. An
"Incumbent Director" is a member of the Board who has been either (i) nominated
by a majority of the directors of the Company then in office or (ii) appointed
by directors so nominated, but excluding, for this purpose, any such individual
whose initial assumption of office occurs as a result of either an actual or
threatened election contest (as such terms are used in Rule 14a-11 of Regulation
14A promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person (as hereinafter defined) other than the
Board; or
(b) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of (i) more than 50% of either (i) the then outstanding shares of
Common Stock of the Company (the "Outstanding Company Common Stock") or (ii) the
combined voting power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors (the "Outstanding
Company Voting Securities"); provided, however, that the following acquisitions
shall not constitute a Change of Control: (x) any acquisition by the Company,
(y) any acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company or (z)
any acquisition by any corporation pursuant to a reorganization, merger or
consolidation, if, following such reorganization, merger or consolidation, the
conditions described in clauses (i), (ii) and (iii) of subsection (c) of this
Appendix A are satisfied; or
(c) Approval by the shareholders of the Company of a reorganization,
merger or consolidation, in each case, unless, immediately following such
25
reorganization, merger or consolidation, (i) more than 50% of, respectively, the
then outstanding shares of common stock of the corporation resulting from such
reorganization, merger or consolidation and the combined voting power of the
then outstanding voting securities of such corporation entitled to vote
generally in the election of directors is then beneficially owned, directly or
indirectly, by all or substantially all the individuals and entities who were
the beneficial owners, respectively, of the Outstanding Company Common Stock and
the Outstanding Company Voting Securities immediately prior to such
reorganization, merger or consolidation in substantially the same proportion as
their ownership immediately prior to such reorganization, merger or
consolidation of the Outstanding Company Common Stock and the Outstanding
Company Voting Securities, as the case may be, (ii) no Person (excluding the
Company, any employee benefit plan (or related trust) of the Company or such
corporation resulting from such reorganization, merger or consolidation and any
Person beneficially owning, immediately prior to such reorganization, merger or
consolidation, directly or indirectly, 33% or more of the Outstanding Company
Common Stock or the Outstanding Voting Securities, as the case may be)
beneficially owns, directly or indirectly, 33% or more of, respectively, the
then outstanding shares of common stock of the corporation resulting from such
reorganization, merger or consolidation or the combined voting power of the then
outstanding voting securities of such corporation entitled to vote generally in
the election of directors, and (iii) at least a majority of the members of the
board of directors of the corporation resulting from such reorganization, merger
or consolidation were the Incumbent Directors at the time of the execution of
the initial agreement providing for such reorganization, merger or
consolidation; or
(d) Approval by the shareholders of the Company of (i) a complete
liquidation or dissolution of the Company or (ii) the sale or other disposition
of all or substantially all the assets of the Company, other than to a
corporation with respect to which immediately following such sale or other
disposition, (A) more than 50% of, respectively, the then outstanding shares of
common stock of such corporation and the combined voting power of the then
outstanding voting securities of such corporation entitled to vote generally in
the election of directors is then beneficially owned, directly or indirectly, by
all or substantially all the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and the
Outstanding Company Voting Securities immediately prior to such sale or other
disposition in substantially the same proportion as their ownership, immediately
prior to such sale or other disposition, of the Outstanding Company Common Stock
and the Outstanding Company Voting Securities, as the case may be, (B) no Person
(excluding the Company, any employee benefit plan (or related trust) of the
Company or such corporation and any Person beneficially owning, immediately
prior to such sale or other disposition, directly or indirectly, 33% or more of
the Outstanding Company Common Stock or the Outstanding Company Voting
Securities, as the case
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26
may be) beneficially owns, directly or indirectly, 33% or more of, respectively,
the then outstanding shares of common stock of such corporation and the combined
voting power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors and (C) at least a
majority of the members of the board of directors of such corporation were
approved by a majority of the Incumbent Directors at the time of the execution
of the initial agreement or action of the Board providing for such sale or other
disposition of assets of the Company.
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27
EXHIBIT B
WALL DATA INCORPORATED
INVENTION AND CONFIDENTIAL INFORMATION AGREEMENT
In consideration of my employment or continued employment by Wall Data
Incorporated (the "Company"), the compensation paid to me in connection with
such employment, and the mutual undertakings set forth below, I agree as
follows:
1. CONFIDENTIAL INFORMATION: I shall not at any time during the period
of my employment or thereafter, except as required in the course of my
employment with the Company or as authorized in writing by an executive officer
of the Company other than myself, directly or indirectly use, disclose,
disseminate, reproduce, lecture on, or publish articles with respect to any
Confidential Information. "Confidential Information" means information not
generally known or recognized as standard practice, relating to the business of
the Company of any third parties with whom the Company deals, contributed to,
developed by, disclosed to, or known by me in my course of employment by the
Company, including but not limited to: Developments, as defined in Section 2
below, specifications, data, machinery, equipment, technology, research, test
procedures and results, know-how, manufacturing processes and products, services
used, identity and description of raw materials used, purchasing, accounting,
engineering, business methods, marketing, merchandising, selling, and servicing.
2. DEVELOPMENTS: "Development(s)" shall mean all inventions,
discoveries, concepts, and ideas, whether patentable or not. All Developments
made or conceived by me which relate directly to: (1) the subject matter of my
work for the Company, (2) the business of the Company, or (3) the Company's
actual or demonstrably anticipated research or development, are the property of
the Company whether or not patent applications are filed thereon and whether or
not the Developments are made or conceived solely by me or jointly with others.
I am to disclose promptly to the Company all such Developments made or conceived
by me during the period of my employment. This paragraph shall not apply if the
Development was made or conceived entirely on my own time and I used no
equipment, supplies, facilities or confidential information of the Company. Upon
request and at the expense of the Company, I shall:
28
(a) make application in the United States and in foreign countries
for patent foreign countries for a patent on any such
Development specified by the Company;
(b) assign to the Company or its designee all of my right, title,
and interest in and to such Development, any patent
applications relating thereto, and any patents granted
thereon; and
(c) from time to time, at the request of the Company, execute all
instruments and render all such assistance as may reasonably
be required in order to protect the rights of the Company, or
its designee, and to vest in the Company or its designee all
rights to any such Development, patent applications, and
patents.
Each of my duties specified in this paragraph 2 shall survive
termination of my employment with the Company, to the extent such duties related
to Developments made or conceived by me during my employment. I have prepared
and attached hereto a list of all Developments, patent applications, and patents
made or conceived by me prior to my employment with the Company, which are
subject to prior agreements or which I desire to exclude from this Agreement, or
if no such list is attached, I hereby represent and warrant that there are no
such Developments, patent applications or patents.
3. INITIAL AND FINAL PATENT AWARDS: For each Development assigned to
the Company by me upon which an application for patent is filed in the United
States of America by or at the request of the Company, the Company shall pay me,
if I am the sole inventor, or my proportionate share, if I am one of several
joint investors:
(a) an Initial Patent Award of $100 upon the execution by me of
the initial patent application and instrument assigning the
Development, the patent application and any resulting patent
to the company; and
(b) a Final Minimum Patent Award of $500 upon issuance of the
patent resulting from such patent application. The actual
amounts of the awards in excess of the stated minimums shall
be determined by the Company in its sole discretion.
4. CREATIVE MATERIALS: All writings, drawings, designs or other
creative expressions conceived or prepared by me for the Company or which relate
to the business of the Company ("Creative Materials") are the property of the
Company whether or not copyright or trademark applications are filed thereon,
whether or not such Creative Materials are conceived or prepared solely by me or
jointly with others. I am to disclose promptly to the Company all such Creative
Materials conceived or
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29
prepared by me during the period of my employment. Upon request and at the
expense of the Company, I shall execute all instruments and render all such
assistance as may reasonably be required in order to protect the rights of the
Company or its designee and to vest in the Company or its designee all rights to
any such Creative Materials. Each of my duties specified in this paragraph 4
shall survive termination of my employment with the Company, to the extent such
duties related to Creative Materials conceived or prepared by me during my
employment.
5. MISCELLANEOUS: This agreement shall be binding upon and for the
benefit of me and the Company, and our respective successors, assigns, and
personal representatives; provided that I may not assign any of the benefits due
or to become due under this Agreement without the Company's written consent. In
the event of my death, benefits due or to become due hereunder shall become part
of my estate and be distributed to those lawfully entitled thereto. In any case
in which the Company determines that it has no interest in a Development or
other matter covered by this Agreement, the Company, by a written statement, may
release such Development or other matter to me. References to termination of
employment by the Company or with the Company shall mean termination of the
employment relationship between the Company and me, regardless of whether
termination is initiated by the Company or by me. If any one or more of the
provisions of this Agreement shall for any reason be excessively broad as to
duration, scope, activity, or subject, it shall be construed by limiting and
reducing such provisions, so as to be enforceable to the extent compatible with
the applicable law as it shall then appear. This Agreement shall be governed by
the laws of the State of Washington.
NOTICE (REQUIRED BY WASHINGTON STATUTE): This Agreement does not apply
to an invention for which no equipment, supplies, facility, or trade secret
information of the Company was used and which was developed entirely on the
employee's own time, unless (a) the invention relates (I) directly to the
business of the Company, or (ii) to the Company's actual or demonstrably
anticipated research or development, or (b) the invention results from any work
performed by the employee for the Company.
DATED:
EMPLOYEE:
/s/ Xxxxx X. Xxxxxx
-----------------------------------------
WALL DATA INCORPORATED
By /s/ Xxxx X. Xxxxxx
-------------------------------------
Its Administrative Assistant
-------------------------------------
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