Exhibit 10.17
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement"), is entered into this 11th day
of May, 1998, by and between CUMETRIX DATA SYSTEMS CORP., a California
corporation (the "Corporation"), and XXXXX XXXXXXXXX, an individual
("Executive"), with reference to the following facts:
A. Executive desires to become employed by the Corporation and the
Corporation desires to employ Executive.
B. The Corporation and Executive desire to enter into this Agreement to
assure the Corporation of the services of Executive and to set forth the
respective rights and duties of the parties. The parties agree as follows:
1. "AT WILL" EMPLOYMENT AND SEVERANCE PAY.
a. The Corporation hereby employs Executive, and Executive hereby
accepts and agrees to such employment on the terms and conditions set forth
herein. Executive's engagement hereunder shall commence on May 11, 1998 and is
subject to termination at any time by either party, with or without cause and
with or without notice. The period of Executive's employment shall be referred
to herein as the "Employment."
b. Executive shall serve in the capacity of Chief Technology Officer
of the Corporation. Executive's principal duties shall involve responsibility
for implementation and operation of the Company's hardware and software systems
and such other responsibilities as are customarily undertaken by a chief
technology officer of a computer hardware reseller and provider of software
configuration services. Executive shall diligently perform and complete such
other services and duties appropriate for the position of Chief Technology
Officer as may from time to time be assigned by the Chairman, the Chief
Executive Officer or the Board of Directors of the Corporation. Executive shall
report directly to the Corporation's Chief Executive Officer or such other
person as designated from time to time by the Board of Directors of the
Corporation. Executive agrees that, except during vacation periods or in
accordance with the Corporation's personnel policies, if any, covering leaves
and reasonable periods of illness or other incapacity, Executive shall devote
all of Executive's business time and services to the business and interests of
the Corporation. Executive shall perform the duties of his office and those
assigned to Executive by the Corporation with fidelity, to the best of
Executive's ability, and in the best interests of the Corporation
c. If Executive is terminated by the Corporation for any reason
other than for "cause" (as defined below) at any time following the closing of
the Company's initial public offering and before May 1, 2000 (the "Agreement
Period"), Executive shall be entitled to receive
as severance pay an amount equal to the remaining base salary that would have
been payable to Executive over the remainder of the Agreement Period, which
amount shall be payable in equal installments over the Agreement Period in the
same manner and at the same times the Corporation pays base salaries to other
Executives of the Corporation and subject to customary withholding and other
required employment taxes. If Executive is terminated by the Corporation for
any reason other than for "cause" (as defined below) at any time following the
Agreement Period, Executive shall be entitled to receive as severance pay
continuation of base salary for six months (the "At-Will Severance Period"),
payable in equal installments over the At-Will Severance Period in the same
manner and at the same times the Corporation pays base salaries to other
Executives of the Corporation and subject to customary withholding and other
required employment taxes. As used herein, the term "cause" shall mean: (i)
Executive's committing any fraud, theft, embezzlement or other dishonest act
against the Corporation; (ii) Executive's conviction of a crime constituting a
felony under state or federal law; (iii) Executive's intentional or grossly
negligent act(s) which is detrimental to or damages or xxxxx the Corporation or
any of its employees; or (iv) Executive's breach of this Agreement. Any payment
due under this paragraph shall be reduced by the amount of compensation payable
to Executive from any person or entity which employs or retains Executive in a
position comparable to Executive's position with the Company during the
Agreement Period and/or the At-Will Severance Period, if any. For purposes of
this Agreement, the Agreement Period and the At-Will Severance Period are
collectively referred to as the "Severance Period."
d. Executive's office shall be located on the East Coast and
Executive will travel to the extent necessary to perform his duties to the
Corporation.
2. COMPENSATION.
a. During the Employment, Executive shall be entitled to an
annualized base salary of One Hundred and Ten Thousand Dollars ($110,000),
payable in installments throughout the year in the same manner and at the same
times the Corporation pays base salaries to other Executives of the Corporation
and subject to customary withholding and other required employment taxes.
b. In addition to the base salary referenced above, Executive shall
be entitled to receive an annual merit bonus of up to 10% of Executive's base
salary upon satisfaction of criteria determined in the discretion of the
Compensation Committee of the Board of Directors.
c. As additional compensation, Executive shall receive an option to
acquire 20,000 shares of the Corporation's Common Stock under the Corporation's
Stock Option Plan. The option will be granted as of the date hereof and shall
have an exercise price of $6 1/8 per share and will vest in twenty-four equal
monthly installments so long as Executive is employed with the Corporation. All
shares underlying the option that have vested will remain exercisable for a
period of ten years from the date of grant, subject to earlier termination as
provided in the Corporation's standard stock option agreement.
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3. EXPENSES. The Corporation shall promptly reimburse Executive for the
reasonable business expenses incurred by Executive in promoting the business of
the Corporation, including expenditures for entertainment and travel; PROVIDED,
HOWEVER, that each such expenditure shall be reimbursable only if (i) it is
incurred in compliance with the Corporation's then applicable expense
reimbursement policies, (ii) it is of a nature qualifying it as a proper
deduction on the federal and state income tax return of the Corporation, and
(iii) Executive furnishes to the Corporation adequate records and other
documentary evidence required by federal and state statutes and regulations
issued by the appropriate taxing authorities for the substantiation of that
expenditure as an income tax deduction. In the event any taxing authority
disallows the Corporation a deduction for all or any part of an expense charged
by Executive, the part disallowed shall be charged to Executive as additional
compensation.
4. PROVISIONS OF EMPLOYEE HANDBOOK. Except as modified by this
Agreement, all of the provisions of the Corporation's Employee Handbook as now
in effect or as hereafter adopted or amended by the Board of Directors of the
Corporation shall apply to Executive.
5. MEDICAL INSURANCE; BENEFITS. During the term of Executive's
engagement under this Agreement, subject to Executive's insurability with the
insurance company chosen exclusively by the Corporation at preferred rates and
subject to the availability of such insurance coverage, the Corporation shall at
its sole expense make available to Executive usual and customary medical
insurance coverage. The Corporation reserves the right to change insurers, the
type and extent of insurance coverage and to discontinue offering insurance
coverage altogether at any time upon 30 days' notice. Executive shall be
entitled to participate in all of the Corporation's other standard benefit plans
and programs on the same basis as the Corporation's other executive officers.
6. VACATION LEAVE. Executive shall be entitled to ten days of vacation
per year, which shall accrue at the rate of 0.833 days for each month worked,
and which shall be otherwise subject to the Corporation's vacation policy as
announced from time to time and/or set forth in the Employee Handbook.
7. EXECUTIVE'S DUTIES ON TERMINATION. Upon the termination of
Executive's services hereunder, Executive agrees to deliver promptly to the
Corporation all equipment, notebooks, documents, memoranda, reports, written and
computer files and data, samples, books, correspondence, lists, or other written
or graphic records, and the like, relating to the Corporation's business, which
are or have been in Executive's possession or control.
8. CONFLICTS OF INTEREST AND NON-COMPETITION.
a. During the Employment, Executive agrees that Executive will not,
directly or indirectly, own an interest in, operate, join, control, or
participate in, or be connected as an officer, employee, agent, independent
contractor, partner, shareholder, or principal of any corporation, partnership,
proprietorship, firm, association, person, or other entity which
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competes, or which, by hiring Executive, intends to compete, with the automated
custom software configuration and/or computer assembly business of the Company.
b. During the Employment, Executive agrees that Executive will not,
directly or indirectly, undertake planning for or organization of any business
activity competitive with the Corporation's business or combine or conspire with
other executives or representatives of the Corporation's business for the
purpose of organizing any such competitive business activity.
c. During the Employment and for a period (the "Non-Compete Period")
of two years following termination of the Severance Period, if any, Executive
agrees that he will not, directly or indirectly, either for Executive or for any
other person, firm, or corporation, divert or take away or attempt to divert or
take away (and during the Non-Compete Period, call on or solicit or attempt to
call on or solicit) any of the Corporation's customers or clients, including but
not limited to those upon whom Executive called or whom Executive solicited or
to whom Executive provided services or with whom Executive became acquainted
while Executive's services were engaged by the Corporation; provided, however,
that Executive shall not be deemed to be in violation of this Section 10c merely
by becoming employed by a business that competes with the Corporation so long as
Executive does not participate in, assist, allow use of Confidential Information
in connection with, or facilitate, solicitation of the Corporation's Customers
or clients by such business and otherwise complies in all respects with the
provisions of this Agreement.
d. During the Employment and for the Non-Compete Period, Executive
agrees that he will not, directly or indirectly or by action in concert with
others, induce or influence (or seek to induce or influence) any person who is
or will be hereafter engaged (as an executive, agent, independent contractor or
otherwise) by the Corporation to terminate his or her employment or engagement.
e. Nothing contained in this paragraph 8 shall be deemed a waiver of
Executive's obligations under the laws of the State of California or the United
States of America and in the event of any conflict or inconsistency between the
provisions of this paragraph 8 and such laws, such laws shall control. The
covenants of this paragraph shall be construed as separate covenants covering
their subject matter in Los Angeles County, each of the other separate counties
in the state of California in which the Corporation transacts its business, the
names of which are incorporated herein by this reference, and each of the
separate counties or similar political subdivisions of each state in the United
States in which the Corporation transacts its business, the names of which are
incorporated herein by reference; to the extent that any covenant shall be
judicially unenforceable in any one or more of said counties or states, said
covenant shall not be affected with respect to each other county and state, each
covenant with respect to each county and state being construed as severable and
independent.
9. CONTINUING OBLIGATIONS. Executive's obligations under paragraphs 7
and 8 shall continue in effect beyond the date of termination of Executive's
services and such obligations shall
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be binding on Executive's assigns, heirs, executors, administrators, and other
legal representatives.
10. SEVERABLE PROVISIONS. The provisions of this Agreement are severable,
and if any one or more provisions is determined to be judicially unenforceable,
in whole or in part, the remaining provisions shall nevertheless be binding and
enforceable.
11. ATTORNEYS' FEES. If any legal action arises under this Agreement or
by reason of any asserted breach of it, the prevailing party shall be entitled
to recover all costs and expenses, including reasonable attorney's fees,
incurred in enforcing or attempting to enforce any of the terms, covenants or
conditions, including costs incurred prior to commencement of legal action, and
all costs and expenses, including reasonable attorneys fees, incurred in any
appeal from an action brought to enforce any of the terms, covenants or
conditions hereof.
12. NOTICES. Any notice to be given to the Corporation under the terms of
this Agreement shall be addressed to the Corporation at 000 Xxxxxx Xxxxxx,
Xxxxxxxx, Xxxxxxxxxx 00000, Attention: Chief Executive Officer, and any notice
to be given to Executive shall be addressed to Executive at Executive's home
address or at such other address as either party may hereafter designate in
writing to the other. Any such notice shall be deemed to have been duly given
if personally delivered or when enclosed in a properly sealed and addressed
envelope, registered or certified, return receipt requested, and deposited
(postage prepaid) in a post office or branch post office regularly maintained by
the United States government. Notices mailed in accordance herewith by
registered or certified mail shall be deemed to have been duly given four days
from date of deposit in the United States mails, unless sooner received.
13. WAIVERS AND AMENDMENTS. Either party's failure to enforce any
provision or provisions of this Agreement shall not in any way be construed as a
waiver of any such provision or provisions, or prevent that party thereafter
from enforcing each and every other provision of this Agreement. No amendment
or waiver of any provision of this Agreement shall be effective unless and until
an instrument reflecting the amendment or waiver has been executed by the party
or parties charged with such amendment or waiver.
14. ENFORCEMENT. Executive agrees that the breach of any of the
provisions of paragraphs 7 and 8 of this Agreement could not reasonably or
adequately be compensated in damages in an action at law and that the
Corporation shall be entitled to injunctive relief, which may include but shall
not be limited to restraining Executive from rendering any service that would
breach this Agreement. However, no remedy conferred by any of the specific
provisions of this Agreement (including this paragraph) is intended to be
exclusive of any other remedy, and each and every remedy shall be cumulative and
shall be in addition to every other remedy given hereunder or now or hereafter
existing at law or in equity or by statute or otherwise. The election of any
one or more remedies by the Corporation shall not constitute a waiver of the
right to pursue other available remedies.
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15. ARBITRATION; DISPUTE RESOLUTION PROCESS. The parties hereby agree
that, in order to obtain prompt and expeditious resolution of any disputes under
this Agreement, each claim, dispute or controversy of whatever nature, arising
out of, in connection with, or in relation to the interpretation, performance or
breach of this Agreement (or any other agreement contemplated by or related to
this Agreement), including without limitation any claim based on contract, tort
or statute, or the arbitrability of any claim hereunder (an "Arbitrable Claim"),
shall be settled, at the request of any party of this Agreement, exclusively by
final and binding arbitration conducted in Los Angeles, California or, at the
election of the Company, in the Commonwealth of Virginia. All such Arbitrable
Claims shall be settled by three arbitrators in accordance with the Commercial
Arbitration Rules ("CAR") then in effect of the American Arbitration
Association. EACH PARTY HERETO EXPRESSLY CONSENTS TO, AND WAIVES ANY FUTURE
OBJECTION TO, SUCH FORUM AND ARBITRATION RULES. Judgment upon any award may be
entered by any state or federal court having jurisdiction thereof. Except as
required by law (including, without limitation, the rules and regulations of the
Securities and Exchange Commission and the Nasdaq Stock Market), no party nor
the arbitrator shall disclose the existence, content, or results of any
arbitration hereunder without the prior written consent of all parties. Except
as provided herein, the California Arbitration Act shall govern the
interpretation, enforcement and all proceedings to this Section 15.
The parties further agree that the nature, scope and timing of any
production of any documents or other information or witnesses in respect of the
resolution of any Arbitrable Claim pursuant to this Section 15 shall be in
accordance with the CAR.
Adherence to this dispute resolution process shall not limit the right
of the parties hereto to obtain any provisional remedy, including without
limitation, injunctive or similar relief, from any court of competent
jurisdiction as may be necessary to protect their respective rights and
interests pending arbitration. Notwithstanding the foregoing sentence, this
dispute resolution procedure is intended to be the exclusive method of resolving
any Arbitrable Claim arising out of or relating to this Agreement.
16. WAIVER OF JURY TRIAL. Consistent with Section 15, each signatory to
this Agreement further waives its respective right to a jury trial of any claim
or cause of action arising out of this Agreement or any dealings between any of
the signatories hereto relating to the subject matter of this Agreement. The
scope of this waiver is intended to be all-encompassing of any and all disputes
that may be filed in any court and that relate to the subject matter of this
Agreement, including, without limitation, contract claims, tort claims, and all
other common law and statutory claims. This waiver is irrevocable, meaning that
it may not be modified either orally or in writing, and this waiver shall apply
to any subsequent amendments, supplements or other modifications to this
Agreement or to any other document or agreement relating to the transactions
contemplated by this Agreement.
17. TITLES AND HEADINGS; INTERPRETATION. Titles and headings to
paragraphs in this Agreement are for the purpose of reference only and shall in
no way limit, define or otherwise affect the provisions of this Agreement. The
provisions of this Agreement shall be interpreted in
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accordance with their plain meaning. No provision of this Agreement shall be
interpreted against a party by reason of that party having been responsible for
the drafting of the provision.
18. GOVERNING LAW. The parties hereto agree that it is their intention
and covenant that this Agreement and performance under this Agreement, and all
suits and special proceedings that may ensue from its breach, be construed in
accordance with and under the laws of the State of California; PROVIDED,
HOWEVER, that the provisions of Section 8 shall be interpreted and construed in
accordance with the laws of the Commonwealth of Virginia.
19. ENTIRE AGREEMENT. With the exception of that certain Employee
Confidential Information and Non-Solicitation Agreement, of even date herewith,
by and between Executive and the Corporation (the "Confidentiality Agreement"),
this instrument constitutes the entire agreement of the parties hereto
respecting the subject matter hereof and correctly sets forth the rights,
duties, and obligations of each to the other in relation thereto as of its date.
Any prior agreements, promises, negotiations, or representations (other than the
Confidentiality Agreement) concerning its subject matter not expressly set forth
in this Agreement are of no force or effect and are hereby superseded and merged
herein.
20. EXECUTIVE'S REPRESENTATIONS. Executive represents and warrants that
Executive is free to enter into this Agreement and to perform each of its terms
and covenants. Executive represents and warrants that Executive is not
restricted or prohibited, contractually or otherwise, from entering into and
performing this Agreement, and that Executive's execution and performance of
this Agreement is not a violation or a breach of any other agreement between
Executive and any other person or entity. Executive agrees to indemnify and
hold the Corporation harmless from any all costs and expenses, including
attorneys' fees, incurred by the Corporation as a result of any breach by
Executive of this paragraph 20.
21. COUNTERPARTS. This Agreement may be executed in multiple counterparts
each of which shall be deemed an original and all of which together shall be
deemed one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.
"CORPORATION"
CUMETRIX DATA SYSTEMS CORP., a
California corporation
By: /S/ MAX TOGHRAIE
----------------
Max Toghraie
Chief Executive Officer
"EXECUTIVE"
/S/ XXXXX XXXXXXXXX
-------------------
Xxxxx Xxxxxxxxx
Address: 00000 Xxxxxxxxx Xx.
Xxxxxxx, XX 00000
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