Exhibit 10.4
EMPLOYMENT AGREEMENT
Agreement made as of April 16, 1998 between Xxxxxx X. Xxxx, residing at
0000 Xxx Xxxxxx, Xxxx xx Xxxxxxxx Xxxxx, Xxxxx of California, referred to in
this agreement as "JMF", and DeskTalk Systems, Inc. (DSI), a corporation
organized and existing under the laws of the State of California with its
principal place of business located at 00000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx X-000,
Xxxx of Torrance, State of California, referred to in this agreement as "DSI".
In consideration of the mutual covenants and promises of the parties, DSI
and JMF agree as follows:
Section I
Employment
JMF accepts employment by DSI in an executive capacity, Chief Financial
Officer, subject to the terms and conditions of this agreement. This agreement
is for personal services and is non-assignable.
Section II
Term of Employment
This agreement and the employment shall commence on April 16, 1998, and
continue for a period of one year. The term shall automatically be extended for
an additional period of one year at the end of the Term, unless not less than
sixty days prior to the expiration of the term of this Agreement, either party
notifies the other party in writing that it intends not to renew the Agreement.
If the Agreement is not renewed neither party shall incur any further obligation
to the other at the end of the term.
Section III
Duties of JMF
JMF will serve DSI faithfully and to the best of JMS's ability under the
direction of the President and/or the board of directors of DSI. JMF shall
devote JMF's entire productive time, energy, ability, and attention to the
performance of the duties agreed on to be performed by JMF throughout the term
of this employment agreement. JMF shall not directly or indirectly render any
services of a business, commercial, or professional nature to any person or
organization other than DSI for compensation during the term of this agreement.
JMF shall be present at the Torrance facility on a full-time basis, unless
agreed otherwise.
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Section IV
Compensation
Base. JMF's base salary shall be at a rate of thirteen thousand dollars
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($13,000) per month, payable according to DSI's standard employee wage payment
policy. Said policy may be changed from time to time in the discretion of DSI.
Said base salary may be reviewed for the purpose of increasing same, at any time
during the Term of this Agreement or any renewal thereof. It is anticipated
that said review for increases will occur the annual anniversary of the
Agreement.
Incentive Compensation. JMF shall be paid on a quarterly basis up to
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twenty-five percent of his quarterly base salary. Incentive compensation shall
be based fifty percent on the company meeting its revenue objectives as compared
to plan as approved by the Board of Directors, and fifty percent on management
objectives as defined by the President of DSI.
If JMF shall fail or unable to perform the services required, because of
any physical or mental infirmity, and such failure or inability shall continue
for thirty consecutive days, DSI will have the continuing right during the
continuance of such disability to cancel the remainder of this contract, and
terminate JMF's employ. If DSI terminates the Agreement pursuant to this
paragraph, DSI shall continue to pay base compensation and health benefits for a
period of thirty (30) days.
Section V
Employee's Services as Director
JMF consents to serve as a director of DSI, if elected or appointed,
without further compensation. JMF may decline such appointment or election if
DSI does not maintain Directors and Officers insurance coverage that
specifically includes JMF as a named insured.
Section VI
Termination
Termination by JMF. JMF may terminate this agreement at any time with
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thirty days advance notice. So long as JMF continues to perform his duties
through the date of termination, DSI agrees to continue to pay JMF pursuant to
the compensation schedule above until the date of termination.
Termination by DSI. DSI may terminate this agreement pursuant to Section
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II and/or Section IV(c). DSI shall have "cause" to terminate JMF hereunder upon
(i) the willful and continued failure by JMF to substantially perform his duties
hereunder and (other than any such failure resulting from JMF's incapacity due
to physical or mental illness), after written notice is delivered by DSI that
specifically identifies the manner in
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which DSI believes JMF has not substantially performed his duties and failure
continues uncured for seven (7) business day, (ii) the willful engaging by JMF
in misconduct which is materially injurious to DSI, monetarily or otherwise
(including, but not limited to, conduct that constitutes competitive activity)
and the same remains uncured seven (7) business days after written notice to
cure is given by DSI, (iii) conviction of a felony, or (iv) failure to utilize
the DSI Headquarters facility as his base of operation. For purposes of this
paragraph no act, of failure to act, on JMF's part shall be considered "willful"
unless done, or omitted to be done, by him not in good faith and without
reasonable belief that his action or omission was in the best interest of DSI.
DSI shall have the right to terminate JMF for cause with the payment of one
month's full base compensation and car allowance (if in existence), payment for
any accrued vacation at the existing base pay rate and the continuation of any
DSI-paid insurance coverage for a period of thirty (30) days from the
termination date. If DSI breaches or terminates this Agreement without cause
and, not pursuant to Section II and/or Section IV(c), then DSI shall pay JMF, in
one lump sum or as they would otherwise come due without mitigation or offset,
the greater of either (a) six months base salary or (2) the remaining base
salary due as if this Agreement were to conclude at the end of the current term.
Termination without cause shall be deemed to occur if both of the following
occur (1) a change in the CEO of the company after April 1999 or a merger or
consolidation and (2) JMF's title, pay or position is downgraded without JMF's
approval.
Section VII
Return of DSI's Property
On termination of this agreement, regardless of how termination is
effected, or whenever requested by DSI, JMF shall immediately return to DSI all
of DSI's property, including without limitation all computer equipment issued,
customer lists and prospect lists, used in rendering services or otherwise, that
is in JMF's possession or under JMF's control.
Section VIII
Use of Confidential Information
It is understood between the parties that, during the term of the
employment, JMF will be dealing with the confidential information that DSI's
property used in the course of its business. All documents that JMF prepares, or
confidential information that might be given to JMF in the course of the
employment, are the exclusive property of DSI and shall remain in DSI's
possession. JMF shall treat as confidential any information obtained by JMF
concerning techniques, methods, systems, prices, plans or policies. JMF agrees
that JMF will not during JMF's employment, or at any time subsequently, disclose
to anyone, directly or indirectly, any of such confidential information, or use
them for any reason or purpose whatsoever other than in the course of his
employment with DSI.
Section IX
Other Benefits
JMF shall be entitled to all benefits normally afforded regular employees
of DSI or any other benefit mutually agreed to between DSI and JMF and reduced
to writing.
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Section X
General Provisions
Complete Agreement. The parties agree that this agreement is the complete
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and exclusive statement of the agreement between the parties, which supersedes
and merges all prior proposals, understandings and all other agreements, oral or
written, between the parties relating to this agreement. Excluding the
previously executed Confidentiality Agreement. In addition the Board has
tendered certain stock options to JMF.
Representation by Counsel. JMF has been represented by counsel and this
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agreement was drafted by both DSI and JMF. JMF understands that the General
Counsel of DSI works solely for and owes his duty of loyalty strictly to DSI.
JMF has not relied on any statements made by the General Counsel of DSI in
regards to his decision to enter into this Agreement.
Amendment. This agreement may not be modified, altered or amended except
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by written instrument duly executed by the authorized representatives of each of
the parties.
Waiver. The waiver or failure of either party to exercise in any respect
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any right provided for in this agreement shall not be deemed a waiver of any
further right under this agreement.
Severability. If any provision of this agreement is invalid, illegal or
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unenforceable under any applicable statute or rule of law, it is to that extent
to be deemed omitted. The remainder of the agreement shall be valid and
enforceable to the maximum extent possible.
Governing Law and Jurisdiction. This agreement and performance hereunder
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shall be governed by the laws of the State of California.
If any action shall be brought pursuant to or arising out of this
Agreement, the prevailing party shall be entitled to its reasonable costs and
expenses including reasonable attorney fees and costs.
IN WITNESS WHEREOF, the parties have executed this agreement.
Dated as of April 16, 1998
DESKTALK SYSTEMS, INC.
By: /s/ Xxxxx X. Xxxxxxx /s/ Xxxxxx X. Xxxx
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Xxxxx X. Xxxxxxx, President Xxxxxx X. Xxxx
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