Exhibit 10.6
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is made as of December 31,
2001 by Primal Solutions, Inc., a Delaware corporation (the "Employer"), and
Xxxxx Xxxxxx, an individual resident in Irvine, California (the "Executive").
Recitals
The Employer desires to employ the Executive, and the Executive wishes to
accept such employment, upon the terms and conditions set forth in this
Agreement.
For the purposes of this Agreement, the terms defined in Section 9 of this
Agreement have the meanings specified or referred to in such Section 9.
Agreement
The parties, intending to be legally bound, agree as follows:
1. EMPLOYMENT TERMS AND DUTIES
1.1 Employment
The Employer hereby employs the Executive, and the Executive hereby accepts
employment by the Employer, upon the terms and conditions set forth in this
Agreement.
1.2 Term
Subject to the provisions of Section 5, the term of the Executive's
employment under this Agreement will commence on the Effective Date and end on
December 31, 2002.
1.3 Duties
The Executive will have such duties as are assigned or delegated to the
Executive in writing by the Chief Executive Officer, and will initially serve as
Vice President of Sales and Marketing of the Employer. The Executive's job
duties shall include those responsibilities set forth in Exhibit A. The
Executive will devote his entire business time, attention, skill, and energy to
the business of the Employer, will use his best efforts to promote the success
of the Employer's business, and will cooperate fully with the Board of Directors
and the Chief Executive Officer in the advancement of the best interests of the
Employer. Nothing in this Section 1.3, however, will prevent the Executive from
engaging in additional activities in connection with personal investments and
community affairs that are not inconsistent with the Executive's duties under
this Agreement. If the Executive is elected as a director of the
Employer or as a director or officer of any of its affiliates, the Executive
will fulfill his duties as such director or officer without additional
compensation.
2. COMPENSATION
2.1 Basic Compensation
(a) Salary. The Executive will be paid an annual salary of $140,000 (the
"Salary"), subject to adjustment as provided below, which will be payable in
equal periodic installments according to the Employer's customary payroll
practices, but no less frequently than monthly. The Salary will be reviewed by
the Board of Directors not less frequently than annually, and may be adjusted
upward in the sole discretion of the Board of Directors.
(b) Benefits. The Executive will, during the Employment Period, be
permitted to participate in such stock option, restricted stock, pension, profit
sharing, bonus, life insurance, hospitalization, major medical, tuition
reimbursement, medical flexible spending accounts and other employee benefit
plans provided by the Employer that may be in effect from time to time, at
levels made available to other similarly situated executives of the Employer,
and to the extent the Executive is eligible under the terms of those plans
(collectively, the "Benefits"). The Benefits shall include life insurance on the
Executive's life in an amount not less than the Executive's Salary.
2.2 Incentive Compensation.
As additional compensation (the "Incentive Compensation") for the services
to be rendered by the Executive pursuant to this Agreement, the Employer will
pay the Executive with respect to Fiscal Year 2002, commencing on January 1,
2002, such amount as set forth in the compensation plan adopted by the Board of
Directors for such year (the Compensation Plan"). The Compensation Plan and the
Individual and Corporate Objectives under said Compensation Plan will be
established by the Board of Directors within 60 days from the beginning of
Fiscal Year 2002 and will be communicated to the Executive in writing within 30
days of being so established. Said Compensation Plan will have the following two
components:
(a) Individual Objectives. Executive will be eligible for quarterly
incentive payments based on achievement of the Individual Objectives as set
forth in the Compensation Plan. The amount and timing of such payments shall be
set forth in the Compensation Plan, with each quarterly payment contingent on
Executive being continually employed through the last day of the fiscal quarter.
(b) Corporate Objectives. Executive also will be eligible for an annual
incentive compensation payment if the Employer meets or exceeds the Corporate
Objectives set forth in the Compensation Plan. Except as set forth in this
Agreement, (i) the Employer shall pay the Executive the Corporate Objectives
component of the Incentive Compensation for Fiscal Year 2002 if (A) the
Executive is continually employed by the Employer from the Effective Date until
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December 31, 2002, and (B) the Corporate Objectives are met, and (ii) in such
event the payment shall be made no later than April 15, 2003.
3. FACILITIES AND EXPENSES
The Employer will furnish the Executive office space, equipment, supplies,
and such other facilities and personnel as the Employer deems necessary or
appropriate for the performance of the Executive's duties under this Agreement.
The Employer will pay the Executive's dues in such professional societies and
organizations as the Chief Executive Officer deems appropriate, and will pay on
behalf of the Executive (or reimburse the Executive for) reasonable expenses
incurred by the Executive at the request of, or on behalf of, the Employer in
the performance of the Executive's duties pursuant to this Agreement, and in
accordance with the Employer's employment policies, including reasonable
expenses incurred by the Executive in attending conventions, seminars, and other
business meetings, in appropriate business entertainment activities, and for
promotional expenses. The Executive must file expense reports with respect to
such expenses in accordance with the Employer's policies.
4. VACATIONS AND HOLIDAYS
The Executive will be entitled to four weeks' paid vacation each calendar
year in accordance with the vacation policies of the Employer in effect for its
executive officers from time to time. Vacation must be taken by the Executive at
such time or times as approved by the Chief Executive Officer. The Executive
will also be entitled to the paid holidays set forth in the Employer's policies.
Any unused vacation days may be carried over to the subsequent calendar year.
5. TERMINATION
5.1 Events of Termination
(a) Termination. The Employment Period, the Executive's Basic Compensation
and Incentive Compensation, and any and all other rights of the Executive under
this Agreement or otherwise as an employee of the Employer will terminate
(except as otherwise provided in this Section 5):
(i) upon the death of the Executive;
(ii) upon the disability of the Executive (as defined in Section 5.2)
for 120 consecutive days, or 180 days during any twelve-month period,
immediately upon notice from either party to the other;
(iii) for cause (as defined in Section 5.3), immediately upon notice
from the Employer to the Executive, or at such later time as such notice
may specify;
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(iv) for good reason (as defined in Section 5.4) upon not less than
thirty days' prior notice from the Executive to the Employer; or
(v) without cause immediately upon notice from either party to the
other.
(b) Notice of Termination. Any termination of the Executive's employment by
the Employer (or its successor) or by the Executive (other than termination
based on the Executive's death), pursuant to this Agreement, shall be
communicated by the terminating party in a written notice to the other party
hereto. Such written notice shall (i) set forth the specific termination
provision in this Agreement relied upon, if applicable, (ii) set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated, and
(iii) set forth the date the Executive's employment with the Employer shall
terminate.
5.2 Definition of Disability
The Executive will be deemed to have a "disability" if, for physical or
mental reasons, the Executive is unable to perform the essential functions of
the Executive's duties under this Agreement, with or without reasonable
accommodation. The Executive shall be provided with short term and long term
disability benefits in accordance with the terms of the Employer's plans then in
effect.
5.3 Definition of "Cause"
"Cause" means: (a) the Executive's material breach of this Agreement;
provided, however, that the Executive shall have thirty (30) days to remedy the
breach after receipt of written notice from the Employer that the breach has
occurred if the breach is susceptible of cure; (b) the Executive's failure to
perform (other than by reason of disability) his duties hereunder in any
material respect in the good faith determination of the Board of Directors and,
after receiving written notice to such effect from the Employer, fails to cure
the problem within ten (10) days of receipt of such written notice; (c) the
Executive's gross negligence or willful misconduct in the performance of his
duties and responsibilities to the Employer, such duties and responsibilities
not to be unreasonably imposed; (d) the Executive's appropriation (or attempted
appropriation) of a material business opportunity of the Employer, including
attempting to secure or securing any personal profit in connection with any
transaction entered into on behalf of the Employer; (e) the Executive's
misappropriation (or attempted misappropriation) of any of the Employer's funds
or property; or (f) the conviction of, or the entering of a guilty plea or plea
of no contest by the Executive with respect to, a felony.
5.4 Definition of "Good Reason"
"Good reason" means any of the following: (a) the Employer's material
breach of this Agreement or any other agreement between Executive and Employer
concerning Executive's employment with the Employer; (b) the assignment of the
Executive without his express and voluntary written consent to a title, status,
overall position, responsibilities, or duties, reporting
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relationship, and general working environment of a materially lesser status or
degree of responsibility than his title, status, overall position,
responsibilities, or duties, reporting relationship, and general working
environment at the Effective Date; (c) the requirement by the Employer that the
Executive relocate the Executive's personal residence outside the metropolitan
Orange County, California area; (d) the relocation by the Employer of the
Executive's office more than 50 miles from its location as of the Effective
Date; (e) any failure by the Employer to obtain the assumption of any material
agreement between the Executive and the Employer concerning Executive's
employment by any successor of the Employer or assignee of substantially all of
the business of the Employer; or (f) any material change by the Employer in the
Benefits or Incentive Compensation offered to the Executive from those in which
the Executive is participating on the Effective Date, or the taking of any
action by the Employer which would materially and adversely affect the
Executive's participation in or reduce the Executive's benefits under any of the
Benefits or Incentive Compensation plans or deprive the Executive of any fringe
benefit then enjoyed by the Executive, provided, however, that nothing contained
herein shall be deemed to permit termination by the Executive for Good Reason if
the Employer offers a range of benefit plans and programs to the Executive
which, taken as a whole, are at least comparable to the Benefits and Incentive
Compensation in which the Executive is participating on the Effective Date.
5.5 Termination Pay
Effective upon the termination of the Executive's employment, the Employer
will be obligated to pay the Executive (or, in the event of his death, his
designated beneficiary as defined below) only such compensation as is provided
in this Section 5.5, or, if applicable, as provided in the Change of Control
Agreement which is being entered into concurrently herewith between the
Executive and the Employer (the "Change in Control Agreement"), and in lieu of
all other amounts and in settlement and complete release of all claims the
Executive may have against the Employer. If the Executive receives payments
under the Change of Control Agreement, then he will not also receive payments
under this Agreement. The Employer may, as a condition to the Executive
receiving any unvested pay or benefits under this Section 5.5, require the
Executive to execute a release of all claims the Executive may have against the
Employer or its affiliates arising from the Executive's employment with the
Employer or the termination thereof in a form reasonably satisfactory to the
Employer. Except as set forth herein, all amounts to be paid under this Section
5.5 shall be paid in equal periodic installments according to the Employer's
customary payroll practices, including without limitation any payments of
Incentive Compensation.
For purposes of this Section 5.5, the Executive's designated beneficiary
will be such individual beneficiary or trust, located at such address, as the
Executive may designate by notice to the Employer from time to time or, if the
Executive fails to give notice to the Employer of such a beneficiary, the
Executive's estate. Notwithstanding the preceding sentence, the Employer will
have no duty, in any circumstances, to attempt to open an estate on behalf of
the Executive, to determine whether any beneficiary designated by the Executive
is alive or to ascertain the address of any such beneficiary, to determine the
existence of any trust, to determine whether any person or entity purporting to
act as the Executive's personal representative (or the trustee of
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a trust established by the Executive) is duly authorized to act in that
capacity, or to locate or attempt to locate any beneficiary, personal
representative, or trustee.
(a) Termination Without Cause or By the Executive for Good Reason. If
Employer terminates the Executive's employment without cause or the Executive
terminates his employment for good reason, the Employer will pay the Executive
(i) the Executive's Salary for the remainder, if any, of the calendar month in
which such termination is effective, and for the remainder of this Agreement or
six months, whichever is greater, (ii) that portion of the Corporate Objectives
component of the Executive's Incentive Compensation, if any, for the Fiscal Year
during which the termination is effective, prorated through the date of
termination, as described in Section 5.5(f), (iii) accrued vacation through the
date of termination, and (iv) Incentive Compensation accrued and unpaid from the
previous Fiscal Year, if any.
(b) Termination by the Employer for Cause or Voluntarily by the Executive.
If the Employer terminates the Executive's employment for cause, or the
Executive voluntarily terminates his employment other than for good reason or
disability, the Employer will pay the Executive (i) his Salary and accrued
vacation through the date such termination is effective, and (ii) accrued and
unpaid Incentive Compensation, if any, from the previous Fiscal Year, but the
Executive will not be entitled to the Corporate Objectives component of any
Incentive Compensation for the Fiscal Year during which such termination occurs.
In addition, in the event that the Employer terminates the Executive's
employment for cause pursuant to Section 5.3(b), the Employer shall pay the
Executive his Salary for a period of three months after the date of termination.
(c) Termination upon Disability. Upon the disability of the Executive for
120 consecutive days, or 180 days during any twelve-month period, the
Executive's employment may be terminated by either party, and upon such
termination the Employer will pay the Executive (i) that part of the Corporate
Objectives component of Executive's Incentive Compensation, if any, for the
Fiscal Year during which the disability occurs, prorated through the end of the
calendar month during which the disability is deemed to have occurred under
Section 5.2, as described in Section 5.5(f), (ii) accrued vacation through the
date of termination, (iii) accrued and unpaid Incentive Compensation, if any,
from the previous Fiscal Year, (iv) his Salary through the date such termination
is effective, and (v) the payments set forth in Section 6.1.
(d) Termination upon Death. If Executive's employment is terminated because
of the Executive's death, the Employer will pay the Executive's designated
beneficiary (i) the Executive's Salary through the end of the calendar month in
which his death occurs, (ii) accrued vacation through the date of termination,
(iii) accrued and unpaid Incentive Compensation, if any, from the previous
Fiscal Year, and (iv) that part of the Corporate Objectives component of
Executive's Incentive Compensation, if any, for the Fiscal Year during which his
death occurs, prorated through the end of the calendar month during which his
death occurs, as described in Section 5.5(f).
(e) Benefits.
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(i) If the Executive's employment hereunder is terminated by the
Employer without cause or by the Executive for Good Reason, then the
Employer will provide and pay for continued medical, dental, life, and
disability insurance coverage for the Executive and the Executive's
dependants on the same terms as in effect at the time of termination of the
Executive's employment, including general premium increases, for the period
from the date of termination until the Executive obtains replacement
coverage through other employment, or for a period consistent with Section
5.5(a)(i), whichever is less.
(ii) If the Executive's employment hereunder is terminated (A) by
death or disability, (B) because this Agreement expires by its terms and
the Executive's employment with the Employer is not continued, or (C) by
the Employer for cause pursuant to Section 5.3(b), then the Employer will
provide and pay for continued medical and dental coverage for the
Executive, if applicable, and the Executive's dependents, on the same terms
as in effect at the time of termination of the Executive's employment,
including general premium increases, for a period of 90 days after the
effective date of termination. If such coverage is pursuant to COBRA, the
Employer's obligations hereunder will be contingent upon the Executive or
his dependents, as applicable, executing all documents required to obtain
such coverage.
(iii) Except as set forth in this Section 5.5(e), the Executive's
accrual of, or participation in plans providing for, the Benefits will
cease at the effective date of the termination of his employment, and the
Executive will be entitled to accrued Benefits pursuant to such plans only
as provided in such plans.
(f) Corporate Objectives Component of Incentive Compensation. That portion
of the Corporate Objectives Component of Executive's Incentive Compensation to
be paid pursuant to subsections (a)(ii), (c)(i), or (d)(iv) above, shall be paid
only if the Employer meets the Corporate Objectives for the Fiscal Year during
which the termination is effective. If such Corporate Objectives are met, then
the amount due shall be paid no later than April 15, 2003. Notwithstanding the
foregoing, if the Board of Directors in its discretion determines that the
Employer does not have sufficient available cash to pay such amount on such
date, the Board of Directors may defer, without interest, payment of any or all
of such amount, to not later than December 31, 2003, provided however, that
payments to the Executive may only be deferred to the extent that payments to
continuing employees of the Employer entitled to such payments are deferred. If
the Executive is entitled to payment of Incentive Compensation pursuant to this
Section 5.5(f), then on or before March 15, 2003, the Employer shall provide the
Executive with a written notice (i) setting forth financial data based on the
audited financial statements of the Employer sufficient for the Executive to
determine if the Corporate Objectives were met, and the amount of Incentive
Compensation owed to the Executive, and (ii) if Incentive Compensation is owed
to the Executive, stating a good faith determination by the Board of Directors
of the payment schedule for the amount owed.
6. DISABILITY
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6.1 Disability Payments
Upon the disability of the Executive, the Employer will pay the Executive
(i) his Salary for the lesser of (A) 90 days and (B) the date on which
disability insurance benefits commence under the disability insurance coverage
furnished by the Employer to the Executive or under any state disability
program, and (ii) if the Executive qualifies for such disability insurance
benefits, for a period of up to 180 days, the difference between (A) the
Executive's Salary at the time the disability is deemed to have occurred under
Section 5.2, and (B) the insurance benefits under such disability insurance
coverage or state disability program, provided that the period in which the
Employer is required to make payments under subsections (i) and (ii) shall not
in the aggregate exceed 180 days in any 12-month period.
7. NON-DISCLOSURE COVENANT; EMPLOYEE INVENTIONS
7.1 Acknowledgments by the Executive
The Executive acknowledges that (a) during the Employment Period and as a
part of his employment, the Executive will be afforded access to Confidential
Information; (b) public disclosure of such Confidential Information could have
an adverse effect on the Employer and its business; (c) because the Executive
possesses substantial technical expertise and skill with respect to the
Employer's business, the Employer desires to obtain exclusive ownership of each
Employee Invention, and the Employer will be at a substantial competitive
disadvantage if it fails to acquire exclusive ownership of each Employee
Invention; and (d) the provisions of this Section 7 are reasonable and necessary
to prevent the improper use or disclosure of Confidential Information and to
provide the Employer with exclusive ownership of all Employee Inventions.
7.2 Agreements of the Executive
In consideration of the compensation and benefits to be paid or provided to
the Executive by the Employer under this Agreement, the Executive covenants as
follows:
(a) Confidentiality.
(1) During and following the Employment Period, the Executive will
hold in confidence the Confidential Information and will not use or
disclose it to any person except with the specific prior written consent of
the Employer or except as otherwise expressly permitted by the terms of
this Agreement.
(2) Any trade secrets of the Employer will be entitled to all of the
protections and benefits under applicable state trade secret and any other
applicable law. If any information that the Employer deems to be a trade
secret is found by a court of competent jurisdiction not to be a trade
secret for purposes of this Agreement, such information will, nevertheless,
be considered Confidential Information for purposes of this Agreement.
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(3) None of the foregoing obligations and restrictions applies to any
part of the Confidential Information that the Executive demonstrates was or
became generally available to the public other than as a result of a
disclosure by the Executive.
(4) The Executive will not remove from the Employer's premises (except
to the extent such removal is for purposes of the performance of the
Executive's duties at home or while traveling, or except as otherwise
specifically authorized by the Employer) any Employer document, record,
notebook, plan, model, component, device, or computer software or code,
whether embodied in a disk or in any other form (collectively, the
"Proprietary Items"). The Executive recognizes that, as between the
Employer and the Executive, all of the Proprietary Items, whether or not
developed by the Executive, are the exclusive property of the Employer.
Upon termination of this Agreement by either party, or upon the request of
the Employer during the Employment Period, the Executive will return to the
Employer all of the Proprietary Items in the Executive's possession or
subject to the Executive's control, and the Executive shall not retain any
copies, abstracts, sketches, or other physical embodiment of any of the
Proprietary Items.
(b) Employee Inventions. During the Employment Period every Employee
Invention will belong exclusively to the Employer, subject only to the exception
set forth below. The Executive acknowledges that all of the Executive's written
work product, works of authorship, and other Employee Inventions are works made
for hire and the property of the Employer, including any copyrights, patents,
semiconductor mask protection, or other intellectual property rights pertaining
thereto. If it is determined that any such works are not works made for hire,
the Executive hereby assigns to the Employer all of the Executive's right,
title, and interest, including all rights of copyright, patent, semiconductor
mask protection, and other intellectual property rights, to or in such Employee
Inventions. The Executive covenants that he will promptly:
(1) disclose to the Employer in writing any Employee Invention;
(2) assign to the Employer or to a party designated by the Employer,
at the Employer's request and without additional compensation, all of the
Executive's rights to the Employee Invention for the United States and all
foreign jurisdictions;
(3) execute and deliver to the Employer such applications,
assignments, and other documents as the Employer may request in order to
apply for and obtain patents or other registrations with respect to any
Employee Invention in the United States and any foreign jurisdictions;
(4) sign all other papers necessary to carry out the above
obligations; and
(5) give testimony and render any other assistance (but without
expense to the Executive) in support of the Employer's rights to any
Employee Invention.
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This Agreement shall not apply to any invention which qualifies fully under the
provisions of Section 2870 of the California Labor Code, which includes
inventions developed entirely on Executive's own time without using the
Employer's equipment, supplies, facilities or trade secret information, except
for those ideas and inventions that either; (i) relate, at the time of
conception or reduction to practice of the invention, to the Employer's
business, or actual or demonstrably anticipated research or development of the
Employer, or (ii) result from any work performed by the Executive for the
Employer.
7.3 Disputes or Controversies
The Executive recognizes that should a dispute or controversy arising from
or relating to this Agreement be submitted for adjudication to any court,
arbitration panel, or other third party, the preservation of the secrecy of
Confidential Information may be jeopardized. To the extent allowed by law, all
pleadings, documents, testimony, and records relating to any such Confidential
Information will be maintained in secrecy and will be available for inspection
by the Employer, the Executive, and their respective attorneys and experts, who
will agree, in advance and in writing, to receive and maintain all such
information in secrecy, except as may be limited by them in writing.
8. NON-INTERFERENCE
8.1 Acknowledgments by the Executive
The Executive acknowledges that: (a) the services to be performed by him
under this Agreement are of a special, unique, unusual, extraordinary, and
intellectual character; (b) the Employer's business is national in scope and its
products are marketed throughout the United States; (c) the Employer competes
with other businesses that are or could be located in any part of the United
States; and (d) the provisions of this Section 8 are reasonable and necessary to
protect the Employer's business.
8.2 Covenants of the Executive
In consideration of the acknowledgments by the Executive, and in
consideration of the compensation and benefits to be paid or provided to the
Executive by the Employer, the Executive covenants that he will not, directly or
indirectly:
(a) whether for the Executive's own account or for the account of any other
person, at any time during the Employment Period and the Post-Employment Period,
solicit business of the same or similar type being carried on by the Employer,
from any person known by the Executive to be a customer of the Employer, whether
or not the Executive had personal contact with such person during and by reason
of the Executive's employment with the Employer; or
(b) whether for the Executive's own account or the account of any other
person (i) at any time during the Employment Period and the Post-Employment
Period, solicit as an employee,
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independent contractor, or otherwise, any person who is an employee of the
Employer or in any manner induce or attempt to induce any employee of the
Employer to terminate his or her employment with the Employer; or (ii) at any
time during the Employment Period and the Post-Employment Period, interfere with
the Employer's relationship with any person, including any person who at any
time during the Employment Period was an employee, contractor, supplier, or
customer of the Employer.
If the Executive breaches any of the terms and provisions of this Section
8.2 during the Post-Employment Period, the Employer may, in addition to any
other remedies that the Employer may have for any such breach, immediately
terminate the payment of any severance payments or benefits then being paid to
the Executive pursuant to Section 5.5, other than payments vested prior to the
date of termination of the Executive's employment.
For purposes of this Section 8.2, the term "Post-Employment Period" means
the one-year period beginning on the date of termination of the Executive's
employment with the Employer.
If any covenant in this Section 8.2 is held to be unreasonable, arbitrary,
or against public policy, such covenant will be considered to be divisible with
respect to scope, time, and geographic area, and such lesser scope, time, or
geographic area, or all of them, as a court of competent jurisdiction may
determine to be reasonable, not arbitrary, and not against public policy, will
be effective, binding, and enforceable against the Executive.
The Executive will, while the covenant under this Section 8.2 is in effect,
give notice to the Employer, within ten days after accepting any other
employment, of the identity of the Executive's employer. The Employer may notify
such employer that the Executive is bound by this Agreement and, at the
Employer's election, furnish such employer with a copy of this Agreement or
relevant portions thereof.
The terms and provisions of this Section 8.2 shall not be applicable to the
Executive if the Executive terminates his employment with the Employer for good
reason or if the Executive's employment with the Employer is terminated without
cause.
9. DEFINITIONS
For the purposes of this Agreement, the following terms have the meanings
specified or referred to in this Section 9.
"Agreement"--this Employment Agreement.
"Basic Compensation"--Salary and Benefits.
"Benefits"--as defined in Section 2.1(b).
"Board of Directors"--the board of directors of the Employer.
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"Claim"--as defined in Section 10.9(a).
"Confidential Information"--any and all:
(a) trade secrets concerning the business and affairs of the Employer
and its affiliates, product specifications, data, know-how, formulae,
compositions, processes, designs, sketches, photographs, graphs, drawings,
samples, inventions and ideas, past, current, and planned research and
development, current and planned manufacturing or distribution methods and
processes, customer lists, current and anticipated customer requirements,
price lists, market studies, business plans, computer software and programs
(including object code and source code), computer software and database
technologies, systems, structures, and architectures (and related formulae,
compositions, processes, improvements, devices, know-how, inventions,
discoveries, concepts, ideas, designs, methods and information), and any
other information of the Employer or its affiliates, however documented,
that is a trade secret within the meaning of applicable state trade secret
law; and
(b) information concerning the business and affairs of the Employer
and its affiliates (which includes historical financial statements,
financial projections and budgets, historical and projected sales, capital
spending budgets and plans, the names and backgrounds of key personnel,
personnel training and techniques and materials), however documented; and
(c) notes, analysis, compilations, studies, summaries, and other
material prepared by or for the Employer or its affiliates containing or
based, in whole or in part, on any information included in the foregoing.
"disability"--as defined in Section 5.2.
"Effective Date"--the date stated in the first paragraph of this Agreement.
"Employee Invention"--any idea, invention, technique, modification,
process, or improvement (whether patentable or not), any industrial design
(whether registerable or not), any mask work, however fixed or encoded, that is
suitable to be fixed, embedded or programmed in a semiconductor product (whether
recordable or not), and any work of authorship (whether or not copyright
protection may be obtained for it), created, conceived, or developed by the
Executive, either solely or in conjunction with others, during the Employment
Period, or a period that includes a portion of the Employment Period, that
relates in any way to, or is useful in any manner in, the business then being
conducted or proposed to be conducted by the Employer or its affiliates, and any
such item created by the Executive, either solely or in conjunction with others,
following termination of the Executive's employment with the Employer, that is
based upon or uses Confidential Information.
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"Employment Period"--the term of the Executive's employment with the
Employer or its affiliates.
"Fiscal Year"--the Employer's fiscal year, as it exists on the Effective
Date or as changed from time to time.
"cause"--as defined in Section 5.3.
"good reason"--as defined in Section 5.4.
"Incentive Compensation"--as defined in Section 2.2.
"person"--any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, governmental body or other
entity.
"Post-Employment Period"--as defined in Section 8.2.
"Proprietary Items"--as defined in Section 7.2(a)(4).
"Salary"--as defined in Section 2.1(a).
10. General Provisions
10.1 Injunctive Relief and Additional Remedy
The Executive acknowledges that the injury that would be suffered by the
Employer as a result of a breach of the provisions of this Agreement (including
any provision of Sections 7 and 8) would be irreparable and that an award of
monetary damages to the Employer for such a breach would be an inadequate
remedy. Consequently, the Employer will have the right, in addition to any other
rights it may have, to obtain injunctive relief to restrain any breach or
threatened breach or otherwise to specifically enforce any provision of this
Agreement, and the Employer will not be obligated to post bond or other security
in seeking such relief. Without limiting the Employer's rights under this
Section 10 or any other remedies of the Employer, if the Executive breaches any
of the provisions of Section 7 or 8, the Employer will have the right to cease
making any payments otherwise due to the Executive under this Agreement or the
Change in Control Agreement.
10.2 Covenants of Sections 7 and 8 are Essential and Independent Covenants
The covenants by the Executive in Sections 7 and 8 are essential elements
of this Agreement, and without the Executive's agreement to comply with such
covenants, the Employer would not have entered into this Agreement or employed
the Executive. The Employer and the Executive acknowledge that they have been
advised of their right to independently consult with
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their respective counsel concerning the reasonableness and propriety of such
covenants, with specific regard to the nature of the business conducted by the
Employer.
The Executive's covenants in Sections 7 and 8 are independent covenants and
the existence of any claim by the Executive against the Employer under this
Agreement or otherwise will not excuse the Executive's breach of any covenant in
Section 7 or 8.
If the Executive's employment hereunder expires or is terminated, this
Agreement will continue in full force and effect as is necessary or appropriate
to enforce the covenants and agreements of the Executive in Sections 7 and 8.
10.3 Representations and Warranties by the Executive
The Executive represents and warrants to the Employer that the execution
and delivery by the Executive of this Agreement do not, and the performance by
the Executive of the Executive's obligations hereunder will not, with or without
the giving of notice or the passage of time, or both: (a) violate any judgment,
writ, injunction, or order of any court, arbitrator, or governmental agency
applicable to the Executive; or (b) conflict with, result in the breach of any
provisions of or the termination of, or constitute a default under, any
agreement to which the Executive is a party or by which the Executive is or may
be bound.
10.4 Obligations Contingent On Performance
The obligations of the Employer hereunder, including its obligation to pay
the compensation provided for herein, are contingent upon the Executive's
performance of the Executive's obligations hereunder.
10.5 Waiver
The rights and remedies of the parties to this Agreement are cumulative and
not alternative. Neither the failure nor any delay by either party in exercising
any right, power, or privilege under this Agreement will operate as a waiver of
such right, power, or privilege, and no single or partial exercise of any such
right, power, or privilege will preclude any other or further exercise of such
right, power, or privilege or the exercise of any other right, power, or
privilege. To the maximum extent permitted by applicable law, (a) no claim or
right arising out of this Agreement can be discharged by one party, in whole or
in part, by a waiver or renunciation of the claim or right unless in writing
signed by the other party; (b) no waiver that may be given by a party will be
applicable except in the specific instance for which it is given; and (c) no
notice to or demand on one party will be deemed to be a waiver of any obligation
of such party or of the right of the party giving such notice or demand to take
further action without notice or demand as provided in this Agreement.
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10.6 Binding Effect; Delegation of Duties Prohibited
This Agreement shall inure to the benefit of, and shall be binding upon,
the parties hereto and their respective successors, assigns, heirs, and legal
representatives, including any entity with which the Employer may merge or
consolidate or to which all or substantially all of its assets may be
transferred. The duties and covenants of the Executive under this Agreement,
being personal, may not be delegated.
10.7 Notices
All notices, consents, waivers, and other communications under this
Agreement must be in writing and will be deemed to have been duly given when (a)
delivered by hand (with written confirmation of receipt), (b) sent by facsimile
(with written confirmation of receipt), provided that a copy is mailed by
registered mail, return receipt requested, or (c) when received by the
addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate address and facsimile
number set forth below (or to such other address and facsimile number as a party
may designate by notice to the other party pursuant to the terms of this Section
10.7):
If to the Executive:
Xxxxx Xxxxxx
000 Xxxxx xxx Xxx
Xxx Xxxxxxxx, Xxxxxxxxxx 00000
Facsimile No. N/A
If to the Employer:
Primal Solutions, Inc.
00000 Xxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Attention: President / CEO
Facsimile No.: (000) 000-0000
10.8 Entire Agreement; Amendments
This Agreement, along with the Change of Control Agreement, contains the
entire agreement between the parties with respect to the subject matter hereof
and supersedes all prior agreements and understandings, oral or written, between
the parties hereto with respect to the subject matter hereof. This Agreement may
not be amended orally, but only by an agreement in writing signed by the parties
hereto.
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10.9 Arbitration of Disputes
(a) Exclusive Remedy. Except as set forth in Section 10.9(c), arbitration
shall be the sole and exclusive remedy for any dispute, claim, or controversy of
any kind or nature (a "Claim") arising out of, related to, or connected with the
Executive's employment relationship with the Employer, or the termination of the
Executive's employment relationship with the Employer, including any Claim
against any parent, subsidiary, or affiliated entity of the Employer, or any
director, officer, general or limited partner, employee or agent of the Employer
or of any such parent, subsidiary or affiliated entity.
(b) Claims Subject to Arbitration. This agreement to arbitrate specifically
includes (without limitation) any Claim for breach of this Agreement; any Claim
under or relating to any federal, state or local law or regulation prohibiting
discrimination, harassment or retaliation based on race, color, religion,
national origin, sex, age, disability or any other condition or characteristic
protected by law; demotion, discipline, termination or other adverse action in
violation of any contract, law or public policy; entitlement to wages or other
economic compensation; and any Claim for personal, emotional, physical, economic
or other injury.
(c) Claims Not Subject to Arbitration. This Section 10.9 does not preclude
either party from making an application to a court of competent jurisdiction
for: (a) provisional remedies (e.g., temporary restraining order or preliminary
injunction) pursuant to California Code of Civil Procedure section 1281.8; or
(b) a temporary restraining order or injunction under California Code of Civil
Procedure section 527.8 in order to obtain protection against employee violence
or threats of violence. This Section 10.9 also does not apply to any claims by
Executive: (i) for workers' compensation benefits; (ii) for unemployment
insurance benefits; (iii) under a benefit plan where the plan specifies a
separate arbitration procedure; (iv) filed with an administrative agency which
are not legally subject to arbitration under this Agreement; or (v) which are
otherwise expressly prohibited by law from being subject to arbitration under
this Agreement.
(d) Procedure. The arbitration proceedings shall be conducted in Orange
County, California. Any Claim submitted to arbitration shall be decided by a
single, neutral arbitrator (the "Arbitrator"). The parties to the arbitration
shall mutually select the Arbitrator not later than 45 days after service of the
demand for arbitration. If the parties for any reason do not mutually select the
Arbitrator within the 45 day period, then any party may apply to any court of
competent jurisdiction to appoint a retired judge as the Arbitrator. The parties
agree that arbitration shall be conducted in accordance with California Code of
Civil Procedure sections 1280 et seq., except as modified in this Agreement. The
-- ---
Arbitrator shall apply the substantive federal, state, or local law and statute
of limitations governing any Claim submitted to arbitration. In ruling on any
Claim submitted to arbitration, the Arbitrator shall have the authority to award
only such remedies or forms of relief as are provided for under the substantive
law governing such Claim. The Arbitrator shall issue a written decision
revealing the essential findings and conclusions on which the decision is based.
Judgment on the Arbitrator's decision may be entered in any court of competent
jurisdiction.
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(e) Costs. The Employer shall be responsible for paying the fees and costs
incurred in the arbitration (e.g., filing fees, transcript costs and
Arbitrator's fees). The parties shall be responsible for their own attorneys'
fees and costs, except that the Arbitrator shall have the authority to award
attorneys' fees and costs to the prevailing party in accordance with the
applicable law governing the dispute.
(f) Interpretation of Arbitrability. The Arbitrator, and not any federal or
state court, shall have the exclusive authority to resolve any issue relating to
the interpretation, formation or enforceability of this Agreement, or any issue
relating to whether a Claim is subject to arbitration under this Agreement,
except that any party may bring an action in any court of competent jurisdiction
to compel arbitration in accordance with the terms of this Agreement.
10.10 Headings; Construction
The headings in this Agreement are provided for convenience only and will
not affect its construction or interpretation. All references to "Section" or
"Sections" refer to the corresponding Section or Sections of this Agreement
unless otherwise specified. All words used in this Agreement will be construed
to be of such gender or number as the circumstances require. Unless otherwise
expressly provided, the word "including" does not limit the preceding words or
terms.
10.11 Severability
If any provision of this Agreement is held invalid or unenforceable by any
court of competent jurisdiction or Arbitrator, then to the extent that the
rights or obligations of the parties under this Agreement will not be materially
and adversely effected thereby, the other provisions of this Agreement will
remain in full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable.
10.12 Counterparts
This Agreement may be executed in one or more counterparts, each of which
will be deemed to be an original copy of this Agreement and all of which, when
taken together, will be deemed to constitute one and the same agreement.
10.13 Governing Law
This Agreement shall be governed by and construed in accordance with the
laws of the State of California applicable to contracts entered into and wholly
to be performed within the State of California. If any legal action is necessary
to enforce the terms and conditions of this Agreement, the prevailing party
shall be entitled to recover all costs of suit and reasonable attorneys' fees as
determined by the court or arbitrator.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the date above first written above.
EXECUTIVE
/s/ Xxxxx Xxxxxx
-----------------------------
Xxxxx Xxxxxx
EMPLOYER
PRIMAL SOLUTIONS, INC.,
a Delaware corporation
By: /s/ Xxxxxxx Xxxxxx
--------------------------
Name: Xxxxxxx Xxxxxx
-----------------------
Title: President & CEO
-----------------------
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EXHIBIT A
Primal Solutions, Inc.
Job Description
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