EXHIBIT 10.12
EMPLOYMENT AGREEMENT
Kinetic Systems, Inc., a California corporation ("KSI"), hereby agrees
effective as of July 31, 1994 (the "EFFECTIVE DATE") to employ Xxxxx X. Xxxxxx
("EMPLOYEE"), and EMPLOYEE agrees to be employed by KSI, in consideration of and
pursuant to the following terms and conditions:
1. Position. KSI shall employ EMPLOYEE in the position of Executive
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Vice-President and Secretary of KSI.
2. Duties. EMPLOYEE shall competently and professionally perform the
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duties described in KSI's Bylaws and such other duties as are reasonably
assigned to EMPLOYEE by the Board of Directors of KSI.
3. Outside Business Activities. During her employment with KSI, EMPLOYEE
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shall devote competent energies, interests, and abilities to the performance of
her duties under this AGREEMENT. During the term of this AGREEMENT, EMPLOYEE
shall not, without KSI's prior written consent, render any services to others
for compensation or engage or participate, actively or passively, in any other
business activities that would materially interfere with the performance of
EMPLOYEE's duties hereunder or compete with KSI's business.
4. Term. Subject to termination as provided in Section 9, EMPLOYEE shall
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be employed by KSI from the EFFECTIVE DATE until October 31, 1996. After
October 31, 1996, this AGREEMENT may be renewed for subsequent one year terms
upon the written agreement of both parties.
5. Place of Employment. EMPLOYEE shall be based out of Santa Xxxxx,
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California and such other places as may be specified by KSI from time to time.
6. Compensation/Benefits.
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6.1 Salary. KSI shall pay EMPLOYEE a salary of $80,000 per year
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("BASE SALARY"), payable bi-weekly in arrears, in accordance with KSI's standard
pay policies. Beginning on November 7, 1994, EMPLOYEE's BASE SALARY shall be
increased to $89,600 per year. Beginning the first week of November, 1995,
EMPLOYEE's BASE SALARY shall be increased each November by the greater of 2% or
the increase, if any, in the consumer price index. KSI shall have full
discretion in selecting an appropriate consumer price index, but shall make
reasonable efforts to ensure that the index used is the same from year to year.
6.2 Bonus. Each year, EMPLOYEE shall be entitled to a performance
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bonus, to be set in the sole discretion of the Board of Directors, depending on
the performance of EMPLOYEE during such year.
6.3 Benefits. KSI shall provide EMPLOYEE with such benefits as it
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provides its other salaried exempt employees, as such benefits may change from
time to time.
6.4 Automobile. During the term of this AGREEMENT, KSI shall provide
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EMPLOYEE with an automobile (the "COMPANY CAR") reasonably selected by KSI for
EMPLOYEE's use. KSI shall pay all insurance on the COMPANY CAR.
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6.5 Withholdings. All compensation paid to EMPLOYEE under this
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AGREEMENT, including payment of salary and taxable benefits, shall be subject to
such withholdings as may be required by law or KSI's general practices.
Initials: KSI /s/ DJS EMPLOYEE: /s/ MRB
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7. Termination.
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7.1 At-Will Employment. Either party may terminate this AGREEMENT by
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written notice at any time for any reason or for no reason; provided, however,
that for any termination by KSI without CAUSE (as defined in Section 7.4), KSI
shall pay EMPLOYEE the SEVERANCE PAYMENT described in Section 7.3. This
AGREEMENT is intended to be and shall be deemed to be an at-will employment
agreement and does not constitute a guarantee of continuing employment for any
term.
7.2 Change of At-Will Status. The at-will nature of this AGREEMENT
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may only be modified by the written agreement of the parties.
7.3 Severance. In the event that prior to expiration of the term of
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this AGREEMENT, EMPLOYEE's employment is terminated by KSI without CAUSE (as
defined in Section 7.4), KSI shall pay to EMPLOYEE as severance (the "SEVERANCE
PAYMENT") the following amounts:
a. An amount equal to six months of EMPLOYEE's then current
salary, payable in 12 equal monthly installments over the first year following
termination.
b. During the first year following termination, KSI shall make
reasonable efforts to keep EMPLOYEE on all company benefit plans as if EMPLOYEE
were still an employee of KSI, provided that the granting of such benefits is
allowed by law and the contracts between KSI and the provider of such benefits.
EMPLOYEE acknowledges that it is the responsibility of EMPLOYEE to ensure
EMPLOYEE's own health and other insurance coverage after termination and that
KSI's liability under this Section 7.3.b. shall in all events be limited to the
amount of premiums KSI should have paid on behalf of EMPLOYEE under this Section
7.3.b.
EMPLOYEE shall not be entitled to any SEVERANCE PAYMENT in the event
EMPLOYEE terminates this AGREEMENT for any reason.
7.4 CAUSE. A termination for "CAUSE" shall mean a termination
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because:
a. EMPLOYEE is incapacitated by accident, sickness or otherwise
so as to render her mentally or physically incapable of performing the services
required of her under this AGREEMENT;
b. EMPLOYEE fails to diligently carry out EMPLOYEE's duties
under this AGREEMENT after repeated written notice by KSI to EMPLOYEE of such
failure; or
c. EMPLOYEE commits any act of gross negligence or moral
turpitude.
8. Nondisclosure Agreement. EMPLOYEE acknowledges that the obligations
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of EMPLOYEE pursuant to the Employee Nondisclosure Agreement and Proprietary
Rights Assignment executed by
EMPLOYEE on August 2, 1994 shall continue during the term, and shall survive the
termination of this AGREEMENT.
9. Further Assurances. Each party shall perform any and all further acts
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and execute and deliver any documents which are reasonably necessary to carry
out the intent of this AGREEMENT.
10. Notices. All notices or other communications required or permitted by
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this AGREEMENT or by law shall be in writing and shall be deemed duly served and
given when
Initials: KSI /s/ DJS EMPLOYEE: /s/ MRB
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delivered personally or by facsimile, air courier, certified mail
(return receipt requested), postage and fees prepaid, to the party at the
address indicated in the signature block or at such other address as a party may
request in writing.
11. Governing Law. This AGREEMENT shall be governed and interpreted in
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accordance with the laws of the State of California, as such laws are applied to
agreements between residents of California to be performed entirely within the
State of California.
12. Jurisdiction and Venue. Each party hereby consents to jurisdiction of
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and venue in the federal district court for the Northern District of California
and in the courts of the State of California in Santa Xxxxx County, California.
13. Entire Agreement. Subject to Section 8, this AGREEMENT sets forth the
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entire agreement between the parties pertaining to the subject matter hereof and
supersedes all prior written agreements, and all prior or contemporaneous oral
agreements and understandings, express or implied.
14. Written Modification and Waiver. No modification to this AGREEMENT,
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nor any waiver of any rights, shall be effective unless assented to in writing
by the party to be charged, and the waiver of any breach or default shall not
constitute a waiver of any other right or any subsequent breach or default.
15. Assignment. This AGREEMENT is personal in nature, and neither of the
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parties shall, without the consent of the other, assign or transfer this
AGREEMENT or any rights or obligations under this AGREEMENT, except that KSI may
assign or transfer this AGREEMENT to a successor of KSI's business in the event
of the transfer or sale of all or substantially all of the assets of KSI's
business; provided, that in the case of any assignment or transfer under the
terms of this Section, this AGREEMENT shall be binding on and inure to the
benefit of the successor of KSI's business, and the successor of KSI's business
shall discharge and perform all of the obligations of KSI under this AGREEMENT.
16. Severability. If any of the provisions of this AGREEMENT are
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determined to be invalid, illegal, or unenforceable, such provisions shall be
modified to the minimum extent necessary to make such provisions enforceable,
and the remaining provisions shall continue in full force and effect to the
extent the economic benefits conferred upon the parties by this AGREEMENT remain
substantially unimpaired.
17. Construction. The headings of this AGREEMENT are for convenience only
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and are not to be considered in construing this AGREEMENT. The language of this
AGREEMENT shall be construed according to its fair meaning and not strictly for
or against any party.
Initials: KSI /s/ DJS EMPLOYEE: /s/ MRB
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IN WITNESS WHEREOF, the parties have executed this AGREEMENT effective as
of the date first set forth above.
KSI:
KINETIC SYSTEMS, INC.
0000 Xxxxxxx Xxxxxx
Xxxxx Xxxxx, XX 00000
By: /s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx,
Executive Vice President
EMPLOYEE:
/s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
0000 Xxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
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FIRST ADDENDUM TO EMPLOYMENT AGREEMENT
THIS ADDENDUM is made and entered into effective as of December 11, 1996,
by and between Kinetic Systems, Inc., a California corporation ("KSI") and Xxxxx
X. Xxxxxx, an individual ("XXXXXX").
RECITALS
A. KSI and XXXXXX entered into an Employment Agreement dated July 31,
1994 (the "AGREEMENT").
B. The AGREEMENT automatically terminates on October 31, 1996.
C. The parties wish to extend the AGREEMENT upon the terms and conditions
of this ADDENDUM.
THE PARTIES AGREE AS FOLLOWS:
1. Relation to Agreement. Unless specifically modified by this ADDENDUM,
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all terms and conditions of the AGREEMENT shall remain in full force and effect
and all terms used in this ADDENDUM shall have the same meaning as in the
AGREEMENT. The phrase "this AGREEMENT" in the AGREEMENT shall be deemed to
refer to the AGREEMENT, as modified by this ADDENDUM.
2. Term of AGREEMENT. Section 4 of the AGREEMENT is hereby revised to
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read in full as follows:
4. Term. Subject to termination as provided in Section 9, EMPLOYEE
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shall be employed by KSI from the EFFECTIVE DATE until October 31, 1999.
After October 31, 1999, this AGREEMENT may be renewed for subsequent one
year terms upon the written agreement of both parties.
IN WITNESS WHEREOF, the parties have executed this ADDENDUM effective as of
the day and year first written above.
KSI:
KINETIC SYSTEMS, INC.
By: /s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx, COO
XXXXXX:
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Xxxxx X. Xxxxxx
