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EXHIBIT 10.32
ESS TECHNOLOGY, INC.
RESIGNATION AGREEMENT
This Resignation Agreement ("AGREEMENT") is made as of August 6, 1998, by
and between ESS Technology, Inc. (the "COMPANY"), and ▇▇▇▇ ▇. ▇▇▇▇▇▇ (the
"EMPLOYEE").
WHEREAS, the Employee wishes to resign from his position as Vice-President
of Finance and Administration, Chief Financial Officer and Secretary of the
Company; and
WHEREAS, the Company wishes to accept Employee's resignation.
NOW, THEREFORE, in consideration of the mutual promises made herein, the
Company and Employee (collectively referred to as the "PARTIES") hereby agree as
follows:
1. RESIGNATION. The Company and Employee acknowledge and agree that
Employee's resignation as Vice-President of Finance and Administration, Chief
Financial Officer and Secretary (the "RESIGNATION") shall be effective as of the
close of business on August 31, 1998 (the "RESIGNATION DATE").
2. MUTUAL RELEASE OF CLAIMS. Effective as of the Resignation Date, the
Company and the Employee shall enter into a Resignation Agreement and Mutual
Release (the "Release")in the form attached hereto as Exhibit B.
3. CONSULTING AGREEMENT. Effective as of the Resignation Date, the Company
and the Employee shall enter into a Consulting Agreement (the "CONSULTING
AGREEMENT") in the form attached hereto as Exhibit A. to the Release.
4. CONFIDENTIALITY. The Company and the Employee each agree to use their
best efforts to maintain in confidence the existence of this Agreement and the
contents and terms of this Agreement, except as required by law.
5. SEVERABILITY. In the event that any provision hereof becomes or is
declared by a court or other tribunal of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision.
7. GOVERNING LAW. This Agreement shall be governed by the laws of the State
of California, without regard to its conflicts of law provisions.
8. COUNTERPARTS. This Agreement may be executed in counterparts, and each
counterpart shall have the same force and effect as an original and shall
constitute an effective, binding agreement on the part of each of the
undersigned.
9. PRESS RELEASE. Employee hereby consents to the Company's announcement of
the press release attached hereto.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Parties have executed this Agreement and Mutual
Release on the respective dates set forth below.
ESS TECHNOLOGY, INC.
Dated as of August 6, 1998 By: /s/ ▇▇▇▇ ▇.▇. ▇▇▇▇
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Title: Chairman of the Board of Directors
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▇▇▇▇ ▇. ▇▇▇▇▇▇, an individual
Dated as of August 6, 1998 By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
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EXHIBIT A
CONSULTING AGREEMENT
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ESS TECHNOLOGY, INC.
CONSULTING AGREEMENT
▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇
c/o ESS Technology, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear ▇▇. ▇▇▇▇▇▇:
1. ESS Technology, Inc., a California corporation (the "Company") wishes to
obtain your services as a consultant on specified projects consistent with your
prior duties as an employee of the Company as directed by the Company for a
minimum of 87 hours per month until December 31, 1998, and thereafter on an as
needed basis upon the mutual agreement of you and the Company. This letter shall
constitute an agreement ("Agreement") between you and the Company with respect
to the services you are to provide.
2. This Agreement shall become effective on the date hereof and remain in
effect until the earlier of December 31, 1998, the date on which you commence
full-time employment with another entity, or such time as it may be terminated
for Cause. Either party may terminate this Agreement for Cause at any time. For
this purpose, Cause means the other party's material or intentional breach of
such other party's obligations under this Agreement or the Agreement and Mutual
Release between you and the Company dated as of August 31, 1998 (the
"Resignation Agreement").
3. The Company shall pay you at the rate of $25,000 per month for
consulting services of up to 87 hours per month and an additional $287.35 per
hour for each additional hour more than 87 hours per month worked by you,
payable bi-weekly within 15 days after receipt of your invoice for hours worked
during the prior period, for projects as agreed to by the Company and you.
4. Your relationship with the Company shall be that of an independent
contractor and not that of an employee. You will not be eligible for any
employee benefits, nor will the Company make deductions from payments made to
you for taxes, which shall be your responsibility (unless such deductions are
required by relevant taxing authorities). You agree to indemnify and hold the
Company harmless from any claims, demands, deficiencies, penalties, assessments,
executions, judgments, or recoveries by any government agency against the
Company for any amounts claimed due on account of your failure to pay federal or
state taxes or damages sustained by the Company by reason of any such claims,
including reasonable attorneys' fees. You shall have no authority to enter into
contracts which bind the Company or create obligations on the part of the
Company without the express prior authorization of the Chairman of the Board of
Directors of the Company (the "Chairman").
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5. All services to be performed by you will be as agreed between you and
the Chairman. You shall be required to report to the Chairman concerning your
services performed under this Agreement, or such other party designated by the
Chairman.
6. You understand and agree that the terms of your existing Confidentiality
Agreement (the "Confidentiality Agreement") shall remain in full force and
effect as provided in such agreement, notwithstanding any termination of this
Agreement. In that regard, you shall keep in confidence and shall not disclose
or make available to third parties or make any use of any information or
documents relating to your services under this Agreement or to the products,
methods of manufacture, trade secrets, processes, business or affairs or
confidential or proprietary information of the Company (other than information
in the public domain through no fault of your own), except with the prior
written consent of the Company or to the extent necessary in performing tasks
assigned to you by the Company. No later than September 30, 1998, you will
return to Company all documents and other materials related to the services
provided hereunder or furnished to you by the Company. Your obligations under
this Paragraph 6 shall survive termination of this Agreement for any reason.
7. Any amendment to this Agreement must be in writing signed by you and the
Company.
8. All notices, requests and other communications called for by this
Agreement shall be deemed to have been given if made in writing and mailed,
postage prepaid, if to you at the address set forth above and if to the Company
at ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, or to such other addresses as either
party shall specify to the other.
9. The validity, performance and construction of this Agreement shall be
governed by the laws of the State of California without regard to its conflict
of laws provisions.
10. This Agreement supersedes any prior consulting or other similar
agreements between you and the Company other than the Resignation Agreement and
the Confidentiality Agreement.
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If this Agreement is satisfactory, you should execute and return the
original and one copy to us, retaining the third copy for your file.
Dated as of: August 31, 1998
Very truly yours, ESS
TECHNOLOGY, INC.
By: /S/ ▇▇▇▇ ▇.▇. ▇▇▇▇
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Title: Chairman of the Board of Directors
AGREED AND ACCEPTED:
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
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EXHIBIT B
RESIGNATION AGREEMENT AND MUTUAL RELEASE
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ESS TECHNOLOGY, INC.
RESIGNATION AGREEMENT AND MUTUAL RELEASE
This Resignation Agreement and Mutual Release ("AGREEMENT") is made by and
between ESS Technology, Inc. (the "COMPANY"), and ▇▇▇▇ ▇. ▇▇▇▇▇▇ (the
"EMPLOYEE").
WHEREAS, the Employee wishes to resign from his position as Vice-President
of Finance and Administration, Chief Financial Officer and Secretary of the
Company; and
WHEREAS, the Company and Employee have mutually agreed to release each
other from any claims arising from or related to the employment relationship and
to enter into a consulting arrangement pursuant to which Employee will perform
consulting services for the Company as described below.
NOW, THEREFORE, in consideration of the mutual promises made herein, the
Company and Employee (collectively referred to as the "PARTIES") hereby agree as
follows:
1. RESIGNATION. The Company and Employee acknowledge and agree that
Employee's resignation as Vice-President of Finance and Administration, Chief
Financial Officer and Secretary and resignation from the Company (the
"RESIGNATION") shall be effective at the close of business on August 31, 1998
(the "RESIGNATION DATE").
2. CONSULTING AGREEMENT. Effective as of the Resignation Date, the
Company and the Employee shall enter into a consulting agreement (the
"CONSULTING ARRANGEMENT") in substantially the form attached hereto as Exhibit A
(the "CONSULTING AGREEMENT").
3. CONSIDERATION. Shortly after the Resignation Date, the Company will
pay Employee his pro rated portion of bonuses that he has earned through the
Resignation Date pursuant to the Company's executive bonus program, but in no
event less than $40,000. After the Resignation Date and until the termination of
the Consulting Agreement, the Company shall pay Employee for consulting services
as set forth in the Consulting Agreement.
4. BENEFITS.
(a) Following the Resignation Date, Employee shall have the right to
continue, at his own expense, coverage under the Company's medical insurance
program as provided by the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended ("COBRA"), for the period required by COBRA.
(b) Except as set forth in this Section 4 and as required by
applicable law, Employee shall not be entitled to participate in any benefit
plans or programs provided to employees of the Company following the Resignation
Date.
5. NO OTHER PAYMENTS DUE. The Company agrees that it will pay to Employee
on the Resignation Date all salary, accrued vacation, commissions, compensation,
shares of stock or options therefore and/or such other sums as may then be due
to Employee other than benefits to be paid in accordance with the provisions of
this Agreement. Employee will execute an
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acknowledgment of receipt of all such payments as received and an acknowledgment
that, in light of the payment by the Company of all wages due, or to become due
to Employee, California Labor Code Section 206.5 is not applicable to the
Parties hereto. That section provides in pertinent part as follows:
No employer shall require the execution of any release of
any claim or right on account of wages due, or to become
due, or made as an advance on wages to be earned, unless
payment of such wages has been made.
6. RELEASE OF CLAIMS. Employee agrees that the foregoing consideration
represents settlement in full of all outstanding obligations owed to Employee by
the Company. Employee and the Company, on behalf of themselves, and their
respective heirs, executors, officers, directors, employees, shareholders,
administrators, affiliates, divisions, subsidiaries, predecessor and successor
corporations, and assigns, hereby fully and forever release each other and their
respective heirs, executors, officers, directors, employees, shareholders,
administrators, affiliates, divisions, subsidiaries, predecessor and successor
corporations, and assigns, of and from any claim, duty, obligation or cause of
action relating to any matters of any kind, whether presently known or unknown,
suspected or unsuspected, that any of them may possess arising from any
omissions, acts or facts that have occurred up until and including the Effective
Date, as defined below, of this Agreement including, without limitation:
(a) any and all claims relating to or arising from Employee's
employment relationship with the Company and the termination of that
relationship;
(b) any and all claims for wrongful discharge of employment; breach
of contract, both express and implied; breach of a covenant of good faith and
fair dealing, both express and implied, negligent or intentional infliction of
emotional distress; negligent or intentional misrepresentation; negligent or
intentional interference with contract or prospective economic advantage;
negligence; and defamation;
(c) any and all claims for violation of any federal, state or
municipal statute, including, but not limited to, Title VII of the Civil Rights
Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in Employment
Act of 1967, the Americans with Disabilities Act of 1990, and the California
Fair Employment and Housing Act;
(d) any and all claims arising out of any other laws and regulations
relating to employment or employment discrimination;
(e) any and all claims for attorneys' fees and costs; and
(f) any and all claims relating to the granting of options and the
purchase of the Common Stock of the Company under the Company's 1995 Stock
Option Plan and 1997 Equity Incentive Plan.
The Company and Employee agree that the release set forth in this
Section 6 shall be and remain in effect in all respects as a complete general
release as to the matters released and that this release does not extend to any
obligations incurred under this Agreement.
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7. ACKNOWLEDGMENT OF WAIVER OF CLAIMS UNDER ADEA. Employee acknowledges
that he is waiving and releasing any rights he may have under the Age
Discrimination in Employment Act of 1967 ("ADEA") and that this waiver and
release is knowing and voluntary. Employee and the Company agree that this
waiver and release does not apply to any rights or claims that may arise under
ADEA after the Effective Date of this Agreement. Employee acknowledges that the
consideration given for this waiver and release Agreement is in addition to
anything of value to which Employee was already entitled. Employee further
acknowledges that he has been advised by this writing that (a) he should consult
with an attorney prior to executing this Agreement; (b) he has at least
twenty-one (21) days within which to consider this Agreement; (c) he has at
least seven (7) days following the execution of this Agreement by the Parties to
revoke the Agreement (the "REVOCATION PERIOD"); and (d) this Agreement shall not
be effective until the Revocation Period has expired.
8. CIVIL CODE SECTION 1542. The Parties represent that they are not aware
of any claim by either of them other than the claims that are released by this
Agreement. Employee and the Company acknowledge that they have been advised by
legal counsel and are familiar with the provisions of California Civil Code
Section 1542, which provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE,
WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR.
Employee and the Company, being aware of said Code section, agree to
expressly waive any rights they may have thereunder, as well as under any other
statute or common law principles of similar effect.
9. INDEMNIFICATION AGREEMENT. Notwithstanding the releases set forth in
Sections 6, 7 and 8 of this Agreement, the Company and the Employee agree that
the Employee shall continue to be indemnified to the fullest extent permitted by
the California Corporations Code, as provided for by Section 6.1 of the
Company's By-Laws and the Company and employee shall continue to be subject to
the terms of the Indemnification Agreement executed by the Company and Employee
on August 6, 1998 (the "Indemnification Agreement"), a copy of which is attached
hereto as Exhibit B.
10. CONFIDENTIALITY. The Parties hereto each agree to use their best
efforts to maintain in confidence the existence of this Agreement, the contents
and terms of this Agreement, and the consideration for this Agreement
(hereinafter collectively referred to as "RESIGNATION INFORMATION"), except as
required by law. Each Party hereto agrees to take every reasonable precaution to
prevent disclosure of any Resignation Information to third parties, and each
agrees that there will be no publicity, directly or indirectly, concerning any
Resignation Information. The Parties hereto agree to take every precaution to
disclose Resignation Information only to those employees, officers, directors,
attorneys, accountants, governmental entities, and family members who have a
reasonable need to know of such Resignation Information.
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11. NONDISCLOSURE OF CONFIDENTIAL AND PROPRIETARY INFORMATION. Employee
understands and agrees that his obligations to the Company under his existing
Confidentiality Agreement between the Employee and the Company (the
"CONFIDENTIALITY AGREEMENT"), a copy of which is attached hereto as Exhibit C,
shall survive termination of his relationship with the Company under this
Agreement and that Employee shall continue to maintain the confidentiality of
all confidential and proprietary information of the Company as provided by the
Confidentiality Agreement. Employee agrees that at all times hereafter, Employee
shall not intentionally divulge, furnish or make available to any party any of
the trade secrets, patents, patent applications, price decisions or
determinations, inventions, customers, proprietary information or other
intellectual property of the Company, until after such time as such information
has become publicly known otherwise than by act of collusion of Employee.
Employee further agrees that he will return all the Company's property and
confidential and proprietary information in his possession to the Company no
later than September 30, 1998, unless otherwise agreed to in writing by the
Parties.
12. NONCOMPETITION AND NONSOLICITATION. Employee agrees that until the
termination of the Consulting Agremeent, Employee shall not, without the prior
written consent of the Company, which shall not be unreasonably withheld, at any
time during the term of this Agreement and the Consulting Agreement, directly or
indirectly, whether or not for compensation, (a) engage in, or have any interest
in any person, firm, corporation or business (whether as an employee, officer,
director, agent, security holder, creditor, consultant, partner or otherwise)
that engages in any activity involving the design, marketing or support of
highly integrated mixed signal semiconductor and software solutions for
multimedia applications in the personal computer and consumer marketplaces, (b)
divert or attempt to divert from the Company, or any affiliated company, any
business of a kind involving the professional specialties or product lines
indicated in clause (a) above, or (c) induce or attempt to induce any person who
is an employee of the Company, or any affiliated company, to leave the Company,
or any affiliated company, to become an employee of any person, firm,
corporation or business described in clause (a) above; provided, however, that
Employee may own up to 1% of the securities of any company whose securities are
publicly traded that is of a sort described in clause (a) above.
The Parties intend that the covenant contained in the preceding paragraph
shall be construed as a series of separate covenants, one for each county or
other geographic or political subdivision of each jurisdiction in which the
Company conducts business. If, in any judicial proceeding, a court shall refuse
to enforce any of the separate covenants deemed included in this paragraph, then
the unenforceable covenant shall be deemed eliminated from the provisions for
the purpose of those proceedings to the extent necessary to permit the remaining
separate covenants to be enforced.
13. BREACH OF THIS AGREEMENT. Employee acknowledges that upon breach of
the Confidentiality, Nondisclosure of Confidential and Proprietary Information
and the Noncompetition and Nonsolicitation provisions contained in Sections 10,
11 and 12 of this Agreement, the Company would sustain irreparable harm from
such breach, and, therefore, Employee agrees that in addition to any other
remedies which the Company may have under this Agreement or otherwise, the
Company shall be entitled to obtain equitable relief, including specific
performance and injunctions, restraining Employee from committing or continuing
any such violation of this Agreement. Employee acknowledges and agrees that upon
Employee's
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material or intentional breach of any of the provisions of this Agreement
(including Sections 10, 11 and 12) and following written notice of such breach
by the Company to Employee and an opportunity to cure such breach within five
(5) business days where such breach may be cured, in addition to any other
remedies the Company may have under this Agreement or otherwise, the Company's
obligations to provide consulting payments and benefits to Employee as described
in Sections 3 and 4 of this Agreement (subject to Employee's rights to continue
health insurance coverage at his expense under COBRA as provided in Section 4)
and to continue the Consulting Arrangement with Employee shall immediately
terminate.
14. NON-DISPARAGEMENT. Each Party agrees to refrain from any
disparagement, criticism, defamation, slander of the other, or tortious
interference with the contracts and relationships of the other.
15. AUTHORITY. The Company represents and warrants that the individual
signing this Agreement on behalf of the Company has the authority to act on
behalf of the Company and to bind the Company and all who may claim through it
to the terms and conditions of this Agreement. Employee represents and warrants
that he has the capacity to act on his own behalf and on behalf of all who might
claim through him to bind them to the terms and conditions of this Agreement.
Each Party warrants and represents that there are no liens or claims of lien or
assignments in law or equity or otherwise of or against any of the claims or
causes of action released herein.
16. NO REPRESENTATIONS. Neither Party has relied upon any representations
or statements made by the other Party hereto which are not specifically set
forth in this Agreement.
17. SEVERABILITY. In the event that any provision hereof becomes or is
declared by a court or other tribunal of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision.
18. ARBITRATION. The Parties shall attempt to settle all disputes arising
in connection with this Agreement (or any of the exhibits hereto, except the
Confidentiality Agreement) through good faith consultation. In the event no
agreement can be reached on such dispute within fifteen (15) days after
notification in writing by either Party to the other concerning such dispute,
the dispute shall be settled by binding arbitration to be conducted in Santa
Clara, California in accordance with the then prevailing rules of the American
Arbitration Association. The arbitration decision shall be final, conclusive and
binding on both Parties and any arbitration award or decision may be entered in
any court having jurisdiction. The prevailing Party in any such proceeding shall
be entitled to recover its costs and expenses and attorneys' fees from the other
Party. THE PARTIES HEREBY WAIVE ANY RIGHTS THEY MAY HAVE TO TRIAL BY JURY IN
REGARD TO ARBITRABLE CLAIMS.
19. ENTIRE AGREEMENT. Except for obligations which continue after
termination of Employee's employment relationship with the Company pursuant to
the Confidentiality Agreement and the Indemnification Agreement, this Agreement,
and the exhibits thereto, represent the entire agreement and understanding
between the Company and Employee concerning Employee's separation from the
Company, and supersede and replace any and all
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prior agreements and understandings concerning Employee's relationship with the
Company and his compensation by the Company.
20. NO ORAL MODIFICATION. This Agreement may only be amended in writing
signed by Employee and the Company.
21. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of California, without regard to its conflicts of law provisions.
22. EFFECTIVE DATE. This Agreement is effective upon the expiration of the
Revocation Period described in Section 8 and such date is referred to herein as
the "EFFECTIVE DATE."
23. COUNTERPARTS. This Agreement may be executed in counterparts, and each
counterpart shall have the same force and effect as an original and shall
constitute an effective, binding agreement on the part of each of the
undersigned.
24. ASSIGNMENT. This Agreement may not be assigned by Employee or the
Company without the prior written consent of the other party. Notwithstanding
the foregoing, this Agreement may be assigned by the Company to a corporation
controlling, controlled by or under common control with the Company without the
consent of Employee.
25. PRESS RELEASE. Employee hereby consents to the Company's announcement
of the press release attached hereto.
26. VOLUNTARY EXECUTION OF AGREEMENT. THIS AGREEMENT IS EXECUTED
VOLUNTARILY AND WITHOUT ANY DURESS OR UNDUE INFLUENCE ON THE PART OR BEHALF OF
THE PARTIES HERETO, WITH THE FULL INTENT OF RELEASING ALL CLAIMS. THE PARTIES
ACKNOWLEDGE THAT:
(A) THEY HAVE READ THIS AGREEMENT;
(B) THEY HAVE BEEN REPRESENTED IN THE PREPARATION, NEGOTIATION, AND
EXECUTION OF THIS AGREEMENT BY LEGAL COUNSEL OF THEIR OWN CHOICE OR THAT THEY
HAVE VOLUNTARILY DECLINED TO SEEK SUCH COUNSEL;
(C) THEY UNDERSTAND THE TERMS AND CONSEQUENCES OF THIS AGREEMENT AND
OF THE RELEASES IT CONTAINS; AND
(D) THEY ARE FULLY AWARE OF THE LEGAL AND BINDING EFFECT OF THIS
AGREEMENT.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Parties have executed this Agreement and Mutual
Release on the respective dates set forth below.
ESS TECHNOLOGY, INC.
Dated as of August 31, 1998 By: /s/ ▇▇▇▇ ▇.▇. ▇▇▇▇
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Title: Chairman of the Board of Directors
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▇▇▇▇ ▇. ▇▇▇▇▇▇, an individual
Dated as of August 31, 1998 /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
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EXHIBIT A
CONSULTING AGREEMENT
[SEE EXHIBIT A OF THE "RESIGNATION AGREEMENT"]
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EXHIBIT B
INDEMNIFICATION AGREEMENT
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ESS TECHNOLOGY, INC.
INDEMNITY AGREEMENT
THIS INDEMNITY AGREEMENT (this "Agreement") is entered into, effective
as of August 6, 1998, between ESS Technology, Inc., a California corporation
(the "Company"), and ▇▇▇▇ ▇. ▇▇▇▇▇▇ ("Indemnitee").
WHEREAS, it is essential to the Company to retain and attract as
directors, officers and other agents the most capable persons available; and
WHEREAS, Indemnitee is a director and/or other agent of the Company,
and both the Company and Indemnitee recognize the increased risk of litigation
and other claims currently being asserted against such person; and
WHEREAS, in recognition of Indemnitee's need for substantial protection
against personal liability and in order to enhance Indemnitee's continued and
effective service to the Company, the Company desires to provide for the
indemnification of, and the advancing of expenses to, Indemnitee to the fullest
extent permitted by law and as set forth in this Agreement;
NOW, THEREFORE, in consideration of the above premises and the promises
set forth herein, the parties hereto agree as follows:
1. CERTAIN DEFINITIONS. As used in this Agreement, the capitalized
terms listed below shall have the meanings ascribed to them as follows:
1.1 Board. The Board of Directors of the Company.
1.2 Expenses. Any expense, liability, or loss, including
attorneys' fees, judgments, fines, ERISA excise taxes and penalties, amounts
paid or to be paid in settlement, any interest, assessments, or other charges
imposed thereon, and any federal, state, local, or foreign taxes imposed as a
result of the actual or deemed receipt of any payments under this Agreement,
paid or incurred in connection with investigating, defending, being a witness
in, or participating in (including on appeal), or preparing for any of the
foregoing in, any Proceeding relating to any Indemnifiable Event.
1.3 Indemnifiable Event. Any event or occurrence that takes
place either prior to or after the execution of this Agreement, related to the
fact that Indemnitee:
(a) is or was a director, an officer or other agent of
the Company; or
(b) while a director, officer or other agent of the
Company is or was serving at the request of the Company as a director, officer,
employee, trustee, agent, or fiduciary of another foreign or domestic
corporation, partnership, joint venture, employee benefit plan, trust, or other
enterprise; or
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(c) was a director, officer, employee or other agent of
a foreign or domestic corporation that was a predecessor corporation of the
Company or was a director, officer, employee, trustee, agent, or fiduciary of
another enterprise at the request of such predecessor corporation; and related
to anything done or not done by Indemnitee in any such capacity, whether or not
the basis of the Proceeding is alleged action in an official capacity while
serving as described in clauses (a) through (c) above.
1.4 Proceeding. Any threatened, pending, or completed action,
suit, or proceeding, or any inquiry, hearing, or investigation, whether
conducted by the Company or any other party, that Indemnitee in good faith
believes might lead to the institution of any such action, suit, or proceeding,
whether civil, criminal, administrative, investigative or other.
2. AGREEMENT TO INDEMNIFY. In the event Indemnitee was, is, or becomes
a party to, or witness or other participant in, or is threatened to be made a
party to, or witness or other participant in, a Proceeding by reason of (or
arising in part out of) an Indemnifiable Event, the Company shall indemnify
Indemnitee from and against any and all Expenses to the fullest extent
permitted by law, as the same exists or may hereafter be amended or interpreted
(but in the case of any such amendment or interpretation, only to the extent
that such amendment or interpretation permits the Company to provide broader
indemnification rights than were permitted prior thereto). The rights to
receive indemnification and the advancement of Expenses under this Agreement
are not exclusive of any other rights which Indemnitee may be entitled or
subsequently entitled under any statute, the Company's Articles of Incorporation
or Bylaws, by vote of the shareholders or the Board, or otherwise. To the
extent that a change in applicable law (whether by statute or judicial
decision) or the Bylaws permits greater indemnification than is currently
provided for an Indemnifiable Event, Indemnitee shall be entitled to such
greater indemnification under this Agreement.
2.1 Partial Indemnification. If Indemnitee is entitled under
any provision of this Agreement to indemnification by the Company for a portion
of Expenses, but not, however, for the total amount thereof, the Company shall
nevertheless indemnify Indemnitee for the portion of such Expenses to which
Indemnitee is entitled.
2.2 Prohibited Indemnification. Subject only to Section 2.3
below, no indemnification nor Expense Advance (as defined in Section 3.1 below)
pursuant to this Agreement shall be paid by the Company:
(a) In connection with any Proceeding initiated by
Indemnitee against the Company or any director of officer of the Company unless
the Company has joined in, or the Board has consented to, the initiation of
such Proceeding, or the Proceeding is one to enforce indemnification rights
under Section 5 below;
(b) To the extent Indemnitee settles or otherwise
disposes of a Proceeding or causes the settlement or disposal of a Proceeding
without the Company's express prior written consent (which shall not be
unreasonably withheld) unless Indemnitee receives court approval for
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19
such settlement or other disposition where the Company had the opportunity to
oppose Indemnitee's request for such court approval;
(c) With regard to any judicial award if the Company was
not given a reasonable and timely opportunity, at its expense, to participate
in the defense of such action unless the Company's participation in such
Proceeding was barred by this Agreement or the court in such Proceeding; or
(d) For any acts, omissions, transactions or circumstances
for which indemnification is prohibited by applicable state or federal law or
until any preconditions imposed upon, or agreed to by, the Company by or with
any court or governmental agency are satisfied.
2.3 Mandatory Indemnification. Notwithstanding any other
provision of this Agreement, to the extent that Indemnitee has been successful
on the merits (within the meaning of Section 317(d) of the California
Corporations Code) in defense of any Proceeding relating in whole or in part
to an Indemnifiable Event or in defense of any issue or matter therein,
Indemnitee shall be indemnified against all Expenses incurred in connection
therewith.
3. EXPENSE ADVANCES.
3.1 Advance of Expenses to Indemnitee. Expenses incurred by
Indemnitee in any Proceeding for which indemnification may be sought under this
Agreement shall be advanced by the Company to Indemnitee within 20 days after
receipt by the Company of a statement or statements from Indemnitee requesting
such advance and reasonably evidencing the Expenses incurred by Indemnitee (an
"Expense Advance"). If it is ultimately determined by a final judicial decision
(from which there is no right of appeal) that Indemnitee is not entitled to be
indemnified by the Company, Indemnitee hereby agrees to repay any amounts
advanced by the Company under this Section 3. Indemnitee agrees to execute any
further agreements regarding the repayment of Expenses as the Company may
reasonably request prior to receiving any such advance.
4. NOTIFICATION AND DEFENSE OF PROCEEDING.
4.1 Notice of Claim. Indemnitee shall give written notice to the
Company promptly after Indemnitee has actual knowledge of any Proceeding as to
which indemnification may be sought under this Agreement. The failure of
Indemnitee to give notice, as provided in this Section 4.1, shall not relieve
the Company of its obligations to provide indemnification under this Agreement;
however, the amounts to which Indemnitee may be indemnified shall be reduced to
the extent that the Company has been prejudiced by such failure.
4.2 Defense. With respect to any Proceeding, the Company will be
entitled to participate in the Proceeding at its own expense and, except as
otherwise provided below, to the extent the Company so desires, the Company may
assume the defense thereof with counsel reasonably satisfactory to Indemnitee.
However, the Company shall not be entitled to assume the defense of any
Proceeding (a) brought by the Company, or (b) as to which Indemnitee has rea-
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20
sonably determined that there may be a conflict of interest between Indemnitee
and the Company in the defense of he Proceeding and Indemnitee does in fact
assume and conduct the defense.
4.2.1 If the Company assumes the defense, Indemnitee shall
furnish such information regarding Indemnitee or the Proceeding in question, as
the Company may reasonably request and as may be required in connection with
the defense or settlement of such Proceeding and shall fully cooperate with the
Company in every other respect. Except as provided in Section 4.3 below, if the
Company assumes the defense of the Proceeding, the Company shall take all
necessary steps in good faith to defend, settle or otherwise dispose of the
Proceeding.
4.2.2 After notice from the Company to Indemnitee of its
election to assume the defense of any Proceeding, the Company will not be
liable to Indemnitee under this Agreement or otherwise for any Expenses in
excess of $10,000 subsequently incurred by Indemnitee in connection with
the defense of such Proceeding other than reasonable costs of investigation or
as otherwise provided in clauses (a) through (c) below. Indemnitee shall have
the right to employ Indemnitee's own counsel in such Proceeding, but all
Expenses related thereto incurred after notice from the Company of its
assumption of the defense shall be at Indemnitee's expense, unless: (a) the
employment of counsel by Indemnitee has been authorized by the Company;
(b) Indemnitee has reasonably determined that there may be a conflict of
interest between Indemnitee and the Company in the defense of the Proceeding,
but Indemnitee does not, in fact, assume and conduct the defense; or (c) the
Company has not, in fact, assume and conduct the defense of such Proceeding.
4.2.3 Any Expenses incurred by the Company in defense of the
Proceeding under this Section 4.2 (except in a situation described in clause
(a), (b) or (c) of Section 4.2.2) shall be considered Expenses advanced by the
Company to Indemnitee under Section 3 above.
4.3 Limitation on the Company's Disposition of any Proceeding. The
Company may consent to a settlement or other disposition of all or any part of
any Proceeding which the Company is defending under Section 4.2 above without
first obtaining the written consent of Indemnitee, provided that such
settlement or other disposition would not cause Indemnitee to materially lose
any right to indemnification under this Agreement.
5. ENFORCEMENT. The Company expressly confirms and agrees that it has
entered into this Agreement and assumed the obligations imposed on it hereby in
order to induce Indemnitee to continue as a director, officer or other agent of
the Company, and acknowledges that Indemnitee is relying upon this Agreement in
continuing in such capacity. Indemnitee shall have the right to enforce his
indemnification rights under this Agreement by commencing litigation in any
court in the State of California having subject matter jurisdiction thereof and
in which venue is proper. Likewise, the Company may seek judicial determination
of its obligations under this Agreement. The Company and Indemnitee each hereby
consent to service of process and to appear in any such proceeding.
5.1 Defenses: Burden of Proof. It shall be a defense to any action
brought by Indemnitee or the Company concerning enforceability of this
Agreement that is not permissible
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21
under applicable law for the Company to indemnify Indemnitee for the amount
claimed. In connection with any such action or any determination as to whether
Indemnitee is entitled to be indemnified hereunder, the burden of proof shall
be on the Company.
5.2 Presumptions. Neither the failure of the Company (including its
Board or shareholders) to have made a determination prior to the commencement
of such action that indemnification is proper under the circumstances because
Indemnitee has met the standard of conduct set forth in applicable law, nor an
actual determination by the Company (including its Board or shareholders) that
Indemnitee has not met such applicable standard of conduct, shall be a defense
to the action or create a presumption that Indemnitee has not met the
applicable standard of conduct. For purposes of this Agreement, the termination
of any claim, action, suit or proceeding, by judgment, order, settlement
(whether with or without court approval), conviction, or upon a plea of nolo
contendere, or its equivalent, shall not create a presumption that Indemnitee
did not meet any particular standard of conduct or have any particular belief
or that a court has determined that indemnification is not permitted by
applicable law.
5.3 Equitable Relief. The Company agrees that the Company's failure
to make indemnification payments or Expense Advances to Indemnitee shall cause
irreparable damage to Indemnitee, the exact amount of which is impossible to
ascertain, and for this reason agrees that Indemnitee shall be entitled to such
injunctive or other equitable relief as shall be necessary to adequately
provide for payment or reasonably anticipated payments.
5.4 Indemnification for Expenses Incurred in Enforcing Rights. The
Company shall indemnify Indemnitee against any and all Expenses and, if
requested by Indemnitee, shall (within twenty days after such request), advance
such Expenses to Indemnitee, that are incurred by Indemnitee in connection with
any claim or action asserted against or brought by Indemnitee for
indemnification of Expenses or payment of Expense Advances by the Company under
this Agreement or any other agreement or under applicable law or the Company's
Articles of Incorporation or Bylaws now or hereafter in effect relating to
indemnification for Indemnifiable Events. Any Expenses so paid shall be
considered Expense Advances under Section 3 above.
6. INSURANCE; SUBROGATION. The Company shall not be liable under this
Agreement to make any payment in connection with any claim made against
Indemnitee to the extent Indemnitee has otherwise received payment (under any
insurance policy, Bylaw, or otherwise) of the amounts otherwise indemnifiable
hereunder. In the event of payment under this Agreement, the Company shall be
subrogated to the extent of such payment to all of the rights of recovery of
Indemnitee, who shall execute all papers required and shall do everything that
may be necessary to secure such rights, including the execution of such
documents necessary to enable the Company effectively to bring suit to enforce
such rights.
7. GENERAL PROVISIONS.
7.1 Amendment of this Agreement. No supplement, modification, or
amendment of this Agreement shall be binding unless executed in writing by both
parties hereto. No waiver of any of the provisions of this Agreement shall
operate as a waiver of any other provisions hereof (whether or not similar),
nor shall such waiver constitute a continuing waiver.
- 5 -
22
Except as specifically provided herein, no failure to exercise or any delay in
exercising any right or remedy hereunder shall constitute a waiver thereof.
7.2 Binding Effect. This Agreement shall be binding upon and inure
to the benefit of and be enforceable by the parties hereto and their respective
successors, assigns, spouses, heirs, and personal and legal representatives.
The indemnification provided under this Agreement shall continue as to
Indemnitee for any action taken or not taken while serving in an indemnified
capacity pertaining to an Indemnifiable Event even though Indemnitee may have
ceased to serve in such capacity at the time of any Proceeding.
7.3 Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof.
7.4 Remedies Cumulative. The rights and remedies provided in this
Agreement and by law shall be cumulative and the exercise of any particular
right or remedy shall not preclude the exercise of any other right or remedy in
addition to, or as an alternative to, such right or remedy.
7.5 Notices. Any notice required or permitted by this Agreement
shall be given in writing and shall be deemed effectively given upon personal
delivery or, if mailed, upon deposit with the United States Post Office by
certified mail, return receipt requested, postage prepaid, to the address for
the recipient set forth on the signature page hereto or to such other address as
the recipient shall hereafter have noticed the sending party in the manner
set forth above.
7.6 Headings. Descriptive headings contained herein are for
convenience of reference only and shall not affect the meaning or
interpretation of this Agreement.
7.7 References. Any reference in this Agreement to the indemnity
provisions of the Company's Articles of Incorporation or Bylaws, the California
Corporations Code or to any applicable law shall refer to such provisions as
they shall be amended form time to time or to any successor provision, except
that any change in the Company's Articles of Incorporation or Bylaws shall only
apply to the extent that such amendment permits the Company to provide broader
indemnification rights to Indemnitee than currently provided.
7.8 Severability. Any provision of this Agreement, which is
unenforceable in any jurisdiction, shall be ineffective in such jurisdiction
to the extent of such unenforceability without invalidating the remaining
provisions of this Agreement, and any unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction.
-6-
23
7.9 Applicable Law. The rights and obligations under this Agreement
shall be governed by, and construed in accordance with, the laws of the State of
California applicable to contracts between California residents made and to be
performed entirely within such State.
IN WITNESS WHEREOF, this Agreement has been entered into effective as of
the date first written above.
ESS TECHNOLOGY, INC.
By /s/ ▇▇▇▇ ▇.▇. ▇▇▇▇
----------------------------
▇▇▇▇ ▇.▇. ▇▇▇▇, President
Address: ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
INDEMNITEE: Signature: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------
Address:
----------------------
----------------------
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24
EXHIBIT C
CONFIDENTIALITY AGREEMENT
25
Employment Agreement Between_________________________
And ESS Technology Inc.
It is hereby agreed between _________________ and ESS Technology Inc. that
Employee shall be hired to work full-time for the Company, effective
_______________.
During the course of employment, Employee will come into contact with Company
technology, trade secrets, customer lists, marketing plans, etc. or similar
information of the company's customers. Employee shall treat all such material
as confidential and Employee shall not reveal any such information to any third
parties on any other than need-to-know basis without prior written consent of an
officer of the Company. This restriction shall remain in effect for a period of
five years after Employee first learns such information or until the information
otherwise becomes public knowledge.
As a condition of employment, Employee agrees that all designs, developments,
and improvements conceived or worked on by Employee during his-her term of
employment shall be the sole and exclusive property of the Company. Also,
Employee shall not engage in other business or other employment without prior
written approval from Employer.
Upon termination of employment, Employee agrees that he/she will not contact ESS
existing or contacted potential customers for a period of six months without
prior written consent of an officer of the Company. Employee further agrees that
he/she will not engage in any business in competition with ESS products for a
period of 2 years after termination of employment.
Employee is employed on an at-will basis and understands that, as an at-will
employee, both Employee and ESS can terminate the employment relationship at any
time with or without advance notice and with or without cause. This paragraph
reflects the full and complete agreement between Employee and ESS regarding the
at-will nature of the employment relationship, and Employee further understands
that no one other than the President of ESS has any authority to enter into any
contrary agreement and that any contrary agreement entered into by the President
of ESS and Employee must be in writing and must be signed by the President of
ESS.
This Agreement shall be interpreted and enforced in accordance with the laws of
the State of California.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------- -----------------------------------
Employee Signature Employer Signature
9//18/96 9/18/96
----------------------------------- -----------------------------------
Date Date
26
CONFIDENTIAL INFORMATION
AND INVENTION ASSIGNMENT AGREEMENT
----------------------
In consideration and as a condition of my employment, continued employment,
or consulting relationship by ESS Technology, Inc., a California corporation,
and/or by any companies which it owns, controls, or is affiliated with, or their
successors in business (the "Company"), and the compensation paid therefor:
1. CONFIDENTIALITY. I agree to keep confidential, except as the Company may
otherwise consent in writing, and not to disclose, or make any use of except for
the benefit of the Company, at any time either during or subsequent to my
employment or consulting relationship, any trade secrets, confidential
information, knowledge, data or other information of the Company relating to
products, processes, know-how, designs, formulas, test data, customer lists,
business plans, marketing plans and strategies, and pricing strategies or other
subject matter pertaining to any business of the Company or any of its clients,
customers, consultants, licensees or affiliates, which I may produce, obtain or
otherwise acquire during the course of my employment or consulting relationship,
except as herein provided. I further agree not to deliver, reproduce or in any
way allow any such trade secrets, confidential information, knowledge, data or
other information, or any documentation relating thereto, to be delivered or
used by any third parties without specific direction or consent of a duly
authorized representative of the Company.
I recognize that the Company has received and/or in the future may receive from
third parties confidential information, subject to a duty on the Company's part
to maintain the confidentiality of such information and to use it only for
certain limited purposes. I agree that I owe the Company and such third
parties, during the term of my employment with the Company and thereafter, a
duty to hold all such confidential information of third parties in the strictest
confidence and not to disclose it to any person or entity (except as necessary
in carrying out my work for the Company consistent with the Company's agreement
with such third party) or to use it for the benefit of anyone other than for
the Company or such third party (consistent with the Company's agreement
with such third party), without the express written authorization of an officer
of the Company.
2. CONFLICTING EMPLOYMENT; RETURN OF CONFIDENTIAL MATERIAL. I agree that
during my employment or consulting relationship with the Company I will not
engage in any other employment, occupation, consulting, or other activity
relating to the business in which the Company is now or may hereafter become
engaged, or which would otherwise conflict with my obligations to the Company.
In the event of my termination of employment or consulting relationship with
the Company for any reason whatsoever, I agree to promptly surrender and
deliver to the Company all records, materials, equipment, drawings, documents,
and data of any nature, and any copies thereof, pertaining to any invention,
trade secret or confidential information of the Company or to my employment,
and I will not take with me any description containing or pertaining to any
confidential information, knowledge or data of the Company which I may produce
or obtain during the course of my employment or consulting relationship. In the
event of the
page 1
27
termination of my employment or consulting relationship, I agree to sign
and deliver the "Termination Certification" attached hereto as Exhibit A.
3. ASSIGNMENT OF INVENTIONS. I hereby assign and transfer to the Company my
entire right, title, and interest in and to all inventions, and any claims
for infringement concerning such inventions (as used in this Agreement,
"inventions" shall include, without limitation, ideas, improvements,
designs, and discoveries), whether or not patentable and whether or not
reduced to practice, made or conceived by me (whether made solely by me
or jointly with others) during the period of my employment or consulting
relationship with the Company which relate in any manner to the actual or
demonstrably anticipated business, work, or research and development of
the Company or its subsidiaries, or results from or is suggested by any
task assigned to me or its subsidiaries. I agree that all such inventions
are the sole property of the Company. This Agreement does not require
assignment of any invention which qualifies fully for protection under
Section 2870 of the California Labor Code (hereinafter "Section 2870"),
which provides as follows:
"(a) Any provision in an employment agreement which provides
that an employee shall assign, or offer to assign, any of his or her
rights in an invention to his or her employer shall not apply to an
invention that the employee developed entirely on his or her own time
without using the employer's equipment, supplies, facilities, or
trade secret information except for those inventions that either:
(1) 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
(2) Result from any work performed by the employee for
the employer.
(b) To the extent a provision in an employment agreement
purports to require an employee to assign an invention otherwise
excluded from being required to be assigned under subdivision (a),
the provision is against the public policy of this state and is
unenforceable.""
I acknowledge that receipt and execution of this Agreement by me
constitutes written notification, as required by Section 2872 of the
California Labor Code, regarding the above Section 2870 and its
protective effect on certain inventions developed by me.
In the event any invention relating in any manner to the actual or
anticipated business or research and development of the Company or its
subsidiaries is made, conceived, first reduced to practice, or disclosed
by me whether solely or jointly with others under paragraph 2 within six
(6) months after ceasing to serve as an employee or consultant of the
Company, it is to be presumed that such invention was conceived or
resulted from developments made during the period of my relationship with
the Company and I agree that any such invention will be disclosed,
transferred, and assigned to the Company, subject to the provisions of
Section 2870.
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28
4. DISCLOSURE OF INVENTIONS; PATENTS. I agree that in connection with any
"invention" as defined in paragraph 3 above:
(a) I will disclose such invention promptly in writing to my immediate
superior at the Company, with a copy to the President, regardless of
whether I believe the invention is protected by Section 2870, in order
to permit the Company to claim rights to which it may be entitled
under this Agreement. Such disclosure shall be received in confidence
by the Company.
(b) I will, at the Company's request, promptly execute a written
assignment of title to the company for any invention required to be
assigned by paragraph 3 ("assignable invention") and I will preserve
any such assignable invention as confidential information of the
Company; and
(c) Upon request, I agree to assist the Company or its nominee in securing
(at its expense), during my employment and at any time thereafter, for
its own benefit patents and copyrights for such assignable inventions
in any and all countries, which inventions shall be and remain the
sole and exclusive property of the Company or its nominee whether or
not patented or copyrighted. I agree to execute such papers and
perform such lawful acts as the Company deems to be necessary to allow
it to exercise all rights, title and interest in such patents and
copyrights.
5. EXECUTION OF DOCUMENTS. In connection with paragraph 4(c), I further agree
to execute, acknowledge and deliver to the Company or its nominees upon
request and at its expense all such documents, without limitation, as the
Company may determine necessary or desirable to apply for and obtain and
perfect any intellectual property rights in any country on any assignable
inventions, including without limitation: applications for patents;
applications for trademark or copyrights registrations; assignments of
inventions and any copyright registrations or patents issued or to be
issued therefor; and such other documents that the Company deems
appropriate to protect the interest of the Company or its nominee in such
inventions, patents and copyrights and to vest title thereto in the Company
or its nominees.
6. MAINTENANCE OF RECORDS. I agree to keep and maintain adequate and current
written records of all inventions made by me (in the form of notes,
sketches, drawings and as may be specified by the Company), which records
shall be available to and remain the sole property of the Company at all
times.
7. PRIOR INVENTION. It is understood that all inventions, if any, patented or
unpatented, which I made prior to my employment or consulting relationship
by the Company, are excluded from the scope of this Agreement. To preclude
any possible uncertainty, I have set forth on Exhibit B attached hereto a
complete list of all of my prior inventions, including numbers of all
patents and patent applications, and a brief description of all unpatented
inventions which are not the property of a previous employer. I represent
and covenant that the list is complete and that, if no items are on the
list, I have no such prior inventions. I agree to notify the Company in
writing before I make any disclosure or perform any work on behalf of the
Company which appears to threaten or conflict with proprietary rights I
claim in any invention or idea. In the event of my failure to give such
notice, I agree that I will make no claim against the Company with respect
to any such inventions of ideas.
page 3
29
8. OTHER OBLIGATIONS. I acknowledge that the Company from time to time may
have agreements with other persons or with the U.S. Government, or agencies
thereof, which impose obligations or restrictions on the Company regarding
inventions made during the course of work thereunder or regarding the
confidential nature of such work. I agree to be bound by all such
obligations and restrictions and to take all action necessary to discharge
the obligations of the Company thereunder.
9. TRADE SECRETS OF OTHERS. I represent that my performance of all the terms
of this Agreement and as an employee or consultant of the Company does not
and will not breach any agreement to keep in confidence proprietary
information, knowledge or data acquired by me in confidence or in trust
prior to my employment or consulting relationship with the Company, and I
will not disclose to the Company or induce the Company to use, any
confidential or proprietary information or material belonging to any
previous employer or others. I agree not to enter into any agreement
(either written or oral) in conflict with this Agreement.
10. AT-WILL EMPLOYMENT. Nothing in this Agreement constitutes a promise or
representation by the Company that it will employ me for any particular
period of time, or a promise or representation by me that I will work for
the Company for any particular period of time. Subject to the provisions of
the separate written agreement (if any) I may have with the Company, the
Company may terminate my employment or consulting relationship at any time,
with or without cause, and I may likewise terminate my employment or
consulting relationship with the Company at any time for any reason.
11. MODIFICATION. This Agreement may not be changed, modified, released,
discharged, abandoned, or otherwise amended, in whole or in part, except by
an instrument in writing, signed by me and the Company. I agree that any
subsequent change or changes in my duties, salary or compensation shall not
affect the validity or scope of this Agreement.
12. SOLICITATION. During my employment or consulting relationship, and for a
period of one year after any termination of such relationship, I will not
directly or indirectly solicit any of the Company's employees or key
employees of the Company's customers for employment with a person or entity
involved in marketing products or services competitive with the Company.
Key employees include supervisory personnel, executives, personnel in
charge of any department, section or subdivision, and project managers (or
directors) and senior personnel on any individual project or projects. I
further agree that all customers of the Company, and all prospective
customers from whom I have solicited business while employed with the
Company, shall be solely the customers of the Company. I therefore agree
that I will not, for a period of one year immediately following the
termination of my employment with the Company, either directly or
indirectly, solicit business, as to products or services competitive with
those or the Company, from any of the Company's customers with whom I have
had contact within one year prior to my termination.
13. ENTIRE AGREEMENT. I acknowledge receipt of this Agreement, and agree that
with respect to the subject matter thereof it is my entire agreement with
the Company, superseding any previous
page 4
30
oral or written communications, representations, understandings, or
agreements with the Company or any officer or representative thereof.
14. SEVERABILITY. In the event that any paragraph or provisions of this
Agreement shall be held to be illegal or unenforceable, such paragraph or
provision shall be severed from this Agreement and the entire Agreement
shall not fail on account thereof, but shall otherwise remain in full
force and effect.
15. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon my heirs,
executors, administrators or other legal representatives and is for the
benefit of the Company, its successors and assigns.
16. GOVERNING LAW. This Agreement shall be governed by the laws of the State
of California.
17. COUNTERPARTS. This Agreement may be signed in two counterparts, each of
which shall be deemed an original and both of which shall together
constitute one agreement.
18. SURVIVAL. All provisions of this Agreement shall survive any termination
or severance of my employment or consulting relationship with the Company.
19. EQUITABLE RELIEF. I agree that it would be difficult to measure the
damage to the Company from any breach by me of any of the provisions of
paragraphs 1 through 9, that injury to the Company from such breach would
be impossible to calculate, and that money damages would therefore be an
inadequate remedy for such breach. Accordingly, I agree that if I breach
any of paragraphs 1 through 9, the Company shall be entitled, in addition
to all other remedies it may have, to injunctions or other appropriate
orders to retrain any such breach without showing or proving any actual
damage by the Company.
20. ADVICE OF COUNSEL. I have been given the opportunity to consult with
independent counsel with regard to this Agreement, and have consulted
with such counsel to the extent I deem necessary.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------ -------------------------------
MY SIGNATURE WITNESS SIGNATURE
9/18/96 9-18-96
------------------------------------ -------------------------------
DATE OF SIGNATURE DATE OF SIGNATURE
31
EXHIBIT A
TERMINATION CERTIFICATION
1. This Termination Certification is executed in accordance with that
certain Confidential Information and Invention Assignment Agreement dated
_______________________________________ signed by me (the "Agreement"), in
connection with the termination of my employment or consultant relationship with
ESS Technology, Inc., a California corporation (the "Company"). The capitalized
terms used herein shall have the same meaning as set forth in the Agreement
unless otherwise provided.
2. I certify that I have complied, and will continue to comply, with all
terms of the Agreement, including, without limitation, the provisions pertaining
to (i) nondisclosure of confidential information of the Company or its
subsidiaries, affiliates, successors, or assigns, and other third parties such
as clients, licensees, or consultants; (ii) disclosure and assignment of
Inventions; and (iii) return of all Company documents.
Dated:
------------------------
-----------------------------------
Signature of Employee/Consultant
-----------------------------------
Name of Employee/Consultant
(typed or printed)
page 6
32
EXHIBIT B
DESCRIPTION OF
PRIOR INVENTIONS, DISCOVERIES, IMPROVEMENTS, PATENTS,
PATENT APPLICATIONS, AND UNPATENTED INVENTIONS
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
The foregoing constitutes all of the prior inventions, discoveries,
improvements, patents, patent applications and unpatented inventions of the
undersigned pursuant to paragraph 7 of the Agreement.
Dated: ______________________
_____________________________________________
Employee/Consultant
page 7
33
EXHIBIT D
PRESS RELEASE
[ESS LOGO]
For Immediate Release
Contact: ESS Technology, Inc.
▇▇▇▇ ▇▇▇▇▇▇ Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Vice President & Chief Financial Officer
ESS TECHNOLOGY, INC. ANNOUNCES THAT CHIEF FINANCIAL OFFICER
WILL RESIGN ▇▇ ▇▇▇ ▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, August 7, 1998 -- ESS Technology, Inc. (NASDAQ: ESST)
today announced that ▇▇▇▇ ▇. ▇▇▇▇▇▇, vice president-finance and administration,
chief financial officer and corporate secretary, will resign from the company at
the end of August. Barnet, who has served as an officer of the company since
October, 1996, will assist the company in the search for and transition to a new
chief financial officer and will provide consulting services to ESS through
year-end.
"▇▇▇▇ has made a significant contribution to the company. He has been
contemplating a change and wanted to complete certain programs before resigning
including the orderly conversion of our new management information system, which
will be accomplished this month. We are pleased that he will remain as a
consultant to the company," said ▇▇▇▇ ▇.▇. ▇▇▇▇, ESS' chairman and chief
executive officer.
"I have enjoyed working with the management and employees here at ESS, and
the decision to leave was not an easy one," said Barnet. "I remain a strong
supporter of the company and am pleased to continue my association with ESS."
ESS Technology, Inc. is a leading supplier of PC audio and digital video
solutions for the PC and consumer markets. ESS designs, develops, and markets
highly integrated mixed signal semiconductor and software solutions for
multimedia applications. ESS, headquartered in Fremont, California, has sales
and technical support offices in Austin and Houston, Texas; Irvine, California;
Bellevue, Washington; Beijing and Shenzhen, China; Tokyo, Japan; Taipei, Taiwan;
Seoul, Korea; and Hong Kong. ESS Technology is listed on Nasdaq Market System
under the symbol ESST. World Wide Web site: ▇▇▇▇://▇▇▇.▇▇▇▇▇▇▇.▇▇▇
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