EXHIBIT 10.31
EMPLOYMENT AGREEMENT
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This Employment Agreement (this "Agreement") is made as of January 30,
2004 (the "Effective Date") by and between Island Pacific, Inc., a Delaware
corporation (the "Company"), and ▇▇▇▇ ▇▇▇▇▇▇ ("Executive"), with reference to
the following facts:
A. Page Digital, Inc., a Colorado corporation ("Page Digital") has been
acquired by a wholly owned subsidiary of the Company pursuant to the Agreement
of Merger and Plan of Reorganization ("Merger Agreement") dated as of November
20, 2003, to which the Executive was a party.
B. Executive is experienced in the technology and business of Page
Digital.
C. Under the Merger Agreement, Executive is exchanging/sold all of
Executive's shares of Page Digital to the Company for shares of common stock of
the Company and cash.
D. The Company desires to employ Executive to perform the duties and
responsibilities described herein on the terms and conditions hereinafter set
forth.
1. EMPLOYMENT. The Company hereby employs Executive and Executive
hereby accepts such employment upon the terms and conditions hereinafter set
forth.
2. DUTIES. Subject to the terms and provisions of this Agreement,
Executive is hereby employed by the Company as Senior Vice President-Sales and
Marketing of the Company. Executive's duties shall have full responsibility and
authority for such duties as customarily are associated with service as the Vice
President of Sales of the Company at the direction of the President and the
Board of Directors (the "Board") of the Company. Executive shall report directly
to the President of the Company or his designee.
3. SCOPE OF SERVICES. Executive shall devote substantially all of his
business time, attention, energies, skills, learning and efforts to the
Company's business.
4. TERM OF EMPLOYMENT AND VOLUNTARY TERMINATION. Subject to prior
termination of this Agreement as hereinafter provided, the term of this
Agreement shall commence on the Effective Date and shall continue for two years
thereafter, unless earlier terminated as provided in this Agreement.
5. COMPENSATION.
5.1. SALARY. Executive's annual compensation ("Base
Compensation") under this Agreement shall be $170,000 per year, prorated for any
partial year, commencing upon the Effective Date. The Base Compensation shall be
payable semi-monthly in arrears from the Effective Date in accordance with the
ordinary payroll procedures of the Company. Any increases in Base Compensation
shall be in the sole and absolute discretion of the Company. Executive shall be
eligible to participate in any bonus/profit sharing plan accorded to senior
executives of the Company.
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5.2. OPTIONS. Upon the Closing Date (the "Closing Date" as
that term is defined in the Merger Agreement) Executive shall receive 150,000
options, 50,000 of which shall vest at the first anniversary date of this
agreement. Thereafter, the options shall vest at the rate of 4,166 per month
during the second year of this Agreement. The remaining unvested options shall
either: (i) vest at the second anniversary date of this Agreement; or (ii) vest
at the rate of 4,166 per month if the Executive continues to be employed by the
Company after the second anniversary date of this Agreement, all in accordance
with and subject to Company's current Stock Option Plan. Thereafter, Executive
shall be entitled to enroll and participate in the Company's regular employee
stock option program.
6. OTHER RIGHTS AND BENEFITS. Executive shall also be entitled to
receive a $800 per month car expense allowance and all other rights and
benefits, including health insurance, vacations, sick pay and retirement plan
participation, as are made available to other senior executives of the Company
and its affiliates; provided, however, that Executive shall be entitled to no
less than four weeks paid vacation per year. To the extent the rights and
benefits offered to the Company's employees are based upon seniority, Executive
shall have the same rights and benefits as the most senior employees of the
Company.
7. TERMINATION. The employment of Executive may be terminated as
follows:
7.1. TERMINATION BY MUTUAL AGREEMENT. The Company and
Executive may mutually agree in writing to terminate Executive's employment.
7.2. TERMINATION FOR DEATH. Executive's employment shall
terminate immediately upon Executive's death.
7.3. TERMINATION UPON DISABILITY. Executive's employment shall
terminate if Executive should become totally and permanently disabled. For
purposes of this Agreement, Executive shall be considered "totally and
permanently disabled" if Executive is treated as permanently "disabled" under
any permanent disability insurance policy maintained by the Company and is
entitled to full benefits payable under such policy upon a total and permanent
disability. In the event any such policy is either not in force or the benefits
are not available under such policy, then "total and permanent disability" shall
mean the inability of Executive, as a result of substance abuse, any mental,
nervous or psychiatric disorder, or physical condition, injury or illness to
perform substantially all of his duties on a full-time basis currently for a
period of six (6) consecutive months, as determined by a licensed physician
selected by the Board of Directors of the Company.
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7.4. TERMINATION BY THE COMPANY OR EXECUTIVE. Executive or the
Company may terminate this Agreement at will, for any reason, or for no reason
at all, upon 30 days prior written notice.
7.5. TERMINATION BY COMPANY FOR "CAUSE". The Company may
terminate this Agreement for "Cause" upon three days written notice so long as
the Company has given Executive written notice describing the Cause and
Executive has not cured such Cause within a reasonable time, but no less than 14
days. For purposes of this Agreement, "Cause" shall mean the existence or
occurrence of any of the following:
7.5.1. Executive's conviction of a felony involving
the Company or moral turpitude.
7.5.2. Executive's commission of theft, embezzlement
or fraud.
7.5.3. Executive's willful violation of a Company
policy or a directive of the Board of Directors previously delivered to him in
writing.
7.5.4. Executive's breach of his obligations set
forth in Sections 11, 13, or 14 below.
7.5.5. Any material neglect or breach of duty by
Executive under this Agreement, or any failure by Executive to perform under
this Agreement which remains a breach for 14 days after receipt of written
notice describing such breach.
7.5.6. If Executive breaches any material term of the
Merger Agreement and remains in breach for 14 days after receipt of written
notice describing such breach.
8. SEVERANCE. If Executive's employment with the Company is terminated
without Cause or this Agreement is not assumed upon a Company merger,
acquisition or other corporate restructure, Company shall pay Executive the
greater of:
(a) the balance of Executive's Base Compensation, payable over
the remaining term of this Agreement; or
(b) $170,000.
If the Executive's employment is terminated for Cause, Executive shall not be
entitled to any severance pay or other benefits, except as mandated by law.
9. REPRESENTATIONS AND WARRANTIES. Executive hereby represents and
warrants to Company that as of the date of execution of this Agreement: (i) this
Agreement will not cause or require Executive to breach any obligation to, or
agreement or confidence with, any other person; (ii) Executive is not
representing, or otherwise affiliated in any capacity with, any other lines of
products, manufacturers, vendors or customers of the Company; and (iii)
Executive has not been induced to enter into this Agreement by any promise or
representation other than as expressly set forth in this Agreement.
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10. CONFIDENTIALITY. Executive hereby acknowledges that the Company has
made and will make available to Executive certain customer lists, product design
information, performance standards and other confidential and/or proprietary
information of the Company or licensed to the Company, including without
limitation trade secrets, copyrighted materials and/or financial information of
the Company (or any of its Affiliates, as defined in Section 13.5 below),
including without limitation, financial statements, reports and data
(collectively, the `Confidential Material"). Except as essential to Executive's
obligations under this Agreement, neither Executive nor any agent, employee,
officer, or independent contractor of or retained by Executive shall make any
disclosure of this Agreement, the terms of this Agreement, or any of the
Confidential Material. Except as essential to Executive's obligations under this
Agreement, neither employee nor any agent, employee, officer, or independent
contractor of or retained by Executive shall make any duplication or other copy
of any of the Confidential Material. Immediately upon request from the Company,
Executive shall return to the Company all Confidential Material. Executive shall
notify each person to whom any disclosure is made that such disclosure is made
in confidence, that the Confidential Material shall be kept in confidence by
such person, and that such person shall be bound by the provisions of this
Section. Nothing contained in this Section 11 shall be construed as preventing
Executive from providing Confidential Material in compliance with a valid court
order issued by court of competent jurisdiction, providing Executive takes
reasonable steps to prevent dissemination of such Confidential Material.
11. PROPRIETARY INFORMATION. For purposes of this Agreement,
"Proprietary Information" shall mean any information, observation, data, written
material, record, document, computer program, software, firmware, invention,
discovery, improvement, development, tool, machine, apparatus, appliance,
design, promotional idea, customer list, practice, process, formula, method,
technique, trade secret, product and/or research related to the actual or
anticipated research, marketing strategies, pricing information, business
records, development, products, organization, business or finances of the
Company. Proprietary Information shall not include information in the public
domain as of execution of this Agreement except through any act or omission of
Employee. All right, title and interest of every kind and nature whatsoever in
and to the Proprietary Information made, discussed, developed, secured, obtained
or learned by Executive during the term of this Agreement shall be the sole and
exclusive property of the Company for any purposes or uses whatsoever, and shall
be disclosed promptly by Executive to the Company. The covenants set forth in
the preceding sentence shall apply regardless of whether any Proprietary
Information is made, discovered, developed, secured, obtained or learned (a)
solely or jointly with others, (b) during the usual hours of work or otherwise,
(c) at the request and upon the suggestion of the Company or otherwise, or (d)
with the Company's materials, tools, instruments or on the Company's premises or
otherwise. All Proprietary Information developed, created, invented, devised,
conceived or discovered by Executive that are subject to copyright protection
are explicitly considered by Executive and the Company to be works made for hire
to the extent permitted by law. Executive hereby assigns to the Company all of
Executive's right, title and interest in and to the Proprietary Information.
Executive hereby forever fully releases and discharges the Company, any
Affiliates of the Company and their respective officers, directors and
employees, from and against any and all claims, demands, damages, liabilities,
costs and expenses of Executive arising out of, or relating to, any Proprietary
Information. Executive shall execute any documents and take any action the
Company may deem necessary or appropriate to effectuate the provisions of this
Agreement, including without limitation assisting the Company in obtaining
and/or maintaining patents, copyrights or similar rights to any Proprietary
Information assigned to the Company, if the Company, in its sole discretion,
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requests such assistance. Executive shall comply with any reasonable rules
established from time to time by the Company for the protection of the
confidentiality of any Proprietary Information. Executive irrevocably appoints
the President of the Company to act as Executive's agent and attorney-in-fact to
perform all acts necessary to obtain and/or maintain patents, copyrights and
similar rights to any Proprietary Information assigned by Executive to the
Company under this Agreement if (a) Executive refuses to perform those acts, or
(b) is unavailable, within the meaning of any applicable laws. Executive
acknowledges that the grant of the foregoing power of attorney is coupled with
an interest and shall survive the death or disability of Executive. Executive
shall promptly disclose to the Company, in confidence (a) all Proprietary
Information that Executive creates during the term of this Agreement, and (b)
all patent applications filed by Executive within six months after termination
of this Agreement. Any application for a patent, copyright registration or
similar right filed by Executive within six months after termination of this
Agreement shall be presumed to relate to Proprietary Information created by
Executive during the term of this Agreement, unless Executive can prove
otherwise. Nothing contained in this Agreement shall be construed to preclude
the Company from exercising all of its rights and privileges as sole and
exclusive owner of all of the Proprietary Information owned by or assigned to
the Company under this Agreement. The Company, in exercising such rights and
privileges with respect to any particular item of Proprietary Information, may
decide not to file any patent application or any copyright registration on such
Proprietary Information, may decide to maintain such Proprietary Information as
secret and confidential, or may decide to abandon such Proprietary Information
or dedicate it to the public. Executive shall have no authority to exercise any
rights or privileges with respect to the Proprietary Information owned by or
assigned to the Company under this Agreement. This Agreement does not apply to
any Proprietary Information that qualifies fully under the provisions of
California Labor Code Section 2870 or any similar or successor statute.
12. BUSINESS OPPORTUNITIES. During the term of this Agreement, if
Executive (or any agent, employee, officer or independent contractor of or
retained by Executive) becomes aware of, or develops, creates, invests, devises,
conceives or discovered, any project, investment, venture, business or other
opportunity (any of the preceding, an "Opportunity") that is similar to,
competitive with, related to or in the same field as the Company or any
Affiliate, or any project, investment, venture, or business of the Company or
any Affiliate, then Executive shall so notify the Company immediately in writing
of such Opportunity and shall use Executive's good-faith efforts to cause the
Company to have the opportunity to invest in, participate in or otherwise become
affiliated with such Opportunity.
13. SECTION HEADINGS. The section headings or captions in this
Agreement are for convenience of reference only and do not form a part hereof,
and do not in any way modify, interpret or construe the intent of the parties or
affect any of the provisions of this Agreement.
14. SURVIVAL. The obligations and rights imposed upon the parties
hereto by the provisions of this Agreement which relate to acts or events
subsequent to the termination of this Agreement shall survive the termination of
this Agreement and shall remain fully effective thereafter.
15. VENUE AND JURISDICTION. For purposes of venue and jurisdiction,
this Agreement shall be deemed made and to be performed in the City of San
Diego, California.
16. ARBITRATION.
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16.1. Any claim, dispute or other controversy (a
"Controversy") relating to this Agreement shall be settled and resolved by
binding arbitration in San Diego County, California, before the American
Arbitration Association ("AAA"). The arbitration shall be conducted in
accordance with AAA's rules and procedures, except as expressly modified by this
Section. The Parties to this Agreement (the "Parties") shall be entitled to full
discovery regarding the Controversy as permitted by the California Code of Civil
Procedure. The arbitrator's decision on the Controversy shall be a final and
binding determination of the Controversy and shall be fully enforceable as an
arbitration award in any court having jurisdiction and venue over the Parties.
The arbitrator shall also award the prevailing Party any reasonable attorneys'
fees and reasonable expenses the prevailing Party incurs in connection with the
arbitration, and the other Party shall pay the arbitrator's fees and expenses.
The arbitrator shall determine who is the prevailing Party. Each Party submits
to the exclusive jurisdiction of the courts located in San Diego County,
California, for purposes of Section 16.2 below compelling arbitration or giving
legal confirmation of any arbitration award. Each Party also agrees to accept
service of process for all arbitration proceedings in accordance with AAA's
rules.
16.2. The obligation to arbitrate shall not be binding upon
either party with respect to requests for temporary restraining orders,
preliminary injunctions or other procedures in a court of competent jurisdiction
to obtain interim relief when deemed necessary by such court to preserve the
status quo or prevent irreparable injury pending resolution by arbitration of
the actual dispute between the parties.
16.3. The provisions of this Section shall be construed as
independent of any other covenant or provision of this Agreement; provided that
if a court of competent jurisdiction determines that any such provisions are
unlawful in any way, such court shall modify or interpret such provisions to the
minimum extent necessary to have them comply with the law.
16.4. This arbitration provision shall be deemed to be
self-executing and shall remain in full force and effect after expiration or
termination of this Agreement. In the event either party fails to appear at any
properly noticed arbitration proceeding, an award may be entered against such
party by default or otherwise notwithstanding said failure to appear.
17. SEVERABILITY. Should any one or more of the provisions of this
Agreement be determined to be illegal or unenforceable in any relevant
jurisdiction, then such illegal or unenforceable provision shall be modified by
the proper court, if possible, but only to the extent necessary to make such
provision enforceable, and such modified provision and all other provisions of
this Agreement shall be given effect separately from the provision or portion
thereof determined to be illegal or unenforceable and shall not be affected
thereby; provided, that any such modification shall apply only with respect to
the operation of this Agreement in the particular jurisdiction in which such
determination of illegality or unenforceability is made.
18. WAIVER. The failure of either party to enforce any provision of
this Agreement shall not be construed as a waiver of any such provision, nor
prevent such party thereafter from enforcing such provision or any other
provision of this Agreement. The rights granted both parties herein are
cumulative and the election of one shall not constitute a waiver of such party's
right to assert all other legal remedies available under the circumstances.
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19. PARTIES IN INTEREST. Nothing in this Agreement, whether express or
implied, is intended to confer any rights or remedies under or by reason of this
Agreement on any persons other than the parties to this Agreement and the
successors, assigns and affiliates of the Company, nor is anything in this
Agreement intended to relieve or discharge the obligation or liability of any
third person to any party to this Agreement, nor shall any provision give any
third person any right of action over or against any party to this Agreement.
20. ASSIGNMENT. The rights and obligations under this Agreement shall
be binding upon, and inure to the benefit of, the heirs, executors, successors
and assigns of Executive and the Company. Except as specifically provided in
this Section 22, neither the Company nor Executive may assign this Agreement or
delegate their respective responsibilities under this Agreement without the
consent of the other party hereto. Upon the sale, exchange or other transfer of
substantially all of the assets of the Company, the Company shall assign this
Agreement to the transferee of such assets. No assignment of this Agreement by
the Company shall relieve the Company of, and the Company shall remain obligated
to perform, its duties and obligations under this Agreement, including, without
limitation, payment of the Base Compensation set forth in Section 5, above.
21. ATTORNEYS' FEES. In the event of any suit, action or arbitration to
enforce any of the terms or provisions of this Agreement, the prevailing party
shall be entitled to its reasonable attorneys' fees and costs. The foregoing
entitlement shall also include attorneys' fees and costs of the prevailing party
on any appeal of a judgment and for any action to enforce a judgment.
22. MODIFICATION. This Agreement may be modified only by a contract in
writing executed by the party(ies) to this Agreement against whom enforcement of
such modification is sought.
23. PRIOR UNDERSTANDINGS. This Agreement contains the entire agreement
between the parties to this Agreement with respect to the subject matter of this
Agreement, is intended as a final expression of such parties' agreement with
respect to such terms as are included in this Agreement, is intended as a
complete and exclusive statement of the terms of such agreement, and supersedes
all negotiations, stipulations, understandings, agreements, representations and
warranties, if any, with respect to such subject matter, which precede or
accompany the execution of this Agreement.
24. INTERPRETATION. Whenever the context so requires in this Agreement,
all words used in the singular shall be construed to have been used in the
plural (and vice versa), each gender shall be construed to include any other
genders, and the word "person" shall be construed to include a natural person, a
corporation, a firm, a partnership, a joint venture, a trust, an estate or any
other entity.
25. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
26. APPLICABLE LAW. This Agreement and the rights and obligations of
the parties hereunder shall be construed under, and governed by, the laws of the
State of California without giving effect to conflict of laws provisions.
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27. DRAFTING AMBIGUITIES. Each party to this Agreement has reviewed and
revised this Agreement. Each party to this Agreement has had the opportunity to
have such party's legal counsel review and revise this Agreement. The rule of
construction that any ambiguities are to be resolved against the drafting party
shall not be employed in the interpretation of this Agreement or of any
amendments or exhibits to this Agreement.
28. CONSTRUCTION. Where used in this Agreement, the terms "include" or
"including" mean include or including, as applicable, without limitation.
[Signature Page Follows]
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THE COMPANY:
ISLAND PACIFIC, INC
a Delaware corporation
By:_________________________________________
Name:_______________________________________
Title:______________________________________
EXECUTIVE:
____________________________________________
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