EXHIBIT 10.4
EMPLOYMENT AGREEMENT
AGREEMENT dated as of July 1, 2000, between SYNERGY 2000,
INC., a Delaware corporation (the "Company"), and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
("Employee").
Company currently is engaged in the business of providing
comprehensive business and technology solutions, combining expertise in
information technology with practical consulting solutions for complex workforce
issues. Employee is experienced in general management, technology, human
resources and operational services affecting the Company.
Company desires to employ the Employee, and Employee is
willing to accept such employment, in each case, subject to the terms and
conditions set forth in this Agreement.
Accordingly, Company and Employee hereby agree as follows:
I. TERM OF EMPLOYMENT
The term of Employee's employment under this Agreement shall
be for a period of three (3) years, commencing as of July 1, 2000, unless
earlier terminated as provided in Article IV hereof (the "Employment Period").
Following the initial three (3) year term, this Agreement shall be renewed
automatically for successive terms of one (1) year unless either party gives
notice to the other at least ninety (90) days prior to the expiration of any
such term of its or his intention not to renew.
II. EMPLOYMENT; DUTIES AND ACCEPTANCE
SECTION 2.01. EMPLOYMENT. Employee shall devote her full-time
services, skill and time to the affairs of the Company and the promotion of its
interests. Employee shall be the Executive Vice President of Company and shall
be responsible, subject always to the direction of the Company's President and
the Company's Board of Directors, for working with Company's general management,
business development and marketing teams. Employee shall report to the Company's
President, and as otherwise directed by the Company's Board of Directors.
Employee's expenditure of reasonable amounts of time for personal, business,
charitable or professional activities shall not be deemed a breach of his
undertaking to provide the required services hereunder, subject always to the
provisions of Section 5.02 hereof, provided that such activities do not
interfere materially with Employee's ability to render such services.
SECTION 2.02. ACCEPTANCE OF EMPLOYMENT BY EMPLOYEE. Employee
accepts such employment with Company and shall render the services required by
this Agreement to be rendered by her, and hereby agrees to execute and deliver
the Company's "Confidentiality and Invention Assignment Agreement," in the form
attached hereto. The terms of that agreement require the Employee to refrain for
a period of time after employment from competing with the Company or using or
disclosing the Company's Confidential Information (as defined in the agreement)
or any confidential information received during your prior employment in any
manner which might be detrimental to or conflict with the business interests of
the Company or its employees.
44
III. EMPLOYEE'S COMPENSATION
SECTION 3.01. BASE COMPENSATION. As compensation for services
to be rendered pursuant to this Agreement, Company shall pay Employee and
Employee shall accept, a base salary (the "Salary") at the annual rate of One
Hundred Sixteen Thousand Dollars ($116,000) for the period commencing July 1,
2000 and ending June 30, 2001, increasing to not less than One Hundred
Twenty-Five Thousand Dollars ($125,000) for the period commencing July 1, 2001
and ending June 30, 2002, and increasing to not less than One Hundred Forty-Five
Thousand Dollars ($145,000) for the period commencing July 1, 2002 and ending
June 30, 2003, and thereafter, at an annualized rate of not less than the rate
paid for the immediately preceding year, subject to annual adjustment, upwards
but not downwards. The salary shall be payable to Employee in accordance with
the Company's standard payroll policies.
SECTION 3.02. BONUS. In addition to the Salary, Employee shall
be entitled to a bonus (the "Bonus") based on the amount of the Company's gross
revenues for each calendar year determined by the Company's regularly engaged
public accountant as follows: (i) one and one-quarter percent (1.25%) of Company
gross revenues less than or equal to Five Million Dollars ($5,000,000); (ii) one
half of one percent (0.5%) of Company gross revenues more than Five Million
Dollars ($5,000,000); and (iii) one percent (1.0%) of all Business Plan revenue
derived from consulting and other products developed and implemented by
Employee. The Bonus shall be payable commencing with the 2000 calendar year, not
later than March 15, 2001, and annually thereafter, and pro-rated in the event
of termination prior to said payment date. Employee shall be entitled to such
additional bonuses as may be determined by the Company's Board of Directors.
SECTION 3.03. STOCK OPTIONS. Employee shall receive options,
as of January 1 of each year commencing with January 1, 2001, to purchase
seventy-five thousand (75,000) shares of the Company's Common Stock, at a price
equal to 110% of the closing bid price of the Company's Common Stock on its
Principal Market determined as of the most recent trading date immediately
preceding the date of each such grant. Said option grant shall be pro-rated in
the event of termination prior to January 1 of any year. "Principal Market"
means the OTC Electronic Bulletin Board or the NASDAQ SmallCap Market as
appropriate. Employee shall be entitled to such additional stock options as may
be granted to him under any Company stock option plan(s) from time to time in
effect at the Company.
SECTION 3.04. PARTICIPATION IN EMPLOYEE BENEFIT PLANS. Company
shall make available to the Employee the Company benefit program currently in
effect or as may be established from time to time by its Board of Directors for
similarly situated employees, including without limitation, any incentive
compensation plans or group benefit plans.
45
SECTION 3.05. KEY-MAN INSURANCE. Company shall acquire key man
insurance on the life of Employee not later than January 2001, naming the
Company as beneficiary in an amount not less than One Million Dollars
($1,000,000).
SECTION 3.06. VACATION AND SICK LEAVE PROVISIONS. Employee
shall receive not less than twenty (20) working days' vacation each year,
exclusive of legal holidays. At the option of Employee, unused vacation days may
be carried over to succeeding years or Employee shall be entitled to payment
therefor at the end of Company's fiscal year or Employee's anniversary date of
employment, whichever is mutually determined appropriate by Company and
Employee. In addition, the Employee shall be entitled to sick leave benefits
during the term of this Agreement in accordance with the customary policies
applied to similarly situated employees of the Company.
SECTION 3.07. REIMBURSEMENT OF EXPENSES. Subject to prior
approval by the Company, Employee shall be reimbursed for reasonable expenses
incurred in connection with the business of Company upon the presentation by
Employee, from time to time, of an itemized account of and proper receipts for
such expenditures, including without limitation, an automobile lease or monthly
automobile allowance commencing as of January 1, 2001, in an amount not less
than Seven Hundred Fifty Dollars ($750) as determined after consultation with
the Company's regularly engaged certified public accountants.
SECTION 3.08. OTHER COMPENSATION. Employee shall receive such
other compensation as may from time to time be granted to Employee by Company's
Board of Directors.
SECTION 3.09. WITHHOLDING. All payments due to Employee under
any provisions of this Agreement shall be reduced by any amounts required to be
withheld by Company from time to time from such payments under applicable
Federal, state or local law or regulations then in effect.
IV. TERMINATION
SECTION 4.01. TERMINATION BY EITHER PARTY UPON NOTICE. Either
party may terminate this Agreement, with or without cause, effective upon
delivery of written notice of termination to the other party.
SECTION 4.02. TERMINATION BY COMPANY FOR CAUSE. Company may,
at any time, terminate this Agreement, for Cause. "Cause" means: (a) willful and
repeated failure to comply with the lawful directions of the Board of Directors;
(b) gross negligence or willful misconduct in the performance of Employee's
duties to the Company; (c) commission of any act of fraud against, or
misappropriation of material property belonging to the Company; or (d) action by
Employee that is materially injurious to the business or reputation of the
Company, in each case as determined in good faith by the Board of Directors,
including without limitation, action by Employee involving violation of any
criminal statute constituting a misdemeanor involving moral turpitude or a
felony, chronic alcoholism or drug addiction.
46
Upon termination pursuant to the provisions of this Section, Employee would be
entitled to receive only such compensation accrued and unpaid as of the
termination date.
SECTION 4.03. TERMINATION FOR DEATH AND DISABILITY. This
Agreement shall be terminated effective immediately and automatically, upon the
death or permanent disability of Employee. For purposes of this subsection,
"permanent disability" shall be deemed to have occurred if Employee is unable by
reason of illness or physical or mental disability to perform the services
required under this Agreement for a period aggregating 120 days within any
period of 12 consecutive months during the Employment Period. Upon termination
for death, Employee would be entitled to receive only such compensation accrued
and unpaid as of the termination date. Under termination for permanent
disability, Employee would be entitled to receive full compensation and benefits
for the initial six (6) months following the determination of "permanent
disability", and one-half of such compensation and benefits for the next
succeeding six (6) month period.
SECTION 4.04. TERMINATION OTHER THAN FOR CAUSE. If Employee is
terminated for any reason other than as set forth in Sections 4.02 and 4.03
hereof, then Employee would be entitled to receive compensation and benefits as
follows:
(a) SEVERANCE. Two hundred percent (200%) of the annual Salary
at its then current level, payable in a lump sum or at the times such
salary would otherwise have been payable were Employee to remain
employed with Company, as determined by Employee in his sole
discretion, and acceleration of vesting of all options. If the Company
is unable to make payment entirely in cash, then Employee may, at his
option, elect to receive up to one-half of said severance amount in
Company Common Stock or options to purchase Company Common Stock. If
Employee elects to receive options to purchase Company Common Stock,
then all such options shall be vested immediately and immediately
salable pursuant to a Company registration statement pursuant to
applicable Federal and state securities laws; and
(b) CONTINUATION OF BENEFITS. Company would maintain in full
force and effect Employee's benefit plans (or provide Employee with
alternative substantially equivalent coverage) for a period equal to
six (6) months, or as otherwise required by applicable Federal and/or
state law.
Further, if, during your employment with the Company there is
a Change of Control (as defined below), or if Executive elects to terminate his
employment within six months following a Change in Control, then Executive shall
be entitled to receive not less than the compensation and benefits set forth in
this Section, including the acceleration of vesting of all options. "Change of
Control" shall mean the occurrence of any of the following events:
(a) an acquisition of any voting securities (or securities
convertible or exchangeable for voting securities) of the Company (the
"Voting Securities) by any "person" (as the term "person" is used for
purposes of Section 13(d) or Section 14(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) immediately after which
such person has "beneficial ownership" (within the meaning of Rule
47
13d-3 promulgated under the Exchange Act) ("Beneficial Ownership") of
or otherwise is entitled to obtain (by virtue of any option, conversion
right, etc.) more than forty percent (40%) or more of the combined
voting power of the Company's then outstanding Voting Securities;
PROVIDED, HOWEVER, in determining whether a Change in Control has
occurred, Voting Securities that are acquired in a Non-Control
Acquisition (as hereinafter defined) shall not constitute an
acquisition that would cause a Change in Control. "Non-Control
Acquisition" shall mean an acquisition by (A) an employee benefit plan
(or a trust forming a part thereof) maintained by (1) the Company or
(2) any corporation, partnership or other person of which a majority of
its voting power or its equity securities or equity interest is owned
directly or indirectly by the Company (a "Subsidiary"), or (B) any
person in connection with a Non-Control Transaction (as hereinafter
defined);
(b) the individuals who constitute the Board of Directors of
the Company as of the date hereof (the "Incumbent Board") cease for any
reason to constitute a majority of the Board of Directors; PROVIDED,
HOWEVER, that if the election, or nomination for election by the
Company's stockholders, of any new director was approved by a vote of
at least two-thirds of the Incumbent Board, such new director shall be
considered as a member of the Incumbent Board; provided, further, that
no individual shall be considered a member of the Incumbent Board if
such individual initially assumed office as a result of either an
actual or threatened "election contest" (as described in Rule 14a-11
promulgated under the Exchange Act) (an "Election Contest") or other
actual or threatened solicitation of proxies or consents by or on
behalf of a person other than the Board of Directors (a "Proxy
Contest") including by reason of any agreement intended to avoid or
settle any Election Contest or Proxy Contest; or
(c) approval by stockholders of the Company of: (A) a merger,
consolidation, share exchange or reorganization involving the Company,
unless (1) the stockholders of the Company, immediately before such
merger, consolidation, share exchange or reorganization, own, directly
or indirectly immediately following such merger, consolidation, share
exchange or reorganization, more than forty percent (40%) of the
combined voting power of the outstanding voting securities of the
corporation that is the successor in such merger, consolidation, share
exchange or reorganization (the "Surviving Company") in substantially
the same proportion as their ownership of the Voting Securities
immediately before such merger, consolidation, share exchange or
reorganization, (2) the individuals who were members of the Incumbent
Board immediately prior to the execution of the agreement providing for
such merger, consolidation, share exchange or reorganization constitute
at least two-thirds of the members of the board of directors of the
Surviving Company, and (3) no persons (other than the Company or any
Subsidiary, any employee benefit plan (or any trust forming a part
thereof) maintained by the Company, the Surviving Company or any
Subsidiary, or any person who, immediately prior to such merger,
consolidation, share exchange or reorganization had Beneficial
Ownership of fifteen percent (15%) or more of the then outstanding
Voting Securities) have Beneficial Ownership of fifteen percent (15%)
or more of the combined voting power of the Surviving Company's then
outstanding voting securities (a transaction described in clauses (1)
through (3) is referred to herein as "Non-Control Transaction"); (B) a
complete liquidation or dissolution of the Company; or (C) an agreement
for the sale or other disposition of all or substantially all of the
assets of the Company to any person (other than a transfer to a
Subsidiary).
48
Notwithstanding the foregoing, a Change in Control shall not
be deemed to occur solely because any person (a "Subject Person") acquired
Beneficial Ownership of more than the permitted amount of the outstanding Voting
Securities as a result of the acquisition of Voting Securities by the Company
that, by reducing the number of Voting Securities outstanding, increases the
proportional number of shares Beneficially Owned by such Subject Person,
provided that if a Change in Control would occur (but for the operation of this
sentence) as a result of the acquisition of Voting Securities by the Company,
and after such share acquisition by the Company, such Subject Person becomes the
Beneficial Owner of any additional Voting Securities that increases the
percentage of the then outstanding Voting Securities Beneficially Owned by such
Subject Person, then a Change in Control shall occur.
SECTION 4.05. EFFECT OF TERMINATION. Termination of this
Agreement shall not release or discharge either party hereto from any
obligation, debt or liability which may previously have occurred and remains to
be performed upon the date of termination. In addition, the provisions of
Article V of this Agreement shall survive such termination or expiration of the
term of this Agreement.
V. OBLIGATIONS OF EMPLOYEE
SECTION 5.01. ACCEPTANCE OF "CONFIDENTIALITY AND INVENTION
ASSIGNMENT AGREEMENT". Employee hereby agrees to execute and deliver, and to
abide by, the terms and conditions set forth in that certain "Confidentiality
and Invention Assignment Agreement" attached hereto.
SECTION 5.02. COMPETITION. Without Company's prior written
approval, Employee agrees that, during the Employment Period (and as the same
may be renewed or extended) or, if Employee terminates this Agreement without a
material breach by Company, for a period of one (1) year from the date thereof,
Employee shall not, directly or indirectly, for her own account or the account
of any other person, firm or company, (i) offer or sell any products or
services, or participate in any business which offers or sells any products or
services which compete directly or indirectly with the Company on the date of
such expiration or termination that Employee would have knowledge of by virtue
of her capacity; (ii) induce or attempt to induce any person(s) or entities
which were customers of Company during the Employment Period or were being
actively solicited at the time of termination of the Employment Period to cease
doing business or not to commence doing business in whole or in part with
Company or solicit the business of any such customer which compete with the
Company on the date of such expiration or earlier termination that Employee
would have knowledge of by virtue of her capacity; or (iii) solicit, interfere
with, or endeavor to cause any employee or consultant of Company to leave his
employment or engagement or induce or attempt to induce any such employee or
consultant to breach his employment or engagement agreement with Company.
Participation in a business shall include, but not be limited to, serving as a
director, officer, employee, agent or other representative of or having an
interest in the business as an owner, stockholder, partner, limited partner,
49
joint venturer, material creditor or any other financial interest; PROVIDED,
HOWEVER, that the following shall not be in violation of this covenant: (i) the
ownership by Employee of not more than three (3) percent of the outstanding
shares of stock of any such business listed on any national stock exchange or
registered under the federal securities laws and actively traded in the
over-the-counter market; and (ii) participation by Employee in any capacity in
any business, which participation has received a specific written approval of a
majority of the Board of Directors of Company.
SECTION 5.03. RIGHTS AND REMEDIES UPON BREACH OF EMPLOYEE'S
OBLIGATIONS. Because of the unique and proprietary nature of the Company's
Confidential Information and business operations and practices, and the unique
character of Employee's services, and because any material breach of any of the
provisions of this Agreement will cause irreparable injury to Company for which
money damages would not be an adequate remedy, it is understood and agreed that
Company's remedy for a material breach by Employee of this Agreement will be
inadequate, and that, therefore, in the event of any material breach by Employee
of her obligations pursuant to the terms of this Agreement, Company shall be
entitled, upon application to any court of competent jurisdiction, to equitable
relief (including, without limitation, provisional and permanent injunctive
relief and specific performance) in order to enforce or prevent violation of
such provision or provisions. Nothing contained herein shall be construed as
prohibiting Company from pursuing any other remedies provided to it by this
Agreement or available to it at law or in equity for such breach including,
without limitation, the recovery of money damages from Employee.
SECTION 5.04. SURVIVAL OF EMPLOYEE'S OBLIGATIONS. Employee's
obligations pursuant to this Article shall survive the termination of this
Agreement.
VI. GENERAL PROVISIONS
SECTION 6.01. NOTICES. All notices, requests, consents or
other communications provided for in or to be given under this Agreement shall
be in writing, may be delivered in person, by facsimile transmission (fax), by
overnight air courier or by mail, and shall be deemed to have been duly given
and to have become effective (a) upon receipt if delivered in person or by fax,
(b) one (1) day after having been delivered to an overnight air courier or (c)
three (3) days after having been deposited in the mails as certified or
registered matter, all fees prepaid, directed to the parties or their assignees
at the following addresses (or at such other address as shall be given in
writing by a party hereto):
If to Employee: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to Company: Synergy 2000, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Board of Directors.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
50
SECTION 6.02. ASSIGNMENT. This Agreement shall not be
assigned, pledged or transferred in any way by either party hereto. Any
attempted assignment, pledge, transfer or other disposition of this Agreement or
any rights, interests or benefits contrary to the foregoing provisions shall be
null and void.
SECTION 6.03. CONFLICTING AGREEMENTS. Employee hereby
represents and warrants to Company that her entering into this Agreement, and
the obligations and duties undertaken by her hereunder, will not conflict with,
constitute a breach of or otherwise violate the terms of any employment or other
agreement to which she is a party and that she is not required to obtain the
consent of any person, firm, corporation or other entity in order to enter into
this Agreement.
SECTION 6.04. INDEMNIFICATION; INSURANCE. Company shall
indemnify Employee and hold Employee harmless from any claims, actions, charges,
expenses, judgments, fines, settlements and other amounts actually and
reasonably incurred in connection with any proceeding to which Employee was or
is a party or is threatened to be made a party arising by reason of the fact
that Employee is or was an employee of Company. For purposes of this Agreement,
"proceeding" shall mean any completed, actual, pending or threatened action,
suit, claim or proceeding, whether civil, criminal, administrative or
investigative (including an action by or in the right of the Company) and
whether formal or informal, in which Employee is, was or becomes involved by
reason of the fact that Employee is or was a director, officer, employee,
trustee or agent of the Company or that, being or having been such a director,
officer, employee, trustee or agent, Employee is or was serving at the request
of the Company as a director, officer, employee, trustee or agent of another
corporation or of a partnership, joint venture, trust or other enterprise,
including service with respect to an employee benefit plan, whether the basis of
such proceeding is alleged action (or inaction) by Employee in an official
capacity as a director, officer, employee, trustee or agent or in any other
capacity while serving as a director, officer, employee, trustee or agent. For
purposes of this Agreement, "expenses" includes, without limitation, attorneys'
fees and any expenses of establishing a right to indemnification under this
Agreement or under the laws of the State of California. In addition, to the
extent economically practicable as determined by the Company in its sole
discretion, Company shall include Employee as an additional named insured on its
insurance policies.
SECTION 6.05. NO WAIVER. No term or condition of this
Agreement shall be deemed to have been waived, nor shall any party hereto be
estopped from enforcing any provision of this Agreement, except by written
instrument of the party charged with such waiver or estoppel. Any written waiver
shall not be deemed a continuing waiver unless specifically stated, shall
operate only as to the specific term or condition waived and shall not
constitute a waiver of such term or condition for the future or as to any act
other than the act specifically waived.
51
SECTION 6.06. GOVERNING LAW; VENUE. This Agreement shall be
governed by and construed in accordance with the laws of the State of
California. In the event of any dispute or controversy arising under this
Agreement or the transactions contemplated herein, the parties mutually consent
to the jurisdiction of the state and federal courts located in Los Angeles,
California, and agree that any litigation may be served outside of California
with the same force and effect as if service had been made in California.
SECTION 6.07. ENTIRE AGREEMENT; AMENDMENTS. This Agreement,
including the "Confidentiality and Invention Assignment Agreement" attached
hereto, is intended by the parties as a final expression of their Agreement with
respect to the terms included herein, and may not be contradicted or varied by
evidence of any prior or contemporaneous agreement. All prior negotiations,
correspondence, memoranda, and agreements, whether oral or written, are merged
herein. Any change, revision or modification of any provision of this Agreement
shall not be binding unless executed in writing and signed by a duly authorized
representative of each of the parties hereto.
SECTION 6.08. HEADINGS. Headings contained herein are for
convenient reference only; they are not a part of this Agreement and are not to
affect in any way the substance or interpretation of this Agreement.
SECTION 6.09. SURVIVAL OF PROVISIONS. In case any one or more
of the provisions or any portion of any provision contained in this Agreement
(including, without limitation, any geographical or temporal restrictions,
contained in Article V hereof) should be found to be invalid, illegal or
unenforceable in any respect, such provision or portion thereof shall be
modified or deleted in such manner so as to afford the parties the fullest
protection commensurate with making this Agreement, as modified, legal and
enforceable under applicable laws, and the validity, legality and enforceability
of any such provision shall not in any way be affected or impaired thereby, such
remaining provisions or portion of any such provision construed as severable and
independent thereof.
SECTION 6.10. ARBITRATION; ATTORNEYS' FEES. Any dispute or
conflict which arises between the parties hereto may be submitted to the
American Arbitration Association, before a single arbitrator, in accordance with
its then current Commercial Rules in Los Angeles, California, for arbitration
and the parties may, if so mutually agreed upon, be bound by the results of such
arbitration in accordance with applicable California law. If either party brings
an action for judicial review or enforcement of the arbitration proceedings,
award or decision, the prevailing party in any such action, trial or appeal
shall be entitled to its reasonable attorneys' fees to be paid by the
nonprevailing party as fixed by the court.
SECTION 6.11. COUNTERPARTS. This Agreement may be executed in
two or more counterparts, each of which shall be considered a duplicate
original.
SECTION 6.12. CONSTRUCTION. Each of the parties hereto has
been represented by counsel throughout this transaction who has carefully
negotiated the provisions hereof. The language in all parts of this Agreement
shall be in all cases construed simply according to its fair meaning and not
strictly for or against any of the parties. When the context so requires in this
Agreement, the masculine gender includes the feminine and/or the neuter, and the
singular number includes the plural.
52
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, in the case of Company by its duly authorized officer(s) empowered so
to act, all as of the date first above written.
SYNERGY 2000 INC.,
By: /S/ ▇▇▇ ▇▇▇▇▇▇, ▇▇.
------------------------------------
Its: President
/S/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
[Signature of Employee]
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
[Type or Print Name of Employee]
53
CONFIDENTIALITY AND INVENTION ASSIGNMENT AGREEMENT
AGREEMENT dated as of July 1, 2000, between SYNERGY
2000, INC., a Delaware corporation and its affiliated
companies (collectively, the "Company"), and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
("Employee").
In consideration of the commencement of Employee's employment
and the compensation paid to Employee, Employee acknowledges and agrees with the
Company as follows:
I. EFFECTIVENESS
This Agreement shall become effective on the earlier of (i)
commencement of Employee's employment with the Company, or (ii) the date and
time at which any Confidential Information (as defined in Section 2.01 below)
was or is first disclosed to Employee.
II. PROTECTION OF COMPANY'S CONFIDENTIAL INFORMATION
SECTION 2.01. CONFIDENTIAL INFORMATION. The Company has and
will develop, compile, and own certain proprietary techniques and confidential
information which have great value in its business (said techniques and
information being hereinafter referred to, collectively, as "Confidential
Information"). The Company has and also will have access to Confidential
Information of its Clients. ("Clients" shall mean any persons or entities for
whom the Company performs services or furnishes goods, or from whom the Company
or Employee obtains information). Confidential Information includes not only
information disclosed by the Company or its Clients to Employee in the course of
his or her employment, but also information developed or learned by Employee
during the course of his or her employment with the Company, such as Innovations
(as defined in Section 4.01 below). Confidential Information is to be broadly
defined. Confidential Information includes all information that has or could
have commercial value or other utility in the business in which the Company or
Clients are engaged or contemplate engaging. Confidential Information also
includes all information of which the unauthorized disclosure could be
detrimental to the interests of the Company or Clients, whether or not such
information is identified as Confidential Information by the Company or Clients.
By example and without limitation, Confidential Information includes all
technical and non-technical information including copyright, trade secret and
proprietary information, pricing strategies and models, know-how, processes,
algorithms, software programs, software source documents, and formulas related
to the current, future or proposed products and services of the Company, and
includes, without limitation, the Company's information concerning pricing
strategies, financial information, procurement and purchasing requirements,
business forecasts, and sales and marketing plans and information.
Notwithstanding the foregoing, Confidential Information shall
expressly exclude any information that (i) was in the public domain at the time
it was communicated to the Employee; (ii) entered into the public domain
subsequent to the time it was communicated to the Employee through no fault of
the Employee; (iii) was in the Employee's possession free of any obligation of
54
confidence at the time it was communicated to the Employee; (iv) was developed
by Employee independently of and without reference to any information
communicated to the Employee by the Company; or (v) disclosure was required by
any governmental body, was otherwise required by law, or was necessary to
establish the rights of either party under this Agreement.
SECTION 2.02. PROTECTION OF CONFIDENTIAL INFORMATION. Employee
agrees that at all times during or after his or her employment, he or she will
hold in trust, keep confidential, and not disclose to any third party or make
any use of the Confidential Information of the Company or Clients except for the
benefit of the Company or Clients and in the course of his or her employment
with the Company. Employee further agrees not to cause the transmission,
removal, or transport of Confidential Information or Innovations from the
Company's principal place of business at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, or such other place of business specified by the
Company, without prior written approval of the President of the Company.
Employee acknowledges that he or she is aware that the unauthorized disclosure
of Confidential Information of the Company or its Clients may be highly
prejudicial to their interests, an invasion of privacy, and an improper
disclosure of trade secrets. Whenever the approval, designation, specification,
or other act of the President of the Company is required under this Agreement,
the President may, by written designation, authorize an agent of the Company to
perform such act.
III. PRIOR KNOWLEDGE AND RELATIONSHIPS
SECTION 3.01. PRIOR KNOWLEDGE AND INNOVATIONS. Except as
disclosed on Schedule A to this Agreement, Employee does not know anything about
the Company's Confidential Information, other than the information he or she has
learned from the Company. Employee also has disclosed on Schedule A a complete
list of all inventions or innovations proprietary to Employee and which Employee
wants to exclude from the application of this Agreement. The Company agrees to
receive and hold all such disclosures in confidence.
SECTION 3.02. PRIOR COMMITMENTS. Except as disclosed on
Schedule A to this Agreement, Employee has no other agreements, relationships,
or commitments to any other person or entity which conflict with Employee's
obligations to the Company under this Agreement.
SECTION 3.03. PROPRIETARY INFORMATION OR TRADE SECRETS OF
OTHERS. Employee will not disclose to the Company, or use, or induce the Company
to use, any proprietary information or trade secrets of others. Employee
represents and warrants that he or she has returned all property and
confidential information belonging to all prior employers.
IV. ASSIGNMENT OF EMPLOYEE INNOVATIONS
SECTION 4.01. DISCLOSURE. Employee will promptly disclose in
writing to the Company all discoveries, developments, designs, ideas,
innovations, improvements, inventions, formulas, processes, techniques,
know-how, and data (whether or not patentable or registerable under copyright or
similar statutes) made, conceived, reduced to practice, or learned by Employee
(either alone or jointly with others) during the period of his or her
55
employment, that are related to or useful in the business of the Company, or
which result from tasks assigned to Employee by the Company, or from the use of
premises owned, leased, or otherwise acquired by the Company (all of the
foregoing being hereinafter referred to, collectively, as "Innovations").
SECTION 4.02. ASSIGNMENT OF INNOVATIONS. Employee acknowledges
and agrees that all Innovations belong to and shall be the sole property of the
Company and shall be Innovations of the Company subject to the provisions of
this Agreement. Employee hereby assigns to the Company all right, title, and
interest Employee may have or may acquire in and to all Innovations. Employee
agrees to sign and deliver to the Company (either during or subsequent to his or
her employment) such other documents as the Company considers desirable to
evidence (1) the assignment of all rights of Employee, if any, in any
Innovations to the Company and/or (2) the Company's ownership of such
Innovations. Any provision in this Agreement requiring Employee to assign rights
to an Innovation does not apply to any invention that qualifies under California
Labor Code Section 2870, which section is reproduced in the Written Notification
to Employee attached as Schedule C hereto.
SECTION 4.03. POWER OF ATTORNEY. In the event the Company is
unable to secure Employee's signature on any document necessary to apply for,
prosecute, obtain, or enforce any patent, copyright, or other right or
protection relating to any Innovation, whether due to mental or physical
incapacity or any other cause, Employee hereby irrevocably designates and
appoints the Company and each of its duly authorized officers and agents as his
or her agent and attorney-in-fact, to act for and in his or her behalf and stead
to execute and file any such document and to do all other lawfully permitted
acts to further the prosecution, issuance, and enforcement of patents,
copyrights, or other right or protections with the same force and effect as if
executed and delivered by the Employee.
V. TERMINATION OF EMPLOYMENT
SECTION 5.01. DELIVERY OF DOCUMENTS AND DATA ON TERMINATION OF
EMPLOYMENT. In the event of termination (voluntary or otherwise) of Employee's
employment with the Company, Employee agrees, promptly and without request, to
deliver to and inform the Company of all documents and data pertaining to his or
her employment and the Confidential Information and Innovations of the Company
or Clients, whether prepared by Employee or otherwise coming into his or her
possession or control, and to sign Schedule B to this Agreement. Employee will
not retain any written or other tangible material containing any information
concerning or disclosing any of the Confidential Information or Innovations of
the Company or Clients. Employee recognizes that the unauthorized taking of any
of the Company's trade secrets is a crime under California Penal Code Section
499c and is punishable by imprisonment in a state prison or in a county jail for
a time not exceeding one year, or by a fine not exceeding Five Thousand Dollars
($5,000), or by both such fine and such imprisonment. Employee further
recognizes that such unauthorized taking of the Company's trade secrets could
also result in civil liability under California Civil Code Section 3426, and
that willful misappropriation may result in an award against Employee for triple
the amount of the Company's damages and the Company's attorneys' fees in
collecting such damages.
56
SECTION 5.02. OBLIGATIONS OF EMPLOYEE AFTER TERMINATION OF
EMPLOYMENT. In the event of termination (voluntary or otherwise) of Employee's
employment with the Company, Employee agrees that he or she will protect the
value of the Confidential Information and Innovations of the Company and Clients
and will prevent the misappropriation or disclosure thereof. Employee will not
disclose or use to his or her benefit (or the benefit of any third party) or to
the detriment of the Company or its Clients any Confidential Information or
Innovation. Employee further agrees that for a period of one year immediately
following termination (voluntary or otherwise) of Employee's employment with the
Company, Employee shall not interfere with the business of the Company by
inducing an employee to leave the Company's employ or by inducing a consultant
to sever the consultant's relationship with the Company.
In addition, each party hereto shall refrain thereafter from
uttering any disparaging remarks or criticisms of the other party or its
officers, directors, shareholders, employees, representatives or agents which
might have the effect of injuring such party or such officers', directors',
shareholders', employees', representatives' or agents' character, reputations,
or profitability, and such party shall be entitled in the case of each such
utterance to liquidated damages in the amount of $10,000. Each party hereto
acknowledges that the liquidated damages specified above approximate the amount
of damages which a party would sustain taking into account, from the nature of
the case, that it would be impracticable or extremely difficult to fix the
actual damages. Each party hereto acknowledges further that such damages are
reasonable under the circumstances existing at the time this Agreement is made
and that this provision for liquidated damages is valid under Section 1671 of
the California Civil Code. Each party's entitlement to liquidated damages as
provided herein is in addition to, and not in lieu of, all its other rights and
remedies available hereunder or under applicable law or in equity.
VI. GENERAL PROVISIONS
SECTION 6.01. NOTICES. All notices, demands, requests,
consents, approvals or other communications required or permitted to be given
hereunder shall be in writing and may be personally served or may be deposited
in the United States mail, registered or certified, return receipt requested,
postage prepaid, addressed as follows:
If to the Company: Synergy 2000, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention of President.
If to the Employee: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
57
or at such other address as such party shall have specified most recently to the
other party by written notice. Notice mailed as provided herein shall be deemed
given on the date of delivery, as evidenced by the return receipt.
SECTION 6.02. GOVERNING LAW. This Agreement shall be construed
under the substantive laws of the State of California and without giving effect
to California choice-of-law or conflict-of-law principles. In the event of any
dispute or controversy arising under this Agreement or the transactions
contemplated herein, the parties mutually consent to the jurisdiction of the
state courts of California and the federal district court for the Central
District of California, and agree that any litigation may be served outside of
California with the same force and effect as if service had been made in
California.
SECTION 6.03. PARTIES IN INTEREST. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns; PROVIDED, HOWEVER, that this Agreement may not be
assigned by the Employee without the prior written consent of the Company;
PROVIDED, HOWEVER, FURTHER, that the Company shall be entitled to assign all its
rights and delegate all its duties hereunder without the consent or any act on
the part of the Employee. In case of such assignment and delegation of duties by
the Company, the Employee hereby agrees to execute any releases and other
certificates, agreements and instruments requested by the Company to effectuate
the release of the Company from any liabilities and obligations hereunder.
SECTION 6.04. ENTIRE AGREEMENT; AMENDMENT. This Agreement and
the schedules hereto constitutes and contains the entire agreement of the
parties hereto and supersedes any and all prior negotiations, correspondence,
undertakings and agreements between the parties respecting the subject matter
hereof. This Agreement may not be amended or modified, except by written
instrument signed by the party to be bound.
SECTION 6.05. WAIVER. Neither any failure nor any delay on the
part of the Company or the Employee in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall a single or partial
exercise thereof preclude any other or further exercise or the exercise of any
other right, power or privilege.
SECTION 6.06. SURVIVAL OF PROVISIONS. In case any one or more
of the provisions or any portion of any provision contained in this Agreement
should be found to be invalid, illegal or unenforceable in any respect, such
provision or portion thereof shall be modified or deleted in such manner so as
to afford the parties the fullest protection commensurate with making this
Agreement, as modified, legal and enforceable under applicable laws, and the
validity, legality and enforceability of any such provision shall not in any way
be affected or impaired thereby, such remaining provisions or portion of any
such provision construed as severable and independent thereof.
SECTION 6.07. ARBITRATION; ATTORNEYS' FEES. Any dispute or
conflict which arises between the parties hereto may be submitted to the
American Arbitration Association in accordance with its then current Commercial
Rules in Los Angeles County, California, for arbitration and the parties may, if
so mutually agreed upon, be bound by the results of such arbitration in
58
accordance with the California Code of Civil Procedure Section 1283.05. If
either party brings an action for judicial review or enforcement of the
arbitration proceedings, award or decision, the prevailing party in any such
action, trial or appeal shall be entitled to its reasonable attorneys' fees to
be paid by the nonprevailing party as fixed by the court.
SECTION 6.08. EMPLOYMENT AT WILL. Employment and compensation
can be terminated, with or without cause, and with or without notice, at any
time, at the option of the Company or the Employee. No provision set forth in
this Agreement shall limit or otherwise alter the foregoing.
SECTION 6.09. COUNTERPARTS. This Agreement may be executed in
two or more counterparts, but all of which, when taken together, shall
constitute one and the same Agreement.
IN WITNESS WHEREOF, the Employee and in the case of the
Company, by its duly authorized officer empowered so to act, have duly executed
this Agreement, as of the date first above written.
COMPANY: SYNERGY 2000, INC.,
By: /S/ ▇▇▇ ▇▇▇▇▇▇, ▇▇.
-----------------------
Its: President
CAUTION: THIS AGREEMENT AFFECTS YOUR RIGHTS TO INNOVATIONS YOU MAKE DURING YOUR
EMPLOYMENT, AND RESTRICTS YOUR RIGHT TO DISCLOSE OR USE THE COMPANY'S
CONFIDENTIAL INFORMATION DURING OR SUBSEQUENT TO YOUR EMPLOYMENT. EMPLOYEE HAS
READ THIS AGREEMENT CAREFULLY AND UNDERSTANDS ITS TERMS. EMPLOYEE HAS COMPLETELY
FILLED OUT SCHEDULE A TO THIS AGREEMENT AND HAS RECEIVED A COPY OF THE WRITTEN
NOTIFICATION TO EMPLOYEE CONTAINING CALIFORNIA LABOR CODE SECTION 2870 ATTACHED
AS SCHEDULE C HERETO.
EMPLOYEE: /S/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
59
SCHEDULE A
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
As of July 1, 2000
Synergy 2000, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Attention of President.
Re: EMPLOYEE STATEMENT
--- ------------------
Ladies and Gentlemen::
In connection with my employment by Synergy 2000, Inc., and
its affiliated companies (collectively, the "Company"), I hereby represent and
warrant as set forth below:
1. Confidential Information. Except as set forth below, I
acknowledge at this time that I know nothing about the business or the
Confidential Information of the Company or its Clients, except information that
has been disclosed to me by the Company or its Clients (if none, so state):
__[specify information known about Company or its Clients]
NONE.
--------------------------------------------------------------------------------
2. Prior Inventions. Except as set forth below, I acknowledge
at this time that I have not made or reduced to practice (alone or jointly with
others) any Inventions or Innovations (if none, so state): __[specify Inventions
or Innovations] .
NONE.
--------------------------------------------------------------------------------
3. Conflicting Relationships. Except as set forth below, I
acknowledge that I have no other current or prior agreements, relationships, or
commitments which conflict with my relationship with the Company under my
Confidentiality and Invention Assignment Agreement (if none, so state):
__[specify conflicts]
NONE.
--------------------------------------------------------------------------------
Dated: As of July 1, 2000.
/S/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
60
SCHEDULE B
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Synergy 2000, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Attention of President.
Re: TERMINATION CERTIFICATION
--- -------------------------
Ladies and Gentlemen:
I am writing to certify that I do not have in my possession,
nor have I failed to return, any Confidential Information or copies of such
information, or other documents or materials, equipment, or other property
belonging to Synergy 2000, Inc., a Delaware corporation, and its affiliated
companies (collectively, the "Company"), or its Clients.
I further certify that I have complied with and will continue
to comply with all the terms of the Confidentiality and Invention Assignment
Agreement which I signed, including the reporting of any Innovations (as defined
therein) conceived or made by me which are covered by the Agreement.
I further agree that, in compliance with the Confidentiality
and Invention Assignment Agreement, I will preserve as confidential and not use
any or all Confidential Information, Innovations, or other information which has
or could have commercial value or other utility in the business in which the
Company or its Clients are engaged or in which they contemplate engaging. I will
not participate in the unauthorized disclosure of information that could be
detrimental to the interests of the Company or its Clients, whether or not such
information is identified as Confidential Information by the Company or its
Clients.
On termination of my employment with the Company, I will be
employed by __[name of new employer]__ in the _________________ Division and
will be working in connection with the following projects: __[generally describe
the projects]__.
Dated:
-------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
61
SCHEDULE C
SYNERGY 2000, INC.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
As of July 1, 2000
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: WRITTEN NOTIFICATION TO EMPLOYEE
--- --------------------------------
Dear ▇▇▇▇▇▇▇▇:
In accordance with California Labor Code Section 2872, you are
hereby notified that your Confidentiality and Invention Assignment Agreement
does not require you to assign to Synergy 2000, Inc., a Delaware corporation,
and its affiliated companies (collectively, the "Company"), any invention for
which no equipment, supplies, facilities, or trade secret information of the
Company was used and which was developed entirely on your own time, and which
does not relate to the business of the Company or to the Company's actual or
demonstrably anticipated research or development, or which does not result from
any work performed by you for the Company. You are hereby provided a copy of
California Labor Code Section 2870:
"(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."
Please acknowledge receipt of this written notification by
signing in the space indicated below.
Very truly yours,
SYNERGY 2000, INC.,
By: /S/ ▇▇▇ ▇▇▇▇▇▇, ▇▇.
-----------------------
Its: President
ACKNOWLEDGED:
/S/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
[Signature]
Printed Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------
Dated: As of July 1, 2000.
62