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EXHIBIT 10.7
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made and entered into as of
November 20, 1998, by and between Mobility Electronics, Inc., a Delaware
corporation ("Employer"), and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ("Employee").
W I T N E S S E T H:
WHEREAS, Employer desires to employ Employee as provided herein, and
Employee desires to accept such employment; and
WHEREAS, Employee shall, as an employee of Employer, have access to
confidential information with respect to Employer and its affiliates;
NOW THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1. Employment. Employer hereby employs Employee and Employee hereby accepts
employment with Employer upon the terms and conditions hereinafter set forth
with an initial start date of January 1, 1999.
2. Duties. Subject to the power of the Board of Directors of Employer to
elect and remove officers, Employee shall serve Employer as Vice President and
Chief Financial Officer of Employer, and shall perform, faithfully and
diligently, the services and functions relating to such office or otherwise
reasonably incident to such office as may be designated from time to time by the
Chief Executive Officer of Employer. Employee shall report directly to the Chief
Executive Officer of Employer. Employee shall be based in Scottsdale, Arizona,
but shall travel as required by his duties under this Agreement. Employee shall
devote his full time, attention, energies and business efforts to his duties
hereunder and to the promotion of the business and interests of Employer and its
affiliates.
3. Term. Unless earlier terminated pursuant to Section 6 below, the term of
this Agreement shall commence as of January 1, 1999. and shall end on December
31, 2001; provided, however, that the term shall automatically renew for an
additional one-year period at the end of the original three-year term and any
additional one-year term, unless either party gives written notice to the other
party, at least ninety (90) days prior to the end of the applicable term, of
such party's termination of this Agreement at the end of the applicable term. As
used herein, "Term"shall mean the original term and any additional renewal
term(s).
4. Compensation. As compensation for his services rendered under this
Agreement, during the Term Employee shall be entitled to receive the
compensation as provided in Exhibit A
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attached hereto. In addition, Employer shall reimburse Employee (1) for all
reasonable and necessary out-of-pocket travel and other expenses incurred by
Employee in rendering services required under this Agreement, on a monthly basis
upon submission of a detailed monthly statement and reasonable documentation and
(2) for one time out-of-pocket moving cost(s) for household goods and non-equity
Chicago house closing cost(s) (up to a maximum of $60,000) from Chicago to
Scottsdale, Arizona.
5. Confidentiality.
(a) Acknowledgment of Proprietary Interest. Employee recognizes the
proprietary interest of Employer and its affiliates in any Trade Secrets
(as hereinafter defined) of Employer and its affiliates. Employee
acknowledges and agrees that any and all Trade Secrets currently known by
Employee or learned by Employee during the course of his engagement by
Employer or otherwise, whether developed by Employee alone or in
conjunction with others or otherwise, shall be and is the property of
Employer and its affiliates. Employee further acknowledges and understands
that his disclosure of any Trade Secrets will result in irreparable injury
and damage to Employer and its affiliates. As used herein, "Trade Secrets"
means all confidential and proprietary information of Employer and its
affiliates, now owned or hereafter acquired, including, without limitation,
information derived from reports, investigations, experiments, research,
work in progress, drawings, designs, plans, proposals, codes, marketing and
sales programs, client lists, client mailing lists, financial projections,
cost summaries, pricing formula, and all other concepts, ideas, materials,
or information prepared or performed for or by Employer or its affiliates
and information related to the business, products or sales of Employer or
its affiliates, or any of their respective customers, other than
information which is otherwise publicly available.
(b) Covenant Not-to-Divulge Trade Secrets. Employee acknowledges and
agrees that Employer and its affiliates are entitled to prevent the
disclosure of Trade Secrets. As a portion of the consideration for the
employment of Employee and for the compensation being paid to Employee by
Employer, Employee agrees at all times during the Term and thereafter to
hold in strict confidence and not to disclose or allow to be disclosed to
any person, firm or corporation, other than to persons engaged by Employer
and its affiliates to further the business of Employer and its affiliates,
and not to use except in the pursuit of the business of Employer and its
affiliates, the Trade Secrets, without the prior written consent of
Employer, including Trade Secrets developed by Employee.
(c) Return of Materials at Termination. In the event of any termination
or cessation of his employment with Employer for any reason whatsoever,
Employee will promptly deliver to Employer all documents, data and other
information pertaining to Trade Secrets. Employee shall not retain any
documents or other information, or any reproduction or excerpt thereof,
containing or pertaining to any Trade Secrets.
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(d) Competition During Employment. Employee agrees that during the Term,
neither he, nor any of his affiliates, will directly or indirectly: (i)
compete with Employer or its affiliates in the portable or handheld
computer power, docking, and connectivity business, which is defined as
product lines or businesses that are competitive with products that are
manufactured, marketed or sold by Employer and its affiliates during the
Term or under development during the Term (the "Business"); or (ii) act as
an officer, director, employee, consultant, shareholder, lender, or agent
of any entity which is in competition with Employer; provided, however,
that this Section 5(d) shall not prohibit Employee or any of his affiliates
from purchasing or holding an aggregate equity interest of up to 1% in any
publicly-traded company which is in competition with Employer. Furthermore,
Employee agrees that during the Term, he will undertake no planning for the
organization of any business activity competitive with the Business and
Employee will not combine or conspire with any other employees of Employer
and its affiliates for the purpose of the organization of any such
competitive business activity.
(e) Competition Following Employment. Employee agrees that for a period
of one-year after the termination or cessation of his employment for
Employer for any reason whatsoever, neither he, nor any of his affiliates,
will directly or indirectly: (i) compete with Employer or its affiliates in
the Business; (ii) act as an officer, director, employee, consultant,
shareholder, tender, or agent of any entity which is in competition with
Employer; or (iii) undertake or plan for the organization of any business
activity in competition with Employer and Employee will not combine or
conspire with any other employees of Employer or its affiliates for the
purpose of the organization of any such competitive business activity;
provided, however, that this Section 5(e) shall not prohibit Employee or
any of his affiliates from purchasing or holding an aggregate equity
interest of up to 1% in any publicly-traded company which is in competition
with Employer.
6. Termination. This Agreement and the employment relationship created
hereby shall terminate upon the occurrence of any of the following events (each,
a "Termination Event"):
(a) The expiration of the Term;
(b) The death of Employee;
(c) The excessive absence (as hereinafter defined) of Employee;
(d) Written notice to Employee from Employer of termination for "just
cause" (as hereinafter defined);
(e) Written notice to Employee from Employer of termination for any
reason other than (a), (b), (c), and (d) above in this subsection; or
(f) Termination by Employee for any reason.
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In the event of the termination of Employee's employment pursuant to
(a), (b), (c), (d) or (f), then Employee shall be entitled to only the
compensation earned by Employee as of, and payable for the period prior to, the
date of such Termination Event. In the event of the termination of Employee's
employment pursuant to (e) above, the Employee shall (i) continue to receive the
salary, provided in Exhibit A for a period of seven (7) months following the
date of termination. Notwithstanding anything to the contrary in this Agreement,
the provisions of Section 5 above shall survive any termination, for whatever
reason, of Employee's employment under this Agreement.
For purposes of this Section 6 the following terms of the following
meanings:
"excessive absence" of Employee shall mean his inability, for whatever
reason, to perform his duties under this Agreement for a continuous period
of 60 days or for 120 days out of a continuous period of 240 days.
"just cause" shall mean (a) conviction of a felony or commission of
any act of fraud, moral turpitude or dishonesty, (b) an intentional,
material violation of a statutory or fiduciary duty not corrected within
ten days after notice from Employer, (c) any material breach by Employee of
any of the terms or conditions of, or the failure to perform any material
covenant contained in, this Agreement and Employee does not cure such
breach or failure within ten days following notice from Employer; provided,
however, that Employee will not be entitled to cure any breach or failure
under this subclause (c) more than one time in any consecutive three (3)
month period, or (d) the violation by Employee of reasonable instructions
or policies established by Employer with respect to the operation of its
business and affairs or Employee's failure to carry out the reasonable
instructions of the Chief Executive Officer, or Board of Directors of
Employer and following notice thereof from Employer to Employee, Employee
does not cure any such violation or failure within ten days following
notice from Employer; provided, however, that Employee will not be entitled
to cure any breach or failure under this subclause (d) more than one time
in any consecutive three (3) month period.
7. Remedies. Employee recognizes and acknowledges that in the event of any
default in, or breach of any of, the terms, conditions or provisions of this
Agreement (either actual or threatened) by Employee, Employer's and its
affiliates remedies at law shall be inadequate. Accordingly, Employee agrees
that in such event, Employer and its affiliates shall have the right of specific
performance and/or injunctive relief in addition to any and all other remedies
and rights at law, in equity or provided herein, and such rights and remedies
shall be cumulative.
8. Acknowledgments. Employee acknowledges and recognizes that the
enforcement of any of the provisions set forth in Section 5 above by Employer
and its affiliates will not interfere with Employee's ability to pursue a proper
livelihood. Employee recognizes and agrees that the enforcement of this
Agreement is necessary to ensure the preservation and continuity of the business
and good will of Employer and its affiliates.
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9. Notices. Any notices, consents, demands, requests, approvals and other
communications to be given under this Agreement by either party to the other
shall be deemed to have been duly given if given in writing and personally
delivered or sent by facsimile transmission, courier service, overnight delivery
service or by mail, registered or certified, postage prepaid with return receipt
requested, as follows:
If to Employer: Mobility Electronics, Inc.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ L.L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to Employee: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Mobility Electronics, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇)▇▇▇-▇▇▇▇
Notices delivered personally or by facsimile transmission, courier service or
overnight delivery shall be deemed communicated as of actual receipt; mailed
notices shall be deemed communicated as of three days after the date of mailing.
10. Entire Agreement. This Agreement contains the entire agreement of the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings, oral or written between the parties hereto
with respect to the subject matter hereof. No modification or amendment of any
of the terms, conditions or provisions herein may be made otherwise than by
written agreement signed by the parties hereto.
11. Governing Law and Venue. THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE INTERPRETED, CONSTRUED, AND ENFORCED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF ARIZONA, WITHOUT REGARD TO ITS CHOICE OF LAW PRINCIPLES.
12. Parties Bound. This Agreement and the rights and obligations hereunder
shall be binding upon and inure to the benefit of Employer and Employee, and
their respective heirs, personal representatives, successors and assigns.
Employer shall have the right to assign this Agreement to any affiliate or to
its successors or assigns. The terms "successors" and "assigns" shall include
any
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person, corporation, partnership or other entity that buys all or substantially
all of Employer's assets or all of its stock, or with which Employer merges or
consolidates. The rights, duties or benefits to Employee hereunder are personal
to him, and no such right or benefit may be assigned by him. The parties hereto
acknowledge and agree that Employer's affiliates are third-party beneficiaries
of the covenants and agreements of Employee set forth in Section 5 above.
13. Estate. If Employee dies prior to the payment of all sums owed, or to
be owed, to Employee pursuant to Section 4 above, then such sums, as they become
due, shall be paid to Employee's estate.
14. Enforceability. If, for any reason, any provision contained in this
Agreement should be held invalid in part by a court of competent jurisdiction,
then it is the intent of each of the parties hereto that the balance of this
Agreement be enforced to the fullest extent permitted by applicable law.
Accordingly, should a court of competent jurisdiction determine that the scope
of any covenant is too broad to be enforced as written, it is the intent of each
of the parties that the court should reform such covenant to such narrower scope
as it determines enforceable.
15. Waiver of Breach. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach by any party.
16. Captions. The captions in this Agreement are for convenience of
reference only and shall not limit or otherwise affect any of the terms or
provisions hereof.
17. Costs. If any action at law or in equity is necessary to enforce or
interpret the terms of this Agreement, the prevailing party shall be entitled to
reasonable attorneys' fees, costs and necessary disbursements in addition to any
other relief to which he or it may be entitled.
18. Other Obligations. Employee represents and warrants that he is not
subject to any agreement which would be violated or breached as a direct or
indirect result of Employee executing this Agreement or Employee becoming an
employee of Employer.
19. Affiliate. An "affiliate" of any party hereto shall mean any person
controlling, controlled by or under common control with such party.
20. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which shall
constitute one and the same instrument, but only one of which need be produced.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
MOBILITY ELECTRONICS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
Chief Executive Officer
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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EXHIBIT A
1. Annual Salary: Annual Salary will be at the rate of $185,000 per year,
subject to increase at the discretion of the Board of Directors of
Employer. The Annual Salary shall be payable bi-weekly.
2. Bonuses: Employee shall be entitled to receive an annual calender year
bonus target of 25% of Employee's Annual Salary, with additional upside
thereafter, pursuant to Employer's annual bonus plan (pro rated for partial
years).
3. Benefits: Employee shall be entitled to receive such group benefits as
Employer may provide to its other employees at comparable salaries and
responsibilities to those of Employee, which shall specifically include
three weeks of paid vacation per calendar year (pro rated for partial
years).
4. Stock Options:
- Employee will be granted an option to purchase 100,000 shares of
Common Stock under Employer's 1996 Long Term Incentive Plan (the
"Plan"), which options shall: (i) be granted at the lower of
$5.75/share or the price of other options issued pursuant to the plan
before June 30, 1999. (ii) provide for equal annual vesting of 33% per
year for three years; (iii) provide for full vesting in the event of a
Change In Control; and (iv) contain such other terms and conditions as
are contained in Employer's standard form stock option agreement under
the Plan.
- Employee will be granted an additional option to purchase an
additional 30,000 shares of Common Stock (to be vested over the three
year term of this agreement) under the Plan and, on other terms and
conditions described above, subject to Mobility's consummation of an
IPO, sale, or merger prior to March 31, 2001.
- A "Change In Control" shall be deemed to have occurred for purposes
hereof (i) when a change of stock ownership of Employer of a nature
that would be required to be reported in response to Item 6(e) of
Schedule 14A promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and any successor item of a similar
nature has occurred; or (ii) upon the acquisition of beneficial
ownership, directly or indirectly, by any person (as such term is used
in Sections 13(d) and 14(d)(2) of the Exchange Act) of securities of
Employer representing 50% or more of the combined voting power of
Employer's then outstanding securities; provided that a Change In
Control will not be deemed to have occurred for purposes hereof with
respect to any person meeting the requirements of clauses (i) and (ii)
of Rule 13d-1 (b)(1) promulgated under the Exchange Act.
5. Stock Purchase
- Employee will be permitted to purchase, within sixty days of the
execution of this agreement, 30,000 shares of Common Stock at a price
per share of $5.75.