EXHIBIT 10.3
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement"), dated as of September 24, 2001
(the "Effective Date") between Home Director, Inc., a Delaware corporation (the
"Company"), and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("Employee").
WHEREAS, the Company desires to employ Employee as its President and Chief
Executive Officer and as the Chief Executive Officer of Digital Interiors, Inc.,
a California corporation and a wholly owned subsidiary of the Company ("Digital
Interiors"); and
WHEREAS, Employee is willing to accept such employment on the terms set forth
herein.
NOW, THEREFORE, the Company and Employee hereby agree as follows:
1. Employment.
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1.1. General. The Company hereby employs Employee in the capacity of
President and Chief Executive Officer of the Company and as Chief Executive
Officer of Digital Interiors, and Employee hereby accepts such employment, upon
the terms and subject to the conditions herein contained.
1.2. Board of Directors. During the term of Employee's employment
hereunder, the Employee agrees to serve as a member of the Boards of Directors
of the Company and Digital Interiors.
1.3. Duties and Authority. During the term of Employee's employment
hereunder, the Employee shall have such responsibilities, duties and authority
as are consistent with his title and such additional responsibilities, duties
and authority as may, from time to time, be reasonably assigned to Employee by
the Board of Directors of the Company. During the term of this Agreement,
Employee shall serve the Company, faithfully and to the best of his ability, and
shall devote all of his business time and efforts to the business and affairs of
the Company (including its subsidiaries and affiliates) and the promotion of its
interests or such other activities as the Board of Directors of the Company may
approve from time to time; provided, however that this shall not be construed as
either preventing Employee from investing his assets in such form or manner as
will not require any services on the part of Employee or precluding Employee
from performing a reasonable amount of civic and/or charitable service. The
Company hereby acknowledges and approves the following activities by Employee:
(a) Employee's and Employee's spouse's ownership of E&N Business Development and
Advisors, a real estate and business advisory company and (b) Employee's partial
ownership and member on the Board of Directors of Card IT, Inc., a smart card
company. Employee will be furnished with facilities and services commensurate
with his position and adequate for the performance of his duties. Employee shall
make himself available to the Company at such times and places as the Company
shall reasonably request during the term hereof.
2. Term of Employment. The term of this Agreement shall commence on
the Effective Date and shall continue through December 31, 2003 (the "INITIAL
TERM"). Thereafter and unless this Agreement is terminated in accordance with
the provisions set forth in Section 4
hereof, the term of this Agreement shall be automatically extended for
successive and additional one-year periods.
3. Compensation and Benefits.
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3.1. Salary. The Company shall pay to Employee a base salary at the
annual rate of $275,000 or at such increased rate as the Board of Directors of
the Company, in its sole discretion, may hereafter from time to time determine
("BASE SALARY"), payable in accordance with the regular payroll practices of the
Company and subject to all applicable federal and state deductions and
withholdings. During the term of this Agreement, Employee's Base Salary shall be
reviewed no less frequently than annually by the Board of Directors of the
Company to determine whether or not such Base Salary should be increased in
light of Employee's duties, responsibilities and performance, and, if it is
determined that an increase is merited, such increase shall be promptly put into
effect and Employee's base salary as so increased shall constitute Employee's
Base Salary for purposes of this Section 3.1.
3.2. Expenses. Employee is currently a resident of San Jose,
California. During the term of this Agreement, Employee shall spend a
significant amount of time at the Company's headquarters in Morrisville, North
Carolina. During the term of this Agreement, the Company shall: pay for, or
reimburse Employee for, all of Employee's roundtrip airfare to the
Raleigh-Durham International Airport; (b) pay for, or reimburse Employee for, up
to two roundtrip airfares per month for Employee's spouse to the Raleigh-Durham
International Airport; (c) pay for, or reimburse Employee for, Employee's actual
lodging expenses (including an apartment rental and all utilities expenses
related to such apartment rental) in the Research Triangle Area of North
Carolina (the "RTP"); and (d) pay for, or reimburse Employee for, Employee's
actual car rental expenses in the RTP. Employee and the Company hereby
acknowledge and agree that the Board of Directors of the Company may determine
that it is in the best interests of the Company for Employee to relocate his
residence to the RTP. In such event, the Company shall provide Employee with an
adequate relocation package as Employee and the Company shall mutually
determine. The Company shall pay for, or reimburse Employee for, all other
reasonable out-of-pocket expenses incurred by him in performing services under
this Agreement. The Company shall pay to Employee an automobile allowance of
$500 per month. The Company shall pay a maximum of $2,000 annually for
disability insurance on behalf of the Employee. All such payments or
reimbursements shall be made by the Company according to the Company's expense
account and reimbursement policies and provided that Employee shall submit
reasonable documentation with respect to such expenses.
3.3. Incentive Compensation Plan. The Company, with respect to each
calendar year during the term hereof, shall pay Employee an annual cash bonus (a
"BONUS") in an amount equal to no less than 35% of Employee's annual Base Salary
provided that the Employee remains employed by the Company continuously
throughout such calendar year. The Company shall pay such Bonus, if any, to
Employee on or before December 31St of such calendar year. The bonus evaluation
for 2001 will be based on the Chairman of the Board of Directors recommendation
to the Board of Directors Compensation Committee and will be based on if the
Company is Profitable (as defined below) or has been Strategically Repositioned
(as defined below). The term "Profitable" means positive net cash flow from the
Company's business activities, excluding investment activities and losses from
the disposal or write-off of the Company's IBM controller
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inventory. The term "Strategically Repositioned" means additional funding was
achieved and/or business partners were brought in to benefit the company. In
addition to the foregoing, the Company shall pay Employee a bonus of $200,000
upon: (a) the consummation of the initial public offering of shares of the
Company's Common Stock pursuant to the Securities Act of 1933, as amended (an
"IPO") or (b) the consummation of a merger, reorganization, consolidation,
exchange, transfer of assets, or similar transaction in which the Company is not
the surviving company (a "CHANGE IN CONTROL").
3.4. Incentive Stock Options. Simultaneously with the execution and
delivery of this Agreement, the Company and Employee shall execute and deliver a
Stock Option Agreement (the "OPTION AGREEMENT") pursuant to which the Company
shall grant Employee an option to purchase 2,500,000 shares of the Common Stock
of the Company in accordance with the terms and conditions thereof The Option
Agreement shall provide that 625,000 options shall immediately vest and
1,875,000 options shall vest quarterly over two years beginning on the Effective
Date, have an exercise price of $0.22 per share, and vesting will accelerate
upon the consummation of an IPO or a Change In Control. Also, the Company shall
grant Employee an option to purchase 500,000 shares of the Common Stock of the
Company that immediately vests upon consummation and receipt of at least $5
million in equity financing and has a ▇▇▇▇▇ ▇▇▇▇▇ that reflects the then fair
market value. Provided that Employee is an employee of the Company and at such
time as the Company increases its stock option pool, the Company shall grant
Employee: (a) if the Company is Profitable or Strategically Repositioned on the
grant date, an option to purchase 1,800,000 shares of the Common Stock of the
Company that vests quarterly over two years from the grant date, has an exercise
price determined by the Board of Directors of the Company on the grant date, and
has accelerated vesting upon the consummation of an IPO or Change In Control or
(b) if the Company is not Profitable or has not been Strategically Repositioned
on the grant date: (i) an option to purchase 900,000 shares of the Common Stock
of the Company that vests quarterly over two years from the grant date, has an
exercise price determined by the Board of Directors of the Company on the grant
date, and has accelerated vesting upon the consummation of an IPO or a Change In
Control and (ii) an option to purchase up to 900,000 shares of the Common Stock
of the Company that vests quarterly over two years after the Company becomes
Profitable or Strategically Repositioned, has an exercise price determined by
the Board of Directors of the Company on the grant date, and has accelerated
vesting upon the consummation of an IPO or a Change In Control. The Board of
Directors of the Company shall determine when it is appropriate for the Company
to increase its stock option pool to facilitate the foregoing stock option
grants.
3.5. Vacation. Employee shall be entitled to four weeks of vacation
during each calendar year of this Agreement, or such greater period as the Board
of Directors of the Company shall approve, and to paid holidays given by the
Company to its employees generally, without reduction in salary or other
benefits. Vacation for a calendar year that is not used may be used in
subsequent calendar years. Upon termination of Employee's employment pursuant to
Section 4 hereof, Employee shall be entitled, in addition to the compensation
and benefits provided for in Section 4, to receive in cash an amount equivalent
to all accrued and unused vacation as of such termination date.
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3.6. Equipment. The Company shall provide Employee with equipment
reasonably determined by the Company to be necessary for Employee to perform his
duties under this Agreement, including, without limitation, a portable personal
computer and a cellular telephone.
3.7. No Other Benefits. During the term of this Agreement or upon any
termination hereof, the Company shall have no obligation to pay or provide, any
compensation or benefits other than as set forth herein; provided, however, that
Employee shall be entitled to all benefits generally available under the
employee benefit plans, and the policies and practices of, the Company,
determined in accordance with the applicable terms and provisions of such plans,
policies and practices, in each case, as accrued to the date of termination of
employment. Employee hereby acknowledges that the Company may desire to obtain
key-man life insurance on him. In such event, Employee shall take all action
requested by the Company, including submitting to a physical examination, to
facilitate the Company obtaining such policy.
4. Termination of Employment
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4.1. Events of Termination. Employee's employment hereunder shall
terminate prior to the expiration of the term set forth in Section 2 hereof upon
the occurrence of any one or more of the following events:
(a) Death. In the event of Employee's death, Employee's employment
shall terminate on the date of death.
(b) Termination By the Company for Cause. The Company may, at its
option, terminate Employee's employment for Cause (as defined below) upon giving
written notice of termination to Employee. Employee's employment shall terminate
on the date on which such notice shall be given. For purposes hereof, "Cause"
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shall mean Employee's (i) conviction of or guilty plea to a felony, (ii)
commission of fraudulent, illegal or dishonest acts, as determined by the Board
of Directors of the Company, (iii) willful misconduct or gross negligence which
reasonably could be expected to be materially injurious to the business or
operations of the Company (monetarily or otherwise) or (iv) material failure to
perform his duties under this Agreement, or any other material breach of this
Agreement, as reasonably determined by the Board of Directors of the Company and
Employee fails to cure such failure to perform or such breach within thirty (30)
days following receipt of written notice of such failure to perform or such
breach.
(c) Termination By the Company Without Cause. The Company may, at its
option, terminate Employee's employment for any reason whatsoever by giving at
least thirty (30) days prior written notice of termination to Employee.
(d) Termination By Employee. Employee may terminate Employee's
employment for any reason whatsoever by giving at least thirty (30) days prior
written notice of termination to the Company.
(e) Disability. In the event of Employee's Disability (as defined
below), the Company will have the option to terminate Employee's employment by
giving a written notice of
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termination to Employee. Such notice shall specify the date of termination,
which date shall not be earlier than thirty (30) days after such notice is
given. For purposes of this Agreement, "DISABILITY" means the inability of
Employee to substantially perform his duties hereunder for ninety (90)
consecutive days or one hundred eighty (180) days out of three hundred
sixty-five (365) days as a result of a physical or mental illness, all as
determined in good faith by the Board of Directors of the Company following
consultation with medical or mental health experts selected by the Board of
Directors of the Company.
(f) Termination By Employee for Good Reason. Employee may, at his
option, terminate Employee's employment upon giving written notice of
termination to the Company in the event that (i) the Company commits a material
breach of the terms of this Agreement and fails to cure such breach within
thirty (30) days following receipt of written notice of such breach, or (ii)
Employee's Base Salary, title, duties, authority, or responsibilities (as such
duties, authority, and responsibilities have been established by the Board of
Directors of the Company) are substantially reduced.
4.2. Company's Obligations Upon Termination. Following the termination
of Employee's employment under the circumstances described below, the Company
shall pay to Employee (or in the event of Employee's death, as directed by the
executor of Employee's estate the following compensation and provide the
following benefits, and in the case of Section 4.2(a) in full satisfaction and
final settlement of any and all claims and demands that Employee now has or
hereafter may have against the Company (other than any claims and demands
pursuant to the provisions of the Option Agreement or any other Incentive Stock
Option Agreement or Nonqualified Stock Option Agreement to be entered into
between the Company and Employee or the Nonqualified Stock Option Agreement and
Stock Purchase Warrant issued by the Company to Employee in connection with the
acquisition by the Company of Digital Interiors (the "Digital Interiors
Agreements"), the full satisfaction and final settlement of which claims and
demands shall be controlled by the Option Agreement or such other Incentive
Stock Option Agreement or Nonqualified Stock Option Agreement):
(a) Termination Without Cause By the Company or with Good Reason by
Employee. In the event that Employee's employment shall be terminated by the
Company pursuant to Section 4.1(c) hereof:, or by Employee pursuant to Section
4.1(f) hereof, the Company shall pay Employee (a) all Base Salary earned but
unpaid through the date of termination, in accordance with the Company's then
existing payroll practices. Base Salary shall be paid with the payroll
immediately after the termination of Employee's employment and (b) any Bonus
earned on or prior to i (late of termination, but not yet paid, which such Bonus
shall be paid with the payroll immediately alter the termination of Employee's
employment and (c) Base Salary and existing benefits for t period covering the
remaining term of the Agreement, or for one year, whichever is greater, from the
date of termination. n addition, (i) the Company shall reimburse Employee for
any expense incurred through the date of such termination in accordance with
Section 3.2 hereof, (ii) the Company shall provide Employee with executive
outplacement services reasonably acceptable to Employee, au (iii) with respect
to a termination by the Company without Cause pursuant to Section (c) or a
termination by Employee pursuant to Section 4.1(f) hereof; all stock options of
the Company then issued to Employee (the "Options") shall become fully vested
and exercisable as of the date of such termination and shall continue to be
exercisable for a period of three (3) years after the date of such termination
with respect to all shares of the Company's Common Stock subject to the Option.
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(b) By the Company for Cause. In the event that Employee's employment shall
be terminated by the Company for Cause pursuant to Section 4.1(b) hereof,
Employee shall be entitled to no further compensation or other benefits under
this Agreement other than any Base Salary and Bonus earned by him up to and
including the effective date of such termination, but not yet paid. In addition,
the Company shall reimburse Employee for any expenses incurred through the date
of such termination in accordance with Section 3.2 hereof.
(c) Termination upon Expiration of the Employment Term. Upon
expiration of the term of this Agreement, Employee shall be entitled to no
further compensation or other benefits under this Agreement other than that
portion of any unpaid Base Salary earned, but unpaid, through the end of such
term and Bonus earned on or prior to the end of such term, but not yet paid. In
addition, the Company shall reimburse Employee for any expenses incurred through
the date of such termination in accordance with Section 3.2 hereof.
(d) Termination by Employee. In the Event that Employee's employment
shall be terminated by the Employee pursuant to Section 4.1 (d) hereof, Employee
shall be entitled to no further compensation or other benefits under this
Agreement other than that portion of any unpaid Base Salary earned, but unpaid,
through the end of such termination and Bonus earned on or prior to the end of
such termination, but not yet paid. In addition, the Company shall reimburse
Employee for any expenses incurred through the date of such termination in
accordance with Section 3.2 hereof Also, any Options that shall become fully
vested through the end of such termination shall continue to be exercisable for
a period of three (3) years after the date of such termination with respect to
all shares of Common Stock subject to the Options.
(e) Termination Due to Death or Disability. in the event that
Employee's employment shall be terminated by the Company pursuant to Section
4.1(a) or 4.1(e) hereof; (i) the Company shall pay Employee all Base Salary and
Bonus earned, but unpaid, through the date of termination, and shall reimburse
Employees for any expenses incurred through the date of termination in
accordance with Section 3.2 hereof and (ii) the Options shall become fully
vested and exercisable as of the date of such termination and shall continue to
be exercisable for a period of three (3) years after the date of such
termination with respect to all shares of Common Stock subject to the Options.
4.3. Nature of Payments. All amounts to be paid by the Company to
Employee pursuant to this Section 4 (other than Base Salary or reimbursement of
expenses or amounts paid pursuant to Section 4.2(e)) shall be considered by the
parties to be severance payments. In the event that such payments shall be
treated as damages, it is expressly acknowledged by the parties that damages to
Employee for termination of employment would be difficult to ascertain and the
above amounts are reasonable estimates thereof and are not a penalty.
5. Non-Interference; Noncompetition. During the term of this Agreement
and for a period of twenty four (24) months thereafter, Employee shall not:
(a) interfere with any of the Company's or Digital Interiors'
relationships with, or endeavor to employ or entice away from the Company or
Digital Interiors, any person who at
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any time on or after the date hereof, is or shall be an employee of the Company
or Digital Interiors or interfere with or seek to alter the Company's or Digital
Interiors' relationship with, divert any supplier, licensee or distributor of
the Company or Digital Interiors; or
(b) directly or indirectly, engage in or facilitate or support others
to engage in the production, sale or distribution of any products or services
competitive to the business of the Company or Digital Interiors in which the
Company or Digital Interiors or any successor thereof (only to the extent of the
products and services of the Company or Digital Interiors immediately prior to
the successor succeeding to the Company's or Digital Interiors' business) is
then actively engaged or any successor thereof anywhere in the United States or
any other country in which Company or Digital Interiors is then actively
conducting its business or, directly or indirectly, solicit or attempt to
solicit for business in a manner which could reasonably be expected to result in
a detriment to the Company or Digital Interiors, in competition with the Company
or Digital Interiors or any successor thereof, any suppliers, clients or
customers with whom the Company or Digital Interiors or any successor thereof
shall have done business; or
(c) seek or obtain employment with or provide services to any customer
or client of the Company or Digital Interiors with whom Employee interacted
during the Term of this Agreement which employment or services could reasonably
be expected to result in a detriment to the Company or Digital Interiors.
6. Property Rights. With respect to information, inventions and
discoveries developed, made or conceived of by Employee, either alone or with
others, at any time during his employment by the Company and whether or not
within working hours, arising out of such employment or pertinent to any field
of business or research in which, during such employment, the Company is engaged
or (if such is known to or ascertainable by Employee) is considering engaging,
Employee agrees:
(a) that all such information, inventions and discoveries, whether or
not patented or patentable, shall be and remain the exclusive property of the
Company;
(b) to disclose promptly to an authorized representative of the Company
all such information, inventions and discoveries and all information in
Employee's possession as to possible applications and uses thereof;
(c) not to file any patent application relating to any such invention
or discovery except with the prior written consent of an authorized officer of
the Company;
(d) that Employee hereby waives and releases any and all rights
Employee may have in and to such information, inventions and discoveries, and
hereby assigns to the
Company and/or its nominees all of Employee's right, title and interest in them,
and all Employee's right, title and interest in any patent, patent application,
copyright or other property right based thereon. Employee hereby irrevocably
designates and appoints the Company and each of its duly authorized officers and
agents as his agent and attorney-in-fact to act for him and m his behalf and
stead to execute and file any document and to do all other lawfully permitted
acts to further the prosecution, issuance and enforcement of any such patent,
patent application,
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copyright or other property right with the same force and effect as if executed
and delivered by Employee; and
(e) at the request of the Company, and without expense to Employee, to
execute such documents and perform such other acts as the Company deems
necessary or appropriate, for the Company to obtain patents on such inventions
in a jurisdiction or jurisdictions designated by the Company, and to assign to
the Company or its designee such inventions and any and all patent applications
and patents relating thereto.
7. Confidentiality. With respect to the information, inventions and
discoveries referred to in Section 6 hereof, and also with respect to all other
information, whatever its nature and form and whether obtained orally, by
observation, from graphic materials or otherwise (except such as is generally
available through publication), obtained by Employee during or as a result of
his employment by the Company and i-elating to any invention, improvement,
enhancement, product, know-how, formula, software, process, apparatus, design,
concept or other creation, or to any use of any of them, or to materials,
tolerances, specifications, costs (including, without limitation, manufacturing
costs), prices, or to any plans of the Company or Digital Interiors, or to any
other trade secret or proprietary information of the Company or Digital
Interiors, Employee agrees:
(a) to hold all such information, inventions and discoveries which have
not otherwise become public knowledge in strict confidence and not to publish or
otherwise disclose any thereof to any person or entity other than the Company
except with the prior written consent of an authorized officer of the Company or
as may be required by law;
(b) to take all reasonable precautions to assure that all such
information, inventions and discoveries are properly protected from access by
unauthorized persons;
(c) to make no use of nor exploit in any way any such information,
invention or discovery except as required in the performance of his employment
duties for the Company; and
(d) upon termination of his employment by the Company, or at any time
upon request of the Company, to deliver to it all graphic materials and all
substances, models, software, prototypes and the like containing or relating to
any such information, invention or discovery, all of which graphic materials and
other things shall be and remain the exclusive property of the Company.
For purposes of this Agreement, the term 'graphic materials" includes, without
limitation, letters, memoranda, reports, notes, notebooks. books of account,
drawings, prints, specifications, formulae, software, data print-outs,
microfilms, magnetic tapes and disks and other documents and recordings,
together with all copies, excerpts and summaries thereof.
8. No Conflicts. Employee agrees and acknowledges that his employment
by the Company and compliance with this Agreement do not and will not breach any
agreement made by Employee to keep in confidence information acquired by him
prior to or outside of his employment with the Company. Employee will comply
with any and all valid obligations which he may now have to prior employers or
to others relating to confidential information, inventions
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or discoveries which are the property of those prior employers or others, as
the case may be. Employee has supplied or shall promptly supply to the Company
upon its request a copy of each written agreement setting forth any such
obligation. Employee hereby agrees and acknowledges that he has not brought and
will not bring with him for use in the performance of his duties at the Company
any materials, documents or information of a former employer or any third party
that are not generally available to the public, unless he has express written
authorization from the owner thereof for possession and use or Employee
otherwise has undisputed proprietary rights to such material, documents or
information. Employee hereby agrees not to serve on any board of directors,
advisory board or similar board without the prior written consent of the Board
of Directors of the Company.
9. Specific Performance. Without intending to limit the remedies
available to the Company, Employee agrees that damages at law would be an
inadequate remedy to the Company in the event that he shall breach or attempt to
breach any of the provisions of Sections 5, 6, or 7 hereof and that the Company
may apply for and, without the posting of any bond or other security, have
injunctive relief in any court of competent jurisdiction to restrain the breach
or threatened breach of, or otherwise to enforce specifically, any of the
covenants contained in such Sections. Such injunctive relief in such court
shall be available to the Company in lieu of any arbitration proceeding pursuant
to Section 12 hereof.
10. Survival. The provisions of Sections 3, 4, 5, 6, 7, 8, 9, 111,
12.1 and 12.4 shall, subject to any express provisions of such Sections, survive
any termination of this Agreement. Employee's obligations under Sections 5, 6,
and 7 hereof shall remain in effect throughout Employee's employment by the
Company and, subject to the express provisions of such Sections, thereafter,
unaffected by any transfer to a subsidiary or affiliate of the Company, and
without regard to the reason for termination of Employee's employment.
11. Arbitration. Any controversy or claim based on, arising out of or
relating to the interpretation and performance of this Agreement or any
termination hereof shall be solely and finally settled by arbitration under the
rules of the American Arbitration Association, and judgment on the award
rendered in the arbitration may be entered in any court having jurisdiction
thereof. Any such arbitration shall be in Wake County, North Carolina, and shall
be submitted to a single arbitrator appointed by the mutual consent of the
parties or, in the absence of such consent, by application of any party to the
American Arbitration Association. A decision of the arbitrator shall be final
and binding upon the parties, and the arbitrator shall be authorized to
apportion fees and expenses (including counsel fees and expenses) as the
arbitrator shall deem appropriate. In the absence of any such apportionment, the
fees and expense of the arbitrator shall be borne equally by each party, and
each party will bear the fees and expenses of its own attorney. The Company
shall reimburse Employee for all reasonable travel, lodging, and meal expenses
incurred by Employee in connection with any such Arbitration. Such reimbursement
shall be made within 10 business days of Employee submitting reasonable
documentation of such expenses. The parties agree that this clause has been
included to rapidly and inexpensively resolve any disputes between them with
respect to this Agreement and that this clause shall be grounds for dismissal of
any court action commenced by either party with respect to this Agreement, other
than (i) post-arbitration actions seeking to enforce an arbitration award and
(ii) actions seeking appropriate equitable or injunctive relief pursuant to
Section 9 hereof
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12. Miscellaneous.
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12.1. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of North Carolina that are applicable
to agreements entered into between residents of the State of North Carolina and
that are to be performed entirely with the State of North Carolina and without
regard to principles of conflict of laws.
12.2. Entire Agreement; Amendment. As of the Effective Date, Digital
interiors and Employee hereby terminate in all respects the Employment
Agreement, dated as of January 25, 2001, between Digital Interiors and Employee
(the "Digital Interiors Employment Agreement"). This Agreement and the Option
Agreement (together with any other Incentive Stock Option Agreement or
Nonqualified Stock Option Agreement to be entered into between the Company and
Employee) contains the complete understanding and agreement between the parties
hereto with respect to the subject matter hereof, and supersedes all prior
understandings and agreements, written or oral, between the parties hereto
relating to the subject matter hereof, including without limitation, the Digital
Interiors Employment Agreement. This Agreement shall have no effect on the
Digital Interiors Agreements or the Employee's rights thereunder or the
Agreement and Plan of Merger and Reorganization, dated October 24, 2000, as
amended, by and among the Company, DI Acquisition, Inc., Digital Interiors, and
the Stockholders' Agent named therein or Employees rights thereunder.
12.3. Assignment. This Agreement and the rights and obligations
hereunder, shall not be assignable or delegable by any party hereto without the
prior written consent of the other party, except with respect to an assignment
by the Company to any affiliate of the Company or pursuant to a merger or
consolidation involving the Company or pursuant to the sale of all or
substantially all of the assets of the Company.
12.4. Severability. In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any reason, in
whole or in part, (the remaining provisions of this Agreement shall be
unaffected thereby and shall remain in full force and effect to the fullest
extent permitted by law and (any such invalidity or unenforceability shall be
deemed replaced by a term or provision determined by the parties as coming
closest to expressing the intention of the invalid or unenforceable term or
provision.
12.5. Notice. Any notice to be given hereunder shall be in writing and
either delivered in person, by facsimile, by nationally recognized overnight
courier, or by registered or certified first class mail, postage prepaid,
addressed (a) if to the Company at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and (b) if to Employee at the address set forth on the signature
page hereof. Notices delivered personally shall be deemed given as of actual
receipt; notices sent via f transmission shall be deemed given as of one
business day following sender's receipt from sender's facsimile machine of
written confirmation of transmission thereof, notices sent by overnight courier
shall be deemed given as of one business day following sending; and notices
mailed shall be deemed given as of five business days after proper mailing. Any
party may change its address in a notice given to the other party in accordance
with this Section 12.5.
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12.6. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs, legal
representatives, successors (including, without limitation, any successor by
merger or sale of all or substantially all assets) and permitted assigns.
12.7. Further Assurances. Employee shall execute and deliver all
instruments and other documents which are mutually and reasonably agreed to by
Employee and the Company to be necessary or appropriate to carry out the terms
of this Agreement. The Company shall pay or reimburse any expenses incurred by
Employee in connection with Employee's obligations under this Section 12.7.
12.8. Headings. The Section headings in this Agreement are for
convenience of reference only and shall not affect its interpretation.
12.9. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which when
together shall constitute one and the same agreement.
IN WITNESS WHEREOF, this Employment Agreement has been executed and
delivered by the parties hereto as of the date first above written.
EMPLOYER:
HOME DIRECTOR, INC.
By:_________________________________________
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Chairman
EMPLOYEE:
By:_________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Address: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Digital Interiors hereby joins this Agreement for the purposes of
terminating the Digital Interiors Employment Agreement pursuant to Section 12.2
of this Agreement.
DIGITAL INTERIORS, INC.
By:________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Secretary & Treasurer
11