CATC [LOGO] EXHIBIT 10.19
December 18, 2001
Mr. Jean-Louis Gassee
445 Lowell Avenue
Palo Alto CA 94301
Employment Offer
Dear Jean-Louis,
It has been a pleasure working with you over the past year as a member of the
CATC Board and I am pleased to be able to extend our working relationship to
include you as the leader of the CATC's management team. We are excited by the
opportunity to bring your leadership skills and depth of management experience
to the CATC team. Thus, in the name of CATC's Board of Directors, I would like
to extend to you an employment offer for the position of President and Chief
Executive Officer.
The terms and conditions of employment are defined in the attached Employment
Agreement document. To indicate your acceptance of CATC's offer, please sign and
date the employment agreement in the space provided and return it to me.
Jean-Louis, we are excited about you joining the CATC management team and look
forward to building a great company together. Congratulations!
Sincerely,
Dan Wilnai
Chairman of the Board of Directors
President & CEO
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CATC Jean-Louis Gassee--Offer of Employment Page 2
EMPLOYMENT AGREEMENT
Computer Access Technology Corporation, a corporation, (hereinafter known as
"CATC", or "the Company"), having its principal place of business at 2403 Walsh
Avenue, Santa Clara, California 95051-1302, is hiring Mr. Jean-Louis Gassee,
whose social security number is ###-##-#### (hereinafter referred to as
"Employee"), located at 445 Lowell Avenue, Palo Alto CA 94301, as a full time
employee, starting on January 4, 2002 ("Start Date"), under the following
conditions:
1. JOB DESCRIPTION
As President and Chief Executive Officer, reporting to the Company's Board of
Directors, Employee shall perform all business functions required by CATC,
including but not limited to:
1. Lead CATC's executive team to grow the business and increase shareholders'
value
2. Establish corporate strategy, set goals and objectives
3. Manage CATC's executive team in executing our corporate strategy
4. Cultivate strategic relations with key customers and corporate partners
5. Cultivate relations with the investment community
6. Instill and propagate CATC's values, continuing to provide an exciting,
challenging and enjoyable work environment that encourages teamwork and
personal growth and fosters productivity and excellence
By signing this Employment Agreement, you confirm to the Company that you have
no contractual commitments or other legal obligations that would prohibit you
from performing your duties for the Company.
2. COMPENSATION
2.1. Salary:
The Company will pay you a salary at the rate of $250,000 per year, payable in
accordance with the Company's standard payroll schedule. This salary has been
established as part of a total compensation package that has taken into account
the quantity of stock options to be granted to you, and will be subject to
review by the Compensation Committee of the Board pursuant to the Company's
executive compensation policies in effect from time to time.
2.2. Annual Incentive Bonus:
Employee will be eligible to be considered for an incentive bonus for each
fiscal year of the Company, beginning in 2002. The bonus (if any) will be
awarded based on objective or subjective criteria established by the
Compensation Committee of the Board. Within the first 60 days of employment,
CATC `s Board of Directors and Employee will jointly define a set of goals and
objectives for Employee for 2002. Upon successfully reaching these goals CATC
will pay Employee an achievement bonus of $100,000. The bonus for a fiscal year
will be paid after the Company's books for that year have been closed and will
be paid only if Employee is employed
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CATC Jean-Louis Gassee--Offer of Employment Page 3
by the Company at the time of payment. The determinations of the Compensation
Committee of the Board with respect to Employee's bonus will be final and
binding.
2.3. Stock Option:
When joining the company, Employee will have an option to purchase 1,600,000
shares of the Company's Common Stock in accordance with CATC's Stock Option
plan, subject to Board and Shareholders' approval. The exercise price per share
will be determined by the Compensation Committee of the Board after your
acceptance of this letter, but will be at least two business days prior to the
announcement of your joining the Company. The option will be subject to the
terms and conditions applicable to options granted under the Company's 2000
Stock Option Plan, as described in that Plan and the applicable Stock Option
Agreement.
The option will become exercisable under the following terms:
a. 1,037,500 shares will vest over time as follows - 1/4th after 12 months
and then 1/48th each month thereafter for 36 months, until fully vested
at the end of 48 months of continuous employment with the Company.
b. 187,500 shares will vest (i) after 60 months of continuous employment
with the Company, or (ii) when the Market Capitalization of CATC
reaches $200 Million, if Employee is employed by the Company at that
time.
c. 187,500 shares will vest (i) after 72 months of continuous employment
with the Company, or (ii) when the Market Capitalization of CATC
reaches $400 Million, if Employee is employed by the Company at that
time.
d. 187,500 shares will vest (i) after 84 months of continuous employment
with the Company, or (ii) when the Market Capitalization of CATC
reaches $600 Million, if Employee is employed by the Company at that
time.
3. BENEFITS
3.1. Health Care:
Medical, Dental, Vision, Life and Disability insurance plans are fully paid by
CATC for Employee and dependents.
3.2. Pension Plan:
CATC offers its employees a 401K retirement saving plan. The company provides
matching contributions to the plan at the discretion of its Board of Directors.
3.3. Time Off:
CATC recognizes the need for employees to enjoy time away from work to relax and
pursue personal activities. Employee is entitled to the following time off:
o 16 days paid PET (Personal Excused Time) for the first year of service (1.33
days per month accrual). One additional day per year of service up to
maximum of 26 days per year.
o Paid Holidays for all Holidays that CATC's offices are closed.
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Employee should schedule Employee's time off with Employee's supervisor,
providing reasonable notice so that both company and personal needs can be met.
4. EXPENSES
CATC shall reimburse Employee for actual travel expenses incurred while in a
travel status authorized in writing by CATC for reasonable amounts. Said
reimbursement to cover all proper expenses including motel bills, meals, and:
(1) Either the cost of transportation by common carriers; or
(2) A per-mile amount (following Government regulations) when
Employee's automobile is used; and
(3) Other incidental expenses
5. INVENTIONS, PATENT RIGHTS AND COPYRIGHTS
(a) Employee agrees that Employee will communicate to CATC's management all
inventions made or conceived by Employee in connection with the performance of
the work contemplated by this Agreement and that Employee will, without further
consideration, assign all right, title and interest in such inventions to CATC
and will assist CATC and its nominees in every proper way (entirely at CATC
expense) to obtain for its own benefit patents for such inventions in any and
all countries, the invention to be and remain the property of CATC and its
nominees, whether patented or not.
(b) Inventions referred to in the above paragraph means any invention,
improvement, or discovery (whether or not patentable) conceived or actually
reduced to practice either in the performance of the experimental,
developmental, or research work contemplated by this Agreement.
(c) Employee agrees that all writings produced by Employee under this contract
shall be the sole property of CATC and CATC shall have the exclusive right to
copyright such writings in any country or countries.
6. CATC's TRADE SECRETS
Employee agrees that Employee will not, either during or subsequent to the term
of this Agreement, directly or indirectly, divulge to unauthorized persons any
secret or confidential know-how or other information acquired through Employee's
association with CATC, including work in connection with any contract for any
department of the United States Government or other customer, and not known to
the industry or recognized as standard practice, whether acquired or developed
by Employee during the term of this Agreement or obtained from other employees;
and that Employee will not, either during or subsequent to the term of this
Agreement, directly or indirectly, publish or disclose to any third party any
such information without written authorization from CATC to do so, nor will
Employee use such information apart from CATC's business without the approval of
CATC.
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CATC Jean-Louis Gassee--Offer of Employment Page 5
7. TRADE SECRETS OF OTHERS
Employee represents that Employee's performance of all of the terms of this
Agreement and as an Employee to CATC does not and will not breach any agreement
to keep in confidence proprietary information, knowledge or data acquired by
Employee in confidence or in trust prior to Employee's execution of this
Agreement with CATC, and Employee will not disclose to CATC, or induce CATC to
use, any confidential or proprietary information or material belonging to any
previous employer or others. Employee agrees not to enter into any agreement
either written or oral in conflict herewith.
8. EMPLOYMENT TERMS
8.1. At-will Employment
If you accept this offer, your employment with CATC shall be "at-will." That
means that your employment is not for any specified period of time and can be
terminated by yourself or CATC for any or no particular reason or cause, and at
anytime, with or without advance notice. Furthermore, you can be promoted,
demoted, have your title, duties, compensation or other terms or conditions of
your employment changed with or without cause or notice at the will of CATC. The
"at-will" nature of your employment, as set forth above, cannot be changed
except in an express writing signed by the Compensation Committee of CATC.
8.2. Severance Benefits
(a) Termination. If Employee's employment terminates (i) at any time after
a waiting period of twelve (12) months from Start Date, or (ii) if Employee's
employment terminates at any time within twelve (12) months following a Change
of Control, then Employee shall be entitled to receive the following severance
benefits:
(i) Termination other than for Cause; Good Reason. If Employee's
employment is terminated by the Company other than for Cause or if Employee
terminates Employee's employment due to a Good Reason then, in addition to
paying the compensation and benefits already earned by and vested in Employee,
Company shall pay employee severance pay from the Company in an amount equal to
Employee's base salary for the twelve calendar month period immediately
preceding the Termination Date, and 50% of Employee's then unvested shares of
the stock option grant described in Section 2.3 will become fully vested and
exercisable as of the Termination Date. The Company shall pay Employee any
severance pay to which Employee is entitled pursuant to this Section in cash and
in full not later than thirty (30) calendar days following the Termination Date.
(A) Procedures. In the event Employee believes that the Company
has taken an action that constitutes Good Reason as defined in Section 9.(d),
Employee shall give written notice to the Company in writing setting forth the
basis for such belief. The Company shall have 30 days in which to take action,
restoring Employee to the position Employee was in prior to the Company taking
the action that constituted Good Reason. If the Company takes such action,
Employee shall not thereafter have the right to terminate employment for Good
Reason on account of the actions previously taken by Employee. If Employee fails
to notify the Company within 30 days of the events that constitute Good Reason,
Employee shall not thereafter have the right to terminate Employee's employment
for Good Reason based on those events.
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CATC Jean-Louis Gassee--Offer of Employment Page 6
(ii) Voluntary Resignation; Termination for Cause. If Employee's
employment terminates by reason of Employee's voluntary resignation (and not for
Good Reason), or if Employee is terminated for Cause, then Employee shall not be
entitled to receive severance or other benefits except for those (if any) as may
then be established under the Company's then existing severance and benefits
plans and practices or pursuant to other agreements with the Company.
(iii) Disability; Death. If the Company terminates Employee's
employment as a result of Employee's Disability, or such Employee's employment
is terminated due to the death of Employee, then Employee shall not be entitled
to receive severance or other benefits except for those (if any) as may then be
established under the Company's then existing severance and benefits plans and
practices or pursuant to other agreements with the Company.
(b) Other Termination. In the event Employee's employment is terminated for
any reason, (i) prior to the termination of the twelve (12) months waiting
period from Start Date or (ii) prior to the occurrence of a Change of Control or
(iii) after the twelve (12) months period following a Change of Control, then
Employee shall be entitled to receive severance and any other benefits only as
may then be established under the Company's existing severance and benefits
plans and practices or pursuant to other agreements with the Company.
Notwithstanding the foregoing, if Employee's employment is terminated for any
reason, other than those set forth in Sections 8.2(a)(ii) or (iii), during the
first twelve months of his employment, the Company shall pay Employee severance
pay in an amount equal to Employee's base salary until the earlier to occur of
(a) the Employee becomes employed elsewhere or (b) four (4) calendar months
elapse from the time of the Termination Date. Such severance pay shall be in
addition to payment by the Company of compensation and benefits already earned
by and vested in Employee as of the Termination Date.
9. DEFINITION OF TERMS
The following terms referred to in this Agreement shall have the following
meanings:
(a) Cause. For purposes of this Agreement, the term "Cause" is defined as
any one or more of the following occurrences:
(i) Employee's continued failure to perform Employee's duties and
responsibilities commensurate with the scope and stature of Employee's position
in good faith and to the best of Employee's ability for a period of 30 days
after written notice thereof from the Company to Employee; or
(ii) Employee's conviction by, or entry of a plea of guilty or nolo
contendere in, a court of competent and final jurisdiction for any crime which
constitutes a felony in the jurisdiction involved; or
(iii) Employee's commission of an act of fraud or misappropriation
of funds, whether prior or subsequent to the date hereof, upon the Company; or
(iv) Employee's breach of a material provision of this Agreement
or Employee's Confidential Information and Invention Assignment Agreement with
the Company; or
(v) Gross negligence by Employee in the scope of Employee's
services to the Company; or
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(vi) Employee's commencement of employment (as an employee or a
consultant) with another employer while Employee is an employee of the Company,
without the prior written consent of the Company; or
(vii) Material nonconformance with the Company's standard business
practices and policies generally, including but not limited to policies against
racial or sexual discrimination or harassment, delivered in writing to Employee.
(b) Change of Control. "Change of Control" means the occurrence of any of
the following events:
(i) Any "person" (as such term is used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended) other than Dan Wilnai, Peretz
Tzarnotzky or Philips Semiconductors (or any affiliate of any such person) is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under said Act),
directly or indirectly, of securities of the Company representing fifty percent
(50%) or more of the total voting power represented by the Company's then
outstanding voting securities; or
(ii) The shareholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least fifty percent (50%) of the total voting power
represented by the voting securities of the Company, such surviving entity or
the entity that controls such surviving entity outstanding immediately after
such merger or consolidation, or the stockholders of the Company approve a plan
of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all the Company's assets.
(c) Disability. "Disability" shall mean that Employee has been unable to
perform Employee's Company duties as the result of Employee's incapacity due to
physical or mental illness, and such inability, at least 26 weeks after its
commencement, is determined to be total and permanent by a physician selected by
the Company or its insurers and acceptable to Employee or Employee's legal
representative (such Agreement as to acceptability not to be unreasonably
withheld). Termination resulting from Disability may only be effected after at
least 30 days' written notice by the Company of its intention to terminate
Employee's employment. In the event that Employee resumes the performance of
substantially all of Employee's duties hereunder before the termination of
Employee's employment becomes effective, the notice of intent to terminate shall
automatically be deemed to have been revoked.
(d) Good Reason. "Good Reason" shall mean (i) without Employee's express
written consent, the significant reduction of Employee's duties, authority or
responsibilities, relative to Employee's duties, authority or responsibilities
as in effect immediately prior to such reduction, or the assignment to Employee
of such reduced duties, authority or responsibilities; (ii) a reduction by the
Company in the base salary of Employee as in effect immediately prior to such
reduction, unless such reduction is caused by Company's general business
conditions and Company reduces comparably the base salaries of all other members
of the executive team; or (iii) the relocation of Employee to a facility or a
location more than ninety (90) miles from Employee's then present location,
without Employee's express written consent.
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CATC Jean-Louis Gassee--Offer of Employment Page 8
(e) Termination Date. "Termination Date" shall mean (i) if Employee's
employment is terminated by the Company for Disability, thirty (30) days after
notice of termination is given to Employee (provided that Employee shall not
have returned to the performance of Employee's duties on a full-time basis
during such thirty (30)-day period), (ii) if Employee's employment is terminated
by the Company for any other reason, the date on which a notice of termination
is given; provided, however, that if within thirty (30) days after the Company
gives Employee notice of termination, Employee notifies the Company that a
dispute exists concerning the termination or the benefits due pursuant to this
Agreement, then the Termination Date shall be the date on which such dispute is
finally determined, either by mutual written agreement of the parties, or a by
final judgment, order or decree of a court of competent jurisdiction (the time
for appeal there from having expired and no appeal having been perfected), or
(iii) subject to Section 8.2 (a)(i)(A), if Employee's employment is terminated
by Employee for Good Reason, the date on which Employee delivers the notice of
termination required by such Section to the Company.
10. MISCELLANEOUS PROVISIONS
(a) Waiver. No provision of this Agreement shall be modified, waived or
discharged unless the modification, waiver or discharge is agreed to in writing
and signed by Employee and by an authorized officer of the Company (other than
Employee). No waiver by either party of any breach of, or of compliance with,
any condition or provision of this Agreement by the other party shall be
considered a waiver of any other condition or provision or of the same condition
or provision at another time.
(b) Whole Agreement. No agreements, representations or understandings
(whether oral or written and whether express or implied) which are not expressly
set forth in this Agreement have been made or entered into by either party with
respect to the subject matter hereof.
(c) Choice of Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
California as applied to agreements entered into and performed within California
solely by residents of that state.
(d) Withholding. All payments made pursuant to this Agreement will be
subject to withholding of applicable income and employment taxes.
11. EFFECTIVE DATE
This Agreement is effective as of December 18, 2001.
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12. ENTIRE AGREEMENT
This Agreement embodies the entire agreement and understanding which exists
among and between the parties relating to the subject matter. There are no
agreements, representations, warranties or statements with respect to the
subject matter hereof except as expressly set forth herein.
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| Computer Access Technology Corp. | Employee |
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| Signature: | Signature: |
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| Dan Wilnai, Chairman, President & CEO | Name: Jean-Louis Gassee |
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| Date: December 18, 2001 | Date December 18, 2001 |
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