EXHIBIT 10.33
EMPLOYMENT AGREEMENT dated as of January 2, 2004 between PATRIOT SCIENTIFIC
CORPORATION, a Delaware Corporation (the "Company"), and JAYANTA MAITRA (the
"Employee").
WITNESSETH:
1. TERM OF EMPLOYMENT.
The Company hereby agrees to employ the Employee and the Employee hereby agrees
to accept employment as Vice President of Engineering of the Company for a one
year period commencing January 2, 2004, or for such shorter period as may be
mutually agreed by the Company and the Employee (the "Employment Period'),
subject to the terms and conditions of this Agreement. In his capacity as Vice
President of Engineering of the Company, Employee will be responsible for the
general duties associated with his title including, but not limited to
researching, developing, testing, and monitoring the production of products
necessary to enable the Company to successfully market and sell its
microprocessor technology and other technology and/or such other management
duties on behalf of the Company as may be assigned to him from time to time by
the Chairman and Chief Executive Officer ("CEO") of the Company.
The Employee agrees that, during the Employment Period, he will serve the
Company faithfully and to the best of his abilities, devoting substantially all
his time, energy and skill to the activities of the Company and the promotion of
its interests. It is expressly understood that the Employee may devote a
reasonable amount of time to such charitable, civic and personal affairs as
shall not interfere with the obligations set forth in the preceding sentence.
The Employee agrees not to work for or participate in any business that competes
in any manner with the business of the Company during his emp1oyment with the
Company, including after hours, or on weekends, or during vacation time, even if
only organizational assistance or limited consultation is involved.
2. COMPENSATION AND BENEFIT PLANS
(a) The Employee shall receive a base salary during the Employment Period
which shall be payable in installments at such times as other employees are paid
but in any case at least monthly as follows: The Employee shall receive a gross
base salary of not less than ten thousand dollars ($10,920.00) per month for his
services as Vice President of Engineering. The base salary shall be subject to
other upward adjustments as shall be recommended by the Chairman and CEO of the
Company to the Board of Directors of the Company (the "Board") and as shall be
approved by the Board and Compensation Committee.
(b) The Employee is entitled, at the discretion of the Board of Directors
of the Company, to an Annual Incentive Bonus up to 50% of the total yearly base
compensation for the applicable year (the "Annual Incentive Bonus"). The Annual
Incentive Bonus payment will be based upon mutually agreed upon objectives and
levels of performance, if any, and shall otherwise be at the discretion of the
Board of Directors.
(c) The Employee shall be eligible to participate in all employee benefit
programs, if any, maintained by the Company, including, but not limited to,
group life insurance, medical, dental, retirement and pension plans, any
deferred compensation profit sharing plans, 401(k) savings plan, and other such
fringe benefits as are or may be available from time to time to senior Employees
of the Company, including without limitation a car allowance of $400 per month.
During the Employment Period, the Employee is entitled to 4 weeks vacation per
annum.
(d) The Company will pay or reimburse the Employee during the Employment
Period for all expenses normally reimbursed by the Company and reasonably
incurred by the Employee in furtherance of his duties hereunder and authorized
by the Company, including but not limited to, expenses of entertainment, travel,
meals, hotel accommodations and the like upon the submission of the Employee of
vouchers or an itemized list thereof and as may be required in order to permit
such payments as proper deductions for the Company under the Internal Revenue
Code of 1986 and the rules and regulations adopted pursuant thereto now or
hereafter in effect.
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3. STOCK OPTIONS.
(a) The Employee has been granted an option to purchase one hundred twenty
five thousand (125,000) shares of the Company's common stock on December
18, 2003 at the price of $.0345.
(b) The Stock Options will vest according to the following schedule:
1. 25% upon billings to customers of a minimum of $200,000 by the
Company
2. 50% upon billings to customers of total of $500,000 by the
Company
3. 100% upon billings to customers of a total of $750,000 by the
Company All stock options held by employee will vest
immediately prior to a Change in Control of the Company.
Subject to the approval of Company Compensation Committee.
4. TERMINATION OF EMPLOYMENT.
(a) The employment of the Employee hereunder shall automatically terminate
if the Employee shall die during the Term of Employment. The employment of
the Employee can be terminated for cause by the Company at its option only
for the following:
(1) The conviction of the Employee under state or federal law of a felony
or other crime, or the equivalent under foreign law; unless in any such
case Employee performed such act in good faith and in a manner reasonably
believed to be in or not opposed to the best interests of the Company;
(2) The material breach by Employee of any provision of the Agreement
which has not been cured pursuant to the provisions of Section 5 hereof;
or
(3) A determination or request by an appropriate regulatory authority that
the Employee be removed or disqualified from acting as an officer of the
Company.
(b) If the Employee's employment is terminated for other than cause by the
Company, then the Employee is entitled to severance payments equal to the
lesser of (1) two (2) months of the current base salary payable in a lump
sum payment on the last day of the thirty (30) day notice period or (2)
the remaining current base salary for the term of this agreement payable
in a lump sum payment on the last day of the thirty (30) day notice
period. In such event, the Employee shall have the right to continue
coverage, at his expense, under group life insurance, medical, and dental
healthcare plans of the Company by paying the applicable group premium(s)
as if the Employee were still employed; such right, if exercised within
thirty days after termination of employment, shall continue until the
Employee reaches the age of 65, at which time it shall terminate.
(c) The Employee shall have the right at his sole option to terminate his
employment at any time upon ninety (90) days written notice or for such
other notice period to be determined by the President and CEO in his sole
discretion.
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(d) If within twelve (12) months of a Change in Control, as that term is
defined herein, Employee's employment is terminated for other than cause
or Employee refused to accept or voluntarily resigns from a position other
than a Qualified Position, as that term is defined herein, Employee shall
receive severance compensation equal to twelve (12) months of his then
current base salary. A "Change in Control" means the acquisition, directly
or indirectly of more than .40% of the outstanding shares of any class of
voting securities of the Company by one person or one entity that is not
an existing shareholder as of the date of this Agreement, or a merger,
consolidation or sale of all or substantially all of the assets of the
Company, such that the individuals constituting the Board of the Company
immediately prior to such period shall cease to constitute a majority of
the Board, unless the election of each director who was not a director
prior thereto was approved by vote of at least two-thirds of the directors
then in office who were directors prior to such period. Notwithstanding
the foregoing, an acquisition of the requisite percentage of voting
securities in connection with a public offering of securities by the
Company for the primary purpose of providing capital resources to the
Company shall not be considered "Change in Control" for purposes of this
Section 4(d). "Qualified Position" is an Employee officer position with
the entity surviving the Change in Control with substantially the same
responsibilities as those held by the Employee on the date of the Change
in Control. Also, notwithstanding the foregoing, if the Company determines
that the amounts payable to Employee under this employment agreement, when
considered together within the other amounts payable to Employee as a
result of a Change in Control, cause such payments to be treated as excess
parachute payments within the meaning of Section 280G of the Internal
Revenue Code, the Company shall reduce the amount payable to Employee
under this Section 4(d) to an amount that will not subject Employee to the
imposition of tax under Section 4999 of the Internal Revenue Code;
provided, however, that this provision shall apply only to payments to be
made under this employment agreement and Employee by the Company.
5. NOTICE OF BREACH. The Company and the Employee agree that, prior to the
termination of the Employment Period by reason of any breach of any
provision, of the Agreement, the injured party will give the party in
breach written notice, specifying such breach and permitting the party in
breach to cure such breach within a period of thirty (30) days after
receipt of such notice, except a breach by Employee of provisions of
Section 7 of this Agreement shall not have a cure period.
6. INDEMNIFICATION.
(a) If; after the date of the commencement of the Employment Period, the
Employee is made a party or is threatened to be made a party to any
action, suit or proceeding, whether civil, criminal, administrative or
investigative (a "Proceeding"), by reason of the fact that he is or was a
director or officer of the Company or is or was serving at the request of
the Company as a director, officer, member, employee or agent of another
corporation or partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans, whether or not
the basis of such Proceeding is an alleged act or failure to act in an
official capacity as a director, officer, member, employee or agent, he
shall be indemnified and held harmless by the Company to the fullest
extent authorized by Delaware law, as the same exists or may hereafter be
amended, against all expense, liability and loss (including without
limitation, attorney's fees, judgments, fines and amounts paid or to be
paid in settlement) reasonably incurred or suffered by the Employee in
connection herewith, including, without limitation, payment of expenses
incurred in defending a Proceeding prior to the final disposition of such
Proceeding (subject to receipt of an undertaking by the Employee to repay
such amount if it shall ultimately be determined that the Employee is not
entitled to be indemnified by the Company under Delaware law), and such
indemnification shall continue as to the Employee even if he has ceased to
be a director, officer, member, employee or agent of the Company or other
enterprise and shall inure to the benefit of his heirs, executors and
administrators.
(b) The right of indemnification and the payment of expenses incurred in
defending a Proceeding in advance of its final disposition conferring in
this Section 6 shall not be exclusive of any other right that the Employee
may have or hereafter may acquire under any statute, provision of the
Certificate of Incorporation or Bylaws .of the Company, agreement, vote of
shareholders or disinterested directors or otherwise.
7. TRADE SECRETS OF THE COMPANY. PATENTS AND INVENTIONS.
(a) Except as required by the performance of the Employee's services to
the Company under the terms of this Agreement, neither the Employee or any
of his agents or representatives, shall, during his employment and for so
long afterwards as the pertinent information or data remain Confidential
Information, directly or indirectly, make use of; permit others to use,
divulge, disseminate, copy or otherwise disclose the Company's
Confidential Information and/or Inventions as defined by subparagraphs (i)
and (ii),. respectively.
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(i) "Confidential Information" means all information and material which is
proprietary to the Company, whether or not marked as "confidential" or
"proprietary" and which is disclosed to or obtained from the Company by
the Employee, which relates to the Company' past, present or future
research, development or business activities. Confidential Information is
all information or materials prepared by or for the Company and includes,
without limitation, all of the following: designs, drawings,
specifications, techniques, models, data, source code, object code,
documentation, diagrams, flow charts, research, development, processes,
systems, methods, machinery, procedures, "know-how", new product or new
technology information, formulas, patents, patent applications, product
prototypes, product copies, cost of production, manufacturing, developing
or marketing techniques and materials, cost of production, development or
marketing time tables, customer lists, strategies related to customers,
suppliers or personnel, contract forms, pricing policies and financial
information, volumes of sales, and other information of similar nature,
whether or not reduced to writing or other tangible form, and any other
Trade Secrets, as defined by subparagraph (iii), or non-public business
information. Confidential Information does not include any information
which (1) was in the lawful and unrestricted possession of the Employee
prior to its disclosure by the Company, (2) is or becomes generally
available to the public by acts other than those of the Employee after
receiving it, or (3) has been received lawfully and in good faith by the
Employee from a third party who did not derive it from the Company.
(ii) "Inventions" means and discoveries, concepts and ideas, whether
patentable or not, including but not limited to, processes, methods,
formulas, compositions, techniques, articles and machines, as well as
improvements thereof or "know-how" related thereto, relating at the time
of conception or reduction to practice to the business engaged in by the
Company or any actual or anticipated research or development by the
Company.
(iii) "Trade Secrets" shall mean any scientific or technical data,
information, design, process, procedure, formula or improvement that is
commercially available to the Company and is not generally known in the
industry.
Materials involving Confidential Information and Inventions are the
exclusive property of the Company and shall not be removed under any
circumstances from the premises of the Company where the work is being
carried on without prior written consent of the Company except when
consistent with the Company's normal business practices.
(b) The Employee agrees that any inventions made, conceived or completed
by him during the term of his employment, solely or jointly with others,
which are made with the Company's equipment, supplies, facilities or
Confidential Information, or which relate at the time of conception or
reduction to purpose of the invention to the business of the Company or
the Company's actual or demonstrably anticipated research and development,
or which result from any work performed by the Employee for the Company,
shall be the sole and exclusive property of the Company. The Employee
promises to assign such inventions to the Company. The Employee also
agrees that the Company shall have the right to keep such inventions as
trade secrets, if the Company chooses. The Employee agrees to assign to
the Company the Employee's rights in any other inventions where the
Company is required to grant those rights to the United States government
or any agency thereof. In order to permit the Company to claim rights to
which it may be entitled, the Employee agrees to disclose to the Company
in confidence all inventions which the Employee makes arising out of the
Employee's employment and all patent applications filed by the Employee
within one year after the termination of his employment.
(c) The Employee shall assist the Company in obtaining patents on all
inventions, designs, improvements and discoveries patentable by the
Company in the United States and in all foreign countries, and shall
execute all documents and do all things necessary to obtain letters
patent, to vest the Company with full and extensive title thereto, and to
protect the same against infringement by others.
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8. SEVERABILITY In the event that any provisions 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.
9. ASSIGNMENT. The rights of the Company (but not its obligations) under
this Agreement may, without the consent of the Employee, be assigned by
the Company to any parent, subsidiary, or a successor of the Company;
provided that such parent, subsidiary or successor acknowledges in writing
that it is also bound by the terms and obligations of this Agreement.
Except as provided in the preceding sentence, the Company may not assign
all or any of its rights, duties or obligations hereunder without the
prior written consent of the Employee. Except as provided for in Section
11 hereunder the Employee may not assign all or any of his rights, duties
or obligations hereunder without the prior written consent of the Company.
10. SURVIVAL OF CERTAIN PROVISIONS. The covenants and agreements set forth
in Paragraph 7 of this Agreement shall survive termination of the
Employee's employment and/or this Agreement, and shall remain in full
force and effect regardless of the cause of such termination.
11. BENEFICIARIES: REFERENCES. The Employee shall be entitled to select
(and change) a beneficiary or beneficiaries to receive any compensation or
benefit payable following the Employee's death, and may change such
election, in either case, by giving the Company written notice thereof. In
the event of the Employee's death or a judicial determination of his
incompetence, reference in this Agreement shall be deemed, where
appropriate, to refer to the Employee's beneficiary, estate, committee,
conservator or other legal representative.
12. NOTICES. All notices, requests, demands and other communications shall
be in writing and shall be defined to have been duly given if delivered or
if mailed by registered mail, postage prepaid;
(a) If to the Employee, addressed to him at the following address as may
be changed in writing from time to time:
Jayanta Maitra
14380 Marianopolis Way
San Diego, CA 92129
(b) If to the Company, addressed to:
Patriot Scientific Corporation
10989 Via Frontera
San Diego, CA 92127
or to such other address as any party may request by notice given as
aforesaid to the other parties hereto.
13. TITLES AND HEADINGS. Titles and heading to paragraphs hereof are for
the purposes of references only and shall in no way limit, define or
otherwise effect the provisions hereof
14. GOVERNING LAW. This Agreement is being executed and delivered and is
intended to he performed in the State of California, and shall be governed
by and construed in accordance with the laws of the State of California.
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14.5 ARBITRATION/SOLE REMEDY FOR BREACH OF AGREEMENT. In the event of any
dispute between the Company and the Employee concerning any aspect of the
employment relationship, including any disputes upon termination, all such
disputes shall be resolved by binding arbitration before a single neutral
arbitrator. The arbitrator shall be selected from the "American
Arbitration Association" The arbitration shall be held in San Diego,
California. The arbitrator is bound to rule only on whether or not there
has been a violation of the terms of this employment agreement and to
render an award, if any, that is consistent with the terms of this
employment agreement. Neither party to this employment agreement is
entitled to any legal recourse or rights or remedies other than those
provided within this employment agreement. The Employee's sole remedies,
are those set forth in this employment agreement. The arbitrator shall
determine a "prevailing party" and shall award such prevailing party (i)
attorney's fees and costs and (ii) the prevailing party's portion of the
costs of arbitration.
In the event of any dispute between the Company and the Employee
concerning any ownership, use or disclosure of the Company's Confidential
Information or other intellectual property, the requirement of arbitration
may be waived, at the Company's sole election, and any such dispute may be
brought before a court having jurisdiction of the matter.
15. COUNTERPARTS. This Agreement shall be executed simultaneously in two
or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument. It shall
not be necessary in making proof of this Agreement to produce or account
for more than one original counterpart.
16. ENTIRE AGREEMENT. This Agreement contains the entire agreement of the
parties hereto and may be modified or amended only by a written instrument
executed by the parties hereto. Effective on the first day of the
Employment Period, any prior employment agreements between the Company and
the Employee shall terminate.
17. GOOD FAITH. Each of the parties hereto agrees that he or it shall act
in good faith in all actions taken under this Agreement.
18. WAIVER. No waiver of any of the provisions of this Agreement shall be
deemed to he or shall constitute a waiver of any other provision of the
Agreement, whether or not similar, nor shall any waiver constitute a
continuing waiver. No waiver of any provision of this Agreement shall be
binding upon the parties hereto unless it is executed in writing by the
party making the waiver.
IN WITNESS WHEREOF, the parties hereto have executed the Agreement as of
the day and year first above written.
PATRIOT SCIENTIFIC CORPORATION
By:
/S/ J.E. WALLIN
---------------------------
J.E. Wallin, CEO
Employee:
/S/ JAYANTA MAITRA
---------------------------
Jayanta Maitra
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