EXHIBIT 10.1
EMPLOYMENT
AGREEMENT
THIS AGREEMENT made as of
August 4, 2008 by and between SONIC FOUNDRY, INC., a Maryland
corporation having its principal offices at 222 West Washington
Avenue, Suite 775, Madison, Wisconsin 53703 (hereinafter referred
to as “Sonic Foundry”), and Mr. Robert M.
Lipps (hereinafter referred to as “Lipps”).
WITNESSETH
:
WHEREAS, Lipps has been serving is
Executive Vice President of Sales of Sonic Foundry; and
WHEREAS, Sonic Foundry desires to
continue to employ Lipps, and Lipps desires to continue to be
employed by Sonic Foundry; and
WHEREAS, Sonic Foundry and Lipps
desire to enter into an employment agreement that will confirm and
set forth the terms and conditions of Lipps’s continued
employment with Sonic Foundry.
NOW, THEREFORE, in consideration of
the mutual covenants hereinafter contained, the parties agree as
follows:
First : Employment
(a) Employment . Sonic
Foundry hereby confirms and agrees that Lipps will continue to
serve as Executive Vice President of Sales of Sonic Foundry. In his
capacity as Executive Vice President of Sales of Sonic Foundry,
Lipps shall report directly to Sonic Foundry’s Chief
Executive Officer.
(b) Lipps’s Acceptance
. Lipps hereby agrees to continue to serve as Executive Vice
President of Sales of Sonic Foundry.
Second : Term
Subject to the provisions governing
termination as hereinafter provided, the term of this Agreement
shall commence on the date hereof (the “Commencement
Date”) and shall continue until terminated pursuant to the
terms hereof.
Third : Compensation
(a) Base Compensation . For
all services rendered by Lipps under this Agreement, Sonic Foundry
shall pay Lipps a salary of $185,000 per year, payable in bi-weekly
installments in accordance with Sonic Foundry’s standard
payroll practices. The salary payable to Lipps may be adjusted by
Sonic Foundry at its sole discretion. Lipps’s annual salary,
as from time to time adjusted by Sonic Foundry, is hereinafter
referred to as “Base Compensation”.
(b) Bonus Plans . Lipps may
receive periodic performance bonuses as may be declared by the
Board of Directors of Sonic Foundry (or a duly constituted and
empowered committee thereof).
(c) Other Benefits . Lipps
shall receive such other incidental benefits of employment, such as
insurance, retirement plan, employee stock option plan
participation, and vacation, as are provided generally to Sonic
Foundry’s other salaried employees on the same terms as are
applicable to such other employees.
(d) Expenses . Lipps shall
also be reimbursed for all reasonable business expenses incurred in
connection with his employment, including a car allowance in the
amount of $700 per month.
Fourth : Extent of Services
Lipps agrees that he shall devote
sufficient skill, labor and attention to his employment with Sonic
Foundry in order to promptly and faithfully do and perform all
services pertaining to his position that are or may hereafter be
required of him by Sonic Foundry during the term of his employment
hereunder.
Fifth : Working Facilities
Lipps shall be furnished with
facilities and services reasonably suitable to his position and
adequate for the performance of his duties.
Sixth : Ownership and Disclosure of
Information
(a) Generally . The parties
acknowledge that Sonic Foundry and its affiliates (individually and
collectively, the “Companies”), have developed and
intend to continue the development of and to formulate, acquire and
use commercially valuable technical and non-technical information,
design and specification documents, concepts, technology, know-how,
improvements, proposals, patent applications, techniques, marketing
plans, strategies, forecasts, inventions (not limited by the
definition of an invention contained in the United States Patent
Laws), Trade Secrets (as defined in Sec. 3426.1(d) of the Uniform
Trade Secrets Act) and processes which are considered proprietary
by the Companies, particularly including, without limitation,
software, customer and supplier lists, books and records, computer
programs, pricing information and business plans (collectively, the
“Proprietary Information”). It is necessary for the
Companies to protect the Proprietary Information by patents or
copyrights or by holding it secret and confidential.
(b) Access to Proprietary
Information . The parties acknowledge that Lipps has access to
the Proprietary Information and that the disclosure or misuse of
such Proprietary Information could irreparably damage the Companies
and/or their respective clients or customers.
(c) Nondisclosure to others .
Except as directed by Sonic Foundry in writing or verbally, Lipps
shall not at any time during or after the term of his employment
(the “Term”) disclose any Proprietary Information to
any person whatsoever, examine or make copies of any reports or
other documents, papers, memoranda or extracts for use other than
in connection with his duties with
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Sonic Foundry or utilize for his own benefit or
for the benefit of any other party any such Proprietary Information
and will use reasonable diligence to maintain the confidential,
secret or proprietary character of all Proprietary Information,
provided, however, that Lipps may disclose any of such Proprietary
Information if compelled to do so by a court or governmental
agency, provided further, however, that to the extent allowed by
law, Lipps shall give Sonic Foundry three business days notice
prior to such disclosure.
(d) Property of Sonic Foundry
. Lipps agrees that any inventions, discoveries, improvements, or
works which are conceived, first reduced to practice, made,
developed, suggested by, or created in anticipation of, in the
course of or as a result of work done under this Agreement by Lipps
shall become the absolute property of Sonic Foundry. Lipps further
agrees that all such inventions, discoveries, improvements,
creations, or works, and all letters, patent or copyrights that may
be obtained therefore shall be the property of Sonic Foundry, and
Lipps agrees to do every act and thing requisite to vest said
patents or copyrights in Sonic Foundry without any other or
additional consideration to Lipps than herein expressed.
(e) Survivability . Lipps
acknowledges that his obligations hereunder shall continue beyond
the Term with respect to any Proprietary Information (as defined in
Article Sixth, paragraph (a) hereof) which came into his
possession during the Term.
Seventh : Sonic Foundry’s Right to Terminate
For Cause
(a) Cause . Sonic Foundry may
at any time during the term of this Agreement discharge Lipps for
“cause.” The term “cause” is defined herein
as Lipps’s (i) misappropriation of corporate funds,
fraud, embezzlement or other illegal conduct to the detriment of
Sonic Foundry, (ii) negligence in the execution of his
material assigned duties or Lipps’s voluntary abandonment of
his job for any reason other than disability; (iii) refusal or
failure, after not less than 20 days written notice that such
refusal or failure would constitute a default hereunder, to carry
out any reasonable and material direction from the Board of
Directors given to him in writing; (iv) conviction of a
felony; (v) material breach or violation of the terms of this
Agreement, which breach or violation shall not have been fully
cured (as determined by the Board of Directors acting in good
faith) by Lipps within 20 days after receipt of written notice of
the same from the Board of Directors; (vi) Lipps’s death
or disability (except that, in the event of Lipps’s
disability, Sonic Foundry shall, at Lipps’s request, prior to
discharge, grant Lipps a leave of absence of up to six months or
such longer period of time as may be required by law); or
(vii) Lipps’s engagement in drug or alcohol abuse. Lipps
shall be terminated only following a finding of “cause”
in a resolution adopted by majority vote of the Board of Directors
of Sonic Foundry.
(b) No Rights Following Cause
Termination . Following a termination of Lipps’s
employment with Sonic Foundry “for cause” pursuant to
paragraph (a) of this Article Seventh: (i) all rights and
liabilities of the parties hereto shall cease and this Agreement
shall be terminated (subject to the continuing obligations of Lipps
pursuant to Article Sixth and Tenth hereof); and (ii) Lipps
shall not be entitled to receive any severance benefits, salary,
other benefits or compensation of any kind (except for health
insurance continuation as required by COBRA, salary accrued through
the date of termination and accrued vacation pay as required by
law) either as consideration for his employment or in connection
with the termination of his employment. In the event that Lipps
asserts that his voluntary termination was actually a constructive
termination, Sonic Foundry
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