Exhibit 10.1

 

INDEPENDENT CONTRACTING AGREEMENT

 

This Independent Contracting Agreement is entered into effective October 19,
2004 (“Effective Date”), by and between SigmaTel, Inc., having a principal place
of business at 3815 S. Capital of Texas Highway, Suite 300, Austin, Texas 78704
(“SigmaTel”), and Robert Derby, having a principal place of business at 208 S.
Park St., San Angelo, TX 76901 (“Derby”).

 

1. Scope of Work:

 

1.1 Derby shall, on a work for hire basis on behalf of SigmaTel, provide
consulting services relating to sales strategy, sales channels and such other
matters as may be assigned Derby from time to time by SigmaTel’s Chief Executive
Officer (such services are hereinafter collectively or individually referred to
as “Work”).

 

1.2 SigmaTel’s primary contact for Derby, who shall provide overall direction to
Derby in the performance of the Work, SigmaTel’s Chief Executive Officer.

 

2. Rights, Title, and Interest:

 

2.1. Derby hereby assigns to SigmaTel, its successors and assignees, all right,
title and interest in and to the Work, including, but not limited to, all rights
in and to any and all inventions, designs, source code, supporting
documentation, and any other tangible contributions to the Work that may be
generated pursuant to this Agreement; said assignment including, without
limitation, the following:

 

  (a) any copyrights and equivalent rights throughout the world that Derby may
possess or acquire, including all renewals and extensions of such rights that
may be secured under the laws now or hereafter in force and effect in the United
States of America or in any other country or countries;

 

  (b) all rights in and to any inventions, ideas, designs, concepts, techniques,
discoveries, or improvements, whether or not patentable, including but not
limited to all trade secrets, utility and design patent rights and equivalent
rights in and to such inventions and designs throughout the world regardless of
whether or not legal protection is sought for same;

 

  (c) the exclusive right to create derivative technology of the Work; and

 

  (d) a license under any current and future patents and copyrights owned or
licensable by Derby to the extent necessary to combine the Work, or derivative
technology thereof, created by or for SigmaTel, with any hardware and software.

 

2.2. At SigmaTel’s expense, Derby shall execute and deliver such instruments and
take such other action as may be requested by SigmaTel to perfect or protect
SigmaTel’s rights in the Work and to perfect the assignments effected by this
Section 2.

 

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3. Confidentiality:

 

In the course of performing its obligations pursuant to this Agreement, the
parties will be exposed to each other’s Confidential Information. Accordingly,
the parties agree to the following:

 

3.1. Confidential Information includes samples, schematics, test documentation,
product specification, supporting documentation, software, source code, binary
code, business plans, business forecasts, business strategies, product roadmaps,
technology roadmaps, and/or any related materials that provide the disclosing
party with a competitive advantage. Such Confidential Information may be
provided in an oral communication or in a written form that is marked or
identified as being confidential or proprietary. When the Confidential
Information is provided via an oral communication(s), each oral communication
will be reduced to written form to include only the germane points of the
Confidential Information within thirty (30)days of the oral disclosure and
marked with a statement identifying it as Confidential Information.

 

3.2. Receiving party agrees that it shall not disclose the Confidential
Information to any third party, unless in conformity with this Agreement, and
shall limit disclosure of the Confidential Information to its employees with a
reasonable “need to know” and shall take measures in accordance with industry
standards to protect the same from disclosure.

 

3.3. Both parties acknowledge that the confidentiality obligation under this
Agreement extends for a period of three (3) years beyond the date of termination
of this Agreement.

 

3.4. Derby shall use SigmaTel Confidential Information only for the purpose of
performing services on behalf of SigmaTel. Derby agrees that he shall not
reverse engineer, modify, or use the SigmaTel Confidential Information in any
other way than expressly stated herein. Derby agrees that he will not provide
services to a third party, where such services would cause Derby to disclose
SigmaTel Confidential Information while he has a confidentiality obligation to
SigmaTel.

 

3.5. The parties agree that all Confidential Information received is and will
remain the property of the disclosing party.

 

3.6. The receiving party’s obligation under this Section 3 shall terminate with
respect to certain Confidential Information only to the extent any of the
following apply to such Confidential Information:

 

  (a) The Confidential Information becomes known to the public without the fault
of the receiving party;

 

  (b) The Confidential Information is independently developed by the receiving
party’s employees, where the receiving party can show such employees did not
have access to nor were exposed to the Confidential Information;

 

  (c) The disclosing party provides the Confidential Information to a third
party without similar obligations of confidentiality;

 

  (d) The receiving party rightfully receives the Confidential Information
without obligation of confidentiality from a third party authorized to disclose
such information;

 

  (e) The receiving party is required by a court order issued by a court of
competent jurisdiction to disclose the Confidential Information, provided that
the receiving party gives prompt notice of such court order to the disclosing
party, and assists the disclosing party, at the disclosing party’s expense, with
securing whatever protections are available to preserve the secrecy of the
Confidential Information; or

 

  (f) the Confidential Information was rightfully known to the receiving party
without obligation of confidentiality prior to the execution of this Agreement.

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3.7. Derby shall not directly or indirectly cause or permit any Confidential
Information to be copied or reproduced unless such copy or reproduction is
necessary to fulfill the purposes of this Agreement. Any such copy shall be
marked “confidential” and, when appropriate, marked as “proprietary” to
SigmaTel. No other copies may be made without SigmaTel’s prior written consent.

 

3.8. Derby acknowledges that a breach by Derby of any provision of this Section
3 will cause SigmaTel irreparable harm that is difficult to reduce to monetary
damages and that, if SigmaTel is required to bring an action to enforce the
provisions of this Section 3, SigmaTel will be entitled to equitable relief,
including a preliminary injunction, in addition to any other remedies at law
available.

 

4. Non-Competition:

 

Derby agrees, for the term of this Agreement, to refrain from any activity that
would cause Derby to compete directly with SigmaTel for any product line in any
United States or any foreign market.

 

5. Compensation:

 

5.1. Subject to the provisions of Section 5.4 below, Derby shall be compensated
at the daily rate of $2,000 per day, billable and payable in  1/2 day minimum
increments.

 

5.2. Derby shall invoice SigmaTel on a monthly basis. Each invoice shall
indicate the number of days worked and the type of work performed.

 

5.3. Payment of Derby’s invoice shall be in accordance with SigmaTel’s standard
accounts payable policy.

 

5.4 Notwithstanding anything which could be construed to the contrary herein, in
no event shall Derby provide services to SigmaTel during any period of twelve
consecutive months which would require SigmaTel to pay compensation to Derby in
excess of $60,000 for that particular period of twelve consecutive months. If
Derby provides services to SigmaTel in any period of twelve consecutive months
which would, under the normal compensation arrangement adopted in this
Agreement, require SigmaTel to pay fees to Derby in excess of $60,000 for that
particular twelve month period, then SigmaTel’s liability to compensate Derby
for his services during that particular twelve month period is hereby limited to
an aggregate of $59,999. The purpose of this paragraph is to insure that Derby
maintains his status as an “Independent Director” of SigmaTel pursuant to
National Association of Securities Dealers (“NASD”) Rule 4200(a)(15). Derby and
SigmaTel agree that if Rule 4200(a)(15) is amended by the NASD to adopt
requirements for a director to maintain his status as an “Independent Director”
which differ from those requirements in effect on the date of this Agreement,
then the provisions of this paragraph will automatically be amended to be
consistent with the amended NASD requirements, such automatic amendment to this
Agreement to become effective on the effective date of such NASD Rule
4200(a)(15) amendments without any further action required by the parties to
this Agreement.

 

6. Term and Termination:

 

6.1. This Agreement shall begin on the Effective Date, and shall continue until
October 19, 2007 or until completion of the Work, whichever occurs first, unless
earlier terminated.

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6.2. Notwithstanding Section 6.1, either party may terminate this contract on
seven (7) days written notice to the other party, with or without cause.

 

6.3. Either party may suspend performance and/or terminate this Agreement
immediately upon written notice at any time if:

 

  (a) The other party is in material breach of any warranty, term, condition or
covenant of this Agreement, other than those contained in Sections 3, 4 and 7,
and fails to cure that breach within twenty (20) days after written notice
thereof; or

 

  (b) The other party is in material breach of Sections 3, 4, and/or 7.

 

6.4. In the event of termination or expiration of this Agreement for any reason,
Derby shall immediately cease performance of the Work and shall return all
SigmaTel Confidential Information, including all tangible contributions to the
Work produced thus far, including all Work in progress to SigmaTel within ten
(10) days. SigmaTel shall complete payment for all services performed by Derby
up until receipt of the notice of termination. The provisions of Sections 3, 4,
6.4, 7, 8, 9, and 10 shall survive any termination of this Agreement.

 

7. Warranty:

 

7.1. Derby hereby warrants and represents that he has full right and
authorization to use, license, and incorporate any third party intellectual
property that Derby incorporates into the Work. Derby also warrants and
represents that he will not in any way use or rely upon the confidential and/or
proprietary information of any third party without that party’s express, written
permission to do so in the course of creating the Work.

 

7.2. Derby hereby warrants and represents that he is free to enter into this
Agreement without encumbrance to any third party, including past employers,
regarding protection of proprietary and/or trade secret information. Derby shall
provide immediate notification to SigmaTel in the event that SigmaTel directs
Derby to undertake any activity that Derby reasonably believes will cause him to
violate any confidentiality obligations to third parties.

 

8. Independent Parties:

 

THIS IS AN AGREEMENT FOR INDEPENDENT CONTRACTING SERVICES. SIGMATEL PROVIDES NO
BENEFITS SUCH AS UNEMPLOYMENT INSURANCE, HEALTH INSURANCE OR WORKER’S
COMPENSATION INSURANCE TO DERBY.

 

SIGMATEL IS ONLY INTERESTED IN THE RESULTS OBTAINED BY DERBY. SIGMATEL WILL
MAKES ITS FACILITY AND EQUIPMENT AVAILABLE TO DERBY IF, AS AND WHEN NECESSARY.
HOWEVER, THE MANNER AND MEANS BY WHICH DERBY CHOOSES TO COMPLETE THE WORK ARE IN
DERBY’S SOLE DISCRETION AND CONTROL.

 

DERBY IS RESPONSIBLE FOR PAYMENT OF ALL FEDERAL, STATE AND LOCAL INCOME TAXES.

 

9. General:

 

9.1. All monetary values are in United States dollars, unless explicitly stated
otherwise. The laws of the state of Texas and of the United States of America
govern the terms of this Agreement. If any provision herein shall be held to be
invalid or unenforceable for any reason,

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such provisions shall, to the extent of such invalidity or unenforceability, be
severed, but without in any way affecting the remainder of such provision or any
other provision contained herein, all of which shall continue in full force and
effect. This Agreement will not be assignable by either party, by operation of
law, merger, or otherwise, without the prior written consent of the other party.
This Agreement, together with all exhibits referred to in it, is the sole and
complete statement of obligations of the parties and supercedes all prior oral
and written and all contemporaneous oral understandings, negotiations,
commitments, and proposals relating to the subject matter of this agreement. Any
changes hereto must be made in writing and signed by both parties. Neither party
shall be responsible for any failure to perform due to acts of God, war, riot,
embargoes, fire, floods, or similar events beyond the party’s control. Each
party shall immediately notify the other upon learning of any delay or impending
delay in its performance, or if at any time it learns of any facts which
indicate that such a delay could be likely.

 

9.2. The failure of either party to insist at any time upon the strict
performance of any of the terms of this Agreement or to exercise any option,
right, power or remedy contained in this Agreement is not a waiver of the right
or remedy for the future. The waiver of any breach of this Agreement does not
prevent a subsequent act, which would have originally constituted a breach or
violation, from having all the force and effect of an original breach or
violation. No express waiver affects any terms other than the ones specified in
the waiver and those only for the time and in the manner specifically stated.
Acceptance by SigmaTel of any Work that does not perform to agreed
specifications is not a waiver of the breach or the right to seek appropriate
remedies, and no waiver by SigmaTel of any of the terms of this Agreement is
effective unless expressed in writing and signed by SigmaTel.

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized representatives as of the Effective Date.

 

SigmaTel, Inc.   Robert Derby

By:

 

/s/ Alan D. Green

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By:

 

/s/ Robert T. Derby

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Name:

 

Alan D. Green

 

Name:

 

Robert T. Derby

Title:

 

Vice President & General Counsel