Exhibit 10.9

 

SOCKET MOBILE, INC.
[FORM OF] EXECUTIVE EMPLOYMENT AGREEMENT

 

This Employment Agreement (the "Agreement") is entered into as of [Date], 2009
and is effective December 31, 2008 by and between Socket Mobile, Inc., a
Delaware corporation (the "Company"), and [Name of Executive] (the "Executive").

WHEREAS, the Company desires to continue to employ the Executive and the
Executive desires to be employed by the company upon the terms and conditions
set forth below.

WHEREAS, the Company and the Executive entered into an employment agreement
dated [INSERT DATE] (the "Prior Employment Agreement") which expired on December
31, 2008; and

WHEREAS, the Company and the Executive wish to renew the Prior Employment
Agreement and to restate the terms of Executive's Employment Agreement, in order
to come into documentary compliance with Section 409A of the Internal Revenue
Code of 1986, as amended (the "Code"), and any final regulations and official
guidance promulgated thereunder ("Section 409A"), as set forth below.

NOW THEREFORE, in consideration of the foregoing and of the respective covenants
and agreements set forth herein, the Company and Executive agree as follows:

1. Term of the Agreement. The Company hereby employs the Executive and the
Executive hereby accepts employment with the Company under this Agreement
commencing on the Effective Date and expiring on December 31, 2011 (the
"Employment Period") subject, however, to prior termination as provided pursuant
to Section 5 of this Agreement.

2. Duties and Obligations

       a. The Executive shall report to, and follow the instructions and wishes
of, the Company's Chief Executive Officer. [Substitute Chairman of the Board for
Chief Executive Officer for the CEO; substitute Chief Financial Officer for the
Vice President and Controller].

       b. The Executive agrees that to the best of his ability and experience,
he will at all times loyally and conscientiously perform all of the duties and
obligations required of and from him pursuant to the express and implicit terms
hereof.

3. Devotion of Entire time to the Company's Business

       a. During the term of his employment, the Executive shall, during regular
business hours, devote all of his attention, knowledge, skills, interests, and
productive time to the business of the Company, and the Company shall be
entitled to all of the benefits and profits arising from or incident to all
work, services, and advice of the Executive.

       b. During the term of his employment, the Executive shall not, directly
or indirectly, either as an employee, employer, consultant, agent, principal,
partner, stockholder, corporate officer, director, or in any other individual or
representative capacity, engage or participate in any business that is
competitive in any manner whatsoever with the business of the Company.

 

 

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4. Compensation and Benefits

       a. Compensation and Benefits. During the term of this Agreement, the
Company shall pay to the Executive a base annual salary not less than the
current base salary in effect, payable in equal semi-monthly installments in
accordance with the Company's payroll schedule. During the term of this
Agreement, the Executive shall be eligible for salary and merit increases in his
base salary as determined in the sole discretion of the Company's Board of
Directors.

       b. Variable Compensation. During the term of this Agreement, the
Executive is entitled to participate in the Company's Management Variable
Incentive Compensation Plan according to its terms as set by the Company's Board
of Directors.

       c. Insurance. The Executive shall be entitled to the prerequisites and
benefits generally available to the other executive employees and their families
through group insurance programs sponsored by the Company.

       d. Paid Time Off. The Executive shall be entitled to accrue paid time off
("PTO") in accordance with the Company's PTO policy applicable to all employees.

       e. Savings Plan. The Executive shall be entitled to the prerequisites and
benefits generally available to other executive employees through tax deferred
savings, pension and similar programs when and if sponsored by the Company.

5. Termination of Employment

       a. The Executive understands that either he or the Company may terminate
the employment relationship between them at any time, for any reason, with or
without Cause. For purposes of this Agreement, "Cause" for termination of
employment by the Company is defined as a determination in the sole discretion
of the Company's Board of Directors of the occurrence of any of the following:

 

 

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              i. Gross misconduct or fraud by the Executive;

              ii. Misappropriation of the Company's proprietary information by
the Executive;

              iii. Willful and continuing breach by the Executive of his duties
under this Agreement after the Company has given notice to the Executive thereof
and Executive has had 30 days in which to cure such breach.

       b. If at any time during the Employment Period, the Executive's
employment is terminated other than for Cause (as defined above) or death, or in
the event of the Executive's termination of employment due to Executive's
disability (as defined in Code Section 22(e)(3)), then, subject to any required
delay period as described in Appendix A, the Company shall provide to Executive
(or his beneficiary in the event of death) each of the following:

              i. The Executive's regular base salary for a period of three (3)
months plus one month for each completed two years of service up to a maximum of
six (6) months (the "Period"), payable on normal company paydays during the
Period. The Executive will be entitled to receive this payment regardless of
whether or not he secures other employment during the Period.

              ii. Except in the event of death, continued health insurance
benefits pursuant to COBRA until the earlier of either: (a) such time as the
Executive becomes eligible for health insurance benefits provided by another
employer; or (b) the expiration of the Period. The Executive agrees that should
he become eligible for health insurance benefits provided by another employer
during the Period, he will immediately provide written notice of such event to
the Company's Board of Directors.

              iii. For the quarter in which the Executive's employment is
terminated, he will receive the full variable compensation amount, pursuant to
the terms of the Management Variable Incentive Compensation Plan, to which he
would otherwise have been entitled had he remained employed with the Company
through such quarter. In addition, the Executive will receive one-half of the
bonus amount for the quarter following the Executive's termination, pursuant to
the terms of the Management Variable Incentive Compensation Program, to which he
would otherwise have been entitled had he remained employed with the Company
through such quarter. Any such bonus payments pursuant to this paragraph will be
paid in a lump-sum within thirty (30) days following the date of Executive's
termination of employment. The Executive understands that he is not entitled to,
nor will he receive, any further payout under the Management Variable Incentive
Compensation Program.

 

 

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              iv. Within thirty (30) days of the date of the termination without
Cause of the Executive's employment, and pursuant to mutual agreement between
the Company and the Executive, the Executive may purchase at book value certain
items of the Company property which were purchased by the Company for the use of
the Executive, which may include a personal computer, cellular phone, and other
similar items.

              v. Employee stock options granted to the Executive will cease
vesting as of the date of employment termination. The Executive shall have an
extended post-termination exercise period for vested options equal to the
greater of 25% of the total time employed by the Company not to exceed one year,
or 90 days. Addtionally, the option may not be extended beyond the later to
occur of the fifteenth day of the third month after the option exercise rights
would have otherwise expired (typically 90 days), or the end of the calendar
year during which the option exercise rights would have otherwise expired.
However, in no case shall the exercise period be extended beyond the expiration
date of the grant.

              The Executive understands that in the event his employment is
terminated for any reason, with or without Cause, after December 31, 2011, he is
not entitled to receive any of the benefits set forth in this Section 5(b).

       c. In the event of the termination of this Agreement for any reason, at
any time, with or without Cause, the Company agrees that it will pay to the
Executive all his accrued but unused PTO.

       d. In the event that following a change in control, defined as a change
in ownership involving more than 50 percent of the Company's outstanding common
stock, and the Executive is asked to move his principal place of employment by
more than 50 miles measured by road distance, the Executive may elect to resign
his employment within 30 days following the expiration of any Company cure
period (discussed below); provided, however, the Executive must first provide
written notice to the Company of this 50 mile relocation within 90 days of the
initial relocation request and a reasonable cure period of not less than 30 days
following the date of such notice. In the event of such a termination of
Executive's employment, the Executive will be entitled to receive all of the
benefits set forth under Section 5(b).

       e. In the event that the Company alters the Executive's reporting
structure at any time during the Employment Period so that the Executive does
not report directly to the Chief Executive Officer [substitute Chairman of the
Board for the CEO], the Executive may elect to resign his employment. In such
case, the Executive will be entitled to receive all of the benefits set forth
under Section 5(b). [This provision only applies to the contracts for the CEO,
Executive VP and CFO]. In accordance with the provisions of Section 409A,
severance paid under this section 5e will be subject to a six month delay
providing the Executive is deemed a "specified.employee" (e.g., key employee of
a public company) at the time of his or her termination.

 

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6. Governing Law. This Agreement shall be interpreted, construed, governed, and
enforced according to the laws of the State of Delaware.

7. Attorney's Fees. In the event of any arbitration or litigation concerning any
controversy, claim, or dispute between the parties arising out of or relating to
this Agreement or the breach or the interpretation hereof, the prevailing party
shall be entitled to recover from the losing party reasonable expense,
attorneys' fees, and costs incurred therein or in the enforcement or collection
of any judgment or award rendered therein. The "prevailing party" means the
party determined by the arbitrator or court to have most nearly prevailed, even
if such party did not prevail in all matters, not necessarily the one in whose
favor a judgment is rendered.

8. Arbitration. Any controversy between the parties hereto involving the
construction or application of any terms, covenants, or conditions of this
Agreement, or any claim arising out of or relating to this Agreement, except
with respect to prejudgment remedies, will be submitted to and be settled by
final and binding arbitration in San Jose, California, in accordance with the
rules of the American Arbitration Association then in effect, and judgment upon
the award rendered by the arbitrators may be entered in any court having
jurisdiction thereof.

9. Amendments. No amendment or modification of the terms or conditions of this
Agreement shall be valid unless in writing and signed by the parties hereto.

10. Severability. All agreements and covenants contained herein are severable,
and in the event any of them shall be held to be invalid or unenforceable, this
Agreement shall be interpreted as if such invalid agreements or covenants were
not contained herein.

11. Successors and Assigns. The rights and obligations of the Company under this
Agreement shall inure to the benefit of and shall be binding upon the successors
and assigns of the Company. The Executive shall not be entitled to assign any of
his rights or obligations under this Agreement.

12. Entire Agreement. This Agreement and the Proprietary Information and
Inventions Agreement signed by the Executive on joining the Company constitute
the entire agreement between the parties with respect to the employment of the
Executive and supersedes and replaces all prior or contemporaneous agreements
whether written or oral including, without limitation, the Prior Employment
Agreement.

 

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set
forth above.

EXECUTIVE: SOCKET MOBILE, INC.:             ____________________________________
[Name] ____________________________________
By:       ____________________________________
Its:

 

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Appendix A

Section 409A.

(a) Notwithstanding anything to the contrary in this Agreement, no severance
payable to the Executive, if any, pursuant to this Agreement, when considered
together with any other severance payments or separation benefits that are
considered deferred compensation under Section 409A of the Internal Revenue Code
of 1986, as amended (the "Code") and the final regulations and any guidance
promulgated thereunder ("Section 409A") (together, the "Deferred Payments") will
be payable until the Executive has a "separation from service" within the
meaning of Section 409A.

(b) Notwithstanding anything to the contrary in this Agreement, if the Executive
is a "specified employee" within the meaning of Section 409A at the time of the
Executive's termination of employment, then, if required, the Deferred Payments,
which are otherwise due to the Executive on or within the six (6) month period
following the Executive's termination will accrue, to the extent required,
during such six (6) month period and will become payable in a lump-sum payment
on the date six (6) months and one (1) day following the date of the Executive's
termination of employment or the date of the Executive's death, if earlier. All
subsequent Deferred Payments, if any, will be payable in accordance with the
payment schedule applicable to each payment or benefit. Each payment and benefit
payable under this Agreement is intended to constitute separate payments for
purposes of Section 1.409A-2(b)(2) of the Treasury Regulations.

(c) Any amount paid under the Agreement that satisfies the requirements of the
"short-term deferral" rule set forth in Section 1.409A-1(b)(4) of the Treasury
Regulations will not constitute Deferred Payments for purposes of clause (a)
above.

(d) Any amount paid under this Agreement that qualifies as a payment made as a
result of an involuntary separation from service pursuant to Section
1.409A-1(b)(9)(iii) of the Treasury Regulations that does not exceed the Section
409A Limit (as defined below) will not constitute Deferred Payments for purposes
of clause (a) above. For purposes of this Agreement, "Section 409A Limit" means
the lesser of two (2) times: (i) the Executive's annualized compensation based
upon the annual rate of pay paid to the Executive during the Company's taxable
year preceding the Company's taxable year of the Executive's termination of
employment as determined under Treasury Regulation 1.409A-1(b)(9)(iii)(A)(1) and
any Internal Revenue Service guidance issued with respect thereto; or (ii) the
maximum amount that may be taken into account under a qualified plan pursuant to
Section 401(a)(17) of the Internal Revenue Code for the year in which the
Executive's employment is terminated.

(e) The foregoing provisions are intended to comply with the requirements of
Section 409A so that none of the severance payments and benefits to be provided
hereunder will be subject to the additional tax imposed under Section 409A, and
any ambiguities herein will be interpreted to so comply. The Executive and the
Company agree to work together in good faith to consider amendments to this
Agreement and to take such reasonable actions which are necessary, appropriate
or desirable to avoid imposition of any additional tax or income recognition
prior to actual payment to you under Section 409A.

 

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