form10q062009ex10_4.htm


    
      EXHIBIT
10.4



      
        [IPASS
LETTERHEAD]



    

     

    May 20,
2009

     

     

    Steven
Gatoff

    


    Dear
Steven:

    


    I am
pleased to offer you employment in the position of Senior Vice President and
Chief Financial Officer at iPass Inc. (“iPass” or the “Company”), reporting to
me, under the terms set forth in this letter.  Your initial base
salary will be $10,416.67, paid semi-monthly, plus benefits, including the
option of participating in our 401(k) Plan.  If annualized, this base
salary amount equals $250,000.  As an exempt employee, you will not be
eligible for overtime compensation.

    


    In
addition, you will be eligible to earn a target annual bonus of $100,000 paid on
a quarterly basis consistent with the management bonus plan.  Bonuses
are only considered earned if the participant is an employee of iPass in good
standing on the last day of the fiscal quarter and has successfully completed
the quarterly objectives.  If you leave the Company for any reason
during the quarter, no pro-rata bonus shall be earned.  The Company
shall have the sole discretion to determine if you have met all of the
requirements for earning a bonus (including completion of the applicable
objectives) and, if so, the amount of the bonus payment.  If earned,
the bonus payments generally will be paid within forty-five (45) days following
the end of the Company’s fiscal quarter to allow the Company time to determine
bonus calculations.  Any bonus provided to you will be subject to
standard deductions and withholdings.

    


    Further,
subject to the approval of the
Board of Directors of iPass (the "Board"), you will be granted an option
to purchase 200,000 shares of iPass’ common stock, subject
to a four-year vesting schedule, at a purchase price equal to the
fair market value of the stock as of the date of grant (as determined by the
Board) under the iPass 2003 Equity Incentive Plan (the "Plan").  The
option will be governed by the terms of the Plan and your stock option
agreement.

    


    To assist
with your relocation, the Company will provide you with a Relocation Bonus of
$20,000 (subject to standard payroll deductions and withholdings), will also
arrange for the movement of your household goods, and will provide other
relocation assistance, subject to the terms and conditions outlined in the
attached Relocation Agreement.

    


    iPass
offers its employees health, dental, vision, life, AD&D, and short term and
long term disability insurance, and you will be eligible to participate in these
benefit plans in accordance with the terms and conditions of the applicable plan
documents.  The health and dental plans provide you with several
options regarding your care.  Please read the enclosed information
about the health and dental plan options available to you.  You may
call Mike Badgis with any questions about health insurance or any other iPass
benefits at (650) 232-4130.  iPass may modify your position, duties,
reporting relationship, office location, and compensation and benefits from time
to time in its discretion.

     

    In
addition, in the position of Senior Vice President and Chief Financial Officer,
you will be eligible to become a "Participant" under the Company's Executive
Corporate Transaction and Severance Benefit Plan (the "Executive Severance
Plan"), which provides specified severance benefits to certain eligible
executive employees of the Company in the event of qualifying employment
terminations, pursuant to the terms and conditions of the Executive Severance
Plan.  In order to become a Participant, you will need to sign and
return the enclosed Executive Severance Plan Participation Notice.

     

    This
offer is contingent upon the successful results of background and reference
checks, your execution of and compliance with the enclosed Proprietary
Information and Inventions Agreement and satisfactory proof of your right to
work in the United States.  You agree to assist as needed and to complete
any documentation at the Company’s request to meet these
conditions.  In addition, as a condition of your employment, you will
be required to abide by the Company’s policies and procedures, including but not
limited to the policies set forth in the Company’s Employee Handbook, as may be
in effect from time to time.  Employment with iPass is at the will of
each party, is not for a specific term and can be terminated by you or by the
Company at any time, with or without cause and with or without advance
notice.

     

    This
letter, along with your Proprietary Information and Inventions Agreement and the
Relocation Agreement, is the entire agreement between you and iPass concerning
your employment terms, and it supersedes any other agreements or promises made
to you by anyone, whether written or oral.  The terms of this letter
cannot be changed (except with respect to those changes expressly reserved to
the Company’s discretion herein) unless such changes are in writing and signed
by an authorized representative of iPass.  This offer is valid until
Wednesday, May 27, 2009 at 5:00 pm, at which time it will expire if you have not
returned this fully signed letter to the Company.

    


    Please
signify your acceptance of employment with the Company under the terms provided
in this letter by signing and dating below and returning this offer letter to
Mike Badgis at fax number (650) 232-0232.

    
 

    Steven,
your acceptance of our offer represents a unique opportunity for us both to grow
and succeed.  We all want to thank you in advance for your faith in
us, and for the commitment you have made to our common
vision.  Finally, we all look forward to working and building iPass
with you!

    


    Welcome
aboard,                                                                                  Understood
And Accepted

     

     

    /s/
Evan
Kaplan                                                                                     
/s/ Steven
Gatoff

    Evan L.
Kaplan                                                                               Steven
Gatoff

    President
& CEO

     

                                                      May
27, 2009            June
22, 2009    

                                            Date              Start
Date 06-22-09

    

      
        
           


        

        
           


          
            

          

        

        
           


        

      

May 20,
2009

    
      


      Steven
Gatoff

      


      RE:
Relocation Agreement

      


      Dear
Steven:

      


      To assist
you with your relocation, this letter (the “Agreement”) describes the relocation
benefits which iPass Inc. (the “Company”) is making available to you to aid in
your transition.

      


      
        	
                1.  

              	
                A
      Relocation Bonus (the “Bonus”) of $20,000. This Bonus payment will be
      subject to standard payroll deductions and withholding and will be paid in
      a lump-sum within ten (10) days of a mutually agreed upon date of
      relocation.  This Bonus payment is intended to assist with
      incidental expenses incurred during your relocation.  Please
      note that this Bonus is a general amount, and it is not intended to cover
      all expenses resulting from your relocation.  Any expenses
      incurred above this amount are your responsibility unless otherwise
      provided in this Agreement.

              


      

      


      
        	
                2.  

              	
                Movement
      of household goods, utilizing a Company-designated moving
      company.  The Company will provide for insurance, packing,
      shipment and unpacking of all normal household goods from your current
      residence to your new home.  The Company reserves the right to
      refuse reimbursement of any expenses considered outside the normal
      relocation.  Following is a partial list of expenses that will
      not be covered under this
Agreement:

              


      

      


      
        	
                a.  

              	
                Exclusive
      use of the moving van;

              


      

      
        	
                b.  

              	
                Shipment
      of perishables, combustible items and items which may cause damage to
      other goods;

              


      

      
        	
                c.  

              	
                Shipment
      of boats or recreational vehicles;

              


      

      
        	
                d.  

              	
                Shipment
      of bricks, cement, firewood, lumber or other heavy or bulky items which
      are of little value in relation to the cost of
  moving;

              


      

      
        	
                e.  

              	
                Disassembly
      and reassembly of portable spas or swimming
  pools;

              


      

      
        	
                f.  

              	
                Shipment
      of jewelry, precious stones, legal documents money in any form, stamp
      collections or firearms;

              


      

      
        	
                g.  

              	
                Shipment
      of outbuildings, storage sheds or
greenhouses;

              


      

      
        	
                h.  

              	
                Removal
      or installation of TV antennas, satellite dishes, carpeting, draperies and
      other items attached to walls;

              


      

      
        	
                i.  

              	
                Shipment
      of heavy equipment.

              


      

      


      
        	
                 
      

              	
                3.

              	
                The
      Company will either (as elected by the Company) pay directly to third
      parties or reimburse your reasonable expenses incurred for coach-class
      airfare, rental car and hotel costs (covering you, your spouse, and your
      dependent children) for up to two (2) house hunting trips to the San
      Francisco Bay Area (with each trip to be no longer than three (3) days in
      duration).  To be eligible for reimbursement or payment by the
      Company, both trips must be taken no later than August 31,
      2009.  In addition to reimbursement of actual costs for your
      house hunting trips, the Company will provide an additional payment equal
      to thirty percent (30%) of the amount reimbursed to you, to assist with
      the tax implications of these reimbursements.  The Company will
      also assist in your relocation by paying for the costs of 2-day
      comprehensive services provided by relocation specialists, The Right Move
      Group, to assist with your orientation to the Bay Area during one of your
      house hunting trips.

              


      

      


      
        	
                 
      

              	
                4.

              	
                The
      Company will reimburse your lease payments made by you during your
      employment with the Company on your Southern California residence, for up
      to a maximum of six (6) months of lease payments, beginning with your July
      lease payment.  The total monthly reimbursement amount that you
      are eligible to receive will be up to $5,000 for the lease payment (or
      your actual lease payment amount if less than $5,000) plus an additional
      thirty percent (30%) payment amount (up to a maximum of an additional
      $1,500 per month) to assist with the tax implications of these
      reimbursements.  Of course, if your lease expires prior to six
      (6) months, or your landlord relieves you of your lease payment
      obligations, then the Company’s reimbursements will
  cease.

              


      

      


      To
qualify for reimbursement or payment under this Agreement, all expenses incurred
by you (including but not limited to your monthly lease payments as discussed in
Category 4 above) or other costs must be fully documented (including receipts)
on a properly completed expense reimbursement report and otherwise comply with
the Company’s standard expense reimbursement policy and
practice.  Qualifying reimbursements will be paid to you no later than
sixty (60) days after receipt of the fully documented expense reimbursement
report.  In addition, you must remain an employee in good standing of
the Company as of the date that the cost or expense is incurred.

      


      In
consideration of these benefits, you hereby agree that if you voluntarily leave
the Company for any reason or are terminated involuntarily for cause (as defined
in the Company’s Executive Corporate Transaction and Severance Benefit Plan)
during the eighteen (18) month period directly following your date of hire then
you must repay: (A) the Bonus;  (B) the total cost of moving your
household goods to the Company at the time of termination; and (C) the total
gross amount of any reimbursements paid to you, or payments made by the Company
directly to third parties (including but not limited to The Right Move Group),
pursuant to Categories 3 and 4 above.  You hereby authorize the
Company to deduct any such amounts to be repaid from your final check, your
final vacation pay out or your final expense reimbursement.  Should
these payments be insufficient to reimburse the Company fully, you hereby agree
to pay the difference within fifteen (15) calendar days of your final day of
employment with the Company.

      


      Lastly,
please understand that all other terms and conditions of your employment remain
unchanged.

      


      If this
Agreement is acceptable to you, please sign below and return the signed original
to me.

      


      Sincerely,

       

       

      /s/ J. Michael
Badgis
J.
Michael Badgis

      Vice
President, Human Resources &

      Facilities
Management

      


      


      Understood
and Agreed:

      


      


      /s/
Steven Gatoff    May
27, 2009

      Steven
Gatoff          Date

       

      
        
           


        

        
           


          
            

          

        

        
           


        

      

EMPLOYEE
CONFIDENTIALITY AND INVENTIONS ASSIGNMENT AGREEMENT

     

    In
consideration of my employment or continued employment by iPass,
Inc. (“Company”),
and the compensation now and hereafter paid to me, I hereby agree as
follows:

     

    1. Confidentiality.

     

    1.1 Nondisclosure; Recognition of
Company’s Rights.  At all times during my employment and
thereafter, I will hold in confidence and will not disclose, use, lecture upon,
or publish any of Company’s Confidential Information (defined below), except as
such use is required in connection with my work for Company, or unless the Chief
Executive Officer (the “CEO”) of Company expressly
authorizes in writing such disclosure or publication.  I will obtain
the CEO’s written approval before publishing or submitting for publication any
material (written, oral, or otherwise) that relates to my work at Company and/or
incorporates any Confidential Information.  I hereby assign to Company
any rights I have or acquire in any and all Confidential Information and
recognize that all Confidential Information shall be the sole and exclusive
property of Company and its assigns.

     

    1.2 Confidential
Information.  The term “Confidential Information”
shall mean any and all confidential knowledge, data or information related to
Company’s business or its actual or demonstrably anticipated research or
development, including without limitation: (a) trade secrets, inventions, ideas,
processes, computer source and object code, data, formulae, programs, other
works of authorship, know-how, improvements, discoveries, developments, designs,
and techniques; (b) information regarding products, plans for research and
development, marketing and business plans, budgets, financial statements,
contracts, prices, suppliers, and customers; (c) information regarding the
skills and compensation of Company’s employees, contractors, and any other
service providers of Company; and (d) the existence of any business discussions,
negotiations, or agreements between Company and any third party.

     

    1.3 Third Party
Information.  I understand, in addition, that Company has
received and in the future will receive from third parties confidential or
proprietary information (“Third
Party Information”) subject to a duty on Company’s part to maintain the
confidentiality of such information and to use it only for certain limited
purposes.  During the term of my employment and thereafter, I will
hold Third Party Information in strict confidence and will not disclose to
anyone (other than Company personnel who need to know such information in
connection with their work for Company) or use, except in connection with my
work for Company, Third Party Information, unless expressly authorized by an
officer of Company in writing.

     

    1.4  No
Improper Use of Information of Prior

    Employers and
Others.  I represent that my employment by Company does not and
will not breach any agreement with any former employer, including any noncompete
agreement or any agreement to keep in confidence information acquired by me in
confidence or trust prior to my employment by Company.  I further
represent that I have not entered into, and will not enter into, any agreement,
either written or oral, in conflict herewith.  During my employment by
Company, I will not improperly use or disclose any confidential information or
trade secrets of any former employer or other third party to whom I have an
obligation of confidentiality, and I will not bring onto the premises of Company
or use any unpublished documents or any property belonging to any former
employer or other third party to whom I have an obligation of confidentiality,
unless consented to in writing by that former employer or person.  I
will use in the performance of my duties only information that is generally
known and used by persons with training and experience comparable to my own, is
common knowledge in the industry or otherwise legally in the public domain, or
is otherwise provided or developed by Company.

     

    2. Inventions.

     

    2.1 Inventions and Intellectual Property
Rights.  As used in this Agreement, the term “Invention” means any ideas,
concepts, information, materials, processes, data, programs, know-how,
improvements, discoveries, developments, designs, artwork, formulae, other
copyrightable works, and techniques and all Intellectual Property Rights
therein.  The term “Intellectual Property Rights”
means all trade secrets, copyrights, trademarks, mask work rights, patents and
other intellectual property rights recognized by the laws of any jurisdiction or
country.

     

    2.2 Prior Inventions.  I
agree that I will not incorporate, or permit to be incorporated, Prior
Inventions (defined below) in any Company Inventions (defined below) without
Company’s prior written consent. In addition, I agree that I will not
incorporate into any Company software or otherwise deliver to Company any
software code licensed under the GNU GPL or LGPL or any other license that, by
its terms, requires or conditions the use or distribution of such code on the
disclosure, licensing, or distribution of any source code owned or licensed by
Company.  I have disclosed on Exhibit A a complete list of all
Inventions that I have, or I have caused to be, alone or jointly with others,
conceived, developed, or reduced to practice prior to the commencement of my
employment by Company, in which I have an ownership interest or which I have a
license to use, and that I wish to have excluded from the scope of this
Agreement (collectively referred to as “Prior
Inventions”).  If no Prior Inventions are listed in Exhibit A, I warrant that
there are no Prior Inventions.  If, in the course of my employment
with Company, I incorporate a Prior Invention into a Company process, machine or
other work, I hereby grant Company a non-exclusive, perpetual, fully-paid and
royalty-free, irrevocable and worldwide license, with rights to sublicense
through multiple levels of sublicensees, to reproduce, make derivative works of,
distribute, publicly perform, and publicly display in any form or medium,
whether now known or later developed, make, have made, use, sell, import, offer
for sale, and exercise any and all present or future rights in, such Prior
Invention.

     

    2.3 Assignment of Company
Inventions. Subject to the section titled “Government or Third Party” and
except for Inventions that I can prove qualify fully under the provisions of
California Labor Code section 2870 and I have set forth in Exhibit A, I hereby assign and
agree to assign in the future (when any such Inventions or Intellectual Property
Rights are first reduced to practice or first fixed in a tangible medium, as
applicable) to Company all my right, title, and interest in and to any and all
Inventions (and all Intellectual Property Rights with respect thereto) made,
conceived, reduced to practice, or learned by me, either alone or with others,
during the period of my employment by Company.  Inventions assigned to
Company or to a third party as directed by Company pursuant to the section
titled “Government or Third Party” are referred to in this Agreement as “Company
Inventions.”

     

    2.4 Obligation to Keep Company
Informed.  During the period of my employment and for one (1)
year thereafter, I will promptly and fully disclose to Company in writing (a)
all Inventions authored, conceived, or reduced to practice by me, either alone
or with others, including any that might be covered under California Labor Code
section 2870, and (b) all patent applications filed by me or in which I am named
as an inventor or co-inventor.

     

    2.5 Government or Third
Party.  I also agree to assign all my right, title, and
interest in and to any particular Company Invention to a third party, including
without limitation the United States, as directed by Company.

     

    2.6 Enforcement of Intellectual Property
Rights and Assistance.  During the period of my employment and
thereafter, I will assist Company in every proper way to obtain and enforce
United States and foreign Intellectual Property Rights relating to Company
Inventions in all countries.  In the event Company is unable to secure
my signature on any document needed in connection with such purposes, I hereby
irrevocably designate and appoint Company and its duly authorized officers and
agents as my agent and attorney in fact, which appointment is coupled with an
interest, to act on my behalf to execute and file any such documents and to do
all other lawfully permitted acts to further such purposes with the same legal
force and effect as if executed by me.

     

    3. Records.  I
agree to keep and maintain adequate and current records (in the form of notes,
sketches, drawings and in any other form that is required by Company) of all
Inventions made by me during the period of my employment by Company, which
records shall be available to, and remain the sole property of, Company at all
times.

     

    4. Additional
Activities.  I agree that (a)
during the term of my employment by Company, I will not, without Company’s
express written consent, engage in any employment or business activity that is
competitive with, or would otherwise conflict with my employment by, Company,
and (b) for the period of my employment by Company and for one (l) year
thereafter, I will not, either directly or indirectly, solicit or attempt to
solicit any employee, independent contractor, or consultant of Company to
terminate his, her or its relationship with Company in order to become an
employee, consultant, or independent contractor to or for any other person or
entity.

     

    5. Return Of
Company Property. Upon termination of my employment or upon Company’s
request at any other time, I will deliver to Company all of Company’s property,
equipment, and documents, together with all copies thereof, and any other
material containing or disclosing any Inventions, Third Party Information or
Confidential Information of Company and certify in writing that I have fully
complied with the foregoing obligation.  I agree that I will not copy,
delete, or alter any information contained upon my Company computer before I
return it to Company.  I further agree that any property situated on
Company’s premises and owned by Company is subject to inspection by Company
personnel at any time with or without notice.  Prior to leaving, I
will cooperate with Company in attending an exit interview and completing and
signing Company’s termination statement.

     

    6. Notification
Of New Employer.  In the event that
I leave the employ of Company, I hereby consent to the notification of my new
employer of my rights and obligations under this Agreement, by Company’s
providing a copy of this Agreement or otherwise.

     

    7. General
Provisions.

     

    7.1 Governing Law and
Venue.  This Agreement and any action related thereto will be
governed, controlled, interpreted, and defined by and under the laws of the
State of California, without giving effect to any conflicts of laws principles
that require the application of the law of a different state. I hereby
expressly consent to the personal jurisdiction and venue in the state and
federal courts for the county in which Company’s principal place of business is
located for any lawsuit filed there against me by Company arising from or
related to this Agreement.

     

    7.2 Severability.  If
any provision of this Agreement is, for any reason, held to be invalid or
unenforceable, the other provisions of this Agreement will be unimpaired and the
invalid or unenforceable provision will be deemed modified so that it is valid
and enforceable to the maximum extent permitted by law.

     

    7.3 Survival.  This
Agreement shall survive the termination of my employment and the assignment of
this Agreement by Company to any successor-in-interest or other assignee and be
binding upon my heirs and legal representatives.

     

    7.4 At-Will Employment. I agree
and understand that nothing in this Agreement shall confer any right with
respect to continuation of employment by Company, nor shall it interfere in any
way with my right or Company’s right to terminate my employment at any time,
with or without cause and with or without advance notice.

     

    7.5 Notices. Each party must
deliver all notices or other communications required or permitted under this
Agreement in writing to the other party at the address listed on the signature
page, by courier, by certified or registered mail (postage prepaid and return
receipt requested), or by a nationally-recognized express mail
service.  Notice will be effective upon receipt or refusal of
delivery.  If delivered by certified or registered mail, any such
notice will be considered to have been given five (5) business days after it was
mailed, as evidenced by the postmark.  If delivered by courier or
express mail service, any such notice shall be considered to have been given on
the delivery date reflected by the courier or express mail service receipt. Each
party may change its address for receipt of notice by giving notice of such
change to the other party.

     

    


    7.6 Injunctive Relief. I
acknowledge that, because my services are personal and unique and because I will
have access to the Confidential Information of Company, any breach of this
Agreement by me would cause irreparable injury to Company for which monetary
damages would not be an adequate remedy and, therefore, will entitle Company to
injunctive relief (including specific performance).  The rights and
remedies provided to each party in this Agreement are cumulative and in addition
to any other rights and remedies available to such party at law or in
equity.

     

    7.7 Waiver. Any waiver or failure
to enforce any provision of this Agreement on one occasion will not be deemed a
waiver of any other provision or of such provision on any other
occasion.

     

    7.8 Export. I agree not to export,
directly or indirectly, any U.S. technical data acquired from Company or any
products utilizing such data, to countries outside the United States, because
such export could be in violation of the United States export laws or
regulations.

     

    7.9 Entire
Agreement.  The obligations pursuant to sections of this
Agreement titled “Confidentiality” and “Inventions” shall apply to any time
during which I was previously employed, or am in the future employed, by Company
as an independent contractor if no other agreement governs nondisclosure and
assignment of inventions during such period.  This Agreement is the
final, complete and exclusive agreement of the parties with respect to the
subject matters hereof and supersedes and merges all prior communications
between us with respect to such matters.  No modification of or
amendment to this Agreement, or any waiver of any rights under this Agreement,
will be effective unless in writing and signed by me and the CEO of
Company.  Any subsequent change or changes in my duties, salary or
compensation will not affect the validity or scope of this
Agreement.

     

    This
Agreement shall be effective as of the first day of my employment with
Company.

     

    
      	
              EMPLOYEE:

              I
      acknowledge that I have read and understand this agreement and have been
      given the opportunity to discuss it with independent legal
      counsel.

               

              /s/
      Steven Gatoff

              (Signature)

               

              By:       Steven Gatoff

              Title:    SVP and
      CFO

              Date:    June 22,
      2009

              Address:
      

            	
              COMPANY:

              Accepted
      and agreed:

               

               

              /s/ Tiffany
      Snyder

              (Signature)

               

              By:       Tiffany
      Snyder

              Title:    Director,
      HR

              Date:    June 22,
      2009

              Address:   3800 Bridge
      Parkway

                      Redwood
      Shore, CA  94065

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
A

     

    INVENTIONS

     

    1.           Prior Inventions
Disclosure.  The following is a complete list of all Prior
Inventions:

     

    þ None

     

    o See immediately
below:

     

    


     

    


     

    


     

    2.           Limited
Exclusion Notification.

     

    This is to
notify you in accordance with Section 2872 of the California Labor Code
that the foregoing Agreement between you and Company does not require you to
assign or offer to assign to Company any Invention that you develop entirely on
your own time without using Company’s equipment, supplies, facilities or trade
secret information, except for those Inventions that either:

     

    a.           Relate
at the time of conception or reduction to practice to Company’s business, or
actual or demonstrably anticipated research or development; or

     

    b.           Result
from any work performed by you for Company.

     

    To the
extent a provision in the foregoing Agreement purports to require you to assign
an Invention otherwise excluded from the preceding paragraph, the provision is
against the public policy of this state and is unenforceable.

     

    This
limited exclusion does not apply to any patent or Invention covered by a
contract between Company and the United States or any of its agencies requiring
full title to such patent or Invention to be in the United States.