Exhibit 10.1
EXECUTION VERSION
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into
as of the 5th day of July, 2007, by and between Ulticom Inc., a New Jersey
corporation (together with its successors and assigns permitted under this
Agreement, the "Company"), and Xxxxx X. Xxxxxxx (the "Executive").
W I T N E S S E T H
WHEREAS, the Executive has been serving as the Company's President and
Chief Executive Officer since February 1, 2000;
WHEREAS, the Company desires to continue the employment of the
Executive as its President and Chief Executive Officer during the Term of
Employment (as hereinafter defined) by entering into this Agreement; and
WHEREAS, the Executive desires to enter into this Agreement and to
accept such continued employment, subject to the terms and provisions of this
Agreement;
NOW, THEREFORE, in consideration of the above premises and mutual
covenants contained herein and for other good and valuable consideration, the
receipt and sufficiency of which is mutually acknowledged, the Company and the
Executive (individually a "Party" and together the "Parties"), intending to be
legally bound, agree as follows:
1. Definitions.
(a) "Affiliate" shall mean, with respect to any party, an
entity that directly or indirectly, through one or more intermediaries,
controls, is controlled by or is under common control with such party.
(b) "Base Salary" shall mean the Executive's base salary as
determined in accordance with Section 4 below, including any applicable
increases.
(c) "Board" shall mean the Board of Directors of the Company.
(d) "Target Bonus" shall mean the annual bonus for which the
Executive is eligible, as described in Section 5 below.
(e) "Cause" shall mean with respect to events occurring either
prior to or during the Executive's Term of Employment a good faith
finding by the Company of:
(i) repeated failure by the Executive to carry out,
in all material respects, the reasonable and lawful directions
of the Board that are within the Executive's control and
consistent with the Executive's status as a senior executive
of the Company and his duties and responsibilities hereunder,
except for a failure that is attributable to the Executive's
illness, injury or Disability; or
(ii) a material violation by the Executive of any
Company policy or procedure provided to the Executive or
available on the Company's intranet resulting in material and
demonstrable harm to the Company including, without
limitation, a material violation of the Company's Code of
Business Conduct and Ethics; or
(iii) the Executive's unlawful possession, use, sale
or distribution of narcotics or other controlled substances;
or
(iv) Any willful misconduct or gross negligence by
the Executive in the scope of his employment by the Company
which in the reasonable judgment of the Board (A) could result
in the assessment of a civil or criminal penalty against
Executive or the Company or its affiliates, (B) could result
in a violation of any material foreign or United States
federal, State, or local law or regulation having the force of
law, or (C) is injurious to the Company or any of its
affiliates; or
(v) the Executive's conviction of, or plea of guilty
or no contest to, any felony or any misdemeanor involving
moral turpitude, or a material violation by the Executive of
federal or state securities laws as determined by a court or
other governmental body of competent jurisdiction; or
(vi) any intentional or negligent misrepresentation
by the Executive of a material fact to, or intentional or
negligent concealment by the Executive of a material fact
from, (A) the Board or (B) the general counsel, chief
financial officer or any other member of senior management of
the Company, where the misrepresentation or concealment
results in the reasonable judgment of the Board in material
and demonstrable harm to the Company (including, for example,
the Company's materially violating federal or state securities
laws); or
(vii) fraud, embezzlement, theft or material
dishonesty by the Executive against the Company or any of its
Affiliates; or
(viii) Any breach of Section 12 or 13 of this
Agreement; or
(ix) Executive's material breach of any provision of
the Agreement other than Section 12 or 13 (which breach is
covered by (viii) above)
provided that no finding of Cause hereof shall be effective unless and
until the Company has provided the Executive with written notice
thereof in accordance with Section 24 below stating in the case of
clauses (i), (ii), (vi), and (ix) above the facts and circumstances
underlying the finding of Cause and, if the basis for such finding of
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Cause is capable of being cured by the Executive, providing the
Executive with an opportunity to cure the same within thirty (30)
calendar days after receipt of such notice; and provided further that
for purposes of determining whether any such Cause is present, no act
or failure to act by the Executive shall be considered "willful" or
"intentional" if done or omitted to be done by the Executive in good
faith as determined by the Board in its sole discretion and in the
reasonable belief that such act or omission was not prohibited by law
or the Company's policies or procedures, in the best interest of the
Company and/or required by applicable law.
(f) "Change of Control" shall mean, in the event:
(i) any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934 (the "Exchange Act")) (a "Person"), other
than Comverse Technology, Inc. ("Comverse") or an affiliate
thereof, becomes the beneficial owner (within the meaning of
Rule 13d-3 promulgated under the Exchange Act), directly or
indirectly, of securities of the Company representing fifty
percent (50%) or more of the combined voting power of the
Company's then-outstanding securities; or
(ii) individuals who, on the Effective Date,
constitute the Board (the "Incumbent Board") cease for any
reason over a period of one (1) year to constitute a majority
of the number of directors then serving on the Board;
provided, however, that any new director whose appointment or
election by the Incumbent Board or nomination for election by
the Company's stockholders was approved or recommended by
Comverse or a vote of at least a majority of the directors
then still in office who either were directors on the
Effective Date, or whose appointment, election or nomination
for election was previously so approved or recommended, shall
be considered as though such person were a member of the
Incumbent Board; or
(iii) there is consummated a merger or consolidation
of the Company or any subsidiary with any other corporation
(in one or a series of related transactions), other than (A) a
merger or consolidation that would result in the voting
securities of the Company outstanding immediately prior to
such merger or consolidation continuing to represent (either
by remaining outstanding or by being converted into voting
securities of the surviving entity or any parent thereof) more
than fifty percent (50%) of the combined voting power of the
securities of the Company or such surviving entity or any
parent thereof outstanding immediately after such merger or
consolidation, or (B) a merger or consolidation effected to
implement a recapitalization of the Company (or similar
transaction) in which no Person, other than Comverse or an
affiliate thereof, is or becomes the beneficial owner,
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directly or indirectly, of securities of the Company
representing more than fifty percent (50%) or more of the
combined voting power of the Company's then-outstanding
securities; or
(iv) there is consummated one or more sales, leases,
exchanges, or other transfers (in one or a series of related
transactions) of all or substantially all of the Company's
assets, other than a sale, lease, exchange, or other transfer
of all or substantially all of the Company's assets to
Comverse or an affiliate thereof.
(g) "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and the regulations and rules promulgated
thereunder.
(h) "Compensation Committee" shall mean the Compensation
Committee of the Board or another committee of the Board that performs
the functions typically associated with a compensation committee.
(i) "Competitive Activity" shall mean the Executive's engaging
in an activity, whether as an employee, consultant, principal, member,
agent, officer, director, partner or shareholder (except for passive
investment(s) in one or more unrelated entities in which the Executive
is not personally involved in management or providing operating
direction to management, and that individually constitute less than
three percent (3%) of any class of such entity or entities' outstanding
securities) that is competitive with any business of the Company or any
entity controlled by the Company, conducted by the Company or such
entity at the date the Executive's employment ceases (or into which the
Company or such entity enters or re-enters during the one (1) year
period following termination of employment, if such business was
discussed in the Company's proposed business plans as a business line
into which the Company was considering entering and those proposed
business plans were in development and disclosed in good faith to the
Executive at least 30 days before the date on which he is provided with
or provides notice of termination); for the avoidance of doubt, a
business "is competitive with any business conducted by the Company or
any entity controlled by the Company" if such business offers or sells
products or services that are functionally equivalent to the products
or services sold by the Company or entity controlled by the Company.
(j) "Disability" shall mean the Executive's inability to
substantially perform his duties and responsibilities under this
Agreement for a period of (i) six (6) consecutive months or (ii) one
hundred eighty (180) calendar days in any twelve (12) month period, as
determined by a licensed physician selected by the Company and
reasonably acceptable to the Executive, provided that no finding of
Disability shall be made unless the Executive is also deemed disabled
pursuant to the Company's then-applicable long-term disability plan.
(k) "Effective Date" shall mean February 1, 2007.
(l) "Good Reason" shall mean, without the Executive's prior
written consent, the occurrence of any of the following events or
actions, provided that no finding of Good Reason shall be effective
unless and until the Executive has provided the Company, within sixty
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(60) calendar days of becoming aware of the facts and circumstances
underlying the finding of Good Reason, with written notice thereof in
accordance with Section 24 below stating with specificity the facts and
circumstances underlying the finding of Good Reason and, if the basis
for such finding of Good Reason is capable of being cured by the
Company, providing the Company with an opportunity to cure the same
within thirty (30) calendar days after receipt of such notice, provided
further that the Company shall not receive an opportunity to cure any
action taken in bad faith:
(i) a material and adverse change in the Executive's
status, title, position or responsibilities; or
(ii) any material failure by the Company to comply
with any of the provisions regarding the payment of
compensation or benefits to the Executive; or
(iii) any reduction in the Executive's Base Salary,
unless such reduction is in conjunction with a general Company
cost cutting program which includes employee salary reductions
generally; or
(iv) a relocation of the Company's principal
headquarters more than thirty-five (35) miles from Mount
Laurel, New Jersey or the assignment of the Executive as his
primary work location in any location other than the principal
headquarters.
(m) "Noncompetition/Nonsolicitation Period" shall mean the
period commencing on the Effective Date and ending eighteen (18) months
after the date of termination of the Executive's employment for any
reason.
(n) "Term of Employment" shall mean the period specified in
Section 2 below, as such period may be extended.
2. Term of Employment.
The Company hereby continues to employ the Executive, and the
Executive hereby accepts such continued employment, for the period of two (2)
years commencing on the Effective Date, subject to earlier termination of the
Term of Employment in accordance with the terms of this Agreement. This
Agreement and the Term of Employment shall be renewed automatically for
additional one (1) year periods on each anniversary of the Effective Date
thereafter, unless either Party notifies the other Party in writing of his or
its intention not to renew this Agreement not less than thirty (30) calendar
days prior to such expiration date or anniversary, as the case may be.
3. Position, Duties and Responsibilities; Reporting.
As of the Effective Date and continuing for the remainder of
the Term of Employment, the Executive shall be employed as the President and
Chief Executive Officer of the Company and provide his services primarily at the
Company's corporate headquarters in Mount Laurel, New Jersey. In this capacity,
the Executive shall be assigned only such duties and responsibilities as are
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appropriate for a person holding the offices set forth in this section. The
Executive shall serve the Company faithfully, conscientiously and to the best of
the Executive's ability and shall promote the interests and reputation of the
Company. Unless prevented by illness, injury or Disability, the Executive shall
devote all of the Executive's time, attention, knowledge, energy and skills,
during normal working hours and at such other times as the Executive's duties
may reasonably require, to the duties of the Executive's employment; provided,
however, that the Executive may (a) serve on civic or charitable boards or
committees; or (b) with the approval of the Board, serve on corporate boards or
committees. The Executive shall report solely to the Board in carrying out his
duties under this Agreement. During the Term of Employment, the Executive shall
serve on the Board, any committees of the Board, the boards of directors of
subsidiaries of the Company and any committees thereof without additional
compensation therefore.
4. Base Salary.
For the fiscal year that began February 1, 2007 (the "2007
fiscal year"), the Executive shall be paid a Base Salary of $325,000, payable in
accordance with the regular payroll practices of the Company. Beginning with the
2008 fiscal year, the Board or Compensation Committee shall review at least
annually the Executive's Base Salary and shall increase or maintain the Base
Salary at each such review by an amount as to which it shall have sole
discretion, provided, however, that Executive's Base Salary may be decreased if
such decrease is in conjunction with a general Company cost cutting program
which includes employee salary reductions generally.
5. Bonus.
The Executive shall be eligible for, but not automatically
entitled to, an annual performance bonus (the "Bonus") for each full fiscal year
during the Term of Employment, in such amount as the Board or the Compensation
Committee shall, in its sole discretion, determine. The Board or Compensation
Committee shall determine the Executive's Bonus based upon the Company's
performance measured against the revenue, gross profit and operating income
goals set forth in the budget for the applicable fiscal year, provided, however,
that in no event shall the Bonus exceed two hundred percent (200%) of Base
Salary for such year. The Target Bonus shall be sixty percent (60%) of Base
Salary for such year, plus for the 2007 fiscal year only, an additional $25,000.
Except as provided in Section 11 hereof, no Bonus shall be paid to the Executive
with respect to a fiscal year until forty five (45) days after a reasonable
annual budget for the Company with respect to the next fiscal year has been
submitted in good faith to the Board.
6. Equity Incentive Compensation Programs; 2006 Grant.
The Executive shall be eligible to participate in annual and
long-term equity incentive compensation programs applicable to senior-level
executives. The Board or the Compensation Committee may grant to the Executive
equity compensation awards in such amounts, in such form, and at such times, as
it shall, in its sole discretion, determine. The Board or Compensation Committee
shall determine Executive's equity compensation award, based on the Company's
performance measured against revenue, gross profit and operating income goals
set forth in the budget for the applicable fiscal year in the same manner in
which it determines Executive's Bonus as set forth in Section 5 above.
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7. Employee Benefit Programs.
During the Term of Employment, the Executive shall be entitled
to participate in all employee welfare and pension benefit plans, programs
and/or arrangements applicable to senior-level executives.
8. Reimbursement of Business Expenses.
During the Term of Employment, the Executive is authorized to
incur reasonable business expenses in carrying out his duties and
responsibilities under this Agreement, and the Company shall reimburse him for
all such reasonable business expenses incurred in connection with carrying out
the business of the Company, subject to documentation in accordance with the
Company's policy.
9. Perquisites.
During the Term of Employment, the Executive shall be entitled
to participate in the Company's executive fringe benefit programs applicable to
the Company's senior-level executives (if any) in accordance with the terms and
conditions of such arrangements as are in effect from time to time. During the
Term of Employment, the Company shall lease a car for the exclusive use of the
Executive at a total cost (including rent, taxes, down payment, and all of the
lease payments) not to exceed $999 per month, as adjusted upward by the
Compensation Committee from time to time to reflect changes in lease
availability and in related economic factors in its sole discretion. The Company
shall pay directly or reimburse the Executive for premiums for a supplemental
life insurance policy with a face amount equal to $1,000,000 less the face
amount of life insurance paid for by the Company in accordance with the plans
and policies of the Company as then in effect. The Company shall also pay for
reasonable legal fees and expenses incurred by the Executive in connection with
the negotiation and drafting of this Agreement.
10. Vacation.
The Executive shall be entitled to four (4) weeks paid
vacation.
11. Termination of Employment.
(a) Termination of Employment Due to Death. In the event of
the Executive's death during the Term of Employment, the Executive's
employment shall terminate as of the date of death and his estate
and/or beneficiaries, as the case may be, shall be entitled to the
following:
(i) payment of Base Salary earned but not paid prior
to the date of termination;
(ii) a pro-rata share of the Target Bonus the
Executive would have earned if he had remained employed
through the end of the fiscal year in which his death occurred
and the Bonus criteria had been fully achieved, with the
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pro-ration based on the portion of the fiscal year for which
he was employed;
(iii) all restrictions on restricted stock held by
the Executive shall lapse and all outstanding unvested stock
options, stock appreciation rights, tandem options, tandem
stock appreciation rights, performance shares, performance
units, or any similar equity share or unit held by the
Executive shall vest immediately, with any options having or
being amended to have an exercise period of one (1) year (or,
for purposes of Sections 11(b), (d) and (e), ninety (90) days)
from the date of termination, subject to any option plan
provisions relating to a change of control or similar event
and in any event limited to the initial ten (10) year term of
the options; provided, however, that, if necessary, such
exercise period shall be extended if permitted by Section 409A
until the exercise of the options would cease to violate any
federal or state securities laws (but not beyond the initial
ten (10) year term of the options);
(iv) payment of any amounts earned, accrued or owing
to the Executive but not yet paid under Sections 6 through 10
above; and
(v) payment or receipt of such other or additional
benefits, if any, as may be provided under applicable plans,
programs and/or arrangements of the Company.
(b) Termination of Employment Due to Disability. If the
Executive's employment is terminated due to Disability during the Term
of Employment by either the Company or the Executive, the Executive
shall be entitled to the following:
(i) the amounts and benefits provided in Section
11(a); and
(ii) payment of the Executive's costs associated with
COBRA health continuation benefits for himself and his family
for a period of up to eighteen (18) months, payable monthly
following the date of termination of the Executive's
employment; provided, however, that in the event the Executive
ceases to be eligible for such health insurance coverage, the
Executive shall notify the Company and the COBRA benefits
shall cease.
In no event shall a termination of the Executive's employment
for Disability occur unless the Party terminating the Executive's
employment provides written notice to the other Party in accordance
with Section 24 below.
(c) Termination of Employment by the Company for Cause. If the
Company terminates the Executive's employment for Cause during the Term
of Employment, the Executive shall be entitled to the following:
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(i) payment of Base Salary earned but not paid prior
to the date of the termination; and
(ii) payment of any amounts earned, accrued or owing
to the Executive as of the date of termination but not yet
paid under Sections 6 through 9 above.
In no event shall a termination of the Executive's employment
for Cause occur unless the Company, with the approval of the Board,
provides written notice to the Executive in accordance with Section 24
below.
(d) Termination of Employment by the Company Without Cause. If
the Executive's employment is terminated by the Company without Cause,
other than due to the Executive's death or Disability, the Executive
shall be entitled to the following:
(i) the amounts and benefits provided in Section
11(b); and
(ii) payment of an amount equal to the sum of (A) the
Executive's then-applicable Base Salary and (B) the Target
Bonus in the year in which the Executive's employment
terminates.
In no event shall a termination of the Executive's employment
without Cause occur unless the Company, with the approval of the Board,
provides written notice to the Executive in accordance with Section 24
below.
(e) Termination of Employment by the Executive for Good
Reason. The Executive may terminate his employment for Good Reason.
Upon the Executive's termination of his employment for Good Reason, the
Executive shall be entitled to the same payments and benefits as
provided in Section 11(d) above. In no event shall a termination of the
Executive's employment for Good Reason occur unless (i) the Executive
provides written notice to the Company in accordance with Section 24
below and (ii) the actual date of the termination of Executive's
employment occurs during the 100-day period immediately following the
date that the events or actions constituting Good Reason first occur.
Notwithstanding anything else to the contrary contained in this
Agreement, if (i) the Company takes an action that would constitute
Good Reason, (ii) at such time, the Company has pending an inquiry or
investigation that the Board reasonably and in good faith believes may
lead to a Cause termination of the Executive, and (iii) the Executive
tenders his resignation based on the Good Reason within the required
period for resigning, the Company may delay treating the resignation as
for Good Reason until the completion of the investigation or inquiry
and need not treat the resignation as based on Good Reason at such date
if it can then establish Cause. During the period of such inquiry or
investigation, Executive shall continue to be employed by the Company
and to receive his Base Salary and the benefits described or referenced
in Section 7 through 9 hereof, subject to the Company's right to
terminate the Executive for Cause at any time, subject further to the
notice and cure provisions in the definition of Cause, relating to the
inquiry or investigation or otherwise.
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(f) Termination of Employment by the Executive Without Good
Reason. If the Executive voluntarily terminates his employment without
Good Reason, other than a termination of employment due to the
Executive's death or Disability, the Executive shall be entitled to the
payment of Base Salary earned but not paid prior to the date of
termination.
The Executive must provide written notice to the Company in
accordance with Section 24 below at least sixty (60) calendar days
prior to the date of termination if he terminates without Good Reason.
(g) Termination by Notice of Nonrenewal by the Company. If the
Company terminates the Executive's employment by providing a notice of
nonrenewal in accordance with Section 2 above, the Executive shall not
be entitled to any additional payments or benefits as a result of such
termination. Executive shall be entitled to a severance payment in an
amount equal to the greater of 50% of the Bonus earned by the Executive
in the last full year of the Term of Employment or 50% of the average
of the Bonuses earned by the Executive over the Term of Employment
under this Agreement. The Executive shall also be entitled to those
payments and benefits he had accrued, earned or is owing at the date of
termination and those available under the Company policies or plan to
all employees whose employment with the Company is terminated. In no
event shall a termination of the Executive's employment by notice of
nonrenewal occur unless the Company, with the approval of the Board,
provides written notice to the Executive in accordance with Sections 2
and 24 herein, as applicable.
(h) Termination by Notice of Nonrenewal by the Executive. If
the Executive terminates his employment by providing a notice of
nonrenewal in accordance with Sections 2 and 24 herein, the Executive
shall not be entitled to any additional payments or benefits as a
result of such termination. Executive shall be entitled only to those
payments and benefits he had actually accrued, earned or is owing at
the date of termination and those available under the Company policies
or plan to all employees whose employment with the Company is
terminated.
(i) Termination of Employment Due to a Change of Control. If
the Executive's employment is terminated by the Company without Cause
or by the Executive for Good Reason within sixty (60) days before or
one (1) year after a Change of Control, the Executive shall be entitled
to the following:
(i) the amounts and benefits provided in Section
11(b); and
(ii) payment of an amount equal to 1.5 times the sum
of (A) the Executive's then-applicable Base Salary and (B) the
Target Bonus in the year in which the Executive's employment
terminates.
In no event shall a termination of the Executive's
employment without Cause occur unless the Company, with the
approval of the Board, provides written notice to the
Executive in accordance with Section 24 herein. The Executive
must provide written notice to the Company in accordance with
Section 24 below at least sixty (60) calendar days prior to
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the date of termination if he terminates without Good Reason.
(j) Timing of Payment. Any amounts due under this Section 11
shall be paid in a lump sum within thirty (30) calendar days following
the date of termination of the Executive's employment or earlier if
required by applicable law.
(k) No Mitigation; No Offset. In the event of any termination
of the Executive's employment under this Section 11, the Executive
shall be under no obligation to seek other employment and there shall
be no offset against amounts due the Executive under this Agreement on
account of any compensation attributable to any subsequent employment
that he may obtain. Notwithstanding anything to the contrary contained
in any severance or change-in-control plan, program, policy or
arrangement of the Company in which Executive is a participant, the
compensation and benefits payable under this Section 11 shall be the
sole and exclusive compensation and benefits payable to Executive upon
termination of employment.
(l) Return of Company Property. Promptly following the date of
any termination of the Executive's employment, the Executive or his
personal representative shall promptly return all Company property in
his possession, including, but not limited to, all computer equipment
(hardware and software), telephones, facsimile machines, PDAs and other
communication devices, credit cards, office keys, security access
cards, badges, identification cards and all copies (including drafts)
of any documentation or information (however stored) relating to the
business of the Company, its customers and clients or its prospective
customers and clients that is not publicly available.
(m) Nature of Payments. Any amounts due under this Section 11
are in the nature of payments considered to be reasonable by the
Company and are not in the nature of a penalty.
(n) Waiver and Release. As a condition precedent to receiving
the compensation and benefits provided under Sections 11(d), 11(e), or
11(g) (other than those already accrued under Sections 4 though 10
prior to the date of termination), the Executive shall have executed a
waiver and release substantially in the form attached to this Agreement
as Exhibit A and the seven (7) day revocation period set forth in
Section 6 of such release shall have expired.
12. Confidentiality; Assignment of Rights.
(a) During the Term of Employment and thereafter, the
Executive shall not disclose to any individual or entity or make use of
any trade secret or proprietary or confidential information of the
Company, including such trade secret or proprietary or confidential
information of any customer or other entity to which the Company owes
an obligation not to disclose such information, which he acquires
during the Term of Employment or prior thereto, including, but not
limited to, records kept in the ordinary course of business, except (i)
as such disclosure or use may be required or appropriate in connection
with his work as an employee of the Company, (ii) when required to do
so by a court of law, by any governmental agency having supervisory
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authority over the business of the Company or by any administrative or
legislative body (including a committee thereof) with apparent
jurisdiction to order him to divulge, disclose or make accessible such
information, (iii) as to such confidential information that becomes
generally known to the public or trade without his violation of this
Section 12(a), or (iv) as consented to by the Company.
(b) The Executive hereby sells, assigns and transfers to the
Company all of his right, title and interest in and to all inventions,
discoveries, improvements and copyrightable subject matter (the
"Rights") that during the Term of Employment or prior thereto are made
or conceived by him, alone or with others, and that relate to the
Company present or currently contemplated business or arise out of any
work he performs or proprietary or confidential information he receives
regarding the business of the Company while employed by the Company.
The Executive shall fully disclose to the Company as promptly as
possible all information known or possessed by him concerning the
Rights, and upon request by the Company and without any further
compensation in any form to him by the Company, but at the expense of
the Company, execute all applications for patents and for copyright
registrations, assignments thereof and other instruments and do all
things that the Company may deem reasonably necessary to vest and
maintain in it the entire right, title and interest in and to all such
Rights.
13. Noncompetition; Nonsolicitation.
(a) The Executive covenants and agrees that during the
Noncompetition/ Nonsolicitation Period he shall not at any time,
without the prior written consent of the Company, directly or
indirectly, engage in a Competitive Activity.
(b) The Executive covenants and agrees that during the
Noncompetition/ Nonsolicitation Period he shall not at any time,
directly or indirectly, solicit (i) any customer or client of the
Company or any subsidiary with respect to a Competitive Activity or
(ii) any employee of the Company or any subsidiary for the purpose of
causing such employee to terminate his or her employment with the
Company or such subsidiary.
(c) The Parties acknowledge that in the event of a breach or
threatened breach of Sections 12, 13(a) and/or 13(b) above, the Company
will be irreparably harmed and shall not have an adequate remedy at
law. Accordingly, in the event of any breach or threatened breach of
Sections 12, 13(a) and/or 13(b) above, the Company shall be entitled,
without the necessity of posting a bond, to such equitable and
injunctive relief as may be available from any court of competent
jurisdiction to restrain the Executive and any business, firm,
partnership, individual, corporation or entity participating in the
breach or threatened breach from the violation of the provisions of
Sections 12, 13(a) and/or 13(b) above. Nothing in this Agreement shall
be construed as prohibiting the Company from pursuing any other
remedies available at law or in equity from any court of competent
jurisdiction for breach or threatened breach of Sections 13(a) and/or
13(b) above, including the recovery of damages.
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14. Assignability; Binding Nature.
This Agreement shall be binding upon and inure to the benefit
of the Parties and their respective successors, agents, heirs (in the case of
the Executive) and assigns. No rights or obligations of the Company under this
Agreement may be assigned or transferred by the Company except that such rights
or obligations may be assigned or transferred pursuant to any merger or
consolidation in which the Company is not the continuing entity, or the sale or
liquidation of all or substantially all of the assets of the Company; provided,
however, that the assignee or transferee is the successor to all or
substantially all of the assets of the Company and such assignee or transferee
assumes the liabilities, obligations and duties of the Company, as contained in
this Agreement, either contractually or as a matter of law. The Executive may
not assign his rights or delegate his duties or obligations under this
Agreement.
15. Representation.
The Company represents and warrants that it is fully
authorized and empowered to enter into this Agreement and that the performance
of its obligations under this Agreement will not violate any agreement between
it and any other person, firm or organization. The Executive represents and
warrants that no agreement exists between him and any other person, firm or
organization that would be violated by the performance of his obligations under
this Agreement.
16. Entire Agreement.
This Agreement contain the entire understanding and agreement
between the Parties concerning the subject matter hereof and supersedes, merges
and voids all prior agreements, understandings, discussions, negotiations and
undertakings, whether written or oral, between the Parties with respect to the
Executive's employment by the Company; provided, however, that all stock options
and/or restricted stock awarded to the Executive prior to the Effective Date and
all agreements relating thereto shall remain in full force and effect in
accordance with their terms except as otherwise modified herein.
17. Amendment or Waiver.
No provision in this Agreement may be amended unless such
amendment is agreed to in writing and signed by the Executive and an authorized
officer of the Company. No waiver by either Party of any breach by the other
Party of any condition or provision contained in this Agreement to be performed
by such other Party shall be deemed a waiver of a similar or dissimilar
condition or provision at the same or any prior or subsequent time unless such
waiver, by its express terms, so provides. Any waiver must be in writing and
signed by the Executive or an authorized officer of the Company, as the case may
be.
18. Withholding.
The Company may withhold from any amounts payable under this
Agreement such federal, state and local taxes as may be required to be withheld
pursuant to any applicable law or regulation.
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19. Severability.
In the event that any provision or portion of this Agreement
shall be determined by a court of competent jurisdiction to be invalid or
unenforceable for any reason, in whole or in part, the remaining parts, terms or
provisions of this Agreement shall be unaffected thereby and shall remain in
full force and effect to the fullest extent permitted by law.
20. Survivorship.
The respective rights and obligations of the Parties hereunder
shall survive any termination of the Executive's employment to the extent
necessary to preserve such rights and obligations.
21. Controlling Document.
If any provision of any agreement, plan, program, policy,
arrangement or other written document between or relating to the Company and the
Executive conflicts with any provision of this Agreement, the provision of this
Agreement shall control and prevail.
22. Beneficiaries/References.
The Executive shall be entitled, to the extent permitted under
any applicable law, to select and change a beneficiary or beneficiaries to
receive any compensation or benefit payable hereunder following the Executive's
death by giving the Company written notice thereof. In the event of the
Executive's death or a judicial determination of his incompetence, reference in
this Agreement to the Executive shall be deemed, where appropriate, to refer to
his beneficiary, estate or other legal representative.
23. Governing Law/Jurisdiction.
This Agreement shall be governed by and construed and
interpreted in accordance with the laws of the State of New Jersey without
reference to principles of conflict of laws. The Parties agree that any suit,
action or other legal proceeding that is commenced to resolve any matter arising
under or relating to any provision of this Agreement shall be commenced only in
a court of the State of New Jersey (or, if appropriate, a federal court located
within the State of New Jersey), and the Parties consent to the jurisdiction of
such court.
24. Notices.
All notices shall be in writing, shall be sent to the
following addresses listed below using a reputable overnight express delivery
service, and shall be deemed to be received one (1) calendar day after mailing:
If to the Company: 0000 Xxxxxx Xxxx
Xxxxx Xxxxxx, Xxx Xxxxxx
Attention: General Counsel
If to the Executive: at the address listed on the
Company's payroll records for the
Executive's state of residency for
income tax purposes.
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25. Headings.
The headings of the sections contained in this Agreement are
for convenience only and shall not be deemed to control or affect the meaning or
construction of any provision of this Agreement.
26. Compliance with Code Section 409A.
(a) If any payment, compensation or other benefit provided to
the Executive in connection with his employment termination is
determined, in whole or in part, to constitute "nonqualified deferred
compensation" within the meaning of Section 409A and the Executive is a
specified employee as defined in Section 409A(a)(2)(B)(i), no part of
such payments shall be paid before the day that is six (6) months plus
one (1) day after the date of termination (the "New Payment Date"). The
aggregate of any payments that otherwise would have been paid to the
Executive during the period between the date of termination and the New
Payment Date shall be paid to the Executive in a lump sum on such New
Payment Date. Thereafter, any payments that remain outstanding as of
the day immediately following the New Payment Date shall be paid
without delay over the time period originally scheduled, in accordance
with the terms of this Agreement.
(b) The Parties acknowledge and agree that the interpretation
of Section 409A and its application to the terms of this Agreement is
uncertain and may be subject to change as additional guidance and
interpretations become available. Anything to the contrary herein
notwithstanding, all benefits or payments provided by the Company to
the Executive that would be deemed to constitute "nonqualified deferred
compensation" within the meaning of Section 409A are intended to comply
with Section 409A. If, however, any such benefit or payment is deemed
to not comply with Section 409A, the Company and the Executive agree to
renegotiate in good faith any such benefit or payment (including,
without limitation, as to the timing of any severance payments payable
hereof) so that either (i) Section 409A will not apply or (ii)
compliance with Section 409A will be achieved.
(c) If any Company stock options granted to the Executive
prior to the date hereof are determined to have been granted at a per
share exercise price that was less than the fair market value of a
share of the Company's stock as of the relevant grant date within the
meaning of Section 409A (any such options, "Discount Options") and such
Discount Options are subject to the additional 20% tax imposed by
Section 409A(a)(1)(B) or any interest or penalties with respect to such
taxes (such interest and penalties are collectively referred to as the
"Section 409A Penalties"), then the Company will promptly pay to the
Executive an additional amount (a "Gross-Up Payment") such that the net
amount the Executive retains after paying any applicable Section 409A
Penalties and any federal, state or local income or FICA taxes on such
Gross-Up Payment shall be equal to the amount the Executive would have
received if the Section 409A Penalties were not applicable to the
Discount Options. All determinations of the Section 409A Penalties and
Gross-Up Payment, if any, will be made by tax counsel or other tax
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advisers designated by the Company and reasonably acceptable to the
Executive. For purposes of determining the amount of the Gross-Up
Payment, if any, the Executive will be deemed to pay federal income tax
at the highest marginal rate of federal income taxation in the calendar
year in which the Section 409A Tax is paid and state and local income
taxes at the highest marginal rate of taxation in the state and
locality of the Executive's residence on the date the Section 409A Tax
is paid, net of the maximum reduction in federal income taxes that
could be obtained from deduction of such state and local taxes. If a
final nonappealable determination is made by the appropriate taxing
authority or court of the amount of Section 409A Penalties, and such
409A Penalties exceed the amount taken into account hereunder in
calculating the Gross-Up Payment (including by reason of any payment
the existence or amount of which cannot be determined at the time of
the Gross-Up Payment), the Company must make another Gross-Up Payment
with respect to such excess (plus any interest, penalties or additions
payable by the Executive with respect to such excess) within ten (10)
calendar days immediately following the date that the amount of such
excess is so determined. The Company and the Executive must each
reasonably cooperate with the other in connection with any
administrative or judicial proceedings concerning the existence or
amount of liability for Section 409A Penalties with respect to the
Discount Options, provided, however, that the Company shall assume
control over any such proceedings and Executive shall not voluntarily
agree to any determination in connection with such proceeding without
the prior written consent of the Company.
27. Counterparts.
This Agreement may be executed in two or more counterparts,
and such counterparts shall constitute one and the same instrument. Signatures
delivered by facsimile shall be deemed effective for all purposes to the extent
permitted under applicable law.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first written above.
ULTICOM INC.
By: /s/ Xxxxx Xxxxxxxx
------------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Senior Vice President
/s/ Xxxxx X. Xxxxxxx
------------------------------------------
Xxxxx X. Xxxxxxx
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EXHIBIT A
RELEASE
This RELEASE ("Release") is dated as of ____________________ between
Ulticom Inc., a New Jersey corporation (the "Company"), and Xxxxx X. Xxxxxxx
(the "Executive").
WHEREAS, the Company and the Executive previously entered into an
employment agreement dated June __, 2007 under which the Executive was employed
to serve as the Company's President and Chief Executive Officer (the "Employment
Agreement"); and
WHEREAS, the Executive's employment with the Company (has been) (will
be) terminated effective __________________; and
WHEREAS, pursuant to Section 11 of the Employment Agreement, the
Executive is entitled to certain compensation and benefits upon such
termination, contingent upon the execution of this Release;
NOW, THEREFORE, in consideration of the premises and mutual agreements
contained herein and in the Employment Agreement, the Company and the Executive
agree as follows:
1. The Executive, on behalf of his heirs, estate and beneficiaries,
hereby waives all claims against the Company, and any of its subsidiaries or
affiliates, and each past or present officer, director, agent, employee,
shareholder, and insurer of any such entities, from liability for any claims or
damages the Executive may have against it or them as of the date this Release is
executed, whether known or unknown, including, but not limited to, any alleged
violation of the Age Discrimination in Employment Act, as amended, the Older
Worker Benefits Protection Act; Title VII of the Civil Rights of 1964, as
amended; Sections 1981 through 1988 of Title 42 of the United States Code; the
Civil Rights Act of 1991; the Equal Pay Act; the Americans with Disabilities
Act; the Rehabilitation Act; the Family and Medical Leave Act; the Employee
Retirement Income Security Act of 1974, as amended; the Worker Adjustment and
Retraining Notification Act; the Fair Credit Reporting Act; the Occupational
Safety and Health Act; the Uniformed Services Employment and Reemployment Act;
the Employee Polygraph Protection Act; the Immigration Reform Control Act; the
retaliation provisions of the Xxxxxxxx-Xxxxx Act of 2002; the New Jersey Law
Against Discrimination; the New Jersey Domestic Partnership Act; the New Jersey
Conscientious Employee Protection Act; the New Jersey Family Leave Act; the New
Jersey Wage and Hour Law; the New Jersey Equal Pay Law; the New Jersey
Occupational Safety and Health Law; the New Jersey Smokers' Rights Law; the New
Jersey Genetic Privacy Act; the New Jersey Fair Credit Reporting Act; the
retaliation provisions of the New Jersey Workers' Compensation Law (and
including any and all amendments to the above) and/or any other alleged
violation of any federal, state or local law, regulation or ordinance, and/or
contract (including, but not limited to, the Employment Agreement) or implied
contract or tort law or public policy or whistleblower claim, having any bearing
whatsoever on the Executive's employment by and the termination of employment
with the Company, including, but not limited to, any claim for wrongful
discharge, back pay, vacation pay, sick pay, bonus payment, attorneys' fees,
costs and/or future wage loss. This paragraph does not release any claims that
lawfully cannot be waived.
Nothing in this Release is intended to preclude the Executive from
filing a charge or participating in any investigation or proceeding conducted by
the Equal Employment Opportunity Commission or state fair employment practices
agency. The Executive agrees not to seek or accept any money damages or any
other relief upon the filing of any such administrative or judicial charges or
complaints.
2. The Executive acknowledges and agrees that even though claims and
facts in addition to those now known or believed by him to exist may
subsequently be discovered, it is his intention to fully settle and release all
claims he may have against the Company and the persons and entities described
above, whether known, unknown or suspected.
3. The Executive relinquishes any right to future employment with the
Company and the Company shall have the right to refuse to re-employ the
Executive, in each case without liability of the Executive or the Company.
4. The Company and the Executive acknowledge and agree that the release
contained in Paragraph 1 does not, and shall not be construed to, release or
limit the scope of any existing obligation of the Company (i) to indemnify the
Executive for his acts as an officer or director of Company in accordance with
the bylaws of Company, (ii) to the Executive and his eligible, participating
dependents or beneficiaries under any existing group welfare or retirement plan
of the Company in which the Executive and/or such dependents are participants,
or (iii) to satisfy all vested equity compensation obligations previously
granted to the Executive.
5. The Executive reaffirms his agreement to Sections 12 and 13 of the
Employment Agreement relating to confidentiality, noncompetition and
nonsolicitation.
6. The Executive acknowledge that he has been provided at least
twenty-one (21) days to review the Release and has been advised to review it
with an attorney of his choice and at his own expense. In the event the
Executive elects to sign this Release Agreement prior to this twenty-one (21)
day period, he agrees that it is a knowing and voluntary waiver of his right to
wait the full twenty-one (21) days. The Executive further understands that he
has seven (7) days after the signing hereof to revoke it by so notifying the
Company in writing, such notice to be received by _____________ within the seven
(7) day period. The Executive further acknowledges that he has carefully read
this Release, knows and understands its contents and its binding legal effect.
The Executive acknowledge that by signing this Release, he does so of his own
free will and act and that it is his intention that he be legally bound by its
terms.
7. This Release shall be construed and enforced in accordance with, and
governed by, the laws of the State of New Jersey, without regard to principles
of conflict of laws. If any clause of this Release should ever be determined to
be unenforceable, it is agreed that this will not affect the enforceability of
any other clause or the remainder of this Release.
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IN WITNESS WHEREOF, the parties have executed this Release on the date
first above written.
ULTICOM INC.
By:
------------------------------------------
Name:
Title:
------------------------------------------
Xxxxx X. Xxxxxxx
3
