Exhibit 10.3
EMPLOYMENT AGREEMENT
This Employment Agreement, dated as of July 1, 2004 is between Glowpoint, Inc.,
a Delaware corporation (the "Company"), and Xxxxxxxxxxx Xxxxxxx ("Employee").
WHEREAS, Employee currently serves as Executive Vice President and Chief
Financial Officer of the Company; and
WHEREAS, the Company wishes to continue to employ Employee and Employee wishes
to continue to work for Company.
NOW, THEREFORE, in consideration of the mutual covenants set forth herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. POSITION AND RESPONSIBILITIES.
1.1 Position. Employee is employed by the Company to render services to
the Company in the position of Executive Vice President and Chief Financial
Officer. Employee shall perform such duties and responsibilities as are normally
related to such position in accordance with the standards of the industry and
any additional duties consistent with his position now or hereafter assigned to
Employee by the President and CEO. Employee shall abide by the rules,
regulations and practices of the Company as adopted or modified from time to
time in the Company's reasonable discretion.
1.2 Other Activities. Employee shall devote his full business time,
attention and skill to perform any assigned duties, services and
responsibilities, consistent with the position of Executive Vice President and
Chief Financial Officer, while employed by the Company, for the furtherance of
the Company's business, in a diligent, loyal and conscientious manner. Except
upon the prior written consent of the Board of Directors, Employee will not,
during the term of this Agreement: (i) accept any other employment; or (ii)
engage, directly or indirectly, in any other business activity (whether or not
pursued for pecuniary advantage) that interferes with Employee's duties and
responsibilities hereunder or create a conflict of interest with the Company.
1.3 No Conflict. Employee represents and warrants that Employee's
execution of this Agreement, Employee's employment with the Company, and the
performance of Employee's proposed duties under this Agreement will not violate
any obligations Employee may have to any other employer, person or entity,
including any obligations with respect to proprietary or confidential
information of any other person or entity.
2. Compensation and Benefits.
2.1 Base Salary. In consideration of the services to be rendered under
this Agreement and so long as Employee remains employed by the Company, the
Company shall pay Employee a salary equivalent to $215,000.00 per year (the
"Base Salary"). The Base Salary shall be paid in accordance with the Company's
regularly established payroll practice. Employee's Base Salary shall be reduced
by withholdings required by law.
2.2 Incentive Compensation. (a) Employee and his/her manager will
establish appropriate goals and metrics by which Employee will be evaluated for
2004. If in the opinion of the President and CEO the Employee meets the mutually
agreed upon goals and metrics, Employee will receive incentive compensation in
an amount equivalent to forty percent (40%) of his base salary annually.
(b) The Company shall pay Employee a one-time guaranteed bonus of
$50,000 on December 31, 2004.
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2.3 Options. The Company shall recommend to the Compensation Committee
("Compensation Committee") and to the Board of Directors (the "Board") that (i)
Employee be granted stock options (the "Options") in the amount of 100,000
shares of Common Stock of the Company, with 50,000 Options vesting immediately
upon execution of this Agreement (pending board approval) and the remaining
50,000 Options vesting on December 31, 2004 and (ii) the post-termination
exercise period for all options held by Employee be extended to twenty-four (24)
months.
2.4 Benefits. Employee shall be eligible to participate in the benefits
made generally available by the Company to similarly-situated employees, in
accordance with the benefit plans established by the Company, and as may be
amended from time to time in the Company's sole discretion.
2.5 Expenses. The Company shall reimburse Employee for reasonable travel
and other business expenses incurred by Employee in the performance of
Employee's duties hereunder in accordance with the Company's expense
reimbursement guidelines, as they may be amended in the Company's sole
discretion.
2.6 Car Allowance. The Company will reimburse Employee up to $400 per
month for the lease of a car to conduct Company business. Reimbursement will be
made upon presentation of receipts according to the Company's reimbursement
guidelines.
2.7 Vacation. Employee will be entitled to accrue 4 weeks of paid vacation
per year. Such vacation must be used in the year in which it is accrued and may
not be carried over from year to year.
3. EMPLOYMENT AND SEVERANCE.
3.1 Employment. The Company hereby employs you as Executive Vice President
and Chief Financial Officer through December 31, 2004, (herein called the
"Employment Period") commencing as of the date of this agreement (the "Start
Date") (it being understood that the Employment Period may be extended to
continue on an "at will" basis following December 31, 2004, where either the
Company or Employee may terminate Employee's employment with the Company at any
time, for any reason or no reason at all so long as they comply with the terms
in this section 3).
3.2 Termination for Cause or Voluntary Resignation. If Employee is
terminated for Cause (as defined below) or if Employee voluntarily resigns,
Employee will be entitled to his Base Salary and other benefits through the last
day actually worked. Thereafter, all benefits, compensation and perquisites of
employment will cease.
3.3 Termination Without Cause, Resignation for Good Reason or Death. If
Employee is terminated without Cause, or Resigns for Good Reason (as defined
below), or dies, Employee shall be entitled to severance equal to seven and
one-half (7 1/2) months' salary at his then current rate of compensation as well
as the continuation of benefits under Section 2.4 and the car allowance under
Section 2.6 for seven and one-half (7 1/2) months. Such severance shall be paid
either as a lump sum or as salary continuation, at the Company's discretion. In
the event that the Employee is terminated without Cause, or Resigns for Good
Reason, or dies, Employee will also be entitled to one year of accelerated
vesting on the Options to be granted pursuant to this Agreement and the
forfeiture provisions as to the Options which is subject to accelerated vesting
will lift.
3.4 Definition of Cause. For purposes of this Agreement, Cause shall mean,
in the judgment of the Company: (i) Employee willfully engages in any act or
omission which is in bad faith and to the detriment of the Company; (ii)
Employee exhibits unfitness for service, dishonesty, habitual neglect,
persistent and serious deficiencies in performance, or gross incompetence, which
conduct is not cured within fifteen (15) days after receipt by Employee of
written notice of the conduct; (iii) Employee is convicted of a crime; or (iv)
Employee refuses or fails to act on any reasonable and lawful directive or order
from the President and CEO, which refusal is not cured within fifteen (15) days
after receipt by the Employee of written notice thereof. Notice of any
termination for Cause shall be given in writing to the Employee, which notice
shall set forth in reasonable detail all acts or omission upon which the Company
is relying for such termination prior to the effective date of the termination.
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3.5 Definition of Resignation for Good Reason. For purposes of this
Agreement, Resignation for Good Reason shall mean if Employee resigns because:
(i) there has been a diminution in his Base Salary; (ii) he is required to be
based in an office that is more than 75 miles from the current location of the
office; (iii) he is assigned duties that are materially inconsistent with his
position as Executive Vice President and Chief Financial Officer; or (iv) there
is a material diminution of his status, office, title or reporting requirements.
4. TERMINATION OBLIGATIONS.
4.1 Return of Property. Employee agrees that all property (including
without limitation all equipment, tangible proprietary information, documents,
records, notes, contracts and computer-generated materials) furnished to or
created or prepared by Employee incident to Employee's employment belongs to the
Company and shall be promptly returned to the Company upon termination of
Employee's employment.
4.2 Cooperation. Following any termination of employment, Employee shall
cooperate with the Company in the winding up of pending work on behalf of the
Company and the orderly transfer of work to other employees. Employee shall also
cooperate with the Company in the defense of any action brought by any third
party against the Company that relates to Employee's employment by the Company.
5. INVENTIONS AND PROPRIETARY INFORMATION; PROHIBITION ON THIRD PARTY
INFORMATION.
5.1 Proprietary Information. Employee hereby covenants, agrees and
acknowledges as follows:
(a) The Company is engaged in a continuous program of research,
design, development, production, marketing and servicing with respect to its
business.
(b) Employee's employment hereunder creates a relationship of
confidence and trust between Employee and the Company with respect to certain
information pertaining to the business of the Company or pertaining to the
business of any customer of the Company which may be made known to the Employee
by the Company or by any customer of the Company or learned by the Employee
during the period of Employee's employment by the Company.
(c) The Company possesses and will continue to possess information
that has been created, discovered or developed by, or otherwise becomes known to
it (including, without limitation, information created, discovered or developed
by, or made known to, Employee during the period of Employee's employment or
arising out of Employee's employment and which pertains to the Company's actual
or contemplated business, products, intellectual property or processes) or in
which property rights have been or may be assigned or otherwise conveyed to the
Company, which information has commercial value in the business in which the
Company is engaged and is treated by the Company as confidential.
(d) Any and all inventions, products, discoveries, improvements,
processes, manufacturing, marketing and services methods or techniques,
formulae, designs, styles, specifications, data bases, computer programs
(whether in source code or object code), know-how, strategies and data, whether
or not patentable or registrable under copyright or similar statutes, made,
developed or created by Employee (whether at the request or suggestion of the
Company or otherwise, whether alone or in conjunction with others, and whether
during regular hours of work or otherwise) during the period of Employee's
employment
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by the Company which pertains to the Company's actual or contemplated business,
products, intellectual property or processes (collectively hereinafter referred
to as "Developments"), shall be the sole property of the Company and will be
promptly and fully disclosed by Employee to the Board without any additional
compensation therefore, including, without limitation, all papers, drawings,
models, data, documents and other material pertaining to or in any way relating
to any Developments made, developed or created by Employee as aforesaid. The
Company shall own all right, title and interest in and to the Developments and
such Developments shall be considered "works made for hire" for the Company
under US Copyright Law. If any of the Developments are held for any reason not
to be "works made for hire" for the Company or if ownership of all right, title
and interest in and to the Developments has not vested exclusively and
immediately in the Company upon creation, Employee irrevocably assigns, without
further consideration, any and all right, title and interest in and to the
Developments to the Company, including any and all moral rights, and "shop
rights" in the Developments recognized by applicable law. Employee irrevocably
agrees to execute any document requested by the Company to give effect to this
Section 5.1 such as assignment of invention or other general assignments of
intellectual property rights, without additional compensation therefore.
(e) Employee will keep confidential and will hold for the Company's
sole benefit any Development which is to be the exclusive property of the
Company under this Section 5.1 irrespective of whether any patent, copyright,
trademark or other right or protection is issued in connection therewith.
(f) Employee also agrees that Employee will not, without the prior
approval of the President and CEO, use for Employee's benefit or disclose at any
time during Employee's employment by the Company, or thereafter, except to the
extent required by the performance by Employee of Employee's duties, any
information obtained or developed by Employee while in the employ of the Company
with respect to any Developments or with respect to any customers, clients,
suppliers, products, services, prices, Employees, financial affairs, or methods
of design, distribution, marketing, service, procurement or manufacture of the
Company or any confidential matter, except information which at the time is
generally known to the public other than as a result of disclosure by Employee
not permitted hereunder. Notwithstanding the foregoing, the following will not
constitute confidential information for purposes of this Agreement: (i)
information which is or becomes publicly available other than as a result of
disclosure by the Employee; (ii) information designated in writing by the
Company as no longer confidential; or (iii) information known by Employee as of
the date of this Agreement and identified as such in writing to the Board.
Employee will comply with all intellectual property disclosure policies
established by the Company from time to time with respect to the Company's
confidential information, including without respect to Developments.
5.2 Non-Disclosure of Third Party Information. Employee represents and
warrants and covenants that Employee shall not disclose to the Company, or use,
or induce the Company to use, any proprietary information or trade secrets of
others at any time, including but not limited to any proprietary information or
trade secrets of any former employer, if any; and Employee acknowledges and
agrees that any violation of this provision shall be grounds for Employee's
immediate termination and could subject Employee to substantial civil
liabilities and criminal
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penalties. Employee further specifically and expressly acknowledges that no
officer or other employee or representative of the Company has requested or
instructed Employee to disclose or use any such third party proprietary
information or trade secrets.
5.3 Injunctive Relief. Employee acknowledges and agrees that a remedy at
law for any breach or threatened breach of the provisions of this Section 5
would be inadequate and, therefore, agrees that the Company shall be entitled to
injunctive relief in addition to any other available rights and remedies in case
of any such breach or threatened breach.
6. LIMITED AGREEMENT NOT TO COMPETE OR SOLICIT.
6.1 Non-Competition. During the term of this Agreement, and for 12 months
after the termination of Employee's employment with the Company for any reason,
unless mutually agreed otherwise by the Employee and the Company, Employee shall
not, directly or indirectly, work as an employee, consultant, agent, principal,
partner, manager, officer, or director for any person or entity who or which
engages in a substantially similar business as the Company. For purposes of this
Agreement the Company is currently engaged in the business of designing,
developing, providing and selling video communication services.
6.2 Non-Solicitation. Employee shall not, during his employment and for a
period of 12 months immediately after termination of his employment, for any
reason, either directly or indirectly: (a) call on or solicit for similar
services, or, encourage or take away any of the Company's customers or potential
customers about whom Employee became aware or with whom Employee had contact as
a result of Employee's employment with the Company, either for benefit of
Employee or for any other person or entity; or (b) solicit, induce, recruit, or
encourage any of the Company's employees or contractors to leave the employ of
the Company or cease providing services to the Company on behalf of the Employee
or on behalf of any other person or entity; or (c) hire for himself or any other
person or entity any employee who was employed or engaged by the Company within
six months prior to the termination of Employee's employment.
6.3 Limitations; Remedies. The Employee further agrees that the
limitations set forth in this Section 6 (including, without limitation, any time
or territorial limitations) are reasonable and properly required for the
adequate protection of the businesses of the Company. The Employee agrees that
the lack of territorial limit is reasonable given the global reach of the
Company. If any of the restrictions contained in Sections 6.1 and 6.2 are deemed
by a court or arbitrator to be unenforceable by reason of the extent, duration
or geographic scope thereof, or otherwise, then the parties agree that such
court or arbitrator may modify such restriction to the extent necessary to
render it enforceable and enforce such restriction in its modified form. The
Employee acknowledges and agrees that a remedy at law for any breach or
threatened breach of the provisions of this Section 6 would be inadequate and,
therefore, agrees that the Company shall be entitled to injunctive relief in
addition to any other available rights and remedies in cases of any such breach
or threatened breach.
7. ALTERNATIVE DISPUTE RESOLUTION.
The Company and Employee mutually agree that any controversy or claim
arising out of or relating to this Agreement or the breach thereof, or any other
dispute between the parties arising from or related to Employee's employment
with the Company, shall be submitted to mediation before a mutually agreeable
mediator. In the event mediation is unsuccessful in resolving the claim or
controversy, such claim or controversy shall be resolved by arbitration
Company and Employee agree that arbitration shall be held in Union County,
New Jersey, before a mutually agreed upon single arbitrator licensed to practice
law. The arbitrator shall have authority to award or grant legal, equitable, and
declaratory relief. Such arbitration shall be final and binding on the parties.
If the parties are unable to agree on an arbitrator, the matter may be submitted
to the American Arbitration Association solely for appointment of an arbitrator.
The claims covered by this Agreement ("Arbitrable Claims") include, but
are not limited to, claims for wages or other compensation due; claims for
breach of any contract (including this Agreement) or covenant (express or
implied); tort claims; claims for discrimination (including, but not limited to,
race, sex, religion, national origin,
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age, marital status, medical condition, or disability); claims for benefits
(except where an employee benefit or pension plan specifies that its claims
procedure shall culminate in an arbitration procedure different from this one);
and claims for violation of any federal, state, or other law, statute,
regulation, or ordinance, except claims excluded in the following paragraph. The
parties hereby waive any rights they may have to trial by jury in regard to
Arbitrable Claims.
Claims Employee may have for Workers' Compensation State disability or
unemployment compensation benefits are not covered by this Agreement. Also not
covered is either party's right to obtain provisional remedies, or interim
relief from a court of competent jurisdiction.
Arbitration under this Agreement shall be the exclusive remedy for all
Arbitrable Claims. This agreement to mediate and arbitrate survives termination
of Employee's employment.
8. AMENDMENTS; WAIVERS; REMEDIES.
This Agreement may not be amended or waived except by a writing signed by
Employee and by a duly authorized representative of the Company. Failure to
exercise any right under this Agreement shall not constitute a waiver of such
right. Any waiver of any breach of this Agreement shall not operate as a waiver
of any subsequent breaches. All rights or remedies specified for a party herein
shall be cumulative and in addition to all other rights and remedies of the
party hereunder or under applicable law.
9. ASSIGNMENT; BINDING EFFECT.
9.1 Assignment. The performance of Employee is personal hereunder, and
Employee agrees that Employee shall have no right to assign and shall not assign
or purport to assign any rights or obligations under this Agreement. This
Agreement may be assigned or transferred by the Company; and nothing in this
Agreement shall prevent the consolidation, merger or sale of the Company or a
sale of any or all or substantially all of its assets.
9.2 Binding Effect. Subject to the foregoing restriction on assignment by
Employee, this Agreement shall inure to the benefit of and be binding upon each
of the parties; the affiliates, officers, directors, agents, successors and
assigns of the Company; and the heirs, devisees, spouses, legal representatives
and successors of Employee.
10. SEVERABILITY.
If any provision of this Agreement shall be held by a court or arbitrator
to be invalid, unenforceable, or void, such provision shall be enforced to the
fullest extent permitted by law, and the remainder of this Agreement shall
remain in full force and effect. In the event that the time period or scope of
any provision is declared by a court or arbitrator of competent jurisdiction to
exceed the maximum time period or scope that such court or arbitrator deems
enforceable, then such court or arbitrator shall reduce the time period or scope
to the maximum time period or scope permitted by law.
11. TAXES.
All amounts paid under this Agreement (including without limitation Base
Salary) shall be reduced by all applicable state and federal tax withholdings
and any other withholdings required by any applicable jurisdiction.
12. GOVERNING LAW.
The validity, interpretation, enforceability, and performance of this
Agreement shall be governed by and construed in accordance with the laws of the
State of New Jersey, without regard to New Jersey conflict of laws principles.
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13. INTERPRETATION.
This Agreement shall be construed as a whole, according to its fair
meaning, and not in favor of or against any party. Sections and section headings
contained in this Agreement are for reference purposes only, and shall not
affect in any manner the meaning or interpretation of this Agreement. Whenever
the context requires, references to the singular shall include the plural and
the plural the singular.
14. OBLIGATIONS SURVIVE TERMINATION OF EMPLOYMENT.
Employee agrees that any and all of Employee's obligations under this
agreement, shall survive the termination of employment and the termination of
this Agreement.
15. AUTHORITY.
Each party represents and warrants that such party has the right, power
and authority to enter into and execute this Agreement and to perform and
discharge all of the obligations hereunder; and that this Agreement constitutes
the valid and legally binding agreement and obligation of such party and is
enforceable in accordance with its terms.
16. ENTIRE AGREEMENT.
This Agreement is the final, complete and exclusive agreement of the
parties with respect to the subject matter hereof and supersedes and merges all
prior or contemporaneous representations, discussions, proposals, negotiations,
conditions, communications and agreements, whether written or oral, between the
parties relating to the subject matter hereof. Employee acknowledges Employee
has had the opportunity to consult legal counsel concerning this Agreement, that
Employee has read and understands the Agreement, that Employee is fully aware of
its legal effect, and that Employee has entered into it freely based on
Employee's own judgment and not on any representations or promises other than
those contained in this Agreement.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first written above.
GLOWPOINT, INC.
/s/ Xxxxx X. Xxxxxxxxxxxx /s/ Xxxxxxxxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxxxxxxx, Xxxxxxxxxxx X. Xxxxxxx
President & CEO
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