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EXHIBIT 10.2
U.S. ROBOTICS ACCESS CORP.
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") made effective as of the 1st
day of January, 1997, by and between U.S. Robotics Access Corp., a Delaware
corporation (the "Company"), and XXXX XXXXXXXXX ("Xx. XxXxxxxxx").
RECITALS
WHEREAS, the Company is engaged in the business of designing,
manufacturing and selling data communications equipment, including modems, and
other high technology products; and
WHEREAS, Xx. XxXxxxxxx has acknowledged knowledge, skill and experience;
and
WHEREAS, the Company desires to obtain the benefit of Xx. XxXxxxxxx'x
knowledge, skill, and experience and, therefore, is willing to engage the
services of Xx. XxXxxxxxx upon the terms set forth in this Agreement; and
WHEREAS, Xx. XxXxxxxxx is willing to render services to the Company and
its affiliates on the terms set forth herein;
AGREEMENTS
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the Company and Xx. XxXxxxxxx agree as follows:
1. EMPLOYMENT.
(a) EMPLOYMENT. The Company hereby employs Xx. XxXxxxxxx and Xx.
XxXxxxxxx hereby accepts employment by the Company, subject to the terms set
forth in this Agreement.
(b) EMPLOYMENT TERM. The term of Xx. XxXxxxxxx'x employment under this
Agreement ("Employment Term") shall begin on January 1, 1997, and shall
continue for a period of three (3) consecutive calendar years, unless
terminated sooner in accordance with this Agreement. On each January 1 during
the Employment Term, the Employment Term shall be automatically extended by an
additional one-year period unless a notice of non-extension is given by one
party to the other at least sixty (60) days prior to January 1.
(c) TITLE AND DUTIES. Xx. XxXxxxxxx'x title shall be President and Chief
Operating Officer of the Company's parent corporation, U.S. Robotics
Corporation (the "Parent Corporation"), and he shall possess such powers and
duties normally incident to such position, as he currently exercises and
performs and as provided in the By-laws and in accordance with Delaware General
Corporation Law. Xx. XxXxxxxxx'x title and duties may be changed at the
discretion of the Board of Directors of the Parent Corporation. During the
Employment Term, Xx. XxXxxxxxx shall faithfully discharge his duties and
responsibilities in a diligent manner, devoting substantially all of his
working time to the affairs of the Parent Corporation and its subsidiaries
(collectively, "U.S. Robotics").
2. COMPENSATION AND RELATED MATTERS.
(a) SALARY. For services rendered by Xx. XxXxxxxxx to U.S. Robotics and
upon the condition that Xx. XxXxxxxxx fully and faithfully perform all of his
duties and obligations owed during the Employment Term under this Agreement,
the Company shall pay Xx. XxXxxxxxx an annual base salary equal to $500,000,
payable in
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twenty-six equal bi-weekly installments per year less income tax withholdings
and other normal employee deductions. This base salary set forth herein shall
be reviewed annually by the Stock Option and Compensation Committee (the "Stock
Option and Compensation Committee") of the Board of Directors of the Parent
Corporation at the end of each fiscal year of the Company beginning with the
fiscal year ending on or about September 30, 1997 (hereafter "Fiscal Year"), or
at such other times as deemed appropriate by the Stock Option and Compensation
Committee, and may, at the sole discretion of the Stock Option and Compensation
Committee, be increased by an amount which it deems appropriate.
(b) BONUSES. Xx. XxXxxxxxx shall be eligible to receive with respect to
each Fiscal Year during the Employment Term quarterly and annual bonuses under
the Parent Corporation's Senior Executive Performance Bonus Program or a
comparable bonus program which would afford him the opportunity to earn a
substantially equivalent bonus, subject to the terms, conditions, and
restrictions as set forth in such bonus program. The minimum bonus target set
for each Fiscal Year shall not be less than an amount equal to the sum of the
amounts of the Threshold Bonus, the maximum Incremental Threshold Bonus and the
Base Target Bonus for him for the 1997 Fiscal Year as heretofore determined by
the Stock Option and Compensation Committee.
(c) STOCK OPTION PLAN. Xx. XxXxxxxxx shall be entitled to receive such
options to purchase the common stock of the Parent Corporation as shall be
granted by the Stock Option and Compensation Committee pursuant to the Parent
Corporation's Executive Officers and Directors Stock Option Plan.
(d) FRINGE BENEFITS. During the Employment Term, Xx. XxXxxxxxx shall be
eligible to receive reasonable amounts of paid, noncumulative vacation per
year, to be taken at a time or times reasonably agreeable to both Xx. XxXxxxxxx
and the Company, and shall be eligible to participate in and receive coverage
and benefits under all group insurance, pension, profit sharing, bonus, stock
option, stock ownership and other employee benefit plans, programs and
arrangements of U.S. Robotics which are now or hereafter adopted by U.S.
Robotics for the benefit of its senior executive employees, subject to and on a
basis consistent with the terms, conditions and overall administration of such
plans, programs and arrangements. U. S. Robotics shall not make any changes in
such plans, programs, and arrangements which would adversely affect Xx.
XxXxxxxxx'x (or, if Section 3 herein is applicable, his spouse's or
dependents') rights or benefits thereunder, unless such change occurs pursuant
to a plan, program or arrangement applicable to all senior executive employees
of the Parent Corporation and does not result in a proportionately greater
reduction in the rights of or benefits to Xx. XxXxxxxxx as compared with any
other senior executive employee of the Parent Corporation. The Company shall
also provide Xx. XxXxxxxxx with certain perquisites, payable at the Company's
expense, which are offered to other senior executive employees and which are
reasonable, necessary and in the best interests of U.S. Robotics.
(e) AUTOMOBILE ALLOWANCE. During the Employment Term, the Company shall
pay to Xx. XxXxxxxxx a monthly automobile allowance in the amount of $1,100,
which amount may be paid in periodic installments, not less frequently than
monthly. Such allowance may be reviewed by the Stock Option and Compensation
Committee at the end of each Fiscal Year, or at such other times as deemed
appropriate by the Stock Option and Compensation Committee, and may, at the
sole discretion of the Stock Option and Compensation Committee, be increased by
an amount which it deems appropriate. If such allowance is increased by the
Stock Option and Compensation Committee, it shall not be decreased thereafter
during the Employment Term.
(f) BUSINESS EXPENSES. The Company shall reimburse Xx. XxXxxxxxx for the
reasonable and necessary business expenses incurred by Xx. XxXxxxxxx in
connection with the performance of his duties and obligations as set forth
herein during the Employment Term. Such expenses shall include, but are not
limited to, cellular telephone expenses and all expenses of travel and living
expenses while away from home on business or at the request and in the service
of the Company, provided that such expenses are properly incurred and accounted
for in accordance with the applicable policies and procedures established by
the Company. Reimbursement shall be made upon the presentation by Xx.
XxXxxxxxx to the Company of reasonably detailed statements of such expenses.
(g) EFFECT OF SALARY AND OTHER BENEFITS. Salary payments pursuant to
Subsection (a) of this Section 2 shall not be deemed exclusive and shall not
prevent Xx. XxXxxxxxx from participating in any other compensation or benefit
plan, program or arrangement of U.S. Robotics as provided in this Section 2.
Such salary payments
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(including any increased salary payments) shall not in any way limit or reduce
any other obligation of the Company pursuant to this Agreement, and no other
compensation, benefit or payment hereunder shall in any way limit or reduce the
obligation of the Company to pay Xx. XxXxxxxxx'x salary pursuant to Subsection
(a) of this Section 2. At the same time, nothing paid to Xx. XxXxxxxxx under
any benefit plan, program, or arrangement under this Section 2, which is
presently in effect or made available in the future, shall be deemed to be in
lieu of the salary payable to Xx. XxXxxxxxx pursuant to Subsection (a) of this
Section 2.
(h) PRORATION OF COMPENSATION. Any compensation payable to Xx. XxXxxxxxx
under this Section 2, in respect of any Fiscal Year during which the Employment
Term terminates prior to the last day of such Fiscal Year shall, unless
otherwise provided in the applicable plan, program or arrangement, be prorated
in accordance with the number of days in such Fiscal Year during which he is so
employed.
3. BENEFITS FOLLOWING EMPLOYMENT TERM OR TERMINATION. For a period of
three (3) years following the Date of Termination of the Employment Term, other
than as provided in Subsection (a) (cause) of Section 5 herein, the Company
shall permit, at the Company's expense, Xx. XxXxxxxxx, his spouse and
dependents, as applicable (the "Benefit Participants"), to participate in all
group medical and health insurance plans and employee benefit plans (including
fringe benefits), programs, and arrangements now or hereafter made available to
the senior executive employees of the Parent Corporation (the "Plans")
(including but not limited to such Plans in which Xx. XxXxxxxxx was entitled to
participate immediately prior to the Date of Termination), in the same manner
as provided to its other senior executive employees; provided, however, that
this Section 3 shall not apply in the event that (i) U.S. Robotics shall
hereafter terminate the applicable Plan, or (ii) the participation of the
Benefit Participants in such Plan is prohibited by law or, if applicable, would
disqualify such Plan as a tax qualified plan pursuant to the Internal Revenue
Code of 1986, as amended, or any successor thereto (the "Code"), or (iii) the
participation of the Benefit Participants violates the general terms and
provisions of such applicable Plan. In the event that any of the Benefit
Participants' participation in such Plans is prohibited by law or, if
applicable, would disqualify the Plan as a tax qualified plan, the Company
shall permit the Benefit Participants to acquire substantially comparable
coverage or benefits, at the Company's expense, from a source of Xx.
XxXxxxxxx'x or his spouse's choosing, notwithstanding the fact that such
coverage or benefit will result in a higher cost than if provided under a U.S.
Robotics Plan. However, in no event will the Benefit Participants receive from
the Company the coverage and benefits contemplated by this Section 3 if the
Benefit Participants receive such coverage and benefits from any other source.
4. COMPENSATION UPON TERMINATION OR DURING DISABILITY.
(a) COMPENSATION UPON TERMINATION FOR CAUSE. If the Employment Term shall
be terminated "for cause," as provided in Subsection (a) of Section 5 herein,
the Company shall have no further liability under this Agreement except to pay
Xx. XxXxxxxxx (i) the value of any accrued salary or other compensation due to
Xx. XxXxxxxxx pursuant to Section 2 herein (including any earned but unpaid
bonus payment or prorata share of such earned bonus payment, but excluding
deferred bonus payments based upon annual Fiscal Year performance), upon the
date of delivery of Notice of Termination to Xx. XxXxxxxxx, at the rate in
effect at the time such Notice of Termination is delivered, and (ii) any
benefits payable under all employee benefit plans, programs and arrangements of
U.S. Robotics in which Xx. XxXxxxxxx is a participant on the date of delivery
of Notice of Termination.
(b) COMPENSATION UPON DEATH. If the Employment Term is terminated by Xx.
XxXxxxxxx'x death, the Company shall have no further liability under this
Agreement except to pay Xx. XxXxxxxxx'x spouse, or if he leaves no spouse, to
his estate or devisee, legatee or other designee, as applicable, (i) the value
of any accrued salary or other compensation due to Xx. XxXxxxxxx pursuant to
Section 2 herein (including any earned but unpaid bonus payment or prorata
share of such earned bonus payment, but excluding deferred bonus payments based
upon annual Fiscal Year performance), at the time of his death, (ii) an amount
equal to the next six (6) bi-weekly salary payments payable to Xx. XxXxxxxxx
under Subsection (a) of Section 2 herein at the time of his death, payable on
the dates when such payments would otherwise have been made had Xx. XxXxxxxxx'x
death not occurred, (iii) any death benefit payable under all employee benefit
plans, programs and arrangements of U.S. Robotics in which Xx. XxXxxxxxx is a
participant on the date of his death, and (iv) any Plan coverage or benefit
continuation for Xx. XxXxxxxxx'x spouse and dependents, as applicable, under
Section 3 herein.
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(c) COMPENSATION UPON DISABILITY. During any period that Xx. XxXxxxxxx
fails to perform his duties hereunder as a result of incapacity due to an
"impaired condition," as such term is defined in Subsection (c) of Section 5
herein (the "disability period"), Xx. XxXxxxxxx shall continue to receive his
full salary at the rate then in effect for the disability period until the
Employment Term is terminated pursuant to Subsection (c) of Section 5 herein;
provided, however, that such salary payments so made to Xx. XxXxxxxxx pursuant
hereto shall be reduced by the sum of the amounts, if any, payable to Xx.
XxXxxxxxx prior to or during this period, as the result of such incapacity,
under any disability benefit plan or insurance program of U.S. Robotics in
which Xx. XxXxxxxxx participates.
In the event of termination of the Employment Term pursuant to Subsection
(c) (disability) of Section 5 herein, the Company shall have no further
responsibilities under this Agreement except (i) to pay the value of any
accrued salary or other compensation due under Section 2 herein (including any
earned but unpaid bonus payment or prorata share of such earned bonus payment,
but excluding deferred bonus payments based upon annual Fiscal Year
performance), on the Date of Termination to Xx. XxXxxxxxx (or in the event of
Xx. XxXxxxxxx'x subsequent death, to his estate or devisee, legatee or other
designee, as applicable), together with any benefits payable under all employee
benefit plans, programs or arrangements of U.S. Robotics in which Xx. XxXxxxxxx
is a participant on the Date of Termination, (ii) to pay the value of any
severance compensation owed to Xx. XxXxxxxxx (or in the event of Xx.
XxXxxxxxx'x subsequent death, to his estate or devisee, legatee or other
designee, as applicable), as set forth in Subsection (f)(i) of this Section 4
(which shall survive the termination of the Employment Term) and (iii) to
provide for any Plan coverage or benefit continuation for Xx. XxXxxxxxx, his
spouse and dependents, as applicable under Section 3 herein.
(d) COMPENSATION UPON TERMINATION BY XX. XXXXXXXXX. If Xx. XxXxxxxxx
terminates the Employment Term due to "impaired health" or for Good Reason, as
such terms are defined in Subsection (d) of Section 5 herein, the Company shall
have no further responsibility under this Agreement except (i) to pay the value
of any accrued salary or other compensation due under Section 2 herein
(including any earned but unpaid bonus payment or prorata share of such earned
bonus payment, but excluding deferred bonus payments based upon annual Fiscal
Year performance), on the Date of Termination to Xx. XxXxxxxxx (or in the event
of Xx. XxXxxxxxx'x subsequent death, to his estate or devisee, legatee or other
designee, as appropriate), together with any benefits payable under all
employee benefit plans, programs or arrangements of U.S. Robotics in which Xx.
XxXxxxxxx is a participant on the Date of Termination, (ii) to pay the value of
any severance compensation owed to Xx. XxXxxxxxx (or in the event of Xx.
XxXxxxxxx'x subsequent death, to his estate or devisee, legatee or other
designee, as appropriate), as set forth in Subsection (f) of this Section 4
(which shall survive the termination of the Employment Term) and (iii) to
provide for any Plan coverage or benefit continuation for Xx. XxXxxxxxx, his
spouse and dependents, as applicable, under Section 3 herein.
(e) COMPENSATION UPON TERMINATION BY COMPANY. If the Company breaches
this Agreement by terminating the Employment Term, other than pursuant to
Subsections (a) (cause), (b) (death), or (c) (disability) of Section 5 herein,
including but not limited to termination without "cause" (as such term is
defined in Subsection (a) of Section 5 herein), the Company shall (i) pay the
value of any accrued salary or other compensation due under Section 2 herein
(including any earned but unpaid bonus payment or prorata share of such earned
bonus payment, but excluding deferred bonus payments based upon annual Fiscal
Year performance), on the Date of Termination to Xx. XxXxxxxxx (or in the event
of Xx. XxXxxxxxx'x subsequent death, to his estate or devisee, legatee or other
designee, as appropriate), together with any benefits payable under all
employee benefit plans, programs or arrangements of U.S. Robotics in which Xx.
XxXxxxxxx is a participant on the Date of Termination, (ii) pay the value of
any severance compensation owed to Xx. XxXxxxxxx (or in the event of Xx.
XxXxxxxxx'x subsequent death, to his estate or devisee, legatee or other
designee, as appropriate), as set forth in Subsection (f) of this Section 4
(which shall survive the termination of the Employment Term) and (iii) provide
for any Plan coverage or benefit continuation for Xx. XxXxxxxxx, his spouse and
dependents, as applicable, under Section 3 herein.
(f) SEVERANCE COMPENSATION.
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(i) TERMINATION DUE TO DISABILITY OR IMPAIRED HEALTH. Upon the
termination of the Employment Term under Subsection (c) (disability) of
Section 5 herein or upon the termination of the Employment Term by Xx.
XxXxxxxxx due to "impaired health" (as such term is defined in Subsection
(d) of Section 5 herein), the Company shall pay to Xx. XxXxxxxxx (or in
the event of Xx. XxXxxxxxx'x subsequent death, his estate or devisee,
legatee or other designee, as appropriate) all compensation and benefits
specified under Section 2 herein, for a period of one (1) year from the
Date of Termination, payable in the same manner as if the Employment Term
had not been terminated.
(ii) TERMINATION BY COMPANY OR BY XX. XXXXXXXXX FOR GOOD REASON. If
the Company breaches this Agreement by terminating the Employment Term,
other than pursuant to Subsections (a) (cause), (b) (death) or (c)
(disability) of Section 5 herein, including but not limited to
termination without "cause" (as such term is defined in Subsection (a) of
Section 5 herein), or if Xx. XxXxxxxxx terminates the Employment Term for
Good Reason, as such term is defined in Subsection (d)(i) of Section 5
herein, then the Company shall pay as severance compensation to Xx.
XxXxxxxxx an amount equal to (1) Xx. XxXxxxxxx'x annual base salary in
effect as of the Date of Termination, multiplied by three, plus (2) the
sum of the annual cash bonuses actually received by Xx. XxXxxxxxx with
respect to the previous three Fiscal Years of U.S. Robotics, less the
amount of cash bonuses, if any, theretofore paid to him with respect to
the Fiscal Year in which such termination occurs. Such severance
compensation shall be payable in cash in a lump sum on or before the
fifteenth (15th) day following the Date of Termination; provided,
however, that where Sections 280G and Section 4999 of the Internal
Revenue Code of 1986, as amended, or any successor thereto (the "Code")
are applicable, then such severance pay shall amount to one dollar less
than the maximum amount that Xx. XxXxxxxxx may receive without having
such payment be treated as an excess parachute payment under Section 280G
of the Code. Such severance compensation shall not be subject to
mitigation or offset due to other earnings of Xx. XxXxxxxxx.
5. TERMINATION.
(a) CAUSE. The Employment Term may be terminated at any time at the
option of the Company "for cause" (as such term is hereinafter defined),
effective upon the giving of written notice of termination to Xx. XxXxxxxxx.
As used herein, the term "for cause" shall mean and be limited to: (i) any
felony conviction, (ii) willful misconduct or gross negligence in connection
with the performance of Xx. XxXxxxxxx'x duties, responsibilities, agreements
and covenants hereunder, which shall continue for a period of thirty (30) days
after the receipt of notice from the Company, (iii) refusal to comply with
reasonable rules, regulations, policies, directions and restrictions as may be
established from time to time by the Board, whereby such refusal continues for
thirty (30) days after the receipt of notice from the Company, or (iv)
repeated abuse (following at least one written warning from the Company) of
alcohol or any illegal use of narcotics or other controlled substances.
If Xx. XxXxxxxxx is advised that he is being terminated for cause and,
within fifteen (15) days thereafter submits to the Board of Directors of the
Parent Corporation a written objection to such determination, this Subsection
will not be applicable unless the Board of Directors of the Parent Corporation,
at or before its next regularly scheduled meeting, determines by majority vote
that Xx. XxXxxxxxx has been terminated for cause.
(b) DEATH. The Employment Term shall terminate automatically upon the
death of Xx. XxXxxxxxx.
(c) DISABILITY. In the event Xx. XxXxxxxxx becomes mentally or physically
"disabled" during the Employment Term, the Employment Term shall terminate on
the Date of Termination (as such term is defined in Subsection (f) of this
Section 5) once such disability is "established." As used in this Subsection,
the term "disabled" means suffering from any mental or physical condition,
other than that resulting from the use of alcohol or illegal use of narcotics
or other controlled substances, which renders Xx. XxXxxxxxx unable to
substantially perform all of his material duties and services under this
Agreement in a satisfactory manner (an "impaired condition") for a period of
one hundred twenty (120) consecutive days or for more than one hundred eighty
(180) days in any twelve (12) month period. For purposes of this Subsection,
the date that Xx. XxXxxxxxx'x disability is "established" shall be, in the case
of an impaired condition which exists for a period of one hundred twenty (120)
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consecutive days, the one hundred twenty-first (121) day on which such impaired
condition exists, and, in the case of an impaired condition existing for more
than one hundred eighty (180) days in any twelve (12) month period, the one
hundred eighty-first (181) day on which such impaired condition exists.
(d) TERMINATION BY XX. XXXXXXXXX. Xx. XxXxxxxxx may terminate the
Employment Term (1) for Good Reason, or (2) if his health should become
impaired to an extent that makes his continued performance of his duties and
obligations hereunder hazardous to his physical or mental health or his life
("impaired health"), provided that Xx. XxXxxxxxx shall have furnished the
Company with a written statement from a qualified doctor to such effect and
provided, further, that, at the Company's request, Xx. XxXxxxxxx shall submit
to an examination by a doctor selected by the Company and such doctor shall
have concurred in the conclusion of Xx. XxXxxxxxx'x doctor, or (3) voluntarily,
without Good Reason and not due to "impaired health." In the event that Xx.
XxXxxxxxx voluntarily terminates the Employment Term without Good Reason and
not due to "impaired health", such termination shall be treated as if it were a
termination "for cause" by the Company.
(i) GOOD REASON DEFINED. For purposes of this Agreement, "Good
Reason" shall mean:
a. a Change in Control of the Parent Corporation (as defined
in Subsection (d)(ii) below), with termination of the Employment
Term occurring within one year following such Change in Control;
b. a decrease in the total amount of Xx. XxXxxxxxx'x base
salary below its level in effect on the date hereof, as provided in
Subsection (a) of Section 2 herein;
c. a reduction in Xx. XxXxxxxxx'x title, duties, job
responsibilities or working conditions without Xx. XxXxxxxxx'x
consent, whereby the determination of whether a reduction in such
title, duties, job responsibilities or working conditions is in the
sole discretion of Xx. XxXxxxxxx;
d. a failure by the Company to comply with any material
provision of this Agreement which has not been cured within ten
(10) days after notice of such noncompliance has been given by Xx.
XxXxxxxxx to the Company; or
e. any purported termination of Xx. XxXxxxxxx'x employment
which is not effected pursuant to a Notice of Termination
satisfying the requirements of Subsection (e) of this Section 5
(and for purposes of this Agreement no such purported termination
shall be effective).
For the purpose of this Subsection (d)(i), no action or inaction by
Xx. XxXxxxxxx within ninety (90) days following the occurrence of the
foregoing events shall be deemed a consent by Xx. XxXxxxxxx to such
events, absent written consent from Xx. XxXxxxxxx to the Company.
(ii) CHANGE IN CONTROL DEFINED. A "Change in Control" shall be
deemed to have occurred:
a. upon any "person" as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934 (the "Exchange
Act") (other than U.S. Robotics, any trustee or other fiduciary
holding securities under any employee benefit plan of U.S.
Robotics, or any company owned, directly or indirectly, by the
stockholders of the Parent Corporation in substantially the same
proportions as their ownership of common stock of the Parent
Corporation), becoming the owner (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the
Parent Corporation representing twenty-five percent (25%) or more
of the combined voting power of the Parent Corporation's then
outstanding securities;
b. during any period of two consecutive years, individuals
who at the beginning of such period constitute the Board of
Directors, and any new director (other than a director designated
by a person who has entered into an agreement with the Parent
Corporation to effect a transaction
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described in paragraph (a), (c) or (d) of this Subsection or a
director whose initial assumption of office occurs as a result of
either an actual or threatened election contest (as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act) or other actual or threatened solicitation of proxies
or contests by or on behalf of a person other than the Board of
Directors of the Parent Corporation) whose election by the Board of
Directors or nomination for election by the Parent Corporation's
stockholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the
beginning of the two-year period or whose election or nomination
for election was previously so approved, cease for any reason to
constitute at least a majority of the Board of Directors;
c. upon the merger or consolidation of the Parent Corporation
with any other corporation, other than a merger or consolidation
which would result in the voting securities of the Parent
Corporation outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) more than fifty
percent (50%) of the combined voting power of the voting securities
of the Parent Corporation or such surviving entity (which entity
shall thereafter be the "Parent Corporation" as defined herein)
outstanding immediately after such merger or consolidation;
provided, however, that a merger or consolidation effected to
implement a recapitalization of the Parent Corporation (or similar
transaction) in which no person (other than those covered by the
exceptions in (a) above) acquires more than twenty-five percent
(25%) of the combined voting power of the Parent Corporation's then
outstanding securities shall not constitute a Change in Control of
the Parent Corporation; or
d. the stockholders of the Parent Corporation approve a plan
of complete liquidation of the Company or an agreement for the sale
or disposition by the Parent Corporation of all or substantially
all of the Parent Corporation's assets other than the sale of all
or substantially all of the assets of the Parent Corporation to a
person or persons who beneficially own, directly or indirectly, at
least fifty percent (50%) or more of the combined voting power of
the outstanding voting securities of the Parent Corporation at the
time of the sale.
(e) NOTICE OF TERMINATION. Any termination of the Employment Term by the
Company or by Xx. XxXxxxxxx (other than termination pursuant to Subsection (b)
(death) of this Section 5) shall be communicated by written Notice of
Termination to the other party hereto. For purposes of this Agreement, a
"Notice of Termination" shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Employment Term under the Section and Subsection so
indicated.
(f) DATE OF TERMINATION. "Date of Termination" shall mean the following:
if the Employment Term is terminated by (i) Subsection (a) (cause) of this
Section 5, the date specified in the Notice of Termination, (ii) Subsection (b)
(death) of this Section 5, the date of Xx. XxXxxxxxx'x death, (iii) Subsection
(c) (disability) of this Section 5, thirty (30) days after Notice of
Termination is given (provided that Xx. XxXxxxxxx shall not have returned to
the satisfactory performance of his duties on a full-time basis during such
thirty (30) day period), and (iv) if for any other reason, the date on which a
Notice of Termination is given; provided, however, that if, within (30) days
after any Notice of Termination is given, the party receiving such Notice of
Termination notifies the other party that a dispute exists concerning the
termination, the Date of Termination shall be the date on which the dispute is
finally determined, either by mutual agreement of the parties, by a binding and
final arbitration award or by a final judgment, order or decree of a court of
competent jurisdiction (the time for appeal therefrom having expired and no
appeal having been perfected).
6. OTHER BUSINESS ACTIVITIES. During the Employment Term, Xx. XxXxxxxxx
shall not, without the prior written authorization of the Board of Directors of
the Parent Corporation, directly or indirectly render services of a business,
professional or commercial nature (whether for compensation or otherwise) to
any person or entity competitive or adverse to U.S. Robotics' business welfare
or engage in any activity whether alone, as a partner, or
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as an officer, director, employee, consultant, independent contractor, or
stockholder in any other corporation, person, or entity which is competitive
with or adverse to U.S. Robotics' business welfare. This Section 6 shall not,
however, prevent Xx. XxXxxxxxx from investing in securities issued by any such
competitive or adverse corporation, provided the holdings thereof by Xx.
XxXxxxxxx do not constitute more than five percent (5%) of any one class of
such securities.
7. CONFIDENTIAL INFORMATION.
(a) DISCLOSURE AND USE. Xx. XxXxxxxxx shall not disclose or use at any
time, either during or subsequent to the Employment Term, any trade secrets or
other confidential information, whether patentable or not, of U.S. Robotics,
including but not limited to, any technical or non-technical data, any
formula, pattern, compilation, program, device, method, technique, drawing,
process, financial data, or any list of actual or potential customers or
suppliers, of which Xx. XxXxxxxxx is or becomes informed or aware during the
Employment Term, whether or not developed by Xx. XxXxxxxxx, except (i) as may
be reasonably required for Xx. XxXxxxxxx to perform Xx. XxXxxxxxx'x employment
duties with U.S. Robotics, (ii) to the extent such information becomes
generally available to the public through no wrongful act of Xx. XxXxxxxxx,
(iii) information which has been disclosed as a result of a subpoena or other
legal process, provided that Xx. XxXxxxxxx has provided the Company with prompt
written notice of the receipt thereof, or (iv) unless Xx. XxXxxxxxx shall first
secure the Company's prior written authorization. This covenant shall survive
the termination of Xx. XxXxxxxxx'x employment hereunder, and shall remain in
effect and be enforceable against Xx. XxXxxxxxx for so long as any such U.S.
Robotics secret or confidential information retains economic value, whether
actual or potential, from not being generally known to other persons who can
obtain economic value from its disclosure or use. Xx. XxXxxxxxx agrees to
execute such further agreements and/or confirmations of Xx. XxXxxxxxx'x
obligations to U.S. Robotics concerning non-disclosure of U.S. Robotics trade
secrets and confidential information as U.S. Robotics may reasonably require
from time-to-time.
(b) RETURN OF MATERIALS. Upon termination of the Employment Term, Xx.
XxXxxxxxx (or in the event of termination due to Xx. XxXxxxxxx'x death, his
estate or devisee, legatee or other designee, as applicable) shall promptly
deliver to the Company all materials of a secret or confidential nature
relating to U.S. Robotics' business, which are in the possession or under the
control of Xx. XxXxxxxxx.
8. INVENTIONS AND DISCOVERIES. Xx. XxXxxxxxx hereby assigns to the
Company or its designee all of Xx. XxXxxxxxx'x rights, title and interest in
and to all inventions, discoveries, processes, designs, works of authorship and
other intellectual property and all improvements on existing inventions,
discoveries, processes, designs, works and other intellectual property made or
discovered by Xx. XxXxxxxxx during the Employment Term. Promptly upon the
development, making, creation, or discovery of any invention, discovery,
process, design, work, intellectual property or improvement, Xx. XxXxxxxxx
shall disclose the same to the Company and shall execute and deliver to the
Company or its designee such reasonable documents as the Company may request to
confirm the assignment of Xx. XxXxxxxxx'x rights therein, and if requested by
the Company, shall assist the Company or its designee in applying for and
prosecuting any patents and any trademark or copyright registration which may
be available in respect thereof. Any invention, discovery or other work for
which none of U.S. Robotics' equipment, supplies, facilities, or confidential
information was used and which was developed entirely on Xx. XxXxxxxxx'x own
time, is exempted from this Section 8 so long as it (i) does not relate in any
way to U.S. Robotics' business, or actual or demonstrably anticipated research
and development; and (ii) does not result in any way from Xx. XxXxxxxxx'x work
for U.S. Robotics.
9. SEVERABILITY. If any provision of this Agreement is held invalid or
unenforceable, either in its entirety or by virtue of its scope or application
to given circumstances, such provision shall thereupon be deemed (i) modified
only to the extent necessary to render the same valid, or (ii) not applicable
to given circumstances, or (iii) excised from this Agreement, as the situation
may require, and this Agreement shall be construed and enforced as if such
provision had been included herein as so modified in scope or application, or
had not been included herein, as the case may be.
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10. ARBITRATION OF DISPUTES. In the event of any controversy among the
parties hereto arising out of, or relating to, this Agreement which cannot be
settled amicably by the parties (other than a controversy contemplated by
Sections 6, 7, 8 and 11 herein), such controversy shall be submitted to binding
arbitration. Either the Company or Xx. XxXxxxxxx may institute such
arbitration proceeding by giving written notice to the other party and by
designating one independent arbitrator. Unless such independent arbitrator
alone is acceptable to the other party, such other party shall designate within
ten (10) days following receipt of such notice, a second independent
arbitrator, and such two arbitrators shall thereafter select a third
independent arbitrator. A hearing shall be held by the arbitrator or
arbitrators in the City of Chicago, Illinois, and a decision of the matter so
submitted shall be rendered promptly in accordance with the rules of the
American Arbitration Association. The decision of the arbitrator or, if more
than one, a majority of the arbitrators shall be final and binding upon all
parties hereto. Judgment upon the award rendered may be entered in any court
having jurisdiction thereof. The cost of the arbitration shall be borne by the
Company.
11. ENFORCEMENT. The Company will be entitled to institute proceedings
and avail itself of all remedies at law or in equity to recover damages
occasioned by a breach or threatened breach of any of the provisions of this
Agreement by Xx. XxXxxxxxx and shall have the right to pursue one or more of
such proceedings and remedies simultaneously or from time to time. Xx.
XxXxxxxxx hereby acknowledges that the Company would suffer irreparable injury
if the provisions of Sections 6, 7 and 8 herein, which shall survive the
termination of this Agreement, were breached and that the Company's remedies at
law would be inadequate in the event of such breach or threatened breach.
Accordingly, Xx. XxXxxxxxx hereby agrees that any such breach or threatened
breach may, in addition to any and all other available remedies, be
preliminarily and permanently enjoined by any court of competent jurisdiction
without any requirement that the Company post a bond.
12. LEGAL FEES AND EXPENSES. In the event of litigation or arbitration
proceeding under this Agreement, both the Company and Xx. XxXxxxxxx shall pay
their own attorneys' fees and other legal expenses; provided, however, that (i)
the Company shall pay Xx. XxXxxxxxx'x attorneys' fees and legal expenses in
connection with any proceeding which results in a court refusing to issue a
preliminary or permanent injunction against Xx. XxXxxxxxx due to his alleged
breach or threatened breach of any provision of this Agreement, and (ii) the
Company shall pay the reasonable legal fees and expenses which Xx. XxXxxxxxx
may incur in connection with the enforcement of this Agreement in connection
with the termination of the Employment Term under Subsections (c) (disability)
and (d) (termination by Xx. XxXxxxxxx for Good Reason) of Section 5 herein or
due to the termination of the Employment Term by the Company for any reason
other than as provided in Section 5 herein, including but not limited to
termination without "cause" as such term is defined in Subsection (a) of
Section 5 herein.
Such fees and expenses shall be paid in cash within forty-five (45) days
after the submission to the Company's Secretary, and inquiry into the
reasonableness of such fees and expenses shall not delay such payment.
13. GENERAL PROVISIONS.
(a) NOTICES. Any notice, request, demand or other communication required
or permitted to be given hereunder shall be in writing and personally delivered
or sent by registered or certified mail, return receipt requested, or by a
facsimile, telegram or telex followed by a confirmation letter sent by
registered or certified mail, return receipt requested, addressed as follows:
To the Company: U.S. Robotics Corporation
0000 XxXxxxxxx Xxxx.
Xxxxxx, Xxxxxxxx 00000
Attention: Vice President of Human Resources
cc: General Counsel
To Xx. XxXxxxxxx: Mr. Xxxx XxXxxxxxx
[Omitted]
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Either the Company or Xx. XxXxxxxxx may, at any time, by notice to the other,
designate another address for service of notice on such party. When the
letter, facsimile, telegram or telex is dispatched as provided for above, the
notice shall be deemed to be made when the addressee receives the letter,
facsimile, telegram or telex, or upon the third (3rd) business day after the
date it is sent, whichever is earlier.
(b) AMENDMENTS. Neither this Agreement nor any of the terms or conditions
hereof may be waived, amended or modified except by means of a written
instrument duly executed by the party to be charged therewith.
(c) CAPTIONS AND HEADINGS. The captions and Section headings used in this
Agreement are for convenience of reference only, and shall not affect the
construction or interpretation of this Agreement or any of the provisions
hereof.
(d) GOVERNING LAW. This Agreement, and all matters or disputes relating
to the validity, construction, performance or enforcement hereof, shall be
governed, construed and controlled by and under the laws of the State of
Illinois without regard to principles of conflicts of law.
(e) SUCCESSORS AND ASSIGNS. In light of the unique personal services to
be performed by Xx. XxXxxxxxx hereunder, it is acknowledged and agreed that any
purported or attempted assignment or transfer by Xx. XxXxxxxxx of this
Agreement or any of Xx. XxXxxxxxx'x duties, responsibilities, or obligations
hereunder shall be void. The Company shall not assign this Agreement to any
third party entity which is not affiliated with the Company, the Parent
Corporation or any of their direct or indirect subsidiaries. Subject to the
foregoing, this Agreement shall be binding upon and shall inure to the benefit
of the parties hereto and their respective heirs, executors, administrators,
personal representatives, successors and permitted assigns.
(f) COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original hereof, but all
of which together shall constitute one and the same instrument.
(g) ENTIRE AGREEMENT. Except as otherwise set forth or referred to in
this Agreement, this Agreement constitutes the sole and entire agreement and
understanding between the parties hereto as to the subject matter hereof, and
supersedes all prior discussions, agreements and understandings of every kind
and nature between them as to such subject matter.
(h) RELIANCE BY THIRD PARTIES. This Agreement is intended for the sole
and exclusive benefit of the parties hereto and their respective heirs,
executors, administrators, personal representatives, successors and permitted
assigns, and no other person or entity shall have any right to rely on this
Agreement or to claim or derive any benefit therefrom absent the express
written consent of the party to be charged with such reliance or benefit.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
ATTEST: U.S. ROBOTICS ACCESS CORP.
/s/ XXXXXX X. XXXXXXX By: /s/ XXXXX XXXXXX
Xxxxxx X. Xxxxxxx, Secretary Xxxxx Xxxxxx, Chief Executive Officer
/s/ XXXX XXXXXXXXX
Xxxx XxXxxxxxx
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