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Exhibit 10.32
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (the "Agreement"), made this 18th day of October,
1996, is entered into by Summa Four, Inc., a Delaware corporation, with its
principal place of business at Manchester, New Hampshire (the "Company"), and
Xxxx X. Hasselbeck (the "Employee").
The Company desires to employ the Employee, and the Employee desires to be
employed by the Company. In consideration of the mutual covenants and promises
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the parties
agree as follows:
1. EMPLOYMENT AT WILL. The Company hereby agrees to employ the Employee as
an employee at will, and the Employee hereby accepts such employment with the
Company, upon the terms set forth in this Agreement, for the period commencing
on November 4, 1996 (the "Commencement Date") and ending on the date the
Employee's employment is terminated in accordance with the provisions of Section
4 (such period, the "Employment Period").
2. TITLE, CAPACITY. The Employee shall serve as the Company's Vice
President, Sales, currently reporting to the President, or in such other more
senior or responsible position as the Company or its Board of Directors (the
"Board") may determine from time to time. The Employee shall be based at the
Company's headquarters in Manchester, New Hampshire, or such place or places in
the continental United States as the Board shall reasonably determine and the
Employee shall agree. The Employee shall be subject to the supervision of, and
shall have such
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authority as is delegated to him by, the Board or such officer of the Company as
may be designated by the Board.
The Employee hereby accepts such employment and agrees to undertake the
duties and responsibilities inherent in such position and such other duties and
responsibilities as the Board or its designee shall from time to time reasonably
assign to him. The Employee agrees to devote his entire business time, attention
and energies to the business and interests of the Company during the Employment
Period. The Employee agrees to abide by rules, regulations, instructions,
personnel practices and policies of the Company and any changes therein which
may be adopted from time to time by the Company.
3. Compensation and Benefits.
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3.1 SALARY. The Company shall pay the Employee, in bi-weekly
installments, an annual base salary of $125,000 (less applicable state and
federal taxes) for the period commencing on the Commencement Date and ending
March 31, 1997, subject to adjustment thereafter as determined annually by the
Board at its first regular meeting following its receipt of the Company's
audited financial results for its preceding fiscal year.
3.2 BONUS. For such period ending March 31, 1997, the Employee shall
be eligible for a bonus of up to 40% of his current base salary (pro-rated for
the 3rd and 4th Quarter of FY'97) based on the achievement of certain goals with
half of the bonus based on the satisfaction of personal objectives and the other
half based on the satisfaction of corporate objectives for the Company's fiscal
year then ending, as
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determined by the Company's management and approved by its Board of Directors.
If either the Employee's personal objectives or corporate objectives are
satisfied, the Employee shall receive that portion of his bonus related to the
satisfaction of either of those objectives without regard to whether the other
is satisfied. In order for the Employee to be entitled to payment of his bonus,
he must be actively employed by the Company on the date the bonus is paid. For
periods thereafter, the Employee shall be entitled to participate in such bonus
programs, if any, as may be established from time to time by its Board of
Directors. For the balance of FY'97 the Employee is able to earn additional
bonuses, as described in Attachment B, Compensation Plan for VP of Sales, which
will be reviewed and may be adjusted annually by the Board.
3.3 FRINGE BENEFITS. The Employee shall be entitled to participate in
all benefit programs that the Company establishes and makes available to its
employees, if any, to the extent that Employee's position, tenure, salary, age,
health and other qualifications make him eligible to participate, and to
vacations in accordance with the Company's vacation policy.
3.4 REIMBURSEMENT OF EXPENSES. The Company shall reimburse the
Employee for all gasoline used by the Employee in one automobile owned or leased
by him and for reasonable travel, entertainment and other expenses incurred, per
the Company's Travel and Entertainment Policy, or paid by the Employee in
connection with, or related to, the performance of his duties, responsibilities
or services under this Agreement, as more fully described in section 12.5.3,
upon presentation by the Employee of documentation, expense statements, vouchers
and/or such other
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supporting information as the Company may request, provided, however, that (i)
the amount available for such travel, entertainment and other expenses may be
fixed in advance by senior management or the Board and (ii) amounts so
reimbursed for gasoline will be included in Employee's taxable income except as
so documented as a business expense.
3.5 STOCK OPTION. Subject to Board approval, the Employee shall be
granted an incentive stock option to purchase 45,000 shares of the Company's
common stock under its 1993 Stock Incentive Plan (the "Plan"). The option price
shall be the closing price on Employee's first day of employment. The option to
purchase 45,000 shares shall vest over five years at 20% per year. If, in the
future, the Board votes to shorten the vesting schedule for Officers generally,
then any of the Employee's unvested shares would fall under the new, more
favorable vesting schedule. Stock options granted may be exercised by the
Employee, to the extent vested in accordance with the terms of the Plan.
Additionally, the vesting shall convert to a three-year vesting schedule, based
on 100% achievement of the revenue plan. Achievement of 100% of the revenue plan
for the 3rd and 4th Quarters of FY'97 converts 7,500 shares to three-year
vesting, achievement of 100% in FY'98 converts 22,500 shares, achievement of
100% in FY'99 converts 15,000 shares to a three-year vesting schedule. If, after
completing six months of service, Employee's employment is involuntarily
terminated by the Company for any reason other than "Cause," any unvested
shares, which would have otherwise vested within 12 months of such involuntary
termination, shall vest immediately.
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4. EMPLOYMENT TERMINATION WITHOUT CAUSE. The Employee shall have the status
of an employee at will. The Company may terminate the Employee's employment at
any time without cause. The Employee has no obligation to remain employed by the
Company and may terminate his employment at any time.
4.1 TERMINATION FOR CAUSE. In the event the Employee's employment is
terminated for cause the Company shall pay to the Employee the compensation and
benefits otherwise payable to him under Section 3 through the last day of his
actual employment by the Company. For purposes of this Agreement, "cause" for
termination shall be deemed to exist upon (a) alcohol or drug abuse affecting
the performance of your duties, theft, embezzlement, fraud, absenteeism,
dishonesty, gross negligence or misconduct, or (b) the conviction of the
Employee of, or the entry of a pleading of guilty or nolo contendere by the
Employee to, any crime involving moral turpitude or any felony.
4.2 TERMINATION FOR DEATH OR DISABILITY. If the Employee's employment
is terminated by death or because of disability, the Company shall pay to the
estate of the Employee or to the Employee, as the case may be, the compensation
which would otherwise be payable to the Employee up to the end of the month in
which the termination of his employment because of death or disability occurs,
as well as any benefits due Employee under the benefits programs, e.g., life
insurance. For purposes of this Agreement, the term "disability" shall mean the
inability of the Employee, due to a physical or mental disability, for a period
of 90 days, whether or not consecutive, during any 360-day period to perform the
services
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contemplated under this Agreement. A determination of disability shall be made
by a physician satisfactory to both the Employee and the Company, PROVIDED THAT
if the Employee and the Company do not agree on a physician, the Employee and
the Company shall each select a physician and these two together shall select a
third physician, whose determination as to disability shall be binding on all
parties.
4.3 TERMINATION BY THE COMPANY OTHER THAN FOR CAUSE. If the Employee's
employment is terminated by the Company for any reason other than for cause, the
Company shall continue paying the Employee's current base salary and insurance
benefits, after the Employee's termination of employment, for up to twelve (12)
months (the "Severance Benefit"). Payment of the Severance Benefit shall cease
upon the earlier of (a) the first anniversary of the Employee's date of
termination, or (b) the date the Employee begins employment with another
employer (or is re-employed by the Company).
4.4 TERMINATION FOLLOWING CHANGE IN CONTROL. If the Employee's
employment is terminated by the Company for any reason other than cause within
one year after a change in control, or the Employee experiences a substantial
diminution in the nature or status of his responsibilities from those set forth
in his job description, and the Employee chooses to terminate employment, the
Company shall continue paying the Employee's current base salary and benefits,
after the Employee's termination of employment, for up to twelve (12) months
(the "Severance Benefit"). Payment of the Severance Benefit shall cease upon the
earlier of (a) the first anniversary of the Employee's date of termination, or
(b) the date the Employee
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begins employment with another employer (or is re-employed by the Company). In
the event of change of control, the Employee's unvested shares shall vest
immediately, in accordance with section 16 of the Company's 1995 stock plan. For
the purposes of this paragraph, a change in control is defined as provided for
in Attachment "A."
5. Non-Compete.
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(a) During the Employment Period and for a period of twelve (12)
months after the Employee's termination of employment for any reason, the
Employee will not knowingly directly or indirectly:
(i) as an individual proprietor, partner, stockholder, officer,
employee, director, joint venturer, investor, lender, consultant or in any other
capacity whatsoever, render any services to Excel or Sattel; or
(ii) recruit, solicit or induce, or attempt to induce, any employee or
employees of the Company to terminate their employment with, or otherwise cease
their relationship with, the Company; or
(iii) solicit, divert or take away, or attempt to divert or to take
away, the business or patronage of any of the clients, customers or accounts, or
prospective clients, customers or accounts, of the Company which were contacted,
solicited or served by the Employee while employed by the Company.
(b) If any restriction set forth in this Section 5 is found by any
court of competent jurisdiction to be unenforceable because it extends for too
long a period of time or over too great a range of activities or too broad a
geographic area, it shall
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be interpreted to extend only over the maximum period of time, range of
activities or geographic area as to which it may be enforceable.
(c) The restrictions contained in this Section 5 are necessary for the
protection of the business and goodwill of the Company and are considered by the
Employee reasonable for such purpose. The Employee agrees that any breach of
this Section 5 will cause the Company substantial and irrevocable damage and
therefore, in the event of any such breach, in addition to such other remedies
which may be available, the Company shall have the right to seek specific
performance and injunctive relief.
6. NOTICES. All notices required or permitted under this Agreement shall be
in writing and shall be deemed effective upon personal delivery or upon deposit
in the United States Post Office, by registered or certified mail, postage
prepaid, addressed to the other party at the address shown above, or at such
other address or addresses as either party shall designate to the other in
accordance with this Section 6.
7. PRONOUNS. Whenever the context may require, any pronouns used in this
Agreement shall include the corresponding masculine, feminine or neuter forms,
and the singular forms of nouns and pronouns shall include the plural, and vice
versa.
8. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties and supersedes all prior agreements and understandings,
whether written or oral, relating to the subject matter of this Agreement.
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9. AMENDMENT. This Agreement may be amended or modified only by a written
instrument executed by both the Company and the Employee.
10. GOVERNING LAW. This Agreement shall be construed, interpreted and
enforced in accordance with the laws of the State of New Hampshire.
11. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure
to the benefit of both parties and their respective successors and assigns,
including any corporation with which or into which the Company may be merged or
which may succeed to its assets or business, provided, however, that the
obligations of the Employee are personal and shall not be assigned by him.
12. Miscellaneous.
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12.1 No delay or omission by the Company in exercising any right under
this Agreement shall operate as a waiver of that or any right. A waiver or
consent given by the Company on any one occasion shall be effective only in that
instance and shall not be construed as a bar or waiver of any right on any other
occasion.
12.2 The captions of the sections of this Agreement are for
convenience of reference only and in no way define, limit or affect the scope or
substance of any section of this Agreement.
12.3 In case any provision of this Agreement shall be invalid, illegal
or otherwise unenforceable, the validity, legality and enforceability of the
remaining provisions shall in no way be affected or impaired thereby.
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12.4 The Employee shall be entitled to indemnification as an Officer
of the Company under the Company's bylaws and charter.
12.5 Duties and Responsibilities of the Vice President, Sales
12.5.1 In the course of fulfilling the duties as Vice President,
Sales, the Employee will have the responsibility and authority to
negotiate and approve the necessary commercial contracts, prices,
purchase orders, and Gross Margins, in order to achieve the desired
growth in sales. In these cases the normal practice will be to consult
with the other appropriate officers prior to approving commercial
conditions or prices which may differ from our standards. These
variations may include:
a. Product discount levels and volume purchase discounts.
b. Overall profit levels on large strategic deals with low
Margins as calculated over the full scope of the project.
c. Payment Terms.
d. Delivery Commitments.
e. Other special and creative sales incentives as may be
necessary to close sales and achieve the desired growth
rates.
12.5.2 The Employee will have the responsibility and authority
for developing the Annual Sales Compensation Plan and will have the
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flexibility to considerably improve the earnings potential (within the
overall scope of the expense budget and applicable Human Resources
Policies and Guidelines) in order to attract the best candidates and
retain the industry's top performers.
12.5.3 The Company will provide and/or reimburse reasonable
business communications and entertainment expenses including; Cellular
Phone, pager, business phone/fax line at residence, computer docking
station/printer at residence, other business and entertainment
expenses as is customary for a Vice President, Sales, and consistent
with the Company's T&E policy.
12.5.4 The Employee will have control over the hiring, promotion,
and organizational decisions within the Sales organization. This
includes the currently open positions in Sales. The Employee will seek
the advice of the President and other related or experienced
executives in arriving at these decisions and follow relevant Company
policies, procedures, and applicable laws.
12.5.6 The Employee will be responsible and compensated for all
revenues generated by all distribution channels managed by Sales. The
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Employee will also be responsible for developing and managing all
relationships for product distribution and resale, in cooperation and
with the assistance of the rest of the management team.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year set forth above.
SUMMA FOUR, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
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Title: President and COO
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XXXX X. HASSELBECK
/s/ Xxxx Xxxxxxxxxx
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ATTACHMENT "A"
For the purposes of this Agreement, a change of control shall be deemed to
have occurred if at any shareholders' meeting fifty percent (50%) of the total
shares voting of the shares of the Company's common stock outstanding are voted
either directly or by proxy for a person or persons other than those nominated
by the Company's Board of Directors or if the individuals who, as of the date
hereof, constitute the Board of Directors of the Company, cease for any reason
to constitute at least a majority of the Board, provided that any person
becoming a director subsequent to the date hereof whose election or nomination
for election by the Company's shareholders was approved of by a vote of at least
a majority of the Directors then comprising the Board, shall be, for the
purposes of this Agreement, considered as though such person was a member of the
Board as of the date hereof.
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Attachment B
10/18/96 17:00
Compensation Plan for VP of Sales
Percentage of achievement
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Components Value 100 105 110 115 120
Base IB:
(paid quarterly) $ 125,000 $ 125,000 $ 125,000 $ 125,000 $ 125,000 $ 125,000
Revenue $ 24,000 $ 24,000 $ 26,400 $ 28,800 $ 31,200 $ 33,600
(1)
Margin $ 12,000 $ 12,000 $ 12,000 $ 12,000 $ 12,000 $ 12,000
(2)
Expenses $ 4,000 $ 4,000 $ 4,000 $ 4,000 $ 4,000 $ 4,000
(3)
Special $ 40,000 $ 8,000 $ 16,000 $ 24,000 $ 32,000 $ 40,000
Bonus(4)
MIB(5)(6) $ 50,000 $ 25,000 $ 31,250 $ 37,500 $ 43,750 $ 50,000
Annual(7) $ 255,000 $ 198,000 $ 214,650 $ 231,300 $ 247,950 $ 264,600
Options(8)(9) 45,000
Signing Bonus $ 20,000
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1. 50% of bonus at 75% of achievement; 2% more for every 1% more achieved; no
cap
2. Quarterly margin is "factory" margin, e.g. revenue less std cost, binary
result
3. Quarterly expenses: $1k per quarter for being with +-5% of plan
4. For achievement of revenue plan earned & paid quarterly in increments of 5%
starting at 100%, no cap
5. MIB means Management Incentive Plan
6. MIB 40% of base paid 50% on corporate revenues, 50% on personal goals,
based upon FY97 corp goals
7. Assumes 100% achievement of personal goals; results may vary
8. Strike price set by Board vote after offer accepted
9. Achievement of 100% of revenue in Q3 & Q4 FY97 converts 7500 shares of 3 yr
vesting, 100% in FY98 converts 22,500, and 100% in FY99 gets 15,000
