Exhibit 10.28
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is entered into as of April
28, 2003, by and between Visual Networks Operations, Inc., a company organized
under the laws of Delaware ("Visual" or the "Employer"), and Xxxxxxxx X. Xxxxxx,
an individual (hereafter the "Executive").
WITNESSETH:
WHEREAS, VISUAL desires to employ the Executive, and the Executive desires
to accept such employment, on the terms and conditions set forth herein;
WHEREAS, VISUAL and the Executive have entered into a Confidentiality,
Non-Disclosure, And Non-Solicitation Agreement (the "Non-Solicitation
Agreement");
NOW, THEREFORE, in consideration of the mutual promises and covenants set
forth herein, and for other good and valuable consideration, the sufficiency of
which is hereby acknowledged, and intending to be legally bound hereby, VISUAL
and Executive hereby agree as follows:
ARTICLE 1
POSITION OF EMPLOYMENT
1.1 Title and Position. VISUAL agrees to employ Executive in the following
position: President and Chief Executive Officer.
1.2 Start Date. April 28, 2003.
1.3 Exclusive Devotion of Business Time. VISUAL agrees to employ the Executive
and the Executive agrees to devote his full business time, effort, skills
and loyalty to the business of VISUAL, to effectively carry out his
responsibilities to VISUAL hereunder and to render his services and skills
in the furtherance of the business of VISUAL, except for during permitted
vacation periods and reasonable periods of illness or other incapacity.
This Section 1.2 does not prevent the Executive from: (i) serving on civic
and charitable boards, subject to VISUAL's policies and standards; and
(ii) managing his investments and the investments of his immediate family,
subject VISUAL's policies and standards. Despite anything in this Section
1.2 to the contrary, the activities referenced in clauses (i) and (ii)
above shall not, individually or in the aggregate, interfere with the
performance of the Executive's duties under this Agreement. To the extent
that Executive desires to act as a member of the Board of Directors of
another entity, VISUAL and the Executive shall reasonably discuss and
attempt to come to an arrangement suitable to both the Executive and
VISUAL.
1.4 Conflict with Company Policies. The terms and conditions of Executive's
employment will, to the extent not addressed in this Agreement, be
governed by VISUAL's company policies ("Policies"). In the event of a
conflict between this Agreement and the Policies, the terms of this
Agreement shall govern.
ARTICLE 2
DUTIES, AUTHORITY AND PERFORMANCE
2.1 Performance. Executive acknowledges and agrees that he is being offered a
position of employment by VISUAL with the understanding that he possesses
a unique set of skills, abilities, and experiences which will benefit
VISUAL. Executive agrees that his continued
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employment with VISUAL is contingent upon his successfully performing his
duties as set forth in this Agreement.
2.2 Duties and responsibilities. VISUAL agrees to employ the Executive as the
President and Chief Executive Officer of VISUAL. Executive shall report to
the Board of Directors (the "Board") of Visual Networks, Inc. The primary
responsibilities of the Executive shall be determined by the Board from
time to time. On the date hereof, the duties and responsibilities of the
Executive generally are as follows:
2.2.1 Executive shall render to the very best of his ability, on behalf of
VISUAL, and shall undertake diligently, all duties assigned to him
by the Board.
2.2.2 In the performance of the Executive's duties hereunder, he must
comply in each and every respect with applicable laws, rules and
regulations applicable to VISUAL.
2.2.3 As President and Chief Executive Officer of VISUAL, Executive must
develop and implement the necessary plans to ensure the success of
VISUAL. Executive must also effectively manage and administer the
day-to-day execution of these plans.
2.2.4 The Executive acknowledges that he may have to travel and work in
different locations for business reasons from time to time as is
reasonably necessary or advisable for the performance of his duties
hereunder.
2.3 Cooperation. During the term of this Agreement and any time thereafter,
the Executive agrees to give prompt written notice to VISUAL of any claim
or injury relating to VISUAL, and to fully cooperate in good faith and to
the best of his ability with VISUAL in connection with all pending,
potential or future claims, investigations or actions which directly or
indirectly relate to any transaction, event or activity about which the
Executive may have knowledge because of his employment with VISUAL. Such
cooperation shall include all assistance that VISUAL, its counsel, or its
representatives may reasonably request, including reviewing and
interpreting documents, meeting with counsel, providing factual
information and material, and appearing or testifying as a witness. Should
Executive be required to cooperate under the provisions of this Section
2.3 after termination of his employment with VISUAL, then he shall be
reimbursed by VISUAL for all reasonable costs and expenses related to his
cooperation hereunder.
2.4 Duty of Loyalty. Executive acknowledges and agrees that he owes a
fiduciary duty of loyalty to act at all times in the best interests of
VISUAL.
2.5 Business Opportunities. All business opportunities presented to Executive:
(i) by reason of Executive's employment by VISUAL; or (ii) relating to the
businesses and activities engaged in (or contemplated to be engaged in) by
VISUAL or any affiliate of VISUAL prior to and as of the date hereof or
during the term hereof, shall be owned by, and belong exclusively to,
VISUAL, and the Executive shall have no personal interest or rights
therein or thereto. Executive shall promptly disclose any such business
opportunity to VISUAL and execute and deliver to VISUAL, without
additional compensation, such instruments as VISUAL may require from time
to time to evidence its ownership of any such business opportunity.
ARTICLE 3
COMPENSATION AND BENEFITS
3.1 Base Salary. Executive shall be paid a base salary of three hundred sixty
thousand dollars ($360,000) annually (the "Base Salary"), subject to
applicable federal, state, and local withholding, such Base Salary to be
paid to Executive on a semi-monthly basis. VISUAL may,
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in its sole discretion, increase the amount of Base Salary effective for
any specified year or part thereof during the term of this Agreement.
3.2 Options. Executive shall be granted nonstatutory stock options to purchase
eight hundred eleven thousand one hundred fifty (811,150) shares of common
stock of VISUAL (the "Initial Grant"), issued and pursuant to the
Nonstatutory Stock Option Grant Agreement (the "Grant Agreement") dated
April 28, 2003 between VISUAL and Executive. Vesting of the Initial Grant
shall be as described in the Grant Agreement.
3.3 Annual Bonus. A bonus pool equal to fifty percent (50%) of Executive's
Base Salary shall be available for Executive. The Board, no later than
June 30, 2003, will determine the performance metrics required for payment
of all or part of the annual bonus as well as payout intervals, if any.
The Board shall, in its sole discretion, determine what portion of the
bonus pool, if any, will be paid. During the period from April 28, 2003 to
April 27, 2004, Executive shall receive a minimum bonus of ninety thousand
dollars ($90,000) paid in three (3) equal instalments on the payroll date
immediately following July 28, 2003, October 28, 2003 and January 28, 2004
provided that Executive remains actively employed with VISUAL as of the
date each of the above noted payments becomes payable.
3.4 Signing Bonus. Executive shall receive a one time signing bonus of
twenty-five thousand dollars ($25,000). This bonus will be paid on the
first regularly scheduled payroll following Executive's date of hire and
will be subject to all federal, state, and local withholdings as required
by law.
3.5 Employee Benefits. During the period that Executive is employed by VISUAL
and for such longer period as required by applicable law, Executive shall
be eligible to participate in all employee benefit plans, policies,
programs, or perquisites in which other VISUAL employees participate.
Executive shall accrue Paid Time Off ("PTO") at the rate of twenty (20)
days per year.
Details of VISUAL's insurance plans, including benefit amounts,
limitations and restrictions are described in the summary plan
descriptions provided to the Executive. If there is any difference between
the summary plan descriptions and the information set forth in this
Agreement, then the information contained in the summary plan descriptions
takes precedence.
3.6 Reimbursement for expenses. VISUAL shall reimburse the Executive for all
ordinary, necessary and reasonable out-of-pocket expenses incurred by the
Executive for the benefit of VISUAL upon presentation of appropriate
documentation in accordance with VISUAL's policies in effect from time to
time.
ARTICLE 4
TERMINATION OF EMPLOYMENT
4.1 Term. Executive's employment by VISUAL shall extend for a one (1) year
term from April 28, 2003 through April 27, 2004. Additionally, either
VISUAL or Executive may terminate this employment relationship at any
time, for any reason or for no reason, as provided in Sections 4.2 and 4.3
hereof.
4.2 Executive's Right to Terminate. The Executive has the right to terminate
his employment under this Agreement at any time during the course of this
Agreement by giving ninety (90) days notice in writing to the Board (the
"Notice"). The Notice period may be shortened by mutual agreement of the
parties. During the Notice period, Executive must fulfill all his duties
and responsibilities set forth in this Agreement, and use his best efforts
to train and support
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his replacement, if any. Executive's salary and benefits will remain
unchanged during the Notice period.
4.3 VISUAL's Right to Terminate. VISUAL has the right to terminate immediately
the Executive's employment under this Agreement at any time for any of the
following reasons:
4.3.1 Executive's death; or
4.3.2 Executive's "Disability", which for purposes of this Agreement means
the Executive's incapacitation by accident, sickness or other
circumstances which, in the reasonable good faith determination of the
Board, renders Executive mentally or physically incapable of performing
the duties and services required of him hereunder in substantially the
same manner and to the extent required hereunder prior to the commencement
of such Disability, either with or without reasonable accommodation, on a
full-time basis for a period of at least 90 consecutive days or for a
period of six (6) non-consecutive months of the preceding eighteen (18)
month period; or
4.3.3 For "Cause", which for purposes of this Agreement shall mean:
4.3.3.1 The Executive has engaged in conduct which: (A) resulted in
a conviction of or plea of guilty or no contest to a misdemeanor
involving moral turpitude or involving the property of VISUAL; or
(B) resulted in a conviction of or plea of guilty or no contest to a
felony under the laws of the United States or any state or political
subdivision thereof; or
4.3.3.2 The Executive: (A) commits a breach of his fiduciary duty to
VISUAL or any of its affiliates; or (B) commits an act of gross
negligence; or (C) engages in willful misconduct; or (D) engages in
any transaction which the Executive knows or should have known would
constitute self-dealing or a conflict of interest between the
Executive and VISUAL and in which the Executive does or would
receive any direct or indirect economic or pecuniary benefit without
prior disclosure of such transaction to VISUAL; or
4.3.3.3 The Executive violates the internal procedures or policies
of VISUAL in a manner which has a material adverse effect on the
reputation, business or prospects of VISUAL, such as conduct
constituting employment discrimination or sexual harassment; or
4.3.3.4 Material default or other material breach by Executive of
his obligations hereunder; or
4.3.3.5 Failure by to perform diligently and competently his duties
hereunder after written notice from VISUAL of such failure and
thirty (30) days to remedy the deficiency described in such notice.
4.4 Effect of Termination on Compensation.
4.4.1 Termination by VISUAL Without Cause or Upon Change of Control. If
Executive's employment hereunder shall be terminated by the Employer
without Cause, or upon a Change of Control, VISUAL agrees to provide
Executive with severance pay, payable according to normal payroll
practice, amounting to twelve (12) months of the Executive's then
applicable Base Salary, plus an amount equal to the bonus pool then in
effect, payable at the end of the twelve (12) month severance period (the
"Severance Pay"). In the event that Executive breaches any of the
provisions of this Agreement (including but not limited to Executive's
obligation to cooperate during the Notice period and/or the
Non-Solicitation Agreement), all compensation and benefits hereunder shall
cease immediately, Executive's
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termination shall be treated as if it had been a termination for Cause,
and Executive shall be required to repay VISUAL any Severance Pay received
hereunder.
4.4.2 Termination by Executive's Resignation or by Employer for Cause,
Death or Disability. If Executive's employment is terminated by Executive
by a voluntary resignation (for any reason or no reason), or for death,
Disability or Cause (as those terms are defined in sections 4.3.2 and
4.3.3 herein), all compensation and benefits payable hereunder shall
terminate contemporaneously with the date of the Executive's termination
of employment.
ARTICLE 5
GENERAL PROVISIONS
5.1 Notices. All notices and other communications required or permitted by this
Agreement to be delivered by VISUAL or Executive to the other party shall be
delivered in writing to the address shown below, either personally, by facsimile
transmission or by registered, certified or express mail, return receipt
requested, postage prepaid, to the address for such party specified below or to
such other address as the party may from time to time advise the other party,
and shall be deemed given and received as of actual personal delivery, on the
first business day after the date of delivery shown on any such facsimile
transmission (with confirmed receipt) or upon the date or actual receipt shown
on any return receipt if registered, certified or express mail is used, as the
case may be.
Employer: Visual Networks Operations, Inc.
Attention: Xxxxx Xxxxxx
Vice President of Human Resources
0000 Xxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
Executive: Xxxxxxxx X. Xxxxxx
0000 Xxxxxxx Xxxx
Xxxxxxx, Xxxxxxxx 00000
5.2 Amendments and Termination; Entire Agreement. This Agreement may not be
amended or terminated except by a writing executed by all of the parties hereto.
This Agreement constitutes the entire agreement of VISUAL and Executive relating
to the subject matter hereof, and supersedes all prior oral and written
understandings and agreements, whether written or oral. Notwithstanding anything
herein to the contrary, this Agreement shall not affect the applicability of the
Non-Solicitation Agreement executed by Executive, and the Non-Solicitation
Agreement shall remain in full force and effect notwithstanding this Agreement.
5.3 Severability; Provisions Subject to Applicable Law. All provisions of this
Agreement shall be applicable only to the extent that they do not violate any
applicable law, and are intended to be limited to the extent necessary so that
they will not render this Agreement invalid, illegal or unenforceable under any
applicable law. If any provision of this Agreement or any application thereof
shall be held to be invalid, illegal or unenforceable, the parties agree and
stipulate that any court of competent jurisdiction may enforce these
restrictions to the maximum extent deemed reasonable, rather than declare any
provision unenforceable.
5.4 Waiver of Rights. No waiver by VISUAL or Executive of a right or remedy
hereunder shall be deemed to be a waiver of any other right or remedy or of any
subsequent right or remedy of the same kind.
5.5 Definitions, Headings and Number. A term defined in any part of this
Employment Agreement shall have the defined meaning wherever such term is used
herein. The headings contained in this
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Agreement are for reference purposes only and shall not affect in any manner the
meaning or interpretation of this Employment Agreement. Where appropriate to the
context of this Agreement, use of the singular shall be deemed also to refer to
the plural, and use of the plural to the singular.
5.6 Counterparts. This Agreement may be executed in separate counterparts, each
of which shall be deemed an original but all of which taken together shall
constitute but one and the same instrument.
5.7 Governing Law. The parties acknowledge and expressly agree that this
Agreement shall be governed by and interpreted in accordance with federal law
and the laws of the State of Maryland. The parties hereto agree that any
disputes shall be resolved by the District Court of Maryland for Xxxxxxxxxx
County, the Circuit Court of Maryland for Xxxxxxxxxx County, or the United
States District Court for the District of Maryland, as may be appropriate.
5.8 Attorneys Fees. If VISUAL incurs costs to enforce the terms of this
Agreement (including but not limited to a declaratory judgment action),
Executive shall reimburse VISUAL all of its costs and expenses, including
reasonable attorneys' fees.
IN WITNESS WHEREOF, VISUAL and Executive have signed this Agreement.
VISUAL NETWORKS OPERATIONS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Xxxxx X. Xxxxxxxx
President and Chief Executive Officer
Date: April 28, 2003
/s/ Xxxxxxxx X. Xxxxxx
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Xxxxxxxx X. Xxxxxx
Date: April 28, 2003
