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Exhibit 10.25
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT is made as of the 14th day of October, 1996, between XXXXX
XXXXXXX ("Executive"), and DIGITAL SYSTEMS INTERNATIONAL, INC., a Washington
corporation ("Company").
IN CONSIDERATION of the mutual covenants and promises contained herein, the
parties agree as follows:
1. EMPLOYMENT.
Effective as of the date of the consummation of the Transaction, as defined
below (the "Effective Date"), the Company will employ Executive, and Executive
will accept employment by the Company, as Company's Senior Vice President,
Product Development, responsible for the management and direction of Product
Development Department of the Company, subject to the direction and control of
the President and the Chief Executive Officer of the Company. The Executive
will perform such additional duties as may be assigned from time to time by the
President and the CEO of the Company which relate to the business of the
Company, its subsidiaries or any business ventures in which the Company or its
subsidiaries may participate.
This Agreement has been made and entered into in contemplation of the
acquisition of ViewStar by the Company in a merger transaction (the
"Transaction") to be consummated in December of 1996. Executive was an
executive officer of ViewStar prior to consummation of such merger
transaction. Each party has agreed to the terms and conditions as set forth
herein to induce the other to go forward with and consummate the merger
transaction. Of specific importance to Company is Executive's commitment to
stay with the Company at least through 1997 and covenant not to compete with
the business of the Company or ViewStar during 1997 or as described in Section
8 hereof.
Executive acknowledges that he has been represented by his own counsel and has
received his own independent tax advice in connection with negotiation of this
Agreement.
2. ATTENTION AND EFFORT.
Executive will devote his full business time, attention and effort to the
Company's business and will use his skills and render services to the best of
his ability to serve the interests of the Company.
3. TERM.
Unless otherwise terminated as provided in Section 6 of this Agreement,
Executive's term of employment under this Agreement shall commence as of the
date hereof and shall expire upon Executive's resignation or termination.
4. COMPENSATION.
4.1 BASE SALARY
Executive's compensation shall consist, in part, of an annual base salary
of $140,000 before all customary payroll deductions (the "Base Salary"). The
Base Salary shall be paid in substantially equal installments at the same
interval as other officers of the Company are paid, or otherwise in conformance
with the Company's standard payroll practices. The Board of Directors of the
Company shall determine any increases in the Base Salary in future years.
4.2 BONUS
Executive shall be entitled to receive, in addition to the Base Salary, an
annual bonus (the "Bonus") in an amount to be determined pursuant to the
Company's Management and Company Performance Bonus Plan, at appropriate level,
as approved by the Board of Directors of the Company, in effect for each
calendar year, but in no event less than the bonus at plan provided for under
the 1996 incentive plan of ViewStar.
4.3 STOCK OPTIONS
As of the Effective Date, Executive shall be granted incentive stock
options and/or nonqualified stock options to purchase shares of common stock of
the Company, issued to replace options previously granted to Executive by
ViewStar, pursuant to the terms of certain Stock Option Plans maintained by
ViewStar
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(the "ViewStar Option Plans"). Such options shall continue to vest during
the term of this Agreement and during any subsequent service as a
consultant to the Company.
As inducement to continue working for the Company through at least June
1998, the Company agrees to recommend to the Board of Directors of the
Company award of options in 1Q97 to Executive to purchase 75,000 shares of
common stock of the Company, pursuant to the terms of the Company's 1996
Stock Incentive Compensation Plan, except that vesting for such options (at
a rate of 25% per year) shall not commence until January 1, 1998.
4.4 SIGNING BONUS
As further inducement to Executive to enter into this Agreement and serve
through 1997, Company agrees to pay to Executive, through the Company's
normal payroll and subject to customary payroll deductions, a one-time
signing bonus in an amount equal to 17.5% of Executive's Base Salary. In
the event that Executive voluntarily gives notice of termination under this
Agreement prior to December 31, 1997, Executive agrees to repay to Company
the amount of such signing bonus.
5. BENEFITS AND EXPENSES.
5.1 EXPENSES
The Company shall promptly reimburse Executive for all reasonable and
necessary business expenses incurred and advanced by him in carrying out
his duties under this Agreement, consistent with Company policies in
connection therewith. Executive shall present to the Company from time to
time an itemized account of such expenses in such form as Company policies
may require.
5.2 BENEFITS
During the term of employment hereunder, Executive shall be entitled to
participate fully in any benefit plans, programs, policies and fringe
benefits which may be made available to the senior executives of the
Company generally, including medical, dental, disability, pension and
retirement benefits, life insurance and other death benefits. Executive
will initially be entitle to three weeks vacation per year and any other
vacation or personal time off in accordance with Company policy.
5.3 OTHER
The Company shall provide Executive an office and with secretarial support
suitable to the position of Vice President.
5.4 MOVING EXPENSES
To the extent required, the Company will reimburse Executive for normal and
reasonable household moving expenses in accordance with standard Company
policy or as otherwise agreed between the parties.
6. TERMINATION.
6.1 BY THE COMPANY
With or without "Cause" (as defined in the Company's 19967 Stock Incentive
Compensation Plan), the Company may terminate the employment of Executive
at any time during the term upon giving at least 30 days Notice of
Termination (as defined below).
6.2 BY EXECUTIVE
Executive may terminate his employment at any time for Good Reason (as
defined below) or otherwise upon giving at least 30 days Notice of
Termination.
6.3 AUTOMATIC TERMINATION
Employment shall terminate automatically upon death or total disability of
Executive. The term "total disability" as used herein means an inability to
perform the duties set forth in paragraph 1 of this Agreement because of
illness or physical or mental disability for a period or periods
aggregating 180 calendar days in any 12-month period, unless Executive is
granted a leave of absence by the Company. Executive and Company hereby
acknowledge that Executive's ability to perform the duties specified in
paragraph 1 hereof is of the essence of this Agreement. Termination
hereunder shall be deemed to be
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effective immediately upon Executive's death or 30 days following a Notice
of Termination based upon a determination by the Board of Directors of the
Company of Executive's total disability as defined herein.
6.4 NOTICE
The term "Notice of Termination" means written notice of termination of
Executive's employment.
6.5 GOOD REASON
For the purpose of this Agreement, "Good Reason" is defined in Section
2.11 of the Company's 1996 Stock Incentive Compensation Plan.
7. SEVERANCE PAYMENTS.
In the event of termination of the employment of Executive, all compensation
and benefits set forth in this Agreement shall terminate as of the effective
date of termination, provided, however, that if the Company terminates
Executive's employment without cause, or if Executive terminates his employment
for Good Reason, the Company shall be obligated to pay to Executive the greater
(if such termination is during 1997) of Executive Base Salary, Bonus and stock
option vesting through 1997 or six months of Executive's Base Salary and stock
option vesting. Such amounts shall be paid as Salary and Bonus continuation
payments in accordance with Section 4 hereof.
8. AGREEMENT NOT TO COMPETE NOR SOLICIT EMPLOYEES.
Following voluntary termination of employment with the Company by Executive,
during 1997 and, if longer, for six months from the effective date of such
termination, Executive agrees not to directly or indirectly engage in (whether
as an employee, consultant, proprietary partner, director or otherwise), or
have an ownership interest in, or participate in the financing, operation,
management or control of any firm, corporation or business, other than the
Company or its subsidiaries, that engages in the directly competitive
manufacture, sale or design of directly competitive Call Flow, Work Flow, or
CTI (Computer Telephony Integration) products or services. In the event of such
voluntary termination after January 1, 1998, and compliance by Executive with
this covenant not to compete, in addition to other compensation and benefits to
which Executive is entitled under this Agreement (except for compensation as
provided in Section 7 above), Executive will also be entitled to six months'
Base Salary, six months' benefits per Section 5.2, and to the extent permitted
by law and the applicable stock option plan, continuation of vesting of stock
options awarded Executive by Company beyond the effective date of termination
of employment. Such amounts shall be paid at Salary and Bonus continuation
payments in accordance with Section 4 hereof. Withholding such benefits shall
be the Company's sole remedy in the event of any breach of such covenant not to
compete by Executive. The above notwithstanding, beneficial ownership by the
Executive (together with any one or more members of his immediate family and
together with any entity under his direct or indirect control) of less than 5%
of the outstanding shares of capital stock of any corporation whose stock is
listed on a national securities exchange or publicly traded in the
over-the-counter market shall not constitute a breach of the covenant not to
compete of this Section 8.
During the term of employment and for so long after that as Executive
continues to provide consulting services as mutually agreed, Executive shall
not solicit or induce employees to leave the Company's (nor its affiliates or
subsidiaries) employ. The foregoing shall not prohibit the executive or any
entity with which the Executive may be affiliated from hiring a former employee
of the Company who approaches Executive on his own initiative or in response to
a general recruitment effort by or through Executive, or if Executive first
communicates with the former Company employee about potential employment after
the employee has left employment with the Company.
9. AGREEMENT NOT TO DISCLOSE CONFIDENTIAL INFORMATION.
As a condition of his employment hereunder, Executive has executed and
delivered to the Company an agreement addressing the nondisclosure of
confidential information and ownership of inventions (the "Non-Disclosure
Agreement") in accordance with standard Company policy, which Non-Disclosure
Agreement shall survive termination of Executive's employment.
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10. FORM OF NOTICE.
Every notice required by the terms of this Agreement shall be given in writing
by serving the same upon the party to whom it was addressed personally, by
courier, by facsimile transmission (with hard copy delivered by overnight
courier) or by registered or certified mail, return receipt requested, at the
address set forth below or at such other address as may hereafter be designated
by notice given in compliance with the terms hereof:
If to Executive: Xxxxx Xxxxxxx
At address maintained by Company HR Department
If to Company: Digital Systems International, Inc.
0000 000xx Xxx XX
Xxxxxxx, XX 00000
Attn.: Wm. Xxxxxxxx Xxxxxx,
General Counsel
Notice shall be effective upon personal delivery, delivery by courier, receipt
of facsimile transmission or three days after mailing.
11. ASSIGNMENT.
Executive agrees that this Agreement may be transferred or assigned by the
Company to (a) any corporation resulting from any merger, consolidation or
other reorganization to which the Company is a party or (b) any corporation,
partnership, association or other person to which the Company may transfer all
or substantially all of the assets and business, and such assignee or
transferee shall succeed to the rights and obligations of the Company
hereunder. This Agreement may not be assigned by Executive.
12. WAIVER.
No waiver of any of the provisions of this Agreement shall be valid unless in
writing, signed by the party against whom such claim or waiver is sought to be
enforced, nor shall failure to enforce any right hereunder constitute a
continuing waiver of the same of a waiver of any other right hereunder.
13. AMENDMENTS IN WRITING.
No amendment, modification, waiver, termination or discharge of any provision of
this Agreement, nor consent to any departure therefrom by either party hereto,
shall in any event be effective unless the same shall be in writing,
specifically identifying this Agreement and the provision intended to be
amended, modified, waived, terminated or discharged, and signed by the Company
and Executive. No provision of this Agreement shall be varied, contradicted or
explained by any oral agreement, course of dealing or performance or any other
matter not set forth in an agreement in writing and signed by the Company and
Executive.
14. APPLICABLE LAW - VENUE.
This Agreement shall be governed by the laws of the state of California,
without regard to its conflicts of laws provisions. Venue of any action brought
to enforce or interpret this Agreement shall be in Alameda, California, and the
parties consent to jurisdiction in the federal and state courts in such venue.
15. SEVERABILITY.
In the event that any provision of this Agreement shall be determined by any
court or arbitrator of competent jurisdiction to be unenforceable or otherwise
invalid for any reason, such provision shall be enforced and validated to the
extent permitted by law, and the court or arbitrator shall have the power to
reform such provision to the extent necessary for such provision to be
enforceable under applicable law. All provisions of this Agreement are
severable, and the unenforceability of any single provision hereof shall not
affect the remaining provisions.
16. HEADINGS.
All headings or titles in this Agreement are for the purpose of reference only
and shall not in any way affect the interpretation or construction of this
Agreement.
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17. ATTORNEYS FEES & COSTS.
In any action or proceeding brought by either party against the other arising
out of or in any way relating to this Agreement, the prevailing party shall, in
addition to other allowable costs and remedies, be entitled to an award of
reasonable attorneys' fees and costs incurred in connection with such action or
proceeding.
IN WITNESS WHEREOF, the parties have executed and entered into this Agreement as
of the date above first written.
EXECUTIVE: COMPANY:
DIGITAL SYSTEMS INTERNATIONAL, INC.
a Washington Corporation
/s/ XXXXX XXXXXXX By [SIG]
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Xxxxx Xxxxxxx Its President & CEO
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