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EXHIBIT 10.15
GLOBESPAN TECHNOLOGIES INC.
KEY EMPLOYEE AGREEMENT
FOR
XXXXXX X. XXXXX
This Key Employee Agreement ("Agreement") is entered into as of
the 1st day of August, 1997, by and between XXXXXX X. XXXXX ("Executive") and
GLOBESPAN TECHNOLOGIES INC., a Delaware corporation (the "Company").
WHEREAS, the Company desires to employ Executive to provide
personal services to the Company, and wishes to provide Executive with certain
compensation and benefits in return for his services; and
WHEREAS, Executive wishes to be employed by the Company and
provide personal services to the Company in return for certain compensation and
benefits;
NOW, THEREFORE, in consideration of the mutual promises and
covenants contained herein, it is hereby agreed by and between the parties
hereto as follows:
1. EMPLOYMENT BY THE COMPANY.
1.1 The Company agrees to employ Executive in the position
of Chairman of the Board of Directors, and Executive hereby accepts such
employment effective as of the date of this Agreement. In addition the Company
shall cause the Executive to be elected to its Board of Directors during the
term of this Agreement. During the first year of the term of his employment with
the Company under this Agreement, Executive will devote his best efforts and the
appropriate amount of his business time and attention (except for such time as
Executive shall require to act as Chairman of Paradyne Corporation Technologies
Inc., vacation periods and reasonable periods of illness or other incapacities
permitted by the Company's general employment policies) to the business of the
Company. During the second year of the term of this Agreement Executive shall
continue to service as Chairman but in a more traditional role with part time
commitment, including presiding over and attendance at regularly scheduled Board
of Directors' meetings and presiding over all Board related activities and
responsibilities. If Executive shall be offered and shall accept additional
positions with an affiliate of the Company or another entity which is directly
or indirectly affiliated with a shareholder of the Company the Board and the
Executive shall mutually agree to any change in roles hereunder and compensation
as hereinafter provided. Such change shall be reflected in an amendment to this
Agreement.
1.2 The employment relationship between the parties shall
also be governed by the general employment policies and practices of the
Company, including those relating to protection of confidential information and
assignment of inventions, except that when the terms of this Agreement differ
from or are in conflict with the Company's general employment policies or
practices, this Agreement shall control.
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1.3 The term of this Agreement shall be for a period of
two years commencing on the date hereof and shall end on its second anniversary
date (the "Term").
2. COMPENSATION.
2.1 SALARY. Executive shall receive, for services to be
rendered under this Agreement, an annualized base salary of $150,000 for the
first twelve months of this Agreement and an annualized base salary of $100,000
for the second twelve months of this Agreement, payable in installments
consistent with the Company's payroll policies.
2.2 EQUITY PLAN. Executive will not be eligible to
participate in the Company's Equity Incentive Plan.
2.3 DISCRETIONARY INCENTIVE BONUS. Executive will not be
eligible for a discretionary or incentive bonus.
2.4 STANDARD COMPANY BENEFITS. Except for the Company's
Severance Benefit Plan (if any) and any incentive or bonus plans, Executive
shall be entitled to all rights and benefits for which he is eligible under the
terms and conditions of the standard Company benefits and compensation practices
which may be in effect from time to time including its Retirement Savings Plan
and provided by the Company to its employees generally and to its management and
executive employees in specific. Notwithstanding the above Executive shall not
be entitled to any duplication of benefits if such benefits are provided to him
in his capacity as Chairman of the Board of Paradyne Corporation. The benefits
of Paradyne shall be considered primary.
3. PROPRIETARY INFORMATION OBLIGATIONS.
3.1 AGREEMENT. Executive agrees to execute and abide by
the Proprietary Information and Inventions Agreement attached hereto as Exhibit
A.
3.2 REMEDIES. Executive's duties under the Proprietary
Information and Inventions Agreement shall survive termination of his employment
with the Company. Executive acknowledges that a remedy at law for any breach or
threatened breach by him of the provisions of the Proprietary Information and
Inventions Agreement would be inadequate, and he therefore agrees that the
Company shall be entitled to injunctive relief in case of any such breach or
threatened breach.
4. OUTSIDE ACTIVITIES.
4.1 Except investments or activities associated with Texas
Pacific Group or with the prior written consent of the Company's Board of
Directors, Executive will not during the first year of the term of this
Agreement undertake or engage in any other employment or occupation, other than
ones in which Executive is a passive investor. Executive may engage in civic and
not-for-profit activities so long as such activities do not materially interfere
with the performance of his duties hereunder.
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4.2 Except as permitted by Section 4.3, Executive agrees
not to acquire, assume, or participate in (directly or indirectly) any position,
investment or interest known by him to be adverse or antagonistic to the
Company, its business, or its prospects, financial or otherwise.
4.3 Except as specified above, during the term of his
employment by the Company, except on behalf of the Company, Executive will not
have any direct or indirect business connection or interest, in any capacity
whatsoever, with any other person or entity known by him to compete directly in
a material detrimental way with the Company, throughout the world, in any line
of business engaged in (or planned to be engaged in) by the Company. Nothing in
this paragraph shall bar Executive from owning securities of any competitor
corporation as a passive investor so long as his aggregate direct holdings in
any one such corporation shall not constitute more than 4% of the voting stock
of that corporation.
5. TERMINATION OF EMPLOYMENT.
5.1 EMPLOYMENT AT-WILL. Executive and Company each
acknowledge that either party has the right to terminate Executive's employment
with the Company at any time for any reason whatsoever, with or without cause or
advance notice. This at-will employment relationship cannot be changed except in
a writing signed by a duly authorized officer of the Company.
5.2 COMPANY-INITIATED TERMINATION WITHOUT CAUSE OR
EXECUTIVE TERMINATION FOR GOOD REASON.
(a) The Company shall have the right to terminate
Executive's employment with the Company at any time without cause and the
Executive shall have the right to terminate at any time for Good Reason.
(b) If Executive's employment is terminated
without cause by the Company or by the Executive for Good Reason, and upon
Executive's providing the Company with a signed general release of all claims, a
form of which is set forth in Exhibit B (the "Release"), then on the Effective
Date of such Release, the Company shall pay Executive an amount equivalent to
the remainder of the Executive's base salary due through July 31, 1999 and shall
provide Executive at its expense with comparable benefits for such period.
Executive's compensation and benefits otherwise cease as of his termination
date.
(c) For purposes of this Agreement, "Good Reason"
shall mean the occurrence of the following, without Executive's express written
consent:
(i) the assignment to Executive of any duties
inconsistent with Executive's status as Chairman of the Board of Directors or
failure to elect Executive Chairman and a member of the Board of Directors;
(ii) a reduction by the Company in Executive's
annual base salary; or
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(iii) There shall be a Change in Control of
the Company and Executive shall not prior to such Change in Control agree in
writing to continue to serve in a mutually acceptable capacity for mutually
acceptable compensation. For purposes of this Agreement, a "Change in Control of
Globespan" shall mean a change in control of a nature that would be required to
be reported in response to Item 5(f) of & Schedule 14A of Regulation 14A
promulgated under the Securities Exchange Act of 1934, as amended ("Exchange
Act"), whether or not Globespan is then subject to such reporting requirement;
provided however, without limitation, such a change in control shall without
limitation be deemed to have occurred if any "person" (as such term is used in
Sections 3(a)(9), 13(d) and 14(d) of the Exchange Act), other than a direct or
indirect affiliate of Texas Pacific Group, is or becomes the "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of Globespan representing 51 percent or more of the combined voting
power of Globespan's then outstanding securities entitled to vote for directors
of Globespan.
5.3 COMPANY-INITIATED TERMINATION FOR CAUSE.
(a) The Company shall have the right to terminate
Executive's employment with the Company at any time for cause.
(b) "Cause" for termination shall mean: (a)
indictment or conviction of any felony or of any crime involving dishonesty; (h)
participation in any fraud against the Company; (c) breach of Executive's duties
to the Company or violations of Company policy which causes the Company to
sustain a material financial or other liability; (d) intentional damage to any
property of the Company; or (e) conduct by Executive which, in the good faith
and reasonable determination of the Board, demonstrates gross unfitness to
serve. "Cause" shall include any single instance of gross breach of Executive's
duties, gross violation of Company policy, or other serious misconduct.
(c) If Executive's employment is terminated at any
time for cause, unless the Company elects to offer the payment specified in
Section 7, he will not be entitled to severance pay, pay in lieu of notice, or
any other such compensation.
5.4 EXECUTIVE-INITIATED VOLUNTARY TERMINATION.
(a) Executive may voluntarily terminate his
employment with the Company at any time, after which no further compensation
will be paid to Executive.
(b) If Executive voluntarily terminates his
employment, he will not be entitled to severance pay, pay in lieu of notice, or
any other such compensation unless the Company elects to offer the payments
specified under Section 7.
6. RESTRICTIVE COVENANT. Provided Executive is receiving a
payment under 5.2 (b), or if the Company elects to make such payment for
termination under 5.3 or 5.4 if Executive's employment with the Company
terminates, then for six (6) months immediately following the termination date,
Executive shall not, without the prior written approval of the Company, directly
or indirectly engage or prepare to engage in any activities in direct or obvious
competition
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with the Company, or accept employment or establish a business
relationship with a business engaged in or preparing to engage in direct or
obvious competition with the Company, in any geographical location in which the
Company as of the termination date either conducts or plans to conduct business.
Executive agrees that this restriction is reasonably necessary to protect the
Company's legitimate business interests in its trade secrets and valuable
confidential business information.
7. NONINTERFERENCE. While employed by the Company, and
thereafter, provided the Company has offered the Executive the payment specified
under 5.2 (b), for six (6) months immediately following the termination of
Executive's employment, Executive agrees not to interfere with the business of
the Company by:
(a) soliciting, attempting to solicit, inducing,
or otherwise causing any employee of the Company to terminate his or her
employment in order to become an employee, consultant, or independent contractor
to or for any competitor of the Company; or
(b) using confidential information of the Company
on behalf of a competitor of the Company to directly or indirectly solicit the
business of any customer, client, vendor, or distributor of the Company which
was a customer, client, vendor, or distributor of the Company at the time of
termination or at any time in the year immediately preceding that date.
Executive agrees that this restriction is reasonably necessary to
protect the Company's legitimate business interest in its substantial
relationship with specific customers, and its valuable confidential business
information.
8. GENERAL PROVISIONS.
8.1 NOTICES. Any notices provided hereunder must be in
writing and shall be deemed effective upon the earlier of personal delivery
(including personal delivery by fax) or the third day after mailing by
first-class mail to the Company at its primary office location and to Executive
at his address as listed on the Company payroll.
8.2 SEVERABILITY. Whenever possible, each provision of
this Agreement will be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
invalid, illegal, or unenforceable in any respect under any applicable law or
rule in any jurisdiction, such invalidity, illegality, or unenforceability will
not affect any other provision or any other jurisdiction, but this Agreement
will be reformed, construed and enforced in such jurisdiction as if such
invalid, illegal, or unenforceable provisions had never been contained herein.
8.3 WAIVER. If either party should waive any breach of
any provisions of this Agreement, that party shall not thereby be deemed to have
waived any preceding or succeeding breach of the same or any other provision of
this Agreement.
8.4 COMPLETE AGREEMENT. This Agreement and its
Exhibits, together with any agreements governing any equity interests which may
become available to Executive in conjunction with his employment by the Company,
constitute the entire agreement between Executive and the Company and it is the
complete, final, and exclusive embodiment of their agreement with regard to this
subject matter. It is entered into without reliance on any promise
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or representation other than those expressly contained herein, and it cannot be
modified or amended except in a writing signed by an of officer of the Company.
8.5 COUNTERPARTS. This agreement may be executed in
separate counterparts, any one of which need not contain signatures of more than
one party, but all of which taken together will constitute one and the same
Agreement.
8.6 HEADINGS. The heading of the sections hereof are
inserted for convenience only and shall not be deemed to constitute a part
hereof nor to affect the meaning.
8.7 SUCCESSORS AND ASSIGNS. This Agreement is intended
to bind and inure to the benefit of and be enforceable by Executive and the
Company, and their respective successors, assigns, heirs, executors and
administrators, except that Executive may not assign any of his duties hereunder
and he may not assign any of his rights hereunder without the written consent of
the Company, which shall not be withheld unreasonably.
8.8 CHOICE OF LAW. All questions concerning the
construction, validity and interpretation of this Agreement will be governed by
the law of the State of New Jersey.
IN WITNESS WHEREOF, the parties have executed this Agreement on
the day and year first above written.
GLOBESPAN TECHNOLOGIES INC.
By:
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Xxxxx X. Xxxxxxxx, Vice President &
Secretary
Date: 29 August 1997
Accepted and agreed as of the 29th
day of August, 1997.
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XXXXXX X. XXXXX
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