EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement"), effective as of March 22,
1999, is made and entered by and between Xxxxxx X. Francesco (the "Executive")
and Netrix Corporation, a Delaware corporation (the "Company").
AGREEMENT
WHEREAS, the Company desires to engage the Executive to provide
services pursuant to the terms of this Agreement; and
WHEREAS, the Executive desires to provide such services to the Company
pursuant to the terms of this Agreement;
NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements set forth below, the parties hereto agree as follows:
1. TERM OF EMPLOYMENT. The term of the Executive's employment under
this Agreement shall commence immediately upon the execution of this Agreement
and end on the third anniversary of such date (the "Term of Employment"). If the
Company or the Executive does not deliver to the other party at least 60 days
prior written notice that the Term of Employment shall end on the third
anniversary of the date hereof, the Term of employment shall automatically
continue for an additional one-year period. At the end of such one year period,
the Term of employment shall automatically continue for successive one year
terms unless either party delivers at least 60 days prior written notice that
the Term or employment shall end at the end of such one-year renewal period.
2. DUTIES.
(a) During the Term of Employment, the Executive shall serve as the
Chief Executive Officer and Chairman of the Board of the Company with such
authority and duties as are generally associated with such positions and as may
be assigned to him from time to time by the Board of Directors of the Company
that are consistent with such authority and duties. The Executive shall report
only to the Board of Directors of the Company.
(b) During the Term of Employment and except as provided in Section
2(d), the Executive shall devote his full business time and best efforts to the
business and affairs of the Company. The Executive agrees to continue to serve
during the Term as a Director and a member of any committee of the Boards of
Directors of the Company, provided that the Executive is indemnified for serving
in any and all such capacities on a basis no less favorable than is provided to
any other Director of the Company. The Company agrees to use its best efforts to
cause the Executive to be elected and continued in office throughout the Term of
Employment as a member of the Board of Directors of the Company and as Chairman
of the Board of Directors and shall include him in the management slate for
election as a Director of the Company at every stockholders' meeting of the
Company at which his term as a Director would otherwise expire.
(c) The Company hereby acknowledges and agrees that the Executive need
not maintain a permanent residence in the Commonwealth of Virginia in order to
fulfill his duties hereunder. The Executive agrees to devote such time as he
determines, in his sole discretion, is necessary at the headquarters of the
Company in order to perform his duties hereunder.
(d) Anything herein to the contrary notwithstanding, nothing in this
Agreement shall preclude the Executive from (i) serving on the boards of
directors of a reasonable number of other corporations or the boards of a
reasonable number of trade associations and/or charitable organizations, (ii)
engaging in charitable activities and community affairs and (iii) managing his
personal investments and affairs, provided that such activities do not
materially interfere with the proper performance of his duties and
responsibilities under this Agreement.
3. COMPENSATION AND RELATED MATTERS.
(a) Salary. During the Term, the Executive shall receive a base salary
(the "Base Salary") at the rate of $160,000 per annum. Such Base Salary shall be
payable in accordance with the Company's policies in effect from time to time,
but in any event no less frequently than monthly. The Board of Directors from
time to time may increase, but not decrease, the Base Salary.
(b) Bonus. The Executive shall be eligible for an annual bonus in such
amount as the Board of Directors may designate. Payment of any annual bonus
shall be made at the same time that other senior-level executives receive their
bonus but in no event later than April 1 of the year following the year to which
such bonus relates.
(c) Stock Options. To induce the Executive to enter into this
Agreement, the Executive is hereby granted an option (the "Stock Option") by the
Company to purchase 1,600,000 shares of common stock, par value $0.05 per share,
of the Company (the "Common Stock"). The Stock Option shall be memorialized in a
separate stock option agreement, dated the date hereof, between the Company and
the Executive. The exercise price of the Stock Options will be $1.50 per share
of Common Stock for the first 400,000 shares and $3.50 per share of Common Stock
for the remaining 1,200,000 shares. The Stock Options shall vest over time as
follows and be subject to earlier vesting as described below:
Time vesting:
400,000 on the date hereof,
400,000 on the first anniversary of the date hereof, 400,000
on the second anniversary of the date hereof, and 400,000
vested on the third anniversary of the date hereof.
Accelerated vesting:
No. of Shares Vesting Event
------------- -------------
400,000 Common Stock trades at $4/share for 10
consecutive trading days
400,000 Common Stock trades at $6/share for 10
consecutive trading days
400,000 Common Stock trades at $8/share for 10
consecutive trading days
The Company shall use its best efforts to register the underlying shares on
Securities and Exchange Commission Form S-8, including the registration of any
shares underlying Stock Options vested prior to the date of filing such Form
S-8. The Stock Options will be granted under the Company's 1999 stock option
plan, which will be subject to shareholder approval. The Company shall use its
best efforts to cause such new stock option plan to be approved by the
stockholders at the next stockholders' meeting. Failure to obtain such approval
will constitute a breach of this Agreement by the Company.
(d) EXPENSES. The Executive is authorized to incur reasonable expenses
in carrying out his duties and responsibilities under this Agreement and the
Company shall promptly reimburse him for all business expenses incurred in
connection therewith, subject to documentation in accordance with the Company's
policy. Without limiting the generality of the foregoing, the Company shall
promptly reimburse the Executive for the expenses incurred by the Executive in
connection with any and all travel between the Company's headquarters and the
Executive's permanent residence.
(e) EMPLOYEE BENEFITS. During the Term of Employment, the Executive
shall be entitled to participate in or receive benefits under any and all
employee benefit plans, programs and arrangements on terms no less favorable
than those generally applicable to senior executives of the Company, subject to
and on a basis consistent with the terms, conditions and overall administration
of such employee benefit plans, programs and arrangements. The Executive shall
also be eligible to participate in the Company's executive perquisites in
accordance with the terms and provisions of the arrangements as in effect from
time to time for the Company's senior executives.
(f) VACATION. The Executive shall be entitled to four weeks of paid
vacation for each 12-month period during the Term of Employment, which shall be
taken at such times and intervals as shall be determined by the Executive,
subject to the reasonable business needs of the Company. The Executive shall
also be entitled to the paid holidays and other paid leave set forth in the
Company's policies. Vacation days and holidays during any year that are not used
by the Executive during such year may be used in any subsequent year.
(g) PAYMENT UPON CHANGE OF CONTROL. In the event of a Change in
Control of the Company, the Company shall issue to the Executive 1,000,000
shares of Common Stock (or, if the Common Stock was modified, exchanged or
converted in connection with such Change of Control, the cash, securities or
other property that such 1,000,000 shares would represent at the time of
termination if they had been modified, exchanged or converted in connection with
such Change of Control). Such Common Stock will be registered by the Company at
the time of, or as soon as possible after, such issuance. For purposes of this
Section 3(g), a Change of Control will be deemed to occur if:
(i) Any person, other than the Company or an employee benefit
plan of the Company, acquires directly or indirectly the
Beneficial Ownership (as defined in Section 13(d) of the
Securities Exchange Act of 1934 as in effect on the date of this
Agreement) of any voting security of the Company and immediately
after such acquisition such person is, directly or indirectly,
the Beneficial Owner of voting securities representing 50% or
more of the total voting power of all then outstanding voting
securities of the Company;
(ii) The stockholders of the Company approve a merger,
consolidation, recapitalization or reorganization of the Company,
a reverse stock-split of outstanding voting securities, or
consummation of any such transaction if stockholder approval is
not sought or obtained, other than any such transaction which
would result in at least 75% of the total voting power
represented by the voting securities of the surviving entity
outstanding immediately after such transaction being Beneficially
Owned by at least 75% of the holder of outstanding, voting
securities of the Company immediately prior to such transaction,
with the voting power of each such continuing holder relative to
other such continuing holders not substantially altered in the
transaction;
(iii) The stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or
disposition by the Company of all or a substantial portion of the
Company's assets (i.e., 50% or more of the total assets of the
Company); or
(iv) Continuing Directors cease for any reason to constitute a
majority of the Board of Director of the Company. For this
purpose, "Continuing Directors" means any member of the Board of
Directors of the Company who is (I) a member of the Board of
Directors on the date of this Agreement or (II) is nominated for
election or elected to the Board of Directors of the Company with
the affirmative vote of a majority of the Continuing Directors
who were members of the Board of Directors of the Company at the
time of such nomination or election.
(h) DEDUCTIONS AND WITHHOLDINGS; TAX GROSS-UP IN CERTAIN
CIRCUMSTANCES. All amounts payable or which become payable hereunder shall be
subject to all deductions and withholding required by law. Notwithstanding the
foregoing, if as a result of the termination of the Executive's employment under
this Agreement or a Change of Control the Executive becomes subject to Section
280G of the Internal Revenue Code (or any successor provision) which imposes an
excise tax in respect of the issuance of any payment to the Executive under this
Agreement, then the Company shall pay to the Executive, in cash at the time of
such termination or Change of Control, a "tax gross-up" equal to the amount of
the Executive's tax liability resulting from such excise tax (including any tax
on the amount so paid to cover this obligation calculated at the highest
marginal federal and state income tax rates).
4. Termination of Employment.
(a) Termination Due to Death. In the event the Executive's employment
is terminated due to his death, his estate or his beneficiaries, as the case may
be, shall be entitled to and their sole remedies under this Agreement shall be:
(i) Base Salary through the date of death which shall be paid in a
single lump sum not later than 45 days following the Executive's
death;
(ii) the balance of any bonus awarded and earned but not paid at the
time of termination, which shall be paid in a single lump sum not
later than 45 days following the Executive's death; and
(iii) other or additional benefits then due or earned in accordance
with applicable plans and programs of the Company.
(b) TERMINATION DUE TO DISABILITY. In the event the Executive becomes
Disabled (as defined below), the Company may terminate his employment upon
notice to that effect. Upon such a termination, the Executive or is
representative, as the case may be, shall be entitled to, and their sole
remedies under this Agreement shall be:
(i) Base Salary through the date of termination, which shall be
paid in a single lump sum not later than 45 days following such
termination;
(ii) the balance of any bonus awarded and earned but not paid at
the time of termination, which shall be paid in a single lump sum
not later than 45 days following the date of termination; and
(iii) other or additional benefits then due or earned in
accordance with applicable plans and programs of the Company.
For the purpose of this subsection, the Executive shall have a "Disability" at
such time as he becomes entitled to benefits under the Company's long-term
disability insurance plan as in effect from time to time.
(c) TERMINATION BY THE COMPANY FOR CAUSE.
(i) "Cause shall mean:
(A) willful and material breach by Executive of Section 5 or
6 of this Agreement;
(B) conviction of the Executive for a felony or misdemeanor
involving moral turpitude;
(C) breach by the Executive of any alcohol, drug, sexual
harassment or other policy of the Company which provides for
termination of employment for violation; or
(D) engagement by the Executive in conduct that constitutes
gross neglect or willful gross misconduct in carrying out
his duties under this Agreement
For purposes of this Agreement, an act or failure to act on Executive's part
shall be considered "willful" if it was done or omitted to be done by him not in
good faith, and shall not include any act or failure to act resulting from any
incapacity of Executive.
(ii) In the event the Company terminates the Executive's
employment for Cause, he shall be entitled to and his sole
remedies under this Agreement shall be:
(A) Base Salary through the date of the termination of his
employment for Cause, which shall be paid in a single lump
sum not later than 45 days following the Executive's
termination of employment;
(B) the balance of any bonus awarded and earned but not paid
at the time of termination, which shall be paid in a single
lump sum not later than 45 days following the date of
termination; and
(C) other or additional benefits then due or earned in
accordance with applicable plans or programs of the Company.
(d) Termination Without Cause or Constructive Termination Without
Cause. In the event the Executive's employment with the Company is terminated
without Cause (which termination shall be effective as of the date specified by
the Company in a written notice to the Executive), other than due to death or
Disability, or in the event there is a Constructive Termination Without Cause
(as defined below), the Executive shall be entitled to and his sole remedies
under this Agreement shall be:
(i) Base Salary through the date of termination of the
Executive's employment, which shall be paid in a single lump sum
not later than 15 days following the Executive's termination of
employment;
(ii) Base Salary, at the annualized rate in effect on the date of
termination of the Executive's employment for a period of three
years after the termination of employment (the "Severance
Period") payable in accordance with the Company's standard
payroll practices;
(iii) the balance of any bonus awarded and earned but not paid at
the time of termination, which shall be paid in a single lump sum
not later than 45 days following the date of termination;
(iv) immediate vesting of all stock options which are unvested
but scheduled to vest during the Severance Period, all of which
will be exercisable during the Severance Period or for the
remainder of the exercise period, if less;
(v) continued participation in all medical, health and life
insurance plans at the same benefit level at which he was
participating on the date of the termination of his employment
until the earlier of:
(A) the end of the Severance Period; or
(B) the date, or dates, he receives equivalent coverage and
benefits under the plans and programs of a subsequent
employer (such coverage and benefits to be determined on a
coverage-by-coverage, or benefit-by-benefit, basis);
provided that (1) if the Executive is precluded from
continuing his participation in any employee benefit plan or
program as provided in this clause (vi), he shall receive
cash payments equal on an after-tax basis to the cost to him
of obtaining the benefits provided under the plan or program
in which he is unable to participate for the period
specified in this clause (vi), (2) such cost shall be deemed
to be the lowest reasonable cost that would be incurred by
the Executive in obtaining such benefit himself on an
individual basis, and (3) payment of such amounts shall be
made quarterly in advance; and
(vi) other or additional benefits then due or earned in
accordance with applicable plans and programs of the Company.
"Termination Without Cause" shall mean the Executive's
employment is terminated by the Company for any reason other than Cause (as
defined in Section 4(c)) or due to death.
"Constructive Termination Without Cause" shall mean a
termination of the Executive's employment at his initiative as provided in this
Section 4(d) following the occurrence, without the Executive's written consent,
of one or more of the following events (except as a result of a prior
termination):
(A) a material diminution or change, adverse to Executive,
in Executive's positions, titles, or offices as set forth in
Section 2;
(B) an assignment of any duties to Executive which are
inconsistent with his status as Chief Executive Officer and
Chairman of the Board of the Company;
(C) any other failure by the Company to perform any material
obligation under, or breach by the Company of any material
provision of, this Agreement that is not cured within 30
days; or
(D) any failure to secure the agreement of any successor
corporation or other entity to the Company to fully assume
the Company's obligations under this Agreement.
(e) TERMINATION FOLLOWING NON-RENEWAL. In the event that the Company
notifies the Executive in writing at least 60 days prior to the expiration of
the then current Term of Employment that it is electing to terminate this
Agreement at the expiration of the then current Term of Employment and the
Executive's employment terminates upon such expiration, whether at the Company's
initiative or the Executive's initiative, the Executive shall be entitled to:
(i) Base Salary through the date of termination of the Executive's
employment, which shall be paid in a single lump sum not later than 45
days following such termination;
(ii) the balance of any bonus awarded and earned but not paid at the
time of termination, which shall be paid in a single lump sum not
later than 45 days following the date of termination;
(iii) continued participation in all medical and dental plans at the
same benefit level at which he was participating on the date of the
termination of his employment until the earlier of:
(A) the end of the Non-renewal Severance Period; or
(B) the date, or dates, he received equivalent coverage and
benefits under the plans and programs of a subsequent employer
(such coverage and benefits to be determined on a
coverage-by-coverage, or benefit-by-benefit, basis);
provided that (x) if the Executive is precluded from continuing his
participation in any employee benefit plan or program as provided in
this clause (iii) of this Section 4(e), he shall receive cash payments
equal on an after-tax basis to the cost to him of obtaining the
benefits provided under the plan or program in which he is unable to
participate for the period specified in this clause (iii) of this
Section 4(e), (y) such cost shall be deemed to be the lowest cost that
would be incurred by the Executive in obtaining such benefit himself
on an individual basis, and (z) payment of such amounts shall be made
quarterly in advance; and
(iv) other or additional benefits then due or earned in
accordance with applicable plans and programs of the Company.
(f) VOLUNTARY TERMINATION. In the event of a termination of employment by
the Executive on his own initiative, other than a termination due to death,
Disability or a Constructive Termination Without Cause, the Executive shall have
the same entitlements as provided in Section 4(c)(ii) above for a Termination
for Cause. A voluntary termination under this Section 4(f) shall be effective
upon 30 days prior written notice to the Company or such shorter period as may
be determined by the Company and shall not be deemed a breach of this Agreement.
(g) NO MITIGATION, NO OFFSET. In the event of any termination of employment
under this Section 4, the Executive shall be under no obligation to seek other
employment; amounts due the Executive under this Agreement shall not be offset
by any remuneration attributable to any subsequent employment that he may
obtain.
(h) NATURE OF PAYMENTS. Any amounts due under this Section 4 are in the
nature of severance payments considered to be reasonable by the Company and are
not in the nature of a penalty.
5. CONFIDENTIALITY.
(a) During the Term of Employment and thereafter, the Executive shall not,
without the prior written consent of the Company, disclose to anyone (except in
good faith in the ordinary course of business to a person who will be advised by
the Executive to keep such information confidential) or make use of any
Confidential Information (as defined below) except in the performance of his
duties hereunder or when required to do so by legal process, by any governmental
agency having supervisory authority over the business of the Company or by any
administrative or legislative body (including a committee thereof) that requires
him to divulge, disclose or make accessible such information. In the event that
the Executive is so ordered, he shall give prompt written notice to the Company
in order to allow the Company the opportunity to object to or otherwise resist
such order.
(b) "Confidential Information" shall mean all information concerning the
business of the Company or any subsidiary relating to any of their products,
product development, trade secrets, customers, suppliers, finances, and business
plans and strategies. Excluded from the definition of Confidential Information
is information (i) that is or becomes part of the public domain, other than
through the breach of this Agreement by the Executive, (ii) regarding the
Company's business or industry properly acquired by the Executive in the course
of his career as an executive in the Company's industry and independent of the
Executive's employment by the Company, (iii) that becomes available to the
Executive on a non-confidential basis from a source other than the Company,
provided that such source is not known by the Executive to be subject to a
confidentiality agreement or other obligation of secrecy or confidentiality
(whether pursuant to a contract, legal or fiduciary obligation or duty or
otherwise) to the Company or any other person or entity or (iv) approved for
release by the Company or which the Company makes generally available to third
parties without an obligation of confidentiality. For this purpose, information
known or available generally within the trade or industry of the Company or any
subsidiary shall be deemed to be known or available to the public.
6. NON-COMPETITION; NON-SOLICITATION. The Executive acknowledges that his
employment with the Company will, of necessity, provide him with specialized,
unique knowledge and confidential information and that, in light of the
competitive nature of the Company's business, the Company could be harmed if
such knowledge and information were used in competition with the Company. The
Executive further acknowledges that the Company would not enter into this
Agreement and undertake the substantial obligations under this Agreement without
the Executive's agreement to the following provisions of this Section 6:
(a) During the Restricted Period (as defined below) he will not, directly
or indirectly, as an officer, director, stockholder, partner, associate,
employee, consultant, owner, agent, co-venturer or otherwise, become or be
interested in or be associated with any other corporation, firm or business
engaged in the manufacture, marketing or sale of products which compete with
products of the Company. The Executive's ownership, directly or indirectly, of
not more than three percent (3%) of the issued and outstanding stock of any
corporation or other entity, the shares of which are traded on a national
securities exchange or the Nasdaq Stock Market, shall not in any event be deemed
to be a violation of the provisions of this Section 6(a).
(b) During the Restricted Period, the Executive shall not call upon,
solicit, divert or take away, or attempt to call upon, solicit, divert or take
away, business of a type the same or similar to the business as conducted by the
Company prior to the date of termination of the Executive's employment with the
Company from any of the Customers of the Company upon whom he called or whom he
solicited or to whom he catered or with whom he became acquainted after entering
the employ of the Company.
(c) The Executive acknowledges and agrees that during the time of his
employment
with the Company, he will gain valuable information about the identity,
qualifications and on-going performance of the employees of the Company. During
the Restricted Period, the Executive shall not (i) hire, employ, offer
employment to, or seek to hire, employ or offer employment to, any of the
Company's senior level employees with whom he had contact prior to such
termination of employment or (ii) solicit or encourage any such senior level
employee to seek or accept employment with any other person or entity.
(d) The Executive represents and warrants that the knowledge, skills and
abilities he currently possesses are sufficient to permit him, in the event of
his termination of employment hereunder for any reason, to earn a livelihood
satisfactory to himself without violating any provision of this Agreement.
(e) For the purposes of this Section 6, "Restriction Period" shall mean the
period beginning on the date hereof and ending with:
(i) in the case of a termination of the Executive's employment without
Cause or a Constructive Termination Without Cause, the end of the
Severance Period;
(ii) in the case of a termination of the Executive's employment for
Cause, the first anniversary of such termination;
(iii) in the case of a termination of the Executive's employment upon
the expiration of the Term of Employment that results in the
commencement of the Non-renewal Severance Period pursuant to Section
4(e) above, the end of the Non-renewal Severance Period; or
(iv) in the case of a voluntary termination of the Executive's
employment pursuant to Section 4(f) above, the date of such
termination; provided, however, that within 10 days after the
Executive announces his resignation from the Company the Company may
notify the Executive that it will cause the Restriction Period to be
12 months and, in consideration for such period, the Company will pay
to the Executive, within 30 days after his employment terminates, an
amount in cash equal to the annual Base Salary in effect at the time
the Executive gives his notice of termination. Failure by the Company
to timely make such payment will release the Executive from this
obligation.
7. Remedies. In addition to whatever other rights and remedies the
Company may have at equity or in law, if the Executive breaches any of the
provisions contain in Sections 5 or 6 above, the Company (a) shall have the
right to immediately terminate all payments and benefits due under this
Agreement and (b) shall have the right to seek injunctive relief. The Executive
acknowledges that such a breach would cause irreparable injury and that money
damages would not provide an adequate remedy for the Company.
8. RESOLUTION OF DISPUTES. Any disputes arising under or in connection
with this Agreement shall be resolved by binding arbitration, to be held in
Washington, D.C. in accordance with the rules and procedures of the American
Arbitration Association, except that disputes arising under or in connection
with Sections 5 and 6 above shall be submitted to a court of appropriate
jurisdiction. Judgment upon the award rendered by the arbitrator(s) may be
entered in any court having jurisdiction thereof. Each party shall bear his or
its own costs of the arbitration or litigation, including, without limitation,
attorneys' fees. Pending the resolution of any arbitration or court proceeding,
the Company shall continue payment of all amounts and benefits due the Executive
under this Agreement.
9. INDEMNIFICATION.
(a) The Company agrees that if the Executive is made a party, or is
threatened to be made a party, to any action, suit or proceeding, whether civil,
criminal, administrative or investigative (a "Proceeding"), by reason of the
fact that he is or was a director, officer or employee of the Company or any
subsidiary or is or was serving at the request of the Company or any subsidiary
as a director, officer, member, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, including service with
respect to employee benefit plans, whether or not the basis of such Proceeding
is the Executive's alleged action in an official capacity while serving as a
director, officer, member, employee or agent, the Executive shall be indemnified
and held harmless by the Company to the fullest extent legally permitted or
authorized by the Company's certificate of incorporation or bylaws or
resolutions of the Company's certificate of incorporation or by laws or
resolutions of the Company's Board of Directors or, if greater, by the laws of
the State of Delaware, against all cost, expense, liability and loss (including,
without limitation, attorney's fees, judgments, fines, ERISA excise taxes or
penalties and amounts paid or to be paid in settlement) reasonably incurred or
suffered by the Executive in connection therewith, and such indemnification
shall continue as to the Executive even if he has ceased to be a director,
member, officer, employee or agent of the Company or other entity and shall
inure to the benefit of the Executive's heirs, executors and administrators. The
Company shall advance to the Executive all reasonable costs and expenses
incurred by him in connection with a Proceeding within 20 days after receipt by
the Company of a written request for such advance. Such request shall include an
undertaking by the Executive to repay the amount of such advance if it shall
ultimately be determined that he is not entitled to be indemnified against such
costs and expenses.
(b) Neither the failure of the Company (including its board of
directors, independent legal counsel or stockholders) to have made a
determination prior to the commencement of any proceeding concerning payment of
amounts claimed by the Executive under Section 9(a) above that indemnification
of the Executive is proper because he has met the applicable standard of
conduct, nor a determination by the Company (including its board of directors,
independent legal counsel or stockholders) that the Executive has not met such
applicable standard of conduct, shall create a presumption that the Executive
has not met the applicable standard of conduct.
(c) The Company agrees to continue and maintain a directors and
officers' liability insurance policy covering the Executive to the extent the
Company provides such coverage for its other executive officers.
10. EFFECT OF AGREEMENT ON OTHER BENEFITS. Except as specifically provided
in this Agreement, the existence of this Agreement shall not be interpreted to
preclude, prohibit or restrict the Executive's participation in any other
employee benefit or other plans or programs in which he currently participates.
11. ASSIGNABILITY; BINDING NATURE. This Agreement shall be binding upon and
inure to the benefit of the Parties and their respective successors, heirs (in
the case of the Executive) and permitted assigns. No rights or obligations of
the Company under this Agreement may be assigned or transferred by the Company
except that such rights or obligations may be assigned or transferred in
connection with the sale or transfer of all or substantially all of the assets
of the Company, provided that the assignee or transferee is the successor to all
or substantially all of the assets of the Company and such assignee or
transferee assumes the liabilities, obligations and duties of the Company, as
contained in this Agreement, either contractually or as a matter of law. The
Company further agrees that, in the event of a sale or transfer of assets as
described in the preceding sentence, it shall take whatever action it legally
can in order to cause such assignee or transferee to expressly assume the
liabilities, obligations and duties of the Company hereunder. No rights or
obligations of the Executive under this Agreement may be assigned or transferred
by the Executive other than his rights to compensation and benefits, which may
be transferred only by will or operation of law, except as provided in Section
17 below.
12. WARRANTY OF EXECUTIVE. As an inducement to the Company to enter into
this Agreement, the Executive represents and warrants that he is not a party to
any other agreement or obligation for personal services, and that there exists
no impediment or restraint, contractual or otherwise, on his power, right or
ability to enter into this Agreement and to perform his duties and obligations
hereunder.
13. COMPANY REPRESENTATIONS. The Company represents to the Executive that
this Agreement has been duly authorized, executed and delivered by the Company
and is a legal, valid and binding obligation of the Company and that the
execution, delivery and performance of this Agreement by the Company will not
breach or be in conflict with any agreements to which the Company is a party or
by which it is bound.
14. ENTIRE AGREEMENT. This Agreement contains the entire understanding and
agreement between the parties concerning the subject matter hereof and
supersedes all prior agreements, understandings, discussions, negotiations and
undertakings, whether written or oral, between the parties with respect thereto.
15. AMENDMENTS; WAIVERS. No provision in this Agreement may be amended
unless such amendment is agreed to in writing and signed by the Executive and an
authorized officer of the Company. No waiver by either Party of any breach by
the other Party of any condition or provision contained in this Agreement to be
performed by such other Party shall be deemed a waiver of a similar or
dissimilar condition or provision at the same or any prior or subsequent time.
Any waiver must be in writing and signed by the Executive or an authorized
officer of the Company, as the case may be. No failure to exercise and no delay
in exercising any right, remedy or power hereunder shall preclude any other or
further exercise of any other right, remedy or power provided herein or by law
or in equity.
16. SEVERABILITY OF PROVISIONS. In the event that any provision or any
portion thereof should ever be adjudicated by a court of competent jurisdiction
to exceed the time or other limitations permitted by applicable law, as
determined by such court in such action, then such provisions shall be deemed
reformed to the maximum time or other limitations permitted by applicable law,
the parties hereby acknowledging their desire that in such event such action be
taken. In addition to the above, the provisions of this Agreement are severable,
and the invalidity or unenforceability of any provision or provisions of this
Agreement or portions thereof shall not affect the validity or enforceability of
any other provision, or portion of this Agreement, which shall remain in full
force and effect as if executed with the unenforceable or invalid provision or
portion thereof eliminated. Notwithstanding the foregoing, the parties hereto
affirmatively represent, acknowledge and agree that it is their intention that
this Agreement and each of its provisions are enforceable in accordance with
their terms and expressly agree not to challenge the validity or enforceability
of this Agreement or any of its provisions, or portions or aspects thereof, in
the future. The parties hereto are expressly relying upon this representation,
acknowledgment and agreement in determining to enter into this Agreement.
17. BENEFICIARIES/REFERENCES. The Executive shall be entitled, to the
extent permitted under any applicable law, to select and change a beneficiary or
beneficiaries to receive any compensation or benefit payable hereunder following
the Executive's death by giving the Company written notice thereof. In the event
of the Executive's death or a judicial determination of his incompetence,
reference in this Agreement to the Executive shall be deemed, where appropriate,
to refer to his beneficiary, estate or other legal representative.
18. GOVERNING LAW. This Agreement shall be governed by and construed and
interpreted in accordance with the laws of the Commonwealth of Virginia without
reference to principles of conflict of laws. The parties hereby irrevocably
consent to the service of any and all process in any action or proceeding
arising out of or relating to this Agreement by the mailing of copies of such
process to the parties at the address specified in Section 19 hereof.
19. NOTICES. All notices, requests, demands and other communications which
are required or may be given under this Agreement shall be in writing and shall
be deemed to have been duly given when received if personally delivered; when
transmitted if transmitted by telecopy, electronic or digital transmission
method upon receipt of telephonic or electronic confirmation; the day after it
is sent, if sent for next day delivery to a domestic address by a recognized
overnight delivery service (e.g., Federal Express); and upon receipt, if sent by
certified or registered mail, return receipt requested. In each case notice
shall be sent to the Company c/o the Board of Directors at the Company's
principal executive offices and to the Executive at his last known permanent
address, or to such other place as either party may designate as to itself or
himself by written notice to the other.
20. HEADINGS. The headings of the sections contained in this Agreement are
for convenience only and shall not be deemed to control or affect the meaning or
construction of any provision of this Agreement.
21. COUNTERPARTS. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original, but all of which together shall
constitute one and the same Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first written above.
NETRIX CORPORATION
By:_______________________
Title:________________________
______________________________
Xxxxxx X. Francesco
