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EXHIBIT(C)(5)
OCTEL COMMUNICATIONS CORPORATION
EMPLOYMENT AGREEMENT
This Agreement dated as of March 1, 1997 (the "Effective Date") is
made by and between Octel Communications Corporation, a Delaware corporation
("Octel"), and Xxxxx X. Xxxx ("Xxxx").
1. DUTIES AND SCOPE OF EMPLOYMENT RELATIONSHIP.
(a) Stage One Duties. During Stage One, Octel agrees to
employ Xxxx, and Xxxx agrees to be employed, full time as Executive Vice
President and Acting Vice President, GBS Engineering, of Octel. Xxxx shall
assume and discharge such duties during Stage One as are consistent with the
goals described on EXHIBIT A attached hereto. During the term of Stage One,
Xxxx shall devote his full time, skill and attention to his duties and
responsibilities, which Xxxx shall perform faithfully, diligently and
competently, and Xxxx shall use his best efforts to further the business of
Octel and its affiliated entities.
(b) Stage Two Duties. During Stage Two, Octel agrees to
employ Xxxx, and Xxxx agrees to be employed, in a part-time capacity for three
days per week with Octel. Xxxx shall assume and discharge such duties during
Stage Two as are consistent with the goals described on EXHIBIT B attached
hereto. During the term of Stage Two, Xxxx shall perform his duties and
responsibilities faithfully, diligently and competently, and Xxxx shall use his
best efforts to further the business of Octel and its affiliated entities.
(c) Stage Three Duties. During Stage Three, Octel agrees
to employ Xxxx, and Xxxx agrees to be employed, in a part-time capacity
off-site advising the Company with respect to intellectual property or other
issues.
2. SALARY. During Stage One and Stage Two, Octel shall pay Xxxx
as compensation for his services a salary at the annualized rate of $225,000.
Such salary shall be paid periodically in accordance with normal Octel payroll
practices. During Stage Three, Octel shall pay Xxxx as compensation for his
services a salary of $10,000 per month, in the event that Xxxx works at least
20 hours per week, and $5,000 per month, in the event that Xxxx works less than
20 hours per week but at least five hours per week.
3. EMPLOYEE BENEFITS. During Stage One and Stage Two, Xxxx shall
be eligible to participate in employee benefit plans and compensation programs
maintained by Octel applicable to other similarly situated employees of Octel,
subject, in each case, to the generally applicable terms and conditions of the
applicable plan or program in question and to the determination of any
committee or employee administering such plan or program. In addition, during
Stage One and Stage Two, Octel shall reimburse Xxxx the reasonable cost of
round trip, coach airfare between San Xxxx or San Francisco and Phoenix each
weekend; provided, however, that the amount to be
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reimbursed shall not exceed the cost of an equivalent ticket booked one week in
advance with a Saturday stayover.
4. STOCK OPTIONS. Octel and Xxxx acknowledge that, in accordance
with the terms of the option agreements governing such options, the option to
purchase 30,000 shares of Common Stock granted on August 9, 1990, the option to
purchase 23,600 shares of Common Stock granted on November 11, 1993 and the
option to purchase 36,400 shares of Common Stock granted on November 11, 1993
(collectively, the "VMX Options") will continue to vest throughout the term of
this Agreement, and Xxxx will have three months within which to exercise the
VMX Options following the expiration of this Agreement. Octel and Xxxx
acknowledge that, in accordance with the terms of the option agreement
governing such option, the option to purchase 150,000 shares of Common Stock
granted on April 28, 1994 will continue to vest throughout the term of this
Agreement (but, during Stage Three, only in the event that Xxxx works at least
20 hours per week), and Xxxx will have 30 days within which to exercise such
option following the expiration of this Agreement.
5. SERVICE ON OUTSIDE BOARDS. During Stage One, Xxxx shall not
serve as a member of the board of directors of any company; provided, however,
that if the duration of Stage One exceeds four months, Xxxx may join the board
of directors of one company with the consent of the Board of Directors of Octel
in its sole discretion. During Stage Two and Stage Three, Xxxx may serve as a
director of any company, so long as such service does not result in any
conflict with Xxxx'x obligations hereunder, including the non-competition
provisions of Section 6. The determination of whether service as a director
results in a conflict shall be made by Octel's Chief Executive Officer in his
sole reasonable judgment.
6. NON-COMPETITION AND NON-SOLICITATION AGREEMENT.
(a) During the term of this Agreement, Xxxx shall not,
other than on behalf of Octel, directly or indirectly, without the prior
written consent of Octel, engage anywhere in the world in (whether as an
employee, agent, consultant, advisor, independent contractor, proprietor,
partner, officer, director or otherwise), or have any ownership interest in
(except for passive ownership of one percent (1%) or less of any entity whose
securities have been registered under the Securities Act of 1933 or Section 12
of the Securities Exchange Act of 1934), or participate in the financing,
operation, management or control of, any firm, partnership, corporation, entity
or business that engages or participates in a "competing business purpose."
The term "competing business purpose" shall mean offering, providing or selling
products or services in the voice information processing industry. The
determination of whether a firm, partnership, corporation, entity or brusiness
engages or participates in a "competing business purpose" shall be made by
Octel's Chief Executive Officer in his sole reasonable judgment.
(b) During the term of this Agreement, Xxxx shall not,
directly or indirectly, without the prior written consent of Octel, solicit,
encourage, hire or take any other action which is intended to induce or
encourage, or has the effect of inducing or encouraging, any employee of
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Octel, any subsidiary of Octel to terminate his or her employment with Octel or
any subsidiary of Octel.
(c) Xxxx acknowledges that the business of Octel is
national and international in nature. Xxxx also acknowledges that this scope
of business and geographic extent are reasonably necessary to protect the
legitimate business interests of Octel.
7. DEFINITIONS.
(a) Stage One. "Stage One" shall mean the period
beginning on the Effective Date and ending on the earlier of (i) the day prior
to the date Octel hires a Vice President, GBS Engineering and (ii) six months
from the Effective Date, unless extended upon mutual agreement of the parties
hereto.
(b) Stage Two. "Stage Two" shall mean the period
beginning on the day following the date Stage One ends and ending on the date
four months thereafter.
(c) Stage Three. "Stage Three" shall mean the period
beginning on the day following the date Stage Two ends and ending on May 31,
1998, unless extended pursuant to Section 11.
8. EXPENSES. Octel will pay or reimburse Xxxx for reasonable
travel, entertainment or other expenses incurred by Xxxx in the furtherance of
or in connection with the performance of Xxxx'x duties hereunder in accordance
with Octel's established policies. Xxxx shall furnish Octel with written
evidence of the incurrence of such expenses within a reasonable period of time
from the date that they were incurred.
9. ARBITRATION.
(a) Xxxx and Octel each agrees that any dispute or
controversy arising out of, relating to, or in connection with this Agreement,
or the interpretation, validity, construction, performance, breach, or
termination thereof, shall be settled by binding arbitration to be held in
Santa Xxxxx County, California, in accordance with the Commercial Arbitration
Rules of the American Arbitration Association then in effect (the "Rules").
The arbitrator may grant injunctions or other relief in such dispute or
controversy. The decision of the arbitrator shall be final, conclusive and
binding on the parties to the arbitration. Judgment may be entered on the
arbitrator's decision in any court having jurisdiction.
(b) The arbitrator(s) shall apply California law to the
merits of any dispute or claim, without reference to rules of conflicts of law.
The arbitration proceedings shall be governed by federal arbitration law and by
the Rules, without reference to state arbitration law.
(c) Octel and Xxxx shall each pay one-half of the costs
and expenses of such arbitration, and each shall separately pay its counsel
fees and expenses.
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10. CONFIDENTIALITY AND INVENTION ASSIGNMENT. Octel and Xxxx
agree to enter into the Confidentiality and Non-Disclosure Agreement in the
form attached hereto as EXHIBIT C.
11. TERM. The term of this Agreement shall begin on the Effective
Date and end on May 31, 1998; provided, however, that the parties may extend
this Agreement on a month-by-month basis with mutual consent.
12. GENERAL PROVISIONS.
(a) Entire Agreement. This Agreement represents the
entire agreement and understanding between the parties as to the subject matter
hereof, and supersedes all prior or contemporaneous agreements, whether written
or oral. No waiver, alteration, or modification, if any, of the provisions of
this Agreement shall be binding unless in writing and signed by duly authorized
representatives of the parties hereto.
(b) Severability. If one or more of the provisions in
this Agreement are deemed void by law, then the remaining provisions will
continue in full force and effect.
(c) Successors. Any successor to Octel (whether direct
or indirect and whether by purchase, lease, merger, consolidation, liquidation
or otherwise) to all or substantially all of Octel's business and/or assets
shall assume the obligations under this Agreement and agree expressly to
perform the obligations under this Agreement in the same manner and to the same
extent as Octel would be required to perform such obligations in the absence of
a succession. For all purposes under this Agreement, the term "Octel" shall
include any successor to Octel's business and/or assets which executes and
delivers the assumption agreement described in this subsection (i) or which
becomes bound by the terms of this Agreement by operation of law.
(d) Conflicting Obligations. Xxxx represents that he has
not entered into, and will not enter into, any oral or written agreement in
conflict herewith.
(e) Counterparts. This Agreement may be executed by
either of the parties hereto in counterparts, each of which shall be deemed to
be an original, but all such counterparts shall together constitute one and the
same instrument.
(f) Governing Law; Consent to Personal Jurisdiction.
This Agreement shall be governed by and construed in accordance with the
internal substantive laws, and not the choice of law rules, of California.
Xxxx hereby consents to the personal jurisdiction of the state and federal
courts located in California for any action or proceeding arising from or
relating to this Agreement or relating to any arbitration in which the parties
are participants.
(g) Notice. Any notice, demand, offer or request
required or permitted to be given by either Octel or Xxxx pursuant to the terms
of this Agreement shall be in writing and shall be deemed effectively given the
earlier of (i) when received, (ii) when delivered personally, (iii) one (1)
business day after being delivered by facsimile, (iv) one (1) business day
after being deposited with
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an overnight courier service or (v) four (4) days after being deposited in the
U.S. mail, First Class with postage prepaid, and addressed to the parties at
the addresses provided to Octel (which Octel agrees to disclose to the other
parties upon request) or such other address as a party may request by notifying
the other in writing.
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IN WITNESS WHEREOF, Xxxx and Octel have caused this Agreement to be
executed as of the date first above written.
XXXXX X. XXXX
/s/ Xxxxx X. Xxxx
________________________________
Signature
OCTEL COMMUNICATIONS CORPORATION
/s/ Authorized Signatory
________________________________
Signature of Authorized Signatory
_________________________________
Print Name and Title
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