Exhibit 10.32
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made this 4th day of May, 1998, by and among
FiveCom, Inc., a Massachusetts corporation with its principal place of business
in Waltham, Massachusetts (hereinafter referred to as the "Company"), and Xxxxx
Xxxx of Sudbury, Massachusetts (hereinafter referred to as the "Employee").
WHEREAS, the Company desires to employ the Employee; and
WHEREAS, the Employee desires to serve in the employ of the Company on a
full-time basis for the period provided in this Employment Agreement
(hereinafter referred to as the "Agreement") on the terms and conditions
hereinafter set forth; and
WHEREAS, the Company and the Employee wish to set forth the terms and
conditions under which such employment will occur.
NOW, THEREFORE, in consideration of the offer of employment by the Company
and the acceptance of employment by the Employee, and the mutual promises and
covenants contained herein, the Company and the Employee hereby agree as
follows:
1. Term of Agreement.
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(a) Term. The term of this Agreement shall begin on April 30, 1998
(hereinafter referred to as the "Effective Date") and shall expire on April 30,
2001.
(b) Expiration. Notwithstanding anything to the contrary in this Section
1, except as to vested benefits, this Agreement and all obligations hereunder
shall terminate on the earliest to occur of (i) the date of the Employee's
death, (ii) 30
days after the Company gives notice to the Employee that the Company is
terminating the Employee's employment for reason of Total Disability or Cause
(as defined below); or (iii) the applicable term of the Agreement as specified
in Section 1(a) above.
2. Definitions. The following terms shall have the meanings set forth
below:
"Affiliate" means a person that directly or indirectly through one or more
intermediaries controls, is controlled by, or is under common control with, the
Company.
"Board" means the Board of Directors of the Company.
"Cause" means any of the following events or occurrences:
(i) Any act of material dishonesty taken by, or committed at the
direction of, the Employee.
(ii) Any illegal or unethical conduct which would impair the
business reputation of the Company.
(iii) Conviction of a felony.
(iv) The continued failure of the Employee to perform his
responsibilities and duties under this Agreement in a
satisfactory manner, 30 days after demand for performance
has been delivered in writing to the Employee specifying the
manner in which the Company believes that the Employee is
not performing.
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"Constructive Discharge" means:
(i) any reduction in the Employee's annual base salary in effect
as of the Effective Date of this Agreement, or as the same
may be increased from time to time;
(ii) a substantial reduction in the nature or scope of the
Employee's responsibilities, duties or authority from those
described in Section 3(c) of this Agreement;
(iii) a material adverse change in the Employee's title or
position; or
(iv) relocation of the Employee's place of employment from the
Company's principal Employee offices to a place more than 50
miles from Waltham, Massachusetts without the Employee's
consent.
"Severance Benefits" means the benefits set forth in Section 5 of this
Agreement.
"Total Disability" means the complete and permanent inability of the
Employee to perform all of his duties under this Agreement on a full-time basis
for a period of at least three consecutive months, as determined upon the basis
of reasonable evidence, which may include independent medical reports and data.
3. Employment.
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(a) Position. The Company hereby agrees to employ the Employee in the
capacity of Vice President - Sales, and the Employee hereby agrees to be so
employed by the Company for the period beginning on the Effective Date and
ending
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on the date on which the Employee's employment is terminated in accordance with
this Agreement (the "Employment Period").
(b) Performance. The Employee agrees that during the Employment Period
he shall devote substantially all his business attention and time to the
business and affairs of the Company, and use his best efforts to perform
faithfully and efficiently the duties and responsibilities of the Employee under
this Agreement. It is expressly understood that (i) the Employee may devote a
reasonable amount of time to such industry associations and charitable and civic
endeavors as shall not interfere with the services that the Employee is required
to render under this Agreement, and (ii) the Employee may serve as a member of
one or more boards of directors of companies that are not affiliated with the
Company and do not compete with the Company or any of its Affiliates so long as
such membership does not materially interfere with the Employee's duties
hereunder.
(c) Job Duties. The following listing of job duties shall represent the
Employee's primary responsibilities. Such responsibilities may be expanded or
decreased as the business needs of the Company require. The Employee's primary
job responsibilities shall include but not be limited to, development of the
sales aspect of the Company's business including but not limited to opening new
markets, public image, sales, marketing and customer relations.
4. Compensation and Benefits.
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(a) During the Employment Period, the Employee shall be compensated as
follows:
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(i) Salary. The Employee shall receive an annual base salary,
the amount of which shall be reviewed regularly and
determined from time to time, but which shall not be less
than $150,000. His salary shall be payable in accordance
with the Company's usual payroll practices.
(ii) Bonus. The Employee shall be eligible to receive an annual
bonus, which bonus shall be comprised of an earned incentive
based upon the achievement of sales targets established by
the Company and goals and awards determined by the Board of
Directors in its sole discretion, provided that, if the
Employee has achieved the sales targets and other goals
established for him by the Company and the Board of
Directors, then the sum of (A) the Employee's then current
annual base salary, plus (B) any bonuses awarded pursuant to
this Section 4(a)(ii), plus (C) the value of the portion of
the option described in Section 4(a)(vi) which becomes
exercisable in any given contract year shall not be less
than $300,000. For purposes of this Section 4(a)(ii), the
value of the portion of the option described in Section
4(a)(vi) which becomes exercisable in a given contract year
shall be the product of (X) the number of shares as to which
such option becomes
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exercisable in such year and (Y) the difference between the
exercise price per share of such option and the fair market
value per share of the Company's Common Stock as of the end
of such year. For purposes of this Section 4(a)(ii), the
fair market value of a share of the Company's Common Stock
shall be equal to the last reported sales price for such
Common Stock on the Nasdaq National Market or other national
securities exchange on the day in question or, if the
Company's Common Stock is not then publicly traded, as
determined in good faith by the Board of Directors.
(iii) Participation in Salaried Employee Plans. The Employee
shall be entitled to participate in any and all plans and
programs maintained by the Company from time to time to
provide benefits for its salaried employees generally,
including without limitation any savings and investment,
stock option and stock purchase or group medical, dental,
life, accident or disability insurance plan or program,
subject to all eligibility requirements of general
applicability, to the extent that Employees are not excluded
from participation therein under the terms thereof or under
the terms of any Employee plan or program or any approval or
adoption thereof.
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(iv) Other Fringe Benefits. The Employee shall be entitled to all
fringe benefits generally provided by the Company at any
time to its full-time salaried employees, including without
limitation three weeks annual paid vacation, holidays and
sick leave but excluding severance pay, in accordance with
generally applicable Company policies with respect to such
benefits.
(v) The Company shall grant options to the Employee to purchase
shares of the Common Stock of the Company substantially on
the terms set forth on Exhibit A to this Agreement.
(b) Withholding. All compensation payable under this Section 4 shall be
subject to normal payroll deductions for withholding income taxes, social
security taxes and the like.
5. Severance Benefits. If the Employee's employment with the Company is
terminated during the Employment Period either (i) by the Company for any reason
other than death, Total Disability or Cause, or (ii) by the Employee within six
calendar months of a Constructive Discharge, the Company shall pay the Employee,
in one lump sum payment within 60 days following the date of termination of
employment as defined in Section 6 below, an amount equal to one times the
Employee's annual base salary in effect on the date immediately preceding the
date
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of termination, or preceding the date of a Constructive Discharge attributable
to a base salary reduction if applicable.
6. Date of Termination. For purposes of this Agreement, the date of
termination of the Employee's employment shall be the date notice is given to
the Employee by the Company and/or any successor or, in the case of a
Constructive Discharge, the date set forth in a written notice given to the
Company or any successor by the Employee, provided that the Employee gives such
notice within six calendar months of the Constructive Discharge, and specifies
therein the event constituting the Constructive Discharge.
7. Taxes. All amounts payable to the Employee under this Agreement shall be
subject to applicable withholding of income, wage and other taxes.
8. Non-Competition, Confidentiality and Cooperation.
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(a) The Employee agrees that:
(i) During the Employment Period and for one year after the
termination of the Employee's employment with the Company
for any reason, the Employee shall not serve as a director,
officer, employee, partner or consultant or in any other
capacity in any business that is a competitor of the
Company, or solicit Company employees for employment or
other participation in any such business, or take any other
action intended to advance the interests of such business.
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(ii) During and after the Employee's employment with the Company,
he shall not divulge or appropriate to his own use or the
use of others any secret, proprietary or confidential
information or knowledge pertaining to the business of the
Company, or any of its Affiliates, obtained during his
employment with the Company.
(iii) During the Employment Period, he shall support the
Company's interests and efforts in all regulatory,
administrative, judicial or other proceedings affecting the
Company and, after the termination of his employment with
the Company, he shall use best efforts to comply with all
reasonable requests of the Company that he cooperate with
the Company, whether by giving testimony or otherwise, in
regulatory, administrative, judicial or other proceedings
affecting the Company except any proceeding in which he may
be in a position adverse to that of the Company. After the
termination of employment, the Company shall reimburse the
Employee for his reasonable expenses and his time, at a
reasonable rate to be determined, for the Employee's
cooperation with the Company in any such proceeding.
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(iv) The term "Company" as used in this Section 8 shall include
the Company, any Affiliate of the Company (determined as of
the date of termination), any successor to the business or
operations of the Company, and any business entity spun-
off, divested, or distributed to shareholders which shall
continue the operations of the Company. The provisions of
this Section 8 shall survive the expiration or termination
of this Agreement. The Employee agrees that the Company
shall be entitled to injunctive relief to prevent any breach
or threatened breach of these provisions. In the event of a
failure to comply with part (i), (ii) or (iii) of this
Section 8, the Employee agrees that the Company shall have
no further obligations to pay the Employee any Severance
Benefits under Section 5 of this Agreement.
9. No Mitigation. The Employee shall not be required to mitigate the amount
of any payment provided for in this Agreement by seeking other employment.
10. Assignment. This Agreement and the rights and obligations of the
Company hereunder shall inure to the benefit of and shall be binding upon the
successors and assigns of the Company, including without limitation any
corporation or other entity acquiring all or substantially all of the business
or assets of the Company whether by operation of law or otherwise. This
Agreement and the rights
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of the Employee hereunder shall not be assignable by the Employee, and any
assignment by the Employee shall be null and void.
11. Arbitration. Any dispute or controversy arising under or in connection
with this Agreement shall be settled exclusively by arbitration in Boston,
Massachusetts, in accordance with the rules of the American Arbitration
Association then in effect. The pendency of any such dispute or controversy
shall not affect any rights or obligations under this Agreement. Judgment may be
entered on the arbitrator's award in any court having jurisdiction.
12. Waiver; Amendment. The failure of either party to enforce, or any delay
in enforcing, any rights under this Agreement shall not be deemed to be a waiver
of such rights, unless such waiver is an express written waiver which has been
signed by the waiving party. Waiver of any one breach shall not be deemed to be
a waiver of any other breach of the same or any other provision hereof. This
Agreement can be amended only by written instrument signed by each party hereto
and no course of dealing or practice or failure to enforce or delay in enforcing
any rights hereunder may be claimed to have effected an amendment of this
Agreement.
13. Singular Contract. This Agreement is a singular agreement between the
Employee and the Company, and is not part of a general "plan" or "program" for
employees as a group. This Agreement shall, under no circumstances, be deemed to
be an "employee welfare benefit plan" or an "employee pension benefit plan" as
defined in the Employment Retirement Income Security Act of 1974 (hereinafter
referred to as "ERISA"). Notwithstanding, the Company may submit a letter to the
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Department of Labor indicating the possible establishment of a so-called
unfunded "top hat" plan for the benefit of a select group of management and
highly compensated employees to avoid the costs and uncertainties which may
occur in the event of a Department of Labor audit and challenge relative to
compliance with any allegedly applicable provisions of ERISA. The Employee
specifically acknowledges and agrees that the filing of the so-called "top hat"
letter notice by the Company shall not be construed or interpreted as an
admission on the part of the Company that this Agreement constitutes an ERISA
plan, and the Company hereby categorically states, and the Employee hereby
agrees, that this Agreement is an ad hoc individual contract with the Employee.
14. Notices. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and sent by first-class, registered
or certified mail or hand-delivered to the Employee at the last residence
address he has provided to the Company or, in the case of the Company, at its
principal Employee offices to the attention of the Corporation Secretary.
15. Titles and Captions. The section and paragraph titles and captions
contained herein are for convenience only and shall not be held to explain,
modify, amplify, or aid in the interpretation, construction or meaning of the
provisions of this Agreement.
16. Miscellaneous. This Agreement shall be construed and enforced in
accordance with the laws of the Commonwealth of Massachusetts. In the event that
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any provisions of this Agreement shall be held to be invalid, the other
provisions hereof shall remain in full force and effect.
17. Entire Agreement. The terms of this Agreement are intended by the
parties to be the final expression of their agreement with respect to the
employment of the Employee by the Company and may not be contradicted by
evidence of any prior or contemporaneous oral or written agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the Effective Date written above.
THE COMPANY:
WITNESS: FIVECOM, INC.
/s/ [illegible] /s/ Xxxxxx Xxxxxxxxxx
___________________________ _____________________________________
By: Xxxxxx Xxxxxxxxxx
President
THE EMPLOYEE:
WITNESS:
/s/ [illegible] /s/ Xxxxx Xxxx
___________________________ _____________________________________
Xxxxx Xxxx
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EXHIBIT A
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STOCK OPTION TERMS
At such time as the Company adopts a new employee stock option plan, the
Company shall grant to the Employee an option to purchase up to 1% of the
portion of the Common Stock of the Company reserved for issuance pursuant to
option grants under such stock option plan, which option shall become
exercisable (i) as to 50% of the number of shares subject to such option on the
first anniversary of the date of this Agreement, (ii) an additional 25% of the
number of shares subject to such option on the second anniversary of the date of
this Agreement and (iii) an additional 25% of the number of shares subject to
such option on the third anniversary of the date of this Agreement. This option
shall be evidenced by an Option Agreement on customary terms and conditions
(including the condition that vesting occur only for so long as the Employee is
employed by the Company) and shall be granted under and subject to the terms and
conditions of one of the Company's employee stock option plans. This option
shall have an exercise price equal to the price at which the Company's Common
Stock is first offered to the public.
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