EXHIBIT 10.46
AGREEMENT
WHEREAS, CUseeMe Networks, Inc., a Delaware corporation (the "Company")
and Xxxxxx Xxxxx (the "Executive") are parties to that certain Executive
Retention Agreement, dated as of December 1, 2000 (the "Executive Retention
Agreement"), and that certain Offer Letter, dated September 22, 2000 (the "Offer
Letter");
WHEREAS, the Company is a party to that certain Agreement and Plan of
Merger and Reorganization, dated as of March 22, 2001 (the "Merger Agreement"),
between the Company, First Virtual Communications, Inc., a Delaware corporation
("FVC"), and FVC Acquisition Corp., a Delaware corporation and a wholly owned
subsidiary of FVC;
WHEREAS, in anticipation of the transactions contemplated by the Merger
Agreement, the Executive agrees to terminate the Executive Retention Agreement
and the Offer Letter effective immediately prior to the consummation of the
merger contemplated by the Merger Agreement;
WHEREAS, in consideration for the Executive's termination of the
Executive Retention Agreement and the Offer Letter, the Company will grant to
the Executive options to purchase 200,000 shares of common stock, par value
$0.01, of the Company ("Company Common Stock") pursuant to the Company's 1996
Incentive and Nonqualified Stock Option Plan; and
WHEREAS, the Executive has been granted and as of the date hereof holds
options to purchase Company Common Stock (the "Existing Options") which are
subject to certain vesting provisions as set forth in the option plans and
option agreements governing the terms of such Existing Options.
NOW, THEREFORE, intending to be legally bound, the parties agree as
follows:
1. The parties agree that each of the Executive Retention Agreement and
the Offer Letter shall terminate (without any liability or
obligation to the parties thereof) and shall be of no further force
or effect, effective as of immediately prior to the Effective Time
(as defined in the Merger Agreement) and this Agreement (together
with the exhibit attached hereto) shall govern the Executive's
relationship with the Company and FVC; PROVIDED HOWEVER, that in the
event the Executive's employment is terminated by FVC without Cause
(as defined in this Agreement) within 6 months after the date of the
Effective Time, then upon the Executive's furnishing to FVC an
executed release and waiver of claims (a form of which is attached
hereto as EXHIBIT A), the Executive shall be entitled to the
benefits afforded by Sections 4.1 (with respect solely to the
Existing Options) and 4.2(a) of the Executive Retention Agreement,
subject in all respects to the terms and conditions of such Sections
4.1 and 4.2(a) . For purposes of this Agreement, "Cause" shall mean
(i) gross negligence or willful misconduct by the Executive,
including, but not limited to, dishonesty which materially and
adversely reflects upon the Executive's ability to perform his
duties for FVC, (ii) the Executive's conviction of, or the entry of
a pleading of guilty or nolo contendere by the Executive to, any
crime involving moral turpitude or any felony, (iii) fraud,
embezzlement or theft against FVC, (iv) a material breach by the
Executive of any material provision of any employment contract,
assignment of inventions, confidentiality and/or nondisclosure
agreement between the Executive and FVC, or (v) the Executive's
willful and habitual failure to attend to his duties as assigned by
the officer of FVC to whom the Executive reports if such
non-performance is not cured by the Executive within thirty (30)
days after the Executive receives written notice from FVC.
2. The parties agree that, notwithstanding anything to the contrary
contained in the Executive Retention Agreement or the Offer Letter,
upon termination of each of the Executive Retention Agreement and
the Offer Letter, the Company shall not have any payment or other
obligations to the Executive, including, without limitation, payment
obligations for severance, salary, bonus, employee benefits or
similar payments.
3. The parties agree that, notwithstanding anything to the contrary
contained in the Executive Retention Agreement or the Offer Letter,
upon termination of each of the Executive Retention Agreement and
the Offer Letter, the vesting and exercisability of the Existing
Options will not accelerate as a result of the merger contemplated
by the Merger Agreement or the transactions contemplated thereby and
will remain subject to their current vesting provisions as otherwise
provided in the stock option plan of the Company under which such
options were issued and in the stock option agreements by which such
stock options are evidenced.
4. As partial consideration for Executive's agreement to terminate the
Executive Retention Agreement and the Offer Letter, the Company
shall, immediately prior to the Effective Time and simultaneously
with the termination of the Executive Retention Agreement and the
Offer Letter, grant to the Executive an option to purchase an
aggregate of 200,000 shares of Company Common Stock pursuant to the
Company's 1996 Incentive and Nonqualified Stock Option Plan or, if
outside such plan, then on terms and conditions substantially
similar to such plan. The exercise price of a share of Company
Common Stock pursuant to such option shall be equal to the fair
market value of one share of Company Common Stock as quoted on The
Nasdaq Stock Market on the date of execution of the Merger
Agreement.
5. As partial consideration for the Executive's agreement to terminate
the Executive Retention Agreement and the Offer Letter, FVC shall
enroll the Executive as a participant in FVC's Executive Officers'
Change of Control Plan (the "Change of Control Plan"), with such
enrollment to become effective as of immediately after the Effective
Time.
6. The Executive and FVC hereby agree to enter into the agreement
attached hereto as EXHIBIT B at or prior to the Effective Time, with
such agreement becoming effective as of immediately after the
Effective Time.
Date: April 11, 2001
CUSEEME NETWORKS, INC.
By: /s/ Xxxxxx Xxxxxxxxx
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Name:
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Title:
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FIRST VIRTUAL COMMUNICATIONS, INC.
By: /s/ Xxxxx Xxxxxxxxx
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Name:
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Title:
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/s/ Xxxxxx Xxxxx
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XXXXXX XXXXX
EXHIBIT A
FORM OF RELEASE AND WAIVER OF CLAIMS
In consideration of the payments and other benefits set forth in the
Employment Agreement to which this form is attached, I, XXXXXX XXXXX, hereby
furnish FIRST VIRTUAL COMMUNICATIONS, INC. (the "Company"), with the following
release and waiver ("Release and Waiver").
I hereby release, and forever discharge the Company, its officers,
directors, agents, employees, stockholders, successors, assigns affiliates and
Benefit Plans, of and from any and all claims, liabilities, demands, causes of
action, costs, expenses, attorneys' fees, damages, indemnities and obligations
of every kind and nature, in law, equity, or otherwise, known and unknown,
suspected and unsuspected, disclosed and undisclosed, arising at any time prior
to and including my employment Termination Date with respect to any claims
relating to my employment and the termination of my employment, including but
not limited to, claims pursuant to any federal, state or local law relating to
employment, including, but not limited to, discrimination claims, claims under
the California Fair Employment and Housing Act, and the Federal Age
Discrimination in Employment Act of 1967, as amended ("ADEA"), or claims for
wrongful termination, breach of the covenant of good faith, contract claims,
tort claims, and wage or benefit claims, including but not limited to, claims
for salary, bonuses, commissions, stock, stock options, vacation pay, fringe
benefits, severance pay or any form of compensation. The only claims excepted
from this Release are the following claims: a) any claims I may have for
benefits under the workers' compensation and unemployment insurance laws; b) my
legal right to continue medical coverage under COBRA; c) my right to vested
benefits under the Company `s 401(k) retirement plan; and d) my right to vested
stock in the Company.
I also acknowledge that I have read and understand Section 1542 of the
California Civil Code which reads as follows: "A GENERAL RELEASE DOES NOT EXTEND
TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT
THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR." I hereby expressly waive and
relinquish all rights and benefits under that section and any law of any
jurisdiction of similar effect with respect to any claims I may have against the
Company.
I acknowledge that, among other rights, I am waiving and releasing any
rights I may have under ADEA, that this Release and Waiver is knowing and
voluntary, and that the consideration given for this Release and Waiver is in
addition to anything of value to which I was already entitled as an executive of
the Company. I further acknowledge that I have been advised, as required by the
Older Workers Benefit Protection Act, that: (a) the Release and Waiver granted
herein does not relate to claims which may arise after this Release and Waiver
is executed; (b) I have the right to consult with an attorney prior to executing
this Release and Waiver (although I may choose voluntarily not to do so); and if
I am over 40 years of age upon execution of this Release and Waiver: (c) I have
twenty-one (21) days from the date of termination of my employment with the
Company in which to consider this Release and Waiver (although I may choose
voluntarily to execute this Release and Waiver earlier); (d) I have seven (7)
days following the execution of this Release and Waiver to revoke my consent to
this Release and Waiver; and (e) this Release and Waiver shall not be effective
until the seven (7) day revocation period has expired.
Date: By:
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XXXXXX XXXXX
EXHIBIT B
[COMPANY LETTERHEAD]
April 11, 2001
Xxxxxx Xxxxx
00 Xxxxxx Xxxx
X. Xxxxxxx, XX 00000
RE: ADDITIONAL EMPLOYMENT TERMS
Dear Xxx:
This letter will clarify the terms of your employment with FIRST VIRTUAL
COMMUNICATIONS, Inc. (the "Company") as Chief Marketing Officer, effective as of
the Effective Time, as defined in that certain Agreement and Plan of Merger and
Reorganization, dated as of March 22, 2001, between the Company, CUseeMe
Networks, Inc. and FVC Acquisition Corp., a wholly owned subsidiary of the
Company.
The Company shall pay you a base salary of Two Hundred Thirty Thousand Dollars
($230,000) per year (the "Base Salary"), less payroll deductions and all
required withholdings payable in regular periodic payments in accordance with
Company policy. Such Base Salary shall be prorated for any partial year of
employment on the basis of a 365-day fiscal year. The Base Salary shall be
reviewed annually for possible increases in light of your performance of your
duties and the Company's profitability and other relevant factors, as determined
by the Company's Board of Directors or the Compensation Committee of the Board
(the "Compensation Committee").
You shall be eligible for an annual bonus, provided that certain personal and
corporate performance targets to be set by the Compensation Committee of the
Board of Directors of the Company are met or exceeded and provided further that
in the first year of your employment you are guaranteed payment of 42% of the
Target Bonus, which shall be paid during the first year of employment on a pro
rata basis at the same time Base Salary payments are made. Such performance
targets shall be adopted by the Compensation Committee after discussion with you
within ninety (90) days after the start of your employment with the Company and
each subsequent fiscal year during your employment. The Compensation Committee,
in its sole discretion, shall determine whether such goals have been achieved.
Your target bonus (the "Target Bonus") for the first year of your employment
shall be $85,000. The Target Bonus shall be paid in accordance with normal
Company executive bonus payment practice and, subject to the usual required
withholding, the payment of any portion of the Target Bonus shall also be
contingent on you still being employed by the Company as of the regular date of
payment for such portion of the Target Bonus.
The Company shall reimburse reasonable, documented, out-of-pocket moving
expenses incurred by you in connection with any relocation of your principal
place of employment to Santa Clara, California. The Company shall reimburse you
for the cost of one round trip flight for you and your spouse to visit Santa
Clara, California prior to your relocation to the Company's principal office.
Notwithstanding the above, the Company shall not pay or reimburse you for the
costs of any travel to the extent such costs exceed the cost of business class.
The Company may terminate your employment at any time and for any or no reason,
with or without advance notice by giving written notice of such termination.
Similarly, you may terminate your employment with the Company at any time at
your election, in your sole discretion, for any or no reason upon two (2) weeks
notice to the Company during which time you shall provide reasonable transition
assistance to the Company. The Company reserves the right to ask you to expedite
your resignation date and to leave prior to the end of the two-week notice
period. The at-will nature of your employment relationship may not be modified
except by a written agreement between you and the Chief Executive Officer of the
Company.
If your employment is terminated for any or no reason, or you voluntarily
terminate your employment from the Company, all compensation and benefits will
cease immediately and you will receive no additional payments from the Company
other than your accrued base salary and accrued and unused vacation benefits
earned through the date of your termination.
In the event that you are entitled to the benefits under the Company's Executive
Officers' Change of Control Plan, you will not be entitled to any of the
benefits or payments under this letter agreement.
This letter agreement, the Agreement dated April 11, 2001, between Xxxxxx Xxxxx,
CuseeMe Networks, Inc. and the Company, the Change of Control Plan and the
Proprietary Information and Inventions Agreement between you and the Company the
complete and exclusive statement of the terms of your employment with the
Company and supersedes any other agreements or promises made to you by anyone,
whether oral or written.
Please sign and date this letter agreement, and return it to me on or before
April 11, 2001 if you wish to accept employment with the Company under the terms
described above.
We look forward to a productive and enjoyable work relationship.
Sincerely,
/s/ Xxxxx Xxxxxxxxx
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Xxxxx Xxxxxxxxx
Chief Executive Officer and Chairman of the Board of Directors
Accepted:
/s/ Xxxxxx Xxxxx
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Xxxxxx Xxxxx
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Date