Exhibit 10.24
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement, dated September 08, 2003, is
between ION Networks, Inc., a Delaware corporation (the "Company"), and Xxxxxx
X. Xxxx, an individual residing at 00 Xxxxxxx Xxxxx, Xxxxxxxxx, XX 00000
("Executive").
WHEREAS, the Company and Executive have entered into an Employment Agreement
(the "Employment Agreement"), dated August 16, 2003, (the "Effective Date"); and
WHEREAS, the Company and Executive desire to amend and restate the Employment
Agreement as set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants set forth herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. Position and Responsibilities.
1.1 Position. Executive is employed by the Company to render
services to the Company in the position of Chief Executive
Officer. Executive shall perform such duties and
responsibilities as are normally related to such position in
accordance with the standards of the industry and any
additional duties consistent with his position now or
hereafter assigned to Executive by the Chairman of the Board
of Directors. Executive shall abide by the rules, regulations,
and practices as adopted or modified from time to time in the
Company's sole discretion.
1.2 Other Activities. Executive shall devote his full business
time, attention and skill to perform any assigned duties,
services and responsibilities while employed by the Company,
for the furtherance of the Company's business, in a diligent,
loyal and conscientious manner. Except upon the prior written
consent of the Chairman of the Board of Directors, Executive
will not, during the term of this Agreement, (i) accept any
other employment, or (ii) engage, directly or indirectly, in
any other business activity (whether or not pursued for
pecuniary advantage) that might interfere with Executive's
duties and responsibilities hereunder or create a conflict of
interest with the Company.
1.3 No Conflict. Executive represents and warrants that
Executive's execution of this Agreement, Executive's
employment with the Company, and the performance of
Executive's proposed duties under this Agreement shall not
violate any obligations Executive may have to any other
employer, person or entity, including any obligations with
respect to proprietary or confidential information of any
other person or entity.
2. Compensation and Benefits.
2.1 Base Salary. In consideration of the services to be rendered
under this Agreement, the Company shall pay Executive a salary
equivalent to $10,000 per month for the first three months
after the Effective Date, $20,000 per month for the fourth
through sixth month following the Effective Date (unless the
Company employs a Chief Operating Officer during the first six
months after the Effective Date, in which case Executive's
salary for the fourth to sixth months will be reduced to
$16,000), and $15,000 per month for the seventh through
twelfth months after the Effective Date (the "Base Salary").
The Base Salary shall be paid in accordance with the Company's
regularly established payroll practice. Executive's Base
Salary shall be reduced by withholdings required by law.
Executive's Base Salary will be reviewed from time to time in
accordance with the established procedures of the Company for
adjusting salaries for similarly situated employees and may be
adjusted in the sole discretion of the Company.
2.2 Stock Options. The Company shall recommend to the Compensation
Committee and to the Board of Directors (the "Board") that
Executive be provided with non-qualified stock options to
purchase 1,000,000 shares of the Common Stock of the Company
on the Effective Date, an additional 250,000 shares of the
Common Stock of the Company ninety days after the Effective
Date, and an additional 250,000 shares of the Common Stock of
the Company 180 days after the Effective Date, as long as
Executive remains employed by the Company on each such date.
This recommendation will be considered for approval at the
Company's next Board meeting. The price per share of any
approved options will be determined at that meeting.
Executive's entitlement to any stock options that may be
approved is conditioned upon Executive's signing of a separate
Stock Option Agreement. Stock options to purchase 750,000
shares of the Common Stock of the Company shall automatically
vest upon a Change in Control (as defined below) which occurs
within (6) months after the Effective Date as long as
Executive remains employed by the Company on the date of the
occurrence of a Change in Control and the remainder of the
options granted hereunder shall vest automatically upon a
Change in Control which occurs six (6) months after the
Effective Date as long as Executive remains employed by the
Company on such date; provided, however, if the surviving
company of such Change in Control offers Executive continued
employment at a level comparable to that existing immediately
prior to the Change in Control, such non-qualified options
shall not vest automatically but shall vest in accordance to
the vesting schedule set forth in the Stock Option Agreement.
A Change in Control is defined as (i) a sale of all or
substantially all of the assets or all of the outstanding
equity of the Company or (ii) the merger or consolidation of
the Company with or into another entity or any other corporate
reorganization if persons who were not shareholders of the
Company immediately prior to such merger, consolidation or
reorganization own immediately after such merger,
consolidation or other reorganization fifty percent (50%) or
more of the voting powers of the outstanding securities of
each of (A) the continuing or surviving entity and (B) any
direct or indirect parent corporation of such continuing or
surviving entity.
2.3 Benefits. Executive shall be eligible to participate in the
benefits made generally available by the Company to
similarly-situated employees, in accordance with the benefit
plans established by the Company, and as may be amended from
time to time in the Company's sole discretion.
2.4 Expenses. The Company shall reimburse Executive for reasonable
travel and other business expenses incurred by Executive in
the performance of Executive's duties hereunder in accordance
with the Company's expense reimbursement guidelines, as they
may be amended in the Company's sole discretion.
2.5 Incentive Compensation. Executive will be eligible for
incentive compensation when the Board and the stockholders of
the Company (if required by the securities laws and related
rules and regulations) approve a new incentive compensation
plan.
2.6 D&O Insurance. The Company shall provide Executive with the
same level of insurance coverage under the Company's D&O
insurance policies as provided to similarly situated employees
and shall reimburse Executive up to an aggregate amount of
$100,000 (which is equal to the deductible amount under such
policies) for any amounts incurred by Executive in connection
with any claims, demands, suits, judgments, losses or expenses
covered by the Company's D&O insurance policies as determined
by the insurers.
2.7 Indemnification. To the extent not covered by the D&O
insurance policies set forth in Section 2.6, the Company
agrees to indemnify and hold Executive harmless from and
against any claims, demands, suits, judgments, losses or
expenses (including reasonable attorney's fees) incurred by
Executive in connection with Executive's performance of his
duties under this Agreement; provided, however, the Company
shall have no obligation to indemnify Executive under this
Section 2.7 if such claims, demands, suits, judgments, losses
or expenses (including reasonable attorney's fees) directly or
indirectly arose from or out of or were the result of (i) a
breach of Executive's obligations set forth in this Agreement,
(ii) Executive's failure to follow the reasonable directions
of the Board or (iii) Executive's gross negligence,
misconduct, error or omission in the performance of his duties
hereunder.
2.8 Approval. The terms and conditions of this Agreement shall be
subject to the approval of the Compensation Committee and the
Board.
3. At-Will Employment.
The employment of Executive shall be "at-will" at all times. The Company or
Executive may terminate Executive's employment with the Company at any time,
without any advance notice, for any reason or no reason at all. The at-will
relationship may not be modified by anything contrary contained in or arising
from any statements, policies or practices of the Company relating to the
employment, discipline or termination of its employees. Upon and after such
termination, all obligations of the Company (except for any vested rights
Executive may have under any Company benefit plan(s) provided under Section 2.3
or his right to continue benefits under COBRA) under this Agreement shall cease.
4. Termination Obligations.
4.1 Return of Property. Executive agrees that all property
(including without limitation all equipment, tangible
proprietary information, documents, records, notes, contracts
and computer-generated materials) furnished to or created or
prepared by Executive incident to Executive's employment
belongs to the Company and shall be promptly returned to the
Company upon termination of Executive's employment.
4.2 Resignation and Compensation. Following any termination of
employment, Executive shall cooperate with the Company in the
winding up of pending work on behalf of the Company and the
orderly transfer of work to other employees. Executive shall
also cooperate with the Company in the defense of any action
brought by any third party against the Company that relates to
Executive's employment by the Company. Executive shall be
compensated on a per diem basis (based on his Base Salary) and
shall be reimbursed for all reasonable unpaid out-of-pocket
expenses for which Executive provides the Company proper
documentation on a timely basis.
5. Inventions and Proprietary Information; Prohibition on Third Party
Information.
5.1 Proprietary Information. Executive hereby covenants, agrees
and acknowledges as follows:
(a) The Company is engaged in a continuous program of
research, design, development, production, marketing
and servicing with respect to its business.
(b) Executive's employment hereunder creates a
relationship of confidence and trust between
Executive and the Company with respect to certain
information pertaining to the business of the Company
or pertaining to the business of any customer of the
Company which may be made known to the Executive by
the Company or by any customer of the Company or
learned by the Executive during the period of
Executive's employment by the Company.
(c) The Company possesses and will continue to possess
information that has been created, discovered or
developed by, or otherwise becomes known to it
(including, without limitation, information created,
discovered or developed by, or made known to,
Executive during the period of Executive's employment
or arising out of Executive's employment) or in which
property rights have been or may be assigned or
otherwise conveyed to the Company, which information
has commercial value in the business in which the
Company is engaged and is treated by the Company as
confidential.
(d) Any and all inventions, products, discoveries,
improvements, processes, manufacturing, marketing and
services methods or techniques, formulae, designs,
styles, specifications, data bases, computer programs
(whether in source code or object code), know-how,
strategies and data, whether or not patentable or
registrable under copyright or similar statutes,
made, developed or created by Executive (whether at
the request or suggestion of the Company or
otherwise, whether alone or in conjunction with
others, and whether during regular hours of work or
otherwise) during the period of Executive's
employment by the Company which pertains to the
Company's actual or contemplated business, products,
intellectual property or processes of the Company
(collectively hereinafter referred to as
"Developments"), shall be the sole property of the
Company and will be promptly and fully disclosed by
Executive to the Board without any additional
compensation therefor, including, without limitation,
all papers, drawings, models, data, documents and
other material pertaining to or in any way relating
to any Developments made, developed or created by
Executive as aforesaid. The Company shall own all
right, title and interest in and to the Developments
and such Developments shall be considered "works made
for hire" for the Company under US Copyright Law. If
any of the Developments are held for any reason not
to be "works made for hire" for the Company or if
ownership of all right, title and interest in and to
the Developments has not vested exclusively and
immediately in the Company upon creation, Executive
irrevocably assigns, without further consideration,
any and all right, title and interest in and to the
Developments to the Company, including any and all
moral rights, and "shop rights" in the Developments
recognized by applicable law. Executive irrevocably
agrees to execute any document requested by the
Company to give effect to this Section 5.1 such as
assignment of invention or other general assignments
of intellectual property rights, without additional
compensation therefor.
(e) Executive will keep confidential and will hold for
the Company's sole benefit any Development which is
to be the exclusive property of the Company under
this Section 5.1 irrespective of whether any patent,
copyright, trademark or other right or protection is
issued in connection therewith.
(f) Executive also agrees that Executive will not,
without the prior approval of the Board use for
Executive's benefit or disclose at any time during
Executive's employment by the Company, or thereafter,
except to the extent required by the performance by
Executive of Executive's duties, any information
obtained or developed by Executive while in the
employ of the Company with respect to any
Developments or with respect to any customers,
clients, suppliers, products, services, prices,
executives, financial affairs, or methods of design,
distribution, marketing, service, procurement or
manufacture of the Company or any confidential
matter, except information which at the time is
generally known to the public other than as a result
of disclosure by Executive not permitted hereunder.
Notwithstanding the foregoing, the following will not
constitute confidential information for purposes of
this Agreement: (i) information which is or becomes
publicly available other than as a result of
disclosure by the Executive; (ii) information
designated in writing by the Company as no longer
confidential, or (iii) information known by Executive
as of the Effective Date and identified as such in
writing to the Board. Executive will comply with all
intellectual property disclosure policies established
by the Company from time to time with respect to the
Company's confidential information, including without
respect to Developments.
5.2 Non-Disclosure of Third Party Information. Executive
represents and warrants and covenants that Executive shall not
disclose to the Company, or use, or induce the Company to use,
any proprietary information or trade secrets of others at any
time, including but not limited to any proprietary information
or trade secrets of any former employer, if any; and Executive
acknowledges and agrees that any violation of this provision
shall be grounds for Executive's immediate termination and
could subject Executive to substantial civil liabilities and
criminal penalties. Executive further specifically and
expressly acknowledges that no officer or other employee or
representative of the Company has requested or instructed
Executive to disclose or use any such third party proprietary
information or trade secrets.
5.3 Injunctive Relief. Executive acknowledges and agrees that a
remedy at law for any breach or threatened breach of the
provisions of this Section 5 would be inadequate and,
therefore, agrees that the Company shall be entitled to
injunctive relief in addition to any other available rights
and remedies in case of any such breach or threatened breach.
6. LIMITED AGREEMENT NOT TO COMPETE OR SOLICIT.
6.1 Non-Competition. During the term of this Agreement, and for
six (6) months after the termination of Executive's employment
with the Company (unless during such six (6) month period, the
Company is dissolved, in which such case such non-compete
period shall terminate prior to the end of the six (6) month
period), Executive shall not, directly or indirectly, work as
an employee, consultant, agent, principal, partner, manager,
officer, or director for any person or entity who or which
engages in a substantially similar business as the Company.
For purposes of this Agreement the Company is currently
engaged in the business of designing, developing,
manufacturing or selling network infrastructure security
solutions.
6.2 Non-Solicitation. Executive shall not, during his or her
employment and for a period of six (6) months immediately
after termination of his or her employment, for any reason,
either directly or indirectly: (a) call on, solicit, or take
away any of the Company's customers or potential customers
about whom Executive became aware or with whom Executive had
contact as a result of Executive's employment with the
Company, either for benefit of Executive or for any other
person or entity; or (b) solicit, induce, recruit or encourage
any of the Company's employees or contractors to leave the
employ of the Company or cease providing services to the
Company on behalf of the Executive or on behalf of any other
person or entity.
6.3 Limitations; Remedies. The Executive further agrees that the
limitations set forth in this Section 6 (including, without
limitation, any time or territorial limitations) are
reasonable and properly required for the adequate protection
of the businesses of the Company. If any of the restrictions
contained in Sections 6.1 and 6.2 are deemed by a court or
arbitrator to be unenforceable by reason of the extent,
duration or geographic scope thereof, or otherwise, then the
parties agree that such court or arbitrator may modify such
restriction to the extent necessary to render it enforceable
and enforce such restriction in its modified form. The
Executive acknowledges and agrees that a remedy at law for any
breach or threatened breach of the provisions of this Section
6 would be inadequate and, therefore, agrees that the Company
shall be entitled to injunctive relief in addition to any
other available rights and remedies in cases of any such
breach or threatened breach.
7. Alternative Dispute Resolution.
The Company and Executive mutually agree that any controversy or claim
arising out of or relating to this Agreement or the breach thereof, or any other
dispute between the parties arising from or related to Executive's employment
with the Company, shall be submitted to mediation before a mutually agreeable
mediator. In the event mediation is unsuccessful in resolving the claim or
controversy, such claim or controversy shall be resolved by arbitration. The
claims covered by this Agreement ("Arbitrable Claims") include, but are not
limited to, claims for wages or other compensation due; claims for breach of any
contract (including this Agreement) or covenant (express or implied); tort
claims; claims for discrimination (including, but not limited to, race, sex,
religion, national origin, age, marital status, medical condition, or
disability); claims for benefits (except where an employee benefit or pension
plan specifies that its claims procedure shall culminate in an arbitration
procedure different from this one); and claims for violation of any federal,
state, or other law, statute, regulation, or ordinance, except claims excluded
in the following paragraph. The parties hereby waive any rights they may have to
trial by jury in regard to Arbitrable Claims.
Claims Executive may have for Workers' Compensation or unemployment
compensation benefits are not covered by this Agreement. Also not covered is
either party's right to obtain provisional remedies or interim relief from a
court of competent jurisdiction.
Arbitration under this Agreement shall be the exclusive remedy for all
Arbitrable Claims. Company and Executive agree that arbitration shall be held in
or near South Plainfield, New Jersey and shall be in accordance with the then
current Employment Dispute Resolution Rules of the American Arbitration
Association, before a single arbitrator licensed to practice. The arbitrator
shall have authority to award or grant legal, equitable, and declaratory relief.
Such arbitration shall be final and binding on the parties. This agreement to
mediate and arbitrate survives termination of Executive's employment.
8. Amendments; Waivers; Remedies.
This Agreement may not be amended or waived except by a writing signed by
Executive and by a duly authorized representative of the Company. Failure to
exercise any right under this Agreement shall not constitute a waiver of such
right. Any waiver of any breach of this Agreement shall not operate as a waiver
of any subsequent breaches. All rights or remedies specified for a party herein
shall be cumulative and in addition to all other rights and remedies of the
party hereunder or under applicable law.
9. Assignment; Binding Effect.
9.1 Assignment. The performance of Executive is personal
hereunder, and Executive agrees that Executive shall have no
right to assign and shall not assign or purport to assign any
rights or obligations under this Agreement. This Agreement may
be assigned or transferred by the Company; and nothing in this
Agreement shall prevent the consolidation, merger or sale of
the Company or a sale of any or all or substantially all of
its assets.
9.2 Binding Effect. Subject to the foregoing restriction on
assignment by Executive, this Agreement shall inure to the
benefit of and be binding upon each of the parties; the
affiliates, officers, directors, agents, successors and
assigns of the Company; and the heirs, devisees, spouses,
legal representatives and successors of Executive.
10. Severability.
If any provision of this Agreement shall be held by a court or arbitrator to be
invalid, unenforceable, or void, such provision shall be enforced to the fullest
extent permitted by law, and the remainder of this Agreement shall remain in
full force and effect. In the event that the time period or scope of any
provision is declared by a court or arbitrator of competent jurisdiction to
exceed the maximum time period or scope that such court or arbitrator deems
enforceable, then such court or arbitrator shall reduce the time period or scope
to the maximum time period or scope permitted by law.
11. Taxes.
All amounts paid under this Agreement (including without limitation Base Salary)
shall be reduced by all applicable state and federal tax withholdings and any
other withholdings required by any applicable jurisdiction.
12. Governing Law.
The validity, interpretation, enforceability, and performance of this Agreement
shall be governed by and construed in accordance with the laws of the State of
New Jersey, without regard to New Jersey conflict of laws principles.
13. Interpretation.
This Agreement shall be construed as a whole, according to its fair meaning, and
not in favor of or against any party. Sections and section headings contained in
this Agreement are for reference purposes only, and shall not affect in any
manner the meaning or interpretation of this Agreement. Whenever the context
requires, references to the singular shall include the plural and the plural the
singular.
14. Obligations Survive Termination of Employment.
Executive agrees that any and all of Executive's obligations under this
agreement, shall survive the termination of employment and the termination of
this Agreement.
15. Counterparts.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original of this Agreement, but all of which together shall
constitute one and the same instrument.
16. Authority.
Each party represents and warrants that such party has the right, power and
authority to enter into and execute this Agreement and to perform and discharge
all of the obligations hereunder; and that this Agreement constitutes the valid
and legally binding agreement and obligation of such party and is enforceable in
accordance with its terms.
17. Entire Agreement.
This Agreement (including the Exhibits attached hereto, which are incorporated
herein by reference) is the final, complete and exclusive agreement of the
parties with respect to the subject matter hereof and supersedes and merges all
prior or contemporaneous representations, discussions, proposals, negotiations,
conditions, communications and agreements, whether written or oral, between the
parties relating to the subject matter hereof and all past courses of dealing or
industry custom.
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Executive acknowledges Executive has had the opportunity to consult legal
counsel concerning this agreement, that Executive has read and understands the
agreement, that Executive is fully aware of its legal effect, and that Executive
has entered into it freely based on Executive's own judgment and not on any
representations or promises other than those contained in this agreement.
In Witness Whereof, the parties have duly executed this Agreement as of the date
first written above.
ION NETWORKS, INC. EXECUTIVE:
/s/ Xxxxxxx X. Xxxxxxx /s/ Xxxxxx X. Xxxx
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Xxxxxxx X. Xxxxxxx Xxxxxx X. Xxxx
Chairman of the Board of Directors
