Exhibit 99.13
AMENDED AND RESTATED
EXECUTIVE OFFICER CHANGE IN CONTROL AGREEMENT
THIS AMENDED AND RESTATED AGREEMENT (the "Agreement") dated and
effective May 24, 2001 is made by and between PictureTel Corporation, a Delaware
Corporation, (the "Company") and Xxxxxx Xxxxxxxx ("Executive").
WHEREAS, the Company, Pharaoh Acquisition Corporation and Polycom, Inc.
("Polycom") have entered into an Agreement and Plan of Merger (the "Merger
Agreement"), which requires, among other things, that Executive enter into this
Amended and Restated Executive Change in Control Agreement as a condition to the
closing of the merger contemplated by the Merger Agreement (the "Merger") (the
"Closing");
WHEREAS, Polycom has, in the Merger Agreement, expressly agreed to
assume PictureTel's obligations under this Agreement and agreed to perform under
this Agreement in the same manner and to the same extent that PictureTel would
be required to perform if the Merger had not occurred;
NOW THEREFORE, in consideration of the premises and the mutual
covenants herein contained and other good and valuable consideration, the
Company and the Executive hereby agree as follows:
1.0 DEFINED TERMS. The definition of capitalized terms used in this
Agreement is provided in the last Section hereof and throughout the document
enclosed in quotation marks inside parentheses.
2.0 TERM OF AGREEMENT. This Agreement shall be effective immediately
prior to the signing by all the parties thereto of the Merger Agreement and
shall continue in effect from such time until six months following the Closing;
provided, however, that if the Merger is not consummated within one year
following the signing of the Merger Agreement or if, earlier, the Company is
acquired by an entity not affiliated with Polycom then this Amended and Restated
Agreement shall become void and without further force and effect and the terms
of the prior Executive Officer Change in Control Agreement shall be reinstated
in their entirety and shall govern.
3.0 COMPANY'S COVENANTS SUMMARIZED; EMPLOYMENT TERMS. In order to
induce the Executive to remain in the employ of the Company and in consideration
of the Executive's covenants set forth in Section 7 hereof and Appendix IV
hereto, and in the event Executive is to receive severance payments, in
consideration of Executive's entering into a standard form of release of claims
attached as Appendix III hereto, the Company agrees, under the conditions
described herein, to pay the Executive the "Severance and Retention Payments"
described in Section 6.2 hereof and the other payments and benefits described
herein in the event the Executive's employment continues or pursuant to certain
terminations of employment during the term of this Agreement. Except with
respect to Retention Payments payable under Section 6.0 hereof, no amount or
benefit shall be payable under this Agreement unless there shall have been (or,
under the terms hereof, there shall be deemed to have been) a termination of the
Executive's employment
during the term of this Agreement. This Agreement shall not be construed as
creating an express or implied contract of employment prior to or following the
date of the Merger and subject to the Company providing severance benefits as
required hereunder and, subject to the notice requirements hereof, Executive's
employment with the Company shall be "at-will" and may be terminated either by
the Company or Executive at any time, with or without cause.
3.1 As consideration for entering into this Amended and Restated
Change in Control Agreement, the Company agrees to pay Executive the sum of
$2,500.00 prior to the Merger.
3.2 On and after the Closing, the Company agrees to employ the
Executive, and the Executive hereby accepts employment with the Company, in the
position set forth in Appendix I hereto and the Executive agrees to assume and
discharge such responsibilities, and perform such duties, as are commensurate
with such position; PROVIDED, HOWEVER, that, subject to Executive's right to
terminate for Good Reason , the Company or Polycom shall have the right to
revise such position, responsibilities and duties from time to time as the
Company may reasonably deem appropriate. The Executive shall (i) carry out his
duties and responsibilities hereunder faithfully, diligently and competently,
(ii) devote his full time and attention to the business and affairs of the
Company, (iii) use his best efforts, skills and abilities to promote the
Company's interests, and (iv) comply in all material respects with the written
operating policies and practices of the Company generally applicable to all
Company employees and as from time to time in effect during the term of this
Agreement.
3.3 The Executive shall perform his duties hereunder at Andover,
Massachussetts or at a location that is mutually agreed by the Company and the
Executive.
3.4 Executive shall maintain the confidentiality of all
confidential and proprietary information of the Company, and on or prior to the
Closing, but effective at the Closing, shall execute and deliver to Polycom its
standard Proprietary Information and Invention Agreement in the form attached
hereto as Appendix II (the "CONFIDENTIALITY AGREEMENT"). Such obligations shall
survive any termination of Executive's employment relationship or of this
Agreement and shall be in addition to, and not in substitution of, any
agreements currently in effect between Executive and the Company.
4.0 COMPENSATION AND BENEFITS.
4.1 The Company shall pay the Executive as compensation for his
services a base salary at the annualized rate set forth on Appendix I hereto
(the "Base Salary"). Such salary shall be subject to applicable tax withholding
and shall be paid periodically in accordance with the Company's standard payroll
practices. Such annual compensation shall be reviewed annually for increases
(but not decrease) in the discretion of Management. In conducting any such
annual review, Management shall take into account any increase in Executive's
responsibilities, the performance of the Executive and/or other pertinent
factors. Following the Merger, Executive shall not be eligible to participate in
Polycom's Senior Management Incentive Compensation Plan ("SMICOM").
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4.2 Executive will be entitled to receive such employee benefits
as are made available by the Company to its other employees and managers.
Executive shall be entitled, to the extent eligible under the terms of the
applicable plans, to participate in all pension and welfare plans, including any
group medical, dental, life insurance and disability insurance plans, or similar
benefit plans of the Company and/or Polycom that are made available to other
similarly situated employees. Participation in any such benefits and plans shall
be consistent with Executive's rate of compensation to the extent that
compensation is a determinative factor with respect to participation and/or
coverage under any such benefit or plan and Executive shall be credited for the
time the Executive has been an employee of PictureTel.
4.3 The Company shall reimburse Executive for all reasonable
business expenses incurred and paid by Executive in the performance of services
hereunder in accordance with the Company's expense reimbursement policy as from
time to time in effect.
5.0 COMPENSATION OTHER THAN SEVERANCE OR RETENTION PAYMENTS.
5.1 In the event of Executive's death or a termination of
Executive's employment due to the Executive's Disability, no compensation or
payments will be made to the Executive other than those to which he is entitled
under the Company's existing benefit plans and policies at the time of such
termination and other than any compensation or payments accrued under this
Agreement up to the date of termination of his employment and unpaid at the date
of such termination.
5.2 If Executive's employment shall be terminated for any reason,
the Company shall pay the Executive's full salary to the Executive through the
Date of Termination at the rate in effect at the time the Notice of Termination
is given, together with all compensation and benefits payable to the Executive
through the Date of Termination under the terms of any compensation or benefit
plan, program, agreement or arrangement maintained by the Company prior to the
Date of Termination; provided that severance and retention benefits shall only
be payable to Executive during the term of this Agreement pursuant to Section
6.0 of this Agreement; and Executive expressly waives the right to receive any
severance benefits under all other plans, programs, arrangements and agreements
during the term of this Agreement, including, without limitation, the PictureTel
Key Employee Change in Control Severance Plan and PictureTel Severance Plan.
5.3 If Executive's employment shall be terminated for any reason,
the Company shall also pay Executive's normal post-termination compensation and
benefits to Executive as such payments become due. Such post-termination
compensation and benefits shall be determined under, and paid in accordance
with, the Company's retirement, insurance and other compensation or benefit
plans, programs and arrangements; provided that severance and retention benefits
shall only be payable to Executive pursuant to Section 6.0 of this Agreement.
6.0 SEVERANCE AND RETENTION PAYMENTS.
6.1 Subject to Executive's continued employment with the Company,
Polycom or an affiliate thereof for six (6) months following the Closing (the
"Post-Closing Employment Period"), in addition to any Base Salary earned by
Executive by virtue of his continued employment with the Company, Polycom or an
affiliate thereof during the Post-Closing Employment Period, the
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Company shall commence payment of the Total Severance and Retention Payments
beginning with the first Polycom payroll payment following the Closing. Such
Base Salary and Total Severance and Retention Payments shall continue to be paid
to Executive during the Post-Closing Employment Period so long as Executive's
employment does not terminate (i) for Cause, (ii) voluntarily by Executive other
than for Good Reason, or (iii) pursuant to Executive's death or Disability. In
the event of Executive's employment during the Post-Closing Termination Period
is terminated (i) by the Company other than for Cause, or (ii) by Executive for
Good Reason, then subject to (i) Executive entering into a release of claims in
substantially the form attached hereto as Appendix III, and (ii) Executive not
breaching the Non-Compete and Non-Solicit covenants of Section 7.0 hereof and
Appendix VII hereto, the Company shall pay the Executive the unpaid balance of
the Total Severance and Retention Payments described in Section 6.2 (i.e., the
Total Severance and Retention Payments minus the amount of any Severance
Retention Payments previously paid to Executive during the Post-Closing
Employment Period) over the period remaining period until two years following
the Closing. No Severance and Retention Payments shall be payable pursuant to
this Agreement following the second anniversary of the Closing. In the event
Executive's employment with the Company, Polycom or its affiliates terminates
for any or no reason after the Post-Closing Employment Period and prior to the
second anniversary of the Closing, Executive shall receive the balance of his
Total Severance and Retention Payments through the second anniversary of the
Closing. The Executive's employment shall be deemed to have been terminated
following a Change in Control by the Company without Cause or by the Executive
with Good Reason if the Executive's employment is terminated prior to the Merger
without Cause at the express direction (or action which constitutes an express
direction) of Polycom. The Total Severance and Retention Payments, if any,
payable under this Section 6.1 will be paid in substantially equal increments on
the same payroll cycle as applies to active Polycom employees over a period of
up to two years following the Closing.
6.2 The Total Severance and Retention Payments shall be equal to
two (2) times the sum of (a) the higher of the Executive's annual base salary in
effect immediately prior to the occurrence of the event or circumstance upon
which the Notice of Termination is based or in effect immediately prior to the
Change in Control, and (b) the higher of the highest annual bonus paid to the
Executive in the three years preceding the year in which the Date of Termination
occurs or paid in the three years preceding the year in which the Change in
Control occurs (the "Total Severance and Retention Payments").
6.3 In the event Executive is eligible to receive Severance and
Retention Payments following his termination of employment pursuant to Section
6.1, then for the identical time period over which Executive receives such
post-termination Severance and Retention Payments (the "Severance Period"), the
Company shall arrange to provide the Executive with medical and dental insurance
benefits substantially similar to those which the Executive is receiving
immediately prior to the termination of employment. Benefits otherwise
receivable by the Executive pursuant to this Section 6.4 shall be reduced to the
extent comparable benefits are actually received by or made available to the
Executive without cost during the Severance Period (and any such benefits
actually received by the Executive shall be reported to the Company by the
Executive). If the benefits provided to the Executive under this Section 6.3
shall result in a decrease, pursuant to Section 6.4, in the Severance and
Retention Payments or the severance payments otherwise payable pursuant to
Section 6.2 and these Section 6.3 benefits are thereafter reduced pursuant to
the immediately
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preceding sentence because of the receipt of comparable benefits, the Company
shall, at the time of such reduction, pay to the Executive the lesser of (a) the
amount of the decrease made in the Severance and Retention Payments or severance
payments pursuant to Section 6.4, or (b) the maximum amount which can be paid to
the Executive without being, or causing any other payment to be, nondeductible
by reason of section 280G of the Code.
6.4 Notwithstanding any other provisions of this Agreement, in the
event that any payment or benefit received or to be received by the Executive in
connection with a Change in Control or the termination of the Executive' s
employment (whether or not received pursuant to the terms of this Agreement)
(all such payments and benefits, including but not limited to the Total
Severance and Retention Payments, being hereinafter called the "Total Payments")
would be subject in whole or in part to the Excise Tax, then the Total Severance
and Retention Payments shall be reduced to the extent, but only to the extent,
necessary so that no portion of the Total Payments is subject to the Excise Tax;
provided, that no such reduction shall be effected unless the net amount of the
Total Payments after such reduction in the Total Severance and Retention
Payments and after deduction of the net amount of federal, state and local
income taxes on such reduced Total Payments would be greater than the excess of
(a) the net amount of the Total Payments without such reduction in the Total
Severance and Retention Payments but after deduction of the net amount of
federal, state and local income taxes (other than the Excise Tax) on such
unreduced Total Payments, over (b) the Excise Tax to which the Total Payments
are subject. The determination as to whether a reduction in Severance Payments
is to be made under this Section 6.4 and, if so, the amount of any such
reduction shall be made by the Company's auditors or by such other firm of
certified public accountants, benefits consulting firm or legal counsel as the
Board may designate prior to the Change in Control.
The Company shall provide the executive with its calculations of the
amounts referred to in this Section 6.4 and such supporting materials as are
reasonably necessary for the Executive to evaluate the Company's calculations.
7.0 NO CONFLICTING EMPLOYMENT; NON-SOLICITATION OF EMPLOYEES.
7.1 During Executive's employment during the term of this
Agreement, Executive will not engage in any other employment, occupation,
consulting or other business activity directly or indirectly related to the
business in which the Polycom or PictureTel is now involved or becomes involved
during the term of this Agreement, nor will Executive engage in any other
activities that conflict with his obligations to Polycom or PictureTel.
7.2 Executive further agrees that for a period of one (1) year
immediately following the termination of his employment relationship with the
Company for any reason, whether with or without Cause, Executive will not (i)
either directly or indirectly hire, solicit, induce, recruit or encourage any of
the Company's or Polycom's employees to leave their employment, or attempt to
solicit, induce, recruit, encourage any employees of the Company or Polycom to
leave their employment, either for himself or for any other person, firm,
corporation or other entity, or (ii) knowingly and intentionally interfere in
any manner with the contractual or employment relationship between the Company
or Polycom and any employee, supplier or customer of the Company or Polycom..
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7.3 Executive agrees to sign and deliver to Polycom the
Non-Competition Agreement attached hereto as Appendix IV on or prior to the
Closing, but effective as of the Closing.
8.0 TERMINATION PROCEDURES AND COMPENSATION DURING DISPUTE.
8.1 NOTICE OF TERMINATION. After the signing of the Merger
Agreement and during the term of this Agreement, any purported termination of
the Executive's employment (other than by reason of death) shall be communicated
by written Notice of Termination from one party hereto to the other party hereto
in accordance with Section 11 hereof. For purposes of this Agreement, a "Notice
of Termination" shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated.
8.2 DATE OF TERMINATION. "Date of Termination", with respect to
any purported termination of the Executive's employment after a Change in
Control during the term of this Agreement, shall mean:
(A) If the Executive's employment is terminated for
Disability, thirty (30) days after Notice of Termination is given (provided that
the Executive shall not have returned to the full-time performance of the
Executive's duties during such thirty (30) day period), and
(B) If the Executive's employment is terminated for any other
reason, the date specified in the Notice of Termination (which, in the case of a
termination by the Company, shall not be less than thirty (30) days (except in
the case of a termination for Cause, in which case the termination may be
effective immediately) and, in the case of a termination by the Executive, shall
not be less than fifteen (15) days nor more than sixty (60) days, respectively,
from the date such Notice of Termination is given).
9.0 NO MITIGATION. The Company agrees that, if the Executive's
employment by the Company is terminated during the term of this Agreement,
the Executive is not required to seek other employment or to attempt in any
way to reduce any amounts payable to the Executive by the Company pursuant to
Section 6.0. Further, the amount of any payment or benefit provided for in
Section 6.0 (other than Section 6.4) shall not be reduced by any compensation
earned by the Executive as the result of employment by another employer, by
retirement benefits, by offset against any amount claimed to be owed by the
Executive to the Company, or otherwise.
10.0 SUCCESSORS; BINDING AGREEMENT.
10.1 In addition to any obligations imposed by law upon any
successor to the Company, the Company will require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. Failure of the Company to obtain such assumption and agreement
prior to the effectiveness of any such
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succession shall be a breach of this Agreement and shall entitle the Executive
to compensation from the Company in the same amount and on the same terms as the
Executive would be entitled to hereunder if the Executive were to terminate his
employment for Good Reason after a Change in Control, except that, for purposes
of implementing the foregoing, the date on which any such succession becomes
effective shall be deemed the Date of Termination. In any event this agreement
shall be binding upon the Company and any successors or assignee.
10.2 This Agreement shall inure to the benefit of and be
enforceable by Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If
Executive shall die while any amount would still be payable to Executive
hereunder (other than amounts which, by their terms, terminate upon the death of
the Executive) if Executive had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to the executors, personal representatives or administrators of
Executive's estate.
11.0 NOTICES. For the purpose of this Agreement, notices and all
other communications provided for in the Agreement shall be in writing and shall
be deemed to have been duly given when delivered in hand or one day after
sending by Federal Express overnight delivery service, addressed to the
respective addresses set forth below, or to such other address as either party
may have furnished to the other in writing in accordance herewith, except that
notice of change of address shall be effective only upon actual receipt:
To the Company:
PictureTel Corporation
000 Xxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Attention: General Counsel
cc:
Polycom, Inc.
0000 Xxxxxx Xxxx
Xxxxxxxx, XX 00000
Attention: Xxxx Xxxxx
To the Executive:
Xxxxxx Xxxxxxxx
0X Xxxxx Xx.
Xxxxxxxxxxx, XX 00000
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12.0 MISCELLANEOUS. No provision of this Agreement may be modified
or waived unless such waiver or modification is agreed to in writing and signed
by the Executive and such officer as may be specifically designated by the
Board. No waiver by either party hereto at any time of any breach by the other
party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. The Amendment and Restatement of this Agreement (including the
appendices hereto) supersedes and replaces in its entirety the Executive Officer
Change in Control Agreement in effect prior to the parties hereto entering into
this Amended and Restated Agreement, subject to the reinstatement of the prior
agreement as provided in Section 2. No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof have
been made by either party or by Polycom which are not expressly set forth in
this Agreement (including the appendices hereto). The laws of the Commonwealth
of Massachusetts shall govern the validity, interpretation, construction and
performance of this Agreement and the Agreement shall be an instrument under
seal. All references to sections of the Exchange Act or the Code shall be deemed
also to refer to any successor provisions to such sections. Any payments
provided for hereunder shall be paid net of any applicable withholding required
under federal, state or local law and any additional withholding to which the
Executive has agreed. The obligations of the Company and Executive under
Sections 5.0, 6.0, 7.0 and 15.0 and Appendices II, III and IV hereto shall
survive the expiration of the term of this Agreement.
13.0 VALIDITY. The invalidity or unenforceability or any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect. In
addition, if any provision of this Agreement is held invalid or unenforceable by
a court of competent jurisdiction, then such provision shall be deemed modified
to the extent necessary to enable such provision to be valid and enforceable.
14.0 COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
15.0 SETTLEMENT OF DISPUTES; ARBITRATION. All claims by Executive for
benefits under this Agreement shall be directed to the Board and shall be in
writing. Any denial by the Board of a claim for benefits under this Agreement
shall be delivered to Executive in writing and shall set forth the specific
reasons for the denial and the specific provisions of this Agreement relied
upon. The Board then shall afford a reasonable opportunity to Executive for a
review of the decision denying a claim and shall further allow Executive to
appeal to the Board a decision of the Board within sixty (60) days after
notification by the Board that Executive's claim has been denied. Any further
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. Judgment
may be entered on the arbitrator's award in any court having jurisdiction;
provided, however, that Executive shall be entitled to seek specific performance
of Executive's right to be paid until the Date of Termination during the
pendency of
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any dispute or controversy arising under or in connection with this Agreement in
such arbitration or by a proceeding in the federal court in Boston or the
Massachusetts state court in Essex County.
16.0 DEFINITIONS. For purposes of this Agreement, the following terms
shall have the meanings indicated below:
(A) "Base Amount" shall have the meaning defined in section
280G(b)(3) of the Code.
(B) "Beneficial Owner" shall have the meaning defined in Rule
13d-3 under the Exchange Act.
(C) "Board" shall mean the Board of Directors of the Company.
(D) "Cause" for termination by the Company of Executive's
employment, after any Change in Control, shall mean:
(i) the willful and continued failure by Executive to
substantially perform Executive's duties with the Company (other than any such
failure resulting from Executive's incapacity due to physical or mental illness
or any such actual or anticipated failure after the issuance of a Notice of
Termination for Good Reason by Executive pursuant to Section 8.1) after a
written demand for substantial performance is delivered to Executive by the
Board, which demand specifically identifies the manner in which the Board
believes that the Executive has not substantially performed Executive's duties,
or
(ii) the willful engaging by Executive in conduct which
is demonstrably and materially injurious to the Company or its subsidiaries,
monetarily or otherwise.
For purposes of clauses (i) and (ii) of this definition, no act, or failure to
act, on Executive's part shall be deemed "Willful" unless done, or omitted to be
done, by Executive not in good faith and without reasonable belief that the
Executive's act, or failure to act, was in the best interest of the Company.
(E) A "Change in Control", shall be deemed to have occurred
if the conditions set forth in any one of the following paragraphs shall have
been satisfied:
(i) any Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of the Company representing twenty-five
(25) percent or more of the combined voting power of the Company's then
outstanding securities; or
(ii) during any period of not more than two consecutive
years (not including any period prior to the execution of this Agreement),
individuals who at the beginning of such period constitute the Board and any new
director (other than a director designated by a Person who has entered into an
agreement with the Company to effect a transaction described in clause (i), (ii)
or (iii) of this Section 16(E)) whose election by the Board or nomination for
election by the Company's stockholders was approved by a vote of at least
two-thirds (2/3) of the directors then still
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in office who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved, cease for any
reason to constitute a majority thereof; or
(iii) the shareholders of the Company approve a merger
or consolidation of the Company with any other corporation, other than (a) a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) sixty (60) percent or more of the combined voting power of the
voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation, or (b) a merger or consolidation
effected to implement a recapitalization of the Company (or similar transaction)
in which no Person acquires twenty-five (25) percent or more of the combined
voting power of the Company's then outstanding securities; or
(iv) the shareholders 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 substantially all the Company's assets.
(F) "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
(G) "Company" shall mean PictureTel Corporation and any
successor to its business and/or assets which assumes and agrees to perform this
Agreement by operation of law, or otherwise (except in determining, under
Section 16(E) hereof, whether or not any Change in Control of the Company has
occurred in connection with such succession).
(H) "Date of Termination" shall have the meaning stated in
Section 8.2 hereof.
(I) "Disability" shall be deemed the reason for the
termination by the Company of the Executive's employment, if, as a result of the
Executive's incapacity due to physical or mental illness, the Executive shall
have been absent from the full-time performance of the Executive's duties with
the Company for a period of three (3) consecutive months, the Company shall have
given the Executive a Notice of Termination for Disability, and, within thirty
(30) days after such Notice of Termination is given, the Executive shall not
have returned to the full-time performance of the Executive's duties.
(J) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended from time to time.
(K) "Excise Tax" shall mean any excise tax imposed under
section 4999 of the Code.
(L) "Executive" shall mean the individual named in the first
paragraph of this Agreement.
(M) "Good Reason" for termination by the Executive of the
Executive's employment shall mean the occurrence (without the Executive's
express written consent) of any one
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of the following acts by the Company, or failures by the Company to act, unless,
(a) in the case of any act or failure to act described in paragraph (i), (ii),
(iii), (iv), (v), (vi), or (vii), below, such act or failure to act is corrected
prior to the Date of Termination specified in the Notice of Termination given in
respect thereof, or (b) such termination occurs more than 90 days after one of
the following acts by the Company or failure by the Company to act:
(i) the assignment to the Executive of any duties
inconsistent with the Executive's status as a senior executive officer of the
Company or a substantial adverse alteration in the nature or status of the
Executive's responsibilities from those in effect immediately prior to the
Change in Control; provided, however that Executive's continuing position as
Chief Financial Officer and Treasurer following the signing of the Merger
Agreement and Executive's position as Merger Transition and Integration
Officer on and after the Closing, and the assignment of duties consistent
with such positions shall not constitute Good Reason or a substantial adverse
alteration in the nature or status of the Executive's responsibilities from
those in effect prior to the Change in Control; provided, further that,
following the Merger, Executive may be re-assigned to another position in the
Company or Polycom of approximately commensurate grade and status and that
such re-assignment, or the attendant duties assigned thereto, shall not
constitute Good Reason;
(ii) a reduction by the Company in the Executive's
annual base salary as in effect on the date hereof or as the same may be
increased from time to time;
(iii) the relocation of the Company's principal
executive offices to a location more than thirty (30) miles) from the location
of such offices immediately prior to the Change in Control or the Company's
requiring the Executive to be based anywhere other than the Company's principal
executive offices, except for required travel on the Company's business to an
extent substantially consistent with the Executive's present business travel
obligations;
(iv) the failure by the Company, without the Executive's
consent, to pay to the Executive any portion of the Executive's current
compensation, or to pay to the Executive any portion of an installment of
deferred compensation under any deferred compensation program of the Company,
within seven (7) days of the date such compensation is due;
(v) the failure by the Company to continue to provide
the Executive with benefits substantially similar in the aggregate to those
enjoyed by the Executive under any of the Company's pension, life insurance,
medical, health and accident, or disability plans in which the Executive was
participating at the time of the Change in Control, the taking of any action by
the Company which would directly or indirectly materially reduce the aggregate
value of such benefits, or the failure by the Company to provide the Executive
with the number of paid vacation days to which the Executive is entitled on the
basis of years of service with the Company in accordance with the Company's
normal vacation policy in effect at the time of the Change in Control; or
(vi) any purported termination of the Executive's
employment that is not effected pursuant to a Notice of Termination satisfying
the requirements of Section 8.1; for purposes of this Agreement, no such
purported termination shall be effective.
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The Executive's right to terminate the Executive's employment for Good Reason
shall not be affected by the Executive's incapacity due to physical or mental
illness. Except with respect to the 90 day window period referred to above in
the first paragraph of this section, the Executive's continued employment shall
not constitute consent to, or a waiver of rights with respect to, any act or
failure to act constituting Good Reason hereunder.
(N) "Notice of Termination" shall have the meaning stated in
Section 7.1 hereof.
(O) "Person" shall have the meaning given in Section 3(a)(9)
of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof;
however, a Person shall not include:
(i) the Company,
(ii) a trustee or other fiduciary holding securities
under an employee benefit plan of the Company, or
(iii) a Corporation owned, directly or indirectly, by
the stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company.
(iv) "Potential Change in Control," shall be deemed to
have occurred upon the signing of the Merger Agreement by the parties thereto.
(P) "Total Payments" shall mean those payments described in
Section 6.5 hereof.
PictureTel Corporation
By /s/ Xxxxxx X. Xxxx
-------------------------------------------
Name: Xxxxxx X. Xxxx
Title: Chairman of the Board of Directors,
President and Chief Executive Officer
/s/ Xxxxxx Xxxxxxxx
----------------------------------------------
Xxxxxx Xxxxxxxx
-12-
APPENDIX I
Merger and Transition Officer
Salary: $220,000
-1-
APPENDIX II
Form of Proprietary Information and Invention Agreement
PROPRIETARY INFORMATION
AND INVENTION AGREEMENT
The following confirms an agreement between me and Polycom, Inc., a
Delaware corporation (the "Company"), which is a material part of the
consideration for my employment by the Company:
A. I understand that the Company possesses Proprietary Information
which is important to its business. For purposes of this
Agreement, "Proprietary Information" is information that was
developed, created, or discovered by the Company, or which became
known by or was conveyed to the Company and is not in the public
domain, which has commercial value in the Company's business.
"Proprietary Information" includes, but is not limited to, trade
secrets, copyrights, ideas, techniques, know-how, inventions
(whether patentable or not), and/or any other information of any
type relating to designs, configurations, toolings,
documentation, recorded data, schematics, source code, object
code, master works, master databases, algorithms, flow charts,
formulae, works of authorship, mechanisms, research, manufacture,
improvements, assembly, installation, marketing, forecasts,
pricing, customers, the salaries, duties, qualifications,
performance levels, and terms of compensation of other employees,
and/or cost or other financial data concerning any of the
foregoing or the Company and its operations generally. I
understand that my employment creates a relationship of
confidence and trust between me and the Company with respect to
Proprietary Information.
B. I understand that the Company possesses "Company Documents" which
are important to its business. For purposes of this Agreement,
"Company Documents" are documents or other media that contain
Proprietary Information or any other confidential information
concerning the business, operations or plans of the Company,
whether such documents have been prepared by me or by others.
"Company Documents" include, but are not limited to, blueprints,
drawings, photographs, charts, organization charts, graphs,
notebooks, customer lists, computer disks, tapes or printouts,
sound recordings and other printed, typewritten or handwritten
documents.
C. In consideration of my employment by the Company and the
compensation received by me from the Company from time to time, I
hereby agree as follows:
1. All Proprietary Information and all patents, copyrights and
other rights in connection therewith shall be the sole
property of the Company. I hereby assign to the Company any
rights I may have or acquire in such Proprietary
Information. At all times, both during my employment by the
-1-
Company and after its termination, I will keep in confidence
and trust and will not use or disclose any Proprietary
Information without the prior written consent of an officer
of the Company, except as may be necessary in the ordinary
course of performing my duties to the Company. Nothing
contained herein will prohibit an employee from disclosing
to anyone the amount of his or her wages.
2. All Company Documents shall be the sole property of the
Company. I agree that during my employment by the Company, I
will not remove any Company Documents from the business
premises of the Company or deliver any Company Documents to
any person or entity outside the Company, except as I am
required to do in connection with performing the duties of
my employment. I further agree that, immediately upon the
termination of my employment by me or by the Company for any
reason, or during my employment if so requested by the
Company, I will return all Company Documents, apparatus,
equipment and other physical property, or any reproduction
of such property, excepting only (i) my personal copies of
records relating to my compensation; (ii) my personal copies
of any materials previously distributed generally to
stockholders of the Company; and (iii) my copy of this
Agreement, and further excepting any Company Document that
may be relevant to any litigation that may arise between me
and the Company in connection with my employment or the
termination of my employment with the Company.
3. I will promptly disclose in writing to my immediate
supervisor, with a copy to the President of the Company, or
to any persons designated in writing by the Company, all
"Inventions," which includes all improvements, inventions,
works of authorship, mask works, computer programs,
formulas, ideas, processes, techniques, know-how and data,
whether or not patentable, made or conceived or reduced to
practice or developed by me, either alone or jointly with
others, during the term and in the course of my employment.
I will also disclose to the President of the Company all
things that would be Inventions if made during the term of
my employment, conceived, reduced to practice, or developed
by me within six (6) months of the termination of my
employment with the Company. Such disclosures shall be
received by the Company in confidence and do not extend the
assignment made in Section 4 below. I will not disclose
Inventions to any person outside the Company unless I am
requested to do so by management personnel of the Company.
4. I agree that all Inventions which I make, conceive, reduce
to practice or develop (in whole or in part, either alone or
jointly with others) during my employment shall be the sole
property of the Company to the maximum extent permitted by
applicable California law and hereby assign such
-2-
Inventions and all rights therein to the Company. I agree to
assign to the Company all patents, copyrights and other
intellectual property or other rights in connection with
such Inventions that are the property of the Company.
5. I agree to perform, during and after my employment, all acts
deemed necessary or desirable by the Company to permit and
assist it, at the Company's expense, in obtaining,
maintaining, defending and enforcing patents, copyrights or
other rights in such Inventions and improvements in any and
all countries. Such acts may include, but are not limited
to, execution of documents and assistance or cooperation in
legal proceedings. I hereby irrevocably designate and
appoint the Company and its duly authorized officers and
agents, as my agents and attorneys-in-fact to act for and in
my behalf and instead of me, to execute and file any
documents and to do all other lawfully permitted acts to
further the above purposes with the same legal force and
effect as if executed by me.
6. I have attached hereto a complete list of all Inventions to
which I claim ownership and that I desire to remove from the
operation of this Agreement, and I acknowledge and agree
that such list is complete. If no such list is attached to
this Agreement, I represent that I have no such Inventions
at the time of signing this Agreement.
7. During the term of my employment and for one (1) year
thereafter, I will not encourage or solicit any employee of
the Company to leave the Company for any reason. However,
this obligation shall not affect any responsibility I may
have as an employee of the Company with respect to the bona
fide hiring and firing of Company personnel.
8. I agree that during my employment with the Company I will
not engage in any employment, business, or activity that is
in any way competitive with the business of the Company, and
I will not materially assist any other person or
organization in competing with the Company or in preparing
to engage in competition with the business of the Company.
The provisions of this paragraph shall apply both during
normal working hours and at all other times including, but
not limited to, nights, weekends and vacation time, while I
am employed by the Company.
9. I represent that my performance of all the terms of this
Agreement will not breach any agreement to keep in
confidence proprietary information acquired by me in
confidence or in trust prior to my employment by the
Company. I have not entered into, and I agree I will not
enter into, any agreement either written or oral in conflict
herewith or in conflict with my employment with the Company.
-3-
D. I agree that this Agreement does not purport to set forth all of
the terms and conditions of my employment, and that as an
employee of the Company I have obligations to the Company
unrelated to the subject matter hereof which are not set forth in
this Agreement.
E. I agree that my obligations under paragraphs C(1) through C(5) of
this Agreement shall continue in effect during my employment and
for a period of two (2) years thereafter, regardless of the
reason or reasons for termination, and whether such termination
is voluntary or involuntary on my part, and that the Company is
entitled to communicate my obligations under this Agreement to
any future employer or potential employer of mine.
F. I agree that any dispute in the meaning, effect or validity of
this Agreement shall be resolved in accordance with the laws of
the State of California without regard to the conflict of laws
provisions thereof. I further agree that if one or more
provisions of this Agreement are held to be unenforceable under
applicable California law, such provision(s) shall be excluded
from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be
enforceable in accordance with its terms.
G. This Agreement shall be effective as of the date I execute this
Agreement and shall be binding upon me, my heirs, executors,
assigns, and administrators and shall inure to the benefit of the
Company, its subsidiaries, successors and assigns.
H. This Agreement can only be modified by a subsequent written
agreement executed by me and the President of the Company.
I HAVE READ THIS AGREEMENT CAREFULLY AND I UNDERSTAND AND ACCEPT THE
OBLIGATIONS WHICH IT IMPOSES UPON ME WITHOUT RESERVATION. EXCEPT FOR THE
AGREEMENTS CONTAINED IN THE EMPLOYMENT AGREEMENT TO WHICH THIS AGREEMENT IS A
SCHEDULE, NO PROMISES OR REPRESENTATIONS HAVE BEEN MADE TO ME TO INDUCE ME TO
SIGN THIS AGREEMENT. I SIGN THIS AGREEMENT VOLUNTARILY AND FREELY.
---------------- ------------------------------- ------------------------------
DATE PRINT NAME SIGNATURE
Accepted and Agreed to:
Polycom, Inc.
By:
-------------------------------------------------
-4-
EXHIBIT A
1. The following is a complete list of all inventions or improvements relevant
to the subject matter of my employment by Polycom, Inc. (the "Company")
that have been made or conceived or first reduced to practice by me alone
or jointly with others prior to my employment by the Company that I desire
to remove from the operation of the Company's Proprietary Information and
Inventions Agreement.
|X| No inventions or improvements.
|_| See below
|_| Additional sheets attached.
2. I propose to bring to my employment the following materials and documents
of a former employer:
|X| No materials or documents.
|_| See below:
-------------------- -----------------------------------------------
DATE SIGNATURE
APPENDIX III
SETTLEMENT AGREEMENT AND RELEASE
This Settlement Agreement and Release ("Agreement") is made by and
between Polycom, Inc. (the "Company"), and Xxxxxx Xxxxxxxx ("Employee").
WHEREAS, Pursuant to the Agreement and Plan of Merger (the "Merger")
between the Company and PictureTel Corporation ("PictureTel"), the Company has
agreed to assume and to perform in the same manner and to the same extent as
PictureTel would have been required to perform had the Merger not been
consummated, the amended and restated Executive Change in Control Agreement
effective immediately prior to the execution of the Merger Agreement;
NOW THEREFORE, in consideration of the mutual promises made herein, the
Company and Employee (collectively referred to as "the Parties") hereby agree as
follows:
1. TERMINATION. Employee's employment from the Company terminated on
________________.
2. CONSIDERATION. The Company agrees to pay Employee the Severance
Payments described in such Employee's amended and restated Executive Change in
Control Agreement, pursuant to the terms and conditions of such Executive Change
in Control Agreement.
3. NO OTHER SEVERANCE PAYABLE. Employee acknowledges that he shall only
be entitled to the Severance Payments in such Employee's amended and restated
Executive Change in Control Agreement. Employee waives any and all other
severance payments in any other agreements entered into between the Employee and
PictureTel, any predecessor corporation thereto, or the Company.
4. CONFIDENTIAL INFORMATION. Employee shall continue to maintain the
confidentiality of all confidential and proprietary information of the Company
and shall continue to comply with the terms and conditions of the
Confidentiality Agreement between Employee and the Company. Employee shall
return all the Company property and confidential and proprietary information in
his possession to the Company on the Effective Date of this Agreement.
5. PAYMENT OF SALARY. Employee acknowledges and represents that the
Company has paid all salary, wages, bonuses, accrued vacation, commissions and
any and all other benefits due to Employee.
6. RELEASE OF CLAIMS. Employee agrees that the foregoing consideration
represents settlement in full of all outstanding obligations owed to Employee by
the Company. Employee, on behalf of himself, and his respective heirs, family
members, executors and assigns, hereby fully and forever releases the Company
and its past, present and future officers, agents, directors, employees,
investors, shareholders, administrators, affiliates, divisions, subsidiaries,
parents, predecessor and successor corporations, and assigns, from, and agrees
not to xxx or otherwise institute or cause to be instituted any legal or
administrative proceedings concerning any claim, duty, obligation or cause of
action relating to any matters of any kind, whether presently known or unknown,
suspected or unsuspected, that he may possess arising from any omissions, acts
or facts that have occurred up until and including the Effective Date of this
Agreement including, without limitation,
(a) any and all claims relating to or arising from Employee's
employment relationship with the Company and the termination of that
relationship;
(b) any and all claims relating to, or arising from, Employee's
right to purchase, or actual purchase of shares of stock of the Company,
including, without limitation, any claims for fraud, misrepresentation, breach
of fiduciary duty, breach of duty under applicable state corporate law, and
securities fraud under any state or federal law;
(c) any and all claims for wrongful discharge of employment;
termination in violation of public policy; discrimination; breach of contract,
both express and implied; breach of a covenant of good faith and fair dealing,
both express and implied; promissory estoppel; negligent or intentional
infliction of emotional distress; negligent or intentional misrepresentation;
negligent or intentional interference with contract or prospective economic
advantage; unfair business practices; defamation; libel; slander; negligence;
personal injury; assault; battery; invasion of privacy; false imprisonment; and
conversion;
(d) any and all claims for violation of any federal, state or
municipal statute, including, but not limited to, Title VII of the Civil Rights
Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in Employment
Act of 1967, the Americans with Disabilities Act of 1990, the Fair Labor
Standards Act, the Employee Retirement Income Security Act of 1974, The Worker
Adjustment and Retraining Notification Act, the California Fair Employment and
Housing Act, and Labor Code section 201, ET SEQ. and section 970, ET SEQ. and
all amendments to each such Act as well as the regulations issued thereunder;
(e) any and all claims for violation of the federal, or any state,
constitution;
(f) any and all claims arising out of any other laws and
regulations relating to employment or employment discrimination; and
(g) any and all claims for attorneys' fees and costs.
Employee agrees that the release set forth in this section shall be and remain
in effect in all respects as a complete general release as to the matters
released. This release does not extend to any obligations incurred under this
Agreement or severance payments and benefits due to Employee pursuant to the
Amended and Restated Change in Control Agreement entered into by and between the
Company and PictureTel, and assumed by Polycom. Employee acknowledges and agrees
that any breach of this paragraph shall constitute a material breach of the
Agreement and in the case of a breach by Employee, shall entitle the Company
immediately to recover the monetary consideration discussed in paragraph 2
above. Employee shall also be responsible to the Company for all costs,
-7-
attorneys' fees and any and all damages incurred by the Company (a) enforcing
the obligation, including the bringing of any suit to recover the monetary
consideration, and (b) defending against a claim or suit brought or pursued by
Employee in violation of this provision.
7. ACKNOWLEDGMENT OF WAIVER OF CLAIMS UNDER ADEA. Employee acknowledges
that he/she is waiving and releasing any rights he/she may have under the Age
Discrimination in Employment Act of 1967 ("ADEA") and that this waiver and
release is knowing and voluntary. Employee and the Company agree that this
waiver and release does not apply to any rights or claims that may arise under
the ADEA after the Effective Date of this Agreement. Employee acknowledges that
the consideration given for this waiver and release Agreement is in addition to
anything of value to which Employee was already entitled. Employee further
acknowledges that he/she has been advised by this writing that (a) he/she should
consult with an attorney PRIOR to executing this Agreement; (b) he/she has
twenty-one (21) days within which to consider this Agreement; (c) he/she has
seven (7) days following the execution of this Agreement by the parties to
revoke the Agreement; and (d) this Agreement shall not be effective until the
revocation period has expired. Any revocation should be in writing and delivered
to the Chief Financial Officer at Polycom, Inc. by close of business on the
seventh day from the date that Employee signs this Agreement.
8. CIVIL CODE SECTION 1542. Employee represents that he is not aware of
any claims against the Company other than the claims that are released by this
Agreement. Employee acknowledges that he has been advised by legal counsel and
is familiar with the provisions of California Civil Code Section 1542, which
provides 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.
Employee, being aware of said code section, agrees to expressly waive
any rights he may have thereunder, as well as under any other statute or common
law principles of similar effect.
9. NO PENDING OR FUTURE LAWSUITS. Employee represents that he has no
lawsuits, claims, or actions pending in his name, or on behalf of any other
person or entity, against the Company or any other person or entity referred to
herein. Employee also represents that he does not intend to bring any claims on
his own behalf or on behalf of any other person or entity against the Company or
any other person or entity referred to herein.
10. APPLICATION FOR EMPLOYMENT. Employee understands and agrees that,
as a condition of this Agreement, he shall not be entitled to any employment
with the Company, its subsidiaries, or any successor, and he hereby waives any
right, or alleged right, of employment or re-employment with the Company.
Employee further agrees that he will not apply for employment with the
-8-
Company, its subsidiaries, its parents, or related companies, or any successor
and will not apply to work as an independent contractor for the Company, its
parents, its subsidiaries or any successor.
11. CONFIDENTIALITY. Employee agrees to use his best efforts to
maintain in confidence the existence of this Agreement, the contents and terms
of this Agreement, and the consideration for this Agreement (hereinafter
collectively referred to as "Settlement Information"). Employee agrees to take
every reasonable precaution to prevent disclosure of any Settlement Information
to third parties, and agrees that there will be no publicity, directly or
indirectly, concerning any Settlement Information. Employee agrees to take every
precaution to disclose Settlement Information only to those attorneys,
accountants, governmental entities, and family members who have a reasonable
need to know of such Settlement Information.
12. NO COOPERATION. Employee agrees he will not act in any manner that
might damage the business of the Company. Employee agrees that he will not
counsel or assist any attorneys or their clients in the presentation or
prosecution of any disputes, differences, grievances, claims, charges, or
complaints by any third party against the Company and/or any officer, director,
employee, agent, representative, shareholder or attorney of the Company, unless
under a subpoena or other court order to do so.
13. NON-DISPARAGEMENT. Employee agrees to refrain from any defamation,
libel or slander of the Company and its respective officers, directors,
employees, investors, shareholders, administrators, affiliates, divisions,
subsidiaries, predecessor and successor corporations, and assigns or tortious
interference with the contracts and relationships of the Company and its
respective officers, directors, employees, investors, shareholders,
administrators, affiliates, divisions, subsidiaries, predecessor and successor
corporations, and assigns.
14. NO ADMISSION OF LIABILITY. No action taken by the Company, either
previously or in connection with this Agreement shall be deemed or construed to
be (a) an admission of the truth or falsity of any claims heretofore made or (b)
an acknowledgment or admission by the Company of any fault or liability
whatsoever to the Employee or to any third party.
15. COSTS. The Parties shall each bear their own costs, expert fees,
attorneys' fees and other fees incurred in connection with this Agreement.
16. ARBITRATION. To the extent permitted by law, the Parties agree that
any and all disputes arising out of the terms of this Agreement, their
interpretation, and any of the matters herein released, including any potential
claims of harassment, discrimination or wrongful termination shall be subject to
binding arbitration, to the extent permitted by law, in Boston, Massachusetts,
before the American Arbitration Association under its National Rules for the
Resolution of Employment Disputes. Employee agrees and hereby waives his right
to jury trial as to matters arising out of the terms of this Agreement and any
matters herein released to the extent permitted by law. The Parties agree that
the prevailing party in any arbitration shall be entitled to injunctive relief
in any court of competent jurisdiction to enforce the arbitration award.
-9-
17. AUTHORITY. Employee represents and warrants that he has the
capacity to act on his own behalf and on behalf of all who might claim through
him to bind them to the terms and conditions of this Agreement.
18. NO REPRESENTATIONS. Employee represents that he has had the
opportunity to consult with an attorney, and has carefully read and understands
the scope and effect of the provisions of this Agreement. Neither party has
relied upon any representations or statements made by the other party hereto
which are not specifically set forth in this Agreement.
19. SEVERABILITY. In the event that any provision hereof becomes or is
declared by a court of competent jurisdiction to be illegal, unenforceable or
void, this Agreement shall continue in full force and effect without said
provision.
20. ENTIRE AGREEMENT. This Agreement and the Confidentiality Agreement
represent the entire agreement and understanding between the Company and
Employee concerning Employee's separation from the Company, and supersede and
replace any and all prior agreements and understandings concerning the subject
matter of this Agreement.
21. NO ORAL MODIFICATION. This Agreement may only be amended in writing
signed by Employee and the President of the Company.
22. GOVERNING LAW. This Agreement shall be governed by the internal
substantive laws, but not the choice of law rules, of the State of California.
23. EFFECTIVE DATE. This Agreement is effective eight days after it has
been signed by both Parties.
24. COUNTERPARTS. This Agreement may be executed in counterparts, and
each counterpart shall have the same force and effect as an original and shall
constitute an effective, binding agreement on the part of each of the
undersigned.
25. VOLUNTARY EXECUTION OF AGREEMENT. This Agreement is executed
voluntarily and without any duress or undue influence on the part or behalf of
the Parties hereto, with the full intent of releasing all claims. The Parties
acknowledge that:
(a) They have read this Agreement;
(b) They have been represented in the preparation, negotiation,
and execution of this Agreement by legal counsel of their own choice or that
they have voluntarily declined to seek such counsel;
(c) They understand the terms and consequences of this Agreement
and of the releases it contains;
(d) They are fully aware of the legal and binding effect of this
Agreement.
-10-
IN WITNESS WHEREOF, the Parties have executed this Agreement on the
respective dates set forth below.
POLYCOM, INC.
Dated: , 200 By
-------------------- ---- ------------------------------
NAME
[TITLE]
Xxxxxx Xxxxxxxx, an individual
Dated: , 200
-------------------- ---- ---------------------------------
Xxxxxx Xxxxxxxx
APPENDIX IV
NON-COMPETITION AGREEMENT
THIS NON-COMPETITION AGREEMENT (the "AGREEMENT") is made as of the
Effective Date (as defined below) by and between Polycom, Inc., a Delaware
corporation ("PARENT"), PictureTel Corporation, an Delaware corporation
("PictureTel") (Parent and PictureTel are sometimes collectively referred to
herein as the "COMPANY"), and the undersigned individual ("EMPLOYEE").
Capitalized terms used but not otherwise defined herein shall have the meanings
ascribed to them in the Reorganization Agreement (as defined below).
BACKGROUND
Parent, PictureTel and Pharaoh Acquisition Corporation, a wholly-owned
subsidiary of Parent ("SUB") have entered into an Agreement and Plan of Merger
and Reorganization dated as of May 24, 2001 (the "REORGANIZATION Agreement"),
whereby Sub will merge with and into PictureTel (the "MERGER"). The Effective
Time of the Merger shall be the "EFFECTIVE DATE" of this Agreement.
Parent and Employee acknowledge that it would be seriously detrimental to the
Company if Employee would compete with the Company following the Merger.
In connection with the Merger, to preserve the value of the business being
acquired by Parent, the Reorganization Agreement contemplates, among other
things, that Employee enter into this Agreement and that this Agreement become
effective upon the closing of the Merger.
PictureTel is currently engaged or planning to engage in its business in each of
the fifty (50) states of the United States and internationally. Parent,
following the Merger, will continue conducting such business in all parts of the
United States and internationally.
NOW THEREFORE, in consideration of the mutual promises made herein,
Parent, PictureTel and Employee (collectively referred to as the "PARTIES")
hereby agree as follows:
1.0 COVENANT NOT TO COMPETE OR SOLICIT.
1.1 For the term of Employee's employment with the Company and a
period of twelve (12) months following the cessation of his employment with the
Company (the "NON-COMPETE PERIOD"), Employee shall not directly or indirectly,
without the prior written consent of Parent:
(A) engage anywhere in the Restricted Territory in (whether
as an employee, agent, consultant, advisor, independent contractor, proprietor,
partner, officer, director or otherwise), or have any ownership interest in
(except for ownership of one percent (1%) or less of any entity whose securities
have been registered under Section 12 of the Securities Exchange Act of 1934, as
amended, or similar laws in other jurisdictions), 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"; or
(B) interfere with the business or contractual relationship
between the Company and any supplier or customer of the Company.
The term "Competing Business Purpose" shall mean the below business
activities that Employee engaged in while employed with the Company and that are
in competition with Polycom products existing or planned on the date of
termination and are directly related to the design, engineering, manufacture,
sale or distribution of competing equipment, including voice and video
communications gateways, bridges, group or desktop endpoints and any software
specifically used in the management of such equipment.
The term Restricted Territory shall mean each and every country,
province, state, city or other political subdivision of the world in which the
Employee carried on the business of the Company.
1.2 During the Non-Compete Period, Employee shall not, directly or
indirectly, without the prior written consent of Parent, (i) solicit, encourage,
hire or induce any employee or consultant of the Company to terminate his or her
employment or consulting relationship with the Company or (ii) interfere in any
manner with the contractual or employment relationship between the Company and
any employee of the Company.
1.3 The covenants contained in the preceding paragraphs shall be
construed as a series of separate covenants, one for each country, province,
state, city or other political subdivision of the world in which the Company is
currently engaged or during the term of this Agreement engages in business or
otherwise sells its products. Except for geographic coverage, each such separate
covenant shall be identical in terms to the covenant contained in the preceding
paragraphs. If, in any judicial or arbitral proceeding, a court refuses to
enforce any of such separate covenants (or any part thereof), then such
unenforceable covenant (or such part) shall be eliminated from this Agreement to
the extent necessary to permit the remaining separate covenants (or portions
thereof) to be enforced. In the event that the provisions of this Section 1 are
deemed to exceed the time, geographic or scope limitations permitted by
applicable law, then such provisions shall be reformed to the maximum time,
geographic or scope limitations, as the case may be, permitted by applicable
laws.
1.4 Employee acknowledges that (i) the goodwill associated with
the existing business, customers and assets of PictureTel prior to the Merger is
an integral component of the value of PictureTel to Parent and is reflected in
the consideration to be received by Employee as a shareholder and (ii)
Employee's agreement as set forth herein is necessary to preserve the value of
PictureTel for Parent following the Merger. Employee also acknowledges that the
limitations of time, geography and scope of activity agreed to in this Agreement
are reasonable because, among other things, (i) PictureTel and Parent are
engaged in a highly competitive industry and (ii) Employee has unique access to,
and will continue to have access to, the trade secrets and know-how of the
Company, including without limitation the plans and strategy of the Company.
-2-
1.5 The parties agree that it would be impossible or inadequate to
measure and calculate the Company's damages from any breach of the covenants set
forth in this Agreement. Accordingly, Employee agrees that if he breaches any
provision of this Agreement, the Company will have available, in addition to any
other right or remedy otherwise available, the right to obtain an injunction
from a court of competent jurisdiction restraining such breach or threatened
breach and to specific performance of any such provision of this Agreement and
to arbitration of the Agreement. The parties further agree that no damages be
required for such equitable relief. Each party hereby expressly consents to the
issuance of such injunctive relief, whether in the form of a temporary
restraining order or otherwise, and to the ordering of such specific performance
upon the other party satisfying all criteria necessary to obtain such injunctive
relief or specific performance.
2.0 CONFLICTING OBLIGATIONS. Employee certifies that Employee has no
outstanding agreement or obligation that is in conflict with any of the
provisions of this Agreement, or that would preclude Employee from complying
with the provisions hereof, and further certifies that Employee will not enter
into any such conflicting agreement during the term of this Agreement.
3.0 RETURNING COMPANY DOCUMENTS. Employee agrees that, at the time of
leaving the employ of the Company, Employee will deliver to the Company (and
will not keep in Employee's possession, recreate or deliver to anyone else) any
and all devices, records, data, notes, reports, proposals, lists,
correspondence, specifications, drawings, blueprints, sketches, materials,
equipment other documents or property, or reproductions of any aforementioned
items developed by the Employee pursuant to Employee's employment with the
Company or otherwise belonging to the Company, its successors or assigns.
4.0 NOTIFICATION OF NEW EMPLOYER. In the event that Employee leaves the
employ of the Company, Employee hereby grants consent to notification by the
Company to Employee's new employer about Employee's obligations under this
Agreement.
5.0 ARBITRATION. Employee agrees that, except as provided in Section
1(e) above, 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 decided by arbitration by
the American Arbitration Association (the "Association") in accordance with the
rules and regulations of the Association.
The parties shall, within 30 days of the date of demand by either party
for arbitration, mutually select one independent, qualified arbitrator. Each
party reserves the right to object to any individual arbitrator who shall be
employed by or affiliated with a competing organization. In the event objection
is made, the Association shall resolve any dispute regarding the propriety of an
individual arbitrator acting in that capacity. Company shall bear the expenses
of the arbitrator. Hearings in the proceeding shall commence within 120 days of
the selection of the arbitrator.
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Arbitration shall take place in Boston, Massachusetts. At the request
of either party, arbitration proceedings will be conducted confidentially; in
such case all documents, testimony and records shall be received, heard and
maintained by the arbitrators in confidence under seal, available for the
inspection only by the Association, the parties and their respective attorneys
and their respective experts who shall agree in advance and in writing to
receive all such information confidentially and to maintain such information in
confidence. The arbitrator shall be able to decree any and all relief of an
equitable and legal nature, including but not limited to such relief as a
temporary restraining order, a temporary and/or a permanent injunction, and
shall also be able to award damages, with or without an accounting and costs.
Reasonable notice of the time and place of arbitration shall be given
to all persons, other than the parties, as shall be required by law, in which
case such persons or those authorized representatives shall have the right to
attend and/or participate in all the arbitration hearings in such manner as the
law shall require.
EMPLOYEE HAS READ AND UNDERSTANDS THIS SECTION 6, WHICH DISCUSSES
ARBITRATION. EMPLOYEE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, EMPLOYEE
AGREES, EXCEPT AS SET FORTH IN SECTION 1(e) ABOVE, TO SUBMIT ANY CLAIMS ARISING
OUT OF, RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT, OR THE
INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH OR TERMINATION
THEREOF TO A BINDING ARBITRATION, AND THAT THIS ARBITRATION CLAUSE CONSTITUTES A
WAIVER OF EMPLOYEE'S RIGHT TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL
DISPUTES RELATING TO THIS AGREEMENT.
6.0 MISCELLANEOUS.
6.1 SEVERABILITY. If any portion of this Agreement is held by a
court of competent jurisdiction to conflict with any federal, state or local
law, such portion of this Agreement shall be of no force or effect and this
Agreement shall otherwise remain in full force and effect and be construed as if
such portion had not been included in this Agreement.
6.2 NO ASSIGNMENT. Employee shall not assign this Agreement or any
rights or obligations under this Agreement without the prior written consent of
Parent and PictureTel.
6.3 NOTICE. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally or by commercial
delivery service, or mailed by registered or certified mail (return receipt
requested) or sent via facsimile (with acknowledgment of complete transmission)
to the parties at the following addresses (or at such other address for a party
as shall be specified by like notice):
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(A) if to Parent, to:
Polycom, Inc.
0000 Xxxxxx Xxxx
Xxxxxxxx, XX 00000
Attention: Xxxx Xxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000)000-0000
with a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxx X. Xxxxxxxxx, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
if to Employee to:
Xxxxxx Xxxxxxxx
0X Xxxxx Xx.
Xxxxxxxxxxx, XX 00000
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Telephone No.:
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Facsimile No.:
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with a copy to:
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Attention:
--------------------------
Telephone No.:
---------------------
Facsimile No.:
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6.4 ENTIRE AGREEMENT. This Agreement contains the entire agreement
and understanding of the parties and supersedes all prior discussions,
agreements and understandings
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relating to the subject matter of this Agreement. This Agreement may not be
changed or modified, except by an agreement in writing executed by Parent and
Employee.
6.5 WAIVER OF BREACH. The waiver of a breach of any term or
provision of this Agreement, which must be in writing, shall not operate as or
be construed to be a waiver of any other previous or subsequent breach of this
Agreement.
6.6 GOVERNING LAW. This Agreement shall be governed, construed and
enforced by the internal laws of the State of Massachusetts without giving
effect to any choice or conflict of law provision or rule (whether of the State
of Massachusetts or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of Massachusetts. Employee
hereby consents to the personal jurisdiction of the state and federal courts
located in the State of Massachusetts for any action or proceeding arising from
or relating to this Agreement or relating to any arbitration in which the
parties are participants.
6.7 HEADINGS. All captions and section headings used in this
Agreement are for convenient reference only and do not form a part of this
Agreement.
6.8 COUNTERPARTS. This Agreement may be executed in counterparts,
and each counterpart shall have the same force and effect as an original and
shall constitute an effective, binding agreement on the part of each of the
undersigned.
6.9 ATTORNEYS FEES. In the event of any action under this
Agreement, each party shall bear their respective expenses.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
POLYCOM, INC. EMPLOYEE
By:
--------------------------------- -------------------------------------
Name:
Title:
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(Print Name)
PICTURETEL CORPORATION
By:
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Name:
Title:
[SIGNATURE PAGE TO NON-COMPETITION AGREEMENT]
