Employment Agreement
Exhibit
10.1
This
Employment Agreement (“Agreement”) is made and
effective as of February 26,
2020 by and between Zoom Telephonics, Inc., a Delaware
company with offices currently located at 000 Xxxxxxxx Xxxxxx,
Xxxxxx, XX 00000 (the “Company”), and Xxxxxxxxx Xxxxx
Xxxxx Xxxxxxxx (the “Executive”), collectively referred
to herein as the “Parties”).
WHEREAS, the Company desires to employ
Executive by engaging Executive to perform services under the terms
hereof;
and
WHEREAS, Executive wishes to be employed
by the company and provide full-time services to the Company in
return for the compensation and benefits detailed
herein.
Statement of Agreement
FOR AND IN CONSIDERATION of the mutual
promises and covenants set forth herein, each of the Company,
directly or through its subsidiaries, and Executive hereby agrees
to the employment of Executive on the following terms and
conditions and, except to the extent specifically superseded by
this Agreement, subject to all of the Company’s policy and
procedures regarding its employees.
1.1.
General
The
Company shall employ Executive as a full-time employee of the
Company effective as of February 26,
2020 (the
“Start Date”), in the position set forth in Section
1.2, and upon the other terms and conditions herein provided.
Executive has seven business days after signing to rescind this
agreement. Executive agrees to devote her best efforts, energies,
and skill to the discharge of the Responsibilities and Authorities
set forth in Section 1.3 below.
1.2.
Position
Executive shall
serve as the Chief Financial Officer of the Company, with
responsibilities and authority set forth in Section 1.3. Executive
shall report to the CEO and, when requested, the Board of
Directors.
1.3.
Responsibility
and Authority
(a)
Oversee accounting,
audit, financial control and compliance, finance and treasury
activities of the company
(b)
Directly manage the
development, approval, distribution and management of budgets, and
performance against budget tracking
(c)
Engage, evaluate
and manage relationships with internal and external auditors and
3rd party
providers of accounting, payroll, employee benefits, tax, equity
management and other accounting and financial services provided to
the company.
(d)
Work with CEO,
staff and other executives to manage company performance in pursuit
of stated annual company objectives for performance.
(e)
Work with CEO,
staff and other executives to put in place business processes and
business systems to improve accuracy, transparency and availability
of key business data to support growth and scale of the
business.
(f)
Advise CEO and,
when required, the Board of Directors of risks affecting the
business that may impede achievement of performance
objectives
(g)
Advise CEO and,
when required, the Board of Directors of any situation that could
put the company at risk of being out of compliance with laws and
regulations under which the company’s activities are governed
in each location in which the company has business
operations.
(h)
Assist CEO in
development and management of company objectives and actively
support tracking and reporting of key performance
objectives.
(i)
Along with CEO, act
as the face of the company when representing company financial
performance to customers, investors, press, government and
regulatory authorities.
(j)
The duties of
Executive shall also include the performance of all the duties
typical of the office held by Executive as described in the bylaws
of the Company and such other duties and projects as may be
assigned by a superior officer of the Company, if any, and/or the
board of directors of the Company.
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1.4.
Primary
Place of Performance
Company’s
principal executive office currently located at 000 Xxxxxxxx
Xxxxxx, Xxxxxx, XX 00000. Executive understands that the principal
executive office may change in the near future to a different
location nearby. In addition, the Company may from time to time
require Executive to travel temporarily to other domestic and
international locations on Company business.
1.5.
Term
The
term of the Agreement commences on the Start Date and continues
until employment terminates pursuant to Section 5 of this
Agreement.
2.
Compensation
and Related Matters.
2.1.
Annual
Base Salary
Executive shall
initially receive a base salary payable at the annualized rate of
US$185,000.00, subject to withholdings and deductions, and paid
electronically to Executive’s designated bank accounts on a
bi-weekly basis. Subject to Executive’s continued employment
and good standing with the Company, annual base salary increases
will be a minimum of the prior year US inflation rate plus
2%.
2.2.
Annual
Bonus
Commencing on the
Start Date, Executive shall be entitled to performance target
bonuses, determined and paid semi-annually according to the Company
fiscal year. Each bonus will be based on performance goals mutually
agreed upon by the Executive and the CEO. The annual performance
target bonus is set at a maximum of 35% with the first semi-annual
bonus to be a maximum of 17.5% of the Executive’s annual base
salary, plus any pro-rata amount, based on achievement of the
mutually agreed objectives. The second and on-going semi-annual
bonus will be up to a maximum of 17.5% of the Executive’s
then annual base salary, based on achievement of mutually agreed
objectives, plus any overachievement payments earned in accordance
with the Company’s performance bonus plan in place for each
year. All bonuses shall be paid in a lump sum, subject to
withholdings and deductions, and paid electronically to
Executive’s designated bank accounts.
2.3.
Travel
Expenses for Business Trips
Domestic and
international travel will be according to Company Travel Policy
and/or normal business travel approach for Senior Executives. For
any international non-stop airline flight greater than six (6)
hours, Executive is entitled to Business Class
accommodations.
2.4.
Reimbursement
for Transportation and Parking
Company
shall reimburse Executive for round trip transportation costs to
and from the Company’s principal office location if public
transportation is used as the means of transportation to and from
the Company’s principal office location. Company shall
reimburse Executive for parking costs incurred if Executive use of
personal transportation is used as the means of transportation to
and from the Company’s principal office location and if no
determined safe, well-lit, free-of-charge parking is available
within one city block of the Company’s principal office
location.
3.
Equity
Awards.
3.1.
Initial
Stock Option
Subject
to the approval of the Company’s Board of Directors, which
approval has been granted prior to the execution of this Agreement,
upon or near the Executive’s Start Date, Executive will
receive an initial option grant to purchase 90,000 shares of the
Company’s common stock, at a purchase price equal to the fair
market value of the Company’s Common Stock on the date of
grant (such fair market value to be determined by the closing price
on the day prior to the date of grant). The option will be subject
to the terms and conditions applicable to options granted under the
Company’s 2009 Stock Option Plan (the “Plan”), as
described in the Plan and the applicable option agreement Executive
will be required to sign. All shares subject to such option will
vest over two years from the grant date, the “Vesting
Commencement Date”). Twenty-five percent (25%) of the shares
subject to such option shall vest on the 6-month anniversary of the
Vesting Commencement Date and the remaining options shall vest in
equal 6-month installments over the two years. The initial stock
options will expire three years after the Vesting Commencement
Date.
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4.
Benefits
and Perquisites
4.1.
Benefits
Executive shall
participate in such full-time employee and executive benefit plans
and programs as the Company may from time to time offer, subject to
the terms and conditions of such plans. Executive benefits are to
begin on the Start Date.
4.2.
Life
Insurance
Company
shall pay for Executive premiums of a Term Life Insurance policy,
up to a maximum of $5,000 annually, beginning on the Start
Date.
4.3.
401(k)
Savings
Executive will be
eligible to participate in the Company 401(k) savings program after
3 months of employment beginning on the 1st day of the follow
month of eligibility.
4.4.
Paid
Vacation, Sick, and Holiday
Vacation and sick
time shall be in accordance with Company policies, with four (4)
weeks’ vacation and up to 40 hours of sick time per
year.
4.5.
Computer
and Cell Phone
On the
Executive’s Start Date, Executive will be provided a
Microsoft Surface Pro 6 laptop, two LG UHD 4k 27” monitors
(or the equivalent, with monitor stands), a Microsoft Surface
wireless keyboard and mouse and Microsoft Surface Dock. Monthly
Executive cell phone charges for domestic and international calling
will be reimbursed by Company.
4.6.
Liability
Protection
Executive will be
eligible for coverage under the Company Directors and Officers
liability insurance.
4.7.
Legal
Fees
Company
shall promptly reimburse or directly pay on Executive’s
behalf, attorney fees and costs incurred by the Executive in
connection with the negotiation, drafting, and finalization of this
Agreement, up to an amount not to exceed $5,000. Executive
acknowledges, understands and agrees that she has been advised of
her right to consult with counsel prior to signing this agreement
and has either availed herself of this right or voluntarily
declined to exercise this right.
4.8.
Allowed
Activities
Executive is
allowed to participate on non-competing company, university, and/or
non-profit organization boards while working at Company full-time,
provided that Executive shall not engage in any activity which
would reasonably be expected to interfere with the performance of
Executive’s duties, services and responsibilities for the
Company. Executive agrees to notify Company of such
activities.
5.
Termination
5.1.
At-Will
Employment
Subject
to the obligations of the Company in Sections 5.2 and 5.3, the
Parties acknowledge that Executive’s employment is and shall
continue to be at-will, as defined under applicable law. This means
that it is not for any specified period of time and can be
terminated by Executive or be the Company at any time, with or
without advance notice.
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5.2.
Change
of Control
In the
event of “Change of Control” and if Executive provides
the Company with a general release and covenant not to xxx and
complies with the terms of this Agreement, the Executive will
receive severance pay equal to six (6) months’ base salary if
(a) employment is terminated without Cause within six months after
a change-in-control, or (b) the Executive’s job
responsibilities, reporting status or compensation are materially
diminished and the named Executive leaves the employment of the
acquiring company within six months after the change-in-control. In
addition, in the event of a change-in-control of Company,
outstanding stock options granted to the Executive will become
immediately vested, with the right to be exercised at the option
xxxxx xxxxx. For purposes of this Agreement, “Change of
Control” shall mean that any person, partnership or
corporation acquires all or substantially all of the assets and
business of the Company or a majority of the voting power
represented by the equity of the Company or any successor
thereto.
5.3.
Severance
If
Executive is terminated for any reason other than for Cause or
Change of Control and provides the Company with a general release
and covenant not to xxx and complies with the terms of this
Agreement, Executive will receive three (3) months base salary pay
to be paid in accordance with the Company’s normally
scheduled payroll and payment on a pro-rata basis of annual bonus,
and all outstanding stock options that have vested (or that will
ordinarily vest within six (6) months) will become immediately
vested and will be exercisable for a period of up to 90 days after
termination.
5.4.
Voluntary
Termination; For Cause Termination
If
Executive voluntarily terminates her employment with the Company or
if the Company terminates Executive’s employment for Cause,
then Executive shall not be entitled to any severance
compensation.
5.5.
Death
or Disability
If this
Agreement terminates due to Executive Death or Disability, Company
shall pay Executive, or to Executive heirs or estate if applicable,
the Severance listed in Section 5.3.
5.6.
Cause
Definition
“Cause”
means, for purposes of this agreement, any of the
following:
a)
Conviction of the
Executive of a felony or any other serious crimes;
b)
Commission by the
Executive of any act of theft, fraud, breach of fiduciary duty or
gross moral turpitude;
c)
Executive’s
gross negligence or willful misconduct in the performance of her
duties;
d)
Wrongful
misappropriation by the Executive of any Company, or Company
clients, money, assets, or other property; or
e)
Any material breach
of this Agreement or other violation of Company policy that remains
uncured for 30 days after notice of such breach.
6.
Executive’s
Restrictive Covenants
6.1.
Non-Compete
During
the term of Executive’s employment, and for any period while
severance is being paid in accordance with Section 5.3 above, and
in consideration thereof, Executive shall not either alone or as a
member of a partnership or association, or as an officer, director,
advisor, consultant, agent, or employee of another organization, be
engaged in or concerned with any other duties or pursuits requiring
Executive’s active personal services that are in Competition
with the business of the Company or will conflict with
Executive’s ability or objectivity in performing
Executive’s obligations under this Agreement. For this
purpose, Competition with the business of the Company includes
supplying products or providing services to any customer or client
with which the Company has done any business during the period
commencing one year prior to the date hereof and ending on the
termination of the Executive’s employment with the
Company.
6.2.
Confidential
Information
The
Company, in the course of performing its business activities, (a)
acquires and develops trade secrets and confidential and
proprietary information which is not generally known in the
industry, and (b) acquires trade secrets and confidential and
proprietary information of or about the Company’s customers,
vendors, business partners, licensors, suppliers and other
companies, persons or entities with which the Company maintains or
has maintained a business relationship, (hereinafter collectively,
“Company Business Relationships”)
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Executive
recognizes that the knowledge and information received by her or to
which she may have access concerning the following information of
the Company and of the Company Business Relationships: corporate
information, including, but not limited to, business plans and
methods, trade secrets, products, services, financial affairs,
formulae, technology, know-how, contracts, pricing lists, costs,
policies, sales methods, financial information, profits, expenses,
operations, operating methods and procedures, blueprints, drawings,
processes, statistics, suppliers, marketing data, strategic
information, sales and plans for future developments, methods,
reports, plans, strategies and efforts, customers, customer lists,
customer requirements and information, prospective customers,
customer files, proposals and communications with customers and
prospective customers, fees, information regarding meeting
attendees, employee lists and information, financial and other
record systems, records, applications, computers, computer
programs, system documentation, hardware, software and information
contained therein, marketing and expansion plans, technologies,
development, projects, forms and other trade secrets, inventions
designs, any facts concerning the systems, methods, procedures or
plans developed or used by the Company or Company Business
Relationships or other private, confidential or proprietary
information of or about the Company or Company Business
Relationships which is not already available to the public
(collectively, “Confidential Information”) are
valuable, special and unique aspects of the business of the Company
and the Company Business Relationships. Executive recognizes that
such Confidential Information would not be provided to Executive by
the Company in the absence of this signed Agreement because of the
risks that valuable Confidential Information might otherwise be
divulged and thereby damage the Company’s competitive
position in the marketplace, damage the Company’s
relationship with Company Business Relationships, or otherwise
cause damage to Company Business Relationships. “Confidential
Information” does not include information that (i) is
generally known to the public other than as a result of disclosure
by Executive in breach of this Agreement, (ii) is independently
developed by Executive after the termination of her employment
without the utilization of any Confidential Information or (iii)
becomes available to Executive at any time after the termination of
her employment from a source which, to Executive’s knowledge,
is not prohibited from disclosing such information to Executive by
a legal, contractual, fiduciary or other obligation to the Company
or any of its affiliates.
Executive agrees
that she will not, during or after Executive’s relationship
with the Company, (i) disclose, in whole or in part, any
Confidential Information to any person, firm, corporation,
association or other entity for any reason or purpose whatsoever
unless authorized in writing to do so by the Company or Executive
is compelled to disclose such Confidential Information or else
stand liable for contempt or suffer other censure or penalty, or
(ii) use any Confidential Information for her own purpose or for
the benefit of any person, firm, corporation, association or other
entity other than the Company, except in the proper performance of
her duties as instructed by the Company.
Defend Trade Secrets Act Whistleblower
Immunity. Executive acknowledges and understands that she
shall not be held criminally or civilly liable under any Federal or
State trade secret law for the disclosure of a trade secret that
(A) is made (i) in confidence to a Federal, State, or local
government official, either directly or indirectly, or to an
attorney; and (ii)
solely for the purpose of reporting or investigating a suspected
violation of law; or (B) is made in a complaint or other document
filed in a lawsuit or other proceeding, if such filing is made
under seal. Also, if Executive files a lawsuit for retaliation by
an employer for reporting a suspected violation of law, Executive
may disclose the trade secret to her attorney and use the trade
secret information in the court proceeding, provided that Executive
files any document containing the trade secret under seal and does
not disclose the trade secret, except pursuant to court
order.
6.3.
Non-Solicitation
In an
effort to protect and maintain the confidentiality of Company trade
secrets, and Company Confidential Information, goodwill and other
protectable interests, Executive agrees that during her employment
with the Company and for one (1) year after the cessation of such
employment (the “Non-Solicitation Period”), she shall
not, directly or indirectly:
(i)
for or on behalf of
a business competitive with the Company, contact, solicit, canvas,
provide services to, contract with, or accept business which
competes with the company’s interests or business from any
entity or individual which (i) was or has been a customer of the
Company within two (2) years prior to the cessation of
Executive’s employment, (ii) has received and has outstanding
a new business proposal from the Company as of the date of such
cessation of Executive’s employment, or (iii) was or is a
prospective customer of the Company with which Executive had
business related communications within two years prior to the
cessation of Executive’s employment or about which Executive
had Company marketing information or confidential or proprietary
information; and/or
(ii)
solicit, entice, or
induce any entity or individual with the effect or the purpose
(which need not be the sole or primary effect or purpose) of (i)
causing any customer or prospective customer of the Company to
refrain from engaging the Company, or (ii) causing any customer to
terminate or diminish its relationship with the Company;
and/or
(iii)
induce, offer,
assist, solicit, encourage or suggest or hire, in any manner
whatsoever, (i) that Executive or another business or enterprise
offer employment to or enter into a business affiliation with any
employee, or representative of the Company, or (ii) that any
employee, agent or representative of the Company terminate his or
her employment or business affiliation with the
Company;
(iv)
or hire, employ or
contract with any employee or representative of the
Company.
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6.4.
Invention
Assignment
All
patents, trademarks, service marks, copyrights, trade secrets and
other intellectual property rights (“Intellectual
Property”) relating in any material way to the business of
the Company that Executive (either alone or in conjunction with
others) conceived, made, obtained or developed during the Term of
Executive’s employment with the Company or conceive, make or
obtain during the Term of Executive’s employment (whether
during or outside of working hours) with the Company (collectively,
“Company IP”), is the sole and exclusive property of
the Company and shall be considered a “work made for
hire.” The Company IP belongs to the Company whether or not
such intellectual property is granted patent, trademark, copyright
and/or other intellectual property rights, or whether or not
applications are or can be filed on any such Company IP.
Notwithstanding the foregoing, to the extent that the Company IP
does not constitute a work made for hire under applicable law,
Executive hereby assigns and transfers to the Company all right,
title and interest in and to the Company IP, including, without
limitation, any and all copyright, trademark, service xxxx, patent
or other intellectual property rights and goodwill inherent therein
or related thereto.
Executive will make
full and prompt disclosure to the Company of all Intellectual
Property and Company IP, and at the Company’s request and
expense (but without additional compensation to Executive),
Executive will at any time and from time to time during and after
Executive’s employment with the Company execute and deliver
to the Company such applications, assignments and other papers) as
the Company, in its reasonable discretion, considers necessary to
vest, perfect, defend or maintain the Company’s rights in and
to the Company IP. Executive has provided to the Company, a
complete list of Intellectual Property, if any, conceived, made,
obtained or developed by Executive (either alone or in conjunction
with others) on or prior to the date hereof, and to the extent that
such Intellectual Property does not also constitute Company IP,
such Intellectual Property is excluded from the undertakings in
this Agreement.
6.5.
No
Disparagement
During
the term of Executive’s employment and thereafter, Executive
shall not criticize, ridicule or make any statement which
disparages or is derogatory of the Company or any person affiliated
with the Company to any third party or in any public
statement.
6.6.
No
Failure to Return Property
Upon
termination of employment, Executive is to immediately surrender to
the Company possession of all Company property in Executive’s
possession or control, tangible or intangible, including without
limitation equipment, trade secrets, confidential and proprietary
information and intellectual property in whatever embodiment or
form, and all copies and other reproductions and extracts thereof,
including those prepared by Executive. Executive also agrees to
destroy any copies of such property and to permanently delete any
electronic copies thereof.
7.
Resolution
of Disputes
7.1.
Negotiation
The
Parties shall attempt in good faith to resolve any such dispute
promptly by negotiation. Either may give the other written notice
of any dispute not resolved in the normal course of business,
stating that party’s position and proceed with negotiations.
Within five (5) business days after delivery of the disputing
party’s notice, the Parties shall meet at a mutually
acceptable time and place, and thereafter as often as they
reasonably deem necessary, to attempt to resolve the dispute. All
reasonable requests for information made by one party to the other
will be honored.
7.2.
Arbitration
If any
issues in dispute are not resolved by such negotiation (or if any
party fails to participate in such negotiation), any party may, by
written notice to the other, demand that the dispute be resolved by
binding arbitration in Boston, MA, before a single arbitrator
pursuant to the national rules for the resolution of employment
disputes of the American Arbitration Association
(“AAA”). The arbitrator shall be instructed, and the
parties shall cooperate, with completing the arbitration with a
ruling, if possible, in writing on each issue in dispute within 60
days of the arbitrator’s appointment by the AAA. The
arbitrator shall have the power to award damages, equitable relief,
reasonable attorney’s fees and expenses, and the fees and
expenses of the arbitrator and of the AAA to any party. The
arbitrator’s rulings and awards shall be final and binding
upon the Parties and judgment thereon may be entered in any court
having competent jurisdiction. Unless otherwise ordered by the
arbitrator, the Company and Executive shall each pay an equal share
of the fees and expenses of the arbitrator and of the
AAA.
8.
Miscellaneous
Provisions
8.1.
Representation
as to Limitations
Executive
represents and warrants that Executive is not under any contractual
or legal restraint that prevents or prohibits Executive from
entering into this Agreement or performing the duties and
obligations described in this Agreement.
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8.2.
Assignment
Executive may not
assign this Agreement or an of its rights or obligations under this
Agreement without Company’s prior written consent. Company
may assign this Agreement or any of its rights and obligations
under this Agreement, effective upon written Notice to Executive.
This Agreement shall inure to the benefit of Company’s
successors and assigns.
8.3.
Notices
Any
notice, request, claim, demand, document and other communication
hereunder to any Party shall be effective upon receipt (or refusal
of receipt) and shall be in writing and delivered personally or by
certified or registered mail, postage prepaid (or if it is sent
through any other method agreed upon by the Parties), as
follows:
a)
If to Company, at
the address set forth on the first page hereto, to the attention of
the CEO.
b)
If to Executive, at
the address set forth on the first page hereto, to the attention of
the Executive.
c)
Or at any other
address as any Party shall have specified by notice in writing to
the other Party.
8.4.
Headings
The
headings and captions are for convenience only and shall not be
deemed to limit, construe, affect, or alter the meaning of the
underlying provisions.
8.5.
Severability
If any
provision of this Agreement is or becomes invalid, illegal, or
unenforceable in any jurisdiction for any reason, such invalidity,
illegality, or unenforceability shall not affect the remainder of
this Agreement, and the remainder of this Agreement shall be
construed and enforced as if such invalid, illegal, or
unenforceable portion were not contained herein.
8.6.
Governing
Law
This
Agreement shall be construed and enforced under and in accordance
with the laws of the Commonwealth of Massachusetts without giving
effect to the conflict of law principles hereof.
8.7 Waiver
Neither
the failure nor delay of either party to exercise any right or
remedy under this Agreement shall operate or be construed as a
waiver of any such right or remedy or constitute an excuse for any
subsequent breach of this Agreement.
8.8 Counterparts
This
Agreement may be executed in counterparts, each of which shall be
deemed an original and all of which shall constitute one and the
same instrument. Electronic signatures are authorized.
8.9 Entire Agreement
This
Agreement represents the entire understanding and agreement between
the parties with respect to the subject matter of this Agreement,
and supersedes all prior negotiations, agreements, discussions and
proposal, both oral and written, between Executive and the Company.
This Agreement may not be amended or modified, and no waiver
hereunder shall be valid or binding, unless set forth in writing,
duly executed by the party against whom enforcement of the
amendment, modification or waiver is sought. The Company and
Executive each further represents, warrants and agrees that (i)
she/it has been represented by competent counsel and participated
in the drafting of this Agreement, and (ii) any applicable
rule of construction to the effect that ambiguities are to be
resolved against the drafting party shall not be applied in
connection with the construction or interpretation of this
Agreement.
IN WITNESS WHEREOF, the Parties have
duly executed this Agreement as of the date and year first above
written.
| Executive |
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| By: /s/ Xxx Xxxxxxx |
By:
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/s/
Xxxxxxxxx Xxxxx Xxxxxxxx
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Name: Xxx
Xxxxxxx
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Name:
Xxxxxxxxx Xxxxx
Xxxxxxxx
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Title: President
& CEO
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