EMPLOYMENT AGREEMENT
This
Employment Agreement, dated January 30, 2007, is between Glowpoint, Inc., a
Delaware corporation (the “Company”), and Xxxxx X. Xxxxxx
(“Employee”).
WHEREAS,
the Employee was hired by the Company on March 2, 2005 and became the Company’s
Chief Financial Officer on April 7, 2006 and the Company wishes to continue
to
employ Employee, and Employee wishes to continue work for Company;
NOW,
THEREFORE, in consideration of the mutual covenants set forth herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
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1.
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POSITION
AND RESPONSIBILITIES.
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1.1 Position.
Employee is employed by the Company to render services to the Company in the
position of Chief Financial Officer for the two year period commencing on the
date first written above. Employee shall perform such duties and
responsibilities as are normally related to such position in accordance with
the
standards of the industry and any additional duties consistent with his position
now or hereafter assigned to Employee by the President and CEO of the Company.
Employee shall abide by the rules, regulations and practices of the Company
as
adopted or modified from time to time in the Company’s reasonable
discretion.
1.2 Other
Activities.
Employee shall devote his full business time, attention and skill to perform
any
assigned duties, services and responsibilities, consistent with the position
of
Chief Financial Officer, while employed by the Company, for the furtherance
of
the Company's business, in a diligent, loyal and conscientious manner. Except
upon the prior written consent of the Board of Directors, Employee will not,
during the term of this Agreement: (i) accept any other employment; or (ii)
engage, directly or indirectly, in any other business activity (whether or
not
pursued for pecuniary advantage) that interferes with Employee’s duties and
responsibilities hereunder or create a conflict of interest with the Company.
1.3 No
Conflict.
Employee represents and warrants that Employee’s execution of this Agreement,
Employee’s employment with the Company, and the performance of Employee’s
proposed duties under this Agreement will not violate any obligations Employee
may have to any other employer, person or entity, including any obligations
with
respect to proprietary or confidential information of any other person or
entity.
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2.
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COMPENSATION
AND BENEFITS.
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2.1 Base
Salary.
Until
December 31, 2006, Employee shall continue to be compensated at the same rate
and on the same terms and conditions as in effect on April 7, 2006. Commencing
on January 1, 2007, in consideration of the services to be rendered under this
Agreement and so long as Employee remains employed by the Company, the Company
shall pay Employee a salary of at least $200,000 per year (the “Base Salary”).
The Base Salary shall be paid in accordance with the Company’s regularly
established payroll practice. Employee's Base Salary shall be reduced by
withholdings required by law. Employee’s Base Salary will be reviewed at the end
of each calendar year for consideration of salary increase.
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2.2 Restricted
Stock. The
Company shall recommend to the Compensation Committee (“Compensation Committee”)
and to the Board of Directors (the “Board”) that Employee be
granted
restricted stock ("Restricted Stock") in the amount of 200,000 shares of Common
Stock of the Company.
(a)
Other
than as expressly provided herein, the Restricted Stock shall be forfeited
if
the Employee’s employment with the Company is terminated for any reason.
Notwithstanding the foregoing, the risk of forfeiture of the Restricted Stock
will irrevocably lapse with respect to one-third of such shares on each of
the
first, second and third anniversaries of the date of this agreement. The
Employee may, in his discretion and subject to the satisfaction of applicable
income and employment tax withholding obligations, make an election under
Section 83(b) of the Internal Revenue Code with respect to the Restricted Stock.
Employee’s entitlement to any Restricted Stock that may be approved by the Board
and/or Compensation Committee is conditioned upon Employee’s signing of a
separate Restricted Stock Agreement and payment of the par value of the
Restricted Stock if required.
(b)
The
risk
of forfeiture of the Restricted Stock shall lapse upon a Change in Control
or
Corporate Transaction (as each is defined in the Restricted Stock Agreement)
as
long as Employee remains employed by the Company during the period commencing
thirty (30) days prior to the date of the Change of Control or Corporate
Transaction; provided, however, if the surviving company of such Change of
Control or Corporate Transaction offers Employee continued
employment at an equivalent level in terms of position, responsibility,
compensation and benefits to that existing immediately prior to the Change
in
Control or Corporate Transaction and the successor entity or its parent assumes
the contractual obligations with respect to the Restricted Stock, such risk
of
forfeiture shall not automatically lapse, but will lapse in accordance to the
schedule set
forth
in paragraph 2.2(a).
2.3 Incentive
Compensation.
Employee and the President and CEO will establish mutually agreed
upon
appropriate goals and metrics applicable to Employee's performance under this
Agreement. Such goals and metrics will be taken into consideration by the
Compensation Committee of the Board of Directors, in consultation with the
President and CEO, in determining the amount, if any, of incentive compensation
to be paid to Employee each year. Updated goals and metrics will be established
no later than 60 days after the start of each new calendar year. Employee will
be eligible to receive incentive compensation in an amount equal to up to forty
percent (40%) of his Base Salary annually. The determination of the awarding
of
any incentive compensation to Employee shall be at the sole discretion of the
Compensation Committee.
2.4 Benefits.
Employee
shall continue to be eligible to participate in all benefits made generally
available by the Company to similarly-situated employees, in accordance with
the
benefit plans established by the Company, and as may be amended from time to
time in the Company’s sole discretion.
2.5 Expenses.
The
Company shall reimburse Employee for reasonable travel and other business
expenses incurred by Employee in the performance of Employee’s duties hereunder
in accordance with the Company’s expense reimbursement guidelines, as they may
be amended in the Company's sole discretion.
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2.6 Car
Allowance.
The
Company will reimburse Employee up to $400 per month for the lease or use of
a
car to conduct Company business. Reimbursement will be made upon presentation
of
receipts according to the Company’s reimbursement guidelines.
2.7 Vacation.
Employee
will be entitled to accrue four (4) weeks of paid vacation per year. Such
vacation must be used in the year in which it is accrued and may be carried
over
from year to year with the prior written consent of the President and
CEO.
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3.
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EMPLOYMENT
AND SEVERANCE.
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3.1 Employment.
Either
the Company or Employee may terminate Employee’s employment with the Company at
any time, for any reason or no reason at all so long as they comply with the
terms in this section 3.
3.2 Termination
for Cause or Voluntary Resignation. If
Employee is terminated for Cause (as defined below) or if Employee voluntarily
resigns, Employee will be entitled to his Base Salary and other benefits through
the last day actually worked. Thereafter, all benefits, compensation and
perquisites of employment will cease.
3.3 Termination
Without Cause;
Resignation for Good Reason or Death.
If
Employee is terminated without Cause or if Employee resigns for Good Reason
(as
defined below) or dies,
Employee
shall be entitled to severance equal to twelve (12) months of his Base Salary,
at his then current rate of compensation. Such severance shall be paid either
as
a lump sum or as salary continuation, at the Company’s
discretion.
In the
event that Employee is terminated without Cause, or if Employee resigns for
Good
Reason, or if Employee dies, Employee will also be entitled to one year of
accelerated vesting on the Restricted Stock granted under this Agreement, and
the forfeiture provisions as to the Restricted Stock which is subject to
accelerated vesting will lift. In addition, in the event that Employee is
terminated without Cause or if Employee resigns for Good Reason and if Employee
timely elects COBRA coverage, the Company will pay the employee contribution
portion of the COBRA coverage on Employee’s behalf for a period of up to one
year.
3.4 Definition
of Cause. For
purposes of this Agreement, Cause shall mean, in the judgment of the Company:
(i) Employee willfully engages in any act or omission which is in bad faith
and to the detriment of the Company; (ii) Employee exhibits unfitness for
service, dishonesty, habitual neglect, persistent and serious deficiencies
in
performance, or gross incompetence,
which
conduct is not cured within fifteen (15) days after receipt by Employee of
written notice of the conduct;
(iii) Employee is convicted of a crime; or (iv) Employee refuses or fails
to act on any reasonable and lawful directive or order from the President and
CEO.
3.5 Definition
of Resignation for Good Reason.
For
purposes of this Agreement, resigning for “Good Reason” shall mean if Employee
resigns because: (i) there has been a diminution in his Base Salary; (ii) he
is
required to be based in an office that is more than 50 miles from the current
location of the office; (iii) he is assigned duties that are materially
inconsistent with his position as Chief Financial Officer and the senior
financial and accounting employee of the Company; or (iv) there is a material
diminution of his status, office, title, responsibility, or reporting
requirements.
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3.6 Indemnification
Obligation; Assumption by Successor.
The
Company expressly acknowledges that its indemnification obligations set forth
in
Article VIII of the Company’s By-Laws include indemnifying Employee for, and the
defense of, any personal liability that is imposed on Employee related to sales,
use and other taxes of the Company and any predecessor.
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4.
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TERMINATION
OBLIGATIONS.
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4.1 Return
of Property.
Employee
agrees that all property (including without limitation all equipment, tangible
proprietary information, documents, records, notes, contracts and
computer-generated materials) furnished to or created or prepared by Employee
incident to Employee’s employment belongs to the Company and shall be promptly
returned to the Company upon termination of Employee’s employment.
4.2 Cooperation.
Following
any termination of employment, Employee shall cooperate with the Company in
the
winding up of pending work on behalf of the Company and the orderly transfer
of
work to other employees. Employee shall also cooperate with the Company in
the
defense of any action brought by any third party against the Company that
relates to Employee’s employment by the Company.
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5.
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INVENTIONS
AND PROPRIETARY INFORMATION; PROHIBITION ON THIRD PARTY
INFORMATION.
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5.1 Proprietary
Information. Employee
hereby covenants, agrees and acknowledges as follows:
(a)
The
Company is engaged in a continuous program of research, design, development,
production, marketing and servicing with respect to its business.
(b)
Employee's
employment hereunder creates a relationship of confidence and trust between
Employee and the Company with respect to certain information pertaining to
the
business of the Company or pertaining to the business of any customer of the
Company which may be made known to the Employee by the Company or by any
customer of the Company or learned by the Employee during the period of
Employee's employment by the Company.
(c)
The
Company possesses and will continue to possess information that has been
created, discovered or developed by, or otherwise becomes known to it
(including, without limitation, information created, discovered or developed
by,
or made known to, Employee during the period of Employee's employment or arising
out of Employee's employment and which pertains to the Company’s actual or
contemplated business, products, intellectual property or processes) or in
which
property rights have been or may be assigned or otherwise conveyed to the
Company, which information has commercial value in the business in which the
Company is engaged and is treated by the Company as
confidential.
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(d)
Any
and
all inventions, products, discoveries, improvements, processes, manufacturing,
marketing and services methods or techniques, formulae, designs, styles,
specifications, data bases, computer programs (whether in source code or object
code), know-how, strategies and data, whether or not patentable or registrable
under copyright or similar statutes, made, developed or created by Employee
(whether at the request or suggestion of the Company or otherwise, whether
alone
or in conjunction with others, and whether during regular hours of work or
otherwise) during the period of Employee's employment by the Company which
pertains to the Company's actual or contemplated business, products,
intellectual property or processes (collectively hereinafter referred to as
"Developments"), shall be the sole property of the Company and will be promptly
and fully disclosed by Employee to the Board without any additional compensation
therefor, including, without limitation, all papers, drawings, models, data,
documents and other material pertaining to or in any way relating to any
Developments made, developed or created by Employee as aforesaid. The Company
shall own all right, title and interest in and to the Developments and such
Developments shall be considered "works made for hire" for the Company under
US
Copyright Law. If any of the Developments are held for any reason not to be
"works made for hire" for the Company or if ownership of all right, title and
interest in and to the Developments has not vested exclusively and immediately
in the Company upon creation, Employee irrevocably assigns, without further
consideration, any and all right, title and interest in and to the Developments
to the Company, including any and all moral rights, and "shop rights" in the
Developments recognized by applicable law. Employee irrevocably agrees to
execute any document requested by the Company to give effect to this Section
5.1
such as an assignment of invention or other general assignments of intellectual
property rights, without additional compensation therefor.
(e)
Employee
will keep confidential and will hold for the Company's sole benefit any
Development which is to be the exclusive property of the Company under this
Section 5.1 irrespective of whether any patent, copyright, trademark or other
right or protection is issued in connection therewith.
(f)
Employee
also agrees that Employee will not, without the prior approval of the President
and CEO, use for Employee's benefit or disclose at any time during Employee's
employment by the Company, or thereafter, except to the extent required by
the
performance by Employee of Employee's duties, any information obtained or
developed by Employee while in the employ of the Company with respect to any
Developments or with respect to any customers, clients, suppliers, products,
services, prices, employees, financial affairs, or methods of design,
distribution, marketing, service, procurement or manufacture of the Company
or
any confidential matter, except information which at the time is generally
known
to the public other than as a result of disclosure by Employee not permitted
hereunder. Notwithstanding the foregoing, the following will not constitute
confidential information for purposes of this Agreement: (i) information which
is or becomes publicly available other than as a result of disclosure by the
Employee; (ii) information designated in writing by the Company as no longer
confidential; or (iii) information known by Employee as of the date of this
Agreement, to the extent Employee can document such prior knowledge. Employee
will comply with all intellectual property disclosure policies established
by
the Company from time to time with respect to the Company's confidential
information, including with respect to Developments.
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5.2 Non-Disclosure
of Third Party Information. Employee
represents, warrants and covenants that Employee shall not disclose to the
Company, or use, or induce the Company to use, any proprietary information
or
trade secrets of others at any time, including but not limited to any
proprietary information or trade secrets of any former employer, if any; and
Employee acknowledges and agrees that any violation of this provision shall
be
grounds for Employee’s immediate termination and could subject Employee to
substantial civil liabilities and criminal penalties. Employee further
specifically and expressly acknowledges that no officer or other employee or
representative of the Company has requested or instructed Employee to disclose
or use any such third party proprietary information or trade
secrets.
5.3 Injunctive
Relief. Employee
acknowledges and agrees that a remedy at law for any breach or threatened breach
of the provisions of this Section 5 would be inadequate and, therefore, agrees
that the Company shall be entitled to injunctive relief in addition to any
other
available rights and remedies in case of any such breach or threatened
breach.
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6.
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LIMITED
AGREEMENT NOT TO COMPETE OR
SOLICIT.
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6.1 Non-Competition.
During
the term of this Agreement, and for twelve (12) months after the termination
of
Employee's employment with the Company for any
reason,
unless
mutually agreed otherwise by the Employee and the Company, Employee shall not,
directly or indirectly, work as an employee, consultant, agent, principal,
partner, manager, officer, or director for any person or entity who or which
engages in a substantially similar business as the Company. For purposes of
this
Agreement, the Company
is
currently engaged in the
business
of
designing, developing, providing and selling video communication
services.
6.2 Non-Solicitation.
Employee
shall not, during his employment and for a period of twelve (12) months
immediately after termination of his employment, for any reason, either directly
or indirectly: (a) call on or solicit for similar services, or, encourage or
take away any of the Company’s customers or potential customers about whom
Employee became aware or with whom Employee had contact as a result of
Employee’s employment with the Company, either for benefit of Employee or for
any other person or entity; or (b) solicit, induce, recruit, or encourage any
of
the Company’s employees or contractors to leave the employ of the Company or
cease providing services to the Company on behalf of the Employee or on behalf
of any other person or entity; or (c) hire for himself or any other person
or
entity any employee who was employed or engaged by the Company within six months
prior to the termination of Employee’s employment.
6.3 Limitations;
Remedies.
The
Employee further agrees that the limitations set forth in this Section 6
(including, without limitation, any time or territorial limitations) are
reasonable and properly required for the adequate protection of the businesses
of the Company. The Employee agrees that the lack of territorial limit is
reasonable given the global reach of the Company. If any of the restrictions
contained in Sections 6.1 and 6.2 are deemed by a court or arbitrator to be
unenforceable by reason of the extent, duration or geographic scope thereof,
or
otherwise, then the parties agree that such court or arbitrator may modify
such
restriction to the extent necessary to render it enforceable and enforce such
restriction in its modified form. The Employee acknowledges and agrees that
a
remedy at law for any breach or threatened breach of the provisions of this
Section 6 would be inadequate and, therefore, agrees that the Company shall
be
entitled to injunctive relief in addition to any other available rights and
remedies in cases of any such breach or threatened breach.
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7.
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ALTERNATIVE
DISPUTE RESOLUTION.
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The
Company and Employee mutually agree that any controversy or claim arising out
of
or relating to this Agreement or the breach thereof, or any other dispute
between the parties arising from or related to Employee’s employment with the
Company, shall be submitted to mediation before a mutually agreeable mediator.
In the event mediation is unsuccessful in resolving the claim or controversy,
such claim or controversy shall be resolved by arbitration.
Company
and Employee agree that arbitration shall be held in New Jersey, before a
mutually agreed upon single arbitrator licensed to practice law, in accordance
with the rules of the American Arbitration Association. The arbitrator shall
have authority to award or grant legal, equitable, and declaratory relief.
Such
arbitration shall be final and binding on the parties. If the parties are unable
to agree on an arbitrator, the matter shall be submitted to the American
Arbitration Association solely for appointment of an arbitrator.
The
claims covered by this Agreement (“Arbitrable Claims”) include, but are not
limited to, claims for wages or other compensation due; claims for breach of
any
contract (including this Agreement) or covenant (express or implied); tort
claims; claims for discrimination (including, but not limited to, race, sex,
religion, national origin, age, marital status, medical condition, or
disability); claims for benefits (except where an employee benefit or pension
plan specifies that its claims procedure shall culminate in an arbitration
procedure different from this one); and claims for violation of any federal,
state, or other law, statute, regulation, or ordinance, except claims excluded
in the following paragraph. The parties hereby waive any rights they may have
to
trial by jury in regard to Arbitrable Claims.
Claims
Employee may have for Workers' Compensation State disability or unemployment
compensation benefits are not covered by this Agreement. Also not covered is
either party's right to obtain provisional remedies, or interim relief from
a
court of competent jurisdiction.
Arbitration
under this Agreement shall be the exclusive remedy for all Arbitrable Claims.
This agreement to mediate and arbitrate survives termination of Employee’s
employment.
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8.
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AMENDMENTS;
WAIVERS; REMEDIES.
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This
Agreement may not be amended or waived except by a writing signed by Employee
and by a duly authorized representative of the Company. Failure to exercise
any
right under this Agreement shall not constitute a waiver of such right. Any
waiver of any breach of this Agreement shall not operate as a waiver of any
subsequent breaches. All rights or remedies specified for a party herein shall
be cumulative and in addition to all other rights and remedies of the party
hereunder or under applicable law.
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9.
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ASSIGNMENT;
BINDING EFFECT.
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9.1 Assignment.
The
performance of Employee is personal hereunder, and Employee agrees that Employee
shall
have no right to assign and shall not assign or purport to assign any rights
or
obligations under this Agreement. This
Agreement may be assigned or transferred by the Company; and
nothing
in
this
Agreement shall prevent the consolidation, merger or sale of the Company or
a
sale of any or all or substantially all of its assets.
9.2 Binding
Effect. Subject
to the foregoing restriction on assignment by Employee, this Agreement shall
inure to the benefit of and be binding upon each of the parties; the affiliates,
officers, directors, agents, successors and assigns of the Company; and the
heirs, devisees, spouses, legal representatives and successors of
Employee.
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10.
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SEVERABILITY.
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If
any
provision of this Agreement shall be held by a court or arbitrator to be
invalid, unenforceable, or void, such provision shall be enforced to the fullest
extent permitted by law, and the remainder of this Agreement shall remain in
full force and effect. In the event that the time period or scope of any
provision is declared by a court or arbitrator of competent jurisdiction to
exceed the maximum time period or scope that such court or arbitrator deems
enforceable, then such court or arbitrator shall reduce the time period or
scope
to the maximum time period or scope permitted by law.
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11.
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TAXES.
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All
amounts paid under this Agreement (including without limitation Base Salary)
shall be reduced by all applicable state and federal tax withholdings and any
other withholdings required by any applicable jurisdiction.
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12.
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GOVERNING
LAW.
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The
validity, interpretation, enforceability, and performance of this Agreement
shall be governed by and construed in accordance with the laws of the State
of
New Jersey, without regard to New Jersey conflict of laws principles.
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13.
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INTERPRETATION.
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This
Agreement shall be construed as a whole, according to its fair meaning, and
not
in favor of or against any party. Sections and section headings contained in
this Agreement are for reference purposes only, and shall not affect in any
manner the meaning or interpretation of this Agreement. Whenever the context
requires, references to the singular shall include the plural and the plural
the
singular.
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14.
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OBLIGATIONS
SURVIVE TERMINATION OF
EMPLOYMENT.
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The
parties agree that any and all of the Employee’s and the Company’s obligations
under this agreement, shall survive the termination of employment and the
termination of this Agreement.
14.1 Record
Retention; Assumption by Successor.
The
Company expressly acknowledges that in the event the Company is acquired in
an
asset purchase, the Company covenants and agrees to have the successor or
acquiring entity maintain all Company records, whether hard copy or electronic,
until all matters indemnified for in paragraph 3.6 have been resolved or the
statue of limitation for those matters has expired.
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15.
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AUTHORITY.
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Each
party represents and warrants that such party has the right, power and authority
to enter into and execute this Agreement and to perform and discharge all of
the
obligations hereunder; and that this Agreement constitutes the valid and legally
binding agreement and obligation of such party and is enforceable in accordance
with its terms.
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16.
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ENTIRE
AGREEMENT.
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This
Agreement is the final, complete and exclusive agreement of the parties with
respect to the subject matter hereof and supersedes and merges all prior or
contemporaneous representations, discussions, proposals, negotiations,
conditions, communications and agreements, whether written or oral, between
the
parties relating to the subject matter hereof and all past courses of dealing
or
industry custom. Employee acknowledges Employee has had the opportunity to
consult legal counsel concerning this Agreement,
that
Employee has read and understands the Agreement,
that
Employee is fully aware of its legal effect, and that Employee has entered
into
it freely based on Employee’s own judgment and not on any representations or
promises other than those contained in this Agreement.
In
Witness Whereof, the parties have duly executed this Agreement as of the date
first written above.
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Glowpoint,
Inc.
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/s/
Xxxxxxx
Xxxxxxxxxx
Xxxxxxx
Xxxxxxxxxx
President
and CEO
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/s/
Xxxxx X.
Xxxxxx
Xxxxx
X.
Xxxxxx
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