Exhibit 10.8
EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated as of September 2,1997, between Applied Language
Technologies, a Delaware corporation ("ALTech" or the "Company"), and Xxxxxx
Xxxxxxxxx (hereinafter referred to as "Employee").
WITNESSETH:
WHEREAS, the Board of Directors of ALTech believes that the services of Employee
would be of value to ALTech and is desirous of retaining his services; and
WHEREAS, Employee is willing to accept employment by ALTech upon the terms and
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual covenants herein
contained and of the mutual benefits herein provided, ALTech and Employee hereby
agree as follows:
1. TERM OF EMPLOYMENT
Subject to termination as provided in Section 5 hereof, the Company shall employ
Employee, and Employee accepts employment by the Company, on the terms and
conditions herein contained, for a period commencing as of September 2, 1997
(the "Employment Date") and ending on the third anniversary thereof (the period
from the date hereof through such third anniversary being hereinafter referred
to as the "Employment Period").
2. DUTIES
2.1. General Duties. During the Employment Period, Employee shall serve the
Company as President. In this capacity Employee shall be generally responsible
for marketing and sales, and shall, with the CEO, participate in the Company's
financial planning and decision making. Employee shall also participate with
senior management in setting strategic goals and operating plans for the
Company. The Company agrees that it shall not substantially and materially
lessen these general duties and responsibilities without the consent of
Employee.
2.2. Primary Activity. During the Employment Period, Employee shall devote
substantially all of his working time and energy to the interests and business
of the Company provided, however, that Employee shall be excused from performing
any services for the Company or its subsidiaries hereunder during periods of
temporary illness or incapacity and during reasonable vacations. During the
Employment Period, Employee shall, to the best of his skill and ability, use his
best efforts and endeavors to the extension and promotion of the business of the
Company and its subsidiaries, to the proper servicing of such business and to
the protection of the goodwill of such business, both as now enjoyed and
hereafter acquired.
3. COMPENSATION
As full compensation to Employee for performance of his services hereunder, the
Company agrees to pay Employee and Employee agrees to accept the following
salary and other benefits during the Employment Period:
(a) Salary: Until January 1,1998, the Company shall pay the Employee a
salary at an annual rate of $125,000. Thereafter the Company shall
pay the Employee a salary at an annual rate of $150,000 (the "Base
Salary").
(b) Performance Bonus: Beginning January 1,1998, Employee shall be
eligible to earn an annual performance bonus (the "Performance
Bonus"), targeted at $50,000. The Performance Bonus shall be based
upon Employee and the Company attaining certain goals which shall be
decided upon by management at the beginning of each calendar year,
acceptable to Employee, and approved by ALTech's Board of Directors.
(c) Health Insurance: The Company shall, during the Employment Period,
pay 80% of the premium for the Employee and 50% for all dependents
of the health insurance plan carried by the Company.
(d) Incentive Stock Options: The Company shall grant Employee 475,000
qualified incentive stock options to purchase shares of the
Company's common stock, 1/5 of which shall vest upon the first
anniversary of the Employee's Employment date. The remainder shall
vest in 48 equal monthly increments. The stock options shall have an
exercise price of $.50. During the Employment Period, in the event
of an acquisition or merger in which ALTech is not the surviving
entity (a "Corporate Transaction"), Employee shall have the right to
exercise 50% of all unvested options as of the effective date of the
Corporate Transaction. The other terms and conditions of the options
shall be in accordance with the Company's 1995 Stock Option Plan, as
amended, and the related stock option grants and agreements.
(e) Other Benefits: Employee shall be entitled to one vacation day per
each month employed and three personal days each calendar year.
ALTech shall pay for term life insurance up to $1,000,000 in
coverage and long-term disability insurance, or, at Employee's
option, reimburse Employee's out-of-pocket costs for life and
disability insurance up to an amount approximately equivalent to
that expended by the Company to provide similar benefits to ALTech's
other senior management. Employee shall also fully participate in
any present or future insurance, pension, retirement, profit-sharing
or other compensation or incentive plans adopted by the Company, for
the general overall benefit of senior management of the Company, the
extent and manner of participation to be determined by the Board of
Directors of the Company.
4. CERTAIN COVENANTS
In order to induce the Company to enter into this Agreement Employee hereby has
executed an Employee Confidentiality and Intellectual Property Assignment and
Agreement, attached as Exhibit A, which is made a part hereof, and an Employee
Non-Competition Agreement, attached as Exhibit B, which is made a part hereof.
5. TERMINATION OF EMPLOYMENT
The Employment Period shall cease and terminate upon the earliest date on which
one of the events specified below occurs (the Date of Termination):
(a) The close of business on the last day of the Employment Period;
(b) The death of Employee;
(c) A material breach by Employee (if the Company elects to terminate
this Agreement) or the Company (if the Employee elects to terminate
this Agreement) of this Agreement;
(d) Termination of Employee's employment by the Company for Good Cause,
which shall be defined as any of the following:
(i) Material misrepresentations knowingly made by Employee to the
Company or the Company's partners, affiliates or customers;
(ii) Chronic absenteeism not caused by disability;
(iii) Mental or physical disability rendering employee substantially
incapable of performing his duties for a continuous period greater
than six months;
(iv) Conviction for a criminal offense;
(v) Drug or alcohol abuse;
(vi) Conduct constituting sexual harrassment or bias based on race,
creed or gender;
(vii) Repeated and documented failure or refusal to perform the
duties and responsibilities of Employee's post.
(e) Employee's voluntary serverance of employment with the Company for
any reason.
6. SEVERANCE PAYMENT
6.1. Termination by the Board of Directors. The Board of Directors may at any
time, in its sole discretion, terminate Employee for any cause, including, but
not limited to failure to perform adequately his responsibilities as President.
In the event of any such termination, provided such termination is not due to
reason specificied in Section 5 hereof, the Company shall, within 15 days
following the effective date of such termination, pay Employee a severance
payment of $75,000 (the "Severance Payment").
6.2. Appointment of Third Party as Chief Executive Officer. In the event that
the Board of Directors appoints a third party other than Employee as Chief
Executive Officer to replace Xxxxxxx X'Xxxxxxx the Employee may, within one year
of such appointment, voluntarily terminate his employment with the Company and
the Company shall pay Employee the Severance Payment within 15 days following
the effective date of termination; provided, however, that the Company shall be
under no obligation to make the Severance Payment if such voluntarily
termination occurs within less than one year of the Employment Date.
6.3. Termination as Chief Executive Officer. The Company shall also pay the
Severance Payment in the event that Employee is appointed Chief Executive
Officer to replace Xxxxxxx X'Xxxxxxx, but is terminated by the Board of
Directors in less than six months following such appointment (other than
termination for a reason specified in Section 5 hereof. The Severance Payment
shall be paid within 15 days of such termination.
6.4. Expiration of this Agreement. The Company shall also pay the Severance
Payment in the event this Agreement expires at the close of the Employment
Period, as defined in Section One hereof, and there exists no other employment
agreement between Employee and the Company.
7. ASSIGNMENT
This Agreement shall not be assigned by the Employee. The Company shall have the
right to assign its rights hereunder pursuant to any merger, acquisition,
consolidation or other event in which the Company is not the surviving entity,
provided that the surviving entity is bound by the terms hereof.
8. MISCELLANEOUS
8.1. Entire Agreement. This Agreement supersedes any prior agreements and
embodies the entire understanding between the parties hereto respecting the
subject matter hereof and no change, alteration or modification hereof may be
made except in writing signed by both parties hereto.
8.2. Headings. The headings in this Agreement are for convenience of reference
only and shall not be considered as part of this Agreement or to limit or
otherwise affect the meaning hereof.
8.3. Severability. If any provision of this Agreement shall be held invalid,
illegal or unenforceable in whole or in part, neither the validity of the
remaining part of such provision nor the validity of any other provision of this
Agreement shall in any way be affected thereby. Additionally, any and all
covenants not to compete shall be construed as separate and independent
covenants so that, in case any one or more of the covenants or any part of a
covenant shall for any reason be held to be invalid, illegal or unenforceable in
any respect in any jurisdiction, such invalidity, illegality or unenforceability
shall be deemed not to affect any other jurisdiction or any other covenant or
part of a covenant, but any and all such covenants not to compete shall be
reformed and construed in such jurisdiction as if such covenant or part of a
covenant held to be invalid or illegal or unenforceable had never been contained
herein and such covenant or part shall be reformed so that, it would be valid,
legal and enforceable in such jurisdiction to the maximum extent possible.
8.4. Governing Law. This Agreement shall in all respects be governed by and
construed in accordance with the laws of the Commonwealth of Massachusetts
without regard to principles of conflicts of laws.
8.5. Additional Assurances. Each party shall execute, acknowledge and deliver
such additional documents, writing or assurances as the other may periodically
require so as to give full force and effect to the provisions of this Agreement.
IN WITNESS WHEREOF, The parties have hereto executed this Agreement as of the
date first above written.
Employee Applied Language Technologies
/s/ Xxxxxx X. Xxxxxxxxx /s/ X. X. X'Xxxxxxx
-------------------------- ------------------------------
By: XXXXXX X. XXXXXXXXX By: X. X. X'XXXXXXX
-------------------------- ------------------------------
Title: CEO
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APPLIED LANGUAGE TECHNOLOGIES, INC.
000 Xxxxxxxx Xxx.
Xxxxxx, Xxxxxxxxxxxxx 00000
EMPLOYEE CONFIDENTIALITY AND INTELLECTUAL PROPERTY ASSIGNMENT AGREEMENT
Name: Xxxxxx X. Xxxxxxxxx Employment Date: 9/2/97 (Type or Print)
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In consideration of my employment, continued employment and the
salary/wages paid to me by Applied Language Technologies, Inc. or any of its
parent, subsidiary or affiliate companies (all hereafter collectively called
"ALTech") and other good and valuable consideration, I understand and agree to
the following provisions for the protection of the property rights of ALTech and
for the protection of the rights of others who have entrusted ALTech with
confidential proprietary information:
1. Disclosure to ALTech. I agree to disclose fully and promptly to ALTech
all Proprietary Information which is developed, conceived, reduced to practice
or learned by me solely or jointly with others, at any time during the term of
my employment I agree to make and maintain written records of the aforesaid
Proprietary Information and to submit promptly the same, and to make
supplemental oral disclosure, to ALTech. The term "Proprietary Information"
means all intellectual and physical work product having actual or potential
value to ALTech including inventions, whether or not patentable and whether or
not tested or reduced to practice, discoveries, ideas, conceptions, processes,
developments, designs, business plans, trade secrets, mask works, and tangible
expressions, whether or not copyrightable, computer software, systems, programs
or procedures, which are developed, conceived, reduced to practice or learned by
employees or consultants of ALTech solely or jointly with others, which
Proprietary Information (a) relates to the current business activities of
ALTech, (b) results from, or is suggested by, work which is performed for ALTech
or which is funded in whole or in part by ALTech, or (c) results from any use of
premises, equipment or property (tangible or intangible) owned, leased, licensed
or contracted for by ALTech.
2. Ownership and Assignment of Rights to ALTech. I agree to assign and
hereby do assign to ALTech as its exclusive property the entire right, title and
interest in and to all Proprietary Information embraced by Paragraph 1 above,
including without limitation, all patents, patent applications and copyrights. I
further agree to execute all papers, and otherwise to provide all requested
assistance, at the expense of ALTech, during and subsequent to my employment, to
enable ALTech or its nominees to obtain such patents, copyrights and other legal
protection as it may desire in any country. All copyrightable work ("Work")
created by me in connection with my employment is intended to be a "work made
for hire" as that term is defined in Section 101 of the Copyright Act of 1976,
as amended (the "Copyright Act"), and shall be the property of ALTech and ALTech
shall be the sole author of such work within the meaning of the Copyright Act.
All such Works, as well as copies of such Works in whatever medium fixed or
embodied, shall be owned exclusively by ALTech and I expressly disclaim any
interest in them. If the copyright to any such Works shall not be the property
of ALTech by operation of law, I hereby assign and will assign to ALTech,
without further consideration, all right, title and interest in such Work and
will assist ALTech, at its expense, to secure, maintain and defend for the
benefit of ALTech all copyrights, registrations, extensions and renewals on any
and all such Work, including translations thereof in any and all countries, such
Work to be and remain the property of ALTech whether copyrighted or not.
I hereby waive all moral rights and all inalienable rights that I may have
in any Work, including without limitation, any right to identification of
authorship, any right of approval on modifications or limitation on subsequent
modifications. To the extent that this waiver is deemed unenforceable under
applicable law, I acknowledge and agree that I will not exercise any such
inalienable right without the specific prior written consent of ALTech.
In the event that ALTech is unable, after reasonable effort, to secure my
signature on letters, patent, copyright or other documents relating to any
Proprietary Information, whether because of my physical or mental incapacity or
for any other reason whatsoever, I hereby irrevocably designate and appoint
ALTech and its duly authorized officers and agents as my agent and
attorney-in-fact, to act for and in my behalf and stead to execute and file any
such application(s) and to take all other lawfully permitted acts to further the
prosecution and issuance of letters patent, copyright or other documents with
the same legal force and effect as if executed by me.
The assignment provisions of this Agreement shall not apply to Proprietary
Information which is exempt from assignment under the applicable laws of the
state of employment. I agree, however, that ALTech shall have a non-exclusive,
fully paid license to use for all purposes any Proprietary Information within
the scope of the actual or anticipated business of ALTech but not assigned to
ALTech under this Agreement unless such a license is prohibited by statute or by
a court of last resort and final jurisdiction.
I understand and agree that ALTech shall determine, in its sole and
absolute discretion, whether an application for or registration of any patent,
copyright or other intellectual property right shall be filed on any development
assigned to ALTech under this Agreement, and whether such an application shall
be prosecuted or abandoned prior to issuance or registration.
3. Confidentiality. I agree to preserve in confidence, and not to use, to
publish, or to otherwise disclose, either during or subsequent to my employment,
without the written permission of ALTech, any Confidential Information. The term
"Confidential Information" means any Proprietary Information or any knowledge,
information or materials about the products, services, know-how, research and
development, customers, or business plans of ALTech or any confidential
information about financial matters, marketing, pricing, compensation or any
other confidential information of ALTech, its customers, or others from whom
ALTech has received information under obligations of confidence.
The conditions of Paragraph 3 hereof shall not apply to information which:
(a) was in the public domain or generally available to the public prior
to my receipt thereof, or which subsequently becomes part of the
public domain or generally available to the public except by my
wrongful act; or
(b) was in my possession prior to receipt from ALTech; or
(c) is received by me from a third party, unless I know or have reason
to know of an obligation of secrecy of the third party to ALTech
with respect to such information; or
(d) is required by law to be disclosed.
4. Confidential Information of Others. I agree not to disclose to ALTech,
or to use in my work at ALTech (a) any confidential information belonging to
others, or (b) any prior inventions made by me which ALTech is not entitled to
learn of or use.
5. Return of Materials. Upon the request of ALTech at any time and in the
event of the termination of my employment at ALTech, whether or not such
termination is voluntary, I will deliver promptly to my superior at ALTech all
documents which relate to the business activities of
ALTech, and all materials and things which belong to ALTech or have been given
to me by ALTech or others during the course of my employment.
6. Prior Agreements. I represent that I have attached hereto a copy of any
agreement (such as a prior employment agreement) which affects my ability to
comply with the terms of this agreement. If there is no such agreement, I have
written my initials here: /s/ SRP
7. Enforcement. I agree that ALTech would not be fairly compensated by
money damages for any breach of this Agreement by me and therefore in the event
of a breach or threatened breach of this Agreement ALTech shall be entitled to
specific performance, an injunction and other equitable relief in addition to
money damages and other legal remedies. I hereby waive any requirement that
ALTech post a bond or surety in connection with its attempts to enforce this
Agreement.
8. Miscellaneous. This Agreement shall be binding on my executors,
administrators, heirs, legal representatives or assigns, and may not be modified
except in writing with the approval of an officer of ALTech. If any provision of
this Agreement is determined to be illegal or unenforceable, because of the
duration thereof or the area or scope covered, I hereby request any court making
such determination to reduce the duration, area and/or scope so that in its
reduced form such covenant shall be enforceable and I agree that in such event
all remaining provisions shall remain in full force and effect. This Agreement
shall be governed by and construed in accordance with the internal laws of The
Commonwealth of Massachusetts. This document sets forth the entire agreement
between ALTech and me with respect to the matters set forth herein.
WITNESS EMPLOYEE
/s/ X.X. Xxxxxxx /s/ Xxxxxx X. Xxxxxxxxx
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Date: 12/1/97 Date: 12/1/97
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Social Security No. ###-##-####
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APPLIED LANGUAGE TECHNOLOGIES, INC.
000 Xxxxxxxx Xxx.
Xxxxxx, Xxxxxxxxxxxxx 00000
EMPLOYEE NON-COMPETITION AGREEMENT
Name: Xxxxxx X. Xxxxxxxxx Employment Date: 9/2/97
------------------- ------
(Type or Print)
In consideration of my employment, continued employment and the
salary/wages paid to me by Applied Language Technologies, Inc. or any of its
parent, subsidiary or affiliate companies (all hereafter collectively called
"ALTech") and other good and valuable consideration, I understand and agree to
the following provisions:
1. Non-Competition. To the extent I was personally involved in or
substantively knowledgeable of confidential ALTech developments, I will not
during my employment and for a period of twelve (12) months after termination of
my employment accept a consulting engagement or employment with a Competitor (as
hereinafter defined), client or customer of ALTech without written permission
from ALTech, which permission will not be unreasonably withheld in those
instances where such engagement or employment does not involve risk of use or
disclosure of Confidential Information. Competitor shall mean any company
engaged in using speech recognition technology to create systems for
telephone-based sales of goods or services. Notwithstanding the foregoing, I
agree that the companies listed in Appendix 1 are competitors of ALTech for whom
I shall not work as provided above. The listing of these specific companies is
not intended to be a complete listing of all current or future competitors of
ALTech.
2. Definition of Confidential Information. The term "Confidential
Information" means any Proprietary Information or any knowledge, information or
materials about the products, services, know-how, research and development,
customers, or business plans of ALTech or any confidential information about
financial matters, marketing, pricing, compensation or any other confidential
information of ALTech, its customers, or others from whom ALTech has received
information under obligations of confidence.
Confidential Information shall not include information which:
(a) was in the public domain or generally available to the public prior
to my receipt thereof, or which subsequently becomes part of the
public domain or generally available to the public except by my
wrongful act; or
(b) was in my possession prior to receipt from ALTech; or
(c) is received by me from a third party, unless I know or have reason
to know of an obligation of secrecy of the third party to ALTech
with respect to such information; or
(d) is required by law to be disclosed.
3. Definition of Proprietary Information. The term "Proprietary
Information" means all intellectual and physical work product having actual or
potential value to ALTech including inventions, whether or not patentable and
whether or not tested or reduced to practice, discoveries, ideas, conceptions,
processes, developments, designs, business plans, trade secrets, mask works and
tangible expressions, whether or not copyrightable, computer software, systems,
programs or procedures, which are developed, conceived, reduced to practice or
learned by employees or consultants of ALTech solely or jointly with others,
which Proprietary
Information (a) relates to the actual or anticipated business activities of
ALTech, (b) results from, or is suggested by, work which is performed for ALTech
or which is funded in whole or in part by ALTech, or (c) results from any use of
premises, equipment or property (tangible or intangible) owned, leased, licensed
or contracted for by ALTech.
4. Enforcement I agree that ALTech would not be fairly compensated by
money damages for any breach of this Agreement by me and therefore in the event
of a breach or threatened breach of this Agreement ALTech shall be entitled to
specific performance, an injunction and other equitable relief in addition to
money damages and other legal remedies. I hereby waive any requirement that
ALTech post a bond or surety in connection with its attempts to enforce this
Agreement.
5. Miscellaneous. This Agreement shall be binding on my executors,
administrators, heirs, legal representatives or assigns, and may not be modified
except in writing with the approval of an officer of ALTech. If any provision of
this Agreement is determined to be illegal or unenforceable, because of the
duration thereof or the area or scope covered, I hereby request any court making
such determination to reduce the duration, area and/or scope so that in its
reduced form such covenant shall be enforceable and I agree that in such event
all remaining provisions shall remain in full force and effect. This Agreement
shall be governed by and construed in accordance with the internal laws of The
Commonwealth of Massachusetts. This document sets forth the entire agreement
between ALTech and me with respect to the matters set forth herein.
WITNESS EMPLOYEE
/s/ X.X. Xxxxxxx /s/ Xxxxxx X. Xxxxxxxxx
------------------------ ---------------------------
Date: 12-1-97 Date: 12/1/97
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Social Security No. ###-##-####
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Appendix I
Competitors of Applied Language Technologies, Inc.
The following entities are deemed to be competitors of Applied Language
Technologies, Inc. as of the date of this Agreement:
Voice Control Systems
BBN- Bolt Beraneck and Xxxxxx
Nuance
Pure Speech
Lucent
Northern Telecom
The listing of these specific companies is not intended to be a complete listing
of all current or future competitors of ALTech.
