Exhibit 10.42
EMPLOYMENT AGREEMENT
This Employment Agreement, dated March 11, 2004 is between Glowpoint,
Inc., a Delaware corporation (the "Company"), and Xxxxxx Xxxx ("Employee").
WHEREAS, the Company wishes to employ Employee and Employee wishes to
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:
1. POSITION AND RESPONSIBILITIES.
1.1 POSITION. Employee is employed by the Company to render services
to the Company in the position of Vice President, Marketing. 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 Vice President, Marketing,
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.
1.4 COMMENCEMENT OF WORK. Employee will commence employment with the
Company on Monday, March 29, 2004.
2. COMPENSATION AND BENEFITS.
2.1 BASE SALARY. 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 $185,000.00 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 from
time to time in accordance with the established procedures of the Company.
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 (i) restricted stock ("Restricted Stock ") in the
amount of 55,000 shares of Common Stock of the Company and (ii) up to 20,000
additional shares of restricted stock (the "Additional Restricted Stock") to be
awarded to Employee concurrently with and in the same percentage as determined
in calculating Employee's 2004 incentive compensation pursuant to Section 2.3
below (e.g., if Employee receives 75% of the total possible incentive
compensation pursuant to Section 2.3, Employee shall concurrently be granted
15,000 shares of Additional Restricted Stock).
(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, as long as
the Employee remains employed by the Company, the risk of forfeiture of
the Restricted Stock will irrevocably lapse with respect to 18,333
shares on each of the first and second anniversaries of the
commencement of the Employee's employment, and 18,334 upon the third
anniversary of the Employee's employment. 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 on 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, 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. No later than sixty days after Employee
commences his employment, Employee and the President and CEO will establish
mutually agreed upon, appropriate goals and metrics by which Employee will be
evaluated for 2004.
Such goals and metrics will be updated by the Employee and the President and CEO
on an annual basis thereafter. If in the opinion of the President and CEO, the
Employee meets the mutually agreed upon goals and metrics, Employee will receive
incentive compensation in an amount equivalent to forty percent (40%) of his
base salary annually. Upon commencement of employment on March 29, 2004,
Employee will be eligible to earn the full 40% of his first year's incentive
compensation, or seventy-four thousand dollars ($74,000.00) through December 31,
2004.
2.4 BENEFITS. Employee shall 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. Employee
may submit reimbursable COBRA expenses until becoming eligible to participate in
GlowPoint's health and welfare benefits plan. Employee may also submit
reimbursable expenses for eligible dependents electing to remain on COBRA. Such
expenses will not exceed the Company's total cost to provide coverage for the
Employee and eligible dependents.
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. These benefits include COBRA expenses for Employee and eligible
dependents until Employee becomes eligible to participate under the GlowPoint
health and welfare plan.
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 3 weeks of paid
vacation per year. Such vacation must be used in the year in which it is accrued
and may not be carried over from year to year.
3. EMPLOYMENT AND SEVERANCE.
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. If Employee is terminated without
Cause, Employee shall be entitled to severance equal to 12 months 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, as well as the
pro-rated amount of incentive compensation due as of the effective date of
termination. Such severance shall be paid either as a lump sum or as salary
continuation, at the Company's discretion. In the event that the Employee is
terminated without Cause, 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. Accelerated vesting provisions do not apply to Additional
Restricted Stock. In addition, in the event that the Employee is terminated
without Cause, and if Employee timely elects COBRA coverage, the Company will
pay 100% of the premium costs of 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.
4. TERMINATION OBLIGATIONS.
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.
5. INVENTIONS AND PROPRIETARY INFORMATION; PROHIBITION ON THIRD PARTY
INFORMATION.
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.
(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 and identified as
such in writing to the Board. 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.
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.
6. LIMITED AGREEMENT NOT TO COMPETE OR SOLICIT.
6.1 NON-COMPETITION. During the term of this Agreement, and for 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 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.
7. ALTERNATIVE DISPUTE RESOLUTION.
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.
8. AMENDMENTS; WAIVERS; REMEDIES.
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.
9. ASSIGNMENT; BINDING EFFECT.
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.
10. SEVERABILITY.
If any provision of this Agreement shall be held by a court or
arbitrator to be invalid, unenforceable, or void, such provision shall be
enforced to the fullest extent permitted by law, and the remainder of this
Agreement shall remain in full force and effect. In the event that the time
period or scope of any provision is declared by a court or arbitrator of
competent jurisdiction to exceed the maximum time period or scope that such
court or arbitrator deems enforceable, then such court or arbitrator shall
reduce the time period or scope to the maximum time period or scope permitted by
law.
11. TAXES.
All amounts paid under this Agreement (including without limitation
Base Salary) shall be reduced by all applicable state and federal tax
withholdings and any other withholdings required by any applicable jurisdiction.
12. GOVERNING LAW.
The validity, interpretation, enforceability, and performance of this Agreement
shall be governed by and construed in accordance with the laws of the State of
New Jersey, without regard to New Jersey conflict of laws principles.
13. INTERPRETATION.
This Agreement shall be construed as a whole, according to its fair
meaning, and not in favor of or against any party. Sections and section headings
contained in this Agreement are for reference purposes only, and shall not
affect in any manner the meaning or interpretation of this Agreement. Whenever
the context requires, references to the singular shall include the plural and
the plural the singular.
14. OBLIGATIONS SURVIVE TERMINATION OF EMPLOYMENT.
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.
15. AUTHORITY.
Each party represents and warrants that such party has the right, power
and authority to enter into and execute this Agreement and to perform and
discharge all of the obligations hereunder; and that this Agreement constitutes
the valid and legally binding agreement and obligation of such party and is
enforceable in accordance with its terms.
16. ENTIRE AGREEMENT.
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.
GLOWPOINT, INC.
/s/ Xxxxx X. Xxxxxxxxxxxx /s/ Xxxxxx Xxxx
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Xxxxx X. Xxxxxxxxxxxx Xxxxxx Xxxx
President and CEO
