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EXHIBIT 10.1
U.S. ROBOTICS ACCESS CORP.
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") made effective as of the 1st
day of January, 1997, by and between U.S. Robotics Access Corp., a Delaware
corporation (the "Company"), and XXXXX XXXXXX ("Xx. Xxxxxx").
RECITALS
WHEREAS, the Company is engaged in the business of designing,
manufacturing and selling data communications equipment, including modems, and
other high technology products; and
WHEREAS, Xx. Xxxxxx has acknowledged knowledge, skill and experience; and
WHEREAS, the Company desires to obtain the benefit of Xx. Xxxxxx'x
knowledge, skill, and experience and, therefore, is willing to engage the
services of Xx. Xxxxxx upon the terms set forth in this Agreement; and
WHEREAS, Xx. Xxxxxx is willing to render services to the Company and its
affiliates on the terms set forth herein;
AGREEMENTS
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the Company and Xx. Xxxxxx agree as follows:
1. EMPLOYMENT.
(a) EMPLOYMENT. The Company hereby employs Xx. Xxxxxx and Xx. Xxxxxx
hereby accepts employment by the Company, subject to the terms set forth in
this Agreement.
(b) EMPLOYMENT TERM. The term of Xx. Xxxxxx'x employment under this
Agreement ("Employment Term") shall begin on January 1, 1997, and shall
continue for a period of three (3) consecutive calendar years, unless
terminated sooner in accordance with this Agreement. On each January 1 during
the Employment Term, the Employment Term shall be automatically extended by an
additional one-year period unless a notice of non-extension is given by one
party to the other at least sixty (60) days prior to January 1.
(c) TITLE AND DUTIES. Xx. Xxxxxx'x title shall be Chairman of the Board
and Chief Executive Officer of the Company's parent corporation, U.S. Robotics
Corporation (the "Parent Corporation"), and he shall possess such powers and
duties normally incident to such position, as provided in the By-laws and in
accordance with Delaware General Corporation Law. Xx. Xxxxxx'x title and
duties may be changed at the discretion of the Board of Directors of the Parent
Corporation. During the Employment Term, Xx. Xxxxxx shall faithfully discharge
his duties and responsibilities in a diligent manner, devoting substantially
all of his working time to the affairs of the Parent Corporation and its
subsidiaries (collectively, "U.S. Robotics").
2. COMPENSATION AND RELATED MATTERS.
(a) SALARY. For services rendered by Xx. Xxxxxx to U.S. Robotics and upon
the condition that Xx. Xxxxxx fully and faithfully perform all of his duties
and obligations owed during the Employment Term under this Agreement, the
Company shall pay Xx. Xxxxxx an annual base salary equal to $950,000, payable
in twenty-six equal bi-weekly installments per year less income tax
withholdings and other normal employee deductions. This base salary set forth
herein shall be reviewed annually by the Stock Option and Compensation
Committee (the
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"Stock Option and Compensation Committee") of the Board of Directors of the
Parent Corporation at the end of each fiscal year of the Company beginning with
the fiscal year ending on or about September 30, 1997 (hereafter "Fiscal
Year"), or at such other times as deemed appropriate by the Stock Option and
Compensation Committee, and may, at the sole discretion of the Stock Option and
Compensation Committee, be increased by an amount which it deems appropriate.
(b) BONUSES. Xx. Xxxxxx shall be eligible to receive with respect to each
Fiscal Year during the Employment Term quarterly and annual bonuses under the
Parent Corporation's Senior Executive Performance Bonus Plan or a comparable
bonus program which would afford him the opportunity to earn a substantially
equivalent bonus, subject to the terms, conditions, and restrictions as set
forth in such bonus program. The minimum bonus target set for each Fiscal
Year shall not be less than an amount equal to the sum of the amounts of the
Threshold Bonus, the maximum Incremental Threshold Bonus and the Base Target
Bonus for him for the 1997 Fiscal Year as heretofore determined by the Stock
Option and Compensation Committee.
(c) STOCK OPTION PLAN. Xx. Xxxxxx shall be entitled to receive such
options to purchase the common stock of the Parent Corporation as shall be
granted by the Stock Option and Compensation Committee pursuant to the Parent
Corporation's Executive Officers and Directors Stock Option Plan.
(d) FRINGE BENEFITS. During the Employment Term, Xx. Xxxxxx shall be
eligible to receive reasonable amounts of paid, noncumulative vacation per
year, to be taken at a time or times reasonably agreeable to both Xx. Xxxxxx
and the Company, and shall be eligible to participate in and receive coverage
and benefits under all group insurance, pension, profit sharing, bonus, stock
option, stock ownership and other employee benefit plans, programs and
arrangements of U.S. Robotics which are now or hereafter adopted by U.S.
Robotics for the benefit of its senior executive employees, subject to and on a
basis consistent with the terms, conditions and overall administration of such
plans, programs and arrangements. U. S. Robotics shall not make any changes in
such plans, programs, and arrangements which would adversely affect Xx.
Xxxxxx'x (or, if Section 3 herein is applicable, his spouse's or dependents')
rights or benefits thereunder, unless such change occurs pursuant to a plan,
program or arrangement applicable to all senior executive employees of the
Parent Corporation and does not result in a proportionately greater reduction
in the rights of or benefits to Xx. Xxxxxx as compared with any other senior
executive employee of the Parent Corporation. The Company shall also provide
Xx. Xxxxxx with certain perquisites, payable at the Company's expense, which
are offered to other senior executive employees and which are reasonable,
necessary and in the best interests of U.S. Robotics.
(e) AUTOMOBILE ALLOWANCE. During the Employment Term, the Company shall
pay to Xx. Xxxxxx a monthly automobile allowance in the amount of $1,250, which
amount may be paid in periodic installments, not less frequently than monthly.
Such allowance may be reviewed by the Stock Option and Compensation Committee
at the end of each Fiscal Year, or at such other times as deemed appropriate by
the Stock Option and Compensation Committee, and may, at the sole discretion of
the Stock Option and Compensation Committee, be increased by an amount which it
deems appropriate. If such allowance is increased by the Stock Option and
Compensation Committee, it shall not be decreased thereafter during the
Employment Term.
(f) BUSINESS EXPENSES. The Company shall reimburse Xx. Xxxxxx for the
reasonable and necessary business expenses incurred by Xx. Xxxxxx in connection
with the performance of his duties and obligations as set forth herein during
the Employment Term. Such expenses shall include, but are not limited to,
cellular telephone expenses and all expenses of travel and living expenses
while away from home on business or at the request and in the service of the
Company, provided that such expenses are properly incurred and accounted for in
accordance with the applicable policies and procedures established by the
Company. Reimbursement shall be made upon the presentation by Xx. Xxxxxx to
the Company of reasonably detailed statements of such expenses.
(g) EFFECT OF SALARY AND OTHER BENEFITS. Salary payments pursuant to
Subsection (a) of this Section 2 shall not be deemed exclusive and shall not
prevent Xx. Xxxxxx from participating in any other compensation or benefit
plan, program or arrangement of U.S. Robotics as provided in this Section 2.
Such salary payments (including any increased salary payments) shall not in any
way limit or reduce any other obligation of the Company pursuant to this
Agreement, and no other compensation, benefit or payment hereunder shall in any
way limit or
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reduce the obligation of the Company to pay Xx. Xxxxxx'x salary pursuant to
Subsection (a) of this Section 2. At the same time, nothing paid to Xx. Xxxxxx
under any benefit plan, program, or arrangement under this Section 2, which is
presently in effect or made available in the future, shall be deemed to be in
lieu of the salary payable to Xx. Xxxxxx pursuant to Subsection (a) of this
Section 2.
(h) PRORATION OF COMPENSATION. Any compensation payable to Xx. Xxxxxx
under this Section 2, in respect of any Fiscal Year during which the Employment
Term terminates prior to the last day of such Fiscal Year shall, unless
otherwise provided in the applicable plan, program or arrangement, be prorated
in accordance with the number of days in such Fiscal Year during which he is so
employed.
3. BENEFITS FOLLOWING EMPLOYMENT TERM OR TERMINATION. For a period of
three (3) years following the Date of Termination of the Employment Term, other
than as provided in Subsection (a) (cause) of Section 5 herein, the Company
shall permit, at the Company's expense, Xx. Xxxxxx, his spouse and dependents,
as applicable (the "Benefit Participants"), to participate in all group medical
and health insurance plans and employee benefit plans (including fringe
benefits), programs, and arrangements now or hereafter made available to the
senior executive employees of the Parent Corporation (the "Plans") (including
but not limited to such Plans in which Xx. Xxxxxx was entitled to participate
immediately prior to the Date of Termination), in the same manner as provided
to its other senior executive employees; provided, however, that this Section 3
shall not apply in the event that (i) U.S. Robotics shall hereafter terminate
the applicable Plan, or (ii) the participation of the Benefit Participants in
such Plan is prohibited by law or, if applicable, would disqualify such Plan as
a tax qualified plan pursuant to the Internal Revenue Code of 1986, as amended,
or any successor thereto (the "Code"), or (iii) the participation of the
Benefit Participants violates the general terms and provisions of such
applicable Plan. In the event that any of the Benefit Participants'
participation in such Plans is prohibited by law or, if applicable, would
disqualify the Plan as a tax qualified plan, the Company shall permit the
Benefit Participants to acquire substantially comparable coverage or benefits,
at the Company's expense, from a source of Xx. Xxxxxx'x or his spouse's
choosing, notwithstanding the fact that such coverage or benefit will result in
a higher cost than if provided under a U.S. Robotics Plan. However, in no
event will the Benefit Participants receive from the Company the coverage and
benefits contemplated by this Section 3 if the Benefit Participants receive
such coverage and benefits from any other source.
4. COMPENSATION UPON TERMINATION OR DURING DISABILITY.
(a) COMPENSATION UPON TERMINATION FOR CAUSE. If the Employment Term shall
be terminated "for cause," as provided in Subsection (a) of Section 5 herein,
the Company shall have no further liability under this Agreement except to pay
Xx. Xxxxxx (i) the value of any accrued salary or other compensation due to Xx.
Xxxxxx pursuant to Section 2 herein (including any earned but unpaid bonus
payment or prorata share of such earned bonus payment, but excluding deferred
bonus payments based upon annual Fiscal Year performance), upon the date of
delivery of Notice of Termination to Xx. Xxxxxx, at the rate in effect at the
time such Notice of Termination is delivered, and (ii) any benefits payable
under all employee benefit plans, programs and arrangements of U.S. Robotics in
which Xx. Xxxxxx is a participant on the date of delivery of Notice of
Termination.
(b) COMPENSATION UPON DEATH. If the Employment Term is terminated by Xx.
Xxxxxx'x death, the Company shall have no further liability under this
Agreement except to pay Xx. Xxxxxx'x spouse, or if he leaves no spouse, to his
estate or devisee, legatee or other designee, as applicable, (i) the value of
any accrued salary or other compensation due to Xx. Xxxxxx pursuant to Section
2 herein (including any earned but unpaid bonus payment or prorata share of
such earned bonus payment, but excluding deferred bonus payments based upon
annual Fiscal Year performance), at the time of his death, (ii) an amount
equal to the next six (6) bi-weekly salary payments payable to Xx. Xxxxxx under
Subsection (a) of Section 2 herein at the time of his death, payable on the
dates when such payments would otherwise have been made had Xx. Xxxxxx'x death
not occurred, (iii) any death benefit payable under all employee benefit plans,
programs and arrangements of U.S. Robotics in which Xx. Xxxxxx is a participant
on the date of his death, and (iv) any Plan coverage or benefit continuation
for Xx. Xxxxxx'x spouse and dependents, as applicable, under Section 3 herein.
(c) COMPENSATION UPON DISABILITY. During any period that Xx. Xxxxxx fails
to perform his duties hereunder as a result of incapacity due to an "impaired
condition," as such term is defined in Subsection (c) of
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Section 5 herein (the "disability period"), Xx. Xxxxxx shall continue to
receive his full salary at the rate then in effect for the disability period
until the Employment Term is terminated pursuant to Subsection (c) of Section 5
herein; provided, however, that such salary payments so made to Xx. Xxxxxx
pursuant hereto shall be reduced by the sum of the amounts, if any, payable to
Xx. Xxxxxx prior to or during this period, as the result of such incapacity,
under any disability benefit plan or insurance program of U.S. Robotics in
which Xx. Xxxxxx participates.
In the event of termination of the Employment Term pursuant to Subsection
(c) (disability) of Section 5 herein, the Company shall have no further
responsibilities under this Agreement except (i) to pay the value of any
accrued salary or other compensation due under Section 2 herein (including any
earned but unpaid bonus payment or prorata share of such earned bonus payment,
but excluding deferred bonus payments based upon annual Fiscal Year
performance), on the Date of Termination to Xx. Xxxxxx (or in the event of Xx.
Xxxxxx'x subsequent death, to his estate or devisee, legatee or other designee,
as applicable), together with any benefits payable under all employee benefit
plans, programs or arrangements of U.S. Robotics in which Xx. Xxxxxx is a
participant on the Date of Termination, (ii) to pay the value of any severance
compensation owed to Xx. Xxxxxx (or in the event of Xx. Xxxxxx'x subsequent
death, to his estate or devisee, legatee or other designee, as applicable), as
set forth in Subsection (f)(i) of this Section 4 (which shall survive the
termination of the Employment Term) and (iii) to provide for any Plan coverage
or benefit continuation for Xx. Xxxxxx, his spouse and dependents, as
applicable under Section 3 herein.
(d) COMPENSATION UPON TERMINATION BY XX. XXXXXX. If Xx. Xxxxxx terminates
the Employment Term due to "impaired health" or for Good Reason, as such terms
are defined in Subsection (d) of Section 5 herein, the Company shall have no
further responsibility under this Agreement except (i) to pay the value of any
accrued salary or other compensation due under Section 2 herein (including any
earned but unpaid bonus payment or prorata share of such earned bonus payment,
but excluding deferred bonus payments based upon annual Fiscal Year
performance), on the Date of Termination to Xx. Xxxxxx (or in the event of Xx.
Xxxxxx'x subsequent death, to his estate or devisee, legatee or other designee,
as appropriate), together with any benefits payable under all employee benefit
plans, programs or arrangements of U.S. Robotics in which Xx. Xxxxxx is a
participant on the Date of Termination, (ii) to pay the value of any severance
compensation owed to Xx. Xxxxxx (or in the event of Xx. Xxxxxx'x subsequent
death, to his estate or devisee, legatee or other designee, as appropriate), as
set forth in Subsection (f) of this Section 4 (which shall survive the
termination of the Employment Term) and (iii) to provide for any Plan coverage
or benefit continuation for Xx. Xxxxxx, his spouse and dependents, as
applicable, under Section 3 herein.
(e) COMPENSATION UPON TERMINATION BY COMPANY. If the Company breaches
this Agreement by terminating the Employment Term, other than pursuant to
Subsections (a) (cause), (b) (death), or (c) (disability) of Section 5 herein,
including but not limited to termination without "cause" (as such term is
defined in Subsection (a) of Section 5 herein), the Company shall (i) pay the
value of any accrued salary or other compensation due under Section 2 herein
(including any earned but unpaid bonus payment or prorata share of such earned
bonus payment, but excluding deferred bonus payments based upon annual Fiscal
Year performance), on the Date of Termination to Xx. Xxxxxx (or in the event of
Xx. Xxxxxx'x subsequent death, to his estate or devisee, legatee or other
designee, as appropriate), together with any benefits payable under all
employee benefit plans, programs or arrangements of U.S. Robotics in which Xx.
Xxxxxx is a participant on the Date of Termination, (ii) pay the value of any
severance compensation owed to Xx. Xxxxxx (or in the event of Xx. Xxxxxx'x
subsequent death, to his estate or devisee, legatee or other designee, as
appropriate), as set forth in Subsection (f) of this Section 4 (which shall
survive the termination of the Employment Term) and (iii) provide for any Plan
coverage or benefit continuation for Xx. Xxxxxx, his spouse and dependents, as
applicable, under Section 3 herein.
(f) SEVERANCE COMPENSATION.
(i) TERMINATION DUE TO DISABILITY OR IMPAIRED HEALTH. Upon the
termination of the Employment Term under Subsection (c) (disability) of
Section 5 herein or upon the termination of the Employment Term by Xx.
Xxxxxx due to "impaired health" (as such term is defined in Subsection
(d) of Section 5 herein), the Company shall pay to Xx. Xxxxxx (or in the
event of Xx. Xxxxxx'x subsequent death, his estate or devisee, legatee or
other designee, as appropriate) all compensation and benefits specified
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under Section 2 herein, for a period of one (1) year from the Date of
Termination, payable in the same manner as if the Employment Term had not
been terminated.
(ii) TERMINATION BY COMPANY OR BY XX. XXXXXX FOR GOOD REASON. If
the Company breaches this Agreement by terminating the Employment Term,
other than pursuant to Subsections (a) (cause), (b) (death) or (c)
(disability) of Section 5 herein, including but not limited to
termination without "cause" (as such term is defined in Subsection (a) of
Section 5 herein), or if Xx. Xxxxxx terminates the Employment Term for
Good Reason, as such term is defined in Subsection (d)(i) of Section 5
herein, then the Company shall pay as severance compensation to Xx.
Xxxxxx an amount equal to (1) Xx. Xxxxxx'x annual base salary in effect
as of the Date of Termination, multiplied by three, plus (2) the sum of
the annual cash bonuses actually received by Xx. Xxxxxx with respect to
the previous three Fiscal Years of U.S. Robotics, less the amount of cash
bonuses, if any, theretofore paid to him with respect to the Fiscal Year
in which such termination occurs. Such severance compensation shall be
payable in cash in a lump sum on or before the fifteenth (15th) day
following the Date of Termination; provided, however, that where Sections
280G and Section 4999 of the Internal Revenue Code of 1986, as amended,
or any successor thereto (the "Code") are applicable, then such severance
pay shall amount to one dollar less than the maximum amount that Xx.
Xxxxxx may receive without having such payment be treated as an excess
parachute payment under Section 280G of the Code. Such severance
compensation shall not be subject to mitigation or offset due to other
earnings of Xx. Xxxxxx.
5. TERMINATION.
(a) CAUSE. The Employment Term may be terminated at any time at the
option of the Company "for cause" (as such term is hereinafter defined),
effective upon the giving of written notice of termination to Xx. Xxxxxx. As
used herein, the term "for cause" shall mean and be limited to: (i) any felony
conviction, (ii) willful misconduct or gross negligence in connection with the
performance of Xx. Xxxxxx'x duties, responsibilities, agreements and covenants
hereunder, which shall continue for a period of thirty (30) days after the
receipt of notice from the Company, (iii) refusal to comply with reasonable
rules, regulations, policies, directions and restrictions as may be established
from time to time by the Board, whereby such refusal continues for thirty (30)
days after the receipt of notice from the Company, or (iv) repeated abuse
(following at least one written warning from the Company) of alcohol or any
illegal use of narcotics or other controlled substances.
If Xx. Xxxxxx is advised that he is being terminated for cause and, within
fifteen (15) days thereafter submits to the Board of Directors of the Parent
Corporation a written objection to such determination, this Subsection will not
be applicable unless the Board of Directors of the Parent Corporation, at or
before its next regularly scheduled meeting, determines by majority vote that
Xx. Xxxxxx has been terminated for cause.
(b) DEATH. The Employment Term shall terminate automatically upon the
death of Xx. Xxxxxx.
(c) DISABILITY. In the event Xx. Xxxxxx becomes mentally or physically
"disabled" during the Employment Term, the Employment Term shall terminate on
the Date of Termination (as such term is defined in Subsection (f) of this
Section 5) once such disability is "established." As used in this Subsection,
the term "disabled" means suffering from any mental or physical condition,
other than that resulting from the use of alcohol or illegal use of narcotics
or other controlled substances, which renders Xx. Xxxxxx unable to
substantially perform all of his material duties and services under this
Agreement in a satisfactory manner (an "impaired condition") for a period of
one hundred twenty (120) consecutive days or for more than one hundred eighty
(180) days in any twelve (12) month period. For purposes of this Subsection,
the date that Xx. Xxxxxx'x disability is "established" shall be, in the case of
an impaired condition which exists for a period of one hundred twenty (120)
consecutive days, the one hundred twenty-first (121) day on which such impaired
condition exists, and, in the case of an impaired condition existing for more
than one hundred eighty (180) days in any twelve (12) month period, the one
hundred eighty-first (181) day on which such impaired condition exists.
(d) TERMINATION BY XX. XXXXXX. Xx. Xxxxxx may terminate the Employment
Term (1) for Good Reason, or (2) if his health should become impaired to an
extent that makes his continued performance of his duties
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and obligations hereunder hazardous to his physical or mental health or his
life ("impaired health"), provided that Xx. Xxxxxx shall have furnished the
Company with a written statement from a qualified doctor to such effect and
provided, further, that, at the Company's request, Xx. Xxxxxx shall submit to
an examination by a doctor selected by the Company and such doctor shall have
concurred in the conclusion of Xx. Xxxxxx'x doctor, or (3) voluntarily, without
Good Reason and not due to "impaired health." In the event that Xx. Xxxxxx
voluntarily terminates the Employment Term without Good Reason and not due to
"impaired health", such termination shall be treated as if it were a
termination "for cause" by the Company.
(i) GOOD REASON DEFINED. For purposes of this Agreement, "Good
Reason" shall mean:
a. a Change in Control of the Parent Corporation (as defined
in Subsection (d)(ii) below), with termination of the Employment
Term occurring within one year following such Change in Control;
b. a decrease in the total amount of Xx. Xxxxxx'x base salary
below its level in effect on the date hereof, as provided in
Subsection (a) of Section 2 herein;
c. a reduction in Xx. Xxxxxx'x title, duties, job
responsibilities or working conditions without Xx. Xxxxxx'x
consent, whereby the determination of whether a reduction in such
title, duties, job responsibilities or working conditions is in the
sole discretion of Xx. Xxxxxx;
d. a failure by the Company to comply with any material
provision of this Agreement which has not been cured within ten
(10) days after notice of such noncompliance has been given by Xx.
Xxxxxx to the Company; or
e. any purported termination of Xx. Xxxxxx'x employment which
is not effected pursuant to a Notice of Termination satisfying the
requirements of Subsection (e) of this Section 5 (and for purposes
of this Agreement no such purported termination shall be
effective).
For the purpose of this Subsection (d)(i), no action or inaction by
Xx. Xxxxxx within ninety (90) days following the occurrence of the
foregoing events shall be deemed a consent by Xx. Xxxxxx to such events,
absent written consent from Xx. Xxxxxx to the Company.
(ii) CHANGE IN CONTROL DEFINED. A "Change in Control" shall be
deemed to have occurred:
a. upon any "person" as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934 (the "Exchange
Act") (other than U.S. Robotics, any trustee or other fiduciary
holding securities under any employee benefit plan of U.S.
Robotics, or any company owned, directly or indirectly, by the
stockholders of the Parent Corporation in substantially the same
proportions as their ownership of common stock of the Parent
Corporation), becoming the owner (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the
Parent Corporation representing twenty-five percent (25%) or more
of the combined voting power of the Parent Corporation's then
outstanding securities;
b. during any period of two consecutive years, individuals
who at the beginning of such period constitute the Board of
Directors, and any new director (other than a director designated
by a person who has entered into an agreement with the Parent
Corporation to effect a transaction described in paragraph (a), (c)
or (d) of this Subsection or a director whose initial assumption of
office occurs as a result of either an actual or threatened
election contest (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act) or other actual
or threatened solicitation of proxies or contests by or on behalf
of a person other than the Board of Directors of the Parent
Corporation) whose election by the Board of Directors or nomination
for election by the Parent Corporation's stockholders was approved
by a vote of at least two-thirds of the directors then still in
office who either were directors at the beginning of the two-year
period
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or whose election or nomination for election was previously so
approved, cease for any reason to constitute at least a majority of
the Board of Directors;
c. upon the merger or consolidation of the Parent Corporation
with any other corporation, other than a merger or consolidation
which would result in the voting securities of the Parent
Corporation outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) more than fifty
percent (50%) of the combined voting power of the voting securities
of the Parent Corporation or such surviving entity (which entity
shall thereafter be the "Parent Corporation" as defined herein)
outstanding immediately after such merger or consolidation;
provided, however, that a merger or consolidation effected to
implement a recapitalization of the Parent Corporation (or similar
transaction) in which no person (other than those covered by the
exceptions in (a) above) acquires more than twenty-five percent
(25%) of the combined voting power of the Parent Corporation's then
outstanding securities shall not constitute a Change in Control of
the Parent Corporation; or
d. the stockholders of the Parent Corporation approve a plan
of complete liquidation of the Company or an agreement for the sale
or disposition by the Parent Corporation of all or substantially
all of the Parent Corporation's assets other than the sale of all
or substantially all of the assets of the Parent Corporation to a
person or persons who beneficially own, directly or indirectly, at
least fifty percent (50%) or more of the combined voting power of
the outstanding voting securities of the Parent Corporation at the
time of the sale.
(E) NOTICE OF TERMINATION. Any termination of the Employment Term by the
Company or by Xx. Xxxxxx (other than termination pursuant to Subsection (b)
(death) of this Section 5) shall be communicated by written Notice of
Termination to the other party hereto. For purposes of this Agreement, a
"Notice of Termination" shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Employment Term under the Section and Subsection so
indicated.
(F) DATE OF TERMINATION. "Date of Termination" shall mean the following:
if the Employment Term is terminated by (i) Subsection (a) (cause) of this
Section 5, the date specified in the Notice of Termination, (ii) Subsection (b)
(death) of this Section 5, the date of Xx. Xxxxxx'x death, (iii) Subsection (c)
(disability) of this Section 5, thirty (30) days after Notice of Termination is
given (provided that Xx. Xxxxxx shall not have returned to the satisfactory
performance of his duties on a full-time basis during such thirty (30) day
period), and (iv) if for any other reason, the date on which a Notice of
Termination is given; provided, however, that if, within (30) days after any
Notice of Termination is given, the party receiving such Notice of Termination
notifies the other party that a dispute exists concerning the termination, the
Date of Termination shall be the date on which the dispute is finally
determined, either by mutual agreement of the parties, by a binding and final
arbitration award or by a final judgment, order or decree of a court of
competent jurisdiction (the time for appeal therefrom having expired and no
appeal having been perfected).
6. OTHER BUSINESS ACTIVITIES. During the Employment Term, Xx. Xxxxxx
shall not, without the prior written authorization of the Board of Directors of
the Parent Corporation, directly or indirectly render services of a business,
professional or commercial nature (whether for compensation or otherwise) to
any person or entity competitive or adverse to U.S. Robotics' business welfare
or engage in any activity whether alone, as a partner, or as an officer,
director, employee, consultant, independent contractor, or stockholder in any
other corporation, person, or entity which is competitive with or adverse to
U.S. Robotics' business welfare. This Section 6 shall not, however, prevent
Xx. Xxxxxx from investing in securities issued by any such competitive or
adverse corporation, provided the holdings thereof by Xx. Xxxxxx do not
constitute more than five percent (5%) of any one class of such securities.
7. CONFIDENTIAL INFORMATION.
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(a) DISCLOSURE AND USE. Xx. Xxxxxx shall not disclose or use at any time,
either during or subsequent to the Employment Term, any trade secrets or other
confidential information, whether patentable or not, of U.S. Robotics,
including but not limited to, any technical or non-technical data, any
formula, pattern, compilation, program, device, method, technique, drawing,
process, financial data, or any list of actual or potential customers or
suppliers, of which Xx. Xxxxxx is or becomes informed or aware during the
Employment Term, whether or not developed by Xx. Xxxxxx, except (i) as may be
reasonably required for Xx. Xxxxxx to perform Xx. Xxxxxx'x employment duties
with U.S. Robotics, (ii) to the extent such information becomes generally
available to the public through no wrongful act of Xx. Xxxxxx, (iii)
information which has been disclosed as a result of a subpoena or other legal
process, provided that Xx. Xxxxxx has provided the Company with prompt written
notice of the receipt thereof, or (iv) unless Xx. Xxxxxx shall first secure the
Company's prior written authorization. This covenant shall survive the
termination of Xx. Xxxxxx'x employment hereunder, and shall remain in effect
and be enforceable against Xx. Xxxxxx for so long as any such U.S. Robotics
secret or confidential information retains economic value, whether actual or
potential, from not being generally known to other persons who can obtain
economic value from its disclosure or use. Xx. Xxxxxx agrees to execute such
further agreements and/or confirmations of Xx. Xxxxxx'x obligations to U.S.
Robotics concerning non-disclosure of U.S. Robotics trade secrets and
confidential information as U.S. Robotics may reasonably require from
time-to-time.
(b) RETURN OF MATERIALS. Upon termination of the Employment Term, Xx.
Xxxxxx (or in the event of termination due to Xx. Xxxxxx'x death, his estate or
devisee, legatee or other designee, as applicable) shall promptly deliver to
the Company all materials of a secret or confidential nature relating to U.S.
Robotics' business, which are in the possession or under the control of Xx.
Xxxxxx.
8. INVENTIONS AND DISCOVERIES. Xx. Xxxxxx hereby assigns to the Company
or its designee all of Xx. Xxxxxx'x rights, title and interest in and to all
inventions, discoveries, processes, designs, works of authorship and other
intellectual property and all improvements on existing inventions, discoveries,
processes, designs, works and other intellectual property made or discovered by
Xx. Xxxxxx during the Employment Term. Promptly upon the development, making,
creation, or discovery of any invention, discovery, process, design, work,
intellectual property or improvement, Xx. Xxxxxx shall disclose the same to the
Company and shall execute and deliver to the Company or its designee such
reasonable documents as the Company may request to confirm the assignment of
Xx. Xxxxxx'x rights therein, and if requested by the Company, shall assist the
Company or its designee in applying for and prosecuting any patents and any
trademark or copyright registration which may be available in respect thereof.
Any invention, discovery or other work for which none of U.S. Robotics'
equipment, supplies, facilities, or confidential information was used and which
was developed entirely on Xx. Xxxxxx'x own time, is exempted from this Section
8 so long as it (i) does not relate in any way to U.S. Robotics' business, or
actual or demonstrably anticipated research and development; and (ii) does not
result in any way from Xx. Xxxxxx'x work for U.S. Robotics.
9. SEVERABILITY. If any provision of this Agreement is held invalid or
unenforceable, either in its entirety or by virtue of its scope or application
to given circumstances, such provision shall thereupon be deemed (i) modified
only to the extent necessary to render the same valid, or (ii) not applicable
to given circumstances, or (iii) excised from this Agreement, as the situation
may require, and this Agreement shall be construed and enforced as if such
provision had been included herein as so modified in scope or application, or
had not been included herein, as the case may be.
10. ARBITRATION OF DISPUTES. In the event of any controversy among the
parties hereto arising out of, or relating to, this Agreement which cannot be
settled amicably by the parties (other than a controversy contemplated by
Sections 6, 7, 8 and 11 herein), such controversy shall be submitted to binding
arbitration. Either the Company or Xx. Xxxxxx may institute such arbitration
proceeding by giving written notice to the other party and by designating one
independent arbitrator. Unless such independent arbitrator alone is acceptable
to the other party, such other party shall designate within ten (10) days
following receipt of such notice, a second independent arbitrator, and such two
arbitrators shall thereafter select a third independent arbitrator. A hearing
shall be held by the arbitrator or arbitrators in the City of Chicago,
Illinois, and a decision of the matter so submitted shall be rendered promptly
in accordance with the rules of the American Arbitration Association. The
decision of the
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arbitrator or, if more than one, a majority of the arbitrators shall be final
and binding upon all parties hereto. Judgment upon the award rendered may be
entered in any court having jurisdiction thereof. The cost of the arbitration
shall be borne by the Company.
11. ENFORCEMENT. The Company will be entitled to institute proceedings
and avail itself of all remedies at law or in equity to recover damages
occasioned by a breach or threatened breach of any of the provisions of this
Agreement by Xx. Xxxxxx and shall have the right to pursue one or more of such
proceedings and remedies simultaneously or from time to time. Xx. Xxxxxx
hereby acknowledges that the Company would suffer irreparable injury if the
provisions of Sections 6, 7 and 8 herein, which shall survive the termination
of this Agreement, were breached and that the Company's remedies at law would
be inadequate in the event of such breach or threatened breach. Accordingly,
Xx. Xxxxxx hereby agrees that any such breach or threatened breach may, in
addition to any and all other available remedies, be preliminarily and
permanently enjoined by any court of competent jurisdiction without any
requirement that the Company post a bond.
12. LEGAL FEES AND EXPENSES. In the event of litigation or arbitration
proceeding under this Agreement, both the Company and Xx. Xxxxxx shall pay
their own attorneys' fees and other legal expenses; provided, however, that (i)
the Company shall pay Xx. Xxxxxx'x attorneys' fees and legal expenses in
connection with any proceeding which results in a court refusing to issue a
preliminary or permanent injunction against Xx. Xxxxxx due to his alleged
breach or threatened breach of any provision of this Agreement, and (ii) the
Company shall pay the reasonable legal fees and expenses which Xx. Xxxxxx may
incur in connection with the enforcement of this Agreement in connection with
the termination of the Employment Term under Subsections (c) (disability) and
(d) (termination by Xx. Xxxxxx for Good Reason) of Section 5 herein or due to
the termination of the Employment Term by the Company for any reason other than
as provided in Section 5 herein, including but not limited to termination
without "cause" as such term is defined in Subsection (a) of Section 5 herein.
Such fees and expenses shall be paid in cash within forty-five (45) days
after the submission to the Company's Secretary, and inquiry into the
reasonableness of such fees and expenses shall not delay such payment.
13. GENERAL PROVISIONS.
(a) NOTICES. Any notice, request, demand or other communication required
or permitted to be given hereunder shall be in writing and personally delivered
or sent by registered or certified mail, return receipt requested, or by a
facsimile, telegram or telex followed by a confirmation letter sent by
registered or certified mail, return receipt requested, addressed as follows:
To the Company: U.S. Robotics Corporation
0000 XxXxxxxxx Xxxx.
Xxxxxx, Xxxxxxxx 00000
Attention: Vice President of Human Resources
cc: General Counsel
To Xx. Xxxxxx: Xx. Xxxxx Xxxxxx
[Omitted]
Either the Company or Xx. Xxxxxx may, at any time, by notice to the other,
designate another address for service of notice on such party. When the
letter, facsimile, telegram or telex is dispatched as provided for above, the
notice shall be deemed to be made when the addressee receives the letter,
facsimile, telegram or telex, or upon the third (3rd) business day after the
date it is sent, whichever is earlier.
(b) AMENDMENTS. Neither this Agreement nor any of the terms or conditions
hereof may be waived, amended or modified except by means of a written
instrument duly executed by the party to be charged therewith.
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(c) CAPTIONS AND HEADINGS. The captions and Section headings used in this
Agreement are for convenience of reference only, and shall not affect the
construction or interpretation of this Agreement or any of the provisions
hereof.
(d) GOVERNING LAW. This Agreement, and all matters or disputes relating
to the validity, construction, performance or enforcement hereof, shall be
governed, construed and controlled by and under the laws of the State of
Illinois without regard to principles of conflicts of law.
(e) SUCCESSORS AND ASSIGNS. In light of the unique personal services to
be performed by Xx. Xxxxxx hereunder, it is acknowledged and agreed that any
purported or attempted assignment or transfer by Xx. Xxxxxx of this Agreement
or any of Xx. Xxxxxx'x duties, responsibilities, or obligations hereunder
shall be void. The Company shall not assign this Agreement to any third party
entity which is not affiliated with the Company, the Parent Corporation or any
of their direct or indirect subsidiaries. Subject to the foregoing, this
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective heirs, executors, administrators, personal
representatives, successors and permitted assigns.
(f) COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original hereof, but all
of which together shall constitute one and the same instrument.
(g) ENTIRE AGREEMENT. Except as otherwise set forth or referred to in
this Agreement, this Agreement constitutes the sole and entire agreement and
understanding between the parties hereto as to the subject matter hereof, and
supersedes all prior discussions, agreements and understandings of every kind
and nature between them as to such subject matter.
(h) RELIANCE BY THIRD PARTIES. This Agreement is intended for the sole
and exclusive benefit of the parties hereto and their respective heirs,
executors, administrators, personal representatives, successors and permitted
assigns, and no other person or entity shall have any right to rely on this
Agreement or to claim or derive any benefit therefrom absent the express
written consent of the party to be charged with such reliance or benefit.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
U.S. ROBOTICS ACCESS CORP.
ATTEST:
/s/ XXXXXX X. XXXXXXX By: /s/ XXXX XXXXXXXXX
Xxxxxx X. Xxxxxxx, Secretary Xxxx XxXxxxxxx, Chief Operating Officer
/s/ XXXXX XXXXXX
Xxxxx Xxxxxx
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