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Exhibit 10.33
AGREEMENT
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THIS AGREEMENT is made and entered into effective the 16th day of November,
1996, by and between XXXXX XXXXXX, of 00 Xxxxxxx Xxxxxx, Xxxxxxxxxx, Xxx
Xxxxxxxxx 00000, (hereinafter referred to as "Executive"), and SUMMA FOUR, INC.
of 00 Xxxxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxxxxx 00000, (hereinafter referred to
as the "Company").
RECITALS
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WHEREAS, Executive is a valued employee of the Company and is currently
Chairman, Chief Executive Officer, President and a member of the Board of
Directors of the Company;
WHEREAS, Executive desires to receive assurances concerning his continued
employment and the receipt of severance pay from the Company in the event of his
Resignation or Termination from the Company on grounds other than "for cause";
WHEREAS, the Company desires to secure Executive's services and provide
written severance pay assurances to Executive to induce him to continue his
service to the Company;
WHEREAS, the parties hereto desire to promote their mutual interests by
imposing certain restrictions and/or obligations on themselves.
NOW THEREFORE, in consideration of the mutual promises herein contained,
the parties hereto agree as follows:
1. EMPLOYMENT. Executive is employed as Chairman, Chief Executive Officer
and President for the period November 16, 1996 through January 1, 1997 or such
date as his successor as Chief
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Executive Officer and President begins employment ("Transition Date"). December
31, 1996. His salary during this period of time will remain at $19,750.00 per
month, prorated for any portion thereof, for an annual equivalent of
$237,000.00. However, the Company will pay additional compensation to reflect
Executive's increased responsibility equal to $136.98 per day from November 16,
1996 to the Transition Date paid at the time of his retirement as Chairman.
Effective on the Transition Date, Executive will retire from his positions
as Chief Executive Officer and President but shall remain Chairman and continue
as an employee of the Company. Effective on the Transition Date, his salary
shall be reduced to $15,625.00 per month for an annual equivalent of
$187,500.00. He shall continue in this position until the annual stockholders
meeting to be scheduled in July, 1997 at which time he will retire as Chairman
and an employee of the Company.
During the period from the Transition Date until the annual stockholders
meeting, Executive will perform those duties assigned to him by the Board of
Directors and/or Chief Executive Officer.
2. BOARD OF DIRECTORS MEMBERSHIP. Executive will continue as a member of
the Board of Directors until the next annual stockholders meeting and will be
nominated for reelection to the Board at that time. He will be considered an
outside director during the period of time he receives retirement compensation
payment under section 3 below. He will receive the normal
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compensation of an outside director for his services upon his reelection, but
will not receive stock options as a newly elected director as he is continuing
as a director. However, he will receive the annual grant of stock options to
outside directors beginning with the 1997 annual meeting.
3. RETIREMENT. Effective with his retirement on the date of the 1997 annual
stockholders meeting ("Retirement Date"), Executive shall begin to receive 18
months of retirement pay at the rate of $15,625.00 per month. During this time
period Executive will perform such consulting services as the Company shall
request up to a maximum of two (2) days a week.
4. RETIREMENT BENEFITS. Effective on the Retirement Date, the Compensation
Committee of the Board will accelerate vesting of Executive's stock options to
fully vest those options. The Compensation Committee will also vote to extend
Executive's existing life insurance, medical and dental insurance for a period
of three years from the Retirement Date. Continuation of disability insurance
coverage will be considered by the Committee at that time. On his Retirement
Date, Executive will receive payment for 240 hours of accrued carried over
vacation time plus any accrued and unused vacation for the period January 1,
1997 until his Retirement Date.
The Company will transfer ownership of the two facsimile machines, lap top
computer, pager and cellular telephone used by Executive to him effective on his
Retirement Date.
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5. SEVERANCE PAYMENTS. In the event that Executive's employment with the
Company is (a) terminated by the Company for any reason other than cause
("Termination"), Executive shall be entitled to receive monthly severance
payments from the Company for eighteen (18) months from the date of his
Termination, or (b) if Executive shall resign after a new President/Chief
Executive Officer has been appointed and at a time when he could not be
terminated for cause ("Resignation"), he shall be entitled to receive severance
payments from the Company for six (6) months from the date of his Resignation.
For purposes of this section, the monthly severance payments to be paid to
Executive shall be based upon his annual base salary with the Company as of the
date of Resignation or Termination. Additionally, in the event of Executive's
Resignation or Termination, the Company will maintain for a period of three (3)
years from the date of Resignation or Termination, then existing life, medical,
and dental insurance benefits. The Company will consider whether to continue
disability insurance coverage at the time of Executive's Resignation or
Termination.
6. BONUS PAYMENT. Executive shall not be entitled to payment of any bonus.
7. STOCK OPTIONS. In consideration of Executive's long years of service to
the Company, in the event of Executive's Resignation or Termination as provided
herein, all of Executive's outstanding unvested employee stock options shall
vest as of the
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date of Resignation or Termination.
Additionally, the Company will make available to Executive during calendar
1997 a loan to assist the Executive in exercising his options. The loan will be
for the additional income taxes payable as a result of exercising nonqualified
options due to expire in July, 1997 and for the amount of the purchase price of
the shares plus any alternative minimum tax occasioned by exercising and holding
the shares pursuant to exercise of incentive stock options. Executive will
execute a promissory note evidencing the loan, bearing interest at the
applicable Federal rate and payable at the earlier of one year from the date of
loan or the sale of any shares held by Executive as a result of the
aforementioned option exercises.
8. COMPANY DISCLAIMER OF LIABILITY. The Company's payment of severance pay
to Executive shall not in any way be construed as an admission by the Company
that it has acted wrongfully With respect to Executive, or that Executive has
any claims whatsoever against the Company, its officers, employees or agents.
9. RELEASE BY EXECUTIVE. In consideration of the Company's execution and
performance of its obligations under the Agreement, Executive does hereby
release, remise and forever discharge the Company, its successors, assigns,
officers, directors and employees from any and all causes of action, suit,
demand, and claims which arose against the Company during the time of or as a
result of Executive's employment with the Company of any nature whatsoever,
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known or unknown, suspected or unsuspected, including age, race, religion or
other forms of discrimination; or claims arising out of the Company's right to
terminate its employees; or claims for alleged personal injuries, emotional
distress and pain and suffering which arose out of Executive's employment with
the Company.
10. DEATH OR DISABILITY. Upon the death of Executive or Executive's total
disability as defined under the Company's disability insurance plan, Company
shall discontinue all of Executive's payments and benefits under this Agreement
and in lieu thereof shall make a lump sum payment to Executive's estate or
disabled Executive equal to six months of Executive's then existing salary.
11. GENERAL PROVISIONS. This Agreement sets forth the entire agreement
between the parties hereto, and fully supersedes any and all prior agreements
and understandings between the parties hereto pertaining to the subject matter
of this Agreement. This Agreement is made under the laws of the State of New
Hampshire and shall be construed according to New Hampshire law. This Agreement
may only be modified, amended or canceled by a written amendment signed by the
parties.
THE FOREGOING AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.
THE SIGNATURES BELOW ATTEST THAT THE PARTIES HAVE CAREFULLY READ THIS AGREEMENT.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year first above-mentioned.
SUMMA FOUR, INC.
By: /s/ Xxxxx X. Xxxxx, Xx. /S/ Xxxxx Xxxxxx
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Its: XXXXX XXXXXX
