Exhibit 10.16
EMPLOYMENT AGREEMENT
This Agreement ("Agreement") is made and entered into this 12th day of
May, 1999, by and between Elastic Networks, Inc., a Delaware corporation
("Elastic"), with its principal place of business at 0000 Xxxxxxxx Xxxxxxx,
Xxxxx 000, Xxxxxxxxxx, Xxxxxxx 00000, and Xxxxxxx X. Xxxxxxxx, an individual
residing at 0000 Xxxxxxx Xxx, Xxxxxxxxxx, Xxxxxxx 00000 ("Executive").
WITNESSETH:
WHEREAS, Elastic shall employ employees to conduct its business on the
Commencement Date:
WHEREAS, conditioned upon the closing of the Private Placement, Elastic
desires to employ the Executive during the Term under the terms and
conditions set forth in this Agreement;
WHEREAS, the Executive desires to accept employment with Elastic during
the Term on the terms and conditions set forth in this Agreement;
WHEREAS, it is a condition precedent to the closing of the agreements
related to the Private Placement that Elastic and the Executive enter into
this Agreement;
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by the parties
hereto, the Executive and Elastic agree as follows:
1. Definitions.
For purposes of this Agreement, the following terms shall have the
meanings set forth below:
(a) "Acquisition Event" shall mean: (1) any merger or consolidation
which results in the voting securities of Elastic outstanding
immediately prior thereto representing immediately thereafter
(either by remaining outstanding or by being converted into voting
securities of the surviving or acquiring entity) less than 50% of
the combined voting power of the voting securities of Elastic or
such surviving or acquiring entity outstanding immediately after
such merger or consolidation; (ii) any sale of all or substantially
all of the assets of Elastic; or (iii) the complete liquidation of
Elastic. Notwithstanding the foregoing, the election of any
Purchaser (as defined in the Right of First Offer Agreement) to sell
its shares (as defined in the Right of First Offer Agreement) to
Nortel Networks, Inc. pursuant to Section 6 of the Right of First
Offer Agreement, and the purchase of any such Shares by Nortel
Networks Inc., shall not be deemed to be an Acquisition Event.
(b) "Agreement" shall have the meaning set forth in the preamble hereto.
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(c) "Award" shall mean Options, restricted stock, or other stock based
awards under the Plan.
(d) "Board" shall mean the Board of Directors of Elastic
(e) "Cause" shall mean (i) the Executive's material breach of this
Agreement, which includes, but is not limited to, a breach of
Sections 9 or 10 of this Agreement or any sub-section thereof,
(ii) a good faith finding by the Board of the Executive's
dishonesty, fraud, malfeasance, gross negligence or willful
misconduct with respect to Elastic or any Co-Employer, (iii) the
Executive's continued failure to satisfactorily perform his duties
with the Company to follow the lawful direction (consistent with the
Executive's duties) of the Board or to follow the established and
lawful policies, procedures and rules of Elastic or any Co-Employer
(other than any such failure resulting from incapacity due to mental
or physical illness or injury that is certified by a physician
satisfactory to Elastic); or (iv) Executive's indictment for (or
similar finding of probable cause with respect to the Executive's
commission of) or conviction of or the Executive's entry of a
pleading of guilty or nolo contendere to, a crime involving moral
turpitude or a felony (other than an offense based solely on a
traffic violation.) With respect to clauses (ii) and (iii) above,
prior to terminating the Executive for Cause as provided in Section
8(a)(1) hereof, the Board shall deliver a written notice to the
Executive stating in reasonable detail the facts and circumstances
regarding the Executive's offense or failure and provide the
Executive with sixty calendar (60) days to correct such offense or
failure; PROVIDED, HOWEVER, that no such notice shall be required,
and the Board may immediately terminate the Executive for Cause,
if the Board in good faith determines that the Executive's offense or
failure is or is likely to be immediately or materially injurious to
Elastic or the Co-Employer or Executive has previously received a
written notice of an offense or failure under clause (ii) or (iii)
above in the twelve (12) month period immediately preceding the
occurrence of the offense or failure at issue. The Executive shall
not participate in the Board's determinations regarding Cause with
respect to the Executive even if the Executive is a member of the
Board.
(f) "Code" shall mean the Internal Revenue Code of 1986, as amended, and
any regulations promulgated thereunder.
(g) "Co-Employer" shall mean that third party, if any, which pursuant to
an agreement with Elastic, provides certain human resources and
payroll services with respect to Elastic employees and, with regard
to such services, is viewed as the employer of Elastic employees.
(h) "Commencement Date" shall mean the day immediately following closing
of Private Placement.
(i) "Developments" shall have the meaning set forth in Section 10(b)(1)
of this Agreement.
(j) "Disability" shall mean the inability of the Executive to perform
the duties set forth in Section 3 of this Agreement because of an
illness or accidental injury for a period of one hundred eighty
(180) calendar days, whether or not consecutive, during any three
hundred sixty (360) calendar day period, as certified by a physician
satisfactory to Elastic and the Executive. If Elastic and the
Executive do not agree on a physician, the Executive and Elastic
shall each
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select a physician and those two (2) physicians shall together select
a third physician, whose determination as to disability shall be
binding on all parties.
(k) "Elastic" shall have the meaning set forth in the preamble to this
Agreement.
(l) "Elastic's Affiliates" shall mean any individual or entity that
directly or indirectly, through one or more intermediaries,
controls, is controlled by or is under common control with Elastic.
For purposes of this definition, "control" means the power to direct
the management and policies of another, whether through the
ownership of voting securities, by contract or otherwise.
(m) "Employment Period" shall mean the Term and any period immediately
following the Term during which Elastic and the Executive have
mutually agreed to continue the Executive's employment.
(n) "Entity" shall mean a corporation, partnership, limited liability
company, trust, joint venture, association, organization, sole
proprietorship or entity in any other form.
(o) "Executive" shall have the meaning set forth in the preamble to this
Agreement.
(p) "Good Reason" shall mean (i) the assignment of the Executive,
without the Executive's consent, to a principal place of work which
increases the Executive's commuting distance from his residence to
his principal place of work by fifty (50) miles or more; (ii) the
assignment to the Executive of job duties that are inconsistent with
the Executive's position as set forth on Schedule A or a substantial
adverse alteration of the Executive's position, reporting
relationship or duties as set forth on Schedule A without the
Executive's consent; or (iii) a reduction of the Executive's annual
base salary then in effect other than in conjunction with the
implementation of an incentive compensation plan, as described in
Schedule B, or without the Executive's consent; PROVIDED, however,
that "Good Reason" shall not include any event or circumstance that
occurs more than one hundred twenty (120) calendar days prior to
Elastic's receipt of the Executive's written notice of his intention
to terminate for Good Reason as established in Section 8, below, a
reduction in the Executive's base salary that is applied to all or
substantially all Elastic employees or a reduction or suspension in
base salary that occurs as a result of the Executive's receipt of
disability payments under a fringe benefit plan in which he
participates as an Elastic employee. Notwithstanding the occurrence
of any event or circumstance set forth in clauses (i) through (iii),
above, such occurrence shall not be deemed to constitute Good Reason
if, while the Executive is employed during the Notice Period, such
event or circumstance has been fully corrected and the Executive has
been reasonably compensated for any losses or damages resulting
therefrom (provided that such right of correction by Elastic shall
only apply to the first notice of termination for Good Reason given
by the Executive).
(q) "Notice Period" shall mean the ninety (90) calendar day period
immediately following the date on which Elastic receives the
Executive's written notice of his intent to terminate employment
under Section 8(b) of this Agreement.
(r) "Options" shall mean those options granted by the Board under the
Plan for the purchase of shares of Elastic common stock.
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(s) "Plan" shall mean the Elastic Networks Inc. 1999 Stock Incentive
Plan.
(t) "Private Placement" shall mean the first sale of Elastic
securities to any person or entity other than Nortel Networks Inc.,
specifically excluding any issuance of Elastic securities or any
right to acquire Elastic securities granted to employees, vendors
or consultants.
(u) "Proprietary Information" shall have the meaning set forth in
Section 10(a)(1) of this Agreement.
(v) "Right of First Offer Agreement" shall mean the Right of First
Offer and Co-Sale Agreement, dated as of May 1999, and as amended
from time to time, by and among Elastic, Nortel Networks Inc. and
the persons and entities listed on Exhibit A thereto.
(w) "Severance Period" shall mean the twelve (12) month period
immediately following the Executive's termination of employment.
(x) "Term" shall mean the period commencing on the Commencement Date
and ending on the fourth anniversary of the Commencement Date,
unless terminated sooner in accordance with the provisions of
Section 8 of this Agreement.
2. Term.
Conditioned upon (i) the closing of the Private Placement, (ii) the
Executive's status as an active employee of Nortel Networks Inc. as of
the closing of the Private Placement, (iii) the Executive providing
documentation required by the Immigration Reform and Control Act of
1986 and (iv) the Executive's completion of employment forms required by
any Co-Employer, Elastic hereby agrees, as the sole employer or jointly
with a Co-Employer, to employ the Executive, and the Executive hereby
accepts employment with Elastic, upon the terms and conditions set forth
in this Agreement, for the Term. If the Executive and Elastic desire to
continue the Executive's employment after the Term, such employment
shall be upon terms and conditions mutually agreed upon by Elastic and
the Executive.
3. Duties.
The Executive shall have the job, duties and reporting relationship set
forth in Schedule A. Except as otherwise provide in this Section 3, the
Executive shall devote his full working time, attention, skill,
knowledge, experience and energies to the performance of his duties set
forth on Schedule A. Notwithstanding the preceding sentence, the
Executive shall not be prohibited from engaging in activities from time
to time on his own behalf or on the behalf of non-profit organizations
or industry associations, provided that such activities do not interfere
with the performance of his duties or obligations under this Agreement.
With the consent of the Board, the Executive may serve on the boards of
directors or trustees of other companies or organizations and devote a
reasonable amount of working time to such approved activities. The
Executive shall abide by, and comply with, all rules, policies and
procedures of Elastic and any Co-Employer and all applicable laws and
regulations including, but not limited to, those relating to antitrust.
The Executive's principal place of work shall be 0000 Xxxxxxxx Xxxxxxx,
Xxxxx 000, Xxxxxxxxxx, Xxxxxxx 00000, until such time as the Board (or any
other individual or entity to whom the Executive reports), in its or his
discretion, designates another location as the Executive's principal
place of work.
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4. Compensation.
(a) BASE SALARY. The Executive shall receive the annual base salary set
forth in Schedule B, which shall be payable in installments in
accordance with such payroll schedule as is then in effect with
respect to all Elastic executive employees.
(b) DEDUCTIONS. Elastic or the Co-Employer, as applicable, is
authorized to deduct from the Executive's compensation such sums as
may be required to be deducted or withheld under the provisions of
any applicable law now in effect or hereafter put into effect,
including, but not limited to, social security, unemployment and
income tax withholding, and such other deductions permitted by
Elastic or the Co-Employer which the Executive may authorize from
time to time.
5. Plan Incentives.
(a) INITIAL AWARD. Subject to the Board's adoption of the Plan, which
shall be substantially similar to Draft Stock Incentive Plan that
is attached hereto as Schedule C, the Executive shall be eligible
to participate in the Plan. Conditioned upon the Board's approval
and in accordance with the terms and conditions of the Plan,
effective on the Commencement Date the Executive shall be granted
an Option(s) to purchase a number of shares of Elastic common stock
that is equal to One Percent (1%) of the sum of the number of
shares of Elastic common and preferred stock issued and outstanding
on the grant date plus the number of shares of Elastic common stock
authorized for grant under the Plan, with an exercise price to be
determined by the Board. The vesting, rights and obligations with
respect to such Option(s) shall be determined by the Board in
accordance with the Plan and shall be set forth in appropriate
option agreements which shall be substantially similar to the Draft
Incentive Stock Option Agreement and Draft NonStatutory Stock
Option Agreement attached hereto as Schedules D and E, respectively.
Notwithstanding anything in the preceding sentence to the contrary,
the outstanding Option(s) granted to the Executive pursuant to this
Section 5(a) shall (i) upon the occurence of an Acquisition Event,
be assumed or an equivalent option or award substituted by the
successor corporation or a parent or subsidiary of the successor
corporation, provided that any such Options substituted for
Incentive Stock Options shall satisfy, in the determination of the
Board, the requirements of Section 424(a) of the Code, unless the
successor corporation refuses to assume or substitute for the
Options(s), in which case the Executive shall have the right to
exercise the Option(s) in full, including with respect to shares of
Common Stock as to which it would not otherwise be exercisable, and
such Options(s) shall be exercisable for a period of not less than
forty-five (45) days from the date on which the Board gives the
executive written notice that such Option(s) are fully exercisable
and shall terminate upon the expiration of such period; and (ii)
upon Elastic's termination of the Executive's employment without
Cause, as provided in Section 8(a)(2) hereof, or the Executive's
termination of his employment for Good Reason, as provided in
Section 8(b)(2) hereof, be immediately exercisable in full.
(b) PERFORMANCE BASED AWARDS. The Executive shall be eligible to
receive additional Awards under the Plan at the sole discretion of
the Board. The Executive shall not participate in decisions to
grant Awards to the Executive under the Stock Plan even if the
Executive is a member of the Board.
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(c) AMENDMENT OF THE PLAN. Notwithstanding anything to the contrary in
this Agreement, the Board may amend, suspend or terminate the Plan
or any portion thereof at any time, except as otherwise provided by
applicable law.
6. Fringe Benefits.
(a) FRINGE BENEFITS OTHER THAN VACATION. The Executive shall be
eligible to participate in the fringe benefit plan and programs
generally made available by Elastic or, if applicable, the
Co-Employer, to Elastic executive employees in accordance with the
terms of those plans and programs. Elastic shall make contributions
for the Executive's participation in such fringe benefit plans and
programs as it generally makes for its other executive employees.
Except as otherwise provided by law, Elastic or the Co-Employer, as
applicable, has the right to modify, add to or eliminate any or all
of its fringe benefit plans or programs at any time and for any
reason.
(b) VACATION. The Executive shall be entitled to three (3) weeks
(fifteen (15) business days) of paid vacation for each year of the
Term, to be taken at such time as may be approved by the Board or
its designee or the individual or entity to whom the Executive
reports. The Executive shall accrue such annual vacation on a
prorata basis each month starting with the Commencement Date.
Accrual of paid vacation shall cease once the Executive has accrued
three (3) weeks of paid vacation and shall not resume until the
accrued vacation is reduced by reason of vacation by the Executive.
7. Reimbursement of Expenses.
(a) BUSINESS EXPENSES. Elastic shall reimburse the Executive for
expenses incurred by the Executive in carrying out those duties set
forth in Section 3 of this Agreement in accordance with Elastic's
policies and procedures relating to expense reimbursement of
executive employees.
(b) FINANCIAL AND ESTATE PLANNING AND TAX ASSISTANCE. Elastics shall
reimburse the Executive for expenses incurred by the Executive for
personal financial and estate planning and tax assistance services
up to a total of Five Thousand Dollars ($5,000) for each year of
the Term upon the Executive's submission of appropriate receipts
documenting the Executive's payment for such services.
(c) ATTORNEY'S FEES WITH RESPECT TO THIS AGREEMENT. Elastic shall
reimburse the Executive for one hundred percent (100%) of the
reasonable expenses incurred by the Executive for the services of
an attorney with respect to the review of this Agreement upon the
Executive's submission of appropriate receipts documenting the
Executive's payment for such services.
8. Employment Termination.
(a) BY ELASTIC. Elastic shall have the right to terminate the
employment of the Executive at any time during the Term, including,
without limitation, for Cause or without Cause.
(1) If Elastic terminates the employment of the Executive upon the
occurrence of the expiration of the Term on the fourth
anniversary of the Commencement Date, the death or
Disability of the Executive or with Cause, Elastic shall pay
to the Executive, or, in the event of the
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Executive's death, the estate of the Executive, the compensation
and benefits ordinarily payable to him under this Agreement through
and until the last day of his actual employment by Elastic.
(2) If Elastic terminates the employment of the Executive
without Cause, subject to the conditions set forth below, Elastic
shall pay the Executive a lump sum amount which is equal to the sum
of (i) the Executive's base salary in effect on his termination
date (or, if higher, the highest base salary in effect at any time
during the six (6) months prior to his termination date) calculated
for the Severance Period, (ii) the expense the Executive incurs
during the Severance Period to continue those health and life
insurance benefits offered under the Consolidated Omnibus Budget
Reconciliation Act of 1985 and benefit conversion options,
respectively, less contributions the Executive would have made for
such coverage as an Elastic employee and (iii) a bonus payment in
an amount equal to the target bonus for the Executive at one
hundred (100%) performance on all factors under the bonus plan in
which the Executive is participating, if any, as of his employment
termination date, multiplied by a fraction, the numerator of which
is the Executive's calendar months of participation as an active
employee under such plan and the denominator of which is the term
of such plan in calendar months. The foregoing payment shall be
conditioned upon the Executive's execution of a Settlement
Agreement with Elastic, the form of which shall be determined by
the Board and shall contain, at a minimum, the Executive's (x)
release of all claims against Elastic and Elastic's Affiliates,
(y) obligation to notify Elastic of his employment by any person
or Entity during the Severance Period and (z) agreement to repay
that portion of the foregoing lump sum amount relating to any part
of the Severance Period during which the Executive is employed by
Elastic or any of Elastic's Affiliates or is in breach of any
provisions of this Agreement that survive the termination of this
Agreement or relating to the continuation of the Executive's health
or life insurance benefits on or after the Executive terminates
such benefits or the Executive's employment by an Entity or person
offering Executive comparable benefits or benefits that would
result in the termination of the Executive's opportunity to
continue Elastic health benefits under the Consolidated Omnibus
Budget Reconciliation Act of 1985.
(b) BY EXECUTIVE. The Executive shall have the right to terminate
his employment with Elastic during the Term for any reason, including,
without limitation, for Good Reason or for other than Good Reason;
PROVIDED, however, that the Executive shall give Elastic ninety (90)
calendar days prior written notice of his intention to terminate his
employment and shall continue his employment during all or such part of
the Notice Period as determined by the Board. In order to terminate for
Good Reason, the Executive must also state in such written notice the
facts and circumstances giving rise to Good Reason in reasonable
detail.
(1) If the Executive terminates his employment with Elastic
for other than Good Reason and satisfies the conditions set forth
in Section 8(b), above, Elastic shall pay the Executive the
compensation and benefits ordinarily payable to him under this
Agreement through and until the last day of his actual employment
by Elastic and his base salary only with respect to any portion of
the Notice Period remaining following the last day of his actual
employment.
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(2) If the Executive terminates his employment with Elastic
for Good Reason and satisfies the conditions set forth in Section
8(b), above, Elastic shall pay the Executive the compensation and
benefits ordinarily payable to him under this Agreement through and
until the last day of his actual employment by Elastic.
Additionally, Elastic shall pay the Executive the lump sum amount
that would be payable to the Executive under Section 8(a)(2) above
as if Elastic terminated the Executive's employment without Cause,
conditioned upon the Executive's execution of a Settlement
Agreement as described in Section 8(a)(2) above.
9. Restrictive Covenants.
(a) During the Employment Period and for a period of one (1)
year after the termination or expiration thereof, the Executive shall
not directly or indirectly:
(1) as an owner, partner, officer, director, employee,
consultant, contractor, joint venturer, investor, lender or
shareholder (other than as the holder of not more than one percent
(1%) of the total outstanding stock of a publicly held company),
participate in, direct, control or manage the sales or marketing
operations, functions or activities of any Entity or person
competitive with the business of Elastic or those Elastic
Affiliates that Elastic controls in the United States without the
written permission of Elastic; or
(2) recruit, solicit or induce, or attempt to induce, any
employee, consultant or contractor of Elastic or Elastic's
Affiliates to terminate their employment with, or otherwise cease
their relationship with, Elastic or Elastic's Affiliates; or
(3) solicit, divert or take away, or attempt to divert or
to take away, the business or patronage of any of the clients,
customers or accounts, or prospective clients, customers or
accounts, of Elastic or Elastic's Affiliates which were contacted,
solicited or served by the Executive during the Employment Period.
(b) If any restriction set forth in this Section 9 is found by
any court of competent jurisdiction to be unenforceable because it
extends for too long a period of time, in too broad a geographic area
or over too great a range of activities, it shall be interpreted to
extend only over the maximum period of time, geographic area or range
of activities as to which it may be enforceable.
(c) The Executive recognizes, understands and agrees that this
Agreement is entered into in connection with the spin-off of Elastic
and is a condition to the provision of financing of certain investors.
The Executive further recognizes, understands and agrees that the
geographic area specified in Section 9(a)(1) is reasonable in light
of the national and international scope of Elastic's business, the
expected expansion of Elastic's business during the Employment Period
and the Executive's expected ownership, as a result of Option(s)
issued pursuant to Section 5(a) of this Agreement, of a number of
shares of Elastic common stock equal to One Percent (1%) of the sum
of the number of shares of Elastic common and preferred stock issued
and outstanding on the grant date plus the number of shares of
Elastic common stock authorized for grant under the Plan. The
Executive further recognizes, understands and agrees that the
foregoing limitations are properly required for the adequate
protection of Elastic's
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legitimate business interests and do not preclude the
Executive from pursuing his livelihood. The Executive further
recognizes, understands and agrees that the consideration
provided in this Agreement, including, but not limited to, any
payment provided pursuant to Section 8 of this Agreement, is
sufficient consideration for the foregoing limitations.
10. Proprietary Information and Developments.
(a) PROPRIETARY INFORMATION
(1) The Executive agrees that all information and know-how,
whether or not in writing, of a private, secret or
confidential nature concerning the business or financial
affairs of Elastic, any of Elastic's Affiliates, Nortel
Networks Inc. or Nortel Networks Corporation is and shall
be the exclusive property of Elastic, Elastic's
Affiliates, Nortel Networks Inc. or Nortel Networks
Corporation, as applicable, such information and know-how
including, but not limited to, inventions, products,
processes, methods, techniques, formulas, compositions,
compounds, projects, developments, plans, research data,
clinical data, financial data, personnel data, computer
programs, and customer and supplier lists (collectively,
"Proprietary Information."). The Executive shall not
disclose any Proprietary Information to others outside
Elastic, Elastic's Affiliates, Nortel Networks Inc. or
Nortel Networks Corporation or use the same for any
unauthorized purposes without written approval by an
officer of Elastic, either during or after the
Employment Period, unless and until such Proprietary
Information has become public knowledge without fault by
the Executive or as otherwise required by law.
(2) The Executive agrees that all files, letters, memoranda,
reports, records, data, sketches, drawings, laboratory
notebooks, program listings, or other written,
photographic, or other tangible material containing
Proprietary Information, whether created by the Executive
or others, which shall come into his custody or
possession, shall be and are the exclusive property of
Elastic, Elastic's Affiliates, Nortel Networks Inc. or
Nortel Networks Corporation, as applicable, to be used by
the Executive only in the performance of his duties for
Elastic. The Executive agrees to deliver to Elastic upon
the expiration of the Employment Period such material
containing Proprietary Information.
(3) The Executive agrees that his obligation not to disclose
or use information, know-how and records of the types set
forth in paragraphs (1) and (2) above, also extends to
such types of information, know-how, records and tangible
property of customers of Elastic, Elastic's Affiliates,
Nortel Networks Inc. or Nortel Networks Corporation or
suppliers to Elastic or Elastic's Affiliates or other
third parties who may have disclosed or entrusted the
same to Elastic, Elastic's Affiliates, Nortel Networks
Inc. or Nortel Networks Corporation or to the Executive
in the course of Elastic's business.
(b) DEVELOPMENT
(1) The Executive shall make full and prompt disclosure to
Elastic of all inventions, improvements, discoveries,
methods, developments, software and works of authorship,
whether patentable or not, which are created
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made conceived or reduced to practice by the Executive or
under his direction or jointly with others during the
Employment Period, whether or not during normal working
hours or on the premises of Elastic or Elastic's Affiliates
(collectively, "Developments").
(2) The Executive agrees to assign and does hereby assign to
Elastic (or any Entity designated by Elastic) all his right,
title and interest in and to all Developments and all
related patents, patent applications, copyrights and
copyright applications. The Executive also hereby waives
all claims to moral rights in any Developments. However,
this Section 10(b)(2) shall not apply to Developments which
do not relate to the present or planned business or research
and development of Elastic or Elastic's Affiliates and which
are made and conceived by the Executive not during normal
working hours, not on the premises of Elastic or Elastic's
Affiliates and not using the tools, devices, equipment of
Elastic or Elastic's Affiliates or Proprietary Information.
(3) The Executive agrees to cooperate fully with Elastic or
Elastic's Affiliates, both during and after the Employment
Period, with respect to the procurement, maintenance and
enforcement of copyrights and patents (both in the United
States and foreign countries) relating to Developments. The
Executive shall sign all papers, including, without
limitation, copyright applications, patent applications,
declarations, oaths, formal assignments, assignment of
priority rights, and powers of attorney, which Elastic or
Elastic's Affiliates may deem necessary or desirable in
order to protect their rights and interests in any
Development.
(c) OTHER AGREEMENTS. The Executive hereby represents that he is not
bound by the terms of any agreement with any previous employer,
other than Elastic's Affiliates, or other party to refrain from
using or disclosing any trade secret or confidential or
proprietary information in the course of his employment with
Elastic or to refrain from competing, directly or indirectly,
with the business of such previous employer or any other party.
The Executive further represents that his performance of all the
terms of this Agreement and as an employee of Elastic does not and
will not breach any agreement, other than agreements with
Elastic's Affiliates, to keep in confidence proprietary
information, knowledge or data acquired by him in confidence or in
trust prior to his employment with Elastic.
11. Breach of Covenants by the Executive.
The restrictions contained in Sections 9 and 10 of this Agreement are
necessary for the protection of the business and goodwill of Elastic or
Elastic's Affiliates and are considered by the Executive to be
reasonable for such purpose. The Executive agrees that any breach of
Sections 9 or 10 shall cause Elastic or Elastic's Affiliates substantial
and irrevocable damage and therefore, in the event of any such breach,
in addition to such other remedies which may be available, Elastic or
Elastic's Affiliates shall have the right to seek specific performance
and injunctive relief.
12. Survival of Certain Provisions after the Term.
Subject to the terms and conditions contained in this Agreement, the
provisions of Sections 8, 9, 10 and 11 shall survive and continue after
the Term as provided in such Sections.
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13. Indemnification.
During the Term, Elastic shall indemnify the Executive as provided under
the Bylaws of Elastic.
14. Miscellaneous.
(a) The waiver by either party of a breach of any provision of this
Agreement shall not operate or be construed as a waiver of any
subsequent breach by either party.
(b) Any notice required or permitted to be given under this Agreement
shall be sufficient if in writing sent by certified mail to the
Executive's residence as it appears on the records of Elastic in
the case of the Executive or to the address set forth above with
respect to Elastic, or to such other address as either party may
hereafter specify in writing to the other.
(c) This Agreement shall be binding upon and inure to the benefit of
both parties and their respective successors and assigns, including
Elastic's Affiliates and any corporation with which or into which
Elastic may be merged or which may succeed to its assets or business,
provided, however, that the obligations of the Executive are personal
and shall not be assigned by him.
(d) This Agreement constitutes the entire agreement between the parties
relating to the subject matter of this Agreement and there are no
representations, warranties, covenants or obligations except as set
forth in this Agreement. This Agreement supersedes all prior and
contemporaneous agreements, understandings, negotiations, and
discussions, written or oral, of the parties hereto, relating to the
subject matter of this Agreement. Nothing in this Agreement is
intended or shall be construed to confer upon or to give any person
other than the parties hereto any rights or remedies under or by
reason of this Agreement except as specifically set forth herein.
(e) This Agreement may be amended only in writing executed by the
parties hereto.
(f) No delay or omission by Elastic in exercising any right under this
Agreement shall operate as a waiver of that or any other right.
A waiver or consent given by Elastic on any one occasion shall be
effective only in that instance and shall not be construed as a bar
or waiver of any right on any other occasion.
(g) The enumeration and headings contained in this Agreement are for
convenience of reference only and are not intended to have any
substantive significance in interpreting this Agreement.
(h) If any provision of this Agreement shall be held to be illegal,
invalid or unenforceable, such provision shall be enforced to the
maximum extent permissible so as to effect the intent of the parties,
and the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
If necessary to effect the intent of the parties, the parties shall
negotiate in good faith to amend this Agreement to replace the
unenforceable language with enforceable language which as closely as
possible reflects such intent.
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(i) This Agreement shall be interpreted and enforced in accordance with
the laws of the State of Georgia, except for its rules with respect
to the conflict of laws.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first written above.
Elastic Networks Inc. Executive
By: /s/ Xxx Xxxx /s/ Xxxxxxx X. Xxxxxxxx
----------------------------- ----------------------------------
Title: President
------------------------
Date: May 12, 1999 Date: May 12,1999
--------------------------- ---------------------------
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SCHEDULE A
POSITION/DUTIES/REPORTING RELATIONSHIP
Executive's Position: Vice President, Sales and Marketing or such other
title as the Chief Executive Officer, Board or such
other individual or entity to whom the Executive
reports may assign from time to time.
Reports to: Chief Executive Officer or such other individual or
entity as may be designated from time to time.
Duties: Management of all aspects of Elastic's sales and
marketing operations, functions and activities and
such other duties as the Chief Executive Officer or
such other individual or entity to whom the Executive
reports may assign from time to time.
SCHEDULE B
Compensation
ANNUAL BASE SALARY: One Hundred Eighty Thousand Three Hundred Dollars
($180,300)
The Executive's annual base salary stated above shall be subject to increase
or decrease from time to time as determined in the sole discretion of the
Chief Executive Officer, the Board or other individual or entity to whom the
Executive reports; provided that any reduction in the Executive's annual base
salary shall be subject to the provisions of Section 1(p). An incentive
compensation plan may be implemented with respect to the Executive and such
incentive compensation plan may result in a decrease in the Executive's
annual base salary.
