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EXHIBIT 10.14
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made this 15th day of December ,1994, by and
between VISUAL NETWORKS, INC., a Delaware corporation (the "Company") and
XXXXXX XXXXXXXX, an individual residing in the State of Maryland
("Employee").
BACKGROUND
The Company and Employee are parties to an agreement in
principle relating to his employment with the Company (the "Agreement in
Principle"); which Agreement in Principle the Company and Employee desire
to terminate by execution hereof. The Company wishes to continue to employ
Employee, and Employee wishes to continue to be employed by the Company,
all on the terms and conditions contained in this Agreement.
NOW, THEREFORE, in consideration of the facts, mutual promises
and covenants contained herein and intending to be legally bound hereby,
the Company and Employee agree as follows:
1. Employment. The Company hereby employs Employee and
Employee hereby accepts employment by the Company for the term set forth
herein and upon the terms and conditions contained in this Agreement.
2. Office and Duties.
(a) Employee shall serve the Company as its Vice
President Engineering and Operations and shall have such authority and such
responsibilities as is consistent with such position and as the Company's
President and Chief Executive Officer may determine from time to time.
(b) Throughout the term of this Agreement, except as
provided in Section 2(c) below, Employee shall devote his entire working
time, energy, skill and best efforts to the performance of his duties
hereunder in a manner which will faithfully and diligently further the
business and interests of the Company.
(c) Notwithstanding the provisions of Section 2(b)
hereof, Employee may engage in activities in connection with any charitable
or civic activities, personal investments and serving as an executor, trustee
or in other similar fiduciary capacity; provided, however, that such
activities do not interfere with his performance of his responsibilities and
obligations pursuant to this Agreement.
3. Term. This Agreement shall be for a term of two (2) years,
commencing on the date of this Agreement, unless sooner terminated as
hereinafter provided. Unless either party elects to terminate this Agreement
at the end of the original or any renewal term by giving the other party
notice of such election at least ninety (90) days before the expiration of
the then
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current term, this Agreement shall be deemed to have been renewed for an
additional term of one (1) year commencing on the day after the expiration
of the then current term.
4. Compensation.
(a) For all of the service rendered by Employee to the
Company, Employee shall receive an annual base salary (inclusive of all
applicable income, Social Security and other taxes and charged) of Eighty
Four Thousand Dollars ($84,000), payable in reasonable periodic
installments in accordance with the Company's regular payroll practices in
effect from time to time. Annual increases to base salary, if any, shall
be approved by the Compensation Committee of the Company's Board of
Directors; provided that the unanimous approval of the Compensation
Committee shall be required for any increase(s) in the base salary of
Employee which exceed an aggregate amount equal to ten percent (10%) of
Employee's base salary for the previous year.
(b) In addition to Employee's base salary, the Company
from time to time may pay Employee such bonuses or other additional
compensation as the Compensation Committee of the Board of Directors of the
Company may determine; provided that the unanimous approval of the
Compensation Committee shall be required for any increase(s) in bonuses (or
stock options) granted to Employee which exceeds an aggregate amount equal
to ten percent (10%) of Employee's bonus(es) (or stock options) (as the
case may be) the previous year other than for bonuses pursuant to the
Company's management bonus pool arrangement.
(c) Throughout the term of this Agreement and as long as
they are kept in force by the Company, Employee shall be entitled to
participate in and receive the benefits of any health, life or accident
insurance plans or programs made available to other similarly situated
employees of the Company.
(d) Employee shall be entitled to fifteen (15) business
days paid leave in accordance with the Company's leave plan as in effect
from time to time, if any (for vacation, illness, personal or otherwise)
during each year of the term of this Agreement.
(e) Employee shall be entitled to twenty (20) business
days "sabbatical" following the completion of each four (4) years of
employment with the Company. Such "sabbatical" must be taken within a finite
period of being earned, such period to be in accordance with the Company's
leave plan as in effect from time to time, if any, or if no such policy shall
be in effect, as shall be determined by the Board of Directors of the Company.
5. Expenses. The Company will reimburse Employee for all
reasonable expenses incurred by Employee in connection with the performance
of Employee's duties hereunder upon presentation of expense statements or
vouchers and such other supporting
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information as it may from time to time request; provided that Employee
complies with all applicable Company procedures and practices relating to
reimbursement of expenses in effect from time to time.
6. Disability.
(a) If Employee is unable to perform his duties hereunder
due to partial or total disability or incapacity resulting from a mental or
physical illness or any similar cause, Employee shall be considered
"Disabled". In the event Employee shall become Disabled, the Company will
continue the payment of Employee's base salary at its then current rate for a
period equal to the period of time that Employee continues to be Disabled;
provided that, in no event shall the Company be required to continue the
payment of Employee's base salary for more than one hundred eighty (180) days
following the date Employee first becomes Disabled. Upon becoming Disabled,
Employee shall also be entitled to receive those benefits to which Employee
may be entitled as a result of Employee's participation under a death or
disability plan in which Employee is a participant as an employee of the
Company, if any.
(b) In the event Employee shall be Disabled for a period
of more than one hundred eighty (180) consecutive days or for a cumulative
period of more than one hundred eighty (180) days during any twelve month
period, Employee shall be considered "Long Term Disabled", the Company shall
have the right to terminate Employee's employment under this Agreement upon
written notice thereof to the Employee, in which event the Company shall have
no further liability or obligation to Employee for compensation or benefits
hereunder by reason of such termination. In the event that the Company does
not exercise such right of termination, the Company shall have no liability
or obligation to Employee for compensation or benefits hereunder during the
period of time that Employee is considered to be Long Term Disabled.
7. Death. If Employee dies, Employee's employment under this
Agreement shall automatically terminate and, all payments hereunder shall
cease on the date of Employee's death, except for those payments which were
due at such time, including any unpaid salary, expense reimbursements, or
bonuses that are owed and Company shall have no further obligations or
liabilities hereunder to Employee's estate or legal representative or
otherwise, except under any death or disability plan in which Employee is a
participant as an employee of the Company, if any. Any management pool bonus
that otherwise would have been due to Employee at year end shall be prorated
up to the time of Employee's death.
8. Termination of the Company's Business. If the Company
shall discontinue its business, the Company may terminate Employee's
employment under this Agreement on thirty (30) days prior written notice,
and in such event the Company shall have no further obligations or
liabilities hereunder and Employee shall be released from the restrictions
continued in Sections 12(a) and 12(b) hereof.
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9. Discharge for Cause. The Company may terminate Employee's
employment under this Agreement at any time for "cause." For purposes of
this Agreement, "cause" shall be defined as:
(a) conviction in a court of law of any felony;
(b) willful violation of specific and lawful directions
from the Board of Directors of the Company or excessive absenteeism which
shall continue for a period of thirty (30) days after written notice thereof
is given of such violation or absenteeism;
(c) embezzlement or theft of Company assets, or other
fraud or dishonesty as determined in a court of law;
(d) material breach by Employee of the provisions of this
Agreement, which breach shall continue for a period of thirty (30) days
after a written notice thereof is given to Employee; or
(e) material breach of any of the covenants or
obligations set forth in that certain Stockholders and Registration Rights
Agreement, dated the date hereof, among the Company and the holders of its
capital stock, which breach continues for a period of thirty (30) days
after a written notice thereof is given to Employee.
10. Termination Without Cause.
(a) The Company may terminate Employee's employment
hereunder at any time, for any reason, with or without cause, effective upon
the date designated by the Company upon not less than 45 days prior written
notice to Employee.
(b) In the event of a termination of Employee's
employment hereunder pursuant to Section 10(a) hereof, Employee shall be
entitled to receive all accrued but unpaid (as of the effective date of such
termination) base salary and bonuses, plus a liquidated termination fee equal
to six (6) months base salary. All other liabilities or obligations of the
Company to Employee, including without limitation, base salary, benefits and
bonuses shall cease at the time of such termination, subject to the terms of
any benefit or compensation plan then in force and applicable law and
applicable to Employee. Except as specifically set forth in this Section 10,
the Company shall have no liability or obligation hereunder by reason of such
termination.
11. Company Property. All computer software and documentation,
advertising, sales, manufacturer's and other materials or articles of
information, or other proprietary information of the Company, including
without limitation, data processing reports,
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customer sales analyses, invoices, price lists or information, samples, or
any other materials or data of any kind furnished to Employee by the
Company or developed by Employee on behalf of the Company or at the
Company's direction or for the Company's use or otherwise in connection
with Employee's employment hereunder, are and shall remain the property of
the Company. If the Company requests the return of such materials at any
time during Employee's employment, Employee shall immediately deliver the
same, and Employee shall also deliver the same immediately upon termination
of Employee's employment hereunder.
12. Nonsolicitation, Trade Secrets, Etc.
(a) During the term of this Agreement and for a period of
twenty-four (24) months after the termination of his employment with the
Company for any reason whatsoever (such twenty-four (24) month period being
reduced to twelve (12) months in the event Employee remains an employee of
the Company for four (4) years following the date hereof), Employee (i) shall
not directly or indirectly induce or attempt to influence any employee,
consultant, supplier, customer or prospective customer of the Company to
terminate his, her or its relationship with the Company, or employ any
employee, or retain, in competition with the Company, consultant, supplier,
customer or prospective customer of the Company, and shall not solicit or do
business in competition with the Company with anyone that is a customer,
prospective customer or supplier of the Company on the date that Employee's
employment is terminated hereunder, and (ii) shall not engage in (as
principal, partner, director, officer, agent, employee, consultant or
otherwise) or be financially interested in any business activities which are
in competition with business activities carried on by the Company, or being
definitely contemplated by the Company, at the time of the termination of
Employee's employment. For purposes hereof, a "prospective customer" shall
mean a sales lead with whom the Company has made contact by means of personal
visits, demonstrations, telephone calls or personally directed mail. For
purposes hereof, business activities shall be deemed to be "in competition"
with the Company if they are activities related to software and/or hardware
products to be embedded in a network infrastructure whose primary purpose is
to aid in the maintenance and support of wide-area data communications
networks based on Frame Relay or Asynchronous Transfer Mode technologies, or
technologies developed by, or being definitely contemplated by, the Company.
(b) During the term of this Agreement and for a period of
three (3) years thereafter, Employee shall not disclose, communicate or
divulge to, to use for the direct or indirect benefit of any person, firm,
association or company other than the Company, any material referred to in
Paragraph 11 above or any information regarding the business methods,
business policies, procedures, techniques, research or development projects
or results, trade secrets, or other knowledge or processes of or developed by
the Company or any names and addresses of customers or clients or any other
confidential information relating to or dealing with prospective customers or
clients or any other confidential information relating to or dealing with the
business operations or activities of the Company, made known to Employee or
learned or
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acquired by Employee while in the employ of the Company or acting as an
officer, director or principal of the Company.
(c) Any and all writing, inventions, improvements,
processes, computer software and/or techniques which Employee may make,
conceive, discover or develop, either solely or jointly with any other person
or persons, at any time during the term of this Agreement, whether during
working hours or at any other time and whether at the request or upon the
suggestion of the Company or otherwise, which relate to or are useful in
connection with any business now or hereafter carried on or definitively
contemplated by the Company, including developments or expansions of its
present fields of operations, shall be the sole and exclusive property of the
Company. Employee shall make full disclosure to the Company of all such
writings, inventions, improvements, processes, computer software, procedures
and techniques, and shall do everything necessary or desirable to vest the
absolute title thereto in the Company. Employee shall write and prepare all
specifications and procedures regarding such inventions, improvement,
processes, computer software, procedures and techniques and otherwise aid and
assist the Company so that the Company can prepare and present applications
for copyright or Letters Patent therefor and can secure such copyright or
Letters Patent wherever possible, as well as reissues, renewals and
extensions thereof, and can obtain the record title to such copyright or
patents so that the Company shall be the sole and absolute owner thereof in
all countries in which it may desire to have copyright or patent protection.
Employee shall not be entitled to any additional or special compensation or
reimbursement regarding any and all such writings, inventions, improvements,
processes, procedures and techniques.
(d) Employee acknowledges that the restrictions contained
in the foregoing subparagraphs (a), (b), and (c), in view of the nature of
the business in which the Company is engaged, are reasonable and necessary
in order to protect the legitimate interests of the Company, and that the
Company would not have entered into this Agreement in the absence of such
restrictions. Employee also acknowledges that any violation thereof would
result in irreparable injuries to the Company for which monetary damages
would not be an adequate remedy. Employee therefore acknowledges that, in
the event that Employee shall violate any of these restrictions, the
Company shall be entitled to obtain from any court of competent
jurisdiction preliminary and permanent injunctive relief as well as damages
and an equitable accounting of all earnings, profits and other rights or
remedies to which the Company may be entitled.
(e) If the period of time or the area specified in
subparagraph (a) or (b) above should be adjudged unreasonable in any
proceeding, then the period of time shall be reduced by such number of
months or the area shall be reduced by the elimination of such portion
thereof, or both, so that such restrictions may be enforced in such area
and for such time as is adjudged to be reasonable. If Employee violates
any of the restrictions contained in the foregoing subparagraph (a) or (b)
the applicable restrictive period shall not run in favor of
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Employee from the time of the commencement of any such violation until such
violation shall be cured by Employee to the satisfaction of the Company.
(f) The provisions of this Section 12 hereof shall survive
termination of Employee's employment hereunder.
13. Prior Agreements. Employee represents to the Company (a)
that there are no restrictions, agreements or understandings whatsoever, to
which Employee is a party which would prevent or make unlawful his
execution of this Agreement or his employment hereunder, (b) that his
execution of this Agreement and his employment hereunder shall not
constitute a breach of any contract, agreement or understanding, oral or
written to which he is a party or by which he is bound, and (c) that he is
free to execute this Agreement and to enter into employment by the Company.
14. Miscellaneous.
(a) Indulgences, Etc. Neither the failure nor any delay
on the part of either party to exercise any right, remedy, power or privilege
(collectively "Rights") under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any Right preclude any
other or further exercise of the same or of any other Right nor shall any
waiver of any Right with respect to any occurrence be construed as a waiver
of such Right with respect to any other occurrence. No waiver shall be
effective unless it is in writing and is signed by the party asserted to have
granted such waiver.
(b) Controlling Law. This Agreement and all questions
relating to its validity, interpretation, performance and enforcement
(including, without limitation, provisions concerning limitations of
actions), shall be governed by and construed in accordance with the laws of
the State of Maryland, notwithstanding any conflict-of-laws doctrines of such
state or other jurisdiction to the contrary, and without the aid of any
canon, custom or rule of law requiring construction against the draftsman.
The parties consent to the exclusive jurisdiction of the Federal and state
courts located in Maryland.
(c) Notices. All notices, requests, demands and other
communications required or permitted under this Agreement shall be in writing
and shall be deemed to have been duly given, made and received only when
personally delivered or when deposited in the United States mails, first
class postage prepaid, addressed as set forth below:
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(i) If to the Employee:
Xxxxxx Xxxxxxxx
0 Xxxxx Xxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxx 00000
(ii) If to the Company:
Visual Networks, Inc.
0000 Xxxxxxx Xxxx
Xxxxx 000 - X
Xxxxxxxxx, XX 00000
Attention: President
Fax: (000) 000-0000
With a copy to:
Xxxxx X. Xxxxxx, Xx.
Piper & Marbury
0000 00xx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Any party may alter the address to which communications or copies
are to be sent by giving notice of such change of address in conformity with
the provisions of this paragraph for the giving of notice.
(d) Binding Nature of Agreement. This Agreement shall be
binding upon and inure to the benefit of the Company and its successors and
assigns and shall be binding upon Employee, his heirs and legal
representatives.
(e) Execution in Counterparts. This Agreement may be
executed in any number of counterparts, each of which shall be deemed to be
an original as against any party whose signature appears thereon, and all of
which shall together constitute one and the same instrument. This Agreement
shall become binding when one or more counterparts hereof, individually or
taken together, shall bear the signatures of all of the parties reflected
hereon as the signatories. Any photocopy or facsimile of this Agreement,
with all signatures reproduced on one or more of its signature pages, shall
be considered for all purposes as if it were executed counterpart of this
Agreement.
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(f) Provisions Separable. The provisions of this
Agreement are independent of and separable from each other, and no provision
shall be affected or rendered invalid or unenforceable by virtue of the fact
that for any reason any other or others of the may be invalid or
unenforceable in whole or in part.
(g) Entire Agreement. This Agreement contains the entire
understanding among the parties hereto with respect to the subject matter
hereof, and supersedes all prior and contemporaneous agreements and
understandings, inducements or conditions, express or implied, oral or
written, including without limitation, the Agreement in Principle, which is
hereby terminated in its entirety. The express terms hereof control and
supersede any course of performance and/or usage of the trade inconsistent
with any of the terms hereof. This Agreement may not be modified or amended
other than by an agreement in writing.
(h) Section Heading. The section headings in this
Agreement are for convenience only; they form no part of this Agreement and
shall not affect its interpretation.
(i) Gender, Etc. Words used herein, regardless of the
number and gender specifically used, shall be deemed and construed to include
any other number, singular or plural, and any other gender, masculine,
feminine or neuter, as the context indicates is appropriate.
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IN WITNESS WHEREOF, the parties have executed and delivered
this Agreement as of the date first above written.
WITNESS:
/S Xxxxx X. Xxxxxxxx /S Xxxxxx Xxxxxxxx
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Xxxxxx Xxxxxxxx
ATTEST: VISUAL NETWORKS, INC.
By: /S Xxxxx X. Xxxxxxxx By: /S Xxxxx X. Xxxxxxxx
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Title: Assistant Secretary Title: President & CEO
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