EXHIBIT 10.8
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of
this 25th day of October, 1996 by and between NetSpeak Corporation, a Florida
corporation (hereinafter call the "Company"), and Xxxxxx X. Xxxxx (hereinafter
called the "Executive").
The Company wishes to employ the Executive, and the Executive wishes to
enter into the employ of the Company, on the terms and conditions contained in
this Agreement.
Accordingly, in consideration of the foregoing and of the mutual
promises hereinafter set forth, the parties hereby agree as follows:
1. EMPLOYMENT
1.1 EMPLOYMENT AND TERM. The Company shall employ the
Executive and the Executive shall serve the Company,
on the terms and conditions set forth herein, for the
period (the "Term") commencing on a date selected by
the Executive, which date shall be no later than 15
days from the date of the Agreement (the
"Commencement Date") and expiring on the second
anniversary of the Commencement Date unless sooner
terminated as hereinafter set forth; provided,
however, that the Term of the Agreement shall be
extended for successive one-year periods unless, at
least 60 days prior to the expiration of the Term or
any renewal term, the Company shall have delivered to
the Executive or the Executive shall have delivered
to the Company written notice that this Agreement
will not be renewed.
1.2 DUTIES OF EXECUTIVE. The Executive shall serve as
Vice President of Marketing of the Company, shall
perform the duties commensurate with such position,
shall diligently perform all services as may be
assigned to him by the Board of Directors of the
Company (the "Board") and shall exercise such power
and authority as may from time to time be delegated
to him by the Board. The Executive shall devote all
of his working time and attention to the business and
affairs of the Company. However, the Executive may
participate as a member of the Board of Directors or
Technical Advisory Committees of non-competing
companies with the prior approval of the President
and/or Chief Executive Officer of the Company, which
approval will not be unreasonably withheld.
1.3 THE COMPANY. As used herein, the term the "Company"
shall be deemed to include any and all present and
future subsidiaries, divisions and affiliates of the
Company.
2. COMPENSATION
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2.1 SALARY. During the Term, the Executive shall receive
a salary (the "Salary") at the annual rate of
$120,000 during the Term. The Salary is to be payable
in substantially equal installments consistent with
the Company's normal payroll schedule, subject to
applicable withholding and other taxes.
2.2 ADDITIONAL CASH COMPENSATION. Executive shall also
be entitled to receive such increments and salary
performance or merit bonuses as shall be determined
from time to time during the term by the Board.
2.3 STOCK OPTIONS On the Commencement Date, the Company
shall grant to the Executive statutory stock options
under the Company's 1995 Stock Option Plan (the
"Plan") to purchase an aggregate of 100,000 Shares of
Common Stock at an exercise price of $5.50 per share
being the fair market value on the date of grant (the
"Options") as hereinafter set forth. The Options
shall vest in equal increments on the first, second
and third anniversary of the Commencement Date of
this Agreement.
3. EXPENSE REIMBURSEMENT AND OTHER BENEFITS.
3.1 EXPENSE REIMBURSEMENT. During the Term, the Company,
upon the submission of supporting documentation by
the Executive, shall reimburse the Executive for all
reasonable expenses actually paid or incurred by the
Executive in the course of and pursuant to the
business of the Company, including reasonable
expenses for travel and entertainment.
3.2 OTHER BENEFITS. The Company shall obtain or shall
continue in force such medical, dental, life and
disability insurance coverages, either group or
individual, as the Company may provide for its
employees generally, for the Executive (collectively,
the "Policies"), which Policies the Company shall
keep in effect throughout the Term. The Policies to
be provided by the Company shall be on terms as
determined by the Board.
3.3 VACATION. The Executive shall be entitled to three
weeks paid vacation during each year of the Term,
which shall not accrue from year to year.
4. TERMINATION
4.1 TERMINATION FOR CAUSE. Notwithstanding anything
contained in this Agreement to the contrary, this
Agreement may be terminated by the Company for Cause.
As used in this Agreement by way of example and not
limitation "Cause" shall mean (i) any action or
omission of the Executive which constitutes a willful
breach of this Agreement which is not cured or as to
which diligent attempts to cure have not commenced
within 10 days after receipt by Executive of notice
thereof, (ii)
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fraud, embezzlement or misappropriation as against
the Company, (iii) the conviction of the Executive
for any criminal act, or (iv) any action or omission
of the Executive which, as reasonably determined by
the Company, is materially contrary to the business
interests, reputation or goodwill of the Company.
Upon any termination pursuant to this Section 4.1,
the Company shall pay to the Executive any unpaid
Salary accrued through the effective date of
termination specified in such notice. Except as
provided above, the Company shall have no further
liability hereunder (other than for reimbursement for
reasonable business expenses incurred prior to the
date of termination, subject, however to the
provisions of Section 3.1 and all Options not vested
shall immediately terminate and expire).
4.2 TERMINATION WITHOUT CAUSE. Except as otherwise
expressly provided in Sections 4.3, 4.4 and 4.5
hereof, in the event the Executive is terminated
other than for Cause pursuant to Section 4.1, the
Company shall pay to the Executive upon such
termination an amount equal to (i) any unpaid Salary
accrued through the effective date of termination,
plus (ii) a lump sum payment equal to the Salary
which would have been paid to the Executive during
the remaining Term of this Agreement (iii) all
Options granted to the Executive pursuant to the Plan
not fully vested shall immediately vest upon such
termination and (iv) continue employee benefit
programs as to the Executive for a period of 90 days
subsequent to termination date. The Company shall
have no further liability hereunder (other than for
reimbursement for reasonable business expenses
incurred prior to the date of termination, subject,
however to the provisions of Section 3.1).
4.3 RESIGNATION BY EXECUTIVE. This Agreement may be
terminated by the Executive upon delivery of notice
therefore not less than 45 days prior to such
termination date. Upon receipt of such notice, the
Company may, in its sole discretion, release the
Executive of his duties and his employment hereunder
prior to the expiration of the 45 day notice period.
Notwithstanding anything contained in this Agreement
or the Plan to contrary, in the event of a
termination by the Executive pursuant to this Section
4.3 (i) the Company shall pay to the Executive any
unpaid Salary accrued through the effective date of
termination, and (ii) all options granted to the
Executive pursuant to the Plan not fully vested as of
the date of termination shall immediately be
canceled.
4.4 DISABILITY. Notwithstanding anything contained in
this Agreement to the contrary, the Company, by 30
days written notice to the Executive, shall at all
times have the right to terminate this Agreement, and
the Executive's employment hereunder, if the
Executive shall, as the result of mental or physical
incapacity, illness or disability, fail to perform
his duties and responsibilities provided for herein
for a period of more than 60 days in any 12 month
period. Upon any termination pursuant to this Section
4.4, the Company shall pay to the Executive any
unpaid
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Salary accrued through the effective date of
termination and continue employee benefit programs as
to the Executive for a period of 90 days subsequent
to termination date. Except as provided above, the
Company shall have no further liability hereunder
(other than for reimbursement for reasonable business
expenses incurred prior to the date of termination,
subject, however to the provisions of Section 3.1).
4.5 DEATH. In the event of the death of the Executive
during the Term of his employment hereunder, the
Company shall pay to the personal representative of
the estate of the deceased Executive any unpaid
Salary accrued through the date of his death. Except
as provided above, the Company shall have no further
liability hereunder (other than for reimbursement for
reasonable business expenses incurred prior to the
date of the Executive's death, subject, however to
the provisions of Section 3.1).
5. RESTRICTIVE COVENANTS
5.1 NON-COMPETITION. During the Term and for a period of
two (2) years following the termination of the
Executive's employment by the Company, Executive
shall not, directly or indirectly engage in or have
any interest in, directly or indirectly, any sole
proprietorship, partnership, corporation, business or
any other person or entity (whether as an employee,
officer, director, partner, agent, security holder,
creditor, consultant, or otherwise) that, directly or
indirectly, engages primarily in the development,
manufacturing, distribution or supply of products and
services which directly compete with the Company's
and/or any subsidiary's products and services in any
and all states in which the Company and/or any
subsidiary conducts its business during the Term or
at the time Executives's employment with the Company
is terminated (the "Territory"); provided, however,
that Executive may hold Company securities and/or
acquire, solely as an investment, shares of capital
stock or other equity securities of any such company,
so long as Executive does not acquire a controlling
interest in or become a member of a group which
exercises direct or indirect control of, more than
five percent of any class of capital stock of such
corporation.
5.2 NONDISCLOSURE. During the Term and following
termination of the Executive's employment with the
Company Executive shall not divulge, communicate, use
to the detriment of the Company or for the benefit of
any other person or persons, or misuse in any way,
any Confidential Information (as hereinafter defined)
pertaining to the business of the Company. Any
Confidential Information or data now or hereafter
acquired by the Executive with respect to the
business of the Company (which shall include, but not
be limited to, information concerning the Company's
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financial condition, prospects, technology,
customers, suppliers, methods of doing business and
marketing and promotion of the Company's services)
shall be deemed a valuable, special and unique asset
of the Company that is received by the Executive in
confidence and as a fiduciary. For purposes of this
Agreement, "Confidential Information" means
information disclosed to the Executive or known by
the Executive as a consequence of or through his
employment by the Company (including information
conceived, originated, discovered or developed by the
Executive) prior to or after the date hereof and not
generally known or in the public domain, about the
Company or its business. Notwithstanding the
foregoing, nothing herein shall be deemed to restrict
the Executive from disclosing Confidential
Information to the extent required by law.
5.3 NONSOLICITATION OF EMPLOYEES. During the Term and for
a period of two years following termination of the
Executive's employment with the Company, Executive
shall not directly or indirectly, for himself or for
any other person, firm, corporation, partnership,
association or other entity, attempt to employ or
enter into any contractual arrangement with any
employee or former employee of the Company.
5.4 BOOKS AND RECORDS. All books, records, accounts and
similar repositories of Confidential Information of
the Company, whether prepared by the Executive or
otherwise coming into the Executive's possession,
shall be the exclusive property of the Company and
shall be returned immediately to the Company on
termination of this Agreement or on the Board's
request at any time.
6. INJUNCTION. It is recognized and hereby acknowledged by the
parties hereto that a breach by the Executive of any of the
covenants contained in Section 5 of this Agreement will cause
irreparable harm and damage to the Company, the monetary amount of
which may be virtually impossible to ascertain. As a result, the
Executive recognizes and hereby acknowledges that the Company
shall be entitled to an injunction from any court of competent
jurisdiction enjoining and restraining any violation of any or all
of the covenants contained in Section 5 of this Agreement by the
Executive or any of his affiliates, associates, partners or
agents, either directly or indirectly, and that such right to
injunction shall be cumulative and in addition to whatever other
remedies the Company may possess.
7. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Florida.
8. NOTICES. Any notice required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been
given when delivered by hand or when deposited in the United
States mail, by registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:
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If to the Company NetSpeak Corporation
000 Xxxxx Xxxxx Xxxx
Xxxxx 000
Xxxx Xxxxx, XX 00000
Attn: Xxxx X. Xxxxxx
If to the Executive: Xxxxxx X. Xxxxx
0000 XX 00xx Xxxx
Xxxx Xxxxx, XX 00000
9. CONSOLIDATION, MERGER OR SALE OF ASSETS. Nothing in this
Agreement shall preclude the Company from consolidating or merging
into or with, or transferring all or substantially all of its
assets to, another corporation which assumes this Agreement, and
all obligations of the Company hereunder, in writing. Upon such
consolidation, merger or transfer of assets and assumption, the
term "the Company" as used herein, shall mean such other
corporation and this Agreement shall continue in full force and
effect. Notwithstanding the foregoing, in the event that the
Company merges into or with, or transfers all or substantially
all, of its assets to another corporation, which results in a
material change of ownership of the Company, all Options granted
to the Executive pursuant to the Plan not fully vested shall
immediately vest upon such transaction.
10. ARBITRATION. Any controversy or claim arising out of or
relating to this agreement, of the breach thereof, shall be
settled by arbitration in accordance with the thereof, and
judgement upon the award rendered by the Arbitrators may be
entered in any Court having jurisdiction thereof. Venue of the
arbitration shall be in Palm Beach County, Florida. Any
controversy or claim shall be submitted to three arbitrators
selected from the panels of the Arbitrators of the American
Arbitrators Association. The arbitrators, in addition to any award
made, shall have the discretion to award the prevailing party the
costs of the proceedings, together with reasonable attorney's
fees, provided that absent such award, each party shall bear the
costs of its own counsel and presentation of evidence, and each
party shall share equally the cost of such arbitration proceeding.
Any award made hereunder may be docketed in a court of competent
jurisdiction in Palm Beach County, Florida, and all parties hereby
consent to the personal jurisdiction of such court for purposes of
the enforcement of the arbitration award.
11. BINDING EFFECT. This Agreement shall be for the benefit of and
binding upon the parties hereto and their perspective heirs,
personal representatives, legal representatives, successors and,
where applicable, assigns. The Executive may not assign his rights
or benefits, or delegate any of his duties, hereunder without the
prior written consent of the Company.
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12. SEVERABILITY. The invalidity of any one or more of the words,
phrases, sentences, clauses or sections contained in this
Agreement shall not affect the enforceability conditionally on
their being valid in law, and, in the event that any one or more
of the words, phrases, sentences, clauses, or sections contained
in this Agreement shall be declared invalid, this Agreement shall
be construed as if such invalid word or words, phrase or phrases,
sentence or sentences, clause or clauses, or section or sections,
had not been inserted. If such invalidity is caused by duration,
geographic scope or both, the otherwise invalid provision will be
considered to be reduced to a period or area which would cure such
invalidity.
13. WAIVERS. The waiver by either party hereto of a breach or
violation of any term or provision of this Agreement shall not
operate nor be construed as a waiver of any subsequent breach of
violation.
14. SURVIVAL. The provisions of Section 5.1, 5.2, 5.3, 5.4 and 10
hereof shall survive the termination of this Agreement upon the
expiration of the Term or pursuant to Section 4 hereof.
Notwithstanding the foregoing, the provisions of Section 5.1 and
5.3 hereof shall not survive in the event the Company ceases
business operations for a consecutive period of 90 days, subject,
however, to Section 9 hereof.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
NETSPEAK CORPORATION
By: /s/ XXXX X. XXXXXX
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Name: Xxxx X. Xxxxxx
Title: Chief Financial Officer
/s/ XXXXXX X. XXXXX
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Xxxxxx X. Xxxxx
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