EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into as of the 1st day of June, 1997, by and between
XXXXX X. XXXXXXXX (the "Employee") and NETCOM ON-LINE COMMUNICATION SERVICES,
INC., a Delaware corporation (the "Corporation").
For ease of reference, this Agreement is divided into the following parts, which
begin on the pages indicated:
FIRSTPART: TERM OF EMPLOYMENT, DUTIES AND SCOPE, COMPENSATION AND
BENEFITS DURING EMPLOYMENT
(Sections 1-5, beginning on page 2)
SECOND PART: COMPENSATION AND BENEFITS IN CASE OF ACTUAL OR CONSTRUCTIVE
TERMINATION NOT OCCURRING WITHIN SIX MONTHS AFTER A CHANGE IN
CONTROL
(Sections 6-8, beginning on page 5)
THIRD PART: COMPENSATION AND BENEFITS IN CASE OF ACTUAL OR CONSTRUCTIVE
TERMINATION OCCURRING WITHIN SIX MONTHS AFTER A CHANGE IN CONTROL
(Sections 9-12, beginning on page 8)
FOURTH PART: PARACHUTE PAYMENTS
(Sections 13-14, beginning on page 10)
FIFTH PART: TRADE SECRETS, SUCCESSORS, MISCELLANEOUS PROVISIONS,
SIGNATURE PAGE
(Sections 15-17, beginning on page 12)
FIRST PART: TERM OF EMPLOYMENT, DUTIES AND SCOPE, COMPENSATION AND BENEFITS
DURING EMPLOYMENT
Section 1: Term of Employment
(a) Basic Rule. The Corporation agrees to continue the Employee's employment,
and the Employee agrees to remain in employment with the Corporation, from
June 1, 1997, until the earliest of:
(1) The date of the Employee's death; or
(2) The date when the Employee's employment terminates pursuant to
Subsection (b), (c), (d) or (e) below.
(b) Early Termination or Resignation. The Corporation may terminate the
Employee's employment at any time and for any reason by giving the Employee
written notice. The Employee may terminate the Employee's employment for
any reason by giving the Corporation not less than 30 days' advance notice
in writing.
(c) Termination for Cause. The Corporation may terminate the Employee's
employment at any time for Cause shown. For all purposes under this
Agreement, "Cause" shall mean (1) a willful failure by the Employee to
substantially perform the Employee's duties under this Agreement, other
than a failure resulting from the Employee's complete or partial incapacity
due to physical or mental illness or impairment, (2) a willful act by the
Employee that constitutes gross misconduct and that is materially injurious
to the Corporation, (3) a willful breach by the Employee of a material
provision of this Agreement or (4) a material and willful violation of a
federal or state law or regulation applicable to the business of the
Corporation that is materially and demonstrably injurious to the
Corporation. No act, or failure to act, by the Employee shall be considered
"willful" unless committed without good faith and without a reasonable
belief that the act or omission was in the Corporation's best interest.
(d) Termination for Disability. The Corporation may terminate the Employee's
employment for Disability by giving the Employee written notice. For all
purposes under this Agreement, "Disability" shall mean that the Employee,
at the time the notice is given, has been unable to perform the Employee's
duties under this Agreement for a period of not less than three consecutive
months as a result of the Employee's incapacity due to physical or mental
illness. In the event that the Employee resumes the performance of
substantially all of the Employee's duties under this Agreement before the
termination of the Employee's employment under this Section becomes
effective, the notice of termination shall automatically be deemed to have
been revoked.
(e) Termination of Agreement. This Agreement shall expire when all obligations
of the parties hereunder have been satisfied. In addition, either the
Corporation or the Employee may terminate this Agreement for any reason,
and without affecting the Employee's status as an employee, by giving the
other party one year's advance notice in writing. A termination of this
Agreement pursuant to the preceding sentence shall be effective for all
purposes, except that such termination shall not affect the payment or
provision of compensation or benefits under this Agreement on account of a
termination of employment occurring prior to the termination of this
Agreement.
Section 2: Duties and Scope of Employment
(a) Position. The Corporation agrees to employ the Employee for the term of
employment under this Agreement in the position of Chief Executive Officer.
Employee shall be given such duties, responsibilities and authorities as
are appropriate to his position.
(b) Obligations. During the term of employment under this Agreement, the
Employee shall devote the Employee's full business efforts and time to the
business and affairs of the Corporation as needed to carry out his duties
and responsibilities hereunder subject to the overall supervision of the
Corporation's Board of Directors. The foregoing shall not preclude the
Employee from engaging in appropriate civic, charitable or religious
activities or from devoting a reasonable amount of time to private
investments or from serving on the boards of directors of other entities,
as long as such activities and service do not interfere or conflict with
the Employee's responsibilities to the Corporation.
Section 3: Base Compensation
During the term of employment under this Agreement, the Corporation agrees to
pay the Employee as compensation for services a base salary at the annual rate
of $350,000, or at such higher rate as the Compensation/Option Committee of the
Board of Directors may determine from time to time. Such salary shall be payable
in accordance with the standard payroll procedures of the Corporation. Once the
Corporation's Compensation/Option Committee of the Board of Directors has
increased such salary, it thereafter shall not be reduced; provided, however,
that if a Change in Control has not occurred, such salary (including any
increases) may be reduced by the Corporation if (1) the Employee commits an act
or omission that meets the definition of Cause, as defined in Section 1(c), or
(2) the Employee and all other executive officers of the Corporation who are
parties to written employment agreements containing substantially the same
provisions as this Agreement have their salaries (including any increases)
reduced by the same percentage amount for the same time period. The annual
compensation specified in this Section 3, together with any increases in such
compensation that the Compensation/Option Committee of the Board of Directors
may grant from time to time, and together with any reductions made in accordance
with this Section 3, is referred to in this Agreement as "Base Compensation."
Section 4: Employee Benefits
In General. During the term of employment under this Agreement, the Employee
shall be eligible to participate in the employee benefit plans and executive
compensation programs maintained by the Corporation, including (without
limitation) savings or profit-sharing plans, deferred compensation plans, stock
option, incentive or other bonus plans, life, disability, health, accident and
other insurance programs, paid vacations, and similar plans or programs, subject
in each case to the generally applicable terms and conditions of the plan or
program in question and to the discretion and determinations of any person,
committee or entity administering such plan or program. In addition, Employee
shall be eligible for a car allowance of $600 per month and a cellular
telephone.
Section 5: Business Expenses and Travel
During the term of employment under this Agreement, the Employee shall be
authorized to incur necessary and reasonable travel, entertainment and other
business expenses in connection with the Employee's duties hereunder. The
Corporation shall reimburse the Employee for such expenses upon presentation of
an itemized account and appropriate supporting documentation, all in accordance
with generally applicable policies.
SECOND PART: COMPENSATION AND BENEFITS IN CASE OF ACTUAL OR CONSTRUCTIVE
TERMINATION NOT OCCURRING WITHIN SIX MONTHS AFTER A CHANGE
IN CONTROL
Section 6: Terminations Not Relating to a Change in Control
This Second Part of the Agreement, consisting of Sections 6 through 8, describes
the benefits and compensation, if any, payable in case of termination of
employment that does not occur within six months after a Change in Control (as
defined in Section 12). The Third Part of the Agreement, consisting of Sections
9 through 12, describes benefits and compensation, if any, payable in case of
termination occurring within six months after a Change in Control. If benefits
and compensation are payable under this Second Part, then no benefits and
compensation are payable under the Third Part.
Section 7: Involuntary Actual Or Constructive Termination Without Cause
or Disability
In the event that, during the term of this Agreement, the Employee's employment
terminates in a Qualifying Termination, as defined in Subsection (a), and such
termination does not occur within six months after a Change in Control, then,
after executing the release of claims described in Section 7(d), the Employee
shall be entitled to receive the payments and benefits described in Subsections
(b) and (c).
(a) Qualifying Termination. A Qualifying Termination occurs if:
(1) The Corporation terminates the Employee's employment for any reason
other than Cause or Disability; or
(2) The Employee separates from employment with the Corporation in
response to a "Constructive Termination," which means a material
reduction in salary or benefits (subject to Section 3), a material
change in responsibilities, or a requirement to relocate, except for
office relocations that would not increase the Employee's one-way
commute distance by more than 20 miles.
(b) Severance (1x payment). The Corporation shall pay to the Employee following
the date of the employment termination and over the succeeding 12 months,
in accordance with standard payroll procedures, an amount equal to the
following:
(1) One times the Employee's Base Compensation in effect on the date of
the employment termination; plus
(2) 100% of the Employee's annual incentive bonus earned on a quarterly
basis as of the date of the termination, assuming the Employee was
employed on the last day of the quarter in which termination of
employment occurred.
Any other provision of this Agreement or of the Corporation's
Incentive Bonus Plan notwithstanding, after the amount described in
this Subsection (b) has been paid to the Employee, the Employee shall
have no further interest in such Plan.
(c) Twelve Months of Life Insurance and Health Plan Coverage. The coverage
described in this Subsection (c) shall be provided for a "Continuation
Period" beginning on the date when the employment termination is effective
and ending on the earlier of (1) the 12-month anniversary of the date when
the employment termination is effective or (2) the date of the Employee's
death. During the Continuation Period, the Employee (and, where applicable,
the Employee's dependents) shall be entitled to continue participation in
the group term life insurance plan and in the health care plan for
employees maintained by the Corporation as if the Employee were still an
employee of the Corporation. The coverage provided under this Subsection
(c) shall run concurrently with and shall be offset against any
continuation coverage under Part 6 of Title I of the Employee Retirement
Income Security Act of 1974, as amended. Where applicable, the Employee's
compensation for purposes of such plans shall be deemed to be equal to the
Employee's compensation (as defined in such plans) in effect on the date of
the employment termination. To the extent that the Corporation finds it
undesirable to cover the Employee under the group life insurance and health
plans of the Corporation, the Corporation shall provide the Employee (at
its own expense) with the same level of coverage under individual policies.
(d) Release of Claims. As a condition to the receipt of the payments and
benefits described in this Section 7, the Employee shall be required to
execute a release of all claims arising out of the Employee's employment or
the termination thereof including, but not limited to, any claim of
discrimination under state or federal law, but excluding claims for
indemnification from the Corporation under any indemnification agreement
with the Corporation, its certificate of incorporation and by-laws or
applicable law or claims for directors and officers' insurance coverage.
(e) Conditions to Receipt of Payments and Benefits. In view of Employee's
position and his access to Confidential Information, as a condition to the
receipt of payments and benefits described in this Section 7, the Employee
shall not, without the Corporation's written consent, directly or
indirectly, alone or as a partner, joint venturer, officer, director,
employee, consultant, agent or stockholder (other than a less than 5%
stockholder of a publicly traded company) (i) engage in any activity which
is in competition with the business, the products or services of the
Corporation (a list of competitors and competitive products and services,
which may be updated, is attached hereto), (ii) solicit any of the
Corporation's employees, consultants or customers, (iii) hire any of the
Corporation's employees or consultants in an unlawful manner or actively
encourage employees or consultants to leave the Corporation, or (iv)
otherwise breach his Confidential Information obligations.
(f) No Mitigation. The Employee shall not be required to mitigate the amount of
any payment or benefit contemplated by this Section 7, nor shall any such
payment or benefit be reduced by any earnings or benefits that the Employee
may receive from any other source.
Section 8: Other Terminations Under This Part
If termination of employment, actual or constructive, occurs at a time that is
not within six months after a Change in Control, and the termination is not
described in Section 7, then the Employee is entitled only to the compensation,
benefits and reimbursements payable under the terms of Sections 3, 4 and 5 of
this Agreement for the period preceding the effective date of the termination
including any disability or death benefits to which Employee (or his estate or
beneficiary(s)) may be entitled as a result of termination of his employment on
account of Disability or death. The payments under this Agreement shall fully
discharge all responsibilities of the Corporation to the Employee upon
termination of the Employee's employment. This Section 8 applies, without
limitation, to any termination of employment initiated by the Employee (except
an Employee-initiated termination that is described in Paragraph 2 of Section
7(a)), termination of employment caused by the Employee's death or Disability,
termination of the Employee for Cause, and any constructive termination (not
described in Section 7).
THIRD PART: COMPENSATION AND BENEFITS IN CASE OF ACTUAL OR CONSTRUCTIVE
TERMINATION OCCURRING WITHIN SIX MONTHS AFTER A CHANGE IN CONTROL
Section 9: Terminations Relating to a Change in Control
This Third Part of the Agreement, consisting of Sections 9 through 12, describes
the benefits and compensation, if any, payable in case of termination of
employment that occurs within six months after a Change in Control (as defined
in Section 12). The Second Part of the Agreement, consisting of Sections 6
through 8, describes benefits and compensation, if any, payable in case of
termination that does not occur within six months after a Change in Control. If
benefits and compensation are payable under this Third Part, then no benefits
and compensation are payable under the Second Part.
Section 10: Involuntary Actual or Constructive Termination Without Cause
In the event that, during the term of this Agreement and within six months after
a Change in Control, the Employee's employment terminates in a Qualifying
Termination, the Employee shall be entitled to receive the payments and benefits
described in Subsections (a), (b) and (c).
(a) Severance (2x payment). The Corporation shall pay to the Employee in a lump
sum, not less than 31 days nor more than 60 days following the date of the
employment termination, an amount equal to the following:
(1) Two times the Employee's Base Compensation in effect on the date of
the employment termination; plus
(2) 200% of the greater of his prior year's incentive bonus or his annual
incentive bonus earned on a quarterly basis as of the date of the
termination, assuming the Employee was employed on the last day of the
quarter in which termination of employment occurred.
Any other provision of this Agreement or of the Corporation's
Incentive Bonus Plan notwithstanding, after the amount described in
this Subsection (a) has been paid to the Employee, the Employee shall
have no further interest in such Plan.
(b) Two Years of Life Insurance and Health Plan Coverage. The coverage
described in this Subsection (c) shall be provided for a "Continuation
Period" beginning on the date when the employment termination is effective
and ending on the earlier of (1) the second anniversary of the date when
the employment termination is effective or (2) the date of the Employee's
death. During the Continuation Period, the Employee (and, where applicable,
the Employee's dependents) shall be entitled to continue participation in
the group term life insurance plan and in the health care plan for
employees maintained by the Corporation as if the Employee were still an
employee of the Corporation. The coverage provided under this Subsection
(c) shall run concurrently with and shall be offset against any
continuation coverage under Part 6 of Title I of the Employee Retirement
Income Security Act of 1974, as amended. Where applicable, the Employee's
compensation for purposes of such plans shall be deemed to be equal to the
Employee's compensation (as defined in such plans) in effect on the date of
the employment termination. To the extent that the Corporation finds it
undesirable to cover the Employee under the group life insurance and health
plans of the Corporation, the Corporation shall provide the Employee (at
its own expense) with the same level of coverage under individual policies.
(c) Incentive Programs. All options granted by the Corporation shall vest an
additional 50% (or the remaining unvested options if less than 50%) upon
the effective date of the Change in Control and any remaining unvested
options shall fully vest upon a Qualifying Termination within 6 months
after the Change in Control.
(d) No Mitigation. The Employee shall not be required to mitigate the amount of
any payment or benefit contemplated by this Section 10, nor shall any such
payment or benefit be reduced by any earnings or benefits that the Employee
may receive from any other source.
Section 11: Other Terminations Under This Part
If termination of employment, actual or constructive, occurs at a time that is
within six months after a Change in Control, and the termination is not
described in Section 10, then the Employee is entitled only to the compensation,
benefits and reimbursements payable under the terms of Sections 3, 4 and 5 of
this Agreement for the period preceding the effective date of the termination
including any disability or death benefits to which Employee (or his estate or
beneficiary(s)) may be entitled as a result of termination of his employment on
account of Disability or death. The payments under this Agreement shall fully
discharge all responsibilities of the Corporation to the Employee upon
termination of the Employee's employment. This Section 11 applies, without
limitation, to any termination of employment initiated by the Employee (except
an Employee-initiated termination that is described in Paragraph (2) of Section
7(a)) or a termination of employment caused by Disability, Cause or the
Employee's death.
Section 12: Definition of Change in Control
For all purposes under this Agreement, "Change in Control" shall mean a "Change
in Control" of the Corporation, as defined in the NetCom On-Line Communications
Services, Inc. 1993 Stock Option Plan as in effect on the date this Agreement is
executed.
FOURTH PART: PARACHUTE PAYMENTS
Section 13: Gross-Up Payment.
In the event it is determined that any payment or distribution of any type to or
for the benefit of the Employee, pursuant to this Agreement or otherwise, by the
Corporation, any Person who acquires ownership or effective control of the
Corporation, or ownership of a substantial portion of the assets of the
Corporation (within the meaning of section 260G of the Code and the regulations
thereunder) or any affiliate of such Person (the "Total Payments") would be
subject to the excise tax imposed by section 4999 of the Code or any interest or
penalties with respect to such excise tax (such excise tax, together with any
such interest and penalties, are collectively referred to as the "Excise Tax"),
then the Employee shall be entitled to receive an additional payment (a
"Gross-Up Payment") in an amount such that, after payment by the Employee of all
taxes (including any interest or penalties imposed with respect to such taxes),
including any Excise Tax, imposed upon the Gross-Up Payment, the Employee
retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon
the Total Payments.
Section 14: Determination by Accountant
All mathematical determinations and determinations as to whether any of the
Total Payments are "parachute payments" (within the meaning of section 280G of
the Code), in each case which determinations are required to be made under this
Section 14, including whether a Gross-Up Payment is required, the amount of such
Gross-Up Payment, and amounts relevant to the last sentence of this Section 14,
shall be made by an independent accounting firm selected by the Employee from
amount the largest six accounting firms in the United States (the "Accounting
Firm"). The Accounting Firm shall provide to the Corporation and to the Employee
its determination (the "Determination"), together with detailed supporting
calculations regarding the amount of any Gross-Up Payment and any other relevant
matter, within ten days after termination of the Employee's employment, if
applicable, or at such earlier time following termination of employment as is
requested by the Employee (if the Employee reasonably believes that any of the
Total Payments may be subject to the Excise Tax). If the Accounting Firm
determines that no Excise Tax is payable by the Employee, it shall furnish the
Employee with a written statement that such Accounting Firm has concluded that
no Excise Tax is payable (including the reasons therefor) and that the Employee
has substantial authority not to report any Excise Tax on the Employee's federal
income tax return. If a Gross-Up Payment is determined to be payable, it shall
be paid to the Employee within ten days after the Determination is delivered to
the Corporation or the Employee. Any determination by the Accounting Firm shall
be binding upon the Corporation and the Employee, absent manifest error.
As a result of uncertainty in the application of section 4999 of the Code at the
time of the initial determination by the Accounting Firm hereunder, it is
possible that Gross-Up Payments not made by the Corporation and members of the
Corporation should have been made ("Underpayment"), or that Gross-Up Payments
will have been made by the Corporation and members of the Corporation that
should not have been made ("Overpayments"). In either such event, the Accounting
Firm shall determine the amount of the Underpayment or Overpayment that has
occurred. In the case of an Underpayment, the Corporation promptly shall pay, or
cause to be paid, the amount of such Underpayment to or for the benefit of the
Employee. In the case of an Overpayment, the Employee shall, at the direction
and expense of the Corporation, take such steps as are reasonably necessary
(including the filing of returns and claims for refund), follow reasonable
instructions from, and procedures established by, the Corporation, and otherwise
reasonably cooperate with the Corporation to correct such Overpayment; provided,
however, that (1) Employee shall not in any event be obligated to return to the
Corporation an amount greater than the net after-tax portion of the Overpayment
that he has retained or recovered as a refund from the applicable taxing
authorities and (2) this provision shall be interpreted in a manner consistent
with the intent of Section 13, which is to make the Employee whole, on an
after-tax basis, from the application of the Excise Tax, it being understood
that the correction of an Overpayment may result in the Employee repaying to the
Corporation an amount that is less than the Overpayment.
FIFTH PART: TRADE SECRETS, SUCCESSORS, MISCELLANEOUS PROVISIONS,
SIGNATURE PAGE
Section 15: Confidential Information
(a) Acknowledgement. The Corporation and the Employee acknowledge that the
services to be performed by the Employee under this Agreement are unique
and extraordinary and that, as a result of the Employee's employment, the
Employee will be in a relationship of confidence and trust with the
Corporation and will come into possession of "Confidential Information" (1)
owned or controlled by the Corporation, (2) in the possession of the
Corporation and belonging to third parties or (3) conceived, originated,
discovered or developed, in whole or in part, by the Employee. As used
herein "Confidential Information includes trade secrets and other
confidential or proprietary business, technical, personnel or financial
information, whether or not the Employee's work product, in written,
graphic, oral or other tangible or intangible forms, including but not
limited to specifications, samples, records, data, computer programs,
drawings, diagrams, models, customer names, ID's or e-mail addresses,
business or marketing plans, studies, analyses, projections and reports,
communications by or to attorneys (including attorney-client privileged
communications), memos and other materials prepared by attorneys or under
their direction (including attorney work product), and software systems and
processes. Any information that is not readily available to the public
shall be considered to be a trade secret and confidential and proprietary,
even if it is not specifically marked as such, unless the Corporation
advises the Employee otherwise in writing.
(b) Nondisclosure. The Employee agrees that the Employee will not, without the
prior written consent of the Corporation, directly or indirectly use or
disclose Confidential Information to any person, during or after the
Employee's employment, except as may be necessary in the ordinary course of
performing the Employee's duties under this Agreement. The Employee will
keep the Confidential Information in strictest confidence and trust. This
Section 15 shall apply indefinitely, both during and after the term of this
Agreement.
(c) Surrender Upon Termination. The Employee agrees that in the event of the
termination of the Employee's employment for any reason, the Employee will
immediately deliver to the Corporation all property belonging to the
Corporation, including all documents and materials of any nature pertaining
to the Employee's work with the Corporation, and will not take with the
Employee any documents or materials of any description, or any reproduction
thereof of any description, containing or pertaining to any Confidential
Information. It is understood that the Employee is free to use information
that is in the public domain (not as a result of a breach of this
Agreement).
Section 16: Successors
(a) Corporation's Successors. The Corporation shall require any successor
(whether direct or indirect and whether by purchase, lease, merger,
consolidation, liquidation or otherwise) to all or substantially all of the
Corporation's business and/or assets, by an agreement in substance and form
satisfactory to the Employee, to assume this Agreement and to agree
expressly to perform this Agreement in the same manner and to the same
extent as the Corporation would be required to perform it in the absence of
a succession. The Corporation's failure to obtain such agreement prior to
the effectiveness of a succession shall be a breach of this Agreement and
shall entitle the Employee to all of the compensation and benefits to which
the Employee would have been entitled hereunder if the Corporation had
involuntarily terminated the Employee's employment without Cause or
Disability, on the date when such succession becomes effective. For all
purposes under this Agreement, the term "Corporation" shall include any
successor to the Corporation's business and/or assets that executes and
delivers the assumption agreement described in this Subsection (a) or that
becomes bound by this Agreement by operation of law.
(b) Employee's Successors. This Agreement and all rights of the Employee
hereunder shall inure to the benefit of, and be enforceable by, the
Employee's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
Section 17: Miscellaneous Provisions
(a) Waiver. No provision of this Agreement shall be modified, waived or
discharged unless the modification, waiver or discharge is agreed to in
writing and signed by the Employee and by an authorized officer of the
Corporation (other than the Employee). No waiver by either party of any
breach of, or of compliance with, any condition or provision of this
Agreement by the other party shall be considered a waiver of any other
condition or provision or of the same condition or provision at another
time.
(b) Whole Agreement. No agreements, representations or understandings (whether
oral or written and whether express or implied) that are not expressly set
forth in this Agreement, or any existing indemnification agreement for the
benefit of the Employee, have been made or entered into by either party
with respect to the subject matter hereof. In addition, the Employee hereby
acknowledges and agrees that this Agreement supersedes in its entirety any
employment agreement between the Employee and the Corporation in effect
immediately prior to the effective date of this Agreement. As of the
effective date of this Agreement, such employment agreement shall terminate
without any further obligation by either party thereto, and the Employee
hereby relinquishes any further rights that the Employee may have had under
such prior employment agreement.
(c) Notice. Notices and all other communications contemplated by this Agreement
shall be in writing and shall be deemed to have been duly given when
personally delivered or when mailed by U.S. registered or certified mail,
return receipt requested and postage prepaid. In the case of the Employee,
mailed notices shall be addressed to the Employee at the home address that
the Employee most recently communicated to the Corporation in writing. In
the case of the Corporation, mailed notices shall be addressed to its
corporate headquarters, and all notices shall be directed to the attention
of its Chief Operating Officer.
(d) No Setoff. There shall be no right of setoff or counterclaim, with respect
to any claim, debt or obligation, against payments to the Employee under
this Agreement.
(e) Choice of Law. The validity, interpretation, construction and performance
of this Agreement shall be governed by the laws of the State of California,
irrespective of California's choice-of-law principles.
(f) Severability. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or
enforceability of any other provision hereof, which shall remain in full
force and effect.
(g) Arbitration. Except as otherwise provided in Section 14 and in the
enforcement of Section 15, any dispute or controversy arising out of the
Employee's employment or the termination thereof, including, but not
limited to, any claim of discrimination under state or federal law, shall
be settled exclusively by arbitration in San Jose, California, in
accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitrator's award in any court
having jurisdiction.
(h) No Assignment of Benefits. The rights of any person to payments or benefits
under this Agreement shall not be made subject to option or assignment,
either by voluntary or involuntary assignment or by operation of law,
including (without limitation) bankruptcy, garnishment, attachment or other
creditor's process, and any action in violation of this Subsection (i)
shall be void.
(i) Employment at Will; Limitation of Remedies. The Corporation and the
Employee acknowledge that the Employee's employment is at will, as defined
under applicable law. If the Employee's employment terminates for any
reason, the Employee shall not be entitled to any payments, benefits,
damages, awards or compensation other than as provided by this Agreement.
(j) Employment Taxes. All payments made pursuant to this Agreement shall be
subject to withholding of applicable taxes.
(k) Benefit Coverage Non-Additive. In the event that the Employee is entitled
to life insurance and health plan coverage under more than one provision
hereunder, only one provision shall apply, and neither the periods of
coverage nor the amounts of benefits shall be additive.
IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case
of the Corporation by its duly authorized officer, as of the day and year first
above written. Employee has consulted (or has had the opportunity to consult)
with his own counsel (who is other than the Corporation's counsel, Pillsbury
Madison & Sutro, LLP) prior to execution of this Agreement.
/s/ Xxxxx X. Xxxxxxxx
------------------------------
Xxxxx X. Xxxxxxxx
Employee
NETCOM ON-LINE COMMUNICATIONS SERVICES, INC.
By /s/Xxxxxxx X. Xxxxxx
--------------------------
Its _________________________
