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[SUMMA FOUR LOGO] EXHIBIT 10.36
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (the "Agreement"), made this 15th day of
April, 1997, is entered into by Summa Four, Inc., a Delaware corporation, with
its principal place of business at Manchester, New Hampshire (the "Company"),
and Xxxxxxx Xxxx (the "Employee").
The Company desires to employ the Employee, and the Employee desires to
be employed by the Company. In consideration of the mutual covenants and
promises contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by the parties hereto,
the parties agree as follows:
1. EMPLOYMENT AT WILL. The Company hereby agrees to employ the
Employee as an employee at will, and the Employee hereby accepts such employment
with the Company, upon the terms set forth in this Agreement, for the period
commencing on April 28, 1997 (the "Commencement Date") and ending on the date
the Employee's employment is terminated in accordance with the provisions of
Section 4 (such period, the "Employment Period").
2. TITLE, CAPACITY. The Employee shall serve as the Company's Vice
President, Engineering, currently reporting to the President and CEO, or in such
other more senior or responsible position as the Company or its Board of
Directors (the "Board") may determine from time to time. The Employee shall be
based at the Company's headquarters in Manchester, New Hampshire, or such place
or places in the continental United States as the Board shall reasonably
determine and the Employee shall agree. The Employee shall be subject to the
supervision of, and shall have such authority as is delegated to him by, the
Board or such officer of the Company as may be designated by the Board.
The Employee hereby accepts such employment and agrees to undertake the
duties and responsibilities inherent in such position and such other duties and
responsibilities as the Board or
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its designee shall from time to time reasonably assign to him. The Employee
agrees to devote his entire business time, attention and energies to the
business and interests of the Company during the Employment Period. The Employee
agrees to abide by rules, regulations, instructions, personnel practices and
policies of the Company and any changes therein which may be adopted from time
to time by the Company.
3. COMPENSATION AND BENEFITS.
3.1 SALARY. The Company shall pay the Employee, in bi-weekly
installments, an annual base salary of $150,000 (less applicable state and
federal taxes) for the period commencing on the Commencement Date and ending
March 31, 1998, subject to adjustment thereafter as determined annually by the
Board at its first regular meeting following its receipt of the Company's
audited financial results for its preceding fiscal year.
3.2 BONUS. For such period ending March 31, 1998, the Employee
shall be eligible for a bonus of up to 25% of his current base salary (pro-rated
for 11 months of FY'98) based on the achievement of certain goals and the
Company's financial performance. In order for the Employee to be entitled to
payment of his bonus, he must be actively employed by the Company on the date
the bonus is paid. For periods thereafter, the Employee shall be entitled to
participate in such bonus programs, if any, as may be established from time to
time by its Board of Directors.
3.3 FRINGE BENEFITS. The Employee shall be entitled to
participate in all benefit programs that the Company establishes and makes
available to its employees, if any, to the extent that Employee's position,
tenure, salary, age, health and other qualifications make him eligible to
participate, and to vacations in accordance with the Company's vacation policy.
3.4 REIMBURSEMENT OF EXPENSES. The Company shall reimburse the
Employee for all gasoline used by the Employee in one automobile owned or leased
by him and for
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reasonable travel, entertainment and other expenses incurred, per the Company's
Travel and Entertainment Policy, or paid by the Employee in connection with, or
related to, the performance of his duties, responsibilities or services under
this Agreement, as more fully described in section 12.5.3, upon presentation by
the Employee of documentation, expense statements, vouchers and/or such other
supporting information as the Company may request, PROVIDED, HOWEVER, that (i)
the amount available for such travel, entertainment and other expenses may be
fixed in advance by senior management or the Board and (ii) amounts so
reimbursed for gasoline will be included in Employee's taxable income except as
so documented as a business expense.
3.5 STOCK OPTION. Subject to Board approval, the Employee
shall be granted an incentive stock option to purchase 30,000 shares of the
Company's common stock under its 1993 Stock Incentive Plan (the "Plan"). The
option price shall be the closing price on the first day of the month following
the employment start date month. The option to purchase 30,000 shares shall vest
over four years at 25% per year. If, in the future, the Board votes to shorten
the vesting schedule for Officers generally, then any of the Employee's unvested
shares would fall under the new, more favorable vesting schedule. Stock options
granted may be exercised by the Employee, to the extent vested in accordance
with the terms of the Plan. If, after completing six months of service,
Employee's employment is involuntarily terminated by the Company for any reason
other than "Cause", any unvested shares, which would have otherwise vested
within 12 months of such involuntary termination, shall vest immediately.
4. EMPLOYMENT TERMINATION WITHOUT CAUSE. The Employee shall have
the status of an employee at will. The Company may terminate the Employee's
employment at any time without cause. The Employee has no obligation to remain
employed by the Company and may terminate his employment at any time.
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4.1 TERMINATION FOR CAUSE. In the event the Employee's
employment is terminated for cause the Company shall pay to the Employee the
compensation and benefits otherwise payable to him under Section 3 through the
last day of his actual employment by the Company. For purposes of this
Agreement, "cause" for termination shall be deemed to exist upon (a) alcohol or
drug abuse affecting the performance of your duties, theft, embezzlement, fraud,
absenteeism, dishonesty, gross negligence or misconduct, or (b) the conviction
of the Employee of, or the entry of a pleading of guilty or nolo contendere by
the Employee to, any crime involving moral turpitude or any felony.
4.2 TERMINATION FOR DEATH OR DISABILITY. If the Employee's
employment is terminated by death or because of disability, the Company shall
pay to the estate of the Employee or to the Employee, as the case may be, the
compensation which would otherwise be payable to the Employee up to the end of
the month in which the termination of his employment because of death or
disability occurs, as well as any benefits due Employee under the benefits
programs, e.g., life insurance. For purposes of this Agreement, the term
"disability" shall mean the inability of the Employee, due to a physical or
mental disability, for a period of 90 days, whether or not consecutive, during
any 360-day period to perform the services contemplated under this Agreement. A
determination of disability shall be made by a physician satisfactory to both
the Employee and the Company, PROVIDED THAT if the Employee and the Company do
not agree on a physician, the Employee and the Company shall each select a
physician and these two together shall select a third physician, whose
determination as to disability shall be binding on all parties.
4.3 TERMINATION BY THE COMPANY OTHER THAN FOR CAUSE. If the
Employee's employment is terminated by the Company for any reason other than for
cause, the Company shall continue paying the Employee's current base salary and
insurance benefits, after the Employee's termination of employment, for up to
twelve (12) months (the "Severance Benefit"). Payment of
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the Severance Benefit shall cease upon the earlier of (a) the first anniversary
of the Employee's date of termination, or (b) the date the Employee begins
employment with another employer (or is re-employed by the Company).
4.4 TERMINATION FOLLOWING CHANGE IN CONTROL. If the Employee's
employment is terminated by the Company for any reason other than cause within
one year after a change in control, or the Employee experiences a substantial
diminution in the nature or status of his responsibilities from those set forth
in his job description, and the Employee chooses to terminate employment, the
Company shall continue paying the Employee's current base salary and benefits,
after the Employee's termination of employment, for up to twelve (12) months
(the "Severance Benefit"). Payment of the Severance Benefit shall cease upon the
earlier of (a) the first anniversary of the Employee's date of termination, or
(b) the date the Employee begins employment with another employer (or is
re-employed by the Company). In the event of change of control, the Employee's
unvested shares shall vest immediately, in accordance with section 16 of the
Company's 1995 stock plan. For the purposes of this paragraph, a change in
control is defined as provided for in Attachment "A".
5. NON-COMPETE.
(a) During the Employment Period and for a period of twelve
(12) months after the Employee's termination of employment for any reason, the
Employee will not knowingly directly or indirectly:
(i) as an individual proprietor, partner, stockholder, officer,
employee, director, joint venturer, investor, lender, consultant or in any other
capacity whatsoever (other than as the holder of not more than one percent (1%)
of the total outstanding stock of a publicly held company), render any services
to any business engaged in the design, manufacture or sale of programmable
switches (including, without limitation, Excel) or to any non-legacy switch
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manufacturer (including, without limitation, Sattel) or any major original
equipment manufacturer customer of Excel (including, without limitation, Boston
Technology, Glenayre or Access Line); or
(ii) recruit, solicit or induce, or attempt to induce, any
employee or employees of the Company to terminate their employment with, or
otherwise cease their relationship with, the Company; or
(iii) 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 the Company which
were contacted, solicited or served by the Employee while employed by the
Company.
(b) If any restriction set forth in this Section 5 is found by
any court of competent jurisdiction to be unenforceable because it extends for
too long a period of time or over too great a range of activities or too broad a
geographic area, it shall be interpreted to extend only over the maximum period
of time, range of activities or geographic area as to which it may be
enforceable.
(c) The restrictions contained in this Section 5 are necessary
for the protection of the business and goodwill of the Company and are
considered by the Employee reasonable for such purpose. The Employee agrees that
any breach of this Section 5 will cause the Company substantial and irrevocable
damage and therefore, in the event of any such breach, in addition to such other
remedies which may be available, the Company shall have the right to seek
specific performance and injunctive relief.
6. NOTICES. All notices required or permitted under this Agreement
shall be in writing and shall be deemed effective upon personal delivery or upon
deposit in the United States Post Office, by registered or certified mail,
postage prepaid, addressed to the other party at the address
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shown above, or at such other address or addresses as either party shall
designate to the other in accordance with this Section 6.
7. PRONOUNS. Whenever the context may require, any pronouns used in
this Agreement shall include the corresponding masculine, feminine or neuter
forms, and the singular forms of nouns and pronouns shall include the plural,
and vice versa.
8. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties and supersedes all prior agreements and
understandings, whether written or oral, relating to the subject matter of this
Agreement.
9. AMENDMENT. This Agreement may be amended or modified only by a
written instrument executed by both the Company and the Employee.
10. GOVERNING LAW. This Agreement shall be construed, interpreted
and enforced in accordance with the laws of the State of New Hampshire.
11. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of both parties and their respective successors and
assigns, including any corporation with which or into which the Company may be
merged or which may succeed to its assets or business, provided, however, that
the obligations of the Employee are personal and shall not be assigned by him.
12. MISCELLANEOUS.
12.1 No delay or omission by the Company in exercising any
right under this Agreement shall operate as a waiver of that or any right. A
waiver or consent given by the Company 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.
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12.2 The captions of the sections of this Agreement are for
convenience of reference only and in no way define, limit or affect the scope or
substance of any section of this Agreement.
12.3 In case any provision of this Agreement shall be invalid,
illegal or otherwise unenforceable, the validity, legality and enforceability of
the remaining provisions shall in no way be affected or impaired thereby.
12.4 The Employee shall be entitled to indemnification as an
Officer of the Company under the Company's by-laws and charter.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year set forth above.
SUMMA FOUR, INC.
By: /s/ Xxxxxx X. Xxxxx
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Title: President & CEO
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XXXXXXX XXXX
/s/ Xxxxxxx Xxxx
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ATTACHMENT "A"
For the purposes of this Agreement, a change of control shall be deemed
to have occurred if at any shareholders meeting fifty percent (50%) of the total
shares voting of the shares of the Company's common stock outstanding are voted
either directly or by proxy for a person or persons other than those nominated
by the Company's Board of Directors or if the individuals who, as of the date
hereof, constitute the Board of Directors of the Company, cease for any reason
to constitute at least a majority of the Board, provided that any person
becoming a director subsequent to the date hereof whose election or nomination
for election by the Company's shareholders was approved of by a vote of at least
a majority of the Directors then comprising the Board, shall be, for the
purposes of this Agreement, considered as though such person was a member of the
Board as of the date hereof.
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