EXHIBIT 10.57
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "AGREEMENT") is entered into by and
between XXXXXXX X. XXXX ("YOU") and PARADYNE CORPORATION, INC., a Delaware
corporation (the "COMPANY"). This agreement will become effective on the day you
begin employment with the Company, (the "EFFECTIVE DATE"), which shall occur on
today's date or a date hereafter not to exceed 30 days, at your choosing.
WHEREAS, you wish to enter into an employment agreement setting forth
certain rights and benefits regarding your employment by the Company;
WHEREAS, you are willing to commence your employment based on your
particular qualifications, on the condition that the Company enter into this
Agreement and perform all of its responsibilities hereunder; and
WHEREAS, you will receive substantial benefits from the entry into this
Agreement by the Company, and agree that you should fully perform all of your
responsibilities and duties and strictly observe all of your obligations
hereunder.
NOW, THEREFORE, in consideration of your employment by the Company and
the compensation to be paid by the Company to you in accordance with this
Agreement and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, you and the Company hereby agree as
follows:
1. POSITION AND RESPONSIBILITIES
(A) POSITION. In accordance with this agreement, the Company
agrees to employ you throughout the Term (defined below) as
its Sr. Vice President, Worldwide Sales. You shall report
directly to the Company's Chief Executive Officer ("CEO") and
will be responsible for providing direction and management for
the sales and service organizations of the Company.
(B) RESPONSIBILITIES. You shall provide your full business efforts
and time to the Company and perform the duties and
responsibilities assigned to you in accordance with the
standards and policies that the CEO may establish from time to
time. You will be assigned a reasonable annual sales quota in
accordance with Company requirements. You shall not render
services to any other person or entity without prior consent
from the CEO or other authorized individual.
2. TERM OF EMPLOYMENT
The Company agrees to continue your employment, and you agree
to remain in Employment with the Company, from the Effective
Date until the date your employment terminates pursuant to
this Agreement. The term of this Agreement is one (1) year
with automatic daily extensions.
3. COMPENSATION
(A) BASE COMPENSATION. Your Base Compensation shall be at the
annual rate of $200,000 and will be increased at the
discretion of the CEO in accordance with performance criteria
to be agreed upon.
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(B) COMMISSIONS. You shall be eligible for target annual
commissions of $100,000 upon successful completion of your
annual quota. The annual quota for FY 2002 will be $143M,
subject to change at the discretion of the CEO. These
commissions are to be paid on a monthly basis as shipments are
recognized in accordance with your basic commission rate
(BCR). The BCR is calculated by dividing the target commission
amount by the annual quota. Additionally, your base commission
rate will double for all amounts exceeding your annual quota.
You will also be eligible for a Quarterly Objective Bonus of
$12,500 based on you meeting your quarterly objective.
Commission payment will be paid in accordance to Company
compensation plan.
(C) STRETCH QUOTA BONUS. You will be awarded a Stretch Quota Bonus
of $100,000 if you achieve the stretch quota revenue target
set by the CEO. The stretch quota revenue target will be $200M
for FY 2002.
(D) STOCK OPTIONS. On the Effective Date of this Agreement you
will be granted an option to purchase 550,000 shares of Common
Stock of the Company. The strike price on 400,000 shares will
be at fair market value and the strike price of the remaining
150,000 shares will be at $1.00. These options will vest in
total over four years. The first vesting will occur one year
from the date of grant at 25%, with the remaining 75% vesting
quarterly thereafter. However, (A) immediately prior to the
occurrence of a Change in Control, the unvested options will
automatically vest as to those shares that would have vested
in the 12-month period immediately following the Change in
Control if such Change in Control had not occurred, and (B)
if, at any time within one year following a Change in Control,
you voluntarily resign for Good Reason or if you are
terminated by the Company without Cause, then the unvested
portion of the options will automatically vest as to those
shares that would have vested in the 24 month period
immediately following the Change in Control if such Change in
Control had not occurred. Upon termination of employment due
to death, disability or retirement, or termination without
Cause or voluntary resignation for any reason, such options,
to the extent exercisable as of the date of termination, will
remain exercisable for six (6) months. Annually, and from time
to time, you may receive additional options from the CEO or
compensation committee.
4. EMPLOYEE BENEFITS
(A) IN GENERAL. Except as otherwise provided in this Agreement,
you are entitled to participate in all incentive, savings,
retirement, health and insurance plans provided by the Company
to its senior executive officers generally.
(B) VACATION. You shall be entitled to paid time off ("PTO") in an
amount each year equal to other senior executive officers in
the Company in addition to holidays and time off as specified
by Company policy.
5. TERMINATION OF EMPLOYMENT. Termination of your employment may occur
under any of the following circumstances:
(A) COMPANY'S TERMINATION OF EMPLOYMENT. The Company has the right
to terminate your employment at any time, with or without
Cause. For all purposes under this Agreement, "Cause" shall
mean:
i. A willful failure by you to substantially perform
your duties and responsibilities in accordance with
this Agreement, other than failure resulting from
your complete or partial incapacity due to physical
or mental illness or impairment; and
ii. A willful act by you, misconduct or negligence in the
performance of duties and responsibilities as an
employee;
iii. Willful violation of any law, rule or regulation or
any cease-and-desist order relating to the operation
of the business of the Company; or
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iv. Conviction of, or plea of "guilty" or "no contest"
to, a felony or a crime involving moral turpitude.
No act, or failure to act, by you shall be considered "willful" unless
committed without good faith and without a reasonable belief that the
act or omission was lawful and in the Company's best interest.
(B) YOUR TERMINATION OF EMPLOYMENT. You have the right to
terminate your employment with the Company at any time. You
agree to provide thirty (30) days prior written notice to the
Company of termination of your employment. The Company may
select any date prior to the end of the notice period as the
date your employment will terminate.
(C) DEATH, RETIREMENT, OR DISABILITY. Your employment will
terminate immediately upon your Death or Retirement during the
Employment Period. In addition, this agreement will terminate
without further obligations to your or your legal
representatives, except for payment of any accrued
obligations, which will be paid to your or your estate or
beneficiary as applicable. However, you or your estate and/or
beneficiaries will be entitled to receive, benefits under such
plans, relating to death, disability or retirement benefits,
if any, as are applicable to you on the date of termination.
Retirement shall mean normal retirement as defined in the
Company's then current retirement plan. In the event of
Disability, if the Company determines in good faith that your
Disability has occurred during the Employment Period, it may
give written notice of its intention to terminate your
employment. In such event, employment will terminate effective
on the 30th day after your receipt of such written notice,
provided that, within the 30 days after such receipt, you have
not returned to full-time performance of your duties.
Disability shall mean the inability of you to perform the
essential functions of your regular duties and
responsibilities, with or without reasonable accommodation,
due to a medically determinable physical or mental illness
which has lasted (or can reasonably be expected to last) for a
period of six consecutive months.
(D) SEVERANCE PAYMENTS. If, during the employment period, the
Company terminates your employment other than for cause or
disability, or if you resign for Good Reason within 90 days
after the occurrence of the event giving rise to Good Reason,
then upon execution of a Release (in substantially the form of
the Exhibit A hereto, you will receive:
i. A lump sum severance payment equal to twelve (12)
months base salary in effect as of the date of
termination.
ii. Payment of premiums for COBRA continuation for
medical and dental benefits for your and your covered
dependents, for a period not to exceed 12 months.
Such obligation will terminate in the event you
obtain other employment that provides such benefits
to you.
(E) "GOOD REASON" means that:
i. Your compensation terms as contained herein, have
been materially reduced;
ii. Your position, duties, or responsibilities have been
materially reduced;
iii. The Corporation has not paid you when due any salary,
bonus, commission, or other material benefit due you.
6. INDEMNIFICATION. During the Term and at all times thereafter,
the Company shall indemnify you from any claims or actions
based upon any acts or omissions, or alleged acts or
omissions, by you which arise out of or related to your
employment with the Company. You shall be a beneficiary of any
directors' or officers' liability insurance policy maintained
by the Company.
7. MISCELLANEOUS PROVISIONS.
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(A) NOTICES. Unless otherwise provided herein, any notice or other
information to be provided to the Company will be made in
writing to the CEO. Any notice or other information to be
provided to you will be sent overnight delivery with receipt
acknowledgement to your home address of 000 X. Xxxxx Xxxx Xxx
Xxxxx, XX 00000
(B) 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 you and by an
authorized officer of the Company. 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.
(C) 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.
IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case
of the Company by its authorized officer, as of the day and year set forth under
their signatures below
PARADYNE NETWORKS, INC. XXXXXXX X. XXXX
BY: /s/ Xxxxxxx Xxxxxx /s/ Xxxxxxx X. Xxxx
Name: Xxxxxxx Xxxxxx 000 X. Xxxxx Xxxx Xxx
Xxxxx, XX 00000
Title: Chief Financial Officer
Date: January 17, 2002 Date: January 17, 2002
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